NRC Group — Investor Presentation 2023

Aug 29, 2023

29 August 2023

2 nd quarter 2023 and 1st half 2023

CEO Henning Olsen CFO Ole Gulsvik

KEY FIGURES Q2 2023 Improved financial performance

REVENUE NOK 1.8 billion Q2 2022: NOK 1.9 billion

OPERATING CASH FLOW Q2 2022: NOK -90 million

EBIT adj. NOK 65 million

Q2 2022: NOK 60 million

EBIT adj. margin Q2 2022: 3.1% 3.6%

ORDER INTAKE NOK 107 million NOK 1.6 billion

Q2 2022: NOK 2.7 billion

ORDER BACKLOG Q2 2022: NOK 8.3 billion NOK 8.0 billion

HEALTH AND SAFETY Committed to providing a safe and secure workplace

LTI¹ 7.3 2022: 4.7 2022: 16.7

SICKNESS ABSENCE 3.8%

2022: 4.3% 2022: 1

TRI² 17.5

SERIOUS INJURIES

0

1) LTI: Injuries resulting in absence at least one full day per million man-hours (incl. subcontractors).

2) TRI: Frequency of injuries with and without absence for personnel (employees, rented workers and subcontractors) per million hours worked.

Figures per last twelve months per 30 June 2023 compared with last twelve months per 30 June 2022.

EU TAXONOMY Results 1st half 2023

	Eligible	Aligned
Turnover (revenue)	91% 2022: 88%	68% 2022: 69%
Operational expenses (OpEx)	92% 2022: 88%	71% 2022: 69%
Investments (CapEx)	91% 2022: 76%	77% 2022: 68%

PROFIT & LOSS Improved operational results

32 96 47 -41 60 91 28 -48 65 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 EBIT adj. NOK million

(Amounts in NOK million)	Q2 2023	Q2 2022	YTD Q2 2023	YTD Q2 2022	FY 2022
Revenue	1 797	1 912	3 088	3 088	7 030
Operating expenses	-1 678	-1 804	-2 965	-2 972	-6 695
Depreciation and amortisation1	-55	-49	-106	-97	-198
EBIT adj.	65	60	17	19	137
EBIT adj. margin	3,6 %	3,1 %	0,5 %	0,6 %	2,0 %
Adjusting items2	-1	-6	-2	-12	-378
Net financial items	-17	-14	-32	-28	-58
Share of profit from associates and JVs	0	0	0	0	-15
Taxes	-10	-8	12	5	-51
Net profit / loss	37	32	-6	-17	-364

Notes

• Revenue decreased 6% in Q2, and down 13% organically in local currency
• Improved EBIT adj. at NOK 65 million, up from NOK 60 million last year
• Operational margin up to 3.6% compared to 3.1% in Q2 2022

Proforma Group figures highlights positive trend¹

BACKLOG Short and long-term backlog remains solid

BALANCE SHEET Solid financial position - equity ratio at 44%

(Amounts in NOK million)	31.03.2023	31.03.2022	31.12.2022	Net interest-bearing debt
ASSETS
Intangible assets	2 602	2 883	2 493	NOK million
Right-of-use assets	560	490	564
Total other non-current assets	211	206	207
				1 178
Cash and cash equivalents	427	413	472
Other current assets	1 743	1 581	1 454		984
Total assets	5 544	5 573	5 191			891
EQUITY AND LIABILITIES
Total equity	2 447	2 646	2 312
Long-term lease liabilities	348	304	353
Other non-current interest-bearing liabilities	815	813	741
Other non-current liabilities	19	24	11
Short-term lease liabilities	174	154	175
Other interest-bearing current liabilities	58	151	153
Other current liabilities	1 683	1 480	1 445
Total equity and liabilities	5 544	5 573	5 191
Equity ratio	44 %	47 %	45 %

Net interest-bearing debt ex. leases: NOK 445 million

8

CASH FLOW Strong cash flow and improved cash position

Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23

FINANCIAL POSITION Reduced leverage ratio

Bank loan Bond

3,1

2,8

GREEN FINANCE Recieved highest rating from S&P Global Ratings

Established our first Green Finance Framework

• As a part of our commitment to provide sustainable transport solutions
• Highest rating, dark green, from external rating company S&P Global Ratings (formerly part of CICERO Shades of green)
• The framework can be used for future green financing products, and will drive cost of capital advantage

LCCR - Low Carbon Climate Resilient

FINANCIAL POSITION

Operational review

OPERATIONAL REVIEW NRC GROUP NORWAY Continued profitability improvement

EBIT adj. LTM Order backlog (total)

Key Figures Notes

(NOK million)	Q2 2023	Q2 2022
Revenue	524	686
EBIT adj.	23	18
EBIT adj. margin	4.4%	2.6%
Order intake	277	918

• Revenue growth in the quarter of -24% and organic growth of -21%
• Continued improvement in profitability driven by improved results in Civil construction, partly offset by weaker result in demolition & recycling
• Book-to-Bill at 0.5 in the quarter

Tender pipeline remains solid albeit down from last quarter

MNOK >300 MNOK 100-300 MNOK 30-100

pipeline compared to Q1 23 and an increase by 0.2bn compared to Q2 22

Compared to Q1 23 the tender pipeline for Civil construction and Environment decreased by NOK 3.2 billion

Tender pipeline for rail construction unchanged compared to Q1 23

OPERATIONAL REVIEW NRC GROUP SWEDEN Gaining positive momentum from actions initiated

Key Figures Notes

(NOK million)	Q2 2023	Q2 2022
Revenue	552	516
EBIT adj.	10	2
EBIT adj. margin	1.9%	0.3%
Order intake	251	1 078

• Revenue growth of 7 % and 1% in local currency
• Turnaround according to plan and actions yield results
• In August the Group signed the final agreement to divest ongoing projects in Karlstad
• Improved profitability in Q2, with positive financial momentum entering second half of 2023
• Book-to-Bill at 0.5 in local currency

Proforma Sweden results at break-even¹

Tender activity in Rail construction remains high

Notes

Total pipeline decrease of NOK 5.3 billion compared to Q1 23 and down 1.3 billion compared to same period last year

The reduction is related to less Maintenance tenders available, while Rail construction market remains high activity

Tender pipeline for Civil construction excluded from overview due to discontinued Civil operations in Karlstad

OPERATIONAL REVIEW NRC GROUP FINLAND Solid order intake in Q2

Key Figures Notes

(NOK million)	Q2 2023	Q2 2022
Revenue	726	712
EBIT adj.	42	50
EBIT adj. margin	5.8%	7.1%
Order intake	1 044	674

EBIT adj. LTM Order backlog (total)

• Revenue growth of 2% and negative -12% in local currency
• Somewhat weaker profitability compared to Q2 last year due to lower margins in Rail construction and costs related to growth initiatives within the newly established Civil unit
• Book-to-Bill of 1.4 in local currency

Rail construction tender pipeline remains high

pipeline from Q1 23 and an increase of 4.2 billion compared to Q2 22

Increase in Rail construction by NOK 1.6 billion compared to Q1 23. Rail pipeline totals NOK 4.1 billion and Civil 1.9 billion.

Limited Maintenance areas up for tendering next 9 months.

Secured first Civil construction contract worth EUR 3.9 million in Q2 23.

SUMMARY

Q2 in brief

Financials

• Revenue decreased 6% in Q2 and down 13% organically in local currency
• Improved profitability with EBIT adj. of NOK 65 million, an increase from NOK 60 million last year
• Order backlog remains high

Operations

• Continued improved profitability in Norway
• Solid order intake in Finland, albeit profitability slightly down in the quarter
• Gaining positive financial momentum in Sweden from actions initiated
• Anders Gustafsson appointed as new Group CEO

Unchanged outlook 2023

• Continued positive operational and financial development
• Slight decrease in revenue
• Moderate increase in EBIT adj. margin

20

Q3 2023 results 24 November

Appendix

(Amounts million) in NOK	Q1 2021	Q2 2021	Q3 2021	Q4 2021	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023	Q2 2023	FY 2020	FY 2021	FY 2022
Revenue	129 1	529 1	698 1	601 1	176 1	912 1	988 1	954 1	291 1	797 1	6 449	957 5	030 7
EBITA*	-59	4 7	102	5 0	-37	6 3	9 4	3 1	-85	6 8	5 0	139	151
of software Amortisations IT investments	-6	-15	-6	-4	-3	-3	-3	-3	-4	-4	-25	-30	-13
Restructuring items	0	0	0	0	0	0	0	0	6	1	0	0	0
Write-down operations be discontinued to	0	0	0	0	0	0	0	0	3 5	0	0	0	0
adj. EBIT	-65	3 2	9 6	4 7	-41	6 0	9 1	2 8	-48	6 5	2 5	110	137
adj. EBIT %	-5,7 %	2,1 %	5,7 %	2,9 %	-3,5 %	3,1 %	4,6 %	1,4 %	-3,7 %	3,6 %	0,4 %	1,8 %	2,0 %

Impact of change from EBITA* to EBIT adj.

Reconciliation of EBIT adj.

(Amounts million) in NOK	Q2 2023	Q2 2022	YTD 2023	YTD 2022	FY 2022
profit/loss Operating (EBIT)	6 4	5 4	1 4	7	-240
Adjusting items
Gain from sale of Gravco	0	0	-40	0	0
M&A expenses	0	0	1	1	2
Amortisation and impairment from PPA*	0	6	0	1 2	376
Restructuring items	1	0	6	0	0
Write-down operations to be discontinued	0	0	3 5	0	0
Adjusting total items,	1	6	2	1 2	378
adj. EBIT	6 5	6 0	1 7	1 9	137
Depreciation	5 1	4 5	9 9	9 0	185
of software Amortisation IT investments	4	3	7	6	1 3
adj. EBITDA	119	108	123	116	335

** PPA (purchase price allocation) refers to merger related fair value adjustments

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