CEO’s letter

In 2021, the impact of our strategic improvement programmes yielded results. We delivered improved profitability and cashflow, as well as strong order intake across all countries. On our way to restore profitability to our target level, we see the results of disciplined project tendering, planning and execution processes.

We won NOK 7.6 billion worth of new contracts, making it our second-best year since inception. We secured several important contracts, including the Crown Bridges light rail project in Finland valued at approximately NOK 1.1 billion and the contract for electrification of Trønder- and Meråkerbanen in Norway valued at NOK 760 million. The order book at the end of the year of NOK 7.8 billion is the highest since second quarter 2019, and mainly comprises projects won during our strengthened tendering framework.

Disciplined tendering, planning and execution processes are fundamental to our future success. NRC Group seeks to foster an environment where everyone can learn, develop and thrive at all levels in the organisation. We are seeing the initial results of our continuous efforts to build the team for the future and from internal programmes for employee development. In 2021, we strengthened the Group HR function to fully realise the potential within our Nordic organisation and help drive recruitment.

BUILDING FOR THE FUTURE Let me also revert to the Trønder- and Meråkerbanen contract mentioned earlier. The project will be executed as a joint arrangement between our Norwegian and Swedish organisation and is an example of how we can utilise our competence and capabilities across markets to be competitive and drive profitable growth. Improving our cross-border collaboration and sharing best practice is a focus area for 2022. We see potential for efficiency improvements, including continued focus on optimisation and utilisation of the machine and equipment pools from a Nordic perspective.

The project is also a great example on how we support de-carbonising society. We take great pride in building sustainable solutions to connect people and cities, and we work on several projects that are transformational for the cities and areas where they are being built. In Oslo, we secured contracts for the Fornebubanen, the biggest metro line project since the 1970s, within construction, demolition and mass transport. In Finland, we continue to develop our leading position within light rail projects under the alliance model. Our projects show how NRC Group’s services contribute to efficient transport, reduced emissions, urban development and a more sustainable society.

HOW WE BUILD MATTERS The way we execute these projects is very important. NRC Group recognises that minimising the impact on the external environment is a prerequisite to deliver sustainable solutions for tomorrow. We are therefore pursuing a strategy of sustainable growth, promoting climate-friendly solutions and proactively working to become a zero-emission industry by 2050 at the latest. By 2025, we target a reduction to our emissions by at least 30%. To make sure that we get all our employees onboard and raise the awareness internally, we launched a sustainability certification for all 2,000 employees to take. Over 60% of our workforce had completed the training after six months. This builds a common understanding of key sustainability principles across the entire business.

Our sustainability strategy sets out how we operate to achieve our sustainability goals. We are focused on identifying and managing climate change-related risks and opportunities. This is

“Our people are the foundation for our success. In line with our values of caring, credible and entrepreneurial, we are building a strong safety culture and an attractive place to work. It is pleasing to see continuous improvement in our health and safety systems”, says Henning Olsen, CEO of NRC Group.

well connected with our business strategy and our commitment to transparent handling of material environmental, social and governance related topics. For us to be successful in our industry, we are actively managing those areas where we have material social and environmental impacts. Our strategy also includes accounting for the impact of the EU taxonomy, where our estimates indicate that approximately 85% of our business activities may be considered eligible under the proposed legislation. Our knowledge and well-defined framework for how to operate and minimise our footprint when building low carbon infrastructure, strengthen our position as leading partner in our industry.

LOOKING UP AND AHEAD Health, safety and environment is our number one priority. It is our collective effort which enables safe operations as the pandemic has impacted how we live and work. I want to thank our employees for their ability to maintain focus and continue operations in this challenging situation. As travel restrictions are eased, I am finally able to again visit projects. It is an inspiration to meet our employees across the Nordic region, and it gives me confidence that we have made the right choices. We are positioning the company to capture the long-term value opportunities created by the strong outlook for investments in sustainable infrastructure in the Nordic region. This is confirmed by the national budget proposals and National Transport Plans of Norway, Sweden and Finland. As our improvement programmes continue to impact across the organisation with more robust processes and better financial performance at project level, we build a stronger platform from which to deliver profitable growth, supported by our clear operational priorities – winning the right projects at the right price, and excellence in project execution.

Stay healthy and safe.

CHIEF EXECUTIVE OFFICER Henning Olsen comes from the position as executive vice president in AF Gruppen, where he has been responsible for the Building business area in Norway since 2016. His previous roles in AF Gruppen include head of AF Eiendom, financial director within AF Bygg Oslo and group controller. Before joining AF Gruppen in 2010, he has been employed at Statkraft and Boston Consulting Group. Henning holds a Master of Science degree in Business from BI Norwegian Business School (2003). Henning Olsen CEO