NCC Group plc

Welcome to NCC and our presentation of the fourth quarter and the full year of 2023. This will be presented by me, Tomas Karlsson, and our CFO, Susanne Litander. And as usual, you are welcome to ask questions after our presentation. So let's start by looking at some of our key figures.

In the fourth quarter, NCC had strong orders received of 16.2 billion SEK, which brought the full year orders received to 56.8 billion, almost 7% higher than 2022. The order backlog at the end of the year was 53.4 billion SEK. Net sales in the quarter was 15.6 billion, slightly lower than last year, and 56.9 billion for the full year, up compared to 2022. Operating profit was 358 million in the fourth quarter, without any profit recognition from property development. For the full year, earnings are up with an operating profit of 1.8 billion.

So this was a good year for NCC in a very mixed market. We had growing earnings and we reached our target of EPS of 16 sec. The board proposes a dividend of 8 sec per share. And this is driven by a couple of developments. We have consistent orders received and net sales affirming the stability in the market. We have a steady and positive earnings growth in infrastructure, growing in selected segments that we have been working with for some time now. Building Nordics, large variations between markets with Denmark as the strongest market, while Finland is the clearly slowest market. Building Sweden, solid order backlog, but lower margins on the back of price pressure in the market. And a very successful turnaround of business area industry during the year. PD, property development has been navigating totally frozen market, focusing on letting and trying to identify viable opportunities going forward. And we had good letting in the fourth quarter. That's the summary. meaning that we have a solid order backlog going into 2024 book to build for the year was again above one and that is with an increasing net sales We had in the quarter, we had stronger earnings in three BAs. The most important thing here to recognize is that property development had no property sales in the quarter and didn't recognize any profit from that. We had the final part of a smaller land sale, but compared to last year when we recognized a large piece of property that we sold. And then the improvement in industry also continuing into the quarter, even though the winter came early this year. IT and pensions impacting other eliminations. And for the full year, the same pattern holds with infrastructure continuing to improve, industry improving earnings for the full year with almost 400 million, property development Lower earnings since we only had one property to recognize for the entire year. And then we had divestment profit from the sales of subsidiary bad in asset, leading us to a full year earnings of 1,802,000. For the contracting margins, infrastructure continued to improve and this is the 21st consecutive quarter with an improvement and this is improvement without the one of gain from sales of bearing assets. So this is the underlying business while the margins in the building business areas are more on a flat level. We met earnings per share target 16 SEC, which we're really happy about. And I'll get back to that in a little while. Because these are our financial targets. 16 SEC was the target for 2023. We met it at 16.11. Now, let's remind everybody that 16 SEC is also the target going forward. This year we were helped by one of sale of the subsidiary, but we also experienced a sort of semi-frozen property development market where we only recognized one project and in the beginning of the year. Going forward, we expect that the contribution to 16 SEC from contracting business and industry will increase. But to meet that target in the short and medium term, we need the property transaction market to come back again so property development can contribute to that target. Net debt target is to be stay below 2.5 times EBITDA. We are now with a wide margin below that on 0.98. And then the dividend policy. We changed that one and a half years ago to approximately 60%. The board had a discussion on what was the prudent dividend this year, considering good earnings in the year, however, helped by one effect, continuous uncertainty in the property market going forward, and our balance sheet came to the recommendation to the AGM of 8 SEK per share for a dividend. That is in the lower end of the range, around 60%. But it also represents a quite significant increase of the dividend and the dividend to be paid in two tranches during the year. We didn't meet the health and safety target. The LTIF4 remained flat. The number of accidents decreased a little bit, but it's clear that we have more to do in this area. Talking about the market, we see still uncertainty in the market. Remains for large parts of the market the same as we've seen last year. However, we have signs of more predictability regarding inflation, interest rates and priorities, and we have more positive signals at the same time. Office and residential market remains slow. Property market and property transaction market continues to be difficult with a very low activity. But we see a strong market for infrastructure and public buildings and large industrial development. So it's a mixed market, but with more positive signs than we've seen in a while. forensics and you may recognize this because this has been our focus for some time we have more diligent project selection using our segment strength that has proven extremely valuable to us during last year continued execution discipline in what we do and adapting resources where we need and that has been continuously ongoing for the last couple of years and with that i hand over to susanna thunder