NRC Group ASA

Welcome to the presentation for the fourth quarter and the year 2025 for NRC Group. As usual, it is possible to ask questions after this presentation. After the necessary new start of the company in 2024, the focus has been for 2025 to stabilize and build up the company. I think the result of 141 million, with a margin of 2.1, proves that we are entering 2026 as a stable company. I also see that the improvement is over the entire business line, that is, Norway, Sweden, Finland, with Finland as the big draw. The operating cash flow is improving to 247 million, with the announced cash release here in the fourth quarter. I think we have a stable order entry in the fourth quarter, resulting in an order volume of 9.2 billion. I would like to emphasize that the order volume is for execution during the second part of 2026, i.e. the third and fourth quarter. Vi ser också att vi har en fortsatt stark marknad över samtliga tre länder. Möjligtvis en liten timing-effekt. Vi ser att vi kanske hade förväntat oss ett lite större railjob här i Norge, men å andra sidan så tar det fart ordentligt på civilsektorn. I den svenska marknaden är det starkt rakt över och så leder det sig även i Finland. Vi har, som vi berättat, även försvarssektorn i våran strategiperiod, men den ligger för senare delen av strategiperioden. Jag tror den, eller jag bedömer att den tar fart under halva, senare halvåret 2027 och framåt. Kostnadseffektivitetsprogrammet i Norge är nu fullt implementerat. Jag förväntar mig en kostnadsreducering på helåret på 40 miljoner, med en effekt här redan i Q1. Vi fortsätter att guida för en marginal på mer än 3,0 för innevarande år med en omsättning på cirka 7,5. Om vi klär det fjärde kvartalet i siffror så kommer vi in på par jämfört med föregående år omsättningsmässigt på 1,7. Här ser ni den markanta resultatförbättringen på 43 som ska jämföras med minus 19 med en marginal på 2,5. Således 2,1 procent på helåret. The order entry in the fourth quarter comes in at 2.2 billion and we have thus an annual backlog of 9.2 billion. The operating cash flow improves to 247. As I have said, we are now in the third phase. New start in 2024, stability in 2025, profitable growth in 2026. I think that book-to-build at 1.1 now signals that we are in a growth phase in the company. Here you can also see the backlog of 9.2 billion. And how it is executed, we see an improvement compared to earlier. And again, is that we judge that it is for execution in the later part of 2026, i.e. Q3-Q4. The health and safety situation in the company is good, as I judge it, if we compare it with our competing companies, so our work injury rate is best in the class at 2.8. We have a good number of sick leave, i.e. at 3.8. And I am very happy that we are scavengers for serious accidents throughout the year 2025. The security situation is always highly prioritized. After that introduction, I'll hand it over to you, Oskar.

Thank you, Anders. Good morning, everyone. It has been a quarter that has been very much in line with our own expectations. And then, of course, in line with the guidance. The turnover, as you can see at the top right, we delivered at 1.7 milliarder, as in 2024. With that, the annual turnover climbed up to 6.6 milliarder, which is about 5% behind last year. There is no surprise, we saw that from about the summer. The three effects that we have drawn from earlier, and based on that, are two timing effects in Finland. Then we talked about that we are in for light-shell, is a little between contracts, and responsible for maintenance. And in Sweden, the Seville investment has taken a little longer to get started. In terms of EBIT, we have an OK quarter. We will deliver 43 million kroner, 2.5% margin. Where Finland, I have to draw from Finland, commercially speaking, back to that. 2025 level, as Anders was talking about, 141 million, 2.1%. Every quarter, I have mentioned some weird words. I have talked about robust, computational practice, and about proactive risk management. To put a little more meat on that leg, what does that actually mean? Well, it means that within the projects, we are much more careful than we were, than NIC has been before. It means that we are careful to take out the magic, and the company creates robustness in that way. Outside of the projects, it means that we are very aware of the risks around us, and invest money for that. It creates a type of robustness, it creates a more solid balance. If we had not done this, we would have been better off. But this is the way to drive the defense. That is our opinion. We have a solid order intake in the quarter, and a book to bill of about 1.3. That means that we get in about 30% more than we have produced. This gives a solid foundation for revenue growth in the future. And then in the future, if we look at 2026, we have a revenue guiding of 7.5 billion. That requires, of course, that we succeed now in the first half year with ordinary tech. We think we do. We have a high activity. At the same time, this is called stang ut, stang in. Even though in the olden days, silver and bronze medals were also delivered, it is not done in our sport. Winner takes it all. But we have very good faith. EBIT-guiding will deliver over 3.0%. The main driver for that is project efficiency. I also have to mention Norway's order intake. And that we also manage to see that we realize million after million on these 40 million, as Anders said. They will be realized. And then with that, let's look at Norway. Norway has delivered four relatively even quarters in terms of revenues this year. Also this quarter at around 500 million or 548 million. And with that we delivered an annual revenue of 2.1 billion. In terms of EBIT, we are at 5 million kroner. for the quarter, and on a yearly basis 54 million. REF, as I mentioned earlier, robust accounting practice, we have made this a risk reduction. Gunnar Knudsen, we must allow to draw up again. Gunnar Knudsen has delivered quite a good and solid year. From and with the incoming quarter, Gunnar Knudsen will report together with KEPT in areas that we call special operations. Det betyr at det som i dag heter segment Norge kommer fremover til å bestå av vår division Bane og division Anlegg eller Sivil i Norge. Order intake som dere ser nederst til venstre på Norge var 334 millioner. Vesentlig bedre enn det publiserte. Så det er jo positivt. Med det så endte reserven på 1,2 milliarder. And as I have mentioned repeatedly in the last few quarters, that is probably our soft point right now. Of course we will succeed. At the same time, you see on the graph on the right side that the execution or what we have for execution in the coming year is not so bad. It is especially for 2027 and beyond that we must increase the activity. I would also say before I leave Norway, the ITM project. ITM is handed over. It's a bit back in time now, we did it early in December, but that has been a big milestone for us. Now there is still a final process. We hope, of course, to reach that goal. If we don't do that, we will enter legal steps, but we try to make sure that we have cut out a lot. On the other hand, the final process will now go through the first half year. Let's look at Sweden. Sweden had a turnover in the quarter of 516 million. And with that, Sweden got a turnover that was very similar to Norway's turnover, 2.1 billion. The EBITDA in Sweden in the quarter is at zero. We have provided some adjustments in the portfolio. There are three projects with a net negative profit. In the 2025 level, Sweden delivered 29 million kroner, or 1.4%. If we look at the graph in the middle, I think we should be proud of that. Sweden is on its way. In terms of orders, it is very fun. Sweden delivers 825 million in order intake per quarter. With that, Sweden has had three record quarters on the order side in 2020-2025. The order reserve, as you can see on the right side, was raised to 4.3 billion kroner. If we look at what we have for execution this year, it is at a very high level in terms of our expectations of turnover within each year. Down to the right of this slide, we also point to a risk. We have a lawsuit, we have mentioned earlier in the reports, of course. We have a lawsuit that is expected. There are legal proceedings in April, and we expect a lawsuit in May. This is a maintenance contract that is back from 2018. We expect that each outfall there will be able to be handled within the guidance that we have just mentioned. If we look at Finland, the turnover is 652 million, and a 2025 turnover of 2.4 billion. That is roughly 15% lower than in 2024. That gap has begun to reduce. When we were here in the summer and through QNH and Quito, the gap was much larger, so that's positive. The quarterly EBITDA is at 64 million kroner. Yes, there is some machine sales in that, and there is machine sales roughly at the edge of 20 million kroner in that figure, so you can read through the figures and the cash flow analysis that is presented in the report. But Finland is very solid, which brings the annual EBIT up to 130 million kroner and a level of 5.5 percent. We are proud of that. And this with machine sales, it has been something that has been relatively repetitive also for Finland, but just this quarter it was quite large. The order side in Finland is also very solid, 1.1 million kroner. A book-to-bill here at 1.6, which brings the order backlog back to the level it was at earlier this year, 3.6 billion. A very solid order book. Here we also expect a good further development based on the activity we have on the tender side. Let us now look at cash flows. To the left you see the development in labor capital. And we have had a good reduction in net working capital in this quarter, with minus 188 million kroner. With that we have netted, we have reduced the top we had in Q3. As you can see, it is sticking out. I would also say that the working capital level we are at now is a good level, if we consider that we have a very large connection to the NIC project. NIC is relatively good at working capital. In the middle we see that we generate a cash flow operationally at 247 million. And to the right you see that we have had a cash realization in total in the quarter at 196. It is from a level of minus 16 up to a bank balance of plus 180. Of course, operational cash flow contributes most to this. We have a net investment flow of plus 19, and we have a financing cash flow of minus 78. The most important elements are, as I said earlier, leasing at the bottom of 40 million, interest at about 18, and repayment of loans between 14 and 15. The working capital, the cash position per Q4, is a bit optimized, so it should not be called normalized. At the same time, we have a cash loan in the bank, a rolling cash loan of 400 million, so the cash situation is very robust and good. Furthermore, I mentioned ETM, and we have said this many times, when ETM comes into action, we do not know when, there is also a lot of money waiting for us there. So it is clear that we have a good liquidity situation afterwards in the company. If we look at the loan situation, we see that net income yield on the left side is 752 million. It is a reduction in the quarter with 189 million kroner. Again, it is the working capital that drives this in the short term. And Gjella consists of a euro loan of 122, an obligation loan of 400, and a leasing loan of 411, combined with a positive bank balance of 180. In the middle of the graph, you see the default structure of our loans. The black is the euro loan, and the green is the obligation loan. We then start working on a plan for refinancing NRC. It is important to do this in good time before the bond falls, and it will fall on 25 October 2027. The most important drivers here are our EBIT growth. order backlog and the development of that. E-to-M is of course a joker in this, but in total I would say that NRC is starting to become a reasonably good bankable case, as they say. So we will be able to solve this in a nice way. On the right side of the graph you see our yield ratio, that is, our net yield over EBITDA. We promised you from Q2 that it would go down to more normal levels, and we delivered that, and we promised another reduction now in Q4. And now it is down to 2.1, which is a completely OK level. If we look at the Covenant side, we just say in the heading that it is comfortable. We are measured primarily at 4 Covenants from the bank. Everything here is drawn in green. There are good buffers for that. We are measured on two covenants when it comes to the obligation. There we also have good margins, or good buffers, and there is no risk that NRC will break any covenants. That's it, Anders. I give the floor back to you. Summary of Q4 and the year.

Thank you very much. If I start with the financials for the whole year and the fourth quarter, I repeat that we are in different phases in our strategy period. In 2024, it was the new start of the company, and in 2025, there has been a great focus on stabilizing and building up the company. I think the results we provide show that we are entering 2026 as a stable, strong company, ready for profitable growth. We then make a full year's result of 141 with a margin of 2.1. And I also think we get a really strong and good end here in the fourth quarter. It is important that we improve our operating cash flow to 247 and we get the promised cash release here at 196 in the fourth quarter. The order entry is improving. We have an order entry in the fourth quarter at 2.2 and enters here in 2026 with an order backlog of a strong 9.2 billion. I would like to emphasize again that we already see that it is for execution during the second half of the year here in 2026. If I take the highlights from the operational side, I'll start with the market. I think the market that we consider relevant for our company, i.e. track-related critical infrastructure, is still strong in all three countries. Norway, Sweden, Finland. However, with some different timing effects. I might have expected some larger projects here from Barnenor in the coming years. We may know that now during the beginning. och andra halvan av 2027. but with a good level still. On the other hand, it's moving at full speed here. We have an incredibly strong activity on the civil side here in Norway. In the Swedish market, it's strong straight ahead, both on tracks, civil, and then it's mainly the energy and water sector we're looking at within the civil sector. Strong light activity and market in Sweden and in Finland as well. It's on rail, light rail, and above all energy. Vi har även försvarssektorn i våran strategi, men den ser vi i samtliga tre länder, ligger lite senare i strategiperioden, möjligtvis att jag bedömer att den tar fart här under andra halvan av 2027 och framåt. If we look at Finland, we clearly see that we are competitive in the energy sector. We take our first wind farm here during the fourth quarter. Not the largest project, but a signal that we are in the right sector and we are competitive. The cost efficiency program here in Norway is now fully implemented. I expect a cost-reducing effect of 40 million all year round. with an effect here already in the first quarter. I would also like to emphasize that our efficiency program in Finland has full effect and I think that is partly what also proves that we are really on the front line and Finland is again our drawbridge in the group with a strong 9.8% here in the fourth quarter. Som vi sagt tidigare så kommer vi från Q1 att separat redovisa vår icke core business Gunnar Knutsen och vår demolition verksamhet Kept här i Norge tillsammans med vår maskinaffär. Vi kommer separat redovisa det från det första kvartalet. As Oskar said, we are now completely finished with the ETM project. So we can put our resources on other projects. Och som jag sagt tidigare, vi är nu i finalfasen med att färdigställa all dokumentation och när den är inlämnad här inom kort så hoppas jag att vi under det här första halvåret kan komma till en lösning med våra viktiga kundbarn i Nord. Skulle vi inte nå dit så står jag fast vid att vi kommer ta rättsliga åtgärder för att komma till en lösning. De risker som vi har redovisat finns i bolaget, ligger i guidningen för innevarande år. Alltså vi guidar ju för 3,0, mer än 3,0 procent. In the current year, we have a revenue of approximately SEK 7.5 billion and an EBIT margin of more than SEK 3.0. At the end of the strategy period, we will be a company that delivers more than SEK 3 billion in revenue with a margin of more than SEK 5.0. With that said, we open up for questions.

We can start there. Sales and machines in Finland. How much has EBITQ4 raised and has sales and machines been added for guiding in 2026?

I can start with the big picture. Selling and buying machines is always in our business, so it is not abnormal. Possibly that we have had a slightly higher activity in Finland. I would say that the margin has been reduced from the machine trade throughout the year, so we have a margin of 4.6%, but you can give more facts.

Yes, that is completely true. It is 4.6% without the sale, and then we can predict that it is in the range of 20 million, as I also mentioned there. So it is completely true, it has been, but we had machine sales in Q2, we had it in Q3, we have it now in Q4, it is a little higher. But that also means that sales have... That you have had the opportunity to be even more aware of the risk side of this, as I mentioned, in terms of business practices. So yes, there will also be machine sales in the future, and that lies in the guiding.

Another question from Finland. What is the status of the Light Rail Alliance projects in Finland?

We are in the design phase of two large projects and I have no change there. We expect that one of them, Helsinki, will go over in the production phase here during the summer or shortly after the summer period. And the other project, Turku, is possibly in the later part of 2026. But both large light rail projects, I assess, will go into production phases here during the current year.

Siste spørsmålet jeg har forlåd med, den skjevheten i order backloggen for execution i år. Kan du si litt mer om den?

Ja, det är riktigt. Vi har haft, på helheten har vi haft både en fin orderingång och vi har ju en stark orderbok, men ligger lite annorlunda. Vi har ju varit lite kanske mer reserverade i Finland med tanke på att vi väntar på att vi ska gå över i produktionsfasen i två viktiga projekt. Så att de ligger ju redan där, vilket har möjligtvis dämpat tenderaktiviteten. I Sverige tycker jag vi är starka rakt över, där vi fokuserar på rail och på... civil sector and above all energy. But we have had a little stricter climate here in Norway, where I had expected a stronger order entry during 2025. But I hope that it will take off here during 2026. We have strong tender teams and we have a strong market. So I still feel great confidence that we will get started with the order entry here in Norway as well.

But we also say that if we follow the 12-month setting through Q1 and Q2, we will probably see a small drop. And that's okay to say that already to the market now. That's what we expect. And then we expect that we will come back very well in Q3 and Q4. And you have seen behind us what we were guiding on last year. So that drop is at least discounted with us.

Men orderingången här fram till Q1 ut är ju en väldigt viktig period för oss. Vi räknar väldigt mycket nu och det är alltid viktigt att vi tar rätt jobb i samtliga tre länder här fram till sommaren.

Yes, hello. I have a question for ABG. You have cut a 40-mile run rate in Norway. Can you say a little more about what it has taken from you?

What we get the effect of is that we have made our organization more efficient. We are simply less people judged according to the market we have. We have also looked at how we make it more efficient in relation to subsidizing organizations and also production resources and also support. system etc. So there is everything in this. But I would say that it is an efficiency program, how we can become more effective, faster alerted in the Norwegian business. And it is a little copy-paste, we have done it in Finland. So we know that it has an effect. So the program is very similar to what we did in Finland the previous year. And we expect the same positive effects here in Norway.

It is not a 40 million run rate effect, but a 40 million in 2026 effect. You can imagine that the 2027 effect will be bigger than that. It will be realized throughout the year.

And if you look at the other eliminations segment, the negative EBIT contribution is much higher than it has been in the previous quarter. What is it that drives this?

Other eliminations?

Not Norway, Sweden or Finland?

Yes, I can't answer with a straight arm. If there have been any major changes, that is what we report to Norway, Sweden and Finland, and then we have, of course, the group. If there have been any major changes in the group from last year, that's what you say there have been.

From the previous quarter?

Yes, I can't say that there have been any major one-offs, which I will come back to.

Ja, om det inte finns några fler frågor så tackar vi för dagens presentation och önskar en fortsatt trevlig dag och en trevlig vecka på återseende och hörande.