Q1 2018 Investor presentation First quarter 2018 8 May 2018 - PowerPoint PPT Presentation

Q1 2018 Investor presentation § First quarter 2018 8 May 2018 § Investor presentation § 8 May 2018 1

Content § Highlights Morten Holum, CEO § Results and financials Svein Vestermo, CFO § The road ahead Morten Holum, CEO 2

Highlights Q1 2018 – Strong winter impacts earnings Underlying revenue, NOK mill. § Revenue decreased by 1% 2 000 1 500 § Earnings NOK 40 million lower 0.7% 0.7% 1 000 1 787 1 710 1 626 § Revenue and earnings impacted by 500 904 898 strong winter in the Nordics - Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 § Visible effects of strategic portfolio Underlying EBITDA, NOK mill . adjustments and margin improvement 250 programs 200 150 100 192 153 152 50 - (56) -50 (96) -100 -150 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 3

Key developments in the quarter Road Safety § The Nordic markets impacted by strong winter – delayed start-up of main season § Additional growth investments taken in Q1 § Restructuring program in Sweden and cost reductions in Norway ongoing § Market and project mix in Europe as expected, building order stock for later in the year § Unchanged market situation in the Nordics Road Infrastructure § Continued good market development in Eastern Europe § Structured exit of water & sewage business in Lithuania on track § Acquisition of Tubosider France to grow, broaden the portfolio and extract synergies 4

Group earnings Underlying EBITDA – change quarter-on-quarter Underlying EBITDA margin, rolling 12 months NOK million 9.5% 9.5% 9.0% 8.3% 7.2% 7.3% 7.0% 7.5% 6.7% 6.0% -56 40 Road Safety Road Infrastructure 3 5 4 3 -96 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 0 Q1 17 RSN RSE RIN RIE Other/Elim. Q1 2018 Road Safety Road Infrastructure 5

Results and financials § First quarter 2018 Svein Vestermo, CFO § Investor presentation § 8 May 2018 6

Road Safety Nordic – Strong winter impacts seasonal start-up Q1 2018 Q1 2017 2017 § Revenue decreased by 7 % organically NOK million Underlying operating revenue 431 449 2 780 - Lower sales in road restraint systems, partly Underlying EBITDA compensated by higher sales in signs and work (59) (19) 223 zone protection Underlying EBITA (81) (40) 139 Reported EBITDA (60) (19) 202 Underlying EBITDA margin § Significant decrease in Underlying EBITDA (13.8%) (4.2%) 8.0% - The strong winter resulted in lower volume and lower capacity utilisation Underlying EBITDA, NOK million 120 - Growth investments in higher capacity gave higher 100 cost base 80 60 101 86 40 55 20 § Additional operational efficiency programs in - (19) Norway are initiated -20 (59) -40 -60 -80 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 7

Road Safety Nordic – a closer look EBITDA underlying, NOK million -19 Q1 17 20 Delayed start-up 13 Growth investments 8 Other -59 Q1 18 8

Road Safety Europe – Good seasonal activity Q1 2018 Q1 2017 2017 NOK million § Revenue increased by 16% Underlying operating revenue 256 220 1 423 Underlying EBITDA (3) 1 123 - 8% revenue growth adjusted for currency effects Underlying EBITA (9) (4) 98 - Lower revenue in road restraint systems more Reported EBITDA (3) 18 136 than compensated by higher sales in other product Underlying EBITDA margin (1.1 %) 0.5 % 8.6 % areas § Earnings in line with first quarter last year Underlying EBITDA, NOK million 50 - Favourable cost position raw materials in 2017 40 30 20 38 37 47 10 1 - (3) -10 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 9

Road Infrastructure Nordic – Earnings in line with Q1 2017 Q1 2018 Q1 2017 2017 NOK million § Decrease in underlying revenue driven by water Underlying operating revenue 75 135 743 & sewage divestment Underlying EBITDA (6) (9) 25 - Adjusted for the divestment, revenue increased by Underlying EBITA (6) (10) 22 10% Reported EBITDA (6) (9) 29 Underlying EBITDA margin (7.8 %) (6.3 %) 3.4 % § Earnings in line with first quarter last year - Positive effect from the divestment of the water & sewage business Underlying EBITDA, NOK million 25 20 15 18 10 19 5 - (3) (6) -5 (9) -10 -15 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 10

Road Infrastructure Europe – Continued positive development Q1 2018 Q1 2017 2017 NOK million § Revenue increased by 28% Underlying operating revenue 160 125 1 224 Underlying EBITDA (13) (18) 109 - Revenue in line with last year, adjusted for currency effects and the acquisitions of Elikopol Underlying EBITA (20) (24) 84 and Tubosider France Reported EBITDA (13) (18) 106 - High seasonal activity in Poland Underlying EBITDA margin (8.0 %) (14.4 %) 8.9 % § Marginally improved earnings Underlying EBITDA, NOK million - Higher volume and a shift in product mix 80 60 § Structured exit of water & sewage business in 40 68 Lithuania on track 20 40 19 - (13) (18) -20 -40 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 11

Profit and loss statement § Net loss in the quarter was NOK Q1 2018 Q1 2017 2017 NOK million (114 mill), NOK 16 million higher Operating revenue 899 921 6 051 than last year Total operating cost (996) (974) (5 675) EBITDA § Lower operating earnings off-set by (97) (53) 375 lower net financials Depreciation and impairment (40) (37) (151) EBITA § Interest expense decreased by NOK (138) (90) 224 Amortisation and impairment 19 million compared to Q1 2017 (20) (16) (70) EBIT (158) (106) 154 § The Group reported a net tax Net financial income(/expense) 22 (57) 53 income of NOK 23 million in Q1 Income (loss) before tax 2018, which is in line with Q1 2017 (136) (162) 207 Income taxes 23 32 21 § An adjustment to the net financials Net income (loss) (114) (130) 228 of NOK 6.7 mill was made in the Of which non-controlling interests (2) (10) 1 annual accounts for 2017 versus the Earnings per share (NOK) Q4 report. The reason for the (1.67) (6.03) 4.80 adjustment was a change in the EBITDA reported (97) (53) 375 assessment of the purchase price Items excluded from underlying EBITDA for the shares in Elikopol. 1 (4) 65 EBITDA underlying 441 (96) (56) 12

Balance sheet 31.03.2018 31.03.2017 31.12.2017 § Equity ratio of 53% compared to NOK million 54% at year end Total intangible assets 1 573 1 528 1 601 Total fixed assets 996 908 986 Total financial assets 38 48 45 Deferred tax assets 66 41 53 § The increase in inventories is Total non-current assets 2 674 2 524 2 684 mainly related to higher raw material prices Inventories 1 147 1 118 934 Trade receivables 690 640 996 Other receivables 345 312 327 § Net interest bearing debt at NOK Cash and cash equivalents 179 153 351 Total current assets 1.1 billion compared to NOK 0.9 2 361 2 223 2 609 Total assets billion last quarter. Leverage at 5 034 4 747 5 293 quarter end was 2.6x Share capital 7 2 7 Other equity 2 584 854 2 809 Non-controlling interests 68 245 33 § The Group’s financial position is Total equity 2 659 1 101 2 849 good, with sufficient financial Provisions 76 58 64 capacity to execute the current Non-current liabilities 1 307 1 983 1 264 projects and initiatives Total non-current liabilities 1 383 2 041 1 328 Accounts payables 488 508 568 Other current liabilities 505 1 097 547 Total current liabilities 993 1 605 1 116 Total shareholders' equity and liabilities 5 034 4 747 5 293 13

Development in cash flow during Q1 2018 400 350 300 NOK million 250 -96 49 200 -43 351 -24 -25 150 -33 179 100 50 Cash flow from operations Cash flow from financing activities - Cash per 31.12.17 EBITDA underlying Changes in working Other items Net CF from Net proceeds from Other financing Cash per 31.03.18 capital investment activities borrowings activities and fx 14

The road ahead § First quarter 2018 Morten Holum, CEO § Investor presentation § 8 May 2018 15

Short-term outlook § Second quarter operating earnings expected to be higher than last year § High activity in Road Safety Nordic, despite late onset of main season, and positive effect from restructuring program and growth investments § Stable in Road Safety Europe and Road Infrastructure Nordic § Continued high demand in Road Infrastructure Europe, and positive effect of water & sewage exit in Lithuania and acquisitions § Full-year outlook unchanged – performance expected to be better than last year 16

Summing up § First quarter performance as expected, but stronger winter impacted earnings in the Nordic region § Continued execution of strategic agenda - Good traction on initiatives to raise margins - Additional portfolio enhancement through acquisition of Tubosider France § Positive outlook for Q2 and full year 17