Ncc Group Plc · LSE:NCC
Ncc — Q1 2024 Earnings Presentation
36 slides from Ncc's earnings presentation, May 3, 2024
Slide 1: Q1 2024
Q1 2024 Tomas Carlsson, CEO Susanne Lithander, CFO May 3, 2024 1 3 May 2024 © NCC | Q1 Saimaanportti school, Mikkeli, Finland
Slide 2: Orders received and order backlog, SEK M
2024 Q1 16.635 Q1 2022 12.763 Q2 11.607 Q3 12.280 Q4 Orders received, SEK M 16.288 Q1 2023 14.691 Q2 9.681 Q3 16.159 Q4 Q1 16,159 13,353 2024 62.510 Q1 2022 60.960 Q2 59.047 Q3 54.995 Q4 Order backlog, SEK M 58.910 Q1 2023 59.359 Q2 54.594 Q3 53.422 Q4 56,270 Q1 2024
Slide 3: Net sales and operating profit, SEK M
Q1 2024 Net sales, SEK M Operating profit, SEK M 152 -170 -100 474 510 544 503 789 358 15,592 14.001 14.068 16.018 12.464 14.854 14.022 15.592 11,561 10.111 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2023 2024 2022 2023 2024
Slide 4: Tomas Carlsson
Tomas Carlsson 4 3 May 2024 © NCC | Q1
Slide 5: Performing in a divided market
Performing in a divided market • Strong seasonal impact on earnings • Infrastructure continues on strong trajectory Hagastaden, Stockholm, Sweden • Building Nordics and Building Sweden not immune to lower residential and office volumes but compensating well • Industry seasonally low – strong orders
Slide 6: Orders received varies between quarters but stable over time
Orders received varies between quarters but stable over time Book-to-bill 1.2 in Q1 R12 Q1 SEK M SEK M Two large projects 60,000 3.7 bn SEK 2023 50,000 Up 20% vs 2023 40,000 30,000 20,000 10,000 58,167 54,362 57,065 53,285 52,938 54,866 52,940 56,819 53,884 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2023 202
Slide 7: Many new asphalt contracts in all countries
Many new asphalt Road and tunnel Breivika- contracts in all countries Lerstand in Ålesund, Norway, SEK 1.5 bn School in Västerås, Sweden, SEK 450 M
Slide 8: Normal seasonal variation in net sales and EBIT
Normal seasonal variation in net sales and EBIT SEK M SEK M 18,000 800 16,000 700 14,000 600 500 12,000 400 10,000 300 8,000 200 6,000 100 4,000 474 510 544 152 503 789 358 0 10,111 14,001 14,068 16,018 12,464 14,854 14,022 15,592 11,561 -170 -100 2,000 -100 0 -200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q
Slide 9: A stable trend over time
A stable trend over time SEK M SEK M 18,000 1,000 4.0% 60,000 16,000 800 3.0% 14,000 50,000 600 12,000 2.0% 40,000 10,000 400 1.0% 8,000 30,000 200 6,000 0.0% 20,000 0 4,000 -200 -1.0% 10,000 2,000 -400 -2.0% 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2023 2024 2022 2023 2024 Net
Slide 10: Contracting EBIT on par with 2023
Contracting EBIT on par with 2023 Smaller project divested in PD, higher maintenance cost in Industry Q1, EBIT SEK M Hokksund, Norway 10 3 May 2024 © NCC | Q1
Slide 11: Financial targets
Financial targets Earnings per share Net debt Dividend policy ≥16.00 < 2.5 60% SEK x EBITDA of profit after tax Q1 2024, R12 Q1 2024, R12 2023 13.59 1.13 8.00 SEK x EBITDA SEK 2023 16.11 SEK 50% of profit after tax 11 3 May 2024 © NCC | Q1
Slide 12: Environment & climate targets
Environment & climate targets Scope 1 & 2 Scope 3 -60% -50% 2030 2030 Q4 2023 Q4 2023 Ready-made concrete -22% -56% Rebar steel -45% Asphalt -25% 2.3 ton CO₂e per SEK M net sales kg CO₂e per bought volumes 12 3 May 2024 © NCC | Q1
Slide 13: Health & Safety targets
Health & Safety targets LTIF4 <2.00 2026 Q1 2024 4.5 13 3 May 2024 © NCC | Q1
Slide 14: A divided, but good, market
A divided, but good, market • Infrastructure, large industrial projects and public buildings remain strong • Residential and office markets are weaker • Future interest rate cuts promising, but too early to see impact on the business • NCC is generally well positioned to benefit from the current mar
Slide 15: Susanne Lithander
Susanne Lithander 15 3 May 2024 © NCC | Q1
Slide 16: NCC's Contracting units
NCC’s Contracting units Business update Q1 • NCC Infrastructure • NCC Building Nordics • NCC Building Sweden • NCC Green Industry Transformation – under construction 16 3 May 2024 © NCC | Q1
Slide 17: Strong order backlog in all three business areas
Strong order backlog in all three business areas SEK M SEK M 6,000 20,000 17,484 17,423 17,880 5,002 5,098 5,000 15,987 4,617 15,000 14,343 14,393 4,000 3,398 3,000 2,643 10,000 2,000 1,818 5,000 1,000 0 0 Infrastructure Building Nordics Building Sweden Infrastructure Building Nordics Building Swede
Slide 18: Portfolio adjustment from residential and office markets
Portfolio adjustment from residential and office markets Building Nordics, Orders received Building Sweden, Orders received Offices Residential Refurbishment Public buildings Other Offices Residential Refurbishment Public buildings Other 18 3 May 2024 © NCC | Q1
Slide 19: Seasonal pattern in net sales and earnings
Seasonal pattern in net sales and earnings SEK M Infrastructure SEK M Building Nordics SEK M Building Sweden 6,000 4 6,000 4 6,000 4 5,000 5,000 5,000 3 3 3 4,000 4,000 4,000 3,000 2 3,000 2 3,000 2 2,000 2,000 2,000 1 1 1 1,000 1,000 1,000 0 0 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 20
Slide 20: On the right trajectory
On the right trajectory 4 3 2 1 0 Q1 2021 Q2 Q3 Q4 Q1 2022 Q2 Q3 Q4 Q1 2023 Q2 Q3 Q4 Q1 2024 Infrastructure Building Nordics Building Sweden Internal target EBIT margin, R 12, excl divestment profit from Bergnäset in 2023 Avicii Arena, Stockholm, 20 3 May 2024 © NCC | Q1 Sweden
Slide 21: NCC Industry
NCC Industry Business update Q1 • Good orders received • Up >20% in Q1 vs 2023 • Important contracts secured for the upcoming season • Increased share of asphalt contracts with higher climate requirements 21 3 May 2024 © NCC | Q1 Riksten, Sweden
Slide 22: Asphalt volumes seasonally low
Asphalt volumes seasonally low Some weather and market impact on stone material volumes Asphalt sold, thousands of tons Stone materials sold, thousands of tons 2,000 9,000 1,800 8,000 1,600 7,000 1,400 6,000 1,200 5,000 1,000 4,000 800 3,000 600 400 2,000 199 188 173 1,532 1,737 1,334 1,531 1,716 1,
Slide 23: Customary seasonal earnings pattern
Customary seasonal earnings pattern Higher maintenance costs and lower volumes in stone 400 7.0 10,000 12% 12% 300 281 281 9,000 240 5.0 10% 8,000 200 3.0 99 7,000 100 8.0% 8% 50 23 1.0 6,000 0 5,000 4,411 6% -1.0 4,162 -100 4,000 -3.0 4% -200 3,000 -5.0 2,000 -300 -261 2% -305 -313 1,000 1.2% -400
Slide 24: NCC Property Development
NCC Property Development Portfolio update Q1 • One property divestment recognized in profit – logistics facility Arendal Albatross • 5 ongoing property projects, 2/5 sold • 5 completed property projects, 3/5 fully let • No projects sold or started during Q1 24 3 May 2024 © NCC | Q1 Arendal Albatross
Slide 25: Letting of >10,000 sqm in Q1
Letting of >10,000 sqm in Q1 Lettable space, sqm 300,000 100% 250,000 79% 70% 200,000 150,000 50% 100,000 50,000 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2023 2024 Previously let area, sqm Sold, no letting Let during quarter, sqm Remaining unlet area, sqm Completion ratio Letting ratio Let during quarte
Slide 26: Earnings from one project – Arendal Albatross
Earnings from one project – Arendal Albatross EBIT SEK M 300 10,000 12% 12% 268 256 9,000 250 10% 8,000 9.4% 200 183 7,000 8% 6,000 150 5,000 9,625 6% 100 87 4,000 8,046 4% 3,000 50 42 29 2,000 1 2% 0 1,000 0.9% -18 0 0% -50 -37 31/3 2023 31/3 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2022 2023 2024 Operating
Slide 27: Close monitoring of the market for divestment opportunities
Close monitoring of the market for divestment opportunities Expected time of profit recognition for sold projects 2024 2025 2026 2027 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Arendal Albatross MIMO Park Central Ongoing unsold projects Completed unsold projects • We Land, Helsinki • Bromma Blocks, S
Slide 28: NCC Green Industry Transformation
NCC Green Industry Transformation Business update Q1 • Initial team in place • Business dialogues ongoing 28 3 May 2024 © NCC | Q1
Slide 29: Other & eliminations
Other & eliminations R12, FY Q1 Apr-Mar Jan-Dec SEK M 2024 2023 2023/2024 2023 NCC Group common functions, subsidiaries and business area NCC Green Industry Transformation -106 -72 -349 -315 Elimination of internal gains 17 23 -25 -18 Pension cost (IAS19 adjustments) 50 57 183 190 Other adjustments
Slide 30: Earnings
Earnings R12, 2023, Q1 Apr-Mar Jan-Dec SEK M 2024 2023 2023/2024 2023 Earnings in segments (all BAs) -65 140 1,777 1,982 Other & Eliminations -35 12 -227 -179 EBIT -100 152 1,550 1,802 Financial items -17 33 -49 1 EBT -117 185 1,502 1,803 Tax 24 -32 -174 -230 Profit for the period -93 153 1,327 1,57
Slide 31: Cashflow seasonally low
Cashflow seasonally low R12, Apr- 2023, Jan- Q1 Mar Dec SEK M 2024 2023 2023/2024 2023 1,500 OPERATING ACTIVITIES 1,000 From operating activities 186 340 1,968 2,122 500 From property projects 135 -254 -1,296 -1,684 0 Other changes in working -500 capital -130 104 135 369 -1,000 Cashflow from operat
Slide 32: Corporate net debt well within limits
Corporate net debt well within limits 0 -1,670 -2,471 Net debt* / EBITDA -500 Target < 2.5x -1,000 Mar 31, 2024, R12 1.13x -1,500 *Corporate net debt excluding pension liabilities and leasing liabilities -2,000 -2,500 -3,000 Q1 2023 Q1 2024 32 3 May 2024 © NCC | Q1
Slide 33: Tomas Carlsson
Tomas Carlsson 33 3 May 2024 © NCC | Q1
Slide 34: In summary
In summary • Strong seasonality • Market divided • Positive signals but too early for business impact • Good performance in most market segments • Compensating for residential and property market situation but some impact in Building Nordics and Sweden • Property Development market still very slow a
Slide 35: Slide 35
Slide 36: Contact information
Contact information Tomas Carlsson, CEO tomas.carlsson@ncc.se Susanne Lithander, CFO susanne.lithander@ncc.se Tel +46 730 37 08 74 Maria Grimberg, Head of Communication & IR maria.grimberg@ncc.se Tel +46 708 96 12 88 ncc.com/Investor-relations For definitions and details, please see the quarterly re