Interim report January 1 March 31, 2016

Interim report January 1 – March 31, 2016 Peter Wågström President and CEO Mattias Lundgren CFO KMH, Stockholm NCC Q1 2016 • Profit/loss after ta...
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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