NCC (NCC) investor relations material

Executive summary

• Orders received increased 5.4% year-over-year to SEK 14.8 billion, marking the strongest level in a long period, with stable contracting earnings despite a harsh winter and robust order backlog.

• Operating profit in Contracting reached SEK 177 million with improved margins, despite a significant drop in revenues due to the removal of low-margin projects.

• Group EBIT was -237 MSEK, down from -170 MSEK, mainly reflecting negative seasonality and cold winter impacts in Industry.

• Property Development earnings remained stable, with letting ratio expected to reach ~90% after HQ relocation; no profit recognition from project sales.

• Board proposes a regular dividend of SEK 9.00 per share and an extra dividend of SEK 2.00 per share.

Financial highlights

• Net sales declined to SEK 9,650 M from SEK 11,077 M year-over-year, mainly due to seasonal effects and lower activity in Industry.

• Operating margin for Q1 was -2.5% (vs. -1.5% last year); rolling 12-month margin before items affecting comparability at 3.4%.

• Earnings per share after dilution was SEK -1.90 (vs. SEK -1.39); rolling 12 months EPS (excluding items affecting comparability) at SEK 13.4.

• Net debt/EBITDA at 0.81x, well below the target of <2.5x, with net debt at SEK 1.1 billion.

• Cash flow from operating activities was SEK -470 M (vs. SEK -359 M), seasonally and exceptionally low due to lower earnings and higher paid taxes.

Outlook and guidance

• Positive outlook for Industry and the group, supported by high state investments in infrastructure and strong order intake.

• Margins in Contracting expected to improve as low-margin projects exit the backlog.

• Net sales in Contracting and Building expected to decline slightly in Q2 and Q3, with recovery anticipated in the second half of the year.

• Market for residential and commercial properties remains weak, but public and industrial demand is strong.

• Company targets EPS ≥16 SEK (R12: 13.4 SEK) and net debt/EBITDA <2.5x.