Interim report January 1 - June 30, 2015 Peter Wågström President and CEO Ann-Sofie Danielsson Chief Financial Officer Rotebro bridge, Stockholm 2015-07-17 NCC AB 1
Rotebro bridge, Stockholm 2015-07-17 NCC AB 2
Rotebro bridge, Stockholm 2015-07-17 NCC AB 3
Q2 2015 in brief Orders received Order backlog SEK 15.8 BN (17.3) SEK 58.4 BN (56.7) Net sales Profit after financial items SEK 14.2 BN (13.5) SEK 541 M (576) Wiesenweg, Köln 2015-07-17 NCC AB 4
January - June 2015 in brief Orders received Order backlog SEK 29.1 BN (30.5) SEK 58.4 BN (54.8, Dec. 31 2014) Net sales Profit after financial items SEK 25.4 BN (23.3) SEK 287 M (336) 2015-07-17 NCC AB 5
Trends in Nordic construction market Sweden Favorable trend in all segments Norway Favorable trend in infrastructure Denmark Growth in Copenhagen and Aarhus – residential and other buildings, energy renovation Finland Challenging market Hercules factory, Västerås. 2015-07-17 NCC AB 6
Increasing net sales NCC Construction SEK BN Orders received, quarter Order backlog Orders received R12 Net sales, R12 50 45 40 35 30 25 20 15 10 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 2015-07-17 NCC AB 7
Increased share of small/ medium projects NCC Construction Project size, orders received Project size, order backlog Total SEK 10.6 BN Total SEK 37.5 BN SEK M 100% <5 6% 5-10 SEK < 5 M 90% 7% 10-25 25-50 6% Q2 2015 80% SEK 5-10 M 4% Q2 2014 50-100 70% 10% SEK 10-25 M 8% 60% 14% SEK 25-50 M 50% 100-300 10% 40% 17% SEK 50-100 M 14% 30% 36% SEK 100-300 M 20% 32% >300 10% 10% SEK > 300 M 25% 0% Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2015-07-17 NCC AB 8
Geographical distribution Orders received, NCC Construction SEK M Q2 2014 Q2 2015 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 Sweden Denmark Finland Norway 2015-07-17 NCC AB 9
Good order intake in residential Orders received, NCC Construction SEK M Q2 2014 Q2 2015 6 000 5 000 4 000 3 000 2 000 1 000 0 Civil engineering Residential Other buildings 2015-07-17 NCC AB 10
A selection of construction projects in Q2 Expansion of E22 outside Kalmar, Sweden Brynsengfaret School, Oslo, Norway SEK 270 M SEK 260 M Residential at Islands Brygge in Copenhagen, Denmark Refurbishment and expansion of the Harju campus in Finland SEK 360 M SEK 270 M 2015-07-17 NCC AB 11
Several major partnering agreements signed in Q2 New Children’s hospital, Gothenburg, ≈ SEK 850 M Expansion of Södersjukhuset, Stockholm, ≈ SEK 1 BN Three hospitals in Sörmland, ≈ SEK 3 BN To be registered in coming quarters Södersjukhuset, Stockholm 2015-07-17 NCC AB 12
Trends in stone material, asphalt and road service The Nordic m arket Stone material Stable demand Asphalt Favorable demand Road service Stable demand 2015-07-17 NCC AB 13
Slightly lower volume of stone material Volum es of stone m aterial sold, thousands of tons 8 273 7 862 Q2 Q2 2014 2015 Ohkola quarry, Finland 2015-07-17 NCC AB 14
… slightly higher asphalt volumes Volum es of asphalt sold, thousands of tons 1 985 1 930 Q2 Q2 2014 2015 2015-07-17 NCC AB 15
Asphalt case in Norway The Norwegian Competition Authority imposed a fine of NOK 140 million on NCC for unlawful cooperation in Trøndelag from 2005 until 2008 In 2014, the District Court in Norway reduced the fine to NOK 40 million The Court of Appeal in Norway decided to raise the fine imposed on NCC in the asphalt case from NOK 40 million to NOK 150 million NCC has earlier made a provision based on Norwegian case law NCC has until mid-September to appeal the judgment to the Supreme Court in Norway 2015-07-17 NCC AB 16
Trends in residential markets Private customers Favorable market in Sweden and Germany Stable demand in St. Petersburg Challenging market in Finland Local variation in Norway Good demand in Copenhagen Investor markets Strong demand for investor packages in Germany, Sweden and Finland Provinzialstrasse, Ahrstrasse, Niederkassel, Germany 2015-07-17 NCC AB 17
Higher sales to private customers No. of housing units sold 1,469 1,472 195 Investor packages 294 St. Petersburg Baltic Countries Germany Finland Denmark Norway Sweden Q2 Q2 2014 2015 Metropolitan, Uppsala 2015-07-17 NCC AB 18
High sales rate For private customers For investors Total Jun. 31, Jun. 31, Jun. 31, Jun. 31, Jun. 31, Jun. 31, 2015 2014 2015 2014 Number of housing units 2015 2014 Ongoing production 6,538 6,014 1,901 1,600 8,439 7,614 Sales rate, % 70 54 93 100 75 64 Sales including bookings, % 78 62 93 100 81 70 Completion rate, % 53 50 72 50 57 50 Hattingen, Gartenkamp, Germany 2015-07-17 NCC AB 19
Main starts in Sweden No. of housing start s 1,568 1,403 294 326 Investor packages St. Petersburg Baltic Countries Germany Finland Denmark Norway Sweden Q2 Q2 2014 2015 Årstaliden, Stockholm 2015-07-17 NCC AB 20
Some of the started housing projects in Q2 Brahenportti, Turku, Finland, Strandtorvet, Copenhagen, Denmark 38 units 25 units Grand Central, Södertälje, Sweden Götelstraße, Berlin, Germany 18 units 42 units 2015-07-17 NCC AB 21
More units to be completed 2015: 3,539 (2,602) Estim ated com pletion No. of housing units 2 000 1 800 Investor packages 1 600 Sweden 1 400 Norway 1 200 Denmark Finland 1 000 Germany 800 Baltic countries 600 St. Petersburg 400 Portion sold 106 sold and 200 completed 0 housing units, to Q3 Q4 Q1 2016 Q2 Q3 Q4 Later be recognized 2015 2016 2016 2015-07-17 NCC AB 22
Housing portfolio Housing for private custom ers, ongoing production June 30, 2015 (Dec. 31 2014) Number of housing units Estimated value Sweden Sweden 47% (41) 32% (29) Finland Finland 7% (8) 6% (7) St. Petersburg St. Petersburg 11% (11) 36% (36) Baltic Countries Baltic Countries 2% (2) 1% (1) Germany Germany 16% (17) 19% (20) Denmark Denmark 11% (12) 5% (4) Norway Norway 2% (4) 5% (8) 2015-07-17 NCC AB 23
Trends in Nordic property market Investor market High interest in the Nordic market Finland • Cautious investors Rental market Strong demand in Sweden Stable in Denmark Weakening in Norway Weak demand in Finland Frederiks Plads, Aarhus, Denmark 2015-07-17 NCC AB 24
Good lease in the quarter – 23,900 sqm Leased floor space, sqm 300 000 Leasable area beginning of quarter Leased in quarter 250 000 Previous leased area 200 000 150 000 100 000 50 000 0 2012 Q2 Q3 Q4 2013 Q2 Q3 Q4 2014 Q2 Q3 Q4 2015 Q2 Q1 Q1 Q1 Q1 Lielathikeskus Retail Cente, Tampere 2015-07-17 NCC AB 25
Sweden – a large part of the portfolio Leasable space, sqm , in ongoing or com pleted projects not recognized in profit 300 000 25 24 250 000 22 17 200 000 16 17 No. of projects 15 17 16 14 150 000 Sweden 100 000 Norway 50 000 Denmark Finland 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2015-07-17 NCC AB 26
NCC takes the next step in the development of Mölndal’s new city center 2015-07-17 NCC AB 27
Ann-Sofie Danielsson Chief Financial Officer Hürth-Stotzheim, Köln, Gemany 2015-07-17 NCC AB 28
Q2 2015 in brief Order backlog on a high level Increasing net sales Operating profit, SEK M 677 649 545 526 512 2011 2012 2013 2014 2015 Q2 Q2 Q2 Q2 Q2 Rådhuset, Kristianstad 2015-07-17 NCC AB 29
Income statement Apr.-Jun. Apr.-Jun. Jul. 14- Jan.-Dec. SEK M 2015 2014 Jun. 15 2014 Net sales 14,152 13,479 58,916 56,867 Gross profit 1,493 1,460 5,776 5,691 Selling and administrative expenses -845 -787 -3,228 -3,117 5.5% Cost ratio 6.0% 5.8% 5.5% Other 2 31 4 30 Operating profit/loss 649 677 2,578 2,604 Financial items -108 -102 -394 -370 Profit after financial items 541 576 2,185 2,234 Tax -105 -125 -378 -396 Tax rate 19.4% 21.7% 17.3% 17.7% Profit for the period 436 451 1,806 1,838 2015-07-17 NCC AB 30
Operating profit/ loss per business area Apr.-Jun. Apr.-Jun. Jul. 14- Jan.-Dec. SEK M 2015 2014 Jun. 15 2014 NCC Construction Sweden 168 146 595 640 Jan.-Jun. Jan.-Jun. 2015 2014 NCC Construction Denmark 76 65 305 281 NCC HQ and International -54 NCC Construction Finland 35 37 96 -56 111 Projects NCC Construction Norway 11 24 158 146 Internal gains -13 -16 NCC Roads 259 255 453 459 Group adjustments 19 10 NCC Housing 110 159 924 949 Total -49 -63 NCC Property Development 53 40 159 169 Other and eliminations -63 -49 -214 -151 Operating profit/loss 649 677 2,578 2,604 2015-07-17 NCC AB 31
NCC Construction SEK M Orders received Net sales 16 000 14 000 • Higher net sales 12 000 10,184 MSEK (9,369) 10 000 8 000 • Higher operating profit 6 000 290 MSEK (272) 4 000 2 000 • Operating margin 0 on the same level Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2.8% (2.9%) 2013 2014 2015 SEK M Operating profit Operating margin % 500 5 400 4 300 3 200 2 100 1 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2015-07-17 NCC AB 32
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