NRC Group — Investor Presentation 2023

Feb 27, 2024

27 February 2024

4 th quarter 2023

CEO Anders Gustafsson CFO Ole Gulsvik

NRC GROUP

Improved operational performance in many areas

Results overall in line with 2022

2

Financial position solid, backed up by robust cashflow

3

New strategic wins across our markets

Going into 2024

New wins setting a positive tone for the new year

RAIL: NORWAY

Rehabilitation and upgrading of the catenary infrastructure on the railway between Hønefoss and Nesbyen.

Our share in this joint venture is valued at approximately NOK 436 million. Work will commence in March 2024 and is scheduled for completion in autumn 2027

CATENARY: SWEDEN RAIL: FINLAND

Catenary work on the railway connection between Alingsås and Olskroken for The Swedish Transport Administration.

Valued at approximately SEK 456 million. Involve rail services such as electro and groundwork. The work will commence in March 2025 and is scheduled for completion in November 2027.

Rail construction, groundworks, foundation, bridges and platforms for Area 2 at Espoo City Rail for FTIA.

Our share is 50% valued at approximately EUR 18 million. The work will commence in February 2024 and is scheduled for completion in June 2028.

NRC Group Our main markets

High demand for infrastructure – strong tender pipeline

NOK 34 billion tender pipeline in Group¹ Notes

• countries
• Solid increase from 2022
• Foundation for future profitable growth for NRC Group

EU TAXONOMY Unique position in our market

	Eligible	Aligned
Turnover (revenue)	98% 2022: 87%	72% 2022: 67%
Operational expenses (OpEx)	99% 2022: 87%	74% 2022: 67%
Investments (CapEx)	98% 2022: 81%	76% 2022: 73%

HEALTH AND SAFETY Committed to providing a safe and secure workplace

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

2) Injury that results in prolonged disability

PROFIT & LOSS Operating profit in line with last year

NOK million and percent

	Revenue and EBIT adj. (Amounts in NOK million)				Q4 2023	Q4 2022	FY 2023	FY 2022
NOK million and percent				Revenue	1 800	1 954	6 732	7 030
			160	Operating expenses 2,5 %	-1 723	-1 874	-6 400	-6 695
	7	030	137	Depreciation and amortisation1	-53	-53	-211	-198
6 449		6 732	140 121	EBIT adj. 2,0 %	24	28	121	137
6 193	5 957		1,8 % 2,0 % 120 110 1,8 %	EBIT adj. margin 1,5 %	1.4 %	1.4 %	1.8 %	2.0 %
			100	Adjusting items2	-7	-359	-16	-378
				1,0 % Net financial items	-9	-15	-59	-58
			80	Share of profit from associates and JVs	-2	-6	-2	-15
			0,6 %	0,5 % Taxes	-12	-41	-8	-51
			60 0,4 %	Net profit / loss 0,0 %	-6	-393	37	-364

Notes

• 2023 revenues slightly decreased from NOK 7.0bn to NOK 6.7bn
• Full year EBIT adj. NOK 121m and EBIT adj. margin at 1,8%
• Positive Net profit of NOK 37m for the year and an EPS of NOK 0.52

OPERATIONAL REVIEW NRC GROUP NORWAY Continued improvement

Revenue and EBIT adj. Order backlog (total)

Key Figures Notes

(NOK million)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	524	635	2 136	2 373
EBIT adj.	16	31	81	80
EBIT adj. margin	3.0%	4.8%	3.8%	3.4%
Order intake	714	563	1 659	2 370

• EBIT adj. of NOK 81 million in 2023 compared to NOK 80 million in 2022 (2022 proforma adjusted for Gravco NOK 65 million)
• Challenging markets in demolition and recycling business offset by continued good results in other divisions
• High order intake and book-to-bill at 1.4x in the quarter strong trend continued after the end of quarter

Revenue and EBIT adj. Order backlog (total)

Key Figures Notes

(NOK million)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	538	646	1 877	2 080
EBIT adj.	4	-31	0	-52
EBIT adj. margin	0.8%	-4.8%	0.0%	-2.5%
Order intake	748	499	1 553	3 111

• Sweden turnaround completed break-even operating result in 2023 after five years of losses
• Improved project control and tender processes to drive further improvements
• Good order backlog for 2024 with strong order intake and book-to-bill at 1.4x in the quarter

OPERATIONAL REVIEW NRC GROUP FINLAND Challenging year – solid platform for improvement

Key Figures Notes

(NOK million)	Q4 2023	Q4 2022	FY 2023	FY 2022
Revenue	751	677	2 753	2 582
EBIT adj.	14	31	78	145
EBIT adj. margin	1.9%	4.6%	2.8%	5.6%
Order intake	563	192	2 420	1 479

• Reduced profitability in Rail construction, mainly due to additional writedowns of a large railway yard renewal project
• Measures to improve profitability identified execution started
• Improved order intake and strong pipeline

BACKLOG Strong order intake – continued into Q1

BALANCE SHEET Net debt and leverage ratio reduced

CASH FLOW Record-high cash flow from operations

SUMMARY

2023 in brief

Financials

• Full-year revenue of NOK 6.7 billion (NOK 7.0 billion)
• Operating margin in 2023 of 1.8% (2.0%)
• Record-high cashflow from operations

Market

• Solid order intake and tender pipeline still at record-high level
• Strong sustainable profile

Operations

• Continued good profitability in Norway
• Ongoing successful transformation in Sweden
• Profitability in Finland down from peak levels, remains in line with peers

Outlook

• For 2024, we expect profitable growth, and positive operational and financial development, with slight increase in revenue and EBIT adj. margin
• Continued focus on measures to improve profitability committed to achieving long-term profitability above 5%
• Forthcoming strategy period to be presented in a CMU during first half of 2024

Q1 2024 results 23 May

Appendix

Impact of change from EBITA* to EBIT adj.

Impact of change in KPI from EBITA* to EBIT adj.

(Amounts million) in NOK	Q1 2021	Q2 2021	Q3 2021	Q4 2021	Q1 2022	Q2 2022	Q3 2022	Q4 2022	Q1 2023	Q2 2023	Q3 2023	Q4 2023	FY 2020	FY 2021	FY 2022	FY 2023
Revenue	1 129	1 529	1 698	1 601	1 176	1 912	1 988	1 954	1 291	1 797	1 844	1 800	6 449	5 957	7 030	6 732
EBITA*	-59	4 7	102	5 0	-37	6 3	9 4	3 1	-85	6 8	7 6	1 3	5	0 139	151	7 2
of software Amortisations IT investments	-6	-15	-6	-4	-3	-3	-3	-3	-4	-4	-3	-4	-25	-30	-13	-15
Restructuring items	0	0	0	0	0	0	0	0	6	1	3	1 2		0 0	0	2 1
Write-down be discontinued operations to	0	0	0	0	0	0	0	0	3 5	0	4	3		0 0	0	4 3
adj. EBIT	-65	3 2	9 6	4 7	-41	6 0	9 1	2 8	-48	6 5	8 0	2 4	2	5 110	137	121
adj. EBIT %	-5,7 %	2,1 %	5,7 %	2,9 %	-3,5 %	3,1 %	4,6 %	1,4 %	-3,7 %	3,6 %	4,3 %	1,4 %	0,4 %	1,8 %	2,0 %	1,8 %

Reconciliation of EBIT adj.

(Amounts million) in NOK	Q4 2023	Q4 2022	FY 2023	FY 2022
profit/loss (EBIT) Operating	1 7	-332	105	-240
Adjusting items
Gain from sale of Gravco	0	0	-40	0
M&A expenses	-8	1	-7	2
and from PPA* Amortisation impairment	0	358	0	376
Restructuring items	2 1	0	2 1	0
Write-down be discontinued operations to	3	0	4 3	0
Adjusting items, total	7	359	1 6	378
adj. EBIT	2 4	2 8	121	137
Depreciation	4 9	5 0	197	185
of software Amortisation IT investments	4	3	1 5	1 3
adj. EBITDA	7 7	8 1	332	335

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

Financial position and cash flow

(Amounts in NOK million)	31.12.2023	31.12.2022	(Amounts in NOK million)	Q4 2023	Q4 2022	FY 2023	FY 2022
ASSETS
Intangible assets	2 557	2 493	Profit/loss before tax	6	-353	45	-313
Right-of-use assets	542	564
Total other non-current assets	171	207	Net cash flow from operating activities	306	160	376	235
Cash and cash equivalents	369	472	Net cash flow from investing activities	18	-9	89	-29
Other current assets	1 504	1 454
Total assets	5 142	5 191	Net cash flow from financing activities	-295	-93	-553	-366
EQUITY AND LIABILITIES			Net change in cash and cash equivalents	30	58	-88	-160
Total equity	2 430	2 312	Cash and cash equivalents at the end of the period	369	472	369	472
Long-term lease liabilities	341	353
Other non-current interest-bearing liabilities	572	741
Other non-current liabilities	16	11
Short-term lease liabilities	162	175
Other interest-bearing current liabilities	55	153
Other current liabilities	1 566	1 445
Total equity and liabilities	5 142	5 191
Equity ratio	47 %	45 %

DISCLAIMER

This draft presentation (hereinafter referred to as the "Presentation") has been prepared exclusively for information purposes and does not constitute an offer to sell or the solicitation of an offer to buy any financial instruments.

This Presentation includes and is based on, among other things, forward-looking information and statements. Such forward-looking information and statements are based on current expectations, estimates and projections. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. We cannot give any assurance as to the correctness of such information and statements.

Several factors could cause the actual results, performance or achievements of the companies mentioned herein to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this Presentation, including, among others, risks or uncertainties associated with the company's business, segment, development, growth management, financing, market acceptance and relations with customers, and, more generally, general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of these risks or uncertainties materialise, or should underlying assumption prove incorrect, actual results may vary materially from those described in this document. We do not intend, and do not assume any obligation, to update or correct the information included in this Presentation.

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.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo City Court AS exclusive venue.