NCC (NCC) Q2 2024 earnings summary

Executive summary

• Earnings increased 24% year-over-year in Q2 2024, driven by strong performance in the Industry segment and stable results in other business areas, despite no profit recognition from property transactions.

• Orders received remained robust, maintaining a healthy and well-distributed backlog, with a book-to-bill ratio of 1.0.

• Market outlook is strong in infrastructure and public sectors, though property transaction activity remains subdued.

• Operational discipline in tendering and project selection was emphasized, avoiding low-price competition.

• CEO highlighted resilience in key segments and strategic focus on public and green industry projects.

Financial highlights

• Net sales rose to SEK 15,448 million in Q2 2024, up from SEK 14,854 million in Q2 2023; H1 net sales were SEK 27,009 million.

• Operating profit reached SEK 623 million in Q2 (up from SEK 503 million); profit for the period was SEK 472 million.

• Earnings per share in Q2 was SEK 4.83 (up from SEK 4.17); R12 EPS at SEK 14.26, below the target of SEK 16.

• Cash flow before financing improved year-over-year, with Q2 at SEK -383 million (from SEK -1,274 million); cash and cash equivalents at SEK 1,033 million.

• Net debt stood at SEK 3.4 billion, with a leverage ratio of 1.48x EBITDA, well below the 2.5x target.

Outlook and guidance

• Market outlook remains fundamentally positive, with strong demand in infrastructure, energy, water, logistics, and public buildings.

• Residential and commercial building demand is slower; property transaction market shows positive signs but no tangible improvement yet.

• Activity in property market is needed to reach EPS target; other business areas are expected to increase profit share.

• No new property transactions or significant changes in market activity expected in the near term.

• Positive long-term drivers include green transition investments and government infrastructure initiatives.