NRC Group — Investor Presentation 2022

Nov 8, 2022

8 November 2022

3rd quarter 2022

CEO Henning Olsen CFO Ole Gulsvik

KEY FIGURES Q3 22 Strong growth and record high order backlog

REVENUE

NOK 2.0 billion

Q3 2021: NOK 1.7 billion

EBITA*

NOK 94 million

Q3 2021: NOK 102 million

EBITA* margin

Q3 2021: 6.0%

ORDER INTAKE Q3 2021: NOK 2.7 billion

OPERATING CASH FLOW NOK 2.2 billion NOK 96 million

Q3 2021: NOK 238 million

ORDER BACKLOG Q3 2021: NOK 7.6 billion NOK 8.6 billion

HEALTH AND SAFETY Fewer injuries resulting in absence

LTI¹ 4.9

SICKNESS ABSENCE 4.0% YTD 2021: 3.7% YTD 2021: 0

TRI² 15.6 YTD 2021: 7.1 YTD 2021: 19.9

SERIOUS INJURIES

2

1) LTI: Injuries resulting in absence at least one full day per million man-hours (incl. subcontractors). Previously reported as LTI-1. 2) TRI: Frequency of injuries with and without absence for personnel (employees, rented workers and subcontractors) per million hours worked. Previously reported as LTI-2. Figures per YTD 30 September 2022 compared with YTD 30 September 2021.

MARKET CHARACTERISTICS

Investments in Rail expected to remain strong in 2023

Market drivers and characteristics

Expectation that investments in rail will remain strong in 2023

Combined railway maintenance backlog of NOK ~80 billion

Population growth and urbanisation drives demand for sustainable infrastructure

Focus on low-carbon transport solutions to reach sustainability targets

Rail and metro systems

Recent quote from Norwegian client

"We left the thought of large double track investments, but will follow the plan and prioritise projects with biggest impact. (…) This will lead to higher demand for rail technical contractors in the years to come"¹

Stine Undrum, Utbyggingsdirektør, Bane NOR

PROFIT & LOSS High volumes and profits in line with last year

EBITA*

(Amounts in NOK million)	Q3 2022	Q3 2021	YTD 2022	YTD 2021	FY 2021
Revenue	1 988	1 698	5 075	4 356	5 957
Operating expenses	-1 849	-1 548	-4 821	-4 117	-5 621
Other income and expenses (M&A expenses)	0	-1	-1	-12	-34
EBITDA	138	149	254	227	302
Depreciation	-44	-49	-135	-150	-196
EBITA*	94	102	120	89	139
EBITA	94	100	119	77	105
Amortisation	-9	-12	-28	-45	-64
Operating profit/loss (EBIT)	85	89	91	32	42
Net financial items	-14	-17	-43	-50	-66
Share of profit from associates and joint ventures	-9	0	-9	0	0
Profit/loss before tax (EBT)	61	71	40	-19	-24

Notes

• Revenues +17 % from Q3 21 and +17% YTD

• EBITA* down NOK 8 million compared to same period last year

• EBITA* margin of 4.7% vs 6.0% last year

KEY FINANCIAL FIGURES LAST TWELVE MONTHS (LTM) On track for strong growth in 2022

BALANCE SHEET Unchanged net interest-bearing debt levels

(Amounts in NOK million)	30.09.2022	30.09.2021	31.12.2021	Net Interest-bearing debt
ASSETS Intangible assets	2 907	2 900	2 867	NOK million						NOK +13	million
Right-of-use assets	510	499	514
Total other non-current assets	215	206	193	1 223
					1 157		1 178
Cash and cash equivalents	412	565	626			1 107
Other current assets	1 794	1 438	1 387					984
Total assets	5 839	5 607	5 587
									891	844
EQUITY AND LIABILITIES
Total equity	2 727	2 668	2 622
Long-term lease liabilities	315	312	319
Other non-current interest-bearing liabilities	780	920	880
Other non-current liabilities	17	28	26
Short-term lease liabilities	161	169	173
Other interest-bearing current liabilities	154	148	146
Other current liabilities	1 685	1 362	1 422
Total equity and liabilities	5 839	5 607	5 587

NIBD ex leasing Leasing

Net Interest-bearing debt ex. leases: NOK 522 million

CASH FLOW Unchanged cash position

Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22

Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22

* Before other income and expenses (M&A expenses) 1) The Group has a NIBOR hedge which partly offsets the effects of increased market interest rates.

FINANCIAL POSITION Financial flexibility remains good – unchanged leverage ratio

* Before other income and expenses (M&A expenses) 1) The Group has an unused credit facility of NOK 200 million

BACKLOG Record high order backlog supporting long-term growth

FINANCIAL POSITION

Operational review

OPERATIONAL REVIEW NRC GROUP NORWAY Higher activity and improved performance

Key Figures Notes

(NOK million)	Q3 2022	Q3 2021
Revenue	554	495
EBITA*	27	20
EBITA* margin	4.9%	4.1%
Order intake	524	697

• Revenue growth in the quarter of 12% mainly driven by Rail construction
• Profitability driven by strong results from Environment and improved results in Rail construction, partly offset by weak results in Civil
• LTM Book-to-Bill at 1.0

Solid tender pipeline with high number of large projects

pipeline compared to Q2 22 mainly related to Civil and Environment, and a decrease of NOK 0.4 billion vs last year, related to Rail constructions

NOK 25.3 billion in proposed national budget for 2023 to rail related projects in 2023, with NOK 17.5 to investments and NOK 7.8 billion to operations,

OPERATIONAL REVIEW NRC GROUP SWEDEN High production and record high order backlog

Key Figures Notes

(NOK million)	Q3 2022	Q3 2021
Revenue	630	411
EBITA*	1	0
EBITA* margin	0.1%	0.1%
Order intake	1 321	576

• Revenue growth of 64% in local currency due to high volumes in Rail construction
• Improved results in Rail construction offset by weak results in Civil
• LTM Book-to-Bill at 1.8 in local currency

High tender activity expected to continue

NOK 12.7 billion tender pipeline¹ BNOK value, # of tenders, next 9 months #6 #4 #12 #31 Rail maintenance 8.7 4.0 Rail and Civil construction

MNOK >300 MNOK 100-300 MNOK 30-100

Notes

Increase of NOK 2.0 billion in tender pipeline vs Q2 22 and increase of NOK 4.0 billion compared to same period last year explained by both Rail and Civil construction and Maintenance.

OPERATIONAL REVIEW NRC GROUP FINLAND Good profitability and solid order backlog

Key Figures Notes

(NOK million)	Q3 2022	Q3 2021
Revenue	804	793
EBITA*	78	87
EBITA* margin	9.7%	10.9%
Order intake	316	1,409

• Higher volumes in Rail construction
• Good profitability in Rail construction and Light rail, weak results in Maintenance.
• LTM Book-to-Bill of 0.9 in local currency

Moderate tender pipeline

NOK 1.7 billion tender pipeline¹ Notes

MNOK >300 MNOK 100-300 MNOK 30-100

BNOK value, # of tenders, next 9 months Decreased by NOK 0.1 billion from Q2 22 pipeline related to Maintenance.

Decrease of NOK 2.2 billion from same period last year mainly related to reduced tender pipeline for Rail construction.

Continued high investment level expected for Light rail projects in the coming years.

Revised National Transport System Plan (2021 – 2032) during fall 2022.

SUMMARY

Q3 in brief

Financials

• Revenue growth of 17%
• Quarterly result in line with same period last year
• Year to date result improved with 34% compared to 2021
• Continued high order intake and record high order backlog

Operations

• Good profitability in Finland
• Continued improved results in Norway
• Strong growth in Sweden and results in line with last year

Outlook 2022

• Continued positive operational and financial development
• Strong revenue growth
• Moderate increase in EBITA* margin compared to 2021

Q4 2022 results 21 February

DISCLAIMER

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There may have been changes in matters which affect the companies herein subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the company/companies have not since changed, and we do not intend, and do not assume any obligation, to update or correct any information included in this Presentation.

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