Interim report January 1 September 30, 2017 Peter Wågström President and CEO Mattias Lundgren CFO 1
NCC Q3 2017 Lower net sales in NCC Building Impairment losses in NCC Infrastructure Good earnings in NCC Industry High order backlog Just Health Center, Helsinki 2
Q3 2017 Orders received Net sales Order backlog Profit after financial items SEK 12.8 BN (12.6) SEK 13.1 BN (13.6) SEK 52.2 BN (47.2) SEK 365 M (471) Hotel AtSix, Stockholm 3
January - September 2017 Orders received Net sales Order backlog Profit after financial items SEK 40.7 BN (40.2) SEK 38.3 BN (36.4) SEK 52.2 BN (47.2) SEK 1,169 M (711) Hotel AtSix, Stockholm 4
Nordic construction market outlook KMH, Stockholm 5
Nordic construction market outlook Higher growth in construction volume than GDP 2017 EUR BN 140 7.2% 120 Norway 100 80 60 40 20 2.2% 2.0% 5.3% 2.1% Finland Denmark Sweden 2.5% 3.9% 2.3% Construction output growth Nordic GDP growth Nordic 0 Source: Euroconstruct and NCC 2015 2017 2018 6
Nordic construction market outlook Construction volume by segment EUR BN 140 14.5% 120 100 80 9.7% 60 6.9% 5.7% 6.9% Civil engineering 40 20 0 3.4% 2.2% 2.0% 2.0% 0.6% 2.1% 1.8% Source: Euroconstruct and NCC 2015 2017 2018 New construction (Building) Refurbishment (Building) 7
Nordic construction market outlook Market outlook asphalt and stone material 8% Growth stone material Growth asphalt 6% 4% 2% 0% Source: Euroconstruct and NCC 2015 2017 2018 8
NCC Building Novozymes, Denmark 9
Geographical distribution Jan. - Sep. 2017 NCC Building Orders received Net sales Finland 14% (18) Norway 5% (6) Finland 22% (25) Denmark 12% (7) Sweden 69% (69) Norway 8% (9) Sweden 56% (51) Denmark 14% (15) 10
Product mix Jan. - Sep. 2017 NCC Building Orders received Net sales Residential 34% (35) Residential 38% (39) Refurbishment / Conversion Public Buildings 8% (4) 24% (17) Refurbishment / Conversion Educational 10% (7) 21% (23) Offices 7% (11) Offices 8% (9) Educational 8% (9) Health Care 7% (6) Other 7% (7) Other 6% (6) Health Care 7% (14) Public Buildings 4% (4) Industry / Logistics 3% (2) Retail 3% (3) Retail 2% (1) Industry / Logistics 3% (3) 11
Higher order backlog NCC Building SEK BN 35 Q3 Q3 2017 SEK BN 30 2017 R12 30 25 25 20 20 15 15 10 10 5 5 0 Orders received Order backlog 0 Orders received Net sales 12
Project example Falkoner Center in Copenhagen Rebuilding and extension of the Falkoner Center, Customer: ATP Ejendomme Order value: SEK 640 m 13
Project example Kapellgärdet Arena property block in Uppsala 152 apartments Customer: Bonava Order value: SEK 250 m 14
Project example Police station in Stockholm s Rinkeby district Redevelopment of a residential building into a police station Customer: Familjebostäder Order value: SEK 520 m 15
NCC Infrastructure Harbour, Norrtälje 16
Geographical distribution Jan. - Sep. 2017 NCC Infrastructure Orders received Net sales Denmark 5% (4) Norway 12% (12) Finland 2% (4) Norway 18% (23) Denmark 5% (6) Finland 2% (3) Sweden 75% (68) Sweden 81% (80) 17
Product mix Jan. - Sep. 2017 NCC Infrastructure Orders received Net sales Groundworks 28% (25) Groundworks 29% (29) Industry 17% (7) Roads 24% (21) Roads Energy & Water Treatment Operation and maintenance 16% (30) 15% (14) 10% (18) Operation and maintenance Industry Energy & Water Treatment 14% (21) 13% (8) 12% (12) Railways 9% (4) Other 5% (3) Other 5% (2) Railways 3% (6) 18
Higher orders received NCC Infrastructure SEK BN Q3 Q3 2017 20 18 16 14 12 10 8 6 4 2 0 Orders received Order backlog SEK BN 20 2017 R12 15 10 5 0 Orders received Net sales 19
Project example Railway in consortium with Spain s OHL New section of railway between Lund and Arlöv in Skåne, Sweden Customer: Swedish Transport Administration Order value: SEK 1 billion Picture: Swedish Transport Administration 20
Eysturoy tunnel and Sandoy tunnel, Faroe Islands 21
Two road tunnels in the Faroe Islands Order value: First tunnel SEK 1.5 billion Second tunnel SEK 1.2 billion Order for the first tunnel registered in NCC Infrastructure, fourth quarter 22
NCC Industry 23
Increased stone volumes in Q3 Stone material sold, thousands of tons 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Asphalt sold, thousands of tons 3,000 2,500 2,000 1,500 1,000 500 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 24
Net sales Jan. - Sep. 2017 NCC Industry Product mix Geographical distribution Foundation 12% (9) Finland 12% (11) Asphalt and paving 65% (68) Norway 14% (14) Stone material 23% (23) Denmark 18% (20) Sweden 56% (55) 25
NCC Property Development Torsplan, Stockholm 26
Property market outlook offices CBD Stockholm Yield 2017 (F) Vacancy rate 2017 (F) Helsinki Copenhagen Oslo Source: Newsec, NCC 0% 2% 4% 6% 8% 10% Torsplan 2, Stockholm 27
Property portfolio Leasable space, sqm, in ongoing or completed projects not recognized in profit 200,000 150,000 16 15 14 14 18 17 18 19 19 18 No. of projects 100,000 16 Sweden 50,000 Norway Denmark Finland 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 28
1,800 sqm leased in the quarter Leased floor space, sqm* 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Remaining unlet area Let during quarter Previously let area Let during quarter (% of available unlet area) 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 0% 29
Property portfolio 100% 90% 80% 70% 60% 50% 40% Letting ratio Completion ratio 30% 20% 10% 0% Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 30
Mattias Lundgren CFO Dome of Visions, Stockholm 31
Income statement SEK M Jul.-Sep. 2017 Jul.-Sep. Oct.16- Sep. 17 Jan.-Dec. Net sales 13,102 13,572 54,809 52,934 Gross profit 935 1,026 4,734 4,450 Selling and administrative expenses -550-542 -2,840-2,912 Cost ratio 4.2% 4.0% 5.2% 5.5% Other 5 19 7-85 Operating profit 390 503 1,901 1,453 Financial items -25-32 -101-112 Profit after financial items 365 471 1,799 1,341 Tax -62-84 -293-225 Profit for the period 303 387 1,507 1,116 Myllytie 4b, Helsinki 32
Cash flow SEK BN 5 Cash flow before financing 4 3 2 1 0-1 -2-3 Q1 2015 Q2 Q3 Q4 Q1 R12 Q2 Q3 Q4 Q1 2017 Q2 Q3 SEK M From operating activities From property projects From housing projects Other working capital Jul.-Sep. 2017 Jul.-Sep. Jan.-Dec. 503 397 1,506-268 345 506 0 0-606 441-788 -237 Investing activities -233-59 -1,181 Cash flow before financing 443-106 -11 33
Operating profit/loss per business area SEK M Jul.-Sep. 2017 Jul.-Sep. Jan.-Dec. NCC Building 116 1 489 NCC Infrastructure -65 3 SEK M 162 NCC HQ and NCC Industry 409 442 International 533 proj. Jul.-Sep. 2017 Jul.-Sep. 12 54 NCC Property Development -9 32 Internal 327gains -10-1 Other and eliminations -62 25 Other -57 Group adjustment Operating profit excl. Bonava (Housing) 390 503 1,453 Other and eliminations -64-28 -62 25 Car park Skruven, Stockholm 34
NCC Building Net sales, SEK M 7,500 6,000 Operating margin 5% 4% SEK M Jul.-Sep. 2017 Jul.-Sep. Oct. 16- Sep. 17 Jan.-Dec. Net sales 5,346 6,033 24,576 25,681 4,500 3% Operating profit 116 1 584 489 3,000 2% Operating margin, % 2.2 0.0 2.4 1.9 1,500 1% 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 0% 35
NCC Infrastructure Net sales, SEK M Operating margin 8,000 7,000 6,000 5,000 4.0% 3.5% 3.0% 2.5% SEK M Jul.-Sep. 2017 Jul.-Sep. Oct. 16- Sep. 17 Jan.-Dec. Net sales 4,472 3,986 17,820 17,007 4,000 3,000 2.0% 1.5% Operating profit -65 3 55 162 2,000 1,000 1.0% 0.5% Operating margin, % -1.5 0.1 0.3 1.0 0 0.0% -1,000-0.5% -2,000-1.0% -3,000 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 Q3-1.5% 36
NCC Industry Net sales, SEK M RoCE, R12 4,000 3,500 16% 14% SEK M Jul.-Sep. 2017 Jul.-Sep. Oct.16- Sep. 17 Jan.-Dec. 3,000 12% Net sales 4,051 3,594 11,795 10,760 2,500 2,000 1,500 10% 8% 6% Operating profit Operating margin, % 409 442 561 533 10.1 12.3 4.8 4.9 1,000 500 4% 2% RoCE, % 12.7 13.5 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 0% 37
NCC Property Development Net sales, SEK M RoCE, R12 2,200 2,000 1,800 1,600 22% 20% 18% 16% SEK M Jul.-Sep. 2017 Jul.-Sep. Oct. 16- Sep. 17 Jan.-Dec. Net sales 168 781 4,017 2,823 1,400 1,200 14% 12% Operating profit -9 32 852 327 1,000 800 10% 8% Operating margin, % -5.1 4.1 21.2 11.6 600 400 6% 4% RoCE, % 21.1 7.0 200 2% 0 Q1 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 Q2 Q3 0% 38
Group financial objectives Käppalaverket, Stockholm 39
Operating margin 5% 4% Target 4% 3% 2% 2.7% 3.5% 1% 0% Q3 2017, R12 40
Revenue development SEK M 60,000 50,000 40,000 3.2% (average annual growth 1.8%) Objective: 5% average annual revenue growth 30,000 20,000 10,000 0 2015 Q3 2017, R12 41
Equity/asset ratio and return on shareholders equity 30% Return on shareholders' equity* Equity/asset ratio 25% 20% Target 20% 15% 10% 5% 0% Q3 2017, R12 Revaluation effect pensions SEK -7 M *Return on equity is calculated based on NCC s earnings excluding Bonava 42
Net indebtness Times 3.0 2.5 Restriction <2.5 times net indebtedness* / EBITDA 2.0 1.5 1.0 0.5 0.0-0.5 * Excl. pension liability Q3 2017, R12 43
Gustavslund, Stockholm 44
Summary Lower net sales and result in Q3 NCC Building and NCC Infrastructure focus on delivering on the order backlog NCC Industry on track NCC Property Development focus on project starts High order backlog and favorable market outlook 45
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Contact information and calendar IR Manager Johan Bergman Tel: +46 (0)70-354 80 35 johan.bergman@ncc.se Chief Financial Officer Mattias Lundgren Tel: +46 (0)70-228 88 81 mattias.l.lundgren@ncc.se Financial Calendar 2018 25 Jan. 2018 Year-end report 2017 11 Apr. 2018 Annual General Meeting 25 Apr. 2018 Interim report Jan. Mar. 18 Jul. 2018 Interim report Jan. Jun. 25 Oct. 2018 Interim report Jan. Sep. 47