NCC RoadsAggregates, asphalt, paving and road services

Göran LandgrenBusiness Area President

May 29, 2013 NCC AB 1

Brief facts NCC Roads 2012

May 29, 2013 NCC AB 2

Sales

SEK 12,211 MOperating profit

SEK 413 M

Average number of

employees 4,209Capital employed

SEK 3,089 M

May 29, 2013 NCC AB 3

NCC Roads – value chain

• 30 million tons/year

• 225 crushing plants

• 6.5 million tons/year

• 100 plants

• 5.4 million tons/year • 39,000 km of road

Road servicesPavingAsphaltAggregates

May 29, 2013 NCC AB 4

Market position 2012

213

113

423

533

3

Source: NCC’s own figures

15%

Asphalt and paving29%

12%

Aggregates

Road services

Market shares

Geographic marketsAggregates, asphalt, paving and road services, share of sales 2012

May 29, 2013 NCC AB 5

Sweden 49%

Denmark18%

Finland12%

St. Petersburg2%

Norway19%

Product mixAggregates, asphalt, paving and road services, share of sales 2012

May 29, 2013 NCC AB 6

Aggregates 18%

Road services 18%

Asphalt and paving64%

Customer mixAggregates, asphalt, paving and road services, share of sales 2012

May 29, 2013 NCC AB 7

Municipalities/County Councils18%

Private customers 49%

Internal in NCC 7%

Government 26%

NCC Roads strategy

May 29, 2013 NCC AB 8

May 29, 2013 NCC AB 9

NCC Roads’ strategic activities2012-2015

Stronger position in Denmark and Finland

• Aggregates

Develop position in the value chain

• Recycling

• Road services

Expand in Norway

Target: sales growth ≥ 2 times GDP growth

Industrial

May 29, 2013 NCC AB 10

Business conditions

Priority 2Priority 1

Road servicesAsphaltAggregates

High Medium/Low Medium

High Medium Medium

High High Low

Entry threshold

Profitability potential

Capital requirement

Profitable growth

May 29, 2013 NCC AB 11

Net sales 2004-2012*

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2004 2005 2006 2007 2008 2009 2010 2011 2012

* Excl. items affecting comparability, e.g. Poland

Annual growth 8%

SEK M

May 29, 2013 NCC AB 12

Operating profit 2004-2012*

0

50

100

150

200

250

300

350

400

450

500

2004 2005 2006 2007 2008 2009 2010 2011 2012

Rörelseresultat

How?

* Excl. items affecting comparability, e.g. Poland

SEK M

Profitability

May 29, 2013 NCC AB 13

Operational excellence

Continued growth

Higher Profitability

Differentiation

Mature marketMore competition

Operational excellence

May 29, 2013 NCC AB 14

Prioritized project

Roads United

May 29, 2013 NCC AB 15

New Group-wide work method and IT systems to increase synergies within the business area and integration with customers

Prioritized project

Capital rationalization in the asphalt operation

May 29, 2013 NCC AB 16

Increased production efficiency and more effective utilization of machinery

Prioritized projects

Pricing of aggregates

May 29, 2013 NCC AB 17

Highlighting the operation to generate better conditions for value-based pricing

Prioritized projects

Review of road services

May 29, 2013 NCC AB 18

Nordic coordination to increase internal efficiency and added sales

Differentiation

May 29, 2013 NCC AB 19

Effects of CO2 emissions

May 29, 2013 NCC AB 20

August 24, 2008 Sept. 5, 2012

DifferentiationCustomer survey

May 29, 2013 NCC AB 21

35% of customers are willing to pay more for a product that will reduce CO2 emissions

May 29, 2013 NCC AB 22

NCC Green Concept®Notable examples

NCC Green Asphalt ®

– patented production method for hot asphalt produced at lower temperatures

NCC Recycling ™

– concept for recycling aggregates, excavated material, etc.

NCC Green Road ®

– paving that produces less rolling resistance

NCC Spuma ™

– weed control based on hot water, coconut and corn sugar

NCC Viaco ™

– paving with prolonged service life and low maintenance costs

NCC Snow melting ™

– process for melting and cleaning snow using water

NCC Green Fuels ™

– renewable fuel, e.g. wood pellets in asphalt production instead of oil

NCC Green Quarry ™

– method for continuous environmental improvements in and around our quarries

We are now paving the way for renewable energy

ncc.se/greenfuels

May 29, 2013 NCC AB 23

May 29, 2013 NCC AB 24

Wood pellets to replace fossil fuels in our asphalt facilities

Wood pellets facilitate sustainable asphalt production

May 29, 2013 NCC AB 25

Asphalt plants fuelled with wood pellets instead of oil

Significantly reduced carbon dioxide in manufacturing process

Energy-efficient method

Limited use of non-renewable resources

Does not compete with food production

For NCC, this entails that CO2 is reduced by 154,000 tons annually

Corresponds to emissions from 73,000 vehicles

Technology is specially developed and patent is pending for NCC

NCC Recycling™

May 29, 2013 NCC AB 26

May 29, 2013 NCC AB 27

NCC’s objective is to secure a leading position in the Nordic market and establish 30 new recycling terminals by 2016

We resolve one problem in society by responsibly managing recoverable material

What is NCC Recycling?

May 29, 2013 NCC AB 28

NCC Recycling is the name of NCC’s new Nordic recycling concept

The terminals will be able to receive and refine primarily asphalt, concrete, aggregates, earth and excavation material, as well as park waste

In addition to the recovered material, all terminals will also be able to sell virgin material

If needs and conditions exist locally, the terminals will be combined with landfill

Our target group comprises both private and public players

Example of areas of use

May 29, 2013 NCC AB 29

• New asphalt mix• Filler and subbase

• New soil• Excavation material

used as filler

• Filler and subbaseat road works

• Filler mix for cycle roads and parking lots

• Filling of building sites and refilling around buildings

• Mix for cobblestones

AGGREGATESSOIL & EXCAVATION

MATERIALCONCRETEASPHALT

• Increased profitability and continued growth through:

• A series of operational excellence initiatives

• Differentiation through distinct offerings of proprietary products and NCC Green Concept products

• Strong value chain

• Market leading position

• Stable profitability

Summary

May 29, 2013 NCC AB 30

Starting point

Strategies