Interim report January 1 – March 31, 2016 Peter Wågström President and CEO
Mattias Lundgren CFO
KMH, Stockholm
NCC Q1 2016
• Profit/loss after tax SEK -156 M (-204) • Improvement due to ‒ higher result from residential development/Bonava ‒ improved result from NCC Industry
Spinoff of Bonava – effects on the financial statement Accounting policy IFRS 5 • Bonava is recognized net on a single line under operations being discontinued in the income statement • Bonava’s sales are not eliminated while inter-company gains are eliminated • Eliminations from the balance sheet comply with previous reports • Bonava’s assets and liabilities are recognized separately on one line each • The order backlog and orders received are eliminated in the same manner as in previous reports • In cash flow, Bonava’s profit after net financial items is recognized separately, following which Bonava as a whole is included KMH, Stockholm
Q1 2016
Orders received
Net sales
Order backlog
Profit/loss after financial items
SEK 10.1 BN (11.1)
SEK 9.2 BN (10.3)
SEK 39.1 BN (38.8)
SEK -309 M (-243)
Nordic construction market outlook
Norsborgsdepån, Stockholm
Nordic construction market
Higher growth in construction volume than GDP 2016 EUR BN 140 120
Sweden
2.4%
3.1%
100 80
2.1%
Denmark
1.9%
GDP growth Nordic
2.0%
60 Finland
1.3% Construction output growth
40 20 0
Norway
2015
Source: Euroconstruct and NCC
20152015
2016e
2017e
Nordic construction market
Construction volume by segment EUR BN 140 5.3% 120
Civil engineering
4.3%
100 3.1%
80 60
Refurbishment
2.7%
40 20 0
1.8% 1.1%
New construction
2015
Source: Euroconstruct and NCC
1.7%
1.3% 0.4% 2015 2015
2016e
2017e
Nordic construction market
Market outlook – asphalt Asphalt, million tons 8.0%
24 18
7
Sweden
4
Denmark
4.0%
12
Growth asphalt 5
Finland
7
Norway
6 0 -1.7% -6
2015
Source: Euroconstruct and NCC
2015
2015
2016e
2017e
Nordic construction market
Market outlook – stone material Stone material, million tons 320
240
76
Sweden 5.0%
50
Denmark
85
Finland
82
Norway 1.3%
160 2.1% Growth stone material
80
0
2015
Source: Euroconstruct and NCC
2015
2015
2016e
2017e
Business Areas Q1 2016
New specialized organization • New strategy • Spin-off of Bonava
CEO Peter Wågström
Hercules (Piling)
NCC Industry
NCC Infrastructure
NCC Building
NCC PD
Jyri Salonen
Svante Hagman
Klaus Kaae
Carola Lavén
Stone Materials
Asphalt
Civil Engineering
Infra Services
SE NO
FI
DK
SE NO
FI
DK
NCC Industry CEO Peter Wågström
Hercules (Piling)
NCC Industry
NCC Infrastructure
NCC Building
NCC PD
Jyri Salonen
Svante Hagman
Klaus Kaae
Carola Lavén
Stone Materials
* NCC Housing will be distributed to shareholders in 2016
Asphalt
Civil Engineering
Infra Services
SE NO
FI
DK
SE NO
FI
DK
Slightly lower volumes in Q1 Stone material sold, thousands of tons
Asphalt sold, thousands of tons
8,000
3,000
7,000
2,500
6,000 2,000
5,000
1,500
4,000 3,000
1,000
2,000 500
1,000 0
Q1 2015
Q2
Q3
Q4
Q1 2016
0
Q1 2014
Q2
Q3
Q4
Q1 2016
Net sales in Q1 NCC Industry Product mix
Geographical distribution Finland 3%
Foundation Denmark
25%
25% Sweden
48%
Stone material 8%
27% Asphalt and paving
Norway
64%
NCC Industry – Division Hercules • Piling • Manufacture concrete piles • Retaining structures • Steel terminal • Steel reinforcement factory • Jet grouting/bored piles
NCC Infrastructure CEO Peter Wågström
Hercules (Piling)
NCC Industry
NCC Infrastructure
NCC Building
NCC PD
Jyri Salonen
Svante Hagman
Klaus Kaae
Carola Lavén
Stone Materials
Asphalt
Civil Engineering
Infra Services
SE NO
FI
DK
SE NO
FI
DK
Lower orders received NCC Infrastructure SEK BN 18
Q1 2015
Q1 2016
SEK BN 18
16
16
14
14
12
12
10
10
8
8
6
6
4
4
2
2
0
Orders received
Order backlog
0
2015
Orders received
Q1 2016, R12
Net sales
Product mix Q1 NCC Infrastructure Orders received
Net sales
Earthworks
37%
Other
22%
Operation and maintenance
15%
Road
11%
Railway Tunnel Bridge
10% 3% 2%
Earthworks
42%
Other
17%
Operation and maintenance
17%
Road
12%
Tunnel
5%
Railway
5%
Bridge
2%
Geographical distribution Q1 NCC Infrastructure Orders received
Denmark
Net sales
1% Finland
Denmark
6%
10% Norway
2% Finland
13% Norway
76%
25% 67%
Sweden
Sweden
Project example
NCC Infrastructure
• 60 bus stops, Gävleborg • Customer: Trafikverket • Turn key contract, SEK 25 million
NCC Building CEO Peter Wågström
Hercules (Piling)
NCC Industry
NCC Infrastructure
NCC Building
NCC PD
Jyri Salonen
Svante Hagman
Klaus Kaae
Carola Lavén
Stone Materials
Asphalt
Civil Engineering
Infra Services
SE NO
FI
DK
SE NO
FI
DK
Higher orderbacklog NCC Building SEK BN 30
Q1 2015
Q1 2016
SEK BN 30
25
25
20
20
15
15
10
10
5
5
0
Orders received
Order backlog
0
2015
Orders received
Q1 2016, R12
Net sales
Product mix Q1 NCC Building Orders receieved
Net sales
Residential
37%
Refurbishment
23%
Residential
40%
Refurbishment
School
12%
Other
Other
12%
Offices
Hospital
7%
School
Offices
7%
Hospital
Retail
1%
Retail
Industry
1%
Industry
22% 12% 10% 7% 5% 3% 1%
Geographical distribution Q1 NCC Building Orders received
Net sales
Finland
Finland
23%
Denmark 12%
9% Norway
24% 56%
51%
Sweden Denmark
16% 9% Norway
Sweden
Project example
NCC Building • 374 new residential rental units • Södra Ekkällan, Linköping • SEK 515 million
NCC Property Development CEO Peter Wågström
Hercules (Piling)
NCC Industry
NCC Infrastructure
NCC Building
NCC PD
Jyri Salonen
Svante Hagman
Klaus Kaae
Carola Lavén
Stone Materials
Asphalt
Civil Engineering
Infra Services
SE NO
FI
DK
SE NO
FI
DK
Property market outlook – offices CBD
Yield 2015
Stockholm
Vacancy rate 2015
Helsinki
Copenhagen
Oslo 0% Source: Newsec, NCC
2%
4%
6%
8%
10%
12% Vallensbæk Company House
Net sales Q1 NCC Property Development Product mix
Geographical distribution
Retail
Finland
4%
7% Sweden
Other/rental income
54%
42%
Office
Denmark
41%
38%
14% Norway
Project starts in Q1 Project
Type
Location
Lettable area, sqm
Letting ratio
CH Vallensbæk 4.1
Office
Denmark
6,100
0%
Alberga E
Office
Helsinki, Finland
5,800
0%
Arendal 2
Logistics
Gothenburg, Sweden
9,700
33%
Vattenbrunnen
Logistics
Upplands-Bro, Sweden
5,900
100%
Good lease in the quarter – 19,100 sqm Leased floor space, sqm
200,000
Leasable area beginning of quarter Leased in quarter
180,000 160,000 140,000
Previous leased area
120,000 100,000 80,000 60,000 40,000 20,000 0 2015 Q1
Q2
Q3
Q4
2016 Q1
Property portfolio Leasable space, sqm, in ongoing or completed projects not recognized in profit
200,000
15 16
18 14
150,000
No. of projects
14 Sweden
100,000
Norway
50,000
Denmark Finland 0 Q1 2015
Q2
Q3
Q4
Q1 2016
Mattias Lundgren CFO ViaSafe
Spinoff of Bonava – effects on the financial statement Accounting policy IFRS 5 • Bonava is recognized net on a single line under operations being discontinued in the income statement • Bonava’s sales are not eliminated while inter-company gains are eliminated • Eliminations from the balance sheet comply with previous reports • Bonava’s assets and liabilities are recognized separately on one line each • The order backlog and orders received are eliminated in the same manner as in previous reports • In cash flow, Bonava’s profit after net financial items is recognized separately, following which Bonava as a whole is included KMH, Stockholm
Income statement Jan.-Mar. 2016
Jan.-Mar. 2015
Apr. 15 – Mar. 16
9,197
10,311
52,002
426
434
4,425
Selling and administrative expenses
-708
-669
-2,804
Cost ratio
7.7%
6.5%
5.4%
-1
1
-8
-284
-235
1,613
-25
-8
-56
-309
-243
1,557
65
48
-285
-243
-195
1,273
88
-9
895
-156
-204
2,168
SEK M Remaining operations Net sales Gross profit
Other Operating profit/loss Financial items Profit/loss after financial items Tax Profit/loss for the period Profit from discontinued operations Profit/loss from remaining and discontinued operations
KMH, Stockholm
Cash flow SEK BN
5
Cash flow before financing
R12
4
SEK M From operating activities From property projects From housing projects Other working capital
3 2 1 0
Jan.-Mar. 2016
Jan.-Mar. 2015
Apr. 15Mar. 16
-73
-128
3,491
-371
-130
430
-877
-441
-261
311
-129
218
-1
Investing activities
-204
-170
-763
-2
Cash flow before financing
-1,213
-998
3,116
Q1 2015
Q2
Q3
Q4
Q1 2016
Operating profit/loss per business area Jan.-Mar. 2016
Jan.-Mar. 2015
Apr. 15 – Mar. 16
NCC Building
70
119
SEK554 M
Jan.-Mar. 2016
Jan.-Mar. 2015
NCC Infrastructure
-11
28
NCC430 HQ
-25
-24
-324
-386
435gains Internal
-27
-11
22
26
12
10
-40
-23
Group 413 adjustments -219 Other and eliminations 1,613
-40
-23
SEK M
NCC Industry NCC Property Development Other and eliminations Operating profit/loss excl. Bonava (Housing)
-283
-236
NCC Building Net sales, SEK M
Operating margin
7,500
5.0%
SEK M 6,000
4.0%
4,500
3.0%
3,000
2.0%
1,500
1.0%
0
0.0% Q1 2015
Q2
Q3
Q4
Q1 2016
Net sales
Jan.-Mar. Jan.-Mar. 2016 2015
Apr. 15Mar. 16
5,389
5,868
24,523
Operating profit
70
119
554
Operating margin, %
1.3
2.0
2.3
NCC Infrastructure Operating margin
Net sales, SEK M 8,000
4.0%
7,000
3.5%
SEK M
6,000
3.0%
Net sales
5,000
2.5%
4,000
2.0%
3,000
1.5%
2,000
1.0%
1,000
0.5%
0
0.0% -0.5%
-1,000 Q1 2015
Q2
Q3
Q4
Q1 2016
Jan.-Mar. Jan.-Mar. 2016 2015
Apr. 15Mar. 16
3,365
3,618
16,852
Operating profit/loss
-11
28
430
Operating margin, %
-0.3
0.8
2.6
NCC Industry RoCE, R12 12.0%
Net sales, SEK M 6,000
10.0%
5,000
SEK M Net sales
977
10,482
Operating profit
-324
-386
435
-36.5
-39.5
4.2
8.0%
3,000
6.0%
Operating margin, %
2,000
4.0%
RoCE, %
1,000
2.0%
0
0.0% Q2
Q3
Q4
Q1 2016
Apr. 15Mar. 16
888
4,000
Q1 2015
Jan.-Mar. Jan.-Mar. 2016 2015
10.9
NCC Property Development Net sales, SEK M 1,600
RoCE, R12
16%
Jan.-Mar. Jan.-Mar. 2016 2015
Apr. 15Mar. 16
1,400
14%
SEK M
1,200
12%
Net sales
93
472
3,049
1,000
10%
Operating profit
22
26
413
800
8%
Operating margin, %
23.7
5.6
13.5
600
6%
400
4%
200
2%
0
0% Q1 2015
Q2
Q3
Q4
Q1 2016
RoCE, %
8.2
Group financial objectives
Logistics, Brunna
Operating margin 5% Target ≥4
4%
3%
3.1%
3.1%
2015
Q1 2016, R12
2%
1%
0%
Revenue growth SEK M 60,000 -2.1%
Objective: 5% average annual revenue growth
50,000 40,000 30,000 20,000 10,000 0
2015
Q1 2016, R12
Equity/asset ratio and return on shareholders’ equity 30%
Equity/asset ratio
Return on shareholders' equity
25% Target ≥20%
20% 15% 10% 5% 0%
2015
Q1 2016, R12
Net indebtedness* / EBITDA Times 3.0 Restriction
