AF Gruppen (AFG) reports an excellent result for Q4 2020. Revenues increased by
16% to NOK 7,485 million in the quarter and earnings before tax increased by 58%
to NOK 614 million. The profit margin was 8.2% in Q4 and 5.4% for 2020.

AF Gruppen's revenues were NOK 7,485 million (6,465 million) in Q4 and earnings
before tax was NOK 614 million (388 million), which corresponds to a profit
margin of 8.2% (6.0%). Revenues totalled NOK 27,025 million (22,612 million) for
the year. Earnings before tax was NOK 1,447 million (1,317 million) for 2020.
This corresponds to a profit margin of 5.4% (5.8%). The total order backlog was
NOK 30,617 million (28,200 million) as at 31 December 2020.  

AF Gruppen is in a strong financial position. Net operating cash flow was NOK
-86 million (784 million) in Q4 and NOK 1,189 million (1,508 million) for the
full year. As at 31 December 2020, AF Gruppen had net interest-bearing
receivables of NOK 90 million (-163 million). Earnings per share for 2020 were
NOK 9.29 (8.51). The Board of Directors proposes a dividend for payment of NOK
6.50 (6.00) per share for the first half of 2021.

"We achieved an excellent result in the quarter, mainly due to good project
operations and solid efforts by the organisation over time. The projects deserve
great credit for creating value during a period that has been particularly
demanding due to strict infection control measures. At the same time, we
recognise a significant potential for improvement in HSE," says Amund Tøftum,
CEO of AF Gruppen. 

AF imposes the same strict requirements on all its partners and suppliers as on
its own employees. The goal is zero serious injuries and work-related absence.
Figures from subcontractors are included in the injury statistics. The LTI rate
for Q4 was 2.4 (1.5). For 2020, the LTI rate was 1.8 (1.2). 

AF works in a systematic and goal-oriented manner to avoid work-related absence.
Sickness absence for Q4 was 4.7% (4.4%). For 2020, sickness absence was 4.6%
(3.8%), with some of the increase compared to previous periods due to the
ongoing infection situation. The Covid-19 outbreak and associated restrictions
creates challenges and impacts all projects, but most projects have still
managed to maintain good performance during the quarter.

"Today, AF Gruppen is presenting its corporate strategy for the period up to
2024. The goal is zero serious injuries and work-related absence, combined with
continued profitable growth and a position as the Nordic region's most
profitable contractor. The strategy builds on AF Gruppen's established business
model and ownership strategy, and defines four strategic initiatives for the
period: Disciplines and management, customers and suppliers, climate and the
environment as well as innovation. 

The new group strategy stakes out a common path for the organisation. AF Gruppen
will be a safe, eco-friendly, innovative and profitable contractor. Strong
entrepreneurial spirit and drive will continue to characterise the business and
create a foundation for delivering profitable growth over time," says Tøftum. 


Selected highlights from the quarter: 

oAF Anlegg delivered good results for the period, and the level of activity
increased considerably compared to the same quarter in 2019. The results were
positively influenced by project completions in the quarter. There are two
ongoing major projects in production, the E39 Kristiansand vest-Mandal øst and
the Bergtunnlar Lovö project in Stockholm. Målselv Maskin & Transport continues
to deliver very good results. 

oThe Building business area delivered good profitability, although revenues
declined compared to the same period in 2019. The AF Bygg Oslo, Haga & Berg and
Åsane Byggmesterforretning units delivered very good results for the quarter,
but there were varying performances in the remaining portfolio of building
units. Covid-19 has created challenges in several projects, especially due to
quarantine and entry regulations. Six new contracts have been announced to the
stock exchange in the 4th quarter.

oBetonmast became a part of AF Gruppen on 31 October 2019. The business area
delivered improved results compared to 2019, although as expected, profitability
was weaker than other operations in AF Gruppen. There is a large variation in
the results of the different units in Norway, where Betonmast Romerike and
Betonmast Oslo excelled with very strong results. Operations in Sweden had a
good level of activity and delivered stable profitability. 12 new contracts were
announced to the stock exchange in the quarter from units in Betonmast.
 
oThe Property business area delivered a profit before tax of NOK 93 million (16
million) in the quarter, which relates to the sale of the ATEA building. The
area achieved good sales in several projects in the quarter, including Lilleby
Triangel and Fyrstikkbakken. A total of 433 (363) apartments were sold in 2020,
of which AF's share was 160 (130). The sales ratio for commenced projects was
81%. 

oEnergy and Environment maintained a good operating margin in the quarter. AF
Decom had good profitability for both demolition and recycling at AF's
environmental centres. The environmental centres recovered a total of 528,758
(317,730) tonnes of materials in 2020, and the recycling rate realised for
contaminated materials was 86%. The AF Energi & Miljøteknikk unit has seen
variable profitability in its project portfolio. 

oThe Sweden business area, which includes AF's Swedish operations in civil
engineering, construction, property and demolition, increased sales and
delivered a strong result for the quarter. In the Swedish building and
construction market, Kanonaden had a growth in revenues of 20% and continues to
deliver very good results. 3 new contracts in Sweden were announced to the stock
exchange this quarter. 

oOffshore had a slightly lower level of activity, but significantly improved
profitability compared with the corresponding quarter last year. Increased
demolition activity at AF Environmental Base Vats contributed to the good
results. AF Offshore Decom demolished and facilitated the recycling of
approximately 22,000 tonnes of steel in 2020. This corresponds to a reduction in
emissions of 1 kg CO2 for each kilo of steel recycled. In 2020, AF AeronMollier
has supplied systems and equipment for electrification of 33 ferries, which
corresponds to around half of the Norwegian market.


For further information:
Amund Tøftum, CEO, mobile +47 920 26 712
Sverre Hærem, CFO, mobile +47 952 45 167
Knut Ekern, Director Corporate Communications, mobile +47 930 02 600

www.afgruppen.no

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