NRC Group ASA

to this presentation for the first quarter of 2025 for the NRC Group. Usually after this presentation, it will be possible to ask questions. I think the first quarter indicates that the NRC Group is on the right track. I think overall that it is a stable result. We see results improvement, especially in the Finnish business. And overall, our restructuring and restart last year has an effect. I also think it is a pleasure to see a result improvement here in Norway. There we have the big drivers, our demolition company NRC KepT, which now makes a result improvement together with a stable result from the NRC Group. And Sweden continues its positive trend in the evening with the previous year. We will report from now on this report Q1 2025 and will be reported in a clean ever and will be removed from the other model with the ever-adjusted. We will remain with the comparison figures for the ever-adjusted for a while. We have had a strong order in the quarter, but a little lower than the previous year, but at a high level. If I should mention some projects, we have two big rail jobs in Sweden, in Nyköping and Postlänken. We also have a large rail job here in Norway, Melhus Leer, which are the three big contracts that are coming out. But overall, a good order. We can mention that here in the morning, we had nothing to do with Q1, we took a big maintenance job in Finland, which is also very important for the Finnish business and so is the case for the company. The strong order in the quarter resulted in that we now have an order backlog at record level, almost 9 billion. I would like to emphasize that the restructuring of the company is now very selective, how we choose our projects, what we will do with it, where we can achieve good profitability. I see that the order in progress and the order backlog reflect that work, and we follow the strategy that we launched last year. Back to the effectiveness of the company, we will now, during the second quarter, launch an efficiency program here in Norway, similar to where we have launched in Finland. I expect the same good development in Norway as we have had in Finland. I can probably expect full effect from the program from the second half of next year, but of course an effect already in the coming year. The market is not really changing, it is still at a very high level of stability. We can still see a small timing effect here in Norway, where we might have expected some bigger job for the order backlog already during Q1 and maybe Q2, but we see that it should come out in Q3 and Q4 this year. I can also see the same movement in the defense sector, it is still a very high activity, but possibly that the jobs have a timing effect, but we expect work for the order backlog in this sector during Q3 and Q4 this year. But above all, a strong market for critical sustainable infrastructure in all three countries, Norway, Sweden and Finland. We have a negative trend in our work capital, and it is mainly driven by our big project here, which we have talked about for a while, ETM in Norway, where we are now consciously forcing the job and have done throughout the year to be able to get rid of our organization and simply be able to do this job and leave behind a quality job to a hopefully satisfied customer. The work capital is also driven by the fact that it has been a mild winter, so we have a higher activity in the project, which is cash flow-affected. Oskar will come back to this during his presentation, of course. I, along with the team, are still full of confidence that we will be able to deliver, according to the guidance we have had for the current year 2025, to reach an eternal marginal of more than two. Our long-term goal for 2028 is also to reach an eternal marginal of more than five in 2028. A picture that reflects why I think it has been a strong start of the year. If we look at the turnover, we have a turnover that is at a similar level as the previous year, but if I look at the order process in relation to turnover and in relation to our result improvement, I think this long-term reflects that we have a profitable growth in the company, which is pleasing and in line with the strategy we are driving. I would emphasize that profitability always goes before turnover. If we take numbers, we have a result that is at minus 27, which should be compared to minus 99 the previous year, so it is a significant result improvement. Compared to the previous year's number, it is at minus 43. We have seasonally demanding work, so we have a negative result in the first quarter, but the trend in the company is positive. I see again that the program and effectiveness initiatives we have taken now have an effect. Marginally, this will be minus 2.1, which will be compared to minus 7.5, given that the number of guests is minus 3.3. The strong order process in the three countries results in that we have an order backlog that is at the record level, at nearly 9 billion, 8.9, which should be compared to 8.2 next year. And in terms of the negative capital, we have a little loss on the cash flow, but Oscar will come back to that. Numbers. I will look at what the order process results for Boktobil, and we have just now a Boktobil at 1.8, and this together with the improvement in profitability clearly indicates that we are on the way to a profitable growth in the company. The order backlog, as I mentioned, is at a stable high level. Excuse me, the order backlog is at record level, and the order income is at a stable level, but somewhat the same as the previous year. I am very focused on looking at how the backlog is for the executive, and I note that we also have a positive trend there. In the order backlog, we have more projects for the improvement of the current year compared to earlier, and we also have more projects for the improvement from 2026 onwards compared to earlier years. Also a good trend. The security situation in the company is always highly priority. There should not be any employee in the NSE Group who will get hurt at work, and I see it gladly here that we start with the working-wage frequency, which indicates one sick person from work every day for one million working hours. And we have from 2022 onwards a positive development, where we have gone from 6.0, 5, 6, 4, 7, 4, 5, which simply indicates that we have safer jobs in the company. We work very hard with the question. If we look at the sick from the stock market, it is the same thing again. It is at a similar level as the previous year, but a positive trend. If we look at the benchmark, we have a good sick condition in the company. I can gladly note that so far we are hidden from serious failures in the company, and I hope that it will continue the year out. Now it is time for Oskar to go a little deeper into the financial sector. Here you go, Oskar.

Thank you, Anders. It is pleasant to be able to report clean EBIT, we think. It is, in itself, naked. It is honest, but it feels very good. We have made some technical changes in the report for this quarter. If we look at the graphs on the left, we are now graphing the quarter's turnover and quarter's EBIT. That means that we have gone away from this quarter and shown trend graphs with LTM or the last twelve months. We will return to that next quarter. We have not done that this time, because it will distort the Q1 very much and give less insight. Moreover, it has been a quarter that has been relatively winter-like, as we mentioned. It is our low season, 1.3 million euros. In terms of results, as Anders was saying, we are pleased. Minus 27 is good in relation to the season. It is good in relation to last year, it is also good in relation to 2023 levels. We wish to draw forward, as Anders said, Norway. Norway has a positive EBIT, and that is good in winter, as well as Sweden, positive EBIT. And Finland, which has a significant improvement in its operation, will return to that. So you can ask yourself this positive trend, where it comes from. Several people are driving it. Nevertheless, it will always be the case that everything starts and ends with the project work. It is done very well in the NRC projects, very positively. There is also a lot of good development work in the NRC. It often takes a little longer time to see the effects of it, but it will come. At the same time, I would also say that we are working systematically and structurally with risk control, which I have been involved in earlier. It sounds a bit vague, it is easy to say, difficult to do in practice. But the values ​​we use make us have a relatively good insight and control. In combination with the new profit recognition model, which we have talked about earlier, and a robust training language, which means that we are building ourselves a little more financially stronger, quarter by quarter. In summary, the last year's development, we will say that we have created a good foundation for us to be able to deliver on the guidance we have had since last summer. Which, financially speaking, will include these at least .0% per year. And then we start looking into 2026 already, with at least .0% in 2026. Let's look at Norway. Norway is separating a little in the first quarter with a high activity. We see that we have a turnover of 500 million a quarter. Anders was already in on it. It is very high-level driven by the ETM. So it is a high production that we get, we give ourselves quite little in terms of profitability. We produce at zero, but still high activity. We expect the ETM to be finished production during the autumn. And when it comes to the introduction of the legal steps, which we have talked about later, it will come after we are finished with the project. In terms of profitability, an EBIT of 4.4 million is, as I said, good. It is a significant difference from last year's minus 57. By and large, we should say that there was a lot of restructuring costs to be kept. But it is also okay to mention it, because kept and this restructuring were very good. It is totally transformed by the company. And kept, our company, has today a very good platform and is a company that we are very proud of. In terms of orders, it has been a good first quarter for Norway. A built-in bill or an order in production at almost two times. And then an order service, as you can see, up to the right, at 1.9 million. Last quarter, we pulled this forward as the weak point. It is still more to be done, it is still more to be done. But it is clear that it has been a good quarter and pushed us in the right direction. If we look at Sweden, the first quarter has been a little like a long quarter. It is the result of the major events. Very often in our industry it can be positive. What is very positive, we see in the mid-sign, is the profitability development. It is trending in the right direction and also there we managed to do a positive profit. At least marginally, plus one, but it is good in a first quarter. What has been far from quiet or far for Sweden has been the order service. Which has been at 2.5 times what we have produced. The result of that is that we have done well on the order service. And then has an all-time high order service at 3.4 million Euro. Gladly. Finland, I am back half a year ago. We stood here under Q3 and promised you that now Finland has reached its bottom. In terms of profitability, it has trended down over a few years. We deliver on that. We have a nice development there now. We have a Q1 for Finland where we report minus 15 million. In comparison with minus 33 in the last year. There are no adjusted elements in this, so this is direct apples and apples. Can be compared. On the order service side, the Q1 was a bit on the weak side. We felt that it was a Q1 and an important order season. With 0.9 and we are even more pleased that we could come with this message earlier today. And we saw that there should be a contract in the information area earlier today. So that is very positive. Then we move on to the capital. And as Annette said, we are not satisfied with the development here. It will not surprise us. It is as predicted, as expected. And it is as the process has reported to you. That we have a lot of production on this special ETM project. Or had a lot of production ahead of us when we accelerated. So we are gradually getting done with it. But it is clear that we are in a situation where we are in too much of a situation than the bank for the customer. So that is what is demanding. If we look at the left side, we see the capital. And the capital increases by 190 million in the quarter. In the middle, we see the operational cash flow. And it will be a very good result of the capital. It is a big driver, in the short term, always in the operational cash flow. And then it is also, as said, in the income over a long time. And in the winter season, we also have a negative income. If we look at the cash development on the right side. Then we see that we had a decrease of 243 million. But we have gone from a positive cash flow of 357 million. And down to a positive of 114 million. The change there is, as said, an operational cash flow of 150 million. And then we have the big, whole financial cash flow of 72 million. And it consists of 40 in leasing, 19 in interest and 14 in repayment of loans. We have good control in this area because we also have a 400 million cash credit. Which is not visible here. But it is clear that the conclusion that is very easy to draw when you look at the slide. Is that the capital is volatile. The consequence of this is that we have to spend a lot of time there on the capital management. As all entrepreneurs. And we do. And we have control in this area. So it is a very calm financial liquidity situation. Although, as said, I look forward to the day we get a raise on ETM. And we will have even more good buffers in our numbers. Finally, I would like to show the debt situation. The debt situation is net and interest rate debt. There we have an increase of 210 million a quarter up to 832 million. Again driven by labor capital. You see on the left side how it is built up. We have a euro loan of 156 million. We have an obligation on 400 million. And then we have a leasing debt of 390 million. And then we net with 114 million in cash to get down to 832 million. I think it is okay to just see that so much of our debt is leasing-based debt. I think it is highly relevant. Because of you who are working with models from Enterplace Value to Equity Value. Then at least one type of leasing debt is a little different from another type of debt. It is already loaded in EBIT. So it is okay to have that with you. Further in for leasing, there are 215 million of this operational leasing debt. That is, it is in our book because of the FRS 16. In the middle graph we see the stock market structure. Nothing new on it. We pay about 14 million down a quarter on our bank debt. And a little more in 2027. And then we have the obligation to fall in October 2027. On the right side we see our Yale's leverage. That is, the goal of Yale in relation to 12 months EBITDA. It went a little in the roof here after Kuto in the stock. And it would be four quarters that we went to a high level on it. As we said then. So what I can promise is that from Kuto, the drastic debt falls to a reasonable level. And as for the covenant, we are well within all the covenant requirements. And we have good control of ourselves in this area. So there is not always a covenant spread for us reasonable buffers. With that, I give the floor back to Anders. Summary of the Q1 and the start of the year.

Thank you, Kåske.

Summary then for the first quarter of 2025. If I start with the financial, I think it is a good start of the year. We have a positive development in the whole tri-affair area. And I would like to emphasize Finland, if I start with Finland. Then the positive development continues. And the efficiency programs that were launched here in the fall of 2024. Really has an effect and it is pleasing. Moving to Norway, it is also pleasing that we see a very big positive development in Norway. With our new Norwegian chief Ingvild in the top. And then it is mainly in the quarter one. Our demolition activity Kept that stands out positively. And again a stable result of Gunnar Knudsen. But in the rest a good trend. The order entry. If I start with the order entry, it is at a high level. And I think it is pleasing that we are now selective. Take the project in line with the strategy we have launched. And there are three big raid projects that are sticking out in the first quarter. Two in Sweden and one here in Norway. But at a good and strong level. And this results in a year of sales that is at record level for the company. At nearly 9 billion. As Oskar mentioned and as I mentioned in the introduction here. We now go from preparing in a clean EBIT. Which is also in line with how our closest competitors prepare. I also think it shows on a progress in the company. I am still in this together with the team. I am confident that we will be able to deliver according to the guidance that we have previously left. More than 2% EBIT margin for the coming year. And the long term goal for 2028 is also to deliver more than 5%. EBIT margin. If I mention a little what is happening in the countries. I think overall we had a demanding tough year. Necessary year in the previous year. Where we restructured and restarted the company. And it is pleasing that we see the effect of this hard work that is carried out. I can also mention that now. Due to the end of the queue. All management things are in place. From concern management to the country management. With strong bosses. With a long industrial background. Then directed towards infrastructure. I can also mention that it is a natural challenge. That we have an average capital that is trending negatively here in the quarter. But it is in line with the prognoses we have. And it is to force the project here in Norway. So that we can handle the project and get our organization away from there. But overall at the group level. Then we have a stable financial platform. Finally, I see nothing but the strong market. For critical sustainable infrastructure continues in all three countries. In the sequence we choose. It is rail, maintenance, defense, energy and water. That is where we are and where we should be. And it is still a very strong trend. And it will continue throughout the strategy period. Is my conviction. I will mention once again the morning speech. I was very happy when we had the opportunity to talk about the fact that we won a big international conference. And that we can take a step towards Finland. It is important for the company and the Finnish business. And it is also a proof that we have a competitive team. That takes the project. We have competition. And we will continue to work on that. Repeat again. But to conclude again with the guidance. Where we aim at a turnover of 7 billion. With an eternal margin of more than 2%. And long-term more than 10 billion in turnover. With an eternal margin of more than 5%. There is no change in that guidance at all. Then I thank you for this presentation and open up for questions.

We have two questions here. At the moment. The first question. Will you get any work done this year?

Yes, we will get into the basic contract. But this twist that we have communicated. That we will take the rest of the process. It is difficult to decide what time it will take. But there are two things. Yes, we get your money in the basic contract. And we will carry out the legal process from the twist we carry out. Do you have any comments to that Oskar?

We also have a small additional job now. The additional jobs we take on. We will not spend money on them. We will have a positive liquidity on them. So we have taken on one job now. Which will also give liquidity in.

Other questions on Etienne. What is the possibility that the project will actually be finished this year?

The project will be finished. We have good control on the project. We have foreseen it consciously. Because the biggest production will be finished already. At the end of July. Then we step down. And the work will be finished here. During the later part of the autumn. There is no change from this. But as Oskar mentioned. There will be changes. That we will carry out. Of course, we have made sure that we will have a positive. Positive cash flow on the changes. So it is still things that are happening in the project. But the answer is yes. We will be finished this year.

We take the last question from Etienne. How much of the project is actually finished?

92% when we break Q1.

We will try to stop with Etienne here. Are there any more questions?

The association has built two questions. When we look at Finland. There is a very positive development in the order situation. But in the quarter. The production is a bit down. I could comment a little on why. And two on Etienne. Can you say it? I still think that this is a project that is finished. In the late summer. Maybe there are some major changes in the timeline.

I'll take the first question first. Finland, I think, is a normal. Normal season effect we see. We have had a little lower activity in Finland. Especially in the big projects we are doing. But I think it is in line with the season. It always beats a little different. How the weather is and what we can do. The order process, as you mentioned, is also. Possibly again in the lower segment compared to previous years. But also at the same time we are very selective. We have naturally. Like everyone else, lost some jobs that we would have wanted to have won. But at the same time we choose very carefully what we count on. To bind the organization and the business area to the right project. The meeting this morning was a clear proof of where we have loaded and waited. And did a very professional job. And this morning the meeting came. At the meeting in Etienne, the answer is yes. We have an incredibly large focus on Etienne. What we do and how we do the work. So we have consciously forced here. Because we have had a good weather play in Norway. Where we can do this type of work. We could have had a strong winter. And we have had a favorable weather. Therefore we have been able to force. So the project is 92% ready. I expect that the biggest things will be completed here during the month of July. To step down here until the end of October. Of course, there is still a lot of work to be done. Which we value together with the customer very carefully. Now I do not have the exact date for the launch of the electricity. I think the first week in October, Oskar, if I remember correctly.

In October, yes.

Was there an answer to the

question? I have asked a question. Given that you get a little extra work on this project. Then we understand that you take the case after you are done with the project. Is it like this that you wait until absolutely everything of potential additional work is finished before you take it?

If we start with how we do, how we tactically work now. Then we want to be done with the job in its entirety. And see what we have done and what may fall into the end of this period. Then we will take out the correct process we have talked about. When we can judge the job in its entirety and the job is completely completed. That is how we judge otherwise.

Two comments only. One comment to the ITM. Just a clarification. It is a tension testing. Does not mean that the system is operated from that data. And the ITM, I just ask you, Ingvild, what is the date?

It is actually December 1st that is taken over.

It is taken over. December 1st is taken over. And then it is a tension test, in any case, in October or November. Small comment on Finland as well. The order is there. So, if you could expect to have a higher turnover, at the same time, I think it is very nice to have a lower turnover than you could possibly expect. Deliver a so-so positive result improvement. It means that the effect of Acceleration Lane, this improvement program, is really in place. So, it is good to see. You have followed all the costs and improvements completely out of the door. You have realized it. So, it is good.

On the capital of work last week, on the 7th, there was a presentation of some measures, on how to make it lower over time, and make the cash conversion better. Given what has happened now, is it something, is it something that you have managed to implement? And when you are done with the ITM, do you think that in 2026 you can get a better cash conversion than you have had before? Or is it something you have not had time to work on?

When Oskar comes on, he can start with that, yes, the whole economic support has changed since we launched our new strategy. How we take forward a careful result improvement, how we control our cash flows, everything from change and supply jobs, and we plan very carefully from the start and forward. So, I am confident with how we control the cash flow from the new projects that we have taken. If we take the ITM from an example, then it is a contract that is in the history, and there we already have a negative effect from the start. It is difficult to influence now, it is what it is. So, I will answer yes, we have good professional support from contracts that are started up, and we do what we can to improve the situation that is in the contracts that we are finishing from history.

What do you think, Oskar, about that? There is no doubt that, as I said, the ITM is fully in the numbers that you see. Given the volume that it is in, the capital is not at a very good place. Even though it is swinging a lot, and over time we expect to get less swings in it. If the company tries to work it down in the project business, then you should at least have a steady negative capital. That is a clear goal.

You pointed out that you have a lot of backlogs from before. Which segment are you most nervous about, that you can get more dead revenue? Are there any projects that you are especially nervous about, and the size of them? I

would say that we have very good control over which projects we are forced to live with dead revenue, and that we produce to zero. It is a project that has been in the history. Sometimes it can be a conscious choice from now on, but it has to do with that we start very carefully with our new results. In the first third of the project, we should be very careful to trim the middle, to be able to finish when we really know that we have control over the project. Absolutely, with the success of the profit calculation, so that we do not end up with a negative trend in the end of the project. We should be careful when we are working on the project.

Last question from me, and it is probably very premature, but the exchange. How do you think about what you are doing today? Is it something that you say, that you are going to finish with an ETM26, that will come when we have 100% comfort? Or is it so comfortable that an ETM fixes itself with an ETM26, that it can come that you are comfortable with it?

I can do that, I think it is really thought of by you, that ETM is a very essential driver in it. Another driver in it is the bond obligation, which runs out in 2027. Of course, it is also a question of the future capital structure. And then this is a question that is at home on the board. There will be good discussions around that in the future. So it is a question that we do not think can say anything more about. I hope

so.

Thank you. We have a few more questions. Now it is a little bit of a repetition, but I think it is okay to just take it like that. But we can start with kept. Do we expect to make money in 2025?

I expect to make money on the business area kept by 2025. And with something profitable, but with a positive direction, yes.

Oskar, you said it internally. In relation to, are there any risks of breaking the bond obligations over the years? Last question, ETM. It was actually a little bit that was asked here, but we can repeat it. So it became clear. Is there so much capital? ETM wants to exclude the work capital government. Is it finished?

I will answer the same as I have the question. Yes, we are binding a lot of work capital in ETM right now. But I also want to emphasize that it is in line with the forecast we have. It is expected that we would have this development. Yes, we will release capital in relation to the project's execution. But the big capital release will come the day we are done with the twist. I don't want to say what time it will take. We from NSE Group are actively working to try to solve this situation. But I can't control our customer base. But I would like to add that we have a good professional dialogue. We have other important projects here in Norway. So it is an important customer that I think we have a very professional collaboration with. But just the twist and how it will be solved, it is very difficult to say. Do you want to add something?

No. Any more questions?

Then we conclude today's presentation. Thank you very much.