Monberg & Thorsen A/S : MT Højgaard A/S’s interim financial report – Third quarter 2018

8 November 2018

Announcement No 22, 2018

MT Højgaard A/S's interim financial report - Third quarter 2018

Please find attached the interim financial report of 2018 of MT Højgaard A/S on its operations in the period 1 January - 30 September 2018.

Monberg & Thorsen A/S has a 46% ownership interest in MT Højgaard A/S.

Questions relating to this announcement should be directed to Morten Pedersen, on telephone [phone].

The announcement can also be viewed atwww.monthor.com

This announcement is available in Danish and English. In case of doubt, the Danish version shall prevail.

MONBERG & THORSEN A/S

CVR 12 61 79 17

LEI 529900NA1V21KR5S7498

Ringager 4C, 2nd Floor, Right 2605 Brøndby

Denmark

___________________________________________________________________________

STOCK EXCHANGE ANNOUNCEMENT

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The MTH GROUP logo on the front page of this report refers to the whole of the MT Højgaard Group, which this interim financial report covers.

This interim financial report has been published in both Danish and English. In case of discrepancies between the two versions, or in case of doubt, the Danish version shall prevail.

MPuTbHlicGaRtOioUnPdIanter:im8 Nfinoavnecmialbrepr o2r0t 1-8third quarter 2018 - Contents

MANAGEMENT'S REVIEW	CONSOLIDATED FINANCIAL STATEMENTS
Contents	2	Income statement and statement of comprehensive income	12
Summary - Third quarter 2018	3	Balance sheet	13
Financial highlights	4	Statement of cash flows	14
Introduction by new President and CEO Anders Heine Jensen	5	Statement of changes in equity	15
Operating and financial review	6	Notes	16
Statement by the Executive Board and the Board of Directors	11
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Summary - Third quarter 2018

1.6

DKK billion

Revenue declined by 19% compared with the same period last year, due to low order intake in 2017.

-459 116

DKK million

Unsatisfactory EBIT, reflecting provision following unexpected MgO award, addi-tional write-downs on a major civil works project, lower reve-nue, and severance costs.

Revenue

DKK million

DKK million

Positive operating cash flows due to positive working capital changes.

1.4

DKK billion

Order intake in-creased by DKK 0.2 billion compared with the same quarter last year.

Operating margin before special items %

9.0

DKK billion

The order book in-creased by DKK 2.0 billion, driven by high order intake in the second quarter of 2018. A few large projects have a pro-ductions horizon of 3 to 4 years.

Order book

DKK million

Q3 17

Q2 18

Q4 17

Q1 18

Q3 18

1.583

Q3 17

Outlook 2018

Revenue remains unchanged at around DKK 6.8 billion for the year. Based on the current order book, revenue is expected to increase in the fourth quarter.

Following the further write-down on a major civil works project and a revised estimate of the earnings potential in the fourth quarter, a breakeven result is now anticipated for the fourth quarter.

Accordingly, the Group has lowered its full-year EBIT outlook to a loss of around DKK 550 million compared with the previous outlook of a loss of around DKK 400 million.

Capital position

Knud Højgaards Fond and Monberg & Thorsen A/S have as of 8 November waived repayment of the subordinated loan totalling DKK 150 million provided in May 2018. As a result is added to the equity.

8.985

The provisional equity as of 8 November make up DKK 401 million equalling an equity ratio of 10,6% exclusive non-controlling interests.

Subordinated loan agreements of DKK 650 million between Knud Højgaards Fond and MT Højgaard A/S has been signed. So far, these facilities have not been drawn down.

At the end of the third quarter of 2018 financial resources totalled DKK 882 million including the subordinated loan facilities.

Including the waived subordinated loan of DKK 150 million and the undrawn subordinated loan facility of DKK 650 million in equity, this gives an equity ratio of 26,0%.

Q4 17

Q1 18

Q2 18

Q3 18

Q3 17

Q4 17

Q1 18

Q2 18

Q3 18

MTH GROUP Interim financial report third quarter 2018 - Summary - Third quarter 2018

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Financial highlights

2018	2017	2018	2017	2017	2018	2017	2018	2017	2017
Amounts in DKK million	Q3	Q3	YTD	YTD	Year	Amounts in DKK million	Q3	Q3	YTD	YTD	Year
Income statement	Other information
Revenue	1.583	1.962	4.826	5.587	7.648	Order intake	1.376	1.157	6.805	3.959	6.064
Gross profit/(loss)	-340	171	-231	446	631	Order book, end of period	-	-	8.985	6.963	7.007
Operating profit/(loss) before special items	-459	65	-548	106	176	Working capital **	-	-	-244	-187	-264
Special items*	-	-100	-	-125	-125	Net interest-bearing deposit/debt (+/-)	-	-	-633	-69	-73
EBIT	-459	-35	-548	-19	51	Average invested capital incl. goodwill	-	-	862	939	934
Profit/(loss) before tax	-463	-38	-556	-28	40	Average number of employees	-	-	3.993	4.375	4.338
Net profit/(loss) for the period	-527	-57	-623	-61	-58
Financial ratios
Cash flows	Gross margin (%)	-21,5	8,7	-4,8	8,0	8,2
Cash flows from operating activities	116	-46	-358	97	168	Operating margin before special items (%)	-29,0	3,3	-11,4	1,9	2,3
Purchase of property, plant and equipment	-39	-45	-111	-115	-86	EBIT margin (%)	-29,0	-1,8	-11,4	-0,3	0,7
Other investments, incl. investments in securi-	Pre-tax margin (%)	-29,3	-2,0	-11,5	-0,5	0,5
ties	9	11	12	16	-12	Return on invested capital incl. goodwill (ROIC)
Cash flows from investing activities	-30	-34	-99	-99	-98	(%)	-	-	-53,7	27,2	21,0
Cash flows from operating and investing activi-	Return on invested capital incl. goodwill after tax
ties	86	-80	-457	-2	70	(%)	-	-	-41,8	21,2	16,4
Return on equity (ROE) (%)	-	-	-114,5	-8,5	-9,4
Balance sheet	Equity ratio (%)	-	-	6,4	21,9	23,3
Non-current assets	-	-	1.221	1.155	1.153	Equity ratio (%) incl. subordinated loan	-	-	10,6	21,9	23,3
Current assets	-	-	2.408	2.794	2.522
Equity	-	-	251	904	884
Non-current liabilities	-	-	664	383	256
Current liabilities	-	-	2.714	2.662	2.535
Balance sheet total	-	-	3.629	3.949	3.675
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*Special items represent the impact on profit of legacy offshore disputes.

** Working capital excludes properties held for resale.

Financial ratios have been calculated in accordance with 'Recommendations & Financial Ratios' published by the Danish Finance Society. Financial ratios are defined in the 2017 annual report under accounting policies.

MTH GROUP Interim financial report third quarter 2018 - Financial highlights