NCC Group plc

Good morning and welcome to this presentation of the first quarter for the NCC Group. I'm Thomas Karlsson and here I have our CFO, Susanne Littander, and together with me, she will be presenting this report. But before we start, let's look at some of our key figures.

In the first quarter of 2024, NCC had orders received of 13.4 billion SEK. It is down compared to last year where two large orders in Denmark were registered. NCC also had strong orders received in Q4 2023. The order backlog was 56.3 billion. Net sales in a quarter was 11.6 billion. Operating profit was seasonally low due to lower activity during the winter months, especially in business area industry, at minus 100 million SEK.

That was some of the key figures. We have a stable quarter where we continue to perform in a really divided market. And to put that into context, there are two things I think it's important to remember. One is the strong and really pronounced seasonal impact that we have on earnings. Most impacted is infrastructure, business industry with the asphalt and stone business impacted, but also the other contracting business areas are impacted by winter. The exact size of this impact varies from year to year depending on exactly what project and where and where the winter has been. But the variation that we have this year is well within normal variation. The thing that can counter that in a year is whether we sell a property development project or not. Last year we sold a big one in Denmark. This year we have only sold a small one logistic property in Gothenburg. But what we see is that infrastructure continues to perform and improving their performance for the 22nd consecutive quarters. We have, despite the seasonally low earnings for industry, we have really strong orders received and what we see a higher proportion of orders sold for their sustainability properties. And then building Nordics and building Sweden, they are not immune to the lower residential and office markets, but they're holding up well and compensating with other types of buildings. That's the highlight. Performing well in the divided market with the normal strong seasonal impact and only one PD project sold. If we then look at orders received, it's down compared to last year, mainly because last year we had two exceptionally large projects in Denmark. It was a part of the hospital in Hilleröd and the hotel in Stockholm. orders that we got last year, but we still have good orders received this year. We have a book to build to 1.2 that is 20% higher than revenue, infrastructure increasing and building in Sweden a little bit down, industry up more than 20% in the quarter. What I've said on many occasions is that you can't look at the orders received in an individual quarter or even in two consecutive quarters. You have to look at it over a longer period of time. If you look at the chart showing the orders received on the rolling 12 basis for the last two years, you see it's remarkably stable regardless, independent of the market. A couple of examples of projects that we've won in the quarter. We have more asphalt contracts, and it's in all countries. We've won a school in Sweden, in Västerås, and our largest project is the tunnel and the roads in Ålesund in Norway for 1.5 billion. We have normal seasonal variations in net sales and EBIT. And if you look at net sales, remember that PD only sold a small project this year compared to last year. And that explains more than half of the difference here. And then you have seasonal variations in net sales for the rest of the business. Earnings minus 100 impacted by the lower sales in PD, but also a slightly higher loss than compared to in industry, all within normal variation boundaries. What we can see is that we have a stable trend on net sales. And if you compare then we have a stable trend when it comes to earnings. And just to highlight, if you look at earnings on the chart to the right, without property development, you see the effect once we sell one project or not. And since we haven't really sold any large projects in a while now, the contribution of PD is low, while the contracting units are holding at the same level or actually improving towards them. And that's what you will see on the next slide. Where the contracting EBIT is on par with 2023. Industry down within normal variations and the difference in PD depending on the sales of a small project this year and a large project last year. And then other eliminations and Susanne will go into the details of that going forward. a pretty normal earnings in a stable quarter continuing to perform in this market. Financial targets, earnings per share, we still have the target of 16 SEC. We're at just short of 14, depending on the PD earnings mainly. Net debt, well below our targets. Susanne will get into that more. And then we have a dividend policy and the board proposed to the AGM and the AGM decided that that we will distribute eight SEC. And the first part of that SEC was distributed to shareholders a couple of weeks ago. Couple of other things, environmental and climate targets. These are the numbers from the year end, end of quarter four. Scope one and two emissions, we have a target of minus 60% to 2030. We are by now at minus 56, very close to that target, and we'll get back to that once we meet 60%. And then scope three. And admittedly, this is way harder to actually find the right metrics. We're getting better and better and getting more and more reliable data on that. But we see that we have improvements in three of our chosen big topics, red-made concrete, rebar steel and asphalt. We do not have any comparisons for transportation, so we'll get back to that later. And then health and safety, which is perhaps where we don't see the development that I would like to see. We have a target of going below 2.0, lost time injury frequency 4. We are now at 4.5, which is higher than what we've seen before. Fortunately, it's mainly... more or less benign accidents in terms of slipping on ice, jumping from low heights, things like that with short absence from work. But we're having programs for this and we're working with it. So finally, a divided but fundamentally good market. Infrastructure, large industrial projects and public buildings remain strong. Residential buildings and office and commercial offices are weaker like it has been for some time. If we compare this quarter to the first quarter of last year, the market is sort of the same. The big difference is that what we see now is signs of positive development in the future, mainly connected to in future interest rates cuts. But it's too early to see any impact on business in this. And NCC is generally well positioned to handle this market. And with that, I hand over to Susanne.