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The presentation is available on the following webcast link:
https://channel.royalcast.com/landingpage/nrcgroup/20210216_1/ (https://channel.r
oyalcast.com/landingpage/nrcgroup/20210216_1/
)
A Q&A session will be held at 10.00 AM (CET), and investors, analysts and
journalists are welcome to participate.
Participants dial-in numbers:
NO: +47 2350 0296
SE: +46 (0)8 5065 3942
FI: +358 (0)9 7479 0404
DK: +45 3515 8121
UK/ International: +44 (0)330 336 9411
US: +1 929 477 0324
Below you will find highlights and a summary from the report.
REVENUE
· NOK 1.58 billion (NOK 1.66 billion)
EBITA*
· NOK -10 million (NOK -47 million)
ORDERS
· Order intake of NOK 1.4 billion (NOK 1.9 billion)
· Order backlog of NOK 6.5 billion (NOK 7.1 billion)
LIQUIDITY
· Cash flow from continuing operations of NOK 110 million (NOK 63 million)
· Cash position of NOK 610 million (NOK 154 million)
KEY FIGURES 2020
· Revenue of NOK 6.45 billion (NOK 6.19 billion)
· EBITA* of NOK 50 million (NOK 55 million)
· Cash flow from continuing operations of NOK 312 million (NOK -37 million)
Comments on fourth quarter 2020 results
Fourth quarter revenue was NOK 1,578 million compared to NOK 1,663 million
reported for the same period of 2019. The revenue growth was -5% in the quarter.
Group EBITA* was NOK -10 million compared to NOK -47 million for the same period
last year. The EBITA* margin was -0.7% in fourth quarter.
Full-year 2020 revenue was NOK 6,449 million, an increase of 4% from 2019, due
to currency effects. Group EBITA* was NOK 50 million, compared with NOK 55
million in 2019. EBITA* margin was 0.8% in 2020, in line with the announcement
of estimated financial results from 21 January 2021.
Revenue in Norway was NOK 442 million compared to NOK 583 million in the fourth
quarter of 2019. The organic growth was -24% in the quarter and is mainly
explained by lower revenue in the civil construction, due to low order intake
during the year, and lower revenue in the demolition- and recycling business.
EBITA* was NOK -43 million, compared to NOK 8 million in the same period of
2019, leading to an EBITA margin of -9.7% this quarter. The weak result is
mainly due to low profitability in the demolition- and recycling business,
including a significant write-down in one project related to a disputed change
order, as well as low activity in civil construction. The result in the
demolition- and recycling business is partly compensated by an income of NOK 12
million due to an adjustment of the earn-out compensation, reported in other
income and expenses and not included in EBITA*.
Revenue from the Swedish operation amounted to NOK 396 million for the quarter
compared to NOK 370 million in the same period of 2019. The organic growth in
the quarter was -4% in local currency. EBITA* was of NOK -22 million compared to
NOK -83 million in the same quarter in 2019. The EBITA* margin in the fourth
quarter was -5.5%, mainly explained by low activity level in combination with a
project mix with low average profitability.
Finland had revenue of NOK 740 million compared to NOK 713 million in the fourth
quarter of 2019. The organic growth was -3% in the quarter in local currency.
The EBITA* was NOK 62 million compared to NOK 29 million in the same period of
2019. EBITA* margin was 8.4% the quarter, an increase from 4.1% last year,
mainly explained by improved margins in the light rail projects.
Group operating profit (EBIT) for the quarter was NOK -16 million compared to
NOK -95 million last year. EBIT for the fourth quarter of 2020 includes an
income in M&A expenses (other income and expenses) of NOK 9 million, related to
the NSS earn-out settlement net of other M&A expenses. Net financial items
amounted to NOK -20 million for the quarter, compared to NOK -20 million for the
same period last year. The Group has a 20% interest in a joint venture sharing
risks and rewards of two larger projects with Astaldi and Gülermak in connection
with the Station Haga in Gothenburg. The projects are complex with substantial
risk, hence net income from the associated company has been reported at zero.
The order backlog amounted to NOK 6,475 million at 31 December. Fourth-quarter
order intake was NOK 1,392 million, split on announced contracts of NOK 754
million and unannounced order intake of NOK 639 million.
In Norway, new orders included an appointed contract by Bane NOR of NOK 220
million, for rehabilitation and upgrading of Nittedal station. The work
commenced in December 2020 and is scheduled for completion in August 2022.
Skanska appointed NRC Group Norway a contract of NOK 90 million, for
transportation and disposal of masses for the new metro station at Fornebu,
where the work will commence in January 2021 and is scheduled for completion in
December 2023. Skanska also appointed NRC Group a contract of NOK 65 million for
demolition and remediation works at Fornebu. The work commenced in November 2020
and is scheduled for completion in June 2021. New orders in Finland included an
extension of the ongoing Tampere Tramway alliance contract where NRC Finland’s
share of the extension is approximately EUR 16 million. The work commenced in
November 2020 and is scheduled for completion in December 2023. In Sweden, new
orders included a SEK 160 million contract of signal renewal on Nässjö station
and Gamlarp station appointed by the Swedish Transport Administration (STA). The
work will commence in March 2021 and is scheduled for completion in September
2025. STA also appointed NRC Group Sweden to a contract of SEK 35 million for
rehabilitation of the catenary system on the railway connection between Åstorp
and Ängelholm. The work will commence in December 2020 and the project is
scheduled for completion in September 2021.
The Group has identified an addressable tender pipeline of approximately NOK 21
billion for the next nine months. This compares to a NOK 16 billion tender
pipeline three months ago and NOK 16 billion at the same time in 2020. The
tender pipeline in Finland is approximately NOK 5.2 billion, an increase of
approximately NOK 2.5 billion compared to the tender pipeline three months ago.
In Sweden, the tender pipeline is approximately NOK 9.9 billion, an increase of
NOK 2.8 billion since last quarter. The strong growth is mainly explained by
increase in tenders for maintenance contracts where several tenders are up for
renewal the next nine months. The tender pipeline in Norway is approximately NOK
6.1 billion and at same level as last quarter.
The Norwegian parliament has decided a total budget for 2021 of NOK 26.5 billion
allocated to railway, up close to 20% from the revised budget for 2020. This
includes an increase of NOK 4.6 billion to rail investment projects and a NOK
500 million increase to maintenance and renewal spending. The increase in
investment projects is mainly targeted towards InterCity projects already
awarded. The maintenance backlog is expected to increase further to NOK 23
billion at the end of 2021, as renewal and maintenance spending of NOK 3.5
billion yearly are required to offset actual wear on existing infrastructure.
These factors indicate continued growth in railway infrastructure investments
and activity in Norway.
The Swedish national budget for rail investments and maintenance spending in
2021 is SEK 30.4 billion, with a SEK 2.9 billion increase allocated to
investment projects. Most of the increase is targeted to already on-going
projects. The Government has also decided a yearly increase in maintenance
spending of SEK 500 million to keep up with the maintenance backlog.
The Central Government in Finland has decided a national budget for railway at
EUR 0.92 billion. Funding allocated to rail investments and maintenance spending
are at the same level in 2021 as it was for 2020. Two years of a high investment
level indicates a strong outlook, confirmed by the increase in tender pipeline.
Light rail investments are expected to be at same level in 2021 as in 2020,
mainly related to on-going projects. NRC Group is involved in all larger light
rail projects in Finland.
In February 2020, NRC Group presented its strategy update to position NRC Group
as a Nordic leader in sustainable infrastructure. NRC Group has established a
clear strategic roadmap with the ambition of NOK 10 billion in revenues and 7%
EBITA margin in 2024. This implies a return to the 2016-2017 average margins,
with the main uplift to come from internal improvements.
Several measures have been implemented to restore profitability and to create
the foundation for continued organic growth. Improvement programs in 2020
yielded satisfactory results. Rail Norway has improved the tendering processes,
strengthened the organisation and project execution, as well as reduced overhead
costs. The financial performance has improved significantly. Sweden has improved
the tendering processes, strengthened the organisation including the project
management, and reduced costs in line with targeted level. Focus on core
processes in tendering and project execution will continue in 2021.
In the demolition- and recycling business in Norway additional measures are
being implemented to restore the profitability back to normal levels. In
Finland, measures to increase flexibility in the cost base implemented in fourth
quarter 2020 are expected to have effect from the second quarter of 2021.
Update on Covid-19
NRC Group continues a sharp focus on adopting guidelines and policies to prevent
and handle COVID-19 outbreaks. The Group monitors the development of the
pandemic and its potential impact on the industry and on business continuity.
The main risks are related to potential operational impact if outbreaks
intensify and restrictions are resumed. Operations also depend on that
customers, predominantly the public transport agencies and the municipalities in
Norway, Sweden and Finland, continue to announce and award tenders as scheduled
to enable efficient planning and execution of projects during 2021. Governmental
restrictions and recommendations were intensified in all three countries as the
numbers of affected has increased in fourth quarter and continued into first
quarter in 2021. The Norwegian Government imposed stricter rules 27 January on
foreign nationals seeking entry to Norway which will impact production over
time. Only those non-Norwegian citizens who are residents of Norway are
permitted to enter the country. Operations in Sweden are not affected due to
zero number of foreign workers and Finland still has open borders to foreign
nationals seeking entry, with a few exceptions.
NRC Group’s main priority is to keep employees safe while maintaining
operations. The Group communicates regularly and transparently to equip teams
for virtual working and safe project execution. The Group complies with
restrictions and guidelines from relevant authorities and follows up with
immediate actions when relevant and needed.
Parts of NRC Group’s activities are related to maintenance and upgrades of
existing railway infrastructure. These operations are defined as critical to the
society, and the company will prioritise these activities in case of situations
where certain resources become scarce. NRC Group is well positioned to ensure
business continuity.
The Covid-19 pandemic has had limited operational impact for NRC Group to date.
Still the long-term impact for the societies and people is characterised by
uncertainty due to increase in infection rates and further intensified
restrictions.
Outlook
In January 2021, NRC Group revised the EBITA margin target for 2021 to 1.75% -
2.5%, explained by expected lower profitability in the demolition- and recycling
business, low order book in the Civil operation in Norway as well as continued
fierce competition in Sweden with low order intake.
NRC Group maintains strong focus on implementation of improvement measures to
restore profitability. The company is strong positioned in a growing market with
a substantial tender pipeline.
The fourth quarter 2020 result report and result presentation can be found
attached and will be available on the company’s homepage: www.nrcgroup.com.
For further information, please contact Dag Fladby, Chief Financial Officer, NRC
Group ASA on tel: +47 90 89 19 35.
This information is subject of the disclosure requirements pursuant to section 5
-12 of the Norwegian Securities Trading Act.
Kilde
