Annual report
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Annual and Sustainability Report 2024 Turning visions into reality
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Cover image: E136: The road that improves Ålesund’s accessibility On behalf of the Norwegian Public Roads Administration, NCC is constructing a four-lane access road (E136) to Ålesund. The project comprises two parallel tunnels, a grade-separated intersection and new pedestrian and bicycle paths. Because the road is being built in the middle of a residential area, there are stringent requirements to limit noise and vibrations, making the project particularly challenging. Once com- pleted in 2027, the road will provide better accessibility, shorter travel times and increased road safety. ESEF report NCC has prepared the Annual Report in a format that enables uniform electronic reporting according to Chapter 16, Section 4a of the Swedish Securities Market Act (2007:528). About the report NCC’s Annual Report for 2024 is submitted by the Board and the President and CEO of NCC AB (publ). The statutory annual accounts are presented on pp. 52–63, 80–123 and have been audited by NCC’s external auditor. The reviewed Corporate Governance Report covers pp. 69–79. The Sustainability Report is presented on pp. 16–50 and has been prepared in accordance with Chapter 6 of the Swedish Annual Accounts Act. Introduction This is NCC 1 Review by the CEO 4 Strategy 6 Operations 8 Sustainability Report General disclosures 17 Environmental disclosures 24 Social disclosures 40 Governance disclosures 47 Auditor’s statement 51 Report of the Board of Directors Developments during the year 53 Material risks and uncertainties 64 Corporate Governance Report 69 Financial statements Consolidated income statement 81 Consolidated statement of comprehensive income 81 Consolidated balance sheet 82 Consolidated changes in equity 83 Consolidated cash flow statement 84 Parent Company income statement 85 Parent Company statement of comprehensive income 85 Parent Company balance sheet 86 Parent Company changes in equity 87 Parent Company cash flow statement 88 Notes 89 Adoption 123 Auditor’s report 124 Other Multi-year review 129 Quarterly data 132 Definitions 133 Financial information 136 Contact details 137
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Building for the future Every generation has a responsibility to maintain and develop its shared social infrastructure in order to create opportunities today and in the future. Construction, maintenance and development projects are initiated by our customers or by NCC. NCC’s purpose is to utilize our expertise and competencies as the basis for taking the customer through the construction process to create a positive end result for all stakeholders. NCC is a knowledge-based company whose core is the ability to manage the complexity of a construction process. Our operations include building and infra- structure project contracting, asphalt and stone materials production and commer- cial property development. We are experts in the various aspects of the process, and also at getting them to work together. NCC is pursuing development initiatives in the areas of skills development, digitiza- tion and increased utilization of expertise and data from all parts of the company. Orders received, SEK M (56,819) 54,730 Net sales, SEK M (56,932) 61,609 Operating profi t, SEK M (1,802) 2,032 Other Financial statements Report of the Board of Directors Sustainability Report Introduction NCC 2024 1
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Business areas Industry Construction and civil engineering Development NCC Property Development Develops, lets and sells properties, with the focus on office properties. With extensive expertise encom- passing the entire chain from con- ceptualization of individual projects to the development of city districts, and with a major focus on sustain- ability and cooperation with our customers, flexible and customized property solutions are created in growth markets in the Nordic region. Read more on pp. 62–63 NCC Industry Develops, produces and sells stone materials and asphalt products for con struction and infrastructure proj- ects in Sweden, Norway, Denmark and stone materials in Finland. The business, which forms a natural supply chain in construction and civil engineering operations in society, is committed to reducing its carbon footprint from the production of asphalt and stone materials. Read more on p. 61 NCC Building Sweden Builds and renovates residential buildings, offices, hotels, healthcare buildings, schools, sports facilities and public buildings for public and private customers in Sweden. With advanced skills in sustainability, safety, digitization and partnering, NCC Building Sweden develops projects jointly with customers from the early stages. Read more on p. 60 NCC Building Nordics Builds and renovates residential buildings, offices, hotels, healthcare buildings, schools, sports facilities and public buildings for public and private customers in Denmark, Finland and Norway. With advanced skills in sustainability, safety, digiti- zation and partnering, NCC Building Nordics develops projects jointly with customers from the early stages. Read more on p. 59 NCC Infrastructure Builds, renovates and maintains infrastructure for travel, transportation, energy and water treatment, as well as facilities for basic industry, in Sweden, Norway and Denmark. With expertise encompassing the entire chain from counseling in early stages, project planning and design to production and maintenance, we realize, together with our customers, projects with a favorable impact on society. Read more on p. 58 NCC Green Industry Transformation In January 2024, NCC launched a new business area, NCC Green Industry Transformation. This is NCC’s focused initiative to support industry in the ongoing green transformation in the Nordic region. Through NCC’s long-standing experience of coordinating large, complex projects, and by becoming involved early in the process, we can – in our capacity as contractor – contribute resources and specialist expertise to facilitate the transition of industry. NCC Green Industry Transformation is a long-term initiative and will be reported under Other and Eliminations in this Annual Report. Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 2Introduction
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Notes for fi nancial targets 1) Corporate net debt excludes pension debt and lease liability. 2) Percent of net profi t for the year to be distributed to shareholders according to dividend proposal. Notes for sustainability 1) Carbon dioxide equivalents, i.e. greenhouse gas emissions expressed as the equivalent amount of carbon dioxide. 2) Relates to sub-set of ready-mix concrete, steel reinforcement and internally purchased asphalt. Outcome 2024 Target 2024 Earnings per share, SEK 16.1 ≥16 Outcome 2024 Target Corporate net debt1) /EBITDA, times –0.1 <2.5 Financial targets and outcome Targets and outcome Outcome 2024 Target 2026 Health and Safety LTIF4 Work-related accidents resulting in more than four calendar days of absence per million working hours. 3.3 ≤2.0 Climate and energy, % Outcome 2024 Target 2030 Scope 1 & 2 Target: 60-percent reduction in CO2e1) by 2030 (base year 2015), measured as CO2e tons/SEK M. Outcome 2024: Emissions intensity amounted to 1.9 CO2e tons/SEK M, corresponding to a reduction of 64 percent compared with 2015. –64 −60 Outcome 2024 Target 2030 Scope 3 Ready-mix concrete2) Asphalt2) −22 –23 −50 Steel reinforcement2) Transportation and machine services –57 +7 Sustainability targets and outcome Dividend policy Outcome 2024 Policy Dividend policy, %2) The Board of Directors has proposed an ordinary dividend of SEK 9 per share and a extra dividend of SEK 2 per share for 2024. 68 ≈60 NCC 2024 3Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Review by the CEO Financial target achieved We reported strong earnings in a challenging market and achieved our fi nancial target of SEK 16 per share for the second consecutive year. The achievement of the target is a result of strong underlying operating profi t and value-generating property sales. Orders received was healthy, particularly in prioritized segments where NCC has specialist expertise in such areas as water treatment, hospitals and energy solutions. The Infrastructure business area performed solidly and ended the year with a healthy order backlog, and Building Nordics achieved record earnings, with Denmark continuing to perform strongly and Finland improving signifi cantly. Building Sweden reported lower earnings as a result of provisions related to projects completed or under completion. The Industry business area reported record earnings, driven by operational discipline, higher prices and lower raw material costs. Following a hesitant market for property transactions at the beginning of the year, Property Development ended the year strongly, completing four sales including one newly started project. This demonstrates the benefi ts of a strong balance sheet, which has enabled us to hold off on selling these projects until we found the right buyer for the properties. Advantages of a large company Our aim is to take the customer through the complex construc- tion process and create value for all stakeholders. NCC has a clear strategic direction aimed at capitalizing on the advantages that come with being a large company. This means that, as a knowledge-based company, we have a culture driven by shared values and behaviors. We work in a data-informed manner, with clear processes to understand and manage costs, leverage the advantages of coordinated purchasing and accumulate specifi c construction expertise. The operational model ensures greater predictability in the business and therefore more stable earn- ings, while strengthening customer relationships and creating the conditions for growth over time. In January 2024, we launched a new business area – NCC Green Industry Transformation. This is NCC’s focused initiative to support industry’s green transformation. Through our long- standing experience of coordinating large, complex projects, and by becoming involved early in the process, we can – in our capacity as contractor – contribute resources and specialist expertise to enable the investments and development projects being pursued to facilitate the transition. NCC has signed two partnering agreements with LKAB concerning major projects, and several other dialogues are ongoing in the business area. At the beginning of 2025, it was announced that we will con- duct a strategic review of the Industry business area. Various options will be evaluated, including a possible divestment of the business area. The purpose is to review the best way to develop the business area going forward and to increase shareholder value in NCC. Financial targets In 2024, NCC achieved earnings per share of SEK 16, which is in line with the company’s fi nancial targets. Our fi nancial targets have been set to focus on creating value for shareholders and to be relevant for all business areas, guiding them in efforts to contribute profi t in absolute terms. No time limit has been set for reaching the target; it is instead based on steadily increasing profi tability in contract and industrial operations, and also assumes profi t recognitions from Property Development. Our strong fi nancial position is an effect of increased profi tability and thus improved cash fl ow in construction operations and Industry as well as recently completed property sales. Sustainable value creation For NCC, 2024 was characterized by stability and strong earnings development. Three business areas reported record earnings. Through careful choices and the positive effects of long-term improvement work, we have been able to demonstrate progress in many areas. Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 4Introduction
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Review by the CEO NCC supports customers in reducing their climate footprint The climate issue and the green transition are strong drivers for today’s societal transformation. NCC is pursuing this work together with our customers and supports them in their efforts to reduce the climate footprint of construction. These activities include work to increase energy effi ciency, choosing the right material for the right place, and by reusing materials. In the asphalt operations, we have taken major steps by phasing out fossil fuels in our asphalt plants, thereby signifi cantly reducing emissions from our own operations. Already in 2024, NCC achieved the target set for 2030 for emissions in its own opera- tions (Scope 1 and 2). NCC has now adopted a new target for own emissions and continues to strive for climate neutrality. Focus always on safety NCC’s primary key fi gure for measuring accidents is the number of accidents resulting in four days or more of absence. The number of accidents is at an all-time low, but we still have some way to go to reach our long-term target. We are also continuing our efforts to completely eliminate serious accidents and inci- dents, and have seen a positive trend in a reduction of serious incidents. In February 2024, a tragic event occurred that affected many people. A fi re broke out at the Oceana water park at Liseberg in Gothenburg, resulting in the death of one person working on behalf of Liseberg. We have worked closely with our client Liseberg and have now been entrusted with the reconstruction of the facility. Our outlook for the future remains positive We continue to see healthy market demand and positive pros- pects in several areas, particularly in infrastructure, industry and public buildings. Other underlying drivers supporting a continued need for signifi cant investment across the Nordic region include preparations in society to address an uncertain security situation as well as the transition to a more sustainable society. The markets for residential construction and commer- cial properties remain cautious. Our focus is to partner with our customers to realize their visions and guide them through the complex construction process. I would like to thank our customers for their confi dence in us. One basic prerequisite for the success of our ambition and our commitments is engaged employees, subcontractors and partners, and I would like to take this opportunity to thank you for your hard work during the year. We would also like to thank our shareholders for their interest and support. Solna, April 2025 Tomas Carlsson, President and CEO “NCC has a clear strategic direc- tion aimed at capitalizing on the advantages that come with being a large company.” NCC 2024 5Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Strategy NCC’s core is the ability to guide customers through the complex construction process. Our operations comprise building con- struction, infrastructure project contracting, asphalt and stone materials production and commercial property development. By realizing hundreds of construction projects every year, NCC con- tributes to positive social development in the Nordic countries. The construction process involves many stakeholders, the need for broad expertise and the ability to coordinate multiple operators. NCC’s strengths include working proactively with customers prior to and during projects and – supported by our data and knowledge – to secure a positive end result for all stakeholders. NCC’s strategic focus means that the company accumulates knowledge, which forms the basis for specialization and focus on specifi c segments. The focus on selected segments pro- vides clear customer value. First and foremost as it allows us to propose the best solutions and structural design early in the process. During the project phase, better conditions are created for effi ciency and time and quality planning. NCC acts to optimally leverage the value created by a large Nordic company with a strong local presence. NCC’s strategic initiatives To achieve the company’s goals and strengthen its market position, NCC focuses on a number of strategic initiatives that form an integral part of the company’s business and operating model. By focusing on these initiatives, NCC is well positioned to continue to deliver value to shareholders and other stake- holders, while contributing to sustainable social development. Values and Star behaviors Building a culture of shared values and behaviors is a key factor in leveraging the strength of a large company. NCC’s Code of Conduct and the Star behaviors framework are central to defi n- ing the desired culture and encouraging behaviors that lead to successful operations. NCC’s values Honesty, Respect and Trust underpin these guiding behaviors. NCC creates value throughout the construction process NCC is a leading player in the Nordic construction market with a strong and well- established position. The foundation for NCC’s strategic focus is being an expert in managing complexity in the construction process. The starting point is to leverage the strength of being a large company combined with strong local presence. NCC’s market NCC conducts operations in Denmark, Finland, Norway and Sweden. The market is fragmented with a large number of participants. Share of net sales and average number of employees. Comparative figures relate to 2023. 21% (22) Denmark Number of employees: 2,100 60% (57) Sweden Number of employees: 6,900 6% (8) Finland Number of employees: 1,000 13% (13) Norway Number of employees: 1,800 Sweden Denmark Norway Finland Building Sweden Building Nordics Infrastructure Industry: Asphalt & Stone materials Stone material Property Development 1) A completely new business area was started as of January 1, 2024, NCC Green Industry Transformation, which will initially have its main focus in Sweden but can work across the Nordic region. Green Industry Transformation1) Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 6Introduction
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Strategy Data-informed decision-making NCC bases its decisions on validated and integrated data, which increases competitiveness and facilitates knowledge sharing. With its size, NCC generates large amounts of data. Capitalizing on this data requires structured and easily accessible informa- tion. The digitization and systematization of data enables effi - cient knowledge sharing between projects and business areas. A future-proof IT backbone Investments in future-proof IT infrastructure support data-in- formed decision-making and provide the necessary fl exibility to adapt to changing customer preferences. Group-wide initiatives Integrated supply chain Integrating purchasing and supply chains in NCC’s projects is crucial to fully utilize suppliers’ expertise and improve overall effi ciency. By building strong relationships with suppliers and integrating their expertise into NCC’s processes, the company can improve purchasing practices, optimize resource use, and ensure the delivery of high-quality projects on time and within budget. Unrivaled cost management Managing project costs effectively from start to fi nish is crucial for delivering value to customers and for creating long-term competitiveness. This requires a comprehensive understanding of customer value, careful planning, good risk management and clear cost control. The Unrivaled Cost Management (UCM) approach simplifi es the conditions for accurately forecasting and monitoring costs, which provides reliable forecasts and early warnings, and this in turn is crucial for maintaining fi nan- cial profi tability and operational effi ciency. Leading construction industry competence Recruiting, retaining and developing skills within the company is a key part of competence building. As part of this, NCC has developed industry-leading training programs in construc- tion processes and project management. By developing our employees and encouraging mobility within the organization, we can ensure that we have the right skills and knowledge in place to manage complex projects and develop operations. Business-area specifi c initiatives Build great business NCC sees great value in involving customers early in the con- struction process. Customers’ needs vary according to market and geography. NCC meets customer requirements by adapting sales and tendering processes to the local market, while these are supported at a central level through training and experience sharing. One example of an initiative during the year is the new NCC Green Industry Transformation business area, which sup- ports customers in the major industrial transition taking place in the Nordic region. Leverage our expertise An important feature of the strategic focus is to further develop NCC’s expertise in specifi c areas. Through sector-specifi c seg- ment strategies, NCC focuses on areas where the company can build unique positions that increase customer value. Examples of areas where NCC has utilized its expertise to a greater extent are hospitals, swim centers and water treatment and sewage plants. To leverage the strength of being a large company, NCC is also focusing on being able to share this expertise throughout the company. Data-informed decision-making A future-proof IT backbone Integrated supply chain Unrivaled cost management Build great business Leverage our construction expertiseLeading construction industry competence Live by our Star behaviors Core Purpose Market position Values NCC’s strategic initiatives Group-wide initiatives Business-area specifi c initiatives NCC 2024 7Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Operations A knowledge-based company with a focus on competence development and culture NCC sees a continued development toward increasingly complex construction projects with a need for specialist expertise in a diverse range of areas. We strive to be an industry leader in managing the construction process and proactively provide the expertise needed at the different stages of the construction project. Major initiatives are therefore taking place in competence development and in building a safe, engaging corporate culture. Engaged employees in a high-performing culture In recent years, NCC has worked purposefully with our corporate culture. Working with shared, guiding behaviors in day-to-day activities – Star behaviors – creates conditions for NCC to achieve set business goals and for employees and work teams to develop, perform at their best and feel a sense of engagement for their work. In the latest employee engagement surveys, the level was 8.0/10, which is clearly above the benchmark and places NCC in the top 25 percent of peer companies1). To further strengthen this positive development, NCC made a minor update to its Star behaviors in 2024. The update aims to more clearly move in the direction of a high-performance culture and strengthen clear leadership and responsible employeeship. NCC’s employee survey shows that Star behaviors are having a positive impact on corporate culture, and that employees have strong sense of engagement. Equally positive is that the overall level of all drivers covered by the survey – such as development opportunities, job recognition and understanding of the strate- gic focus – is above the external benchmark and shows a positive trend. Developing our employees NCC is handling larger and increasingly complex projects, which places high demands on leadership and project management. The ambition of being at the forefront in construction manage- ment is the starting point for skills development at NCC today. In 2024, NCC continued to offer development programs in leadership and project management at the highest level, not least for those who lead the largest and most complex projects – the Mega projects. All leadership programs are based on meeting business needs and the complexities of leading in a project-based organization. The training modules and programs are developed in close cooperation with academic institutions in the Nordic region and Europe. The institutions with which NCC cooperates include Stockholm School of Economics, Copenhagen Business School, IMD and Oxford Global Projects, as well as researchers from Oxford University. Follow-ups of managers and participants showed that the programs contributed to signifi cant improvements in behaviors and offer tools that can directly be implemented into operations and add business value. Other positive effects included increased networking and knowledge sharing within the company. 1) Refers to the Manufacturing & Capital Goods group, where construction & engineering represents almost 50 percent. NCC has a set of behaviors, our Star behaviors, that guide us in our actions to achieve our business goals. Together with our values, they comprise our corporate culture and shape how we act internally – and externally – in relationships with customers and other stakeholders. Act with passion to perform We challenge ourselves and each other to con- stantly improve and outperform our targets and results. Build together We work actively to ensure effective collaboration internally, in and between units, and with our cus- tomers. Follow through and follow up We take data-informed decisions, communi- cate them clearly and always act on what’s decided. Act with care We take responsibility for our actions and use of resources. We mitigate risk and act with integrity to ensure safe, high-quality and responsible operations. Star behaviors Honesty Respect Trust Our values Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 8Introduction
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Operations A safe and healthy work environment Offering a safe and healthy work environment is NCC’s highest priority. We are committed to eliminating serious incidents and fatal accidents, and to reducing all types of accidents. This is a continuous effort and involves and places demands on every- one in our workplaces, including suppliers, consultants and subcontractors. An analysis of the root causes of accidents in the workplace has focused NCC’s work environment efforts on three high-risk areas: heavy lifting by cranes, working at heights and working close to and around heavy machinery. The improvement efforts are focused on planning and organizing work, ensuring strong barriers between people and the risk of an accident, and strengthening the safety culture, as these efforts produce the best results. The NCC Awareness Day is held in September each year. This is an activity when all NCC employees gather at their respective workplaces to refl ect on attitudes and behavior and to discuss safety issues. A strong safety culture is part of NCC’s corporate culture and Star behaviors – to work safely or not at all. The safety culture includes everyone present in the workplace and for NCC this requires the involvement of customers, own employees, suppli- ers and subcontractors. NCC has established work methods and pursues development projects in different phases that together aim to ensure safe work methods and the right authorizations, skills and labor conditions for everyone in the workplace. NCC has zero tolerance for discrimination – no employees should be impeded in their development and careers due to deliberate or non-deliberate discrimination. The results from this year’s employee survey show that employees feel very confi dent that they will not experience discrimination at work. In the latest survey in 2024, the engagement level was 8.8/10, which places NCC in the top 10 percent of peer companies. NCC 2024 9Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Operations The climate issue and the green transition are strong drivers for today’s societal transformation. These factors are also driving NCC’s development. With knowl- edge and expertise, we can satisfy our customers’ needs and challenges in the complex construction process. During the year, work continued to work toward the goal of halving our climate impact across the value chain by 2030. Knowledge and expertise in the climate transition NCC is one of the leading construction companies in the Nor- dics and constructs, maintains and develops the built environ- ment. The construction sector accounts for a signifi cant share of society’s total emissions and therefore has a central role to play in the ongoing climate transition. At the same time, the societal transformation is creating new business opportunities based on changing conditions and needs, such as the demand for building structures with a lower climate impact, investments and infrastructure upgrades, and measures for the long-term climate adaptation of cities. Based on customer needs and circumstances, NCC aims to play a leading role in the transition of the industry toward climate neutrality. Our strength is our expertise and deep knowledge of the complex construction process. By using our knowledge, working with early involvement and customer and stakeholder dialogue, NCC can propose innovative solutions for a lower climate impact. In addition to expert knowledge, access to reliable data is a prerequisite for analysis and well-founded decision-making. During the year, NCC continued its efforts to provide data and digital information about processes and products. This enhances traceability and the ability to compare environmental performance and make informed, fact-based choices. To actively support the climate transition, it is also essential that we interact and collaborate with customers, suppliers and subcontractors. NCC is active in various national industry bodies to promote knowledge sharing and technological advances, and to advocate for joint issues. The company also initiates and participates in research and develop- ment projects. Climate targets NCC’s long-term target is to achieve climate neutrality by 2045. One of NCC’s two interim targets is to reduce the emissions intensity in the company’s own operations (Scope 1 and 2) by 60 percent by 2030, which means 2.08 CO2e tons/SEK M. A multi-year initiative to convert the company’s asphalt plants from fossil fuel to biofuel has resulted in NCC achieving the target ahead of schedule by the end of 2024. The level was then 1.9 CO2e tons/SEK M, a reduction of 64 percent compared with base year 2015. NCC has decided to increase its target for reducing emissions intensity in own operations (Scope 1 and 2) to 75 percent by 2030, which means 1.3 CO2e tons/SEK M. A major challenge is the climate impact emanating from across the value chain (Scope 3). NCC second interim target is to halve these emissions by 2030 com- pared with 2015. To date, climate actions have focused on the four prioritized areas in the “Purchased goods and services” category that are considered to have the greatest climate impact: concrete, steel, asphalt and transportation. NCC 2024 10Introduction Other Financial statements Report of the Board of Directors Sustainability Report
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Operations Work continued in 2024 to analyze our overall carbon emissions in the value chain to support the drafting of a Group-wide climate action plan. The analysis is also part of meeting the requirements for accurate sustainability reporting under the EU Corporate Sustainability Reporting Directive (CSRD). Continued focus on reduced climate footprint NCC’s climate impact comes mainly from the production of materials and the fuel used in the construction process. To reduce climate impact, we are focusing on materials such as concrete, steel and asphalt as well as on transportation and machinery. Our expertise in lifecycle assessment and climate calculations supports customers throughout the construction process and enables designs that optimize the selection of material and structural elements for a lower carbon footprint. Concrete has a high climate impact, but also several advan- tages and is central to many construction projects. NCC works according to a Group-wide roadmap for climate-neutral con- crete-based construction, with three main perspectives: the right concrete in the right place, minimize the amount of cement in concrete, and minimize the volume of concrete. During the year, NCC’s business areas continued to develop and implement solutions for concrete optimization in projects, create new tools and improve internal processes. NCC also participates in various research projects, has close supplier partnerships and an active customer dialogue to increase knowledge sharing. Habitat 7 is a state-of-the-art office building in Gothenburg’s new Masthuggskajen district. With the goal of reducing the construc- tion-phase climate impact by 40 percent, NCC has concentrated on optimizing the use of materials such as concrete and steel, which account for a substantial part of the climate footprint. Solutions that have a low climate impact and are very cost effective have been identified by analyzing the building’s location, design and façade system. The early phases were crucial to ensure that the right materials and building systems were used in the right places. By applying resource-efficient and optimized construction solutions, the volume of concrete was minimized without compromising on function and quality. In addition, climate-improved concrete was used to reduce emis- sions. The frame consists mainly of solid wood, thereby reducing the climate impact compared with a conventional steel and concrete frame. An electric pile driving rig and hybrid wood and concrete piles were used for the foundations to further reduce the carbon footprint. The climate impact during construction of Habitat 7 is estimated to be 230 kg CO 2e/GFA (gross floor area), a reduction of more than 40 percent compared to a reference office according to the Sweden Green Building Council’s Noll CO2 (Zero CO2) certifica- tion. This includes all materials used in the project, meaning a larger scope than what is encompassed by the Swedish National Board of Housing, Building and Planning’s climate declaration. Habitat 7 in Gothenburg – The right material used in the right place reduces climate impact by 40 percent. NCC 2024 11Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Operations To reduce the climate impact of steel, it is crucial to make well- informed purchases from producers that provide products with lower emissions. NCC uses environmental product declara- tions in the evaluation of suppliers, and NCC’s emissions for reinforcement steel have fallen by 57 percent since 2015. By also developing its own product offerings and producing envi- ronmental product declarations, NCC helps its customers to drive positive change. In asphalt, NCC has extensive experience of developing methods to reduce the climate footprint of the asphalt produc- tion phase. This is mainly achieved through biofuels, energy optimization and incorporating reclaimed asphalt pavement (RAP). To highlight the deteriorating road network in Scandina- via, NCC published a report at the beginning of the year on the maintenance debt in the region. The report outlines actions to address the maintenance debt while reducing the climate foot- print of asphalt by up to 50 percent by 2045. As part of its initiatives to reduce its climate footprint, NCC is also focusing on transportation and machinery services, which account for a substantial share of total emissions. Transporta- tion can be reduced by optimizing logistics chains and improv- ing freight effi ciency, particularly in connection with civil engi- neering works and major excavation works. Another approach is to replace fossil fuel with biofuel. NCC is also endeavoring to meet the increased demand for emission-free construction sites and electrifi ed vehicles and machinery. Climate adaptation for increased resilience Greenhouse gas emissions are changing our climate, and the consequences for our society and the world are plain for all to see. The effects of climate change, such as fl ooding and higher temperatures, are also expected to increase in the future. Society and customers are demanding solutions for climate adaptation and the use of innovative technologies and materials are giving rise to new business opportunities. NCC’s offering includes various drainage products, and the company endeavors to ensure that buildings and civil engineer- ing projects to a greater extent are climate future-proofed. NCC also conducts projects directly aimed at achieving enhanced climate adaptation, such as building structures to manage stormwater and heavy rainfall in urban areas or protecting shorelines and ports. NCC’s asphalt laboratory southwest of Oslo has devel- oped a new asphalt mixture that results in almost emis- sions-free asphalt, based on a lifecycle assessment. The first surface to be paved with the new asphalt was located in Kristiansand, in southern Norway. The 150-meter stretch of road is a pilot and an key milestone. The mixture replaces traditional fossil-based resin with wood oil derived from forest industry waste. Forests absorb carbon dioxide from the atmosphere, which is then stored in the wood material. When asphalt is laid, it binds carbon dioxide in the road surface. The tested asphalt uses 40 percent reclaimed asphalt pavement (RAP) and 60 percent new asphalt. The RAP contains some bitumen, which is included in climate calculations. The wood oil comes from pine trees and is a residual product from paper production. Average CO2e emissions per ton of asphalt produced is 44 kg (reference value, Norwegian Public Roads Adminis- tration, 2023). 90 tons of asphalt were used to pave the 150-meter-long stretch in Kristiansand, yielding a reduction of almost 7 tons of CO 2e. NCC uses wood oil to produce almost emissions-free asphalt. Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 12Introduction
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Operations In partnership with the Käppala Association, NCC is expanding the Käppala wastewater treatment plant on Lidingö in Stockholm. In addition to deploying various methods to minimize the overall need for concrete, NCC used a concrete mixture that includes slag, a waste product from steel production. By using concrete with less cement, the climate impact of the concrete in the project could be reduced by 28 percent versus conven- tional concrete. The use of slag in concrete has several benefits. When concrete with cement cures, it produces heat and must be cooled to prevent cracking. Concrete containing slag does not reach such high temperatures and therefore requires less cooling, at the same time as the risk of cracking is reduced. In addition, the concrete is stronger and better able to withstand the harsh environment of a wastewater treatment plant compared with conventional concrete. In the Danish region of Jutland, the city of Randers is located just northeast of the Gudenå River. To protect the Vorup city district from torrential rain and rising water levels, NCC transformed the Storkeengen nature park. The project was completed in 2024 and rain- water from Vorup is now led underground and via channeling routes to Storkeengen, where surface water is collected before being discharged into the Gudenå River. A treat- ment basin with channeling, dual valve and a pumping station were built. A 270-meter-long embankment against the Gudenå River formed a crucial element of the climate adaptation. New hiking trails give local residents access to a beautiful recreational area close to Randers city center. Emissions reduction and higher quality in connection with expansion of Käppala plant. Climate adaptation of Storkeengen nature park prevents fl ooding. NCC 2024 13Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Operations A sustainability framework forms the foundation for the Group’s sustain- ability work. It encompasses our work to pursue and develop operations to ensure that they generate long-term value – fi nancially and in respect of the environment and climate, human health and wellbeing, and on the basis of sound ethical and governance principles. This framework rests on a base comprising NCC’s core, purpose, values and Star behaviors. A prerequisite for long-term sustainability work is healthy and sustainable profi tability. Data and expertise are integral parts of NCC’s strategic focus and also of our sustainability agenda. This ensures a positive end result and generates value for the customer and other stakeholders. The framework’s six impact areas illustrate the aspects and issues that are most important for NCC to work with and where the impact is greatest. Three of the areas relate to environmental issues: Climate and energy, Natural resources and ecosystems, Materials and circularity. Two areas relate to social dimensions: Health and safety and People and team. One area focuses on how the company conducts its opera- tions: Ethics and compliance. In 2024, preparations continued ahead of future reporting according to the CSRD. NCC has conducted a double materiality assessment to identify NCC’s impact, which includes both negative and positive effects that the company has on people and the environment. It also demon- strates how various external sustainability matters may pose a risk or opportunity for NCC’s fi nancial development. In the double materiality assessment, NCC identifi ed and assessed its impacts, risks and opportunities, resulting in a number of material sustainability matters. These matters confi rm the impact areas that NCC has previously identifi ed in its sustainability framework. Some adjustments were made to the sustainability framework during the year, including some additions that NCC considers strategically important to work with going forward. For more information on the double materiality assessment, see p. 23. Targets for sustainability work NCC has Group-wide targets in two areas: Climate and energy and Health and safety. We also report and follow up work in other areas at Group level. Each business area then has relevant sustainability targets and key fi gures for its own operations. NCC supports Agenda 2030 and the Sustainable Development Goals (SDGs). NCC’s potential to contribute is integrated in the sustainability framework and the Group’s overall work to develop the business. Positive impact through core business NCC’s core business – building and developing the built environment – has the potential to contribute to achieving the SDG 7 (Affordable and clean energy), 9 (Industry, innovation and infrastructure), 11 (Sustain- able cities and communities) and 12 (Responsible consumption and production). Resource management NCC has the potential, through its offerings, to contribute to developing products and work methods that improve the situation for both people and the environment. In this context, NCC has the potential to contribute to SDG 3 (Good health and well-being), 6 (Clean water and sanitation), 13 (Climate action), 14 (Life below water) and 15 (Life on land). Based on our values: Honesty, Respect and Trust NCC works with distinct and value-driven principles to promote SDG 4 (Quality education), 5 (Gender equality), and 8 (Decent work and eco- nomic growth). Cooperation and partnerships with various stakeholders are prerequisites for making the transition to a sustainable world by 2030, as refl ected in SDG 16 (Peace and justice strong institutions) and SDG 17 (Partnerships to achieve the goal). Read more at ncc.com. A shared sustainability framework NCC’s sustainability framework is the starting point for the Group’s sustainability work. In addition to the Group-wide sustainability targets, the business areas set operations-specific sustainability targets. Investor report for Green Bonds Each year, NCC publishes an investor report for the com- pany’s Green Bonds and reports its climate emissions to CDP . NCC has a Green Financing Framework that has been verified by the Center for International Climate and Environ- mental Research (CICERO). The framework has been given the highest rating of Excellent for governance and the overall rating of Medium Green under the Shades of Green methodology. Read more at: ncc.com Report of the Board of Directors Financial statementsSustainability Report Other NCC 2024 14Introduction
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Operations Our impact areas Climate and energy Greenhouse gas emissions Energy Climate adaptation Health and safety Occupational health and safety Natural resources and ecosystems Virgin materials Biodiversity Water Pollution People and team Fair working conditions Learning and development Diversity, equity and inclusion Employee engagement Materials and circularity Resource use Hazardous substances Waste Environment Social Data and expertise Value for customers and other stakeholders Economic performance Stable, sustainable fi nancial performance Our core Our core: Our ability to manage the complexity of a construction process Our purpose: To take the customer through the construction process to ensure a positive end result for all stakeholders Our values: Honesty / Trust / Respect Our Star behaviors Act with passion to perform / Build together / Follow through and follow up / Act with care Ethics and Compliance Anti-corruption Fair competition Responsible purchasing Data protection Governance NCC’s sustainability framework NCC 2024 15Report of the Board of Directors Financial statementsSustainability Report OtherIntroduction
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Sustainability Report General disclosures 17 Basis for preparation 17 Governance 17 Strategy 20 Impact, risk and opportunity management 22 Environmental disclosures 24 Reporting according to the EU Taxonomy 24 Climate change 31 Biodiversity and ecosystems 37 Resource use and circular economy 38 Social disclosures 40 Own workforce 40 Workers in the value chain 46 Governance disclosures 47 Ethics and compliance 47 About the report 50 Auditor’s statement 51 Introduction Report of the Board of Directors Financial statements Other NCC 2024 16Sustainability Report
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Basis for preparation The 2024 Sustainability Report has been prepared in accor- dance with the Swedish Annual Accounts Act and is partially inspired by the European Sustainability Reporting Standards (ESRS) – a step that marks a transition from the previous reports. This adjustment to the requirements of ESRS is refl ected in NCC’s ongoing efforts at integrating and harmo- nizing our sustainability initiatives with the ESRS structure. Previous years’ sustainability reports have been prepared with reference to the Global Reporting Initiative (GRI). The information in the Sustainability Report was consolidated on the same basis as the fi nancial statements except for joint arrangements where operational control applies. Both the Sus- tainability Report and the fi nancial statements encompass the Parent Company and the companies and operations in which the Parent Company – directly or indirectly – has a controlling interest, as well as joint arrangements and associated compa- nies. The report covers both NCC’s own operations and the upstream and downstream value chain. All material sustain- ability matters in the value chain are reported on the basis of the double materiality assessment of impacts, risks and opportunities. NCC’s material Group policies are described in the Policies and governing documents section, whereas activities, goals and metrics are presented in connection to the respective sustain- ability topic. Governance A description of the role of the administrative, management and supervisory bodies is provided in the Corporate Governance Report, along with a presentation of the Board members and Senior Management Team. The NCC Board is continually informed about the activities of the various parts of the Group, including the aspects encom- passed by the sustainability framework. Various elements of these activities are presented by Group functions and business areas at Board meetings. The Board conducts reviews and follow-ups to ensure that NCC is working in line with the Group’s targets. The Board of Directors’ Audit Committee is responsible for issues related to sustainability activities and the associated reporting. Risks and opportunities that have been identifi ed as part of the double materiality assessment are also included in the Audit Committee’s yearly agenda. The Board is informed of – and approves – the outcomes of the materiality assessment via the Audit Committee, with the understanding that this forms the basis for statutory expectations of NCC’s future sustain- ability reporting and thus falls within the scope of the Board’s responsibilities. NCC’s Senior Management Team (SMT) is responsible for establishing and monitoring the Group’s sustainability targets. The SMT regularly addresses Group-wide activities, and pro- cesses issues covered by the sustainability framework. On two occasions this year, the Senior Management Team monitored the climate targets and also discussed Group-wide topics in conjunction with this. Health and safety targets were followed up every quarter. Each business area has responsibility for its respective sustainability activities. Operation-wide targets are set in each business area, and followed up on at regularly scheduled busi- ness reviews. Furthermore, the various Group functions Legal Affairs & Risk, Purchasing, Finance & IT, Communication and HR – pursue their own sustainability activities that could relate to Group-wide responsibilities and support for individual business areas as well as specialist functions. NCC’s Common Environment Team is a forum, with represen- tatives from all business areas and relevant Group functions, that coordinates and pursues Group-wide environmental topics. The forum is responsible for coordinating the environmental and climate activities that fall under the Group-wide sustainabil- ity framework. NCC also has a forum called the Sustainability Reporting Board, with representatives from all business areas and relevant Group functions, that coordinates and pursues sustainability reporting. It focuses on Group-wide targets and sustainability data, as well as coordinating the collection and reporting of data. The Group Compliance Committee (GCC), containing representatives from selected Group functions, is responsible for follow-up of the implementation of NCC’s Com- pliance Program as well as generally reviewing reports of sus- pected serious irregularities and breaches of rules within NCC’s whistleblower channel and that these are handled appropriately. To further support effective governance, all NCC business areas are certifi ed or work in accordance with ISO 14001 and ISO 9001. Substantial portions of the operational units are also certifi ed in accordance with ISO 45001. General disclosures Introduction The Board of Directors and the President and CEO of NCC AB (publ), Corporate Registration Number 556034-5174 and headquartered in Solna, Sweden, hereby submit the Sustainability Report for the 2024 fi scal year. This Sustainability Report describes NCC’s efforts to pursue and develop operations in respect of the environment and climate, human health and well-being, and on the basis of sound ethical and governance principles. The Sustainability Report this year is structured and arranged to facilitate the transition to the 2025 Sustainability Statements, which will be prepared in accordance with the European Sustainability Reporting Standards (ESRS). NCC 2024 17Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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General disclosures Preparatory work ahead of reporting under ESRS is led and organized by an internal group, with an associated steering group that consists of members from the Senior Management Team. Subject experts in sustainability matters at Group level have been have been involved in the double materiality assess- ment. Employees from the business areas and Group functions who are experts in the various sustainability matters also participated in identifying impacts, risks and opportunities. The activities within this grouping are temporary in nature, but will continue in 2025. Policies and governing documents NCC has a Code of Conduct as well as several policies and governing documents that are of relevance to its work on sus- tainability matters. All policies, directives and governing docu- ments are collected in the Group Management System (GMS), where they are available to all employees. Sustainability policies that are also material to our external stakeholders are available on the NCC website. Each business area can have its own, further adapted, versions of the governing documents, which in these cases are collected in the management system of the respective business areas. Code of Conduct NCC’s Code of Conduct describes the type of conduct that NCC expects from its employees, management, Board of Directors and business partners. It is based on applicable laws and regu- lations, NCC’s values, Star behaviors and on voluntary initiatives adopted by the Group. The Senior Management Team is respon- sible for ensuring compliance with the Code of Conduct and policies, which is continuously monitored as part of the frame- work of operating activities. Suspicion or observations of poten- tial violations of the Code of Conduct or other serious irregulari- ties may be reported in NCC’s “Tell Me” function, which includes an option to report anonymously. The “Tell Me” function is avail- able to both NCC’s employees and external individuals. Code of Conduct for Suppliers NCC has a Code of Conduct for Suppliers that is based on the content of NCC’s Code of Conduct and describes the expecta- tions on our suppliers. Areas such as the environment, human rights, anti-corruption and regulatory compliance are included in the Code of Conduct for Suppliers. This applies to all entities that supply NCC with products, personnel or services, including direct and indirect suppliers, service suppliers, sub-suppliers, intermediaries and agents. Under the Compliance Directive, the Code of Conduct for Suppliers is a mandatory component of NCC’s contracts. Compliance Directive NCC’s Compliance Directive relating to regulatory compliance includes the Group’s policies and guidelines concerning anti-bribery and anti-corruption, fair competition, confl icts of interest, counteracting fraud, data protection, diversity and human rights. The directive also describes NCC’s Compliance Program, including due diligence on business partners, the whistleblower channel and policy against reprisals for whistle- blowing. Information on the content of the Compliance Directive is regularly distributed via internal communication channels and training courses arranged for NCC’s employees. Health and Safety Policy and Directive Health and safety initiatives at NCC are governed through a Health and Safety Policy and Directive, which are Group-wide and apply to everyone who works at NCC’s worksites. The Policy serves as a guide for how to act and make decisions that are in line with our target of reducing all forms of accidents and com- pletely eliminating accidents with a serious or fatal outcome. Purchasing Policy NCC’s Purchasing Policy addresses, on a general level, the orientation that has been set for the Group-wide purchasing process, both from a business perspective as well as a sustain- ability perspective. The Purchasing Policy is based on NCC’s Code of Conduct and the Group’s shared values. The Policy highlights the need for continuous development of ways of working in responsible purchasing and for building further on existing competence, in order to promote a positive outcome for all stakeholders involved. Sustainability and Environmental Policy Initiatives within sustainability are governed by the Sustainability and Environmental Policy and the sustainability framework adopted by NCC. The Sustainability and Environmental Policy encompasses the entire NCC Group and addresses all employees, suppliers and sub-suppliers. Under the Policy, NCC commits to promote a sustainable society by carrying out its operations in an economically, socially and environmentally sustainable manner, taking the needs of current and future generations into account. Efforts to update and further develop the Policy are ongoing. Tax Policy The Tax Policy applies to all divisions and employees of the Group. It is intended to establish a framework for the company’s position on tax issues, and defi nes principles for regulatory compliance, transparency and risk management linked to tax. Tax Directive The Tax Directive applies to all of the Group’s divisions, and governs how internal pricing and interactions with tax authori- ties are to be handled. Introduction Report of the Board of Directors Financial statements Other NCC 2024 18Sustainability Report
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General disclosures Important policies and governing documents Policy Area Code of Conduct Environment, human rights, social topics, anti-corruption and regulatory compliance Code of Conduct for Suppliers Environment, human rights, social topics, anti-corruption and regulatory compliance Compliance Directive Anti-corruption, fair competition, counteracting fraud, conflicts of interest, data protection, diversity and human rights, as well as a description of the Group’s Compliance Program Health and Safety Policy Social topics Health and Safety Directive Social topics Purchasing Policy Responsible purchasing Sustainability and Environmental Policy Environmental, social topics and anti-corruption Tax Policy Tax Tax Directive Tax Integration of sustainability-related performance in incentive schemes Long-term performance-based share-related incentive pro- grams have been established at NCC. These are three-year programs that are clearly linked to the business strategy, and thus to the company’s long-term value creation, including sus- tainability. The terms and conditions of the incentive programs are determined by the Annual General Meeting. For more infor- mation on the programs, and the criteria on which outcomes are dependent, refer to Note 4 in the fi nancial statements. Risk management and internal controls over sustainability reporting NCC’s sustainability reporting faces risks such as incomplete- ness and insuffi cient data, precision in estimated data, avail- ability of data in the value chain and the timing at which the data is available. Preventive activities include controls designed to cover both general procedures and specifi cally identifi ed risks throughout the NCC organization. This includes, for example, consultation of experts in relevant fi elds, the various IT initia- tives that create conditions for good data processing, and recur- ring meetings with the Sustainability Reporting Board and other forums where risks and questions can be raised and addressed. High priority is given to developing and structuring a robust management and internal controls over sustainability reporting. There are extensive efforts ongoing in the organization and within the sustainability functions to ensure solid risk manage- ment and controls. Over time, sustainability-related procedures will be integrated into NCC’s procedures for various types of internal audits, reviews and self-assessments in pace with the maturation of these procedures. These initiatives will continue through 2025 and beyond. NCC 2024 19Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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General disclosures Value chain NCC has a large supplier base comprising over 32,000 suppliers. A large proportion of building and construction materials used at our facilities are characterized by complex global supply chains. Many materials in NCC’s operations are linked to the mining and extraction industries, and related raw materials such as bitumen, iron, steel, concrete and plastic products may be produced in regions with greater risk of violations of human rights and workers’ rights as well as environmental risks. The majority of NCC’s direct suppliers are based in the Nordic region, and also in counties such as Poland, Estonia, Latvia, Lithuania and China. In addition to purchases made through materials suppliers, NCC also procures services that are provided by sub-suppliers, as well as transport and excavation services. In its own operations, NCC is responsible for planning and completion of construction and civil engineering projects as well as maintenance and redevelopments. During the design phase, NCC works to optimize the choices of material and production processes in order to minimize environmental impact. Own operations also include extraction of stone materials and manu- facturing of asphalt. Downstream in the value chain, buildings and other com- pleted projects are delivered to the customer for future manage- ment and operation. NCC works actively to support circularity and enable a greater proportion of reuse and recycling, and to minimize volumes of waste. Downstream Upstream Extraction of raw materials, manufacture of materials Transportation Materials and services Use of buildings and infrastructure Final disposal – reuse, recycling and waste management Industry – asphalt and stone Construction and civil engineering Property development Own operations Strategy NCC’s strategic focus and business model The core of NCC is its ability to guide customers through the complexity of a construction process. Our operations comprise building construction and infrastructure project contracting, asphalt and stone materials production and commercial property development. The construction process involves many stakeholders, the need for broad expertise and the ability to coordinate multiple operators. NCC’s strengths include working proactively with customers prior to and during projects and – using our data and knowledge – to secure a positive end result for all stakeholders. NCC has a sustainability framework as a foundation for the Group’s work. The framework rests on a basis comprising NCC’s core in the form of its purpose, values, Star behaviors and Code of Conduct. To read more about the sustainability framework, see section Operations in the Introduction. NCC has set targets of becoming climate neutral by 2045 and reducing its own emissions (Scope 1 and 2) by 60 percent by 2030. At the end of 2024, a reduction of 64 percent had been achieved compared with base year 2015. However, the major challenge is to reduce the emissions emanating from the value chain (Scope 3). Read more about this in the section Climate change. NCC has set a target of halving these emissions by 2030 compared with 2015. The effort to reduce emissions in the value chain has focused so far on the four prioritized areas in which the largest emissions are found. These are concrete, steel, asphalt and transportation. In addition to the climate neutrality goal, NCC has set a target for health and safety, where L TIF4 (work-related accidents that result in more than four calendar days of absence per million hours worked) will be less than or equal to 2.0 by 2026. At the end of 2024, L TIF4 totaled 3.3. Read more about this in the section Own workforce. Introduction Report of the Board of Directors Financial statements Other NCC 2024 20Sustainability Report
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General disclosures Summary of NCC’s ongoing dialogues with various stakeholder groups Stakeholder group Issues in focus Type of dialogue Customers Reduced climate footprint. Energy efficiency. Circularity. Reuse. Biodiversity. Control over the supply chain. Health and safety. Sound working conditions. Personal meetings. Partnership projects. Customer surveys. Customer seminars and events. People Safe and secure workplaces. Skills and career development. Good leadership. Diversity, equity and inclusion. Long-term economic value growth. Responsible enterprise. Reduced climate footprint. Daily workplace dialogues. Employee surveys. Work environment measurements, work environment dialogues, safety rounds at workplaces, workplace meetings, in-house training. Employee dialogue. Dialogue and activities with students. Structured internal network. Program for younger talents. Shareholders, investors, banks and other representatives of the financial market Long-term economic value growth. Responsible enterprise with a focus on sound working conditions, work to counter corruption and bribery and control of the supply chain. Reduced climate impact, increased circularity and efficient use of materials. Health and safety. Routine risk assessment and risk management. Annual General Meeting, meetings in conjunction with quarterly reporting, participation in questionnaires and dialogue with investors, individual meetings. Participation in seminars arranged by players in the financial market. Suppliers and subcontractors Sound working conditions with respect to human rights. Climate impact. Circularity. Long-term economic value growth. Procurement processes, supplier assessments, meetings with suppliers, supply days, partnership projects, supplier audits. Society Good dialogues prior to, during and after the construction and work process, to achieve a favorable end result for all stakeholders. Participating in the development of new know-how. Dialogues with local inhabitants, which frequently occur in collaboration with NCC customers. Cooperation with colleges and universities. Interests and views of stakeholders NCC’s principal stakeholder groups are customers, employees, suppliers and subcontractors, shareholders, investors and the fi nancial market, as well as society in the form of experts and representatives of various groups in society. NCC engages in dialogue with the stakeholder groups within the framework of operating activities and also implements structured surveys and dialogues, including customer surveys and employee surveys. NCC also creates opportunities for dialogue with specifi c stakeholder groups in the form of supplier days, Capital Market Days and meetings in conjunction with fi nancial reporting. Furthermore, NCC participates in stake- holders’ initiatives, for example through dialogues with suppliers, investors and customers. NCC also participates in industry-wide collaborations and actively participates in the work of, for example, industry associ- ations, business organizations and chambers of commerce in the markets where we operate. When it comes to silent stakeholders such as nature, NCC uses the expertise in the environmental fi elds that is available within the organization, as well as continual contact with and monitoring of developments in these areas. NCC also takes into account the dialogue and engagement that accompany normal business relationships, such as in business meetings and simi- lar activities. The viewpoints and interests of the principal stakeholders were taken into account when conducting the double materiality assessment, which contributed to the identifi cation of the mate- rial sustainability matters that are presented in this report. NCC 2024 21Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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General disclosures Impact, risk and opportunity management Material impacts, risks and opportunities were identifi ed during the double materiality assessment and are presented in the upcoming sections. Process for assessing material impacts, risks and opportunities NCC conducted a double materiality assessment in 2024.This process included identifying and assessing impacts, risks and opportunities that were then used as the basis for establishing material sustainability matters. Where possible, existing frame- works, scales and work methods regarding risk assessment were used to ensure quality. The double materiality assessment is conducted from two perspectives: impact materiality and fi nancial materiality. Impact materiality pertains to the actual and/or potential effects that NCC has on people and the environment, while fi nancial materiality pertains to the sustainability-related risks and opportunities that have or could have fi nancial effects on NCC. When the fi nancial materiality assessment was carried out, the topics and their assessments were synchronized with the impact assessment, and their connections and dependen- cies were taken into account. The double materiality assess- ment takes into account the impact that is generated both from own operations and through business relationships. The pro- cess accounted for potential factors that give rise to increased risk of negative impact. As an example, the material categories that are considered having the greatest impact were identifi ed, and received extra attention during the assessment. The double materiality assessment involved several experts and key roles within NCC’s business areas as well as in purchas- ing, HR, legal and fi nance, which were deemed relevant for the analysis. This was done to cover perspectives along NCC’s entire value chain and to ensure a well-balanced outcome. The perspectives of affected stakeholders were taken into account during the process, both through the knowledge of the experts about their respective topics’ stakeholders and through the stakeholder analysis that was previously conducted. NCC will review the process of identifying, evaluating and prioritizing impacts, risks and opportunities on a yearly basis, and thereby taking into account ongoing trends, assumptions, changed circumstances and context, as well as regulatory changes. Efforts are under way to integrate the process of the double materiality assessment with NCC’s general risk management process. Scoring method The scoring method connected to the materiality assessment and its criteria focused on: • Impact materiality: Scale, scope and irremediability were taken into account for actual negative impact. Likelihood was taken into account as an additional parameter when analyzing potential impact. The irremediability was not taken into account when analyz- ing positive impact. In cases where there is a risk for violation of human rights, severity takes precedence over likelihood. • Financial materiality: The size of fi nancial risks and opportunities, their likelihood and type of fi nancial effect were analyzed. In addition to the above, the time horizon (short, medium or long-term) was considered for each impact, risk and opportu- nity. The score assigned to the respective parameters was consolidated into a total score. This was then used to set a threshold and determine materiality. Decision process Impacts, risks and opportunities were assessed together with relevant internal experts and stakeholder representatives in the applicable topics. The process and outcome of the double materiality assessment have been approved and validated by the steering group of the CSRD project and the Audit Committee. The steering group comprises members of NCC’s management team. Introduction Report of the Board of Directors Financial statements Other NCC 2024 22Sustainability Report
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General disclosures NCC’s material sustainability matters Sustainability topic Sub-topic Where in the value chain Climate change Climate change adaptation Throughout the value chain Climate change mitigation Throughout the value chain Energy Throughout the value chain Biodiversity and ecosystems Direct impact drivers of biodiversity loss Upstream, own operations Impacts on the extent and condition of ecosystems Own operations Resource use and circular economy Resource inflows, including resource use Throughout the value chain Waste Throughout the value chain Own workforce Working conditions Own operations Equal treatment and opportunities for all Own operations Workers in the value chain Working conditions Upstream Other work-related rights Upstream Ethics and compliance Corporate culture Throughout the value chain Management of relationships with suppliers, including payment practices Upstream, own operations Corruption and bribery Throughout the value chain NCC 2024 23Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Reporting according to the EU Taxonomy Taxonomy-aligned activities The activities that NCC assesses to be Taxonomy-aligned and their criteria for making a substantial contribution to one of the six environmental objectives of the Taxonomy are presented below. In addition to meeting the criteria for making a substan- tial contribution, the Taxonomy-aligned activity must also do no signifi cant harm (DNSH) to the other Taxonomy objectives, and meet minimum social safeguards. In all of its Taxonomy-aligned activities, NCC contributes to the environmental objective of Climate change mitigation. Sector – Energy NCC performs work at facilities that generate electricity from hydropower and wind power, and builds high-voltage electricity grids and distribution systems that transport electricity in high-voltage grid systems. NCC also builds and refurbishes pipelines and associated infrastructure for the distribution of heating and cooling. Aligned activities: • Electricity generation from hydroelectric power: Project activities at electricity generation facilities produce emissions of less than 100g CO2e per kWh. • Transmission and distribution of electricity: The transmission and distribution infrastructure or equipment is the interconnected European system, i.e. the interconnected control areas of Member States, Norway, Switzerland, the United Kingdom and its subordinated systems. • District heating/cooling distribution: Project activities meet the defi nition of effi cient district heat- ing and cooling systems laid down in Article 2, point 41, of Directive 2012/27/EU, or represent modifi cation to lower temperature regimes/advanced pilot systems (control and energy management systems). Sector – Transport A large proportion of NCC’s operations is linked to transport infrastructure in the form of, for example, railways, roads and bicycle logistics. Aligned activities: • Infrastructure for personal mobility and cycle logistics: Infrastructure that is intended for pedestrians and bicycles, with or without electric motors. • Infrastructure for rail transport: Projects have participated in the construction of infrastruc- ture for the electrifi cation of railways, serving as interchange points for travelers between trains, or from other means of transport to trains. The infrastructure is available for various types of rail transport. For all of the above activities in the Transport sector, the infra- structure also meets the criteria that it is not intended for the transport of fossil fuels. Environmental disclosures Introduction NCC’s operations include projects in construction, civil engineering, industry and property development. The operations span several activities of the Taxonomy. To evaluate the business, NCC has established a reporting method based on its various products, projects and sites. NCC’s products are initially reviewed against the economic activities in the Taxonomy. Projects with a product that correspond with an economic activity are Taxonomy-eligible. These projects are subsequently assessed based on established technical screening criteria in order to evaluate whether the project is Taxonomy-aligned. This assessment is based on the sector’s establishedinterpretations of technical screen- ingcriteria. NCC applies thresholds to identify projects and products that should be evaluated on the basis of the technical screening criteria. Introduction Report of the Board of Directors Financial statements Other NCC 2024 24Sustainability Report
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Environmental disclosures Sector – Construction and real estate Construction of new buildings accounts for a major share of NCC’s business and includes hundreds of projects, both residen- tial and non-residential buildings such as schools and hospitals. In addition to construction of new buildings, renovation of exist- ing buildings is another major area for NCC. Acquisition and ownership of buildings accounts for a minor share of NCC’s operations and it is the rental revenue that arises before a prop- erty is recognized in profi t that is classifi ed. This sector also includes asphalt maintenance of streets, roads and highways carried out by the NCC Industry business area. Aligned activities: • Construction of new buildings: The building’s energy performance is at least 10 percent lower than the threshold set on the building permit date, which is certifi ed by the energy declaration. The buildings undergo testing for air-tightness and thermal integrity in accordance with prescribed requirements and standards. For larger buildings, the life-cycle Global Warming Potential (GWP) of the building resulting from the construction has been calculated for each stage in the life cycle, or an accepted alternative method in the respective countries. • Acquisition and ownership of buildings: For acquisition and ownership of large buildings, in addition to a reduction of primary energy demand of at least 10 per- cent compared with national requirements, the building must be operated effi ciently by following up and evaluating energy consumption. This applies only to non-residential buildings. Do no signifi cant harm criteria For an activity to be Taxonomy-aligned, in addition to meeting the technical screening criteria for a substantial contribution to a specifi c environmental objective, it must do no signifi cant harm (DNSH) to any of the other fi ve objectives. NCC applies the following criteria to each project to ensure they do no signifi cant harm. Climate change mitigation Since all of NCC’s Taxonomy-aligned activities contribute sub- stantially to climate change mitigation, the ‘do no signifi cant harm’ criteria are not applicable. Climate change adaptation A risk and vulnerability assessment was performed in relation to future climate change. Where relevant, local changes in tem- perature, wind, water and solid mass, was taken into account. Sustainable use and protection of water and marine resources For construction and renovation, low water fl ow fi xtures are to be installed that meet the requirements of the Taxonomy. For other economic activities, the sustainable use and protection of water and marine resources is complied with on the basis of existing legislation for permits, environmental impact assessments or self-assessments, and taking actions to comply with these. Transition to a circular economy In projects for transmission and distribution of electricity, there must be a waste management plan in place that ensures the highest possible degree of reuse/recycling upon fi nal disman- tling/demolition. The plan must be based on the waste hierarchy, be communicated and economic means must be set aside for the management. For the Taxonomy sector of Transport, and for construction and renovation, at least 70 percent by weight of the non-hazard- ous construction and demolition waste generated on the con- struction site must be prepared for reuse, recycling or other material recovery. For construction and renovation, construction and construc- tion techniques must also support circularity. The projects must describe, based on relevant standards, how the building is designed to be more resource effi cient, adaptable, fl exible and dismantlable to enable reuse and recycling, during and after the building’s lifetime. Pollution prevention and control Guidelines for noise are followed and self-assessments are per- formed. Risk management for dust and emissions are handled in the environmental plan. These requirements are handled by following NCC’s ordinary procedures. NCC’s internal requirements are to primarily choose recom- mended and accepted products in Byggvarubedömningen (BVB) or the equivalent in the applicable country. There must be low emissions of harmful substances to the indoor environment from materials. Projects built on former industrial sites perform a land survey to identify potential contaminants. For district heating/cooling distribution, the relevant pur- chased products and equipment must comply with the Ecode- sign Directive, best energy class and Best Available Technology. Protection and restoration of biodiversity and ecosystems To meet the criteria, either an environmental impact assess- ment (EIA) or a nature value inventory (NVI) or similar are required and the necessary risk mitigation and biodiversity offsets must be carried out to protect the environment. New construction is controlled by building within a planned develop- ment area, otherwise requirements linked to construction on unused land must be followed. NCC 2024 25Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Minimum social safeguards In order to be Taxonomy-aligned, the activities must also meet social safeguards. The aim of the safeguards is to set a mini- mum standard for social and ethical sustainability for how a company should operate for its activities to be considered sustainable. This means that the company must not cause any harm or violate any laws or regulations based on four aspects: taxation, fair competition, corruption and human rights. NCC achieves this minimum standard by complying with the Interna- tional Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, the UN Guiding Principles on Business and Human Rights (UNGP) and the OECD Guidelines for Multinational Enterprises. Taxation Compliance with taxation regulations is a priority at NCC, and the topic is addressed in the same review procedures as corpo- rate governance. NCC complies with tax regulations in all juris- dictions with active operations, and ensures compliance with the regulations through suitable procedures and strategies for managing tax risks. Prudence and transparency guide our decisions within tax management. NCC’s procedures and strat- egies for managing tax risks are described in its Tax Policy and Directive. As needed, extra tax advisers can be called in for consulting, primarily from larger audit companies or law offi ces. NCC has not been found guilty of violating any tax laws. Fair competition NCC operates in an industry that has, historically speaking, been at risk for unfair competition. NCC therefore has clear guidelines and procedures as well as training for ensuring fair competition in all its business. Read more about this in the Ethics and com- pliance section. Anti-corruption and anti-bribery NCC is aware of the risk of corruption and bribery in the industry in which NCC is active, and has training, policies and processes for minimizing and managing the risk of corruption in and around its operations. Read more about this in the Ethics and compliance section. Human rights NCC respects human rights and is responsible for preventing anyone in its own operations from being subjected to treatment that violates those human rights. Read more about this in the Own workforce section. NCC is aware that violations of human rights can occur throughout the value chain, and has various procedures in place to reduce this risk and to detect – to the greatest extent possible – whether anything like this could occur, in order to facilitate remediation. Read more about this in the Workers in the value chain section and about the requirements NCC sets on its sup- pliers in the Ethics and compliance section. Green bonds NCC has market fi nancing programs with SEK 3,350 M (2,850) in green bonds, of which SEK 2,250 M (1,750) is listed on Nasdaq Stockholm. For more information, refer to the Investor Report 2024. During the year, SEK 0 M (0) of bonds or other debt instruments were issued to fi nance specifi c Taxonomy-aligned activities. The absolute majority refers to investments in prop- erty projects conducted by NCC Property Development, which are classifi ed as current assets in NCC’s balance sheet and thus not Taxonomy-eligible capital expenditure. Nuclear and fossil gas related activities Row Yes/No Nuclear energy related activities 1. The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. No 2. The undertaking carries out, funds or has exposures to con- struction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. No 3. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. No Fossil gas related activities 4. The undertaking carries out, funds or has exposures to construc- tion or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. No 5. The undertaking carries out, funds or has exposures to construc- tion, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. No 6. The undertaking carries out, funds or has exposures to construc- tion, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. No Introduction Report of the Board of Directors Financial statements Other NCC 2024 26Sustainability Report
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Environmental disclosures Reporting principles Turnover Total turnover For NCC, turnover according to the Taxonomy and net sales according to IFRS have the same key performance indicator (KPI). Turnover reported according to the Taxonomy is based solely on external revenue, which means that double counting is avoided. For more information, refer to Note 1 Accounting policies and Note 2 Revenue recognition. Taxonomy-eligible turnover (not environmentally sustainable/Taxonomy-aligned, A.2) Taxonomy-eligible turnover for NCC Infrastructure, NCC Build- ing Sweden and NCC Building Nordics refers to revenue from contracting operations. For NCC Property Development, sales of projects and rental revenues from properties are eligible turnover. NCC Industry’s Taxonomy-eligible turnover is those parts related to recycling and reuse of materials, and the paving and maintenance of public roads. Environmentally sustainable turnover (Taxonomy-aligned, A.1) As a consequence of applying revenue recognition gradually over time, in line with the completion rate, the assessment of whether or not an economic activity is Taxonomy-aligned is based on the project’s predetermined assumptions. If these assumption are subsequently changed, the reported Taxonomy- aligned turnover can also be changed. In its assessment of projects, NCC assumes that they are carried out in accordance with the order placed. If, upon the completion of a project, NCC identifi es a change in the assessment of whether the project’s turnover is Taxonomy-aligned, this changed assessment is reported on the next reporting date. For the part of NCC’s opera- tions that report turnover at a certains point in time, whether or not the turnover is Taxonomy-aligned is determined upon com- pletion of the project. Capital Expenditure (CapEx) Total CapEx For NCC, CapEx according to the Taxonomy and IFRS has the same KPI. For more information, refer to Note 15 Tangible fi xed assets, Note 16 Intangible fi xed assets and Note 33 Leasing. Taxonomy-eligible CapEx (not environmentally sustainable/ Taxonomy-aligned, A.2) NCC has determined that investments attributable to owner- occupied properties, machinery and equipment, right-of-use assets buildings and right-of-use assets machinery and equip- ment are eligible CapEx. Since individual investments are used in many economic activi- ties over their lifetime, NCC has distributed Taxonomy-eligible investments in machinery and equipment based on each busi- ness area’s distribution of the net sales KPI. Starting in 2024, right-of-use assets have not been included in the allocation and have instead been handled separately. Right-of-use assets in the form of heavy machinery that are directly linked to an individual project have been reported under the same economic activity as project sales are reported against. Right-of-use assets owner- occupied properties and vehicles of category M1 and N1 (part of Right-of-use assets machinery and equipment) have been reported in their entirety as Acquisition and ownership of buildings and Transport by motorbikes, passenger cars and light commercial vehicles, respectively. Environmentally sustainable CapEx (Taxonomy-aligned, A.1) NCC has applied the same reasoning for Taxonomy-aligned CapEx as for Taxonomy-eligible CapEx. Operating Expenditure (OpEx) Total OpEx Since IFRS does not provide clear guidance on the expenses considered operating expenses, the concept of operating expen- diture (OpEx) is not included in NCC’s fi nancial statements. NCC defi nes OpEx in accordance with the Taxonomy, which means expenses for short-term leases and the repair and maintenance of tangible fi xed assets related to fi xed assets in Taxonomy- eligible activities. NCC has three different business models: contracting opera- tions, industrial operations and property development. The majority of NCC’s assets are in contracting operations and property development, and are recognized as current assets. As a result, NCC’s total capital expenditure and operating expen- diture are not substantial amounts. NCC therefore does not believe that a division of operating expenditure into Taxonomy- aligned and environmentally sustainable operating expenditure in accordance with the Taxonomy is material, and has chosen to apply the exemption in accordance with the Taxonomy. Only total operating expenditure is reported. NCC 2024 27Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Turnover1) Financial year 2024 2024 Substantial Contribution Criteria DNSH criteria (‘Does Not Signifi cantly Harm’) Minimum safeguards Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) Turnover, 2023 Category enabling activity Category transitional activityEconomic activities Code Turnover2) Proportion of Turnover, 2024 Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity SEK M % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) Electricity generation from hydropower CCM 4.5/ CCA 4.5 122 0.2% Y N N/EL N/EL N/EL N/EL – Y Y – – Y Y 0.4% – – Transmission and distribution of electricity CCM 4.9/ CCA 4.9 328 0.5% Y N N/EL N/EL N/EL N/EL – Y – Y Y Y Y 0.3% E – District heating/cooling distribution CCM 4.15/ CCA 4.15 56 0.1% Y N N/EL N/EL N/EL N/EL – Y Y Y – Y Y 0.1% – – Infrastructure for personal mobility, cycle logistics CCM 6.13/ CCA 6.13 54 0.1% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 0.0% E – Infrastructure for rail transport CCM 6.14/ CCA 6.14 4,888 7.9% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 2.8% E – Infrastructure enabling (low carbon) water transport CCM 6.16/ CCA 6.16 0 0.0% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 0.3% – – Construction of new buildings CCM 7.1/ CCA 7.1/ CE 3.1 3,099 5.0% Y N N/EL N/EL N N/EL – Y Y Y Y Y Y 0.8% – – Renovation of existing buildings CCM 7.2/ CCA 7.2/ CE 3.2 0 0.0% Y N N/EL N/EL N N/EL – Y Y Y Y – Y 0.6% – T Acquisition and ownership of buildings CCM 7.7/ CCA 7.7 341 0.6% Y N N/EL N/EL N/EL N/EL – Y – – – – Y 0.2% – – Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) 8,888 14.4% 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% – Y Y Y Y Y Y 5.4% Of which Enabling 5,270 8.6% 58.7% 0.0% 0.0% 0.0% 0.0% 0.0% – Y Y Y Y Y Y 3.1% E Of which Transitional 0 0.0% 0.0% – Y Y Y Y – Y 0.6% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Electricity generation from wind power CCM 4.3/ CCA 4.3 122 0.2% 0.0% Electricity generation from hydropower CCM 4.5/ CCA 4.5 385 0.6% 1.0% Transmission and distribution of electricity CCM 4.9/ CCA 4.9 267 0.4% 0.8% District heating/cooling distribution CCM 4.15/ CCA 4.15 1,131 1.8% 0.7% Construction, extension and operation of water collection, treatment and supply systems CCM 5.1/ CCA 5.1 1,039 1.7% 1.8% Renewal of water collection, treatment and supply systems CCM 5.2/ CCA 5.2 299 0.5% 0.4% Construction, extension and operation of waste water collection and treatment CCM 5.3/ CCA 5.3 1,263 2.0% 1.7% Renewal of waste water collection and treatment CCM 5.4/ CCA 5.4 628 1.0% 0.8% Sorting and material recovery of non hazardous CE 2.7 260 0.4% 0.5% Infrastructure for personal mobility, cycle logistics CCM 6.13/ CCA 6.13 96 0.2% 0.4% Infrastructure for rail transport CCM 6.14/ CCA 6.14 964 1.6% 6.1% Infrastructure enabling (low-carbon) road transport and public transport CCM 6.15/ CCA 6.15 1,887 3.1% 3.2% Infrastructure enabling (low carbon) water transport CCM 6.16/ CCA 6.16 579 0.9% 0.1% Construction of new buildings CCM 7.1/ CCA 7.1/ CE 3.1 20,928 34.0% 36.6% Renovation of existing buildings CCM 7.2/ CCA 7.2/ CE 3.2 4,949 8.0% 6.9% Acquisition and ownership of buildings CCM 7.7/ CCA 7.7 0 0.0% 0.1% Maintenance of roads and motorways CE 3.4 5,217 8.5% 7.8% Flood risk prevention and protection infrastructure CCA 14.2 225 0.4% 0.0% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 40,240 65.3% 68.9% A. Turnover of Taxonomy-eligible activities (A.1 +A.2) 49,128 79.7% 74.3%3) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities 12,482 20.3% TOTAL 61,609 100.0% 1) Proportion of turnover derived from products or services associated with Taxonomy-aligned economic activities – disclosures that cover 2024. 2) Turnover for Taxonomy-eligible but not environmentally sustainable activities where turnover for activities that are < SEK 50 M is not reported separately but as turnover of Taxonomy-non-eligible activities. 3) In 2024, instructions for guidance in assessing the projects for alignment with the Taxonomy were reviewed. The comparative fi gures for some projects have been adjusted. Proportion of Turnover/Total Turnover Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 14.4% 70.5% CCA 0.0% 70.9% WTR 0.0% 0.0% CE 0.0% 50.9% PPC 0.0% 0.0% BIO 0.0% 0.0% Introduction Report of the Board of Directors Financial statements Other NCC 2024 28Sustainability Report
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Environmental disclosures CapEx1) Financial year 2024 2024 Substantial Contribution Criteria DNSH criteria (‘Does Not Signifi cantly Harm’) Minimum safeguards Proportion of Taxonomy aligned (A.1.) or eligible (A.2.) CapEx, 2023 Category enabling activity Category transitional activityEconomic activities Code CapEx Proportion of CapEx 2024 Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity SEK M % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) Electricity generation from hydropower CCM 4.5/ CCA 4.5 1 0.0% Y N N/EL N/EL N/EL N/EL – Y Y – – Y Y 0.2% – – Transmission and distribution of electricity CCM 4.9/ CCA 4.9 3 0.2% Y N N/EL N/EL N/EL N/EL – Y – Y Y Y Y 0.5% E – District heating/cooling distribution CCM 4.15/ CCA 4.15 0 0.0% Y N N/EL N/EL N/EL N/EL – Y Y Y – Y Y 0.1% – – Infrastructure for personal mobility, cycle logistics CCM 6.13/ CCA 6.13 1 0.1% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 0.0% E – Infrastructure for rail transport CCM 6.14/ CCA 6.14 38 2.6% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 5.0% E – Infrastructure enabling (low carbon) water transport CCM 6.16/ CCA 6.16 0 0.0% Y N N/EL N/EL N/EL N/EL – Y Y Y Y Y Y 0.9% – – Construction of new buildings CCM 7.1/ CCA 7.1/ CE 3.1 0 0.0% Y N N/EL N/EL N N/EL – Y Y Y Y Y Y 0.2% – – Renovation of existing buildings CCM 7.2/ CCA 7.2/ CE 3.2 0 0.0% Y N N/EL N/EL N N/EL – Y Y Y Y – Y 0.2% – T CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 44 2.9% 100% 0.0% 0.0% 0.0% 0.0% 0.0% – Y Y Y Y Y Y 7.0% Of which Enabling 41 2.7% 97.0% 0.0% 0.0% 0.0% 0.0% 0.0% – Y Y Y Y Y Y 5.4% E Of which Transitional 0 0.0% 0.0% – Y Y Y Y – Y 0.2% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Electricity generation from wind power CCM 4.3/ CCA 4.3 1 0.0% 0.0% Electricity generation from hydropower CCM 4.5/ CCA 4.5 2 0.1% 0.7% Transmission and distribution of electricity CCM 4.9/ CCA 4.9 1 0.1% 0.3% District heating/cooling distribution CCM 4.15/ CCA 4.15 8 0.5% 0.5% Construction, extension and operation of water collection, treatment and supply systems CCM 5.1/ CCA 5.1 7 0.4% 1.3% Renewal of water collection, treatment and supply systems CCM 5.2/ CCA 5.2 2 0.1% 0.2% Construction, extension and operation of waste water collection and treatment CCM 5.3/ CCA 5.3 8 0.5% 1.7% Renewal of waste water collection and treatment CCM 5.4/ CCA 5.4 4 0.2% 0.4% Sorting and material recovery of non hazardous CE 2.7 3 0.2% 0.8% Infrastructure for personal mobility, cycle logistics CCM 6.13/ CCA 6.13 1 0.1% 0.5% Infrastructure for rail transport CCM 6.14/ CCA 6.14 9 0.6% 3.6% Infrastructure enabling (low-carbon) road transport and public transport CCM 6.15/ CCA 6.15 98 6.6% 2.4% Infrastructure enabling (low carbon) water transport CCM 6.16/ CCA 6.16 6 0.4% 0.1% Transport by motorbikes, passenger cars and light commercial vehicles 2) CCM 6.5 / CCA 6.5 265 17.7% 0.0% Construction of new buildings CCM 7.1/ CCA 7.1/ CE 3.1 39 2.6% 8.9% Renovation of existing buildings CCM 7.2/ CCA 7.2/ CE 3.2 0 0.0% 1.4% Acquisition and ownership of buildings2) CCM 7.7/ CCA 7.7 204 13.6% 0.0% Maintenance of roads and motorways CE 3.4 25 1.7% 3.8% CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 682 45.4% 26.6% A. CapEx of Taxonomy-eligible activities (A.1 +A.2) 726 48.3% 33.6%3) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities 776 51.7% TOTAL 1,502 100.0% 1) Proportion of CapEx derived from products or services associated with Taxonomy-aligned economic activities – disclosures that cover 2024. 2) Starting in 2024, right-of-use assets are handled separately and not included in allocation. The comparative period has not been adjusted, since no data is available. 3) In 2024, instructions for guidance in assessing the projects for alignment with the Taxonomy were reviewed. The comparative fi gures for some projects have been adjusted. Proportion of CapEx/Total CapEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 2.9% 43.5% CCA 0.0% 43.5% WTR 0.0% 0.0% CE 0.0% 4.5% PPC 0.0% 0.0% BIO 0.0% 0.0% NCC 2024 29Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures OpEx1) Financial year 2024 2024 Substantial Contribution Criteria DNSH criteria (‘Does Not Signifi cantly Harm’) Minimum safeguards Proportion of Taxonomy- aligned OpEx, 2023 Category enabling activity Category transitional activityEconomic activities Code OpEx Proportion of OpEx, 2024 Climate change mitigation Climate change adaptation Water Pollution Circular economy Biodiversity Climate change mitigation Climate change adaptation Water and marine resources Pollution Circular economy Biodiversity SEK M % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1. Environmentally sustainable activities (Taxonomy-aligned) OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0 0.0% % % % % % % Y Y Y Y Y Y Y 0.0% Of which Enabling 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% E Of which Transitional 0 0.0% 0.0% Y Y Y Y Y – Y 0.0% T A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 0 0.0% 0.0% A. OpEx of Taxonomy-eligible activities (A.1 +A.2) 0 0.0% 0.0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities 2,737 100.0% TOTAL 2,737 100.0% 1) Proportion of OpEx derived from products or services associated with Taxonomy-aligned economic activities – disclosures that cover 2024. Proportion of OpEx/Total OpEx Taxonomy-aligned per objective Taxonomy-eligible per objective CCM 0.0% 0.0% CCA 0.0% 0.0% WTR 0.0% 0.0% CE 0.0% 0.0% PPC 0.0% 0.0% BIO 0.0% 0.0% Introduction Report of the Board of Directors Financial statements Other NCC 2024 30Sustainability Report
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Environmental disclosures Climate change Material sustainability matters Where in the value chain Climate change adaptation Throughout the value chain Climate change mitigation Throughout the value chain Energy Throughout the value chain Material impacts, risks and opportunities During the double materiality assessment, climate change was identifi ed as one of NCC’s material sustainability topics. This is in line with previous assessments, with NCC having a long history of focusing on reducing greenhouse gas emissions from its operations. Climate change remains a central impact area for NCC since large amounts of greenhouse gases are generated across the value chain. NCC’s climate impact is primarily derived from the materials that are purchased and used in the construction process and from energy consumption in the various parts of the operations. NCC uses a signifi cant amount of energy for machinery, heating and electricity at con- struction sites as well as in the production of asphalt. Upstream in the value chain, greenhouse gas emissions are primarily generated from extraction of virgin materials and from manu- facturing processes. Apart from NCC’s direct impact, there are also fi nancial risks and opportunities. The fi nancial risks com- prise negative impacts on suppliers from a changing climate with disruptions to supply chains and raw materials becoming diffi cult or extremely costly to procure. One potential fi nancial opportunity lies in increased demand for products that help customers adapt to a changing climate and thereby ensuring that society is adapting to new conditions. Governance NCC has a Sustainability and Environmental Policy and is work- ing to update and further develop the policy within the area of climate change. NCC has Group-wide roadmaps for reducing the climate impact of its operations. One example is the road- map for concrete, with the goal of achieving climate-neutral concrete-based construction. Furthermore, each business area is responsible for their respective climate initiatives and have targets that are broken down on the basis of the Group’s energy and climate targets. To achieve these, each business area has established measures and action plans. The efforts to produce a coherent Group-wide climate transi- tion plan continued during the year. For more information on NCC’s policies, see the General disclosures section. Targets NCC’s climate targets 2024 are: • Climate neutrality by 2045 • 60 percent decrease in CO2e emissions for Scope 1 and 2 by 2030 • 50 percent decrease in CO2e emissions for Scope 3 by 2030 The target for Scope 1 and 2 is measured from base year 2015 in CO2e tons/SEK M in sales, with a starting value of 5.2 CO2e/ SEK M. This target includes all fuels that NCC uses in production and own transport as well as all electricity, district heating and district cooling that NCC uses for buildings and construction. The greenhouse gases CO2, CH4 and N2O are included for Scope 1 and 2 since these are the primary gases that are released in conjunction with the included activities. Scope 1 biogenic CO2 emissions are not included in the target. The target for Scope 3 is measured in kg CO2e per volume purchased and MWh, respectively, with 2015 as the base year. The target for Scope 3 includes ready-mix concrete, asphalt, reinforcement steel and transportation. The greenhouse gases CO2, CH4 and N2O are also included. NCC has set a target of only purchasing fossil-free and mainly renewable electricity. In 2024, the portion of fossil-free electricity was 90 percent (95) of total electricity consumption. Activities NCC’s efforts at reducing its climate emissions are based on the specifi c conditions and operation of each business area. Effi cient resource utilization, purchases of materials with lower carbon emissions and increased use of recycled and reused products are essential in this work. These efforts are carried out in close collaboration with NCC’s customers and clients, in conjunction with planning and procurement. Digitization of data processing is necessary for long-term sustainable work processes, and for this reason climate calculations and joint IT development are key activities. NCC is proactive in its dialogue and collaboration with suppliers, and participates in research and development projects to produce materials with a smaller carbon footprint. Reduced climate footprint NCC is focused on reducing its climate footprint. Analysis, cooperation and dialogue with customers, suppliers and other stakeholders for the implementation of measures and changed work methods is of the utmost importance. Climate calcula- tions in construction projects are crucial for making the right decisions and reducing the climate footprint in a cost-effi cient manner for NCC and for customers. As support in this task, NCC has several digital tools as well as internal centers of excellence with experts who specialize in climate calculations. The purpose of climate calculations is to gain an overview of and control over the total climate impact of a project. This includes data and related greenhouse gas emissions associated with the use of materials, energy consumption and waste. NCC 2024 31Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Energy Energy consumption in own operations includes use of energy and fuel in projects and at production work sites. Key actions to reduce energy and fuel consumption, and thereby climate impact, include: • Continued energy-effi ciency improvements in operations • Electrifi cation of machinery and transportation for reduced primary energy • Optimized logistics chains to reduce the total number of transport journeys • Economical driving and avoiding idling • Use of fossil-free fuel • Phase-out of fossil fuels To reduce energy consumption downstream in the value chain, the focus on enhancing energy effi ciency in property develop- ment is an important measure. The NCC Property Development business area requires energy performance to be at least 25 percent better compared with regulations and to use local energy production in all projects. Materials NCC’s climate impact arises primarily in conjunction with the manufacturing of the materials used in the construction pro- cess. Within the category “Purchased goods and services” (Scope 3), concrete, asphalt and steel have the largest climate impact. Concrete: NCC works according to a roadmap toward climate-neutral concrete-based construction, aimed at achieving the target of becoming climate neutral by 2045. This initiative has three main perspectives: The right concrete in the right place, minimize the amount of cement in concrete, and minimize the volume of concrete. Analysis, cooperation and dialogue with customers, suppliers and other stakeholders for the implementation of measures and changed work methods is of the utmost importance. Asphalt: The asphalt division’s total greenhouse gas emissions, from both asphalt production and paving, accounts for 50 percent (53) of the Group’s total emissions (Scope 1 and 2). Key actions to reduce climate impact from production of asphalt include: • Continued conversion of asphalt plants to the use of biofuels • Replacing fossil bitumen with bio-binders in the asphalt • Developing asphalt products with a lower climate impact through NCC’s method of increasing the proportion of reclaimed asphalt pavement (RAP), lowering manufacturing temperatures and using biofuel during production • Decreasing the number of starts and stops at asphalt plants in order to reduce energy consumption • Reduce moisture in the stone materials that are mixed into the asphalt and keep it dry, in order to reduce energy consumption in asphalt production Steel: In order to halve the climate impact of steel, well-informed purchasing from producers who provide products with a lower carbon footprint is crucial. Environmental product declarations (EPDs) for materials are used in the supplier assessment to determine whether the suppliers fulfi ll the requirements of NCC and its customers. By using recycled steel, energy consumption can be reduced by up to 75 percent compared with production of ore-based steel. To achieve fossil-free steel, new production technologies are also needed. Transportation and machine services Key actions to reduce emissions from transportation: • Actively partnering with suppliers to increase degree of fi lling and optimizing logistics chains to reduce the number of transport journeys • Requiring suppliers to use fuel-effi cient vehicles • Requiring suppliers to use electric vehicles and biofuel One key measure for reduced climate impact from machine and machine services is electrifi cation. Examples of such measures include: • Electrifi cation of mobile rock crushers, which would offer signifi cant energy savings and thereby reduce climate emissions • Projects that use emission-free machinery and electrifi ed transport in all countries, together with customers • Continued testing and implementation of electric paving machinery Efforts to obtain data from suppliers of transportation and machine services continued during the year. The focus was on Sweden, and on transportation and machine services that NCC itself purchased. Efforts are under way to include more countries and business areas as well as transportation of the materials that NCC does not directly purchase but are included upstream in the value chain. Introduction Report of the Board of Directors Financial statements Other NCC 2024 32Sustainability Report
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Environmental disclosures Climate-related risks and opportunities1) Material opportunities Description/Effect Likelihood Consequence Existing measures Change Transition risk Changes to external climate-related policies and/or legal conditions that impact NCC. Carbon-price mechanisms – such as higher prices for greenhouse gas emissions through the emissions trading system – or all price mecha- nisms for carbon emissions directly or indirectly through suppliers. May occur Major • Optimize and reduce the use of materials, fuels and energy; use renewable and recycled materials; substitute with materials that have a lower carbon intensity • Manage risks for higher prices through tenders and contracts, as well as follow-up • Participate in projects to develop materials with a lower climate impact Transition risk Changes to external climate-related policies and/or legal conditions that impact NCC. Increased administration and work- load due to expanded climate-related reporting requirements. May occur Major • Increased digitization of data processing, automation and know-how • Optimized procedures to reduce workload Transition risk NCC does not meet changed climate-related needs or requirements from customers quickly enough. Customers substitute products, projects and/or services with lower (lifecycle) emissions options from competitors. May occur Major • Strategies to reduce greenhouse gas emissions in construction projects • Continued phase-out of fossil fuels in operations • Strategies to develop cost-efficient solutions for reducing carbon emissions for customers • Development of climate guides for various customer segments Transition risk Transition and access to sources of fossil-free energy. Stricter requirements from custom- ers for electrification in projects. Shortage of renewable alternatives at competitive prices. Suppliers have to adapt to fossil-free production, which could lead to increased investments and costs. May occur Major • Tools and methods to support the electrification process • Continued monitoring of developments and opportunities for external financing via government initiatives • Management of risks of higher prices through tenders and contracts, as well as follow-up Acute physical risk Increased frequency and severity of extreme weather events such as heat waves, storms, and floods. Delays in project deliveries (e.g. problems with the flow of materials from suppliers). Severe damage to material inven- tories, sites, or construction and infrastructure projects. May occur Major • Thorough review of tender documents and risk assessments to evaluate and price risks • Buffer activities and environmental impact statements • Evaluation of climate risks and vulnerability, with contingency plans for sites and construction projects Chronic physical risk Long-term changes in cli- mate patterns such as rising average temperatures, rising ocean levels and variations in the weather. Higher ocean levels and heavy rains can impact the attractiveness of the land and increase requirements for the resilience of construction projects. May occur Major • Construction norms ensure that structures can cope with climate change • Access to technical expertise and standards in the organization Material opportunities Description/Effect Likelihood Consequence Strategies to realize opportunities Change Transition opportunity Changes in climate-re- lated needs among, and requirements from, cur- rent and future customers. Increased demand for energy-effi- cient buildings and business opera- tions related to renovation and reuse in circular models. Increased demand for hydroelectric power and electricity distribution. May occur Major • Design and construction of cutting-edge projects provide knowledge of potential solutions • Development of climate guides for various customer segments Physical opportunity Increased frequency and severity of extreme weather events and long- term changes in climate patterns, such as rising average temperatures and ocean levels. Increased demand for NCC’s products and/or projects that directly support customers’ climate adaptation activities (for example, urban embankments, flood barriers, storm tunnels). May occur Major • Specialization within the segment • Monitoring of developments in society and the market • Development of climate guides for various customer segments 1) Two scenarios have been used to identify and evaluate climate-related risks and opportunities. For physical risks, the SSP5-8.5 scenario has been used, and for transition risks the International Energy Agency’s Net Zero (NZE) scenario has been used. In this year’s risk assessment, NCC has switched to evaluating gross risks before action taken, to then arrive at a remaining risk assessment that takes the effect of the actions into account. The entire value chain has been evaluated in this assessment. Short-, medium- and long-term time horizons were used in the analysis, corresponding to the ones selected for the strategic risk process and NCC’s strategy. Defi nitions Consequence: Minor (>SEK 10 M) Tangible (>SEK 50 M) Serious (>SEK 100 M) Major (>SEK 250 M) Likelihood: Most unlikely Unlikely May occur Most likely Decrease in consequence or likelihood following action No change in consequence or likelihood following action Increase in consequence or likelihood following action NCC 2024 33Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Metrics and outcome In 2024, Scope 1 and 2 emissions intensity amounted to 1.9 tons CO2e/SEK M, corresponding to a reduction of 64 percent compared with 2015. A multi-year initiative to convert the com- pany’s asphalt plants from fossil fuel to biofuel has resulted in NCC achieving the target set for 2030 early. In view of this, NCC has decided to increase its target for reducing emissions inten- sity in own operations to 75 percent by 2030, which means 1.3 CO2e tons/SEK M. For Scope 3, NCC has mapped climate emissions in the areas that are considered having the greatest climate impact and has identifi ed six categories as material: • Purchased goods and services • Fuel and energy-related activities • Upstream transportation and distribution • Waste • Business travel • Use of sold products In the category Purchased goods and services in Scope 3, NCC specifi cally follows up ready-mix concrete, reinforcement steel and internally purchased asphalt. In 2024, ready-mix concrete decreased by 22 percent, reinforcement steel by 57 percent and internally purchased asphalt by 23 percent compared with base year 2015. Total GHG emissions has decreased compared with 2023. The largest changes are found in Scope 1 and Scope 3, in the categories Purchased goods and services and Use of sold products. Several asphalt plants used biofuel instead of fossil fuels during the year, which resulted in lower emissions for Scope 1. The reason why emissions for internally purchased asphalt have increased is mainly due to a reduction in internal sales in Sweden, where more progress has been made in reduc- ing climate impact than in Norway and Denmark. They therefore constitute a larger share of the total amount of asphalt sold internally and the average climate impact per ton of asphalt sold internally has therefore increased, although the climate impact from the total production of asphalt has decreased. Reinforce- ment steel accounts for the greatest reduction in purchased goods and services, due largely to lower EPDs on reinforcement steel purchased, followed by ready-mix concrete. In the category Use of sold products, the greatest reduction was achieved in Finland. This category is heavily project-dependent, and is largely determined by the number and type of projects that were completed during the reporting year, which is why it can vary without specifi c actions being taken. Emissions from transportation and machinery services are reported using the base year 2023 and use data from Sweden. This year’s increase is mainly attributable to the change in the reduction obligation of biofuels with fossil fuels. The efforts to improve the quality of NCC’s emissions calcula- tions have resulted in a higher coverage rate in Scope 3 com- pared to previous years. Higher emissions in Scope 3 should therefore not be interpreted as an increase in actual emissions. No new Scope 3 categories were added in 2024. In 2025, a project will be conducted aimed at setting a new base year with a uniform coverage rate. NCC will also carry out a new evalua- tion of material categories in Scope 3. Reporting principles, climate data Climate reporting follows the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard for Scope 1 and 2, and the Corporate Value Chain Standard for Scope 3 unless otherwise indicated. NCC reports on Scope 1 and 2, and mate- rial Scope 3 categories. NCC does not include climate compen- sation in the calculations for Scope 1, 2 and 3. Calculations primarily use supplier-specifi c Environmental Product Declarations, or EPDs. Where EPDs are not available, emissions factors from the Department for Energy Security and Net Zero (2024) or the Swedish Environmental Protection Agency (2024) are used, depending on applicability. In cases where pre-calculated climate data is provided from the supplier, the reliability and correctness of the sources used to calculate the data are verifi ed. For Scope 1, NCC reports stationary combustion (combus- tion in connection with asphalt production) and mobile combus- tion (combustion of fuel for vehicles, trucks and working vehi- cles that NCC controls). Combustion of biofuel, which generates biogenic carbon dioxide, is reported separately from Scope 1. For Scope 2, NCC reports energy purchased in the form of electricity, district heating and district cooling. Both market- based and location-based calculation methods are reported, but only market-based calculation methods form the basis for follow-up of the targets for Scope 1 and 2. Greenhouse gas emissions related to the purchase of ready- mix concrete, reinforcement steel and internally purchased asphalt are reported in the category Purchased goods and services in Scope 3. This also includes all purchased machine services in Sweden. The asphalt reported is asphalt that was purchased internally and produced by the NCC Industry busi- ness area. This deviates from the GHG Protocol Corporate Value Chain (Scope 3) Standard. Upstream transportation in Scope 3 includes only directly purchased transportation in Sweden. Carbon emissions from waste management in Scope 3 is based on reported amounts of waste. Use of sold products in Scope 3 includes only the NCC Building Sweden business area, as well as Finland and Norway for NCC Building Nordics. Introduction Report of the Board of Directors Financial statements Other NCC 2024 34Sustainability Report
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Environmental disclosures GHG emissions 2024 Change compared with base year 2015, % 2023 2015 GHG emissions, market-based, Scope 1 and 2, CO2e (thousand tons) 117 –57 130 271 GHG emissions, location-based, Scope 1 and 2, CO2e (thousand tons) 120 –50 137 241 of which, Scope 1 113 –48 126 217 of which, Scope 2 Market-based method 4 –93 4 54 Location-based method 7 –71 11 24 Emissions intensity: CO2e tons/MWh1) 0.15 –32 0.14 0.22 Emissions intensity: CO2e tons/SEK M1) 1.9 –64 2.3 5.2 Net sales, SEK M 61,609 18 56,932 52,155 GHG emissions, Scope 3 355 – 385 – Purchased goods and services2) 144 – 156 – Fuel and energy-related activities 46 – 49 – Upstream transportation and distribution3) 45 – 34 – Waste 1 – 1 – Business traveling (air travel) 4 – 4 – Use of sold products4) 116 – 142 – Total GHG emissions,5) CO2e (thousand tons) 472 – 515 – Combustion of biomass (biogenic Scope 1) (thousand tons) 82 – 57 – 1) Only Scope 1 and Scope 2 (market-based method) are used in the performance indicator. 2) Includes ready-mix concrete, reinforcement steel, internally purchased asphalt and machinery services purchased in Sweden. 3) Includes directly purchased transportation in Sweden. 4) Includes only the NCC Building Sweden business area as well as Finland and Norway for NCC Building Nordics. 5) Total GHG emissions for Scope 1, 2 and 3 (market-based method). Transportation and machine services (kg CO2e/MWh) Färskbetong (kg CO2e/m³) 0 100 200 300 20242023 Outcome 2024: +7 percent from 2023 (only Sweden) Scope 1 and 2, CO2e tons/SEK M CO2e (ton)/SEK M Scope 2 och 2 0 1 2 3 4 5 6 203020242022202020182016 Ready-mix concrete (kg CO2e/m³) Färskbetong (kg CO2e/m³) 0 100 200 300 20242022202020182016 Outcome 2024: –22 percent from 2015 The base level is derived from a compilation of values from customers, trade associations, manufacturers and various research initiatives. Asphalt (kg CO2e/ton) Asfalt (kg CO2e/ton) 0 10 20 30 20242022202020182016 Outcome 2024: –23 percent from 2015 Pertains to internally purchased asphalt. The reason for the increase in emissions from internally purchased asphalt is mainly due to the increased share of production volume in Norway and Denmark. Here, emissions in kg per tonne of asphalt produced are not as low as in Sweden, where work to reduce CO2 emissions has progressed further. Reinforcement steel (kg CO2e/ton) Armeringsstål (kg CO2e/ton) 0 200 400 600 800 20242022202020182016 Outcome 2024: –57 percent from 2015 The base level for concrete is derived from a compilation of values from customers, trade associations, and EPDs from manufacturers of reinforcement steel. Target 2030: ≤ 2.08 NCC 2024 35Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Energy consumption in the operation Fuel use MWh 2024 Change compared with base year 2015, % 2023 2015 Renewable fuels 246,416 195 174,118 83,462 Fossil fuels 495,062 –45 566,017 906,468 Fuels, total 741,478 –25 740,135 989,930 District heating/cooling MWh 2024 Change compared with base year 2015, % 2023 2015 District cooling 3,982 855 818 417 District heating 19,134 –62 26,343 50,851 District cooling/District heating, total 23,116 –55 27,161 51,268 Electricity consumption MWh 2024 Change compared with base year 2015, % 2023 2015 Electricity from fossil-free sources1) 146,947 44 162,052 102,360 Other electricity 16,290 –87 8,030 121,618 Electricity, total 163,236 –27 170,082 223,978 1) Hydroelectric power, wind power and nuclear power. Total energy consumption1) MWh 2024 Change compared with base year 2015, % 2023 2015 Energy consumption, total 927,831 –27 937,378 1,265,176 1) Total energy consumption is a sum of reported energy usage for fuel, district heating/cooling, and electricity. Introduction Report of the Board of Directors Financial statements Other NCC 2024 36Sustainability Report
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Environmental disclosures Biodiversity and ecosystems Material sustainability matters Where in the value chain Direct impact drivers of biodiversity loss Upstream, Own operations Impacts on the extent and condition of ecosystems Own operations Material impacts, risks and opportunities Construction of buildings and infrastructure projects depends on the use of land area, which can cause biodiversity loss depending on the geographical location and scope of the activi- ties. This is why it is important that each project or site that is started is preceded by an assessment of the best location as well as an inventory of natural values. During the double materiality assessment, biodiversity and ecosystems was identifi ed as one of NCC’s material sustain- ability topics. This also confi rms previously conducted materiality and stakeholder analyses. NCC’s operations have an impact not only locally, where the work is being carried out, but also upstream in the value chain. Throughout the supply chain of NCC’s primary goods and products, there is signifi cant depen- dence on virgin raw materials such as soil, limestone, sand and iron. All of these are examples of direct exploitation of virgin materials that could cause biodiversity loss and damage on ecosystems. Wood is a renewable material that is not classifi ed as a virgin material, but its supply chain could still have an impact on biodiversity depending on where the material is gath- ered from. Because of this, it is important for NCC to create traceability in the supply chain for our priority materials. Governance and targets As part of the customer contract, the locations of projects, production sites and quarries are evaluated. The work on per- mits and legislative procedures is normally done in advance, and the risk of establishing operations near areas with sensitive biodiversity is therefore reduced naturally through these proce- dures. Internal routines in NCC’s business areas are in place to control local risks associated with biodiversity, which means the issue is an integral part of NCC’s projects and site management. NCC has a Sustainability and Environmental Policy. Efforts to update and further develop the policy in the area of biodiversity and ecosystems are under way, with the aim of increasing focus on and clarify the direction within this area. For more informa- tion on NCC’s policies, see the General disclosures section. Efforts are in progress to review current work methods which can thereby create possibilities for establishing metrics and targets in the area. NCC will report on the progress of these efforts as part of its sustainability reporting. Activities All of NCC’s business areas have different approaches to addressing risks and opportunities related to biodiversity. The business area NCC Industry has defi ned actions and allocated resources to its production facilities in order to reduce risks and improve biodiversity in local areas where their sites are located. For the business areas NCC Property Development, NCC Build- ing Sweden and NCC Building Nordics, it is possible to include actions for biodiversity and potential compensation measures in the customer contract. Resources are being devoted to work relating to building certifi cations, many of which involve require- ments associated with biodiversity. The business area NCC Infrastructure also carries out projects that support the preser- vation of biodiversity – for example, the construction of wildlife passages. NCC 2024 37Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Environmental disclosures Resource use and circular economy Material sustainability matters Where in the value chain Resource inflows, including resource use Throughout the value chain Waste Throughout the value chain Material impacts, risks and opportunities NCC uses large amounts of materials, which has an impact on resource use in society as a whole. To meet the challenges related to the planet’s fi nite resources, we need to reduce the use of virgin materials and increase the use of reused or recy- cled materials. The materials that NCC uses are primarily con- crete, steel and asphalt, which creates a dependency on virgin raw materials such as limestone, sand, iron and oil. At the same time, the impact of the use of other materials such as rock and soil material is signifi cant, with closed material fl ows being of signifi cant importance. During the double materiality assessment, resource use and circular economy was identifi ed as one of NCC’s material sustainability topics. This is in line with previous analyses that highlighted resource effi ciency and waste management as strategic matters for NCC. Governance and targets NCC has a Sustainability and Environmental Policy. Efforts to update and further develop the policy in the area of resource use and circular economy are under way, with the aim of increasing focus on and clarify the direction within this area. In parallel, initiatives are also under way to review current work methods, which can thereby create possibilities for establishing new metrics and targets within the area. NCC will report on the prog- ress of these efforts as part of its sustainability reporting. For more information on NCC’s policies, see the General disclosures section. Purchasing and resource use NCC is working to reduce the use of virgin materials, where the purchasing function plays a key role in ensuring traceability in the value chain and signing agreements with suitable operators. In construction projects, specifi c materials choices are made based on the needs and wishes of both the project and the customer. Different certifi cation systems can also impose requirements on the use of certain materials. Waste and recycling NCC works to increase recycling and reuse, and facilitates this through measures including active collection and analysis of data. NCC’s objective is to have a sorting rate greater than 70 percent. NCC follows up and governs the waste activities conducted at the construction sites through regular checks of waste statistics, at production meetings and during environ- mental rounds. NCC has established partnerships in all coun- tries for handling of the waste that arises at construction sites. NCC has also developed specifi c control tools for increasing the proportion of recycling and reuse in its projects. Activities NCC’s efforts on issues involving choice of materials, circularity and waste is performed on the basis of each business area’s specifi c conditions and operations, and is designed to reduce the use of materials with a negative impact on climate, environ- ment, and human health. Effi cient resource utilization, purchases of materials with a lower environmental impact and increased recycling play an essential role in this work. Recycling and reuse The construction waste generated at construction sites holds great potential since it can be used in other projects. NCC coop- erates internally among various functions and business areas, but also with suppliers, to develop new ways of reducing con- struction waste and reintroducing it into production as well as reusing and recycling materials. NCC is collaborating with its suppliers to facilitate the circular fl ows of specifi c byproducts such as loading pallets, fl ooring waste, plaster, brick and wood. Signifi cant activities include ensuring that surplus purchased materials can be reused, protecting weather-sensitive materials, minimizing packaging through intelligent transport solutions and having a well-developed sorting system. Cooperation con- cerning circularity also occurs between property development and contracting operations, on the basis of the projects’ specifi c conditions. Reuse of entire construction components and materials is a market that is still immature. NCC focuses primarily on the reuse of large construction components such as frames, since this makes the largest contribution to climate impact in building construction. The research and development being conducted in the areas will now be scaled up. NCC also works internally with reclaimed asphalt pavement (RAP) and uses it in its own asphalt plant – a measure that is monitored and reported yearly. Circular handling of excavation mass In connection with infrastructure projects, NCC aims to only excavate the necessary volume of soil and rock material, and the company strives to increase the reuse of excavation masses that were previously sent to landfi ll. This reuse occurs either within the specifi c project or in a nearby project that needs fi ller materials. Measures include a systematic sampling and chemi- cal analysis of the rock to identify suitable projects for receiving the material. Also in the business area NCC Industry, NCC promotes the reuse and recycling of stone materials, soil, excavation masses, gravel, concrete, asphalt and garden waste, and both purchases and receives materials from other business areas in NCC and external customers. Introduction Report of the Board of Directors Financial statements Other NCC 2024 38Sustainability Report
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Environmental disclosures Waste All of NCC’s business areas are actively engaged in waste man- agement. This includes using a larger share of recovered materi- als, ensuring the use of non-hazardous materials, applying standardized construction with made-to-measure and prefabri- cated products to reduce waste, and designing buildings so that the materials can be reused and recycled. NCC has a strong focus on sorting its construction and demolition waste into the fractions that have been prescribed by the industry. NCC collaborates with stakeholders such as suppliers, hauliers and waste contractors in order to increase circular fl ows and minimize waste, and to work for resource-effi cient management of the waste that arises. NCC also participates in pilot projects around waste and circularity. Metrics and outcome Reporting principles, waste NCC reports its waste volumes from construction activities (NCC Building Sweden, NCC Building Nordics and NCC Infra- structure). Statistics are collected via waste contractor and the fi gures include typical construction waste above ground. NCC collects waste data directly from our main contractors. The data is mapped to the correct waste category and waste fraction, depending on material and processing. Soil, stone and exca- vated materials, which depend on the geography of the projects, are usually handled separately and are not included in the tables below. Amounts of waste by type and disposal method 2024 2023 Residual product and waste category Total weight, tons % Total weight, tons % Non-hazardous waste Sorting 5,102 9 6,438 12 Energy recycling 4,004 7 5,396 10 Reuse/materials recycling 47,502 80 40,687 74 Glass 507 60 Plastic 2,726 1,671 Wood 13,281 14,367 Gypsum 3,519 4,176 Metal 7,884 6,730 Concrete, bricks, tiles 16,514 10,416 Other reuse/materials recycling 3,071 3,267 Landfill 2,304 4 1,777 3 Hazardous waste Special treatment 716 1 450 1 Total amount 59,628 100 54,749 100 Reclaimed asphalt pavement (RAP), % Återvunnen asfalt (RAP), % 0 5 10 15 20 25 20242022202020182016 As a result of the increased amount of RAP , the climate impact from NCC’s total asphalt production in 2024 was approximately 10,300 tons of CO2e lower compared to 2015. NCC 2024 39Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Own workforce Material sustainability matters Where in the value chain Working conditions Own operations Equal treatment and opportunities for all Own operations Material impacts, risks and opportunities During the double materiality assessment, own workforce was identifi ed as one of NCC’s material sustainability topics. NCC’s own workforce is a key stakeholder group, and the material matters that were identifi ed in the double materiality assess- ment are in line with both previous priorities and reporting as well as NCC’s general orientation, with access to a high level of expertise and a safe and healthy work environment being key components. Health and safety has been identifi ed as a material matter with an actual negative impact on own workforce. Some activi- ties at our worksites entail risky work elements, placing high demands on the right competence and safety equipment as well as a risk-aware culture of safety with the right attitudes and behaviors. Serious incidents occur at NCC’s construction sites, primarily in the three high-risk areas identifi ed by NCC: heavy lifting by cranes, working at heights and working close to and around heavy machinery. Routines, guidelines, training, tools and activities are designed to create safe working conditions. For example, NCC requires that everyone who is working at a worksite – both own workforce and subcontractors – undergo NCC’s introductory and safety training before the work begins. Training and skills development has been identifi ed as having a positive impact on employees. NCC offers skills development based on its ambition to have the best project management in the industry. Having skilled project managers, supervisors and managers is crucial for NCC’s operations, which is why NCC has developed a unique portfolio of programs and training modules in project management and leadership. These target groups can thus specifi cally benefi t from the positive impact of the training and skills development initiatives, in addition to NCC identifying access to the total offering of training modules and other skills development initiatives as having a positive impact on all employees. NCC has identifi ed a potential negative impact in the area of gender equality and opportunities for all. NCC operates in an industry that has historically been, and remains, male-domi- nated. NCC currently has an uneven gender distribution when it comes to the total number of employees but also in key leader- ship roles in project operations and in management positions. In organizations with an uneven gender distribution, the minority groups run a greater risk of being at a disadvantage, for exam- ple, due to unconscious partiality, prejudices and habits. Governance NCC has a Code of Conduct as well as policies, directives and routines that are relevant for its own workforce and include procedures and mechanisms to monitor compliance with the UN’s Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD Guidelines for Multinational Enterprises. Read more about NCC’s policies under the section General disclosures. NCC’s Code of Conduct, policies, directives and procedures for health and safety as well as the Compliance Directive are all available to employees on the intranet and are part of general internal communication. This information is included in onboarding of new employees, and is spread and deepened further through subject-specifi c training modules. Policies, directives and procedures for health and safety are integrated into the enterprise systems of the business areas. Questions concerning regulatory compliance, health and safety, diversity and inclusiveness, and discrimination are included in NCC’s employee survey. All managers are responsible for acting upon the survey results for their teams. To support effective governance, NCC works in accordance with ISO 45001. Currently, signifi cant parts of the operational units are certifi ed in accordance with ISO 45001, or intend to be certifi ed. Internal audits are conducted continuously, while units that are ISO 45001 certifi ed are also audited externally. The management approach to occupational health and safety work is based on the EU directive 89/391/EEC (including Norway), which has been included in national laws and ordi- nances, and other national regulations. Targets Health and safety NCC is to offer a safe and healthy work environment. NCC’s strategic focus is to reduce all types of accidents and eliminate accidents with serious or fatal outcomes. NCC’s target is an accident frequency rate for L TIF4 (work-related accidents result- ing in more than four calendar days of absence per million hours worked) that is less than or equal to 2.0 in 2026 with interim targets along the way. For 2024, the target for NCC’s own employees was an acci- dent frequency rate for L TIF4 of less than or equal to 2.5. During 2024, this accident frequency rate was 3.3. Particular focus is put on units where the accident frequency rate increased. Fol- low-up of activities includes all employees and everyone who works at NCC’s worksites. The trend in serious incidents with actual or potential serious consequences is showing a decline over time. Social disclosures Introduction Report of the Board of Directors Financial statements Other NCC 2024 40Sustainability Report
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Social disclosures Diversity, equity and inclusion NCC’s ambition is to recruit, develop and retain the most compe- tent people in the industry, support the progress of high-per- forming teams and to work actively so that no one is excluded unfairly or due to unconscious biases. Work with diversity, equity and inclusion is monitored through measures including NCC’s employee survey, which monitors employee engagement and perceived confi dence in not being subjected to discrimination, harassment or bullying. All managers are responsible for follow- ing up on the employee survey in their team, involving employ- ees in dialogue about the results, and formulating and initiating actions for improvement. NCC monitors gender distribution in management teams, from the Senior Management Team down to department man- agement. The target is that no management team should have a distribution where one gender exceeds 70 percent of the group’s members. Of the total 67 management teams monitored, 64 percent have met the target regarding gender distribution. Activities NCC’s cooperation with trade unions, including safety offi cers, is well established. NCC’s joint forums comprise representatives from all trade union organizations and encompasses all employ- ees. NCC participates in a number of external forums and indus- try-wide initiatives that promote increased safety and a positive impact on the work environment in the construction industry. These exchanges of experience include the European network ENCORD, “Håll Nollan” in Sweden and the “Business Panel” partnership at the Danish National Research Center for Work Environment. Health and safety All accidents, incidents and negative and positive observations are reported in NCC’s shared reporting tool, Synergi. This can be done either online or via a smartphone app. The system is used by anyone who is present at any of NCC’s worksites. The manager in charge is tasked with following up on and pursuing initiatives for improvement. Reporting of both positive and negative observations promotes the employees’ commitment to safety work and provides the organization with the possibility to identify potential risks at an early stage and to highlight best practices. The incident reporting system is also used at an overall level to identify risks and work on improvement mea- sures. When an accident occurs and the employee cannot perform their ordinary work tasks, NCC strives to offer alterna- tive work tasks so that the employee can return to work as soon as possible. A crucial factor for systematic safety work is that the people who are working at the worksite have the right competence. That is why it is mandatory for all NCC employees, hired staff and subcontractors to complete NCC Site Introduction, the online safety training course that NCC has developed, before work commences at an NCC worksite in production. NCC Site Introduction follows up general and specifi c authorizations and will be synchronized with access cards at construction sites to ensure that those who are working at the site have the right Accidents/injuries resulting in four days or more of sickness absence Accident frequency rate for accidents resulting in four days or more of absence from work per million worked hours 2024 2023 2024 2023 Sweden 41 52 3.7 4.2 Norway 3 6 1.0 2.2 Denmark 17 16 4.8 4.7 Finland 2 4 1.4 2.4 NCC Group 63 78 3.3 4.0 L TIF 4 Work-related accidents resulting in more than four days of absence per million working hours. Lost Time Injury Frequency – LTIF4 0 1 2 3 4 5 6 202620242022202020182016 NCC has a Group-wide occupational health and safety (OHS) target for the number of work-re- lated accidents resulting in more than four days of absence per million working hours (Lost Time Injury Frequency, L TIF4). In 2024, the accident frequency rate was 3.3. The target for 2026 is 2.0. Outcome Target NCC 2024 41Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Social disclosures authorizations and competence. The tool is being rolled out in all the Nordic countries. NCC’s strategic focus is to reduce all types of accidents and eliminate accidents with serious or fatal outcomes. Serious incidents can be prevented by focusing on activities primarily related to the three high-risk areas: heavy lifting by cranes, work- ing at heights and working close to and around heavy machin- ery. The activities build on fundamental causes related to plan- ning, safe behaviors and ensuring strong barriers between people and the risk of an accident. Each business area has action plans for these areas that are now being implemented. Measures include: • Risk management and preventive efforts are built into NCC’s work methods. For example, a risk assessment must be performed before production begins, and include a safety analysis of all risky work elements. Analyzing and identifying risks on the basis of fact-based data, and thereby being able to eliminate or minimize work elements or situations that create risks for accidents, is of fundamental importance for occupational health and safety. NCC is working to ensure that all employees, hired staff and employees of subcontractors demonstrate good risk awareness. • NCC’s “Time Out” concept provides all employees with the opportunity to stop work if a new, unexpected risk or hazard- ous situation arises, and to have the situation addressed so that the work can be resumed safely • A daily safety briefi ng is conducted to make employees aware of potential risks connected to the day’s work, and to minimize the risks before work commences • To encourage further commitment and increase safety awareness while strengthening the shared safety culture, NCC arranges an Awareness Day every year. The entire orga- nization pauses work in order to jointly refl ect and focus on occupational health and safety issues. • NCC also arranges a Health & Safety Week when several activities take place to increase awareness around health and safety Diversity, equity and inclusion NCC has the ambition to recruit, develop and retain the most the competent people in the industry. That is why being an attractive choice for all target groups who have the expertise that NCC requires is important. NCC is pursuing a number of initiatives to strengthen diver- sity, equity and inclusion. Some examples are: • In Sweden, NCC has become a member of Diversity Charter Sweden, the world’s largest network in diversity and inclusion issues • NCC in Sweden has appointed a group to work with diversity, equity and inclusion that coordinates activities and supports the Group’s impact areas and the seven bases for discrimination • Training courses to improve knowledge of diversity, equity and inclusion related to unconscious biases were launched in Denmark in 2024 for managers and employees. There is now mandatory e-learning for all employees, training in diversity and inclusion for management teams, and training in manag- ing age differences for new employees and managers. • Participation in the external mentor network Pepp in Sweden, and the Danish Association for Responsible Construction in Denmark • Stella, NCC’s women’s network in Sweden • In Norway, NCC is a partner in the Diversitas network, the leading network in the industry to promote diversity and equity • Highlight role models and people with different backgrounds and experiences in recruitment and communication NCC does not accept any form of discrimination. No employee should be discriminated against on the grounds of gender, transgender identity or expression, sexual orientation, ethnicity, religious convictions, functional disability, age or other reason. Should any form of harassment, discrimination or bullying be discovered, NCC has action plans so that suitable measures can be taken. NCC conducts quarterly employee surveys to capture opin- ions about matters such as leadership, development and job satisfaction, NCC’s Code of Conduct, diversity, equity and inclu- sion. The employee survey is a tool for managers to involve employees in the development of their own work environment. NCC monitors overall employee engagement. For 2024, the result was 8.0 out of 10, which is above the external benchmark. The employee survey is analyzed in order to highlight groups of people who may be more exposed to impacts. This may involve differences in responses between men and women, in various roles, in various countries, etc. in order to gain insight into how improvement efforts can be planned. On the question of whether employees feel confi dent about not being exposed to discrimination, harassment or bullying, NCC had an average value in 2024 of 8.8 out of 10, which is better than the external benchmark. Training and skills development NCC offers its employees continuous skills development based on the needs of the company and the individual. NCC’s leader- ship program covers various stages in a manager’s develop- ment. The various training activities may include face-to-face training sessions, e-learning and other skills enhancement activities and training programs. Examples of ongoing skills development programs include: • The NCC Mega Project Management Program is aimed at our most senior and experienced project managers responsible for our largest and most complex projects. The program is conducted together with, among others, Oxford Global Projects and Copenhagen Business School. Introduction Report of the Board of Directors Financial statements Other NCC 2024 42Sustainability Report
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Social disclosures • The Senior Executive Program in partnership with the IMD Business School in Lausanne, which is aimed at division and department managers • The Strategic Leadership Program for those deemed capable of assuming a more senior management position in the near future, conducted with the Stockholm School of Economics • The Supervisor Academy, where employees train to become supervisors • The Site Manager Program, where supervisors or the equiva- lent can take the next step in their career and train to become site managers • Collaboration and course activities together with the Stockholm School of Economics, Royal Institute of Technology and Copenhagen Business School NCC continually follows up on, evaluates and monitors its train- ing programs. This is done in several ways, for the purpose of following up on the actual effect of the training in the partici- pants’ daily work and often encompasses both managers and employees. Examples of regular monitoring include: • Immediately after the program, follow-up is conducted with the participants using questionnaires, interviews, tests and reports • Pre- and post-surveys of participants to track direct effects • Effect assessment from six months up to two years after a program is fi nished The employee dialogue is the tool that NCC prioritizes to sup- port the employee’s individual development. Managerial respon- sibilities include offering employees a yearly employee dialogue. Employees who start at NCC receive an individualized onboard- ing plan. After the introduction period, the ordinary process for employee dialogue applies. The employee dialogue includes several parts such as the individual’s work situation, individual targets and the individual development plan. NCC promotes work methods and a view of training and skills development in which the largest part of development is related to learning through the daily work, networking, mentorship and planning of professional development. Planned activities are routinely followed up on during the year. Employee data NCC has collective agreements that regulate minimum wages, working time and employees’ rights in relation to the employer in all markets. In total, 90 percent of NCC’s employees are covered by collective agreements and among skilled workers, this cover- age is 100 percent. All employees are covered by collective agreements in Sweden and Norway; the 10 percent not covered are based in Denmark and Finland where local agreements are used to a limited extent. NCC conducts social dialogue in accordance with legal requirements and collective agreements in the markets in which the Group operates, and partners with informational and consulting bodies such as joint participation councils and the European Works Council. Metrics and outcome Reporting principles, health and safety The management system for health and safety encompasses 100 percent of everyone working at NCC’s worksites: NCC employees, hired staff and sub-suppliers. NCC’s internal OHS organization maintains the management system. Internal audits are continually conducted. The management approach to occupational health and safety work is based on the EU directive 89/391/EEC (including Norway), which has been included in national laws and ordi- nances, and other national regulations. Data for NCC’s employees is collected from NCC’s OHS and payroll systems. Subcontractors also include hired staff. The total number of hours worked for NCC’s employees and sub contractors was approximately 45,500,000 hours. For NCC employees, worked hours are based on actual hours. L TIF1 refers to the number of accidents resulting in one or more calendar days of absence per one million hours worked for NCC’s own workforce. L TIF4 refers to the number of accidents resulting in more than four calendar days of absence per million hours worked for NCC’s own workforce. Employee sickness absence data pertains to the number of employees at the end of the fi scal year and was collected from the Group’s HR and payroll system and refers to the companies included in the shared systems. Sickness absence is based on the number of hours of sickness absence in relation to the total number of hours worked, including absence for other reasons but excluding overtime. The data reported pertains to the period from December of the preceding period to November of the current period. Reporting principles, employee data Employee data pertains to the number of employees at the end of the fi scal year. Employees whose employment was termi- nated are included until their employment expires, regardless of whether they were dismissed from all or some of their tasks during the period of notice. NCC reports on gender distribution by men and women, which are the legal genders in the Nordic region. Data was collected from the HR and payroll system and refers as of 2024 to all subsidiaries, with the exception of collec- tive agreements where only companies in NCC’s Group-wide HR and payroll systems are included. The Board of Directors comprises members elected at the Annual General Meeting. Board members elected by employees are not included in this information. Management teams surveyed include all management teams from the Senior Management Team down to department man- agement or the equivalent. NCC 2024 43Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Social disclosures Accidents/injuries resulting in one day or more of sickness absence Accident frequency rate for accidents resulting in one day or more of absence from work per million worked hours Injuries not leading to lost time 2024 2023 2024 2023 2024 2023 Sweden NCC’s employees 82 98 7.4 7.9 258 354 Subcontractors 110 122 – – 244 215 Norway NCC’s employees 9 9 3.0 3.3 41 39 Subcontractors 6 6 – – 36 36 Denmark NCC’s employees 39 39 11.0 11.4 141 146 Subcontractors 46 49 – – 92 68 Finland NCC’s employees 5 11 3.6 6.5 17 32 Subcontractors 22 54 – – 33 54 Total NCC’s employees 135 157 7.1 8.1 457 571 Subcontractors 184 231 – – 405 373 Health and safety Work-related accidents/injuries, accident frequency rate and fatalities 1) Work-related fatalities Accident frequency rate for work-related fatalities Very serious work-related injuries2) Accident frequency rate for very serious work-related injuries 2024 2023 2024 2023 2024 2023 2024 2023 Sweden NCC’s employees 1 1 0.08 0.08 7 3 0.37 0.24 Subcontractors 0 0 – – 5 3 – – Norway NCC’s employees 0 0 0 0 0 0 0 0 Subcontractors 0 0 – – 0 0 – – Denmark NCC’s employees 0 0 0 0 3 0 0.16 0 Subcontractors 0 0 – – 2 3 – – Finland NCC’s employees 0 0 0 0 0 1 0 0.60 Subcontractors 0 0 – – 6 6 – – Total NCC’s employees 1 1 0.05 0.05 10 4 0.52 0.21 Subcontractors 0 0 – – 13 12 – – 1) The data reported pertains to the period from December of the preceding period to November of the current period. Reporting on hours worked for external staff is not available. 2) Injury with permanent impact or more than 30 days of absence. Sickness absence, NCC employees, all types of illness and poor health Sickness absence % All types of illness and poor health 2024 2023 Sweden 3.9 4.1 Norway 6.6 5.7 Denmark 4.4 4.6 Finland 3.0 3.2 Total 4.3 4.3 Close calls and observations 2024 2023 Sweden NCC employees 7,744 6,376 Subcontractors 9,205 8,525 Norway NCC employees 422 552 Subcontractors 5,772 6,550 Denmark NCC employees 3,552 2,690 Subcontractors 2,847 3,847 Finland NCC employees 210 225 Subcontractors 9,397 10,676 Total NCC employees 11,928 9,844 Subcontractors 27,221 29,601 Introduction Report of the Board of Directors Financial statements Other NCC 2024 44Sustainability Report
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Social disclosures Collective agreements 2024 2023 Number covered by collective agreements1) Share covered by collective agreements, % Number covered by collective agreements1) Share covered by collective agreements, % Sweden 6,832 100 7,113 100 Norway 1,417 100 1,376 100 Denmark 1,161 53 1,154 54 Finland 670 82 779 80 Total, NCC 10,080 90 10,422 91 1) Some seasonal variations exist regarding the number of employees. Employment contracts Total employees1) Permanent employment Temporary employment 2024 2023 2024 2023 2024 2023 Men Women Men Women Men Women Men Women Sweden 6,832 7,113 5,311 1,331 5,566 1,342 170 20 184 21 Norway 1,752 1,376 1,460 199 1,173 169 82 11 23 11 Denmark 2,185 2,127 1,837 316 1,799 294 22 10 28 6 Finland 840 921 641 171 704 199 22 6 13 5 Other 8 – 6 2 – – – – – – Total, NCC 11,617 11,537 9,255 2,019 9,242 2,004 296 47 248 43 1) All subsidiaries are included as of 2024. Some seasonal variations exist regarding the number of employees. Note 4 in the fi nancial statement contains employee data on the average number of employees. Scope of employment Full-time Part-time 2024 2023 2024 2023 Number of employees1) Men Women Men Women Men Women Men Women Sweden 5,434 1,323 5,707 1,328 47 28 43 35 Norway 1,515 199 1,191 173 27 11 5 7 Denmark 1,821 263 1,796 252 38 63 31 48 Finland 648 170 707 198 15 7 10 6 Other 6 2 – – 0 0 – – Total, NCC 9,424 1,957 9,401 1951 127 109 89 96 1) Some seasonal variations exist regarding the number of employees. All subsidiaries are included as of 2024. Employee data Age breakdown 2024 2023 Share %1) <30 30–50 >50 <30 30–50 >50 Board of Directors – 29 71 – 29 71 Senior Management Team – 25 75 – 18 82 Management teams 1 52 47 1 53 46 Managers 2 54 44 2 57 41 Employees 12 51 37 15 49 36 White-collar employees 7 56 37 8 56 35 Blue-collar employees 19 44 37 19 43 38 1) All subsidiaries are included as of 2024. Gender breakdown 2024 2023 Share %1) Men Women Men Women Board of Directors 57 43 57 43 Senior Management Team 50 50 45 55 Management teams 64 36 65 35 Managers 81 19 81 19 Employees 82 18 82 18 White-collar employees 71 29 71 29 Blue-collar employees 97 3 97 3 1) All subsidiaries are included as of 2024. NCC 2024 45Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Social disclosures Workers in the value chain Material sustainability matters Where in the value chain Working conditions Upstream Other work-related rights Upstream Material impacts, risks and opportunities During the double materiality assessment, workers in the value chain was identifi ed as one of NCC’s material sustainability topics. NCC’s purchasing function was involved in identifying and evaluating the impacts, risks and opportunities that are related to activities and stakeholders represented in the value chain. The results of this analysis are in line with previous mate- riality assessments, with NCC having addressed risks associ- ated with violations of human rights and workers’ rights throughout the value chain. Despite the fact that NCC is based in the Nordic region, with most of the business and supplier relationships located within the EU, there is dependence on complex relationships with global suppliers’ base networks – a common occurrence in the construction sector. Workers are involved in every step of NCC’s value chain, from raw material extraction (which occasionally takes place in high-risk countries), product manufacturing, transportation, and assembly and installation to the end phase in construction projects. This means that everyone involved in creating, delivering or installing products at NCC sites, or other- wise contributes with their profi ciencies and knowledge to carry out our projects, should be regarded as stakeholders in our value chain. However, the most direct impact occurs at NCC’s own worksites, where we work to ensure that all employees are treated with the same respect and focus on safety. Governance NCC’s purchasing and HR functions are responsible for monitor- ing the protection of human rights. This is accomplished through the Human Rights Due Diligence (HRDD) process, which involves addressing human rights and workers’ rights through governing documents; identifi cation, management and actions to counter- act the negative impact on human rights (Human Rights Impact Assessment, HRIA), surveying and following up actions, com- pensation as needed, and continually communicating progress in the area. NCC also has a number of policies in place to manage issues concerning workers in the value chain, that follow the UN Guid- ing Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work and the OECD Guidelines for Multinational Enterprises. These include: • Compliance Directive • Code of Conduct • Code of Conduct for Suppliers These policies and directives concern material matters associ- ated with human and workers’ rights, regulatory compliance, ethical standards, and health and safety. For more information on NCC’s policies and directives, see the section General disclosures. Targets Efforts are in progress to review current work methods, which can thereby create possibilities for establishing metrics and targets whitin the area. NCC will report on the progress of these efforts as part of its sustainability reporting. Activities NCC has created awareness around the fact that the majority of our initiatives should be concentrated close to our core, meaning the projects where the scope, scale and irremedia- ble character of the impact are the greatest. NCC’s ambition is for all workers at NCC’s worksites to be treated fairly, with respect for human rights and workers’ rights, and for the work they perform to not entail risks to their health, safety or well- being. Efforts are ongoing to expand competence in managing risks that are linked to stakeholders further along the value chain, where transparency and insight are limited. In 2022, NCC began efforts to systematically evaluate the results of its HRDD and HRIA and to address the areas of risk through relevant procedures and communications channels. On the basis of the initial phase of mapping the value chain, NCC has defi ned a number of raw materials that are particularly exposed to potential violations of human rights, and linked them to products that are purchased by NCC. These materials include mining-related products, oil-based products, electronic compo- nents, chemicals and textiles. These types of products are often produced in countries where there is a high risk of violation of human rights and workers’ rights. These matters were then highlighted in the process for supplier risk management that we began implementing in 2024. This is a system that provides support in efforts to increase general transparency in the value chain and to establish contingency plans for managing both business risks and sustainability risks. As a result, we have also initiated efforts to review and develop existing routines around managing relationships with suppliers in order to ensure that they manage matters concerning human rights and workers’ rights responsibly. These efforts will continue through 2025 and beyond. During 2024, the Supplier Insight was further developed, which is a support tool for evaluating and auditing the fulfi llment of internal and external requirements by new and existing suppliers. This tool will be a supplementary solution that will strengthen routines for managing supplier relationships, and will be implemented in 2025. NCC has also introduced a control system for subcontractors that is intended to increase our understanding of relationships among various subcontractors. This facilitates effi cient control of follow-up of subcontractors. The goal is to ensure that all subcontractors working at our sites are working under legal, stable and fair conditions that fulfi ll NCC’s requirements for human and labor rights. Introduction Report of the Board of Directors Financial statements Other NCC 2024 46Sustainability Report
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Ethics and compliance Material sustainability matters Where in the value chain Corporate culture Throughout the value chain Management of relationships with suppliers including payment practices Upstream, Own operations Corruption and bribery Throughout the value chain Material impacts, risks and opportunities During the double materiality assessment, ethics and compliance was identifi ed as one of NCC’s material sustainability topics. Issues concerning general business conduct, anti-corrup tion, transparency and functional governance are of great signifi - cance throughout NCC’s value chain, where both negative and positive impact – as well as fi nancial risks – have been identifi ed. A high ethical standard and integrity in the corporate culture has a positive impact, reducing the risk of unethical behavior and of violations of the law and human rights. NCC works proac- tively with its corporate culture in order to promote good busi- ness conduct, both through communication and activities pertaining to NCC’s values and Star behaviors, and through activities as part of NCC’s Compliance Program. NCC is active in an industry where complex projects, supply chains and operations with both private and public-sector customers lead to an increased risk of corruption and other unethical conduct, both in our own operations and throughout the supply chain. This risk is managed and minimized through, for example, policies, training, and routines to detect and prevent corruption. There is a positive impact within the area of relationships with suppliers, since NCC’s management of and procedures for supplier relationships and payment practices ensure effi cient and functional business operations both in own operations and for operators upstream in the value chain. These procedures support strategic goals through proactive communication, training and evaluation of business, social and environmental performance. In pace with the accumulation of requirements and regulations concerning transparency in the value chain, this area could also constitute a fi nancial risk since expanded legal requirements could entail increased costs for adapting existing procedures and controls. Governance NCC’s Code of Conduct defi nes NCC’s position and policies regarding sustainability matters as well as other areas of rele- vance for maintaining a high ethical standard and a responsible corporate culture. NCC’s values, Star behaviors and Code of Conduct set forth the guiding principles for how NCC’s employ- ees and business partners are expected to act and behave. The Code of Conduct is supported by internal governing documents that provide more guidance in specifi c areas. NCC’s Compliance Program is designed to ensure that responsible leadership and a high ethical standard is a shared committment across all levels in the organization. The program encompasses the risk areas of corruption, competition law, fraud, confl icts of interest, data protection (personal data pro- cessing), and diversity and human rights. The content and policies of this program are described in NCC’s Compliance Directive. The Group Head of Compliance is responsible for overseeing the program regarding the risk areas corruption, competition law, fraud, confl icts of interest and data protection and for ensuring that implementation is monitored and reported on to the Group Compliance Committee (GCC), CEO and Board of Directors. The Board of Directors receives a written Compliance Report at least once a year, with information on training and communication activities, as well as analysis and updates on cases in the whistleblower channel. NCC’s purchasing organization and HR function are responsi- ble for the parts of the program in respect of the protection of human rights and diversity. Operational initiatives related to business conduct and regulatory compliance are pursued in NCC’s business areas and Group functions. These are led by the respective Legal Affairs & Risk teams in the business divisions and Group functions. They are routinely monitored by the Group’s Head of Compliance and the persons responsible regu- larly meet in the Compliance Forum. NCC evaluates the Compliance Program by analyzing statis- tics from the Tell Me function, regular employee surveys and the results of internal audits. The Head of Compliance leads the internal investigation process and is responsible for ensuring that all suspected viola- tions of the Code of Conduct or other non-compliance reported through the Tell Me function are assessed, investigated, and acted upon. The Group Compliance Committee (GCC) is respon- sible for monitoring the Tell Me function to ensure that serious violations of the Code of Conduct are dealt with appropriately. Responsible purchasing initiatives are based on the Group’s Code of Conduct for Suppliers, which all suppliers must under- take to comply with. The Code of Conduct for Suppliers includes guidelines for regulatory compliance and ethical behavior, as well as guidelines to counter bribery and corruption, avoid con- fl icts of interest, respect competition law, protect human rights, promote diversity and inclusion, and for having safe and healthy worksites and reducing the environmental impact. Work to update the Code of Conduct and the Purchasing Policy in order to more clearly address the principles concerning responsible purchasing is ongoing. Most of the major framework agreement suppliers are also required to be certifi ed under the ISO 9001, ISO 14001 manage- ment systems or the equivalent. All of the major framework agreement suppliers are evaluated before any collaboration commences. NCC performs audits of its framework agreement suppliers to ensure compliance with NCC’s Code of Conduct for Suppliers and that the suppliers work in accordance with ISO 9001 and ISO 14001. NCC has a specifi c, thorough process for evaluating suppliers in geographical risk areas in order to pre- vent human rights violations. If any deviations or non-compliance Governance disclosures NCC 2024 47Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Governance disclosures are noted during the supplier audit, this must be corrected by the supplier according to an action plan. If the actions are not imple- mented, collaboration with the supplier may be terminated. Targets Our commitment NCC is committed to acting in accordance with the highest ethical standards and transparency, while serving as a responsi- ble partner across the value chain. Externally, NCC has undertaken to comply with several global initiatives related to responsible business conduct. NCC is a signatory of the United Nations (UN) Global Compact and sup- ports the ten principles of human rights, labor, environment and anti-corruption. In addition, NCC is a supporting member of the Swedish Anti-Corruption Institutet (IMM) and Transparency International Sweden. In cooperation with most other industry players in Sweden, a joint policy has been formulated: “Joint initiative to prevent bribery and corruption”. NCC works continu- ously to counteract corruption in the supply chain. NCC is a member of Amfori BSCI (Business Social Compli- ance Initiative), through which it has access to additional tools for training its suppliers. NCC’s own audits of suppliers in high- risk countries (according to Amfori BSCI’s defi nition) are supple- mented by the fact that these suppliers are integrated into Amfori BSCI’s processes, for training and collaboration. Activities Mechanisms for seeking advice and reporting violations All employees are encouraged to report any suspected or observed violations of the law and the NCC Code of Conduct via the Tell Me function. The Tell Me function includes an externally hosted whistleblower hotline that enables anonymous reporting on a website (for employees and external stakeholders) or by phone (for employees) in NCC’s local languages and English. The hotline can be found on the MyNCC intranet and on the NCC website. Employees can ask their immediate supervisor, HR, Legal Affairs & Risk, the Privacy Navigators as well as Compliance for advice on the NCC’s Code of Conduct and how they themselves should act in a given situation or how to report a concern. Internal investigations and follow-ups NCC is committed to maintaining open and transparent com- munication and all employees are expected to report any sus- pected or observed violations of the law or of the NCC Code of Conduct. NCC has a strict policy against retaliation for good- faith reporting in the whistleblower channel and provides train- ing and communication about the internal investigation pro- cess, lessons learned and protection against retaliation. Communication and training Training and communications are essential components of NCC’s Compliance Program. The Code of Conduct and other relevant policies are part of the NCC onboarding process for all new NCC employees. During the year, information on the Code of Conduct and the Group’s policies and directives were com- municated throughout the organization through various com- munication channels, including articles on NCC’s intranet and at management and team meetings. NCC provides three training modules as part of its Compli- ance Program, which are mandatory for all of NCC’s white-collar employees. These three training modules must be completed within 30 calendar days of commencing employment at NCC. The target group, frequency and content of the training course is defi ned on the basis of a risk assessment. The training is available in English, Norwegian, Danish, Swedish and Finnish. The “Business Ethics” training course was launched in late 2023 and contains an introduction to NCC’s Code of Conduct and Compliance Program as well as training in anti-corruption, confl icts of interest and combating fraud. The training is also mandatory for current NCC white-collar employees. The Head of Compliance follows up on the mandatory train- ing and reports the results to the Group Compliance Committee (GCC), the Senior Management Team and the Board of Directors. Anti-corruption and anti-bribery The risks of corruption can arise in relationships between NCC and its business partners, or in conjunction with, for example, the exercise of government authority. The risk of corruption is linked on the one hand to actions by NCC employees toward, for example, government authorities, public offi cials and private business partners, and on the other hand to actions by business partners, primarily suppliers and sub-suppliers. NCC has an annual Group-wide risk assessment process in which both Group staff units and NCC’s business areas evaluate and report on risks in the operations. In certain parts of the business, corruption has been identifi ed as a risk. NCC’s operations are conducted in countries with a low risk of corruption according to the Transparency International Corruption Perception Index. However, a portion of NCC’s suppliers operate in countries with a higher risk of corruption. NCC’s Code of Conduct and Group Compliance Directive defi ne NCC’s standpoint and policy as regards corruption and bribery. The Compliance Program guides the organization via internal governing documents, training courses and communi- cation to ensure that NCC has adequate procedures in place to prevent corruption in business operations and to ensure that the company complies with applicable laws and regulations. Introduction Report of the Board of Directors Financial statements Other NCC 2024 48Sustainability Report
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Governance disclosures Fair competition NCC operates in an industry where, historically speaking, anti-competitive activities have existed. For this reason, fair competition is a focus area at NCC. NCC’s Code of Conduct and Compliance Directive defi ne NCC’s position and policy as regards anti-competitive practices. The Code of Conduct and Compliance Program guide the organization via additional Group policies and directives, as well as training courses and communication to ensure fair competition and compliance with applicable laws and regulations within competition law. Responsible purchasing NCC has business relationships with several thousands of suppliers from whom we purchase materials and services, either directly or through sub-suppliers. Most of the suppliers are based in the Nordic region but are also found in countries such as Poland, Estonia, Latvia, Lithuania and China. NCC is working on reducing the total number of suppliers. A large portion of these purchases are made through long-term agree- ments. The aims are to improve controls, increase the effi ciency of purchasing work, promote a sustainability focus in the value chain and reduce NCC’s purchasing costs. NCC strives to have a responsible value chain where opera- tions are conducted in an environmentally and socially sustain- able manner that is also in line with healthy working conditions. Efforts are also under way to review our work methods linked to managing supplier relationships. Metrics and outcome Reporting principles, training The number of permanent white-collar employees who com- pleted the training courses is calculated as the proportion that fi nished the respective training courses in relation to the total number of permanent white-collar employees at the date of the reconciliation. Reporting principles, incidents of corruption and fair competition Incidents of corruption pertain to incidents reported to NCC’s whistleblower channel, or legal cases known to NCC, in which corruption or bribery was confi rmed during the fi scal year and in which NCC or NCC employees were involved. Defi nition of legal procedure/case is the number of ongoing or concluded legal cases during the reporting period. Reporting principles, whistleblowing The table presents the cases that were reported in the whistle- blower function during the respective years. The number of cases reported in the table refer to the number of incoming cases during the reporting year. Training In 2024, NCC provided three Group-wide training modules in business ethics (including anti-corruption), GDPR and competi- tion law. At December 31, the percentage of NCC’s white-collar employees who had completed the training modules was: Percentage, % 2024 2023 Business ethics 97 96 GDPR 97 96 Competition law 97 94 Confi rmed incidents of corruption and actions taken Total number and nature of confirmed incidents of corruption 2024 2023 Total number of confirmed incidents in which employees were dismissed or disciplined for corruption 0 0 Total number of confirmed incidents when contracts with business partners were terminated or not renewed due to violations related to corruption 0 0 Public legal proceedings relating to corruption against the organization or its employees during the reporting period and the outcome of such processes 0 0 Fair competition Number 2024 2023 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices 0 0 Whistleblowing Number 2024 2023 Tell Me 101 74 Responsible purchasing All of the non-Nordic material suppliers, with active agreements in 2024, were evaluated initially before any collaboration commenced. During the year, NCC conducted 171 audits of non- Nordic suppliers. NCC 2024 49Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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The company reports its sustainability work annually as part of the NCC Annual Report. The 2024 Sustainability Report has been prepared in accordance with the Swedish Annual Accounts Act and is partially inspired by the European Sustainability Reporting Standards (ESRS) – a step that marks a transition from the previous reports. Previous years’ Sustainability Reports have been prepared according to GRI Standards. NCC’s Com- munication on Progress in accordance with the UN Global Compact can be found on the UNGC website. The report has not been audited by a third party. Unless otherwise stated, all the information pertains to the entire NCC Group including direct, wholly owned subsidiaries for the period January 1 – December 31. If information or calculation methods have changed compared to previous year, it is stated in the respective table. No signifi cant changes have occurred in the organization, the share capital structure or the supply chain during the year. Statutory Sustainability Report At the Board meeting on April 9, 2025, the Board of Directors approved NCC AB’s Sustainability Report for the 2024 fi scal year. The 2024 Sustainability Report has been prepared in accordance with the Swedish Annual Accounts Act, and has to a certain extent been inspired by the European Sustainability Reporting Standards (ESRS). This statutory Sustainability Report is not part of the formal Annual Report. The Sustainability Report in accor- dance with the Annual Accounts Act is included in the Annual and Sustainability Report on pp. 16–50. The Sustainability Report describes NCC’s work to conduct and develop operations with consideration for the environment and climate, human health and well-being, and based on sound principles of ethics and governance. Board of Directors About the report Introduction Report of the Board of Directors Financial statements Other NCC 2024 50Sustainability Report
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To the general meeting of the shareholders in NCC AB (publ.) corporate identity number 556034-5174 Engagement and responsibility The Board of Directors is responsible for the statutory sustain- ability report for the year 2024 on pages 16–50 and for ensuring that it is prepared in accordance with the Annual Accounts Act in accordance with the older wording that applied before July 1, 2024. The scope of the audit Our examination has been conducted in accordance with FAR’s auditing standard RevR 12 The auditor’s opinion regarding the statutory sustainability report. This means that our examination of the statutory sustainability report is substantially different and less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with suffi cient basis for our opinion. Opinion A statutory sustainability report has been prepared. Stockholm, 10 April 2025 Öhrlings PricewaterhouseCoopers AB Patrik Adolfson Authorised Public Accountant Information for the statutory Sustainability Report Pages Environment 24–25, 27–39 Social conditions 40–45 Employees 40–46 Respect for human rights 18–19, 21, 22, 26, 40, 46–48 Anti-corruption 18, 47–49 Business model 20, 27 Policies for sustainability 18–19, 31, 37, 38, 40, 46, 47, 48 Signifi cant sustainability risks 33 Central sustainability performance indicators 31, 32, 34, 35, 37, 38, 40, 41, 42, 43, 46, 48 Auditor’s report on the statutory sustainability report This is a translation of the Swedish original report NCC 2024 51Introduction Report of the Board of Directors Financial statements OtherSustainability Report
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Report of the Board of Directors Developments during the year 53 Material risks and uncertainties 64 Corporate Governance Report 69 Introduction Financial statementsSustainability Report Other NCC 2024 52Report of the Board of Directors NCC 2024 52
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The Board of Directors and the President and CEO of NCC AB (publ), Corporate Registration Number 556034-5174 and headquartered in Solna, hereby submit the Annual Report and the consolidated fi nancial statements for the 2024 fi scal year. Operations NCC is one of the leading construction companies in the Nordics. Based on its expertise in managing complex construction processes, NCC contributes to the positive impact of construction for its customers and society as a whole. Operations include commercial property develop- ment, building and infrastructure project contracting, and asphalt and stone materials production. Market In general, NCC is impacted by the general economic situation and the GDP trend. Costs for input materials, the interest rate situation and expectations for future economic development have a signifi cant impact. The long-term market conditions for construction and civil engineer- ing, property development, and asphalt and stone in the Nordic region are positive. The countries where NCC operates in infrastructure have ambitious plans and investment initiatives in new construction, as well as refurbishment and maintenance of national and regional infrastruc- ture. Urbanization and the emergence of new growth regions are driving investments in infrastructure in city outskirts, such as roads, public transport, water and wastewater systems, and energy solutions. More- over, NCC is well positioned to support major industrial initiatives linked to the green transition. Underlying demand for public buildings throughout the Nordic region, such as schools, security classifi ed buildings, hospitals and nursing homes, is good. Similarly, the market for renovation and refurbishment also remains strong. The long-term need for residential units is substan- tial, but the market remains negatively impacted by the prevailing eco- nomic conditions. Similarly, demand for commercial properties also remains subdued. Demand for asphalt and stone materials is driven by investments in infrastructure and maintenance, as well as general construction and, to some extent, the economic situation of public customers. Activity levels in these markets remain high. External factors See the description in the risk section on page 64. Operations during the year Orders received Orders received amounted to SEK 54,730 M (56,819). Orders received decreased in the Building Nordics business area but increased in the Infrastructure and Industry business areas. The lower orders received in Building Nordics was attributable to the Norwegian and Danish opera- tions. The higher orders received in the Infrastructure business area was due to more major projects being registered among orders. The higher orders received in the Industry business area was driven by the asphalt operations. The Building Sweden business area noted slightly lower orders received year-on-year. Changes in exchange rates impacted orders received by SEK 406 M (326). Order backlog The Group’s order backlog amounted to SEK 50,723 M (53,422) at year- end. The order backlog decreased in the Building Nordics and Building Sweden business areas but increased in the Infrastructure business area. Changes in exchange rates impacted the order backlog by SEK 582 M (–472). Net sales Net sales totaled SEK 61,609 M (56,932). Net sales increased primarily as an effect of property sales in Property Development, but were also higher in Industry and Infrastructure. Net sales in Building Nordics and Building Sweden decreased somewhat during the year. Exchange rate effects had an impact of SEK 425 M (309) on net sales. Operating profi t Operating profi t amounted to SEK 2,032 M (1,802). The higher operating profi t was driven by the Property Development, Industry and Building Nordics business areas. The operating margin was 3.3 percent (3.2). Operating profi t for the Infrastructure business area was slightly lower compared with the preceding year at SEK 535 M (548). The comparative period is adjusted for the positive contribution from the divestment of Bergnäset. In the Building Nordics business area, operating profi t amounted to SEK 426 M (343). The increase was the result of higher profi tability in Finland and Denmark. Operating profi t in the Building Sweden business area was charged with non-recurring costs of approximately SEK 250 M related to provi- sions for the revaluation of risks in the project portfolio for uncertain cost compensation. This relates to projects that were started before infl ation gained momentum in 2022 that are completed or under com- pletion. The profi le of later projects and the order backlog is different, which is expected to gradually improve underlying earnings. Operating profi t was SEK 30 M (272). Operating profi t in Industry amounted to SEK 584 M (400) and increased as a result of a slightly longer season, operational discipline, higher volumes and prices, and lower overheads in general for the business area. Property Development recognized several projects in profi t in Sweden: Arendal Albatross, Brick Studios, Våghuset and MIMO. Operating profi t was SEK 719 M (243). Other and eliminations amounted to SEK –262 M (–179), where the result from NCC AB and minor subsidiaries and associated companies is included as well as inter-company gains and other Group adjustments. The higher costs were largely attributable to continued investment in new IT platforms and applications and to some extent, the start-up of the business area Green Industry Transformation. Net fi nancial items, profi t after fi nancial items and net profi t for the year Net fi nancial items amounted to SEK –169 M (1). The deterioration is explained by the lower capitalization of interest in the Property Develop- ment business area and higher average corporate net debt during the year combined with higher average interest rates. Profi t after fi nancial items was SEK 1,863 M (1,803). Tax expenses for the year totaled SEK –292 M (–230) and the effective tax rate was 16 (13) percent. As in the previous year, the tax rate was reduced due to the tax-free divestments that NCC Property Development carried out during the year. In 2023, the tax rate was also reduced by the tax-free company divestment of Bergnäset. Profi t after tax for the year amounted to SEK 1,571 M (1,573). Comprehensive income for the year Comprehensive income for the year totaled SEK 2,103 M (728). The change was mainly attributable to remeasurement of defi ned-benefi t pension plans, SEK 515 M (–818). Tax relating to items that cannot be recycled to net profi t for the year amounted to SEK –106 M (168). For more information, refer to Note 23. Developments during the year NCC 2024 53Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Developments during the year Orders received, order backlog, net sales and earnings per business area, SEK M Orders received Order backlog Net sales Operating profit/loss 2024 2023 2024 2023 2024 2023 2024 2023 NCC Infrastructure 18,919 16,707 16,824 16,074 18,105 17,667 535 723 NCC Building Nordics 11,392 16,654 16,720 18,684 13,884 14,615 426 343 NCC Building Sweden 12,239 12,661 14,980 16,753 14,012 14,475 30 272 NCC Industry 12,884 11,459 2,281 2,015 12,634 11,485 584 400 NCC Property Development – – – – 4,853 1,376 719 243 Total 55,433 57,481 50,805 53,525 63,488 59,619 2,294 1,982 Other and eliminations –704 –662 –81 –104 –1,879 –2,686 –262 –179 Group 54,730 56,819 50,723 53,422 61,609 56,932 2,032 1,802 Orders received and net sales per country, SEK M Orders received Net sales 2024 2023 2024 2023 Sweden 31,078 30,673 36,843 32,435 Denmark 12,485 15,934 12,989 12,655 Norway 7,493 7,317 7,793 7,082 Finland 3,673 2,895 3,985 4,760 Group 54,730 56,819 61,609 56,932 Return, % Return on capital employed Return on equity Profi t/loss after fi nancial items per quarter, SEK M 2020 2021 2022 2023 2024 NCC is impacted by seasonally low activity in the fi rst quarter. 0 10 20 30 20242023202220212020 -500 0 500 Q 1 Q 2 Q 3 Q 4 Project size of orders received <SEK 25 M, 15 (14)% SEK 25–100 M, 19 (20) % SEK 100–300 M, 20 (23) % SEK 300–500 M, 19 (10) % >SEK 500 M, 27 (33)% The diagram refl ects orders received in contracting operations, which is equivalent to SEK 43 billion of the total orders received of SEK 55 billion. Introduction Financial statementsSustainability Report Other NCC 2024 54Report of the Board of Directors
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Developments during the year Cash fl ow Cash fl ow before fi nancing was SEK 3,990 M (361). The strong cash fl ow is mainly due to the four property sales completed during the year. Cash fl ow from investing activities amounted to SEK –647 M (–446); the lower cash fl ow was due to the divestment of the subsidiary Bergnäset in the preceding year. At the end of the year, cash and cash equivalents amounted to SEK 2,910 M (707). Financial position At December 31, the Group’s total assets amounted to SEK 32,026 M (31,950). Property development projects decreased while cash and cash equivalents increased. On the liabilities side, current liabilities decreased while equity increased with the profi t for the year. Capital employed amounted to SEK 13,746 M (13,175) at the end of the year. The increase is mainly due to an higher cash and cash equiva- lents and short-term investments, partly offset by a decrease in property development projects. The return on capital employed was 15 percent (15). The return on equity was 21 percent (21). The Group’s net debt at December 31 amounted to SEK –1,164 M (–4,310). The change is mainly attributable to better cash fl ow before fi nancing and lower pension debt. The company’s net cash, meaning net debt excluding pension debt and lease liability, amounted to SEK 205 M (–2,374). In all signifi cant respects, the change from net debt to net cash is due to the sale of property projects. The average maturity of interest- bearing liabilities, excluding the pension debt and lease liability, was 24 months (18) at the end of the year. At December 31, 2024, NCC’s unutilized committed lines of credit totaled SEK 3,481 M (5,361), with an average remaining maturity of 23 (24) months. On December 31, 2024, the equity/assets ratio was 27 percent (23). The debt/equity ratio was a multiple of 0.1 (0.6). Business areas For more information about our major projects and developments during the year in NCC’s business areas, see pp. 58–63. Parent Company The Parent Company’s net sales pertain to charges to Group companies and amounted to SEK 179 M (172). The average number of employees was 68 (63). Impairment of shares and participations totaled SEK 0 M (0). Profi t after fi nancial items was SEK 1,800 M (997). Approved dividends, adjusted for repurchased shares, amounted to SEK 781 M, of which SEK 391 M was paid in April and SEK 390 M was paid in November. Personnel The average number of employees in the NCC Group in 2024 was 11,776 (12,243). Remuneration A description of salary, remuneration and terms of employment of the President and CEO and other employees in the company is presented in Note 4. Evaluation of guidelines for remuneration of senior executives in 2024 The Board of Directors has evaluated the application of the guidelines for salary and other remuneration of the CEO and other members of the company’s Senior Management Team (SMT), as resolved by the 2024 AGM. The Board of Directors has concluded that the guidelines were applied when determining salary and other remuneration for the CEO and other senior executives. For more information, refer to the remuneration report available at https://www.ncc.com/investor-relations/annual-general-meeting/. Board of Directors’ motion concerning guidelines for remuneration of senior executives Board of Directors’ motion concerning guidelines encompass the CEO and other members of the Senior Management Team (SMT), totaling 12 people (including the CEO) when the Annual Report was issued. The guidelines are applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of the guidelines by the 2025 Annual General Meeting. These guidelines do not apply to any remuneration resolved or approved by the Annual General Meeting. Board of Directors’ motion concerning guidelines for remuneration of senior executives is in all signifi cant respects similar to previous years. A few minor adjustments have been made due to the establish- ment of the Compensation and Competence Committee. For more information, refer to the remuneration guidelines available at https://www.ncc.com/investor-relations/annual-general-meeting/. NCC share Number unless otherwise specified 2024 2023 Registered share capital, Series A 6,797,667 11,548,853 Registered share capital, Series B 92,963,289 88,212,103 Series B treasury shares 1,968,589 2,099,221 Average price Series B treasury shares, SEK 106.46 106.46 Converted Series A shares to Series B shares 4,751,186 1,365,270 Distributed Series B shares to participants in L TI programs 130,632 69,495 Distributed Series B shares to participants in L TI programs, proportion of total number of shares, % 0.13 0.07 Average price of distributed Series B shares, SEK 106.46 100.39 Quotient value, SEK 8.70 8.70 Series A shares carry ten voting rights each and Series B shares one voting right. All shares provide the same entitlement to participation in the company’s assets and profi t and to an equally large dividend. At the request of the holder, Series A shares can be converted into Series B shares. NCC 2024 55Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Developments during the year Shareholders The number of NCC shareholders at year-end was 45,773 (44,622). In terms of voting rights, OBOS was the largest individual holder account- ing for 10.05 percent (8.38) of the share capital and 28.60 percent (26.19) of the voting rights. No other shareholder accounts for more than 10 percent of the voting rights. NCC holds 1.97 percent (2.10) of the share capital and 1.22 percent (1.03) of the voting rights. The ten largest shareholders jointly accounted for 41.73 percent (37.92) of the share capital and 48.99 percent (58.68) of the voting rights. Dividend NCC’s 2024 Annual General Meeting resolved on a dividend of SEK 8.00 (6.00) per share to be paid on two occasions. The record date for the fi rst payment of SEK 4 was April 11, 2024, with payment occurring on April 16, 2024. The record date for the second payment of SEK 4 was November 7, 2024 with payment occurring on November 12, 2024. Appropriation of profi ts The Board of Directors proposes that the profi t will be appropriated as follows: Profit brought forward 5,194,085,018 Be appropriated as follows: To be distributed to shareholders 1,075,716,037 To be carried forward 4,118,368,981 Total, SEK 5,194,085,018 Refer to Note 39 for more information. Signifi cant events during the year As of January 1, 2024, NCC has a new business area, NCC Green Industry Transformation. The business area focuses on major projects driven by the green industrial transition and that require specialist skills and resources. In February, two new Business Area Managers took offi ce: Niklas Sparw, Head of the NCC Building Sweden business area and Helena Hed, Head of the NCC Green Industry Transformation business area. On February 12, 2024, a fi re broke out at Oceana Water World in Gothenburg, which NCC was building on behalf of Liseberg. In January 2025, it was announced that reconstruction can begin. NCC held its Annual General Meeting on April 9. For more information, refer to the Corporate Governance Report. On March 7, NCC announced that Maria Grimberg, Head of Communi- cations, has decided to leave NCC for a role outside the company. On May 14, NCC appointed Andreas Koch as new Head of Communi- cations and member of the Senior Management Team. Andreas Koch took up his new position on October 14. On November 4, Carnegie Fonder announced that it wished to change its representative on the next Nomination Committee to Mattias Sjödin, Portfolio Manager at Carnegie Fonder. Signifi cant events after the end of the year NCC Industry On February 10, NCC announced that it will conduct a strategic review of the NCC Industry business area in 2025. Various options will be evaluated, including a possible divestment of the business area. Proposed dividend NCC’s Board of Directors has proposed a dividend of SEK 9.00 (8.00) per share and an extra dividend of SEK 2.00 per share to be paid on two occasions. This corresponds to approximately 68 percent of after-tax profi t for the year. The proposed record date for the fi rst payment of SEK 6.50 per share, which includes an extra dividend of SEK 2.00 per share, is May 9, 2025 with payment occurring on May 14, 2025. For the second payment of SEK 4.50 per share, November 7, 2025 is the proposed record date with payment occurring on November 12, 2025. Omnibus On February 26, 2025, the European Commission published a proposal for changes to sustainability reporting regulations in the form of the fi rst Omnibus package of measures. NCC will monitor developments and evaluate any impact on the Group’s sustainability reporting resulting from the changed regulations. Environmental impact The Group conducts operations subject to permit obligations under the Environmental Code in the Swedish subsidiaries. Of the Group opera- tions subject to permit and reporting obligations, it is mainly the asphalt and gravel pit operations conducted by NCC Industry that affect the external environment, as well as the construction and civil engineering operations conducted by NCC Building Sweden, NCC Building Nordics and NCC Infrastructure. Quarries and harbors are activities subject to permit obligations, while asphalt production is generally subject to reporting obligations. Permits for quarries are renewed continuously. NCC Industry also conducts recycling operations that are subject to permit obligations. Some of these include landfi lls, which are also subject to permit obligations. No signifi cant injunctions according to the Environmental Code exist. Statutory Sustainability Report In accordance with Chapter 6, Section 11 and Chapter 7, Sections 31 a–c of the Swedish Annual Accounts Act, NCC has decided to prepare the Parent Company’s and the Group’s statutory Sustainability Report as a separate report that is not part of the offi cial annual accounts. The Sustainability Report encompasses all subsidiaries. For more information, refer to the Sustainability Report on pp. 16–50. Seasonal effects NCC Industry’s operations and certain operations in NCC Building Sweden, NCC Building Nordics and NCC Infrastructure are impacted by seasonal variations due to weather conditions. Earnings in the fi rst quarter are normally weaker than the rest of the year. Amounts and dates Unless otherwise indicated, all amounts are stated in millions of Swedish kronor (SEK M). The period referred to is January 1–December 31 for profi t/loss items and December 31 for balance sheet items. Rounding- off differences may arise. Introduction Financial statementsSustainability Report Other NCC 2024 56Report of the Board of Directors
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Developments during the year Major projects Projects >SEK 500 M Order value and estimated completion may change over the course of the project. Internal projects are not included. NCC’s share of order value, Dec. 31, 2024, SEK M Completion rate Dec. 31, 2024, % Estimated completion New projects in 2024 Road and tunnel, Ålesund NO 1,429 19 2027 Residential renovation, Aarhus DK 1,135 2 2029 Correctional institution 2, Mariestad SE 1,037 14 2027 Train depot, Hagalund SE 921 21 2026 Industrial building, Oxelösund SE 780 46 2026 Ongoing projects Railway tunnel, West Link/Central Station, Gothenburg SE 9,969 – 2026 Hospital, Hillerød DK 8,721 66 2025 Railway tunnel, West Link/Korsvägen, Gothenburg SE 6,934 – – Hospital, Västerås SE 4,100 28 2029 Hospital building, Eskilstuna SE 2,584 90 2025 Subway station, Hagastaden, Stockholm SE 2,411 53 2027 Correctional facility, Tidaholm SE 2,254 77 2029 Railway section, Lund Arlöv SE 2,181 99 2025 Railway station, Drammen NO 2,131 86 2025 Hotel and office, Aarhus DK 1,970 42 2026 Hospital project, phase 2, Oulu FI 1,633 86 2025 Offices, Gothenburg SE 1,617 71 2026 Renovation of water treatment plant, Lidingö SE 1,578 46 2027 Correctional institution 1, Mariestad SE 1,271 90 2026 Offices, Odense DK 1,198 85 2025 Water and wastewater treatment facility, Åkersberga SE 1,182 22 2029 Offices, Trondheim NO 1,113 77 2026 Residential units, Herlev DK 1,107 82 2025 Quay structure, Gothenburg SE 1,066 32 2028 Psychiatric hospital, Oslo NO 1,024 45 2026 Subway depot, Stockholm SE 1,014 86 2025 Industrial building, Kalundborg DK 1,001 72 2025 Extension of office and parking facility, Fredericia DK 930 11 2026 Swim center, Oslo NO 801 49 2026 Residential units, Stockholm SE 788 90 2025 Residential units, Copenhagen DK 755 84 2025 Training and storage area, Halmstad SE 735 50 2026 Wastewater treatment plant, Kristianstad SE 729 93 2025 Refurbishment event arena, Stockholm SE 725 86 2025 Distribution station, Stockholm SE 702 53 2026 Residential renovation 2, Albertslund DK 690 47 2025 Offices, Ballerup DK 628 21 2025 Quay structure, Norrköping SE 620 89 2029 Offices, Middelfart DK 594 35 2026 Residential renovation, Herning DK 591 36 2027 Dam/Hydropower plant, Lilla Edet SE 591 55 2027 School, Varberg SE 531 77 2026 Waterworks, Copenhagen DK 525 29 2027 Dam/Hydropower plant, Borlänge SE 501 52 2027 Completed projects 2024 Residential units, hotel and restaurants, Copenhagen DK 2,381 100 2024 Swimming complex/water park, Gothenburg SE 1,056 100 2024 Offices, Helsinki FI 885 100 2024 Prison, Kristianstad SE 756 100 2024 Residential renovation, Malmö SE 724 100 2024 Offices/residential units, Umeå SE 656 100 2024 University, Borlänge SE 615 100 2024 University buildings, Espoo FI 604 100 2024 Offices, Oslo NO 604 100 2024 Residential renovation, Herlev DK 559 100 2024 Residential renovation 1, Albertslund DK 541 100 2024 NCC 2024 57Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Developments during the year NCC Infrastructure’s orders received totaled SEK 18,919 M (16,707). Orders received for the Energy & Water Treatment product segment remained high, although the share of the total was lower compared to 2023, 27 percent (40). The Railways product segment increased the most, to 26 percent (11). The contract to completely renovate the Majorstuen metro station in Oslo, Norway, is one example of a new project during the year. Groundworks continued to represent a high share of orders received by NCC Infrastructure and amounted to 20 percent (22). The order backlog was higher year-on-year and amounted to SEK 16,824 M (16,074). Net sales increased to SEK 18,105 M (17,667). Energy & Water Treat- ment, Railways and Groundworks accounted for almost 80 percent of total net sales. Sweden is NCC Infrastructure’s largest market, account- ing for 70 percent (74) of net sales, while Denmark and Norway account for 17 percent (13) and 13 percent (13) of net sales, respectively. Operating profi t and operating margin were in line with the preceding year and amounted to SEK 535 M (548). The comparative period has been adjusted for the positive impact on earnings of SEK 175 M from the divestment of the subsidiary Bergnäset. NCC Infrastructure Orders received (SEK M) 18,919 Net sales (SEK M) 18,105 Operating profi t (SEK M) 535 Share of NCC total Net sales Operating profi t Average no. of employees Key fi gures SEK M 2024 2023 Orders received 18,919 16,707 Net sales 18,105 17,667 Operating profit 535 723 Operating profit/loss excl. Bergnäset1) 535 548 Operating margin, % 3.0 4.1 Operating margin excl. Bergnäset, %1) 3.0 3.1 Average no. of employees 3,718 3,910 1) Refers to operating profi t adjusted for the positive impact from the sale of Bergnäset. Orders received per product segment Roads 12 (5)% Railways 26 (11)% Energy & Water Treatment 27 (40)% Groundworks 20 (22)% Industry 8 (8)% Foundation engineering 4 (5)% Other 3 (9)% Net sales per product segment Roads 6 (10)% Railways 28 (24)% Energy & Water Treatment 31 (25)% Groundworks 19 (25)% Industry 5 (4)% Foundation engineering 7 (6)% Other 4 (6)% Net sales per country Sweden 70 (74)% Denmark 17 (13)% Norway, 13 (13)% Central treatment plant, Kristianstad Nettoomsättning Rörelseresultat Medelantal anställda Nettoomsättning Rörelseresultat Medelantal anställda 28% 24% 33% Introduction Financial statementsSustainability Report Other NCC 2024 58Report of the Board of Directors
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Developments during the year NCC Building Nordics’ orders received amounted to SEK 11,392 M (16,654). The lower orders received was mainly attributable to Denmark and Norway, but orders received also declined in Finland. The Refurbish- ment/Conversion product segment increased to 49 percent (17), mainly attributable to a number of contracts won in Denmark during the year (Aarhus, Frederikssund, Copenhagen, Dommerparken, Sönderpark Ringsted and Mindeparken). The Other product segment declined. The prevailing market situation continues to affect mainly Offi ces and Residential and orders received amounted to 6 percent (15) and 6 percent (7) respectively. The order backlog was lower than in the year-earlier period and amounted to SEK 16,720 M (18,684). Net sales amounted to SEK 13,884 M (14,615). The challenging market in Finland was the reason for the lower net sales. The percentage of Public Buildings increased and accounted for the largest proportion of net sales, 37 percent (31), followed by Refurbishment/Conversion. Net sales attributable to Refurbishment/Conversion amounted to 21 percent (18), which was lower than the share for orders received, as several projects were registered during the latter part of the year. Net sales for Offi ces and Residential continued to decline due to the prevailing market situation. Denmark is NCC Building Nordics’ largest market, accounting for 52 percent (49) of sales, while Finland and Norway account for 29 percent (35) and 19 percent (16) of net sales, respectively. Operating profi t amounted to SEK 426 M (343). The operating margin was 3.1 percent (2.3), with the improvement due to higher profi tability in both Finland and Denmark. In Finland, cost adjustments were made in view of the challenging market. NCC Building Nordics Share of NCC total Net sales Operating profi t Average no. of employees Key fi gures SEK M 2024 2023 Orders received 11,392 16,654 Net sales 13,884 14,615 Operating profit 426 343 Operating margin, % 3.1 2.3 Average no. of employees 2,262 2,434 Orders received per product segment Offi ces 6 (15)% Residential 6 (7)% Refurbishment/ Conversion 49 (17)% Public Buildings 29 (37)% Other 10 (24)% Net sales per product segment Offi ces 15 (17)% Residential 14 (22)% Refurbishment/ Conversion 21 (18)% Public Buildings 37 (31)% Other 13 (12)% Net sales per country Denmark 52 (49)% Norway 19 (16)% Finland 29 (35)% Orders received (SEK M) 11,392 Net sales (SEK M) 13,884 Operating profi t (SEK M) 426 Papirön, Copenhagen Nettoomsättning Rörelseresultat Medelantal anställda 22% 19% 20% NCC 2024 59Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Developments during the year NCC Building Sweden’s orders received amounted to SEK 12,239 M (12,661). Public Buildings accounted for the largest share of orders received. The Other product segment increased the most, with orders received comprising one fourth of total orders received during the year. The increase was due primarily to several industrial projects, including a new train maintenance depot in Solna. Orders received for Offi ces and Residential continued to decline due to the prevailing market situation. For Residential, orders received consisted of just over 80 percent rental apartments. Major projects registered among orders during the year included the third project phase of Region Västmanland’s new emergency hospital in Västerås, the next phase of work on SSAB’s new plant for fossil-free steel production and a new train maintenance depot at the Hagalund depot in Solna. The order backlog was lower year-on-year but still in line with net sales for one year and amounted to SEK 14,980 M (16,753). Net sales totaled SEK 14,012 M (14,475). Public Buildings continue to account for the highest share of net sales, 37 percent (31). Residential and Refurbishment/Conversion continue to account for a high share of around 20 percent. Operating profi t was charged with non-recurring costs of approxi- mately SEK 250 M related to provisions for the revaluation of risks in the project portfolio for uncertain cost compensation. This relates to projects that were started before infl ation gained momentum in 2022 that are completed or under completion. The profi le of later projects and the order backlog is different, which is expected to gradually improve underlying earnings. Operating profi t was SEK 30 M (272). NCC Building Sweden Orders received (SEK M) 12,239 Net sales (SEK M) 14,012 Operating profi t (SEK M) 30 Share of NCC total Net sales Operating profi t Average no. of employees Key fi gures SEK M 2024 2023 Orders received 12,239 12,661 Net sales 14,012 14,475 Operating profit 30 272 Operating margin, % 0.2 1.9 Average no. of employees 2,542 2,700 Orders received per product segment Offi ces 5 (6)% Residential 9 (19)% Refurbishment/ Conversion 18 (22)% Public Buildings 43 (46)% Other 25 (7)% Net sales per product segment Offi ces 12 (14)% Residential 20 (27)% Refurbishment/ Conversion 18 (18)% Public Buildings 37 (31)% Other 13 (10)% Net sales per country Sweden 100 (100)% Kulturhus Agnes, Gävle Nettoomsättning Rörelseresultat Medelantal anställda 22% 1% 23% Introduction Financial statementsSustainability Report Other NCC 2024 60Report of the Board of Directors
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Developments during the year NCC Industry Share of NCC total Net sales Operating profi t Average no. of employees Key fi gures SEK M 2024 2023 Net sales 12,634 11,485 Operating profit 584 400 Operating margin, % 4.6 3.5 Operating capital employed 3,844 4,090 Return on operating capital employed, % 14.0 8.9 Average no. of employees 2,596 2,553 Stone materials, 1,000 tons1) 25,642 25,610 Asphalt, 1,000 tons1) 5,061 4,657 1) Sold volume. Orders received per product segment Asphalt and paving 76 (73)% Stone materials 24 (27)% Net sales per product segment Asphalt and paving 75 (73)% Stone materials 25 (27)% Net sales per country Sweden 53 (55)% Denmark 23 (23)% Norway 22 (20)% Finland 2 (2)% Orders received (SEK M) 12,884 Net sales (SEK M) 12,634 Operating profi t (SEK M) 584 NCC Industry’s orders received amounted to SEK 12,884 M (11,459), the increase was mainly attributable to asphalt operations. Net sales totaled SEK 12,634 M (11,485), the increase was attribut- able to higher volumes from both the asphalt and stone materials operations. Volumes of sold stone materials amounted to 25,642 thousand tons (25,610) and volumes of sold asphalt to 5,061 thousand tons (4,657). Operating profi t amounted to SEK 584 M (400) and the operating margin improved from 3.5 percent to 4.6 percent. Operational discipline, higher volumes and prices, and generally lower costs in general for the business area contributed to the higher margin. Operating capital employed Operating capital employed decreased to SEK 3,844 M (4,090) due to higher non-interest-bearing liabilities. Stora Bältbron, Denmark Nettoomsättning Rörelseresultat Medelantal anställda 20% 25% 23% NCC 2024 61Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Developments during the year Net sales amounted to SEK 4,853 M (1,376). Operating profi t amounted to SEK 719 M (243). Four projects in Sweden were recognized in profi t during the year: Arendal Albatross, Brick Studios, Våghuset and MIMO. Higher rental revenues from several projects in Sweden and Finland also made a positive contribution to profi t. Earnings in 2023 were mainly attributable to profi t recognition of one major project, Kontorværket 1 in Denmark, and the sale of land with development rights in Sweden (Järva Krog). Property projects One project in Sweden, Yrket, started during the year and is expected to be recognized in profi t in the second quarter of 2028. In 2023, one project was started, Park Central, in Sweden. Letting amounted to 73,500 square meters (27,900). Of these, the Yrket project accounts for 52,000 square meters (pertaining to GFA). During the year, a total of 23 new leases (31) were signed in Sweden and Finland. At the end of the year, 8 projects (11) were either ongoing or com- pleted but not yet recognized in profi t. Costs incurred in all projects amounted to SEK 7.4 billion (9.0), corresponding to a total completion rate of 64 percent (75). The completion rate for ongoing projects was 24 percent (60). The total letting rate was 77 percent (65). Operating net amounted to SEK 74 M (45). Operating capital employed Operating capital employed decreased and amounted to SEK 7,938 M (9,592) at the end of the year. The decrease was attributable to the recognition in profi t of several projects during the year. NCC Property Development Share of NCC total Net sales Operating profi t Average no. of employees Key fi gures SEK M 2024 2023 Net sales 4,853 1,376 Operating profit 719 243 Operating margin, % 14.8 17.7 Operating capital employed 7,938 9,592 Return on operating capital employed, % 7.6 2.8 Average no. of employees 87 108 Net sales per country Sweden 97 (35)% Denmark 1 (65)% Norway 0 (0)% Finland 2 (0)% Net sales (SEK M) 4,853 Operating profi t (SEK M) 719 Mimo, Mölndal Nettoomsättning Rörelseresultat Medelantal anställda 8% 31% 1% Introduction Financial statementsSustainability Report Other NCC 2024 62Report of the Board of Directors
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Developments during the year Property development projects, Dec. 31, 2024 Ongoing property development projects1) Project Type Location Sold, expected to be recognized in profit Completion rate, % Lettable space, sqm Letting rate, %4) Yrket 2) Offices Solna Q2 2028 12 52,000 100 Habitat 7 Offices Gothenburg 82 7,800 42 Park Central 3) Offices Gothenburg Q2 2027 26 15,200 21 Total, Sweden 24 75,000 76 Total 24 75,000 76 Completed property development projects1) Type Location Sold, expected to be recognized in profit Lettable space, sqm Letting rate, %4) We Land Offices Helsinki 20,800 85 Kulma21 Offices Helsinki 7,700 100 Total, Finland 28,500 89 Nova Offices Solna 9,800 35 Flow Hyllie Offices Malmö 10,200 71 Bromma Blocks Offices Stockholm 52,400 79 Total, Sweden 72,400 71 Total 100,900 77 1) The tables pertain to ongoing or completed property projects that have yet to be recognized in profi t. In addition to these projects, NCC works actively with letting (rental guarantees and supplementary purchase price) in two previously sold and profi t-recognized property projects, equal to a maximum of about SEK 2 M in potential positive impact on earnings. 2) The stated lettable space for the Yrket project pertains to GFA. 3) The project comprises a total area of approximately 40,000 square meters and lettable space of about 30,400 square meters. The project is being carried out together with Jernhusen, a Swedish state-owned property company. In December 2021, a contract was entered into to develop Park Central through a joint venture. NCC has acquired 50 percent of the company owning the property from Jernhusen, which will repurchase this shareholding when the property is fully developed and certain criteria are met. Figures in the table refer to NCC’s share of the project. 4) The percentage of anticipated rental revenues that corresponds to signed leases (also called leasing rate based on revenues). NCC Property Development Flow Hyllie, Malmö NCC 2024 63Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Material risks and uncertainties Management of operational, strategic, fi nancial and sustainability risks is a key prerequisite for NCC’s business and effi cient risk management is a necessity for a stable and profi table company. NCC has conducted an assessment of the company’s risks and describes below the risks regarded as the most probable and that are estimated to have the greatest impact on NCC’s potential to achieve its objectives in the long and the short term. The aim of risk management is to identify, assess and prioritize risks within the operations. The organization can then take action to minimize the likelihood and impact of the incident. Risk management is a central and essential part of NCC’s operations. We work actively with risk management. These activities are supported by experts in the relevant areas. Risk management measures are inte- grated into internal processes for management and operations, with working procedures and guidelines that are often specifi cally designed for risk identifi cation and implementation of mitigating measures. Opportunities are handled separately at NCC and are not included in the same process, where another methodology and approach could be used. Risk assessment is the most important tool for systematic risk management in our projects. It starts in the selling stage and is con- tinuously updated throughout the construction process. The aim is to achieve a safe and predictable construction process, where the project is executed within established parameters. The purpose of the assess- ment is to take the unique conditions for each project and systemati- cally identify, analyze and manage the risks. By taking suitable meas- ures, the likelihood and consequences of risks are minimized. Overview of top risk risks at Group level Risk category Risk Likelihood Consequence Change Market 1. Geopolitical situation Most likely Major 2. Market volatility May occur Serious 3. Price increases and delivery shortage May occur Serious People 4. Competence supply & Leadership May occur Major 5. Health & Safety May occur Serious Environment 6. Climate May occur Serious 7. Resource use May occur Serious Management 8. Management of operations May occur Major 9. Supply chain May occur Serious IT 10. Group Common IT Development May occur Major 11. IT security (Information security) May occur Serious Compliance 12. Compliance May occur Major Defi nitions Consequence: Minor (>10 MSEK) Tangible (>50 MSEK) Serious (>100 MSEK) Major (>250 MSEK) Likelihood: Most unlikely Unlikely May occur Most likely Decrease in consequence or likelihood from 2023 No changes in consequence or likelihood from 2023 Increase in consequence or likelihood from 2023 Introduction Financial statementsSustainability Report Other NCC 2024 64Report of the Board of Directors
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Material risks and uncertainties Top risks at Group level Risk Risk description Key mitigating action plans Market 1. Geopolitical situation The global geopolitical situation is unstable in several parts of the world with a potential impact on the normal course of international relations. This leads to more complex situations for companies in several respects, including inflation and economic developments, rising energy prices and interest rates, austerity in financing markets, higher risk for cyber- attacks and disturbances in the supply chain. • NCC only conducts operations in the Nordic region, which limits exposure to international geopolitical situations and their conse- quences on NCC’s general economy and supply chain • The organization has managed and mitigated challenges related to the geopolitical situation, including cost inflation and disturbances in the supply chains during 2024. The risk remains in the coming years with a potential broad impact on the business. • See sections 2, 3 and 11 below for more details about risk descrip- tion and key mitigation action plans relating to the situation 2. Market volatility Risk of loss of revenue due to weakening market overall. More specifically a risk of underestimating the size and speed of the downturn of the market and then being too slow to respond. The market sentiment is a material risk for the property devel- opment operations both in terms of letting and divestments. Furthermore, there are cost increases linked to interest and inflation. • NCC carefully monitors developments in the market and the financial development of customers and suppliers • Internal processes are designed to ensure that price increases can be passed to customers (fixed prices from suppliers where appropriate) • NCC works continuously to steer operations through segment prioritization and portfolio governance to limit exposure to vulner able parts of the economy where possible 3. Material and price increases Risk of shortage of materials and price increases in general, for instance metals, steel, energy, cement, plastics and freight, due to the external circumstances in the market. Stone material and asphalt plants are highly dependent on the supply of raw material, such as aggregates reserves, bitumen, recycled asphalt etc. • Price and delivery stability are secured by long-term agreements and continuous supplier risk assessments. To guarantee deliveries, the supplier base has several key suppliers. • Work with NCC’s supplier relationship to ensure that we are a prioritized customer • Focus on hedging activities mainly for bitumen. Multiple sources and volume commitment to ensure supply. Hedging strategy for electricity, and transportation contracts with indexation. People 4. Competence supply & Leadership The foundation of NCC’s strategic direction is to be a knowl- edge-based company, and it is therefore imperative for us to have the right people with the right attitude, skills and experi- ence on. Successful recruitment, retention and development of people with necessary skills is crucial for the company. Lack of leadership increases the risk that we cannot deliver according to quality and profitability and will not be able to retain our employees. The development of managers is essential to drive and deliver quality in projects and retain personnel with the desired skills. • Development plans are created for both the short and long term, based on continuous discussion about the skills development needed by our employees (focus on general development and project management ability) • Group-wide development programs are conducted for project man- agement and leadership, such as the Mega Project Management Program, Senior executive program, Strategic leadership program and Practical leadership program for site managers • Workshops based on the Group’s Star behaviors have been con- ducted to improve culture and behavior across the organization • Star behaviors form the basis of all leadership programs • A structured succession planning process is in place to ensure that we constantly replenish with the right competencies and experience 5. Health & Safety In the construction business, there is a high risk of different types of accidents. Fatal and serious accidents still occur and often within the three high-risk areas: working at height, heavy crane lifting and use of heavy vehicles. Analyses implemented have concluded that root causes are poor planning, less involvement from production management, and improper and high-risk behaviors among workers. Another conclusion is that there are few or poor safety barri- ers between people and this increases the risk of an accident. Many operations in the Group feature risky elements for workers, placing high demands on correct training and safety equipment, and not least an established culture that has the health and safety of employees as its highest priority. • Strategic direction that aims to reduce common accidents, and to eliminate serious incidents and fatalities • Systematic work to improve and increase the number of digital and physical safety barriers in collaboration with NCC Group R&I, IT and Purchasing. It is important to incorporate more qualitative safety barriers into equipment, machinery and production vehicles we purchase or lease. NCC stipulates clear safety requirements for production machinery and vehicles used by our subcontractors. • Within the framework of Star behaviors, NCC focuses systematically on reducing behavior among NCC employees and subcontractors that is not in line with NCC’s values • Intensive work to improve our Site Introduction tool to align and digitize our safety requirements for NCC worksites • Each employee, supplier and subcontractor must pass the Site Introduction to gain access to our worksites. The purpose of this is to increase safety awareness. • Clarification of what applies to the entire Group and what all managers must know. At Group level, distinct directives and guidelines are set for safety work, and instructions are devised for each business area, all to achieve the vision of zero accidents at our workplaces. All reported incidents are analyzed with the aim of improving injury- prevention activities, with a particular focus on creating a culture that encourages a safe work environment. NCC 2024 65Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Material risks and uncertainties Risk Risk description Key mitigating action plans Environment 6. Climate NCC's environmental work focuses on reducing greenhouse gas emissions throughout the value chain. The biggest sources of climate impact are the materials used in the construction process and the fuel that drives various parts of this process. Energy use is also a significant factor, as NCC's operations require a lot of energy for machinery, heating, electricity on construction sites and in the manufacture of materials. If we fail to adapt our operations to climate change, we risk facing higher costs, reduced access to capital and lost busi- ness opportunities. • Introduction of stricter CO2 requirements and strategies in projects • Plans and actions to phase out fossil fuels and drive change towards lower climate emissions • Building standards that ensure that constructions are adapted to climate change • Assessment of climate risks and vulnerability, with contingency plans for construction sites • NCC's work with wind and hydropower and climate-optimized construction to meet external demands and adapt operations to climate change 7. Resource use The construction sector consumes large amounts of mate- rials, which significantly affects society's use of resources. Concrete, steel and asphalt are the materials that contribute the most to the climate impact, but other materials such as rock and soil materials also have a significant impact, espe- cially when closed material flows are important. In addition, the business generates large amounts of waste throughout the value chain, making this a significant issue for both NCC and the industry at large. • Streamline and reduce the use of materials, fuel and energy as well as promote the recycling and reuse of building materials, where NCC makes major efforts • NCC adapts its work with material selection, circularity and waste to the unique conditions of each business area and the aim is to reduce the use of materials that harm the climate, the environment and human health Management 8. Management of operations Within contracting operations, the main operating risks are project selection and project management. There is also a risk of failure in the ability to implement what has been decided according to the processes and strategic initiatives. For Industry the season is limited and there is competition to provide large volumes in a short period of time. • NCC assigns priority to submitting tenders with identified risks that are manageable and calculable. Different forms of contracts and partnerships with customers facilitate the management of various risks. These operating risks are counteracted by NCC’s project selection, assessment of tenders and operational control systems. • For NCC Industry, we work with capacity, sales control, tender evaluation and pricing to ensure the right volume and cost control 9. Supply chain Inadequate control of the supply chain gives rise to the risk of human rights violations, such as illegal labor, which remains an industry risk. It also gives rise to the risk of commercial breaches and, lastly, a poor overview of material being brought into our worksites. • All international suppliers are pre-qualified before entering into a contract to ensure compliance with rules and regulations, including internal rules • NCC conducts systematic evaluations to ensure compliance with rules and regulations • At the worksites, the Site Introduction initiative helps to identify personnel on site who support our efforts against illegal labor and unfair pay • During 2025 the two initiatives supplier control and subcontractor control will be rolled out to further strengthen the control with our supplier base Introduction Financial statementsSustainability Report Other NCC 2024 66Report of the Board of Directors
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Material risks and uncertainties Risk Risk description Key mitigating action plans IT 10. Group Common IT Development Failure to implement shared IT developments leads to sig- nificant costs for development without any realized benefits, implying lack of commitment and readiness for change in NCC’s operations. In the event of failure, NCC will face new stalemates in the future, both in terms of the technological lifecycle and adaptation to business needs. • Dedicated resources for leading the program and a business approach (future processes and ways of working at NCC) before selection of the tools • Clear roles and responsibilities have been defined to ensure business alignment and maximum benefit • Process framework and governance are in place and shared pro- cess owners have already been appointed for some process areas • NCC has developed and implemented a common way of working with business change management and is continuously working with building capability to ensure sustainable change • NCC is continuously following up the ongoing implementations and realized benefits to ensure that we are progressing as planned 11. IT security (Information security) The ongoing advances in technology, rapid digitization and emergence of information-dependent societies are expected to give rise to new types of cyberattacks and network vulnerabilities. It is fundamental to continue to monitor the fast-chang- ing technical development and ensure proper security governance and planning to prevent weaknesses in the IT environment. • NCC Security Strategy and roadmap, in combination with the NCC Finance & IT development roadmap, together with each business area’s and Group function’s roadmap, describe the necessary activities to mitigate information security risks • NCC is continuing to develop our Information Security Management System and a Cyber Security Operation Center, which increases the threat-monitoring ability and capabilities for resilience to security incidents Compliance 12. Compliance Risk of penalties and sanctions and risks related to branding, lawsuits and costs for disqualification from public tenders due to compliance breaches. • A risk-based compliance program that includes a whistleblower channel and policies governing anti-corruption, competition law, conflicts of interest, data privacy and human rights • Mandatory training for white-collar employees in anti-corruption, competition law and data privacy. The training programs are regu- larly followed up. NCC 2024 67Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Material risks and uncertainties Sensitivity and risk assessment (fi gures are based on outcomes in 2024) Risk Change Earnings effect after net financial items, SEK M (annual basis) Effect on return on equity (percentage points) Effect on return on capital employed (percentage points) Comments NCC Infrastructure Volume1) ± 5% 72 0.8 0.5 For NCC Infrastructure, a 1-percentage-point increase in the margin has a significantly larger impact on earnings than a 5-percent increase in volume. This reflects the importance of pursuing a selective tendering policy and focusing on risk management in early project stages. Operating margin ± 1 percentage point 181 1.9 1.3 NCC Building Sweden Volume1) ± 5% 34 0.4 0.2 For NCC Building Sweden, a 1-percentage-point increase in the margin has a significantly larger impact on earnings than a 5-percent increase in volume. This reflects the importance of pursuing a selective tendering policy and focusing on risk management in early project stages. Operating margin ± 1 percentage point 140 1.5 1.0 NCC Building Nordics Volume1) ± 5% 59 0.6 0.4 For NCC Building Nordics, a 1-percentage-point increase in the margin has a significantly larger impact on earnings than a 5-percent increase in volume. This reflects the importance of pursuing a selective tendering policy and focusing on risk management in early project stages. Operating margin ± 1 percentage point 139 1.4 1.0 NCC Industry Volume1) ± 5% 53 0.6 0.4 NCC Industry’s operations are affected by such fac- tors as price levels and the volume of produced and paved asphalt. An extended season due to favorable weather conditions increases volumes and, because the proportion of fixed costs is high, the impact on the margin is material. Operating margin ± 1 percentage point 126 1.3 0.9 Capital rationalization ± 10% 21 0.2 0.4 NCC Property Development Sales volume, project ± 10% 71 0.7 0.5 NCC Property Development’s earnings are predom- inantly determined by sales. The potential to sell property projects is largely dependent on the leases signed with tenants. An increased letting rate facili- tates a higher sales volume. The value of a property is also determined by the difference between oper- ating expenses and rent levels, and thus a change in the rent levels or operating economy of ongoing projects could yield a change in value. Sales margin, projects ± 1 percentage point 45 0.5 0.3 Group Changed interest rate, net debt2) ± 1 percentage point 13 0.1 – The exposure is based on the closing balance of net debt by the end of the fiscal year. 1) Given a change in volume, it is assumed that overhead costs will be largely unchanged. 2) Excluding pension debt in accordance with IAS 19. Introduction Financial statementsSustainability Report Other NCC 2024 68Report of the Board of Directors
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1 Shareholders The number of shareholders in NCC AB at year-end 2024 was approximately 45,770, with OBOS as the largest individual holder account- ing for 10.05 percent of the share capital and 28.6 percent of the voting rights. 2 General Shareholder Meetings At General Shareholder Meetings, sharehold- ers may be accompanied by not more than two advisors, on condition that the share- holder has given the company prior notice of this. The Articles of Association contain no stipulations concerning the appointment and dismissal of Board members or concerning amendments of the Articles of Association. Each Series A share carries ten votes and each Series B share carries one vote. All shares provide the same entitlement to participation in the company’s assets and profit and to an equally large dividend. The procedures for notifying shareholders of General Shareholder Meetings are stipulated in the Articles of Association. Annual General Meeting 2024 The 2024 Annual General Meeting (AGM) was held at SPACE Arena in Stockholm on April 9. 247 shareholders were represented at the AGM, accounting for 50.5 percent of the share capital and 57.5 percent of the total number of votes. The minutes of the AGM are available at ncc.com. Corporate Governance Report NCC AB is a Swedish public limited liability company whose shares are registered for trading on Nasdaq Stockholm. NCC AB is governed by and conforms with Swedish company law and other rules that apply to listed companies, such as the Swedish Code of Corporate Governance, Nasdaq Stockholm’s Rule Book for Issuers and generally accepted practices on the stock market. This report has been issued by the Board of Directors of NCC AB but is not part of the formal Annual Report documentation. How NCC is governed: Shareholders 1 General Shareholder Meetings 2 Nomination Committee 3 External audit (Audit fi rm) 7 Audit Committee 4 Project Committee 4 Internal audit 8 Board of Directors 7 Annual General Meeting-elected members 3 employee representatives 4 Compliance 8 Internal control 8 President and CEO Senior Management Team and Group staff 5 Business areas NCC Infrastructure | NCC Building Nordics | NCC Building Sweden | NCC Industry | NCC Property Development | NCC Green Industry Transformation 6 Compensation and Competence Committee 4 NCC 2024 69Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Corporate Governance Report The 2024 AGM passed the following resolu- tions, among others: A dividend for the 2023 fiscal year of SEK 8.00 per share was decided, divided between two payment occasions. Alf Göransson, Simon de Château, Cecilia Fasth, Mats Jönsson, Daniel Kjørberg Siraj and Birgit Nørgaard were re-elected as members of the Board of Directors. Alf Göransson was re-elected Chairman of the Board. Ida Aall Gram was elected as a new member. Board member Angela Langemar Olsson had declined re-election. It was resolved that fees for the Board of Directors and its committees would total SEK 4,815,000. Guidelines were adopted for determining the salary and other remuneration of the CEO and other members of the compa- ny’s management and the remuneration report was adopted. Furthermore, it was decided to establish a long-term performance-based incentive program (L TI 2024 Share Savings Program) for senior executives and key personnel. To give the Board greater scope to be able to adapt the company’s capital structure to the capital requirement from time to time, the AGM authorized the Board, on one or several occasions during the period up to the next AGM, to make decisions on the buyback of the company’s Series B shares up to an amount so that, at the given time following the acquisi- tion, the company holds a maximum of 10 percent of all shares in the company. The AGM also authorized the Board, on one or several occasions during the period up to the next AGM, to make decisions on the transfer of a maximum of 100,000 of the company’s Series B shares on Nasdaq Stockholm to cover costs, for example social security fees, due to outstanding long-term performance-based incentive programs (L TI 2021 and L TI 2023 Share Programs). The AGM approved that NCC, in order to hedge the anticipated financial exposure in respect of L TI 2024 Share Savings Program, shall be able to enter into share swap agree- ments with third parties on normal market terms. Income statements and balance sheets for 2023 were adopted and discharge from liability was granted to the Board and the CEO. 3 Nomination Committee The AGM elects a Nomination Committee whose task is to nominate candidates to the AGM for election as Chairman of the Meeting, Chairman of the Board and Board members, and to propose the fees to these officers. Another task of the Nomination Committee is to nominate auditors and propose the fees to be paid to them. The Nomination Committee’s work complies with the instructions adopted by the AGM. The Board of Directors is evalu- ated within the framework of the Nomination Committee’s work. The Audit Committee assists the Nomination Committee in evalu- ating the work of the auditors. Nomination Committee 2024 At the AGM on April 9, 2024, Trond Stabekk (OBOS), Simon Blecher (Carnegie Fonder) and Anna Magnusson (Första AP-fonden (AP1)) were elected as members of the Nomination Committee. Trond Stabekk was also elected as Chairman of the Nomination Committee. The AGM adopted amended instructions for the Nomination Committee. Carnegie Fonder announced in November 2024 the change of representative to Mattias Sjödin. Alf Göransson, Chairman of the NCC Board, is a co-opted member of the Nomination Committee but has no voting right. No remu- neration was paid to members of the Nomina- tion Committee. The diversity policy applied by the Nomination Committee complies with Article 4.1 of the Swedish Code of Corporate Governance. The Nomination Committee’s proposals to the 2025 AGM are available at ncc.com. 4 Board of Directors, Audit Committee, Project Committee and Compensa- tion and Competence Committee The Board shall consist of not fewer than five and not more than ten members elected by the AGM for a term of one year. The employees are represented on the Board. During 2024, seven Board members were elected by the AGM. The Board also included three representatives and two deputies for the employees. For information on individual Board members, see pp. 76–77. The Chairman of the Board is Alf Göransson (for details concerning the Chairman’s age, education, professional experience, assignments outside the company and holdings of shares in the company, refer to p. 76). The Chairman of the Board directs the work conducted by the Board and maintains regular contact with the President and CEO in order to continuously monitor the Group’s operations and development. The Chairman represents the company in ownership matters and is a co-opted member of the Nomination Com- mittee but has no voting right. The Board’s Audit Committee comprises Board members Birgit Nørgaard, Ida Aall Gram and Mats Jönsson. The Chairman of the Audit Committee is Birgit Nørgaard. The Board of Directors’ Project Committee comprises Board members Daniel Kjørberg Siraj and Alf Göransson. The Project Com- mittee is chaired by Daniel Kjørberg Siraj. The Board of Directors’ Compensation and Competence Committee was established in 2024 and comprises Board members Alf Göransson, Daniel Kjørberg Siraj and Cecilia Fasth. The Compensation and Competence Committee is chaired by Alf Göransson. Work of the Board of Directors In 2024, NCC’s Board held six scheduled meetings, two unscheduled meetings, and one circular-letter meeting as well as the statutory meeting directly after the AGM. The Board’s work focuses primarily on strategic issues, the adoption and follow-up of operational goals, business plans, financial accounts, major investments and divestments, sustainability matters plus other decisions that have to be addressed by the Board. In conjunction with Board meetings, the Board of Directors performed a worksite visit in Trondheim. In addition to the CEO and the CFO, other senior NCC executives participated in order to pres- ent matters, and the Senior Legal Counsel served as secretary. Within the framework of the Board’s work, the Audit Committee is to monitor the compa- ny’s financial and non-financial reporting to, among other objectives, maintain the market’s confidence in the company. Moreover, the Committee is to ensure a qualified, effective and independent internal and external audit of the company and that good communication is maintained between the Board of Directors and the external auditors. This includes pre- paring matters relating to the company’s financial reporting and auditing, as well as sustainability reporting, see p. 75, item 5, Follow-up. In 2024, the Committee held six meetings. All members were present at these meetings. The Project Committee shall, within the framework of the Board’s work, participate in the preparation, analysis and decisions regard- ing tenders in contracting operations for projects exceeding SEK 1.5 billion. In 2024, the Committee addressed six projects and held four meetings, which all members attended. The Compensation and Competence Committee shall, within the framework of the Board’s work, manage remuneration and terms of employment of the President and CEO and other members of the Senior Man- agement Team, as well as issues relating to skills development. In 2024, the Committee Introduction Financial statementsSustainability Report Other NCC 2024 70Report of the Board of Directors
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Corporate Governance Report held three meetings, which all members attended. The Board’s evaluation of its work was conducted by asking all Board members to anonymously respond to a questionnaire. The results were then compiled and discussed by the Board. This documentation was also presented to the Nomination Committee. 5 CEO and Senior Management Team The President and CEO of the company is Tomas Carlsson (for details concerning the CEO’s age, education, professional experience, assignments outside the company and hold- ings of shares in the company, refer to p. 78). The Board has established instructions for the division of duties between the Board and the CEO and for financial reporting to the Board (also refer to “Board of Directors’ report on internal control,” p. 73). The company has not appointed any Deputy Chief Executive Officer. NCC’s Senior Management Team (SMT) consisted during 2024 of the President and CEO, the Heads of NCC Infrastructure, NCC Building Nordics, NCC Building Sweden, NCC Industry, NCC Property Development and NCC Green Industry Transformation (February 2024), Chief Financial Officer, the Senior Legal Counsel, the Head of Human Resources, the Head of Purchasing and the Head of Communications. For information on members of the SMT, see pp. 78–79. The SMT mainly focuses on strategic and other Group-wide matters and generally meets once per month. Remuneration of the Senior Management Team The Board established a Compensation and Competence Committee to prepare matters involving remuneration and other terms of employment for the SMT. Guidelines for salary and other remuneration for the SMT are resolved by the AGM. The CEO’s remuneration for 2025 has been proposed by the Compen- sation and Competence Committee and decided by the Board. Remuneration of other senior executives is proposed by the CEO and approved by the Compensation and Competence Committee, according to a mandate from the Board of Directors. Remuneration of the CEO and other senior executives consists of a fixed salary, variable remuneration, pension and other benefits. Board of Directors’ working year 2024 In addition to such standing items as investments and divestments within NCC Property Development, and Finance. JAN FEB M AR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC Board meeting, December 11 Review of NCC Industry Budget 2025 Proposed bonus system Sustainability report IT Common Development, follow-up Code of conduct, new revised version Purchasing, update Succession planning Board meeting, October 24 Quarterly report Review of NCC Infrastructure Capital rationalization Analysis of large projects Investments and sales Evaluation of Board members Board meeting (unscheduled), September 16 Update on operations Board meeting, July 15 Semi-annual report Board meeting, June 26–27 Strategy Review of NCC Industry and NCC Building Nordics Norway IT Common Development CEO’s review of management team Debriefi ng, Compliance matters Debriefi ng, Sustainability Review of health and safety issues Board meeting, January 29 Review of NCC Property Development and NCC Building Nordics, Norway Division Year-end accounts 2023 Annual Report Compliance report 2023 Proposed dividend Motion concerning guidelines for salary and other remuneration of senior executives Review of audit report Evaluation of CEO Board meeting (unscheduled), March 8 Update on operations Board meeting, May 2 Review of NCC Building Sweden, NCC Green Industry Transformation and NCC Building Nordics, Finland Division Review of Finance and IT function Purchases of bitumen and energy Quarterly report L TI program and allotment Competitor analysis Governing documents, such as: – Group Treasury Policy – Insider Policy – Rules of procedure and decision-making directives Statutory Board meeting, April 9 Company signatories appointed Members of Board of Directors’ committees appointed Board meeting (circular-letter meeting), March 14 Credit facility NCC 2024 71Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Corporate Governance Report A specification of salaries and other remunera- tion paid to Board members, the CEO and senior executives is presented in Note 4, on pp. 93–96. 6 Governance of business areas The Group is composed of business areas. Each business area is headed by a business area manager and has a supervisory council whose members include the President and CEO, CFO and Senior Legal Counsel. The approval of the President and CEO or NCC AB’s Board of Directors is required for certain decisions. The Group staff heads are responsible for Group-wide functional issues that fall under the position and mandate of the individual head of Group staff. 7 External audit The AGM appoints an Authorized Public Accountant to examine the company’s Annual Report, consolidated financial statements, accounting records and the company’s management by the Board and the CEO. A registered firm of accountants may also be appointed auditor of the company. The Nomi- nation Committee nominates auditors. The current auditor is appointed for a period of one year. Öhrlings PricewaterhouseCoopers AB (PwC) will serve as the company’s auditor until the close of the AGM in 2025. Authorized Public Accountant Patrik Adolfson has been appointed PwC’s auditor-in-charge. For more information on the auditor, see p. 77. 8 Internal Governance and Control NCC’s operations require a considerable amount of delegated responsibility. A Group-wide directive is in place to clarify exactly who is entitled to make decisions concerning various matters. In addition to strategic and organizational matters, the areas regulated include investments and divest- ments, rental and leasing agreements, financ- ing, sureties and contracting undertakings. There are also a number of other Group-wide governing documents concerning such matters as communication, finance, Code of Conduct, regulatory compliance, the envi- ronment and social matters. The number of ongoing projects in produc- tion varies from year to year but totals more than a thousand. The organization of each project varies according to the specific proj- ect’s size and complexity. Each project is headed by a project manager who is responsi- ble for product format, purchases, financial aspects, production, quality, completion and handover to the customer. Major projects are monitored on a monthly basis by the business area manager, the CEO and the CFO. All ten- ders are reviewed on the basis of Group-wide requirements. Tenders for projects exceeding SEK 300 M are subject to special assessment and must be approved by the business area manager responsible for the project. Tenders for projects exceeding SEK 500 M are subject to special assessment at Group level and are approved by the CEO. The Board’s Project Committee is involved in projects exceeding SEK 1,500 M. Projects exceeding SEK 300 M are also followed up via the NCC Project Trend Report (PTR) process. Proprietary property development projects representing an invest- ment exceeding SEK 50 M must be approved by the CEO and such projects exceeding SEK 150 M must be authorized by NCC AB’s Board. Decisions regarding investments correspond- ing to less than SEK 50 M are the responsibility of the particular business area. Concerning the internal audit, see p. 75, item 5, Follow-up. Business conduct and regulatory compliance The CEO is ultimately responsible for ensuring that an effective Compliance Program in priority risk areas is implemented in the Group and each head of the business areas is responsible for regulatory compliance and business conduct in their business area. From a risk perspective, NCC has identified the following impact areas for NCC’s Compli- ance Program: Counteracting bribery and corruption; Fair competition; Counteracting fraud and conflict of interest; Data protection (GDPR); and Human rights and diversity. The Compliance function is responsible for the design of the program, the Code of Conduct, policies and processes, Group-wide training and communications relating to Counteracting bribery and corruption; Fair competition; Counteracting fraud and conflict of interest, and regulatory compliance in conjunction with the processing of personal data. The function is headed by the Group’s Head of Compliance, who reports to the Senior Legal Counsel. The implementation of NCC’s Compliance Pro- gram in the business areas and Group staffs is led by the respective Legal Affairs & Risk function. NCC’s purchasing organization is responsible for ensuring high ethical stan- dards and regulatory compliance in the supply chain. For more information, see the section on Ethics and compliance in the separate Sustainability Report. NCC’s purchasing organization and HR function are responsible for the overall work safeguarding human rights and diversity. For more information, see the section on Own workforce in the separate Sustainability Report. The Group Compliance Committee (GCC), containing representatives from selected Group functions, is responsible for follow- ing-up implementation of NCC’s Compliance Program under the Head of Compliance’s area of responsibility as well as generally reviewing reports of suspected serious irregularities and breaches of rules within NCC’s whistleblower channel and ensuring that these are handled appropriately. The Head of Compliance coordinates internal investigations and has overall responsi- bility for NCC’s whistleblower channel, “Tell me”. On a semi-annual basis, the Head of Compli- ance summarizes, in a written report, Tell me statistics, personal data breaches and informa- tion on significant matters, which is presented to NCC’s CEO and Board of Directors. The Head of Compliance also submits a more detailed annual report to the CEO and the Board of Directors on work completed and statistics related to the Compliance function’s responsi- bilities within NCC’s Compliance Program. Sustainability work In 2024, NCC continued work to prepare for the new Corporate Sustainability Reporting Direc- tive (CSRD) and the European Sustainability Reporting Standard (ESRS). NCC will report under ESRS for the 2025 fiscal year. NCC has worked with cross-functional teams to ensure that material perspectives are considered and that ownership is established in day-to-day activities. Subject-specific specialists in sustainability at Group level were also involved in the work. Follow-up and implementation of new sustainability reporting and compliance procedures are standing items on the Audit Committee’s agenda. Internal rules and regulations • Articles of Association • Rules of procedure for Board work and instructions for the CEO • Audit Committee’s instruction • Project Committee’s instruction • Compensation and Competence Committee’s instruction • The Group’s and business areas’ directives on delegation of authorities and internal governance • NCC’s Code of Conduct and Code of Conduct for Suppliers • Group Compliance Directive • Group Tax Policy, Group Treasury Policy and Information Policy • Other governing documents in the form of policies, directives, regula- tions, guidelines and instructions for the CEO Important external rules and regulations • Swedish Companies Act • Listing agreement of Nasdaq Nordic • Swedish Code of Corporate Governance • Annual Accounts Act • Bookkeeping Act • Market Abuse Regulation Introduction Financial statementsSustainability Report Other NCC 2024 72Report of the Board of Directors
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Corporate Governance Report 1 Risk assessment As a feature of its internal control efforts, NCC implements methodical risk assessment and risk management for ensuring that the risks to which NCC is exposed, and that can impact the internal control and financial reporting, are addressed within the company’s established processes. The material risks that have to be taken into account include market risks and operating risks as well as the risk of errors in financial reporting. With respect to the latter, systematic and documented updates occur once annu- ally. The material risks that have to be consid- ered mainly comprise the risk of errors in percentage-of-completion profit recognition and items based on estimates and assess- ments, such as valuations of land held for future development and ongoing development projects, goodwill and provisions. At NCC, the ways risks are followed up include the following: • Regular status checks are performed, according to a structured plan, by the CEO and CFO together with the business area manager, business area controller and other relevant functions of the Group, business areas and/or specialist functions. The participants in these meetings vary depend- ing on the areas being addressed. The areas may include, for example, earnings, financial position and cash flow in terms of outcome, forecast and budget as well as internal control. These meetings and checks also cover orders received, major ongoing and problematic projects, outstanding accounts receivable, tenders and major investments. The meeting structure encompasses both quarterly major meetings and monthly meetings. Forecasts are formulated and are checked in connection with the quarters ending March, June and September, and for the following-year budget in November. • NCC AB’s Board receives monthly financial reports and NCC’s current financial status is presented at each Board meeting • Quarterly follow-up of material claims and disputes, which are also reported to the Board • Annual analysis of business operations and the Group’s committee for the follow-up of strategic risks Financial risk positions, such as interest-rate, credit, liquidity, exchange rate and refinancing risks, are managed by the specialist function, Group Treasury. NCC’s Group Treasury Policy stipulates that Group Treasury must always be consulted and, in cases where Group Treasury sees fit, that it must manage financial matters. Risks that could also influence reporting include breach of NCC’s Code of Conduct and discrepancies in insurance coverage. These risks are monitored by the Compliance func- tion and by NCC Försäkring. Board of Directors’ report on internal control The Board’s responsibility for internal control is regulated in the Swedish Companies Act and in the Swedish Code of Corporate Governance. The Corporate Governance Report must contain disclosures concerning the principal features of the company’s internal control and risk management systems in connection with financial reporting and in the preparation of the company’s consolidated financial statements. Informa- tion on this is provided in this section. Risk assessment 1 Control activities 3 Follow-up 5 Control environment 2 Information and communication 4 NCC 2024 73Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Corporate Governance Report 2 Control environment The Board has overall responsibility for inter- nal control and financial reporting and sustain- ability reporting. A good control environment is characterized by the company having prepared and complied with established policies, directives, guidelines, control frame- work, manuals and job descriptions. These must be documented and kept available. In NCC, this means that the Board establishes rules of procedure for the Board’s work each year, including instructions for the CEO. According to this instruction, the CEO is responsible for ensuring that work on the internal control contributes to an efficient control environment. Important complements to the formal structures include the Group’s work with values and behaviors that are supported and activized by the Senior Man- agement Team, through leaders and manag- ers to reach all employees. The NCC Group is an international organiza- tion that governs and conducts its operations in a Nordic operational structure. Operational management of the Group is based on a Group directive on the delegation of authorities and internal governance adopted annually by the Board. The directive stipulates the matters that require the Board’s approval. In turn, this is reflected in the corresponding directives and attestation regulations applying to the busi- ness areas. The basis for the internal control of financial reporting and sustainability reporting comprises everything that is documented and communicated in governing documents, such as internal policies, directives, guidelines, control framework, instructions and other manuals. The NCC Group’s legal governance occurs on the basis of a corporate structure with subsidiaries in each country. 3 Control activities At NCC, the management of risks is based on a number of control activities that are con- ducted at various levels for business areas, Shared Service Centers (SSCs) and staff units. The purpose of the control activities is to ensure both the efficiency of the Group’s processes and efficient internal control of identified risks. Operational control systems form the basis for the established control structure for the business operations. These focus on important stages in the business operations, such as investment decisions, tender evaluation, project forecasts, authoriza- tion to start up projects and project comple- tion. NCC attaches considerable weight to project follow-up. A strong focus is placed on ensuring the correctness of the business transactions included in the financial reporting, the reason- ableness of sustainability data collected and the fairness of sustainability reporting. For a number of years, NCC has had several SSCs, in part NCC Business Services (NBS), which manages most of the financial transac- tions of the Nordic operations, and in part the Human Resources Services (HRS), which manages NCC’s payroll administration for the Nordic countries. IT also has central responsi- bility for the shared IT systems in NCC. The functions require that their processes include control activities that manage identi- fied risks in a manner that is efficient for NCC in relation to the cost incurred. The units develop their processes using control matrixes that connect risks and control and ensure that the control is documented and that there is proof that control exists. 4 Information and communication Information and communication regarding the internal policies, directives, guidelines, manu- als and codes to which the financial reporting is subject are available on NCC’s Intranet (MyNCC). The information also contains methodology, instructions and supporting documentation in the form of checklists and overall time schedules. It is a living regulatory system that is updated regularly through the addition of, for example, new regulations concerning IFRS and requirements from Nasdaq Stockholm. NCC’s CFO has principal responsibility for documents intended for the management of the internal control of financial reporting and sustainability reporting. MyNCC includes, among other documents, the following: • Policies and regulations for the valuation and classification of assets, liabilities, revenue and costs • Accounting and reporting instructions • Framework for self-evaluation of internal controls • Attestation instructions All financial reporting must comply with the above rules and regulations. Financial report- ing occurs in part in the form of figures in the Group-wide reporting system and in part in the form of written comments in accordance with specially formulated templates. Regular training programs and conferences are arranged for management and financial control personnel in respect of joint principles and frameworks concerning the requirements to which the internal control is subject. A debriefing on internal control occurs annually to the NCC AB Board through the Audit Committee. Debriefing also occurs at business area level. The CFO of the NCC Group is responsible for ensuring that information and communica- tion regarding the internal control have been established and are effective. Introduction Financial statementsSustainability Report Other NCC 2024 74Report of the Board of Directors
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Corporate Governance Report 5 Follow-up Follow-ups to safeguard the efficiency and quality of the internal controls are conducted in various ways within NCC. NCC has devel- oped a system (framework) for documented self-evaluation of internal control. Self-assess- ments are performed regularly for NCC’s business areas, staff units and Group offices and comprise a component of the Board’s assessment of internal control. Operational control systems, which are the business areas’ management systems, are evaluated through audits of business areas’ operations, during which any shortcomings are rectified. The internal controls are followed up via different types of reviews in the various business areas. The financial control and controller organization is utilized when it is considered to be value-generating. In those cases where the necessary skills are not available internally, external consultants are used, for example, linked to external certifica- tions. Feedback from these reviews is directed to the appropriate position in operations to ensure that the right work and controls are done by the right person at the right time. NCC has an independent internal audit function. The function is led by the head of the internal audit and is responsible for providing independent and objective assurance and evaluation of risk management and internal control processes in the entire Group and also subsidiaries that are wholly owned or with a majority ownership. The function plans its work in consultation with the Audit Committee and it reports directly to the Board of Directors through the Audit Committee. PwC participated in all of the Audit Com- mittee’s meetings in 2024. The duties of the Audit Committee in terms of financial report- ing include monitoring the efficiency of the company’s internal controls and internal audit. The Board meets the external auditor at least once a year. In addition, the Chairman of the Board has direct contact with the external auditor on a number of occasions during the year. Prior to these meetings, views from the audit of the business areas and subsidiaries have been presented to the Board meetings held in the particular business area/subsidiary or to the respective business area manage- ment. The views that arise are to be consid- ered and followed up within the particular unit. NCC’s external auditor also reviewed the company’s nine-month report. For more information on governance and control of NCC, see the Group’s website ncc.com. The information also includes such documents as the Articles of Association and the Code of Conduct. Sustainability work According to the Swedish Code of Corporate Governance, the Board of Directors is respon- sible for internal control over financial report- ing and sustainability reporting. In 2024, NCC’s Board of Directors and Audit Committee monitored preparations ahead of the Corpo- rate Sustainability Reporting Directive (CSRD) and the associated European Sustainability Reporting Standard (ESRS) and were involved in, among other aspects, the approval of the double materiality assessment. As part of this process, it is being reviewed how the work of the Board and the Audit Committee in relation to the company’s internal control and risk management needs to be updated to comply with the new updated requirements. The Sustainability Report contained in the 2024 Annual Report has been inspired by the upcoming ESRS requirements and further development will be carried out until the 2025 report when NCC’s reporting must be fully compliant with the new regulations. NCC 2024 75Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Corporate Governance Report Board of Directors Alf Göransson Chairman of the Board Chairman of the Compensation and Competence Committee and member of the Project Committee Born 1957. International B.Sc. in Eco- nomics and Business Administration. Elected (year): 2019 (member), Chairman since 2020. Other assignments: Chairman of the Board of Loomis, Hexpol and AxFast and Board member of Sweco, Melker Schörling, Sandberg Development Group and Anticimex. Previous experience includes: CEO of Securitas, CEO of NCC and CEO of Svedala Industri. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 10 (10) Total annual remuneration: SEK 1,805,000 Shareholding in NCC AB1): 10,000 Series B shares Ida Aall Gram Board member Member of Audit Committee Born 1977. M.Sc. in Economics. Elected (year): 2024 Other assignments: President and CEO of Aspelin Ramm and Board member of A/S Høyres Hus. Previous experience includes: Executive Vice President Real Estate, HR and Communications of AF Gruppen, Port- folio Director at AF Eiendom, CFO of Gyldendal, Investment Manager at Orkla Eiendom and consultant at McKinsey & Company Inc. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 5 (10) Total annual remuneration: SEK 660,000 Shareholding in NCC AB1): 0 Simon de Château Board member Born 1970. M.Sc. in Business Administration. Elected (year): 2020 Other assignments: Chairman and founder of Alma Property Partners. Chairman of the Board of Prisma Properties and Board member of Atrium Ljungberg and Akka Egendom. Previous experience includes: Partner and CEO of Sveafastigheter, Partner and Head of Corporate Finance and Research at Leimdörfer. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 9 (10) Total annual remuneration: SEK 535,000 Shareholding in NCC AB1): 20,000 Series B shares Cecilia Fasth Board member Member of Compensation and Competence Committee Born 1973. M.Sc. in Engineering. Elected (year): 2023 Other assignments: CEO of Stena Fastigheter, Board member of Fagerhult and Swegon Group. Previous experience includes: CEO of Castellum Väst, CEO of Sverigehuset, EVP of Skanska UK and various roles at Skanska. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 9 (10) Total annual remuneration: SEK 585,000 Shareholding in NCC AB1): 3,100 Series B shares Mats Jönsson Board member Member of Audit Committee Born 1957. M.Sc. in Engineering. Elected (year): 2017 Other assignments: Chairman of the Board of Bonava and Eduviva as well as Board member of Assemblin Caverion Group. Previous experience includes: President and CEO of Coor Service Management, Business Unit Manager of Skanska Ser- vices and Division Manager of Skanska Sweden. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 10 (10) Total annual remuneration: SEK 660,000 Shareholding in NCC AB1): 20,000 Series B shares Daniel Kjørberg Siraj Board member Chairman of Project Committee and Member of Compensation and Competence Committee Born 1975. Master of Laws. Elected (year): 2023 Other assignments: CEO of OBOS and Chairman of the Board of Construction City Cluster. Previous experience includes: EVP Residential Development at OBOS, Board member and Vice Chairman of BWG Homes ASA, AF Gruppen ASA and Veidekke ASA. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: No Attendance, Board meetings: 10 (10) Total annual remuneration: SEK 710,000 Shareholding in NCC AB1): 0 Birgit Nørgaard Board member Chairman of Audit Committee Born 1958. M.Sc. Economics and MBA. Elected (year): 2017 Other assignments: Chairman of the Board of Scandlines Infrastructure Aps and Norisol Holding A/S, Deputy Chairman of the Board of the Danish Government’s IT Council and Dansk Vækstkapital I. Board member of WSP Global Inc., Associated British Ports, Dansk Vækstkapital II and Associated Danish Ports. Previous experience includes: President and CEO of Carl Bro A/S, COO of Grontmij NV and CFO of Danisco Distill ers A/S. Independent in relation to the company and the SMT: Yes Independent in relation to major shareholders: Yes Attendance, Board meetings: 10 (10) Total annual remuneration: SEK 710,000 Shareholding in NCC AB1): 6,500 Series B shares Introduction Financial statementsSustainability Report Other NCC 2024 76Report of the Board of Directors
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Corporate Governance Report Karl G. Sivertsson Board member Employee representative Born 1961. Carpenter and crane operator. Elected (year): 2009 Employed by NCC since 1981. Shop steward in NCC. Employee representative of Swedish Building Workers Union (Byggnads). Other assignments: Board member of Byggnads’ Central Northern Sweden region. Shareholding in NCC AB1): 200 Series B shares Karl-Johan Andersson Board member Employee representative Born 1964. Paver. Elected (year): 2011 Employed by NCC since 1984. Shop steward in NCC. Employee representative of SEKO (Union for Employees in the Service and Communication Sectors). Other assignments: Chairman of SEKO’s Road and Rail Department in Skåne. Chairman of SEKO’s negotiating organization at NCC. Shareholding in NCC AB1): 0 Harald Stjernström Board member Employee representative Born 1962. Project Manager. Elected (year): 2018 Employed by NCC since 1984. Shop steward in NCC. Employee representative of Ledarna (Swedish Association of Supervisors). Shareholding in NCC AB1): 0 Bengt Göransson Deputy Employee representative Born 1959. Installation Manager. Elected (year): 2017 Employed by NCC since 2013. Shop steward in NCC. Employee representative of Unionen. Shareholding in NCC AB1): 0 Thomas Gustafsson Deputy Employee representative Born 1963. Concrete worker. Elected (year): 2022 Employed by NCC since 1988. Shop steward at NCC, and occupational health and safety offi cer. Employee representative of Swedish Building Workers Union (Byggnads). Other assignments: Deputy Chairman of Byggnads, Region East, Chairman of The Swedish Trade Union Confedera- tion (LO) section in Kinda Municipality, Östergötland. Shareholding in NCC AB1): 6 Series B shares Auditors – Öhrlings PricewaterhouseCoopers AB Patrik Adolfson Auditor in Charge. Born 1973. Other signifi cant assignments: Auditor in Charge of Anticimex Group, Bonava, Dometic Group, Nordstjernan and Röko. Secretary of the Board of Directors Ann-Marie Hedbeck Born 1972. Master of Laws. NCC’s Senior Legal Counsel since 2018. Previous experience includes: Chief Legal Counsel in NCC Infrastructure and General Counsel at Skanska. Employed by NCC since 2017. Shareholding in NCC AB1): 3,730 Series B shares 1) The details regarding shareholdings in NCC pertain to shares that were directly owned, owned via related parties or owned via companies at December 31, 2024. NCC 2024 77Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Corporate Governance Report Senior Management Team Tomas Carlsson President and CEO Born 1965. M.Sc. in Engineering and MBA. President and CEO since 2018. Employed by NCC since 2018 and 1991–2012. Previous experience includes: President and CEO of Sweco, Head of NCC Construction Sweden and Regional Manager of NCC Construction Western Sweden. Other assignments: Board member of Alimak Group. Shareholding in NCC AB1): 161,551 Series B shares Niklas Sparw Head of NCC Building Sweden business area Born 1973. M.Sc. in Engineering. Head of NCC Building Sweden since 2024. Employed by NCC since 1996. Previous experience includes: Division Manager of West/South NCC Building Sweden, Head of NCC Engineering & Sustainability. Shareholding in NCC AB1): 5,969 Series B shares Susanne Lithander CFO and Head of Finance & IT Born 1961. B.Sc. in Economics. CFO since 2018 and Head of Finance & IT since 2020. Employed by NCC since 2018. Previous experience includes: CFO of Billerud Korsnäs, CEO of Mercuri International and several key positions at Ericsson. Other assignments: Board member of Svedbergs Group. Shareholding in NCC AB1): 6,497 Series B shares Catarina Molén-Runnäs Head of NCC Building Nordics business area Born 1966. M.Sc. in Engineering. Head of NCC Building Nordics since 2020. Employed by NCC since 2020 and 1988–1999. Previous experience includes: CEO Nordic Property Management and CPO Nordic Choice Hotels. Project and property development in the Nordic region and Germany for a number of years. Other assignments: Board Member of Helvar OY. Shareholding in NCC AB1): 9,915 Series B shares Kenneth Nilsson Head of NCC Infrastructure business area Born 1961. M.Sc. in Engineering. Head of NCC Infrastructure since 2018. Employed by NCC since 2018. Previous experience includes: 20 years of experience from various executive positions at Skanska, such as Deputy CEO of Skanska Sweden and Head of Skanska’s Road and Civil Engineering operations, and CEO of Skanska in Finland. An additional ten years of experience as foreman as well as project manager and supervisor. Shareholding in NCC AB1): 17,340 Series B shares Grete Aspelund Head of NCC Industry business area Born 1971. M.Sc. in Economics. Head of NCC Industry since 2022. Employed by NCC since 2022. Previous experience includes: President of Sweco Norway, CEO of Nemko AS and Ramböll Management Norway. Shareholding in NCC AB1): 4,672 Series B shares Introduction Financial statementsSustainability Report Other NCC 2024 78Report of the Board of Directors
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Corporate Governance Report Joachim Holmberg Head of NCC Property Development business area Born 1971. M.Sc. in Engineering. Head of NCC Property Development since 2019. Employed by NCC since 2019. Previous experience includes: Head of Skans- ka Sweden’s Commercial Project Development, Operational Development Head of Skanska Sweden’s commercial project development, District Manager Skanska Sweden, Project Manager Skanska Sweden. Shareholding in NCC AB1): 9,520 Series B shares Johan Lindqvist CPO, Head of Purchasing Born 1975. M.Sc. Business Administration & Economics. Head of Purchasing and Chief Procurement Offi cer since 2021. Employed by NCC since 2021. Previous experience includes: Vice President & Head of Purchasing Volvo Group Canada Inc, Vice President Global Purchasing Volvo Buses and several other senior purchasing roles at Volvo Trucks. Shareholding in NCC AB1): 8,401 Series B shares Helena Hed Head of NCC Green Industry Transformation business area Born 1975. M.Sc. in Engineering. Head of NCC Green Industry Transformation since 2024. Employed by NCC since 2024. Previous experience includes: President and CEO Projektengagemang, CEO of Sweco Management and Regional Manager at Sweco Rail. Shareholding in NCC AB1): 2,161 Series B shares Andreas Koch Head of Communications Born 1977. M.Sc. Business and Economics. Head of Communications since 2024. Employed by NCC since 2024. Previous experience includes: Communication and IR Director at Attendo, Head of Investor Relations at SSAB, Head of Communications at Carnegie Invest- ment Bank, Head of Investor Relations at SCA/Essity. Shareholding in NCC AB1): 1,149 Series B shares Marie Reifeldt Head of HR Born 1963. B.Sc. in Social Work. Head of HR since 2018. Employed by NCC since 2007. Previous experience includes: HR Manager at NCC Construction Sverige, Corporate HR Manager at Bravida group, Head of HR Teracom, HR Manager at Stokab and HR Manager at Stockholm Energi Elnät. Shareholding in NCC AB1): 8,851 Series B shares Ann-Marie Hedbeck Senior Legal Counsel Born 1972. Master of Laws. Senior Legal Counsel since 2018. Employed by NCC since 2017. Previous experience includes: Chief Legal Counsel in NCC Infrastructure and General Counsel at Skanska. Shareholding in NCC AB1): 3,730 Series B shares 1) The details regarding shareholdings in NCC pertain to shares that were directly owned, owned via related parties or owned via companies at December 31, 2024. NCC 2024 79Introduction Financial statementsSustainability Report OtherReport of the Board of Directors
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Financial statements Notes Consolidated income statement 81 Consolidated statement of comprehensive income 81 Consolidated balance sheet 82 Consolidated changes in equity 83 Consolidated cash flow statement 84 Parent Company income statement 85 Parent Company statement of comprehensive income 85 Parent Company balance sheet 86 Parent Company changes in equity 87 Parent Company cash flow statement 88 Notes 89 Adoption 123 Auditor’s report 124 Note 1 Accounting policies 89 Note 2 Revenue recognition 90 Note 3 Reporting by operating segment 91 Note 4 Number of employees, personnel expenses and remuneration of senior executives 93 Note 5 Depreciation/amortization 97 Note 6 Fees and remuneration to audit firms 97 Note 7 Impairment losses 97 Note 8 Result from participations in Group companies 97 Note 9 Operating expenses by type of cost 97 Note 10 Interest expense and similar items 98 Note 11 Net financial items 98 Note 12 Effects on profit or loss of exchange rate changes 98 Note 13 Appropriations 98 Note 14 Equity 98 Note 15 Intangible fixed assets 99 Note 16 Tangible fixed assets 101 Note 17 Participations in Group companies 102 Note 18 Investments in associated companies and joint ventures 102 Note 19 Joint operations 102 Note 20 Financial investments 103 Note 21 Financial fixed assets 103 Note 22 Long-term interest-bearing receivables and other receivables 104 Note 23 Tax on profit for the year, deferred tax assets and deferred tax liabilities 104 Note 24 Properties classified as current assets 105 Note 25 Inventory 107 Note 26 Share capital 107 Note 27 Interest-bearing liabilities 107 Note 28 Other provisions 108 Note 29 Pensions 109 Note 30 Other liabilities 111 Note 31 Accrued expenses and deferred income 111 Note 32 Related party transactions 111 Note 33 Leasing 111 Note 34 Pledged assets and contingent liabilities 113 Note 35 Cash flow statement 113 Note 36 Financial instruments and financial risk management 115 Note 37 Information about the Parent Company 122 Note 38 Events after the balance sheet date 122 Note 39 Appropriation of the company’s profit 122 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 80Financial statements
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Group Consolidated income statement SEK M Note 1, 3, 12, 19 2024 2023 Net sales 2 61,609 56,932 Production costs 4, 5, 9, 15, 16, 24, 33 –56,330 –52,245 Gross profit 5,280 4,687 Selling and administrative costs 4, 5, 6, 9, 15, 16, 33 –3,223 –3,156 Result from sales of owner-occupied properties 16 5 19 Impairment losses and reversal of impairment losses, fixed assets 7, 15, 16 –27 –2 Result from sales of Group companies 8 3 265 Result from participations in associated companies and joint ventures –6 –11 Operating profit 2,032 1,802 Financial income 11 75 80 Financial expenses 11 –244 –79 Net financial items –169 1 Profit after financial items 1,863 1,803 Tax on profit for the year 23 –292 –230 Net profit for the year 1,571 1,573 Attributable to: NCC’s shareholders 1,571 1,573 Net profit for the year 1,571 1,573 Earnings per share Profit after tax, SEK, before dilution 16.08 16.11 Profit after tax, SEK, after dilution 16.08 16.11 Number of shares, millions Total number of issued shares 99.8 99.8 Average number of shares outstanding before dilution during the year 97.7 97.6 Average number of shares outstanding after dilution during the year 97.7 97.6 Number of shares outstanding on Dec. 31 97.8 97.7 Consolidated statement of comprehensive income SEK M Note 2024 2023 Net profit for the year 1,571 1,573 Items that have been recycled or can be recycled to net profit for the year 14 Year’s exchange differences on translating foreign operations 95 –74 Fair value changes for the year in cash flow hedges 5 –54 Year’s fair value changes for cash flow hedges transferred to net profit for the year 30 –100 Tax attributable to cash flow hedges 23 –7 32 123 –196 Items that cannot be recycled to net profit for the year Remeasurement of defined-benefit pension plans 29 515 –818 Tax relating to items that cannot be recycled to net profit for the year 23 –106 168 409 –649 Other comprehensive income for the year 532 –846 Comprehensive income for the year 2,103 728 Attributable to: NCC’s shareholders 2,103 728 Total comprehensive income during the year 2,103 728 NCC 2024 81Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Group Consolidated balance sheet SEK M Note 2024 2023 ASSETS 1, 19, 32, 36 Fixed assets Goodwill 15 1,942 1,913 Other intangible assets 15 731 545 Right-of-use assets 33 1,396 1,300 Owner-occupied properties 16 892 867 Machinery and equipment 16 2,158 2,310 Long-term holdings of securities 18, 20 88 84 Long-term interest-bearing receivables 22 201 204 Pension receivable 29 94 – Other long-term receivables 23 21 Deferred tax assets 23 557 583 Total fixed assets 8,082 7,827 Current assets Right-of-use assets 33 1 1 Properties held for future development 24 1,314 1,265 Ongoing property projects 24 749 3,794 Completed property projects 24 6,302 4,986 Participations in associated companies 24 238 201 Inventory 25 1,052 1,120 Tax receivables 42 43 Accounts receivable 36 8,322 8,696 Worked-up non-invoiced revenues 2 837 1,076 Prepaid expenses and accrued income 1,096 1,190 Current interest-bearing receivables 138 129 Other receivables 22 368 415 Short-term investments 20 576 501 Cash and cash equivalents 35 2,910 707 Total current assets 23,945 24,124 TOTAL ASSETS 32,026 31,950 EQUITY 1 Share capital 26 867 867 Other capital contributions 1,844 1,844 Reserves 14 258 135 Earnings brought forward including net profit for the year 5,694 4,477 Shareholders’ equity 8,663 7,324 Total equity 8,663 7,324 LIABILITIES 1, 19, 32, 36 Long-term liabilities Long-term interest-bearing liabilities 27, 33 3,314 3,006 Other long-term liabilities 30 17 13 Provisions for pensions and similar obligations 29 – 556 Deferred tax liabilities 23 1,165 889 Other provisions 28 2,448 2,218 Total long-term liabilities 6,944 6,683 Current liabilities Current interest-bearing liabilities 27, 33 1,769 2,289 Accounts payable 4,841 6,105 Tax liabilities 14 – Invoiced revenues not worked up 2 5,226 5,058 Accrued expenses and deferred income 31 3,552 3,396 Provisions 28 2 – Other current liabilities 30 1,016 1,096 Total current liabilities 16,419 17,944 Total liabilities 23,363 24,627 TOTAL EQUITY AND LIABILITIES 32,026 31,950 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 82Financial statements
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Group Consolidated changes in equity Equity attributable to Parent Company shareholders SEK M Share capital Other capital contributions Reserves Profit brought forward Total Total equity Opening equity, Jan. 1, 2023 867 1,844 331 4,140 7,183 7,183 Net profit for the year – – – 1,573 1,573 1,573 Other comprehensive income – – –196 –649 –846 –846 Total comprehensive income – – –196 924 728 728 Withdrawal of own shares –69 – – 69 – – Bonus issue 69 – – –69 – – Performance-based incentive program – – – –1 –1 –1 Dividend – – – –586 –586 –586 Total transactions with the Group’s shareholders – – – –586 –586 –586 Equity on Dec. 31, 2023 867 1,844 135 4,477 7,324 7,324 Net profit for the year – – – 1,571 1,571 1,571 Other comprehensive income – – 123 409 532 532 Total comprehensive income – – 123 1,981 2,103 2,103 Performance-based incentive program – – – 18 18 18 Dividend – – – –781 –781 –781 Total transactions with the Group’s shareholders – – – –764 –764 –764 Equity on Dec. 31, 2024 867 1,844 258 5,694 8,663 8,663 NCC 2024 83Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Group Consolidated cash flow statement SEK M Note 2024 2023 OPERATING ACTIVITIES Operating profit 2,032 1,802 Adjustments for items not included in cash flow: – Depreciation/amortization 5 1,271 1,219 – Impairment losses and reversal of impairment losses 7 27 2 – Result from sales of fixed assets –60 –336 – Changes in provisions 28 72 –433 – Other 79 82 Total items not included in cash flow 1,388 534 Interest paid and received –250 –162 Tax paid –103 –52 Cash flow from operating activities before changes in working capital 3,067 2,122 Cash flow from changes in working capital Sales of property projects 24 3,599 747 Investments in property projects 24 –1,672 –2,432 Other changes in working capital 35 –356 369 Cash flow from changes in working capital 1,571 –1,315 Cash flow from operating activities 4,638 807 INVESTING ACTIVITIES Sale of subsidiaries/operations 35 – 265 Investment in tangible fixed assets 16 –481 –602 Sale of tangible fixed assets 16 62 195 Investment in financial fixed assets –36 –65 Sale of financial fixed assets 92 61 Investment in intangible fixed assets 15 –285 –307 Sale of intangible fixed assets 15 1 7 Cash flow from investing activities –647 –446 Cash flow before financing 3,990 361 FINANCING ACTIVITIES Dividend paid –781 –586 Loans raised 1,312 1,381 Amortization of loans –1,543 –350 Amortization of lease liabilities 33 –697 –646 Increase (–) / Decrease (+) in long-term interest-bearing receivables 30 53 Increase (–) / Decrease (+) in current interest-bearing receivables –111 –40 Cash flow from financing activities 35 –1,790 –187 Cash flow for the year 2,201 174 Cash and cash equivalents, Jan. 1 707 534 Exchange rate difference in cash and cash equivalents 2 0 Cash and cash equivalents, Dec. 31 35 2,910 707 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 84Financial statements
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Parent Company Parent Company income statement SEK M Note 1, 32 2024 2023 Net sales 179 172 Gross profit 179 172 Selling and administrative costs 4, 6, 7 –293 –316 Operating loss –114 –144 Result from financial investments Result from participations in Group companies 7, 8 1,888 1,125 Result from other financial fixed assets 14 14 Result from financial current assets 34 17 Interest expense and similar items 10 –22 –15 Profit after financial items 1,800 997 Appropriations 13 116 134 Tax on net profit for the year 23 3 3 Net profit for the year 1,920 1,133 Parent Company statement of comprehensive income SEK M 2024 2023 Net profit for the year 1,920 1,133 Total comprehensive income during the year 1,920 1,133 NCC 2024 85Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Parent Company Parent Company balance sheet SEK M Note 2024 2023 ASSETS 1, 32, 36 Fixed assets Tangible fixed assets Owner-occupied properties 0 0 Total tangible fixed assets 0 0 Financial fixed assets Participations in Group companies 17 5,061 5,048 Other long-term holdings of securities 45 45 Deferred tax assets 23 35 33 Total financial fixed assets 21 5,141 5,125 Total fixed assets 5,142 5,126 Current assets Current receivables Accounts receivable 1 1 Receivables from Group companies 423 314 Other current receivables 4 6 Tax receivables 36 35 Prepaid expenses and accrued income 8 2 Total current receivables 473 359 Balance in NCC Treasury AB 35 930 133 Total current assets 1,403 492 TOTAL ASSETS 6,545 5,618 EQUITY AND LIABILITIES 1, 32, 36 Equity Restricted equity Share capital 26 867 867 Statutory reserves 174 174 Total restricted equity 1,041 1,041 Unrestricted equity Profit brought forward 3,275 2,905 Net profit for the year 1,920 1,133 Total unrestricted equity 5,194 4,038 Total equity 6,235 5,079 Provisions Other provisions 28 – 6 Total provisions – 6 Long-term liabilities Other long-term liabilities 3 2 Total long-term liabilities 3 2 Current liabilities Accounts payable 14 19 Liabilities to Group companies 27 158 387 Tax liabilities 38 34 Other liabilities 22 20 Accrued expenses and deferred income 31 75 71 Total current liabilities 307 531 TOTAL EQUITY AND LIABILITIES 6,545 5,618 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 86Financial statements
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Parent Company Parent Company changes in equity Restricted equity Unrestricted equity SEK M Share capital Statutory reserves Profit brought forward Net profit for the year Total equity Opening equity, Jan. 1, 2023 867 174 2,287 1,205 4,532 Appropriation of profits – – 1,205 –1,205 – Net profit for the year – – – 1,133 1,133 Total comprehensive income – – – 1,133 1,133 Withdrawal of own shares –69 – 69 – – Bonus issue 69 – –69 – – Performance-based incentive program – – –1 – –1 Dividend – – –586 – –586 Equity on Dec. 31, 2023 867 174 2,905 1,133 5,079 Appropriation of profits – – 1,133 –1,133 – Net profit for the year – – – 1,920 1,920 Total comprehensive income – – – 1,920 1,920 Performance-based incentive program – – 18 – 18 Dividend – – –781 – –781 Equity on Dec. 31, 2024 867 174 3,275 1,920 6,235 NCC 2024 87Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Parent Company Parent Company cash flow statement SEK M Note 2024 2023 OPERATING ACTIVITIES Operating loss –114 –144 Adjustments for items not included in cash flow: 7, 28 – Changes in provisions –6 – – Other 0 –7 Total items not included in cash flow –6 –7 Interest paid and received 18 7 Tax paid 3 63 Cash flow from operating activities before changes in working capital –99 –81 Cash flow from changes in working capital Other changes in working capital –8 17 Cash flow from changes in working capital –8 17 Cash flow from operating activities –107 –65 INVESTING ACTIVITIES Acquisition of subsidiaries/operations – –562 Sale of financial fixed assets 14 14 Cash flow from investing activities 14 –548 Cash flow before financing –93 –613 FINANCING ACTIVITIES Dividend paid –781 –586 Group contributions net and dividends received 2,021 1,358 Loans raised 320 350 Amortization of loans –670 –600 Increase (–) / Decrease (+) in current interest-bearing receivables 1 11 Cash flow from financing activities 35 891 534 Cash flow for the year 798 –80 Cash and cash equivalents, Jan. 1 133 213 Cash and cash equivalents, Dec. 31 35 930 133 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 88Financial statements
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Notes Note 1 Accounting policies Basis for preparing the accounts The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as approved by the European Union (EU). The Group also complies with RFR 1 Supplementary Accounting Rules for Groups, the Swedish Annual Accounts Act and applicable statements (UFRs). The Annual Report is prepared in accordance with the Annual Accounts Act and RFR 2 Accounting for Legal Entities. The Annual Report and the consolidated financial statements were approved for issue by the Board of Directors on April 9, 2025. The consolidated income statement and balance sheet and the Parent Company’s income statement and balance sheet will be presented to the Annual General Meeting (AGM) for adoption on May 7, 2025. Important estimates and assessments These estimates and assessments that have been made for accounting pur- poses were made on the basis of what is known when the Annual Report was issued, and, by definition, will rarely correspond to the actual outcome. This needs to be specially considered in connection with uncertainty in the economic climate and the global financial market, as NCC is impacted to a normal degree by the general economic situation. The areas subject to a high degree of com- plex assessment or those where assumptions and estimates are material to NCC are presented in the relevant note. New IFRS accounting standards and amendments to IFRS accounting standards applied NCC is subject to the OECD’s Pillar Two model rules. For more information, refer to Note 23 Tax on profit for the year, deferred tax assets and deferred tax liabilities. NCC is also encompassed by the agenda decision from the IASB that clarifies the disclosure requirements in IFRS 8 regarding the specified amounts included in profit or loss per reportable segment as well as information on material income and expense items. NCC believes that Note 3 Reporting by operating segment meets the disclosure requirements. No other amendments that came into effect on January 1, 2024 had a material impact on the consolidated financial statements. New IFRS accounting standards and amendments to IFRS accounting standards whose application has yet to commence No amendments that came into effect on January 1, 2025 are expected to have any material impact on the consolidated financial statements. Parent Company accounts compared with consolidated financial statements The Parent Company has prepared its Annual Report in accordance with the Annual Accounts Act (1995:1554), recommendation RFR 2 Accounting for Legal Entities and statements issued by the Swedish Financial Reporting Board. The Parent Company recognizes Group contributions received and granted as appropriations, which is in accordance with the alternative rule in RFR 2. Share- holder contributions granted are recognized as a part of the investment in the subsidiary and are thus subject to customary impairment testing. The Swedish Financial Reporting Board has granted exemption from the requirement that listed parent companies must recognize certain financial instruments at fair value. NCC applies the exemption rules and has thus refrained from recognizing certain financial instruments at fair value. Within the areas described below, the Parent Company’s accounting policies differ from the Group’s: • Borrowing costs, refer to Note 10, Interest expense and similar items • Subsidiaries, refer to Note 17, Participations in Group companies • Associated companies, refer to Note 18, Investments in associated companies and joint ventures • Joint arrangements, refer to Note 19, Participations in joint operations • Income taxes, refer to Note 23, Tax on profit for the year, deferred tax assets and deferred tax liabilities • Pensions, refer to Note 29, Pensions • Leasing, refer to Note 33, Leasing • Financial instruments, refer to Note 36, Financial instruments and financial risk management Consolidated financial statements The consolidated financial statements include the Parent Company and the companies and operations in which the Parent Company, directly or indirectly, has a controlling interest, as well as joint arrangements and associated companies. Elimination of inter-Group transactions Receivables, liabilities, revenue and costs, as well as unrealized gains and losses, that arise when a Group company sells goods or services to another Group company are eliminated in their entirety. Unrealized losses are eliminated in the same way as unrealized gains, but only insofar as there are no impairment requirements. This also applies to joint arrangements and associated compa- nies, in an amount corresponding to the Group’s holding. Refer to Note 32, Related party transactions. Foreign subsidiaries, associated companies and joint arrangements Foreign subsidiaries, associated companies and joint arrangements are recog- nized using the functional currency and are translated to the reporting currency. For NCC, the functional currency is defined as the local currency used in the reporting entity’s accounts. The Parent Company’s functional currency is SEK. The reporting currency is defined as the currency in which the Group’s overall accounting is conducted, in NCC’s case SEK. Property holdings NCC’s property holdings are recognized divided into: • Owner-occupied properties, which are held for use in the company’s own operations. Refer to Note 16, Tangible fixed assets. • Properties classified as current assets, which are held for development and sale as part of operations. Refer to Note 24, Properties classified as current assets. Climate change Risk management measures are integrated into internal processes for manage- ment and operations. Risk assessment is the most important tool for systematic risk management in NCC’s projects. Sustainability factors such as price out- looks, resource use, technology changes and initiatives to limit climate changes are in different ways factored into the risk assessments. The assumptions may change over time, which could materialize in different outcomes. This could result in significant changes to accounting estimates, such as useful life (poten- tial impact on depreciation period), value-in-use calculations (potential impact on impairment assessments) and measurement of deferred tax assets. For 2024, climate change has not been assessed to have a significant impact on the financial statements nor on the estimates and assumptions made when preparing the Annual Report and consolidated accounts. For 2025, the risk of a material adjustment of the financial statements related to climate risks is assessed not to be significant. However, the financial impact of the sustainability factors might still impose a risk of material adjustments in the long-term per- spective. NCC will continue the work of incorporating the risk assessments into the record to report process in order to fully be able to understand the impact of particular transactions, other events and conditions on NCC’s financial position and performance. Effects of amended accounting policies No effects of amended accounting policies in 2024. NCC 2024 89Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Revenue recognition NCC Infrastructure NCC Building Nordics NCC Building Sweden Subtotal, construction and civil engineering NCC Industry NCC Property Development Other and eliminations1) Group Order backlog, December 31, 2024 16,824 16,720 14,980 48,523 2,281 – –81 50,723 Of which, expected to be recognized as revenue: Within one year 11,930 10,612 9,862 32,405 1,345 – –47 33,703 Within two years 2,069 4,453 3,838 10,360 739 – –29 11,070 More than two years ahead 2,825 1,655 1,279 5,759 197 – –5 5,951 External net sales 20242) 17,867 13,439 13,228 44,534 12,157 4,849 70 61,609 External net sales 2023 17,288 13,833 13,314 44,436 10,972 1,373 151 56,932 Point in time for revenue recognition Over time (percentage-of-completion) x x x x Specific point in time x x 1) Road Services is recognized in Other and eliminations and this unit’s order backlog at Dec. 31, 2024 amounted to SEK 137 M. 2) For information on net sales per service/product, refer to Note 3. Revenues from construction and civil engineering operations are recognized successively over time, on a percentage-of-completion basis (recognized costs in relation to estimated total project costs). Invoicing is conducted on an ongoing basis according to agreement over the course of the project. This also applies to parts of NCC Industry’s operations, where percentage-of-completion revenue is recognized but usually during the same calendar year. A component of NCC Industry’s revenues is recognized at a point in time connected to delivery of asphalt and stone materials to the customer, which is reflected in customer payments. For NCC Property Development too, revenues are normally recog- nized at a point in time (at date of occupancy), which normally coincides with the receipt of payment from the customer. In all significant respects, the order backlog in construction and civil engineer- ing operations is expected to be recognized as revenue over the coming 24 months, the majority of which within the coming year. In all significant respects, NCC Industry’s order backlog is expected to be recognized as revenue during the coming year. For information regarding NCC Property Development’s as yet unfulfilled performance obligations, see the property table in the Report of the Board of Directors. For information on orders received, see the Order status section in the Report of the Board of Directors. Worked-up non-invoiced revenues Group 2024 2023 Worked-up revenues from ongoing contracts 35,824 37,926 Invoicing for ongoing contracts –34,987 –36,850 Total 837 1,076 Invoiced revenues not worked up Group 2024 2023 Advance invoicing for ongoing contracts 64,660 67,134 Worked-up revenues from advance-invoiced contracts –59,433 –62,076 Total 5,226 5,058 Worked-up revenues from ongoing projects including recognized gains less recognized loss allowances amounted to SEK 95,257 M (100,002) for 2024 and prior years. In 2024, recognized revenue derived from work performed in 2023 or earlier is not estimated to amount to significant amounts. In all significant respects, invoiced revenues not worked up at December 31, 2023 or earlier are adjudged to have been recognized in 2024. In 2024, reversed bad debt losses arising from 2023 or earlier are not expected to amount to significant amounts. Accounting policies NCC’s revenues are recognized according to IFRS 15 Revenue from Contracts with Customers, meaning when the customer gains control over the sold goods or services. This can occur either by NCC’s performance obligations being fulfilled over time (on a percentage-of-completion basis) or at a point in time. NCC’s revenues essentially comprise: • Revenues from construction contracts and similar projects • Revenues from commercial property development • Revenues from sales of asphalt, stone materials, etc Revenues from construction contracts and similar projects The construction contracts mean that NCC performs work on land belonging to the customer and thus creates an asset that is controlled by the customer in pace with the asset’s completion. In turn this means that NCC recognizes revenues over time by applying percentage-of-completion profit recognition. Application of the percentage-of-completion recognition of revenue and profit entails that profit is recognized in pace with completion of the project. To determine the amount of income worked up at a specific point in time, the following components are required: • Project revenue: total revenues attributable to the construction contract. The revenues must be of such a character that the recipient can credit them to income in the form of actual payment received or another form of payment. • Project cost: total costs attributable to the construction contract, which corresponds to project revenues • Completion rate (worked-up rate): recognized costs in relation to estimated total project costs The fundamental condition for percentage-of-completion profit recognition is that estimate-at-completion of total project revenues and costs can be quanti- fied reliably. As a consequence of percentage-of-completion profit recognition, the trend of earnings in ongoing projects is reflected immediately in the financial statements. Percentage-of-completion profit recognition is subject to a compo- nent of uncertainty. Due to unforeseen events, the final profit of the projects may occasionally be higher or lower than expected. It is particularly difficult to anticipate profit at the beginning of the project period and for technologically complex projects or projects that extend over a long period. For projects that are difficult to forecast, revenue is recognized in an amount corresponding to the worked-up cost, meaning that SEK zero earnings are entered until the profit can be reliably estimated. As soon as this is possible, the project switches to percent- age-of-completion profit recognition. Provisions posted for potential loss-making contracts are charged against profit for the relevant year. Provisions for losses are posted as soon as they become known, refer to Note 28 Other provisions for more information. Contract modifications covering change orders and contract claims for shortcomings in tender specifications and similar items are recognized when the modifications are enforceable. When assessing whether the modifications are enforceable, all relevant facts and circumstances are to be considered. If the parties fail to agree on the price, the revenue is only to be recognized insofar as it is highly probable that a material reversal of accumulated recognized revenues will not arise when the parties reach agreement. The same applies to revenue recognition of any bonuses, as well as sanctions, whereby revenue is only to be recognized insofar as it is highly probable that a material reversal of accumu- lated recognized revenues will not be necessary. Balance sheet items such as “Worked-up non-invoiced revenues” and “Invoiced revenues not worked up” are recognized in gross amounts on a project-by-project basis. Projects for which worked-up revenues exceed invoiced revenues are recognized as current assets, while projects for which invoiced revenues exceed worked-up revenues are recognized as a current interest-free liability. The customer is normally invoiced on account during the term of the project. The following example illustrates how the percentage-of-completion profit recognition is applied. On January 1 of Year 1, NCC receives a contract regarding the construction of a building. The project is estimated to take two years to complete. The contract price is 100 and the anticipated profit from the project is 10. On December 31 of year 1, NCC’s costs for the project amount to 45, in line with expectations. Since NCC has completed half of the work and the project is proceeding as planned, NCC recognizes half of the anticipated profit of 10, that is 5, in the accounts for Year 1. Profit recognition on completion means that profit is not recognized until the end of Year 2, or the beginning of Year 3, depend- ing on when the final financial settlement with the client was agreed. Note 2 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 90Financial statements
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Notes Profit Year 1 Year 2 Profit recognition on completion 0 10 According to percentage-of-completion profit recognition 5 5 For agreements that contain both a contract and an operation and maintenance service, the revenue must be allocated to the various parts. The part of the agreement that pertains to the contract-related service is recognized on a percentage-of-completion basis. Revenues from commercial property development NCC’s net sales include revenues from sales of properties classed as current assets. Sales include both land and the building constructed by NCC on the land. Normally, the sale of land and construction of a building constitute a perfor- mance obligation and are recognized jointly. Payment is normally received in conjunction with date of occupancy. In rare cases, depending on the terms and conditions of the agreements, the sale of land (or land with construction under way) constitutes one performance obligation and construction of a building another. Revenues are recognized at the point in time when control is transferred to the buyer. Control is transferred over time (on a percentage-of-completion basis) unless NCC has an alternative use for the sold property and NCC is entitled to payment from the customer for work completed to date, in which case the revenue is recognized by applying percentage-of-completion profit recognition. If one of the above criteria is not fulfilled, the revenue is to be recognized at a point in time – on completion and handover to the customer. Since NCC always contractually agrees on delivery of a certain property to the customer, and the property cannot be sold to anyone else, NCC never has an alternative use for the sold property. Concerning the question of whether NCC is entitled to payment, certain legislation contains factors that indicate that NCC has such an entitle- ment, while other legislation indicates that this is not the case. Moreover, legal praxis has not been developed in this context. NCC’s overall assessment is that in normal cases the uncertainty concerning NCC’s entitlement to payment is so great that the revenue should be recognized at a point in time, on completion of the property and handover to the customer. It could also be the case that property projects are sold with guarantees of certain leasing to tenants or with a stipulation that a supplementary purchase consideration be paid when a certain letting rate has been achieved. In connec- tion with the date of sale, any rental guarantees are recognized as prepaid income, which is then recognized as revenue as letting progresses. The supple- mentary purchase consideration is recognized as revenue when the agreed letting rate has been achieved. In the event NCC remains the owner of a property during a transition period, the property continues to be recognized as a current asset and NCC receives rental revenues until the property is divested and transferred to a buyer. Revenues from sales of asphalt, stone materials, etc. Revenues from sales of asphalt, stone materials, etc. are recognized at the point in time of delivery to the customer. Important estimates and assessments Percentage-of-completion profit recognition A fundamental condition for being able to estimate percentage-of-completion profit recognition is that project revenues and project costs can be established reliably. This reliability is based on such factors as compliance with NCC’s sys- tems for project control and that project management has the necessary skills. The assessment of project revenues and project costs is based on a number of estimates and assessments that depend on the experience and knowledge of project management in respect of project control, training and the prior manage- ment of projects. The assessment also includes a review of project portfolio risks related to provisions for uncertain cost compensation. The assessment component means that the final result may differ from the profit accrued based on percentage-of-completion. Revenue recognition of property development projects Property sales are recognized at the point in time when control is transferred to the buyer. The point in time primarily depends on the assessment of which point in time NCC is entitled to payment. This normally does not occur until the project is completed and handed over to the customer, at which time the revenue is recognized in full. However, assessments are made on an agreement-by- agreement basis. Note 3 Reporting by operating segment NCC’s business operations are divided into five operating segments. Each operating segment has a president who is responsible for the daily operations and regularly reports on the results of the segment’s performance to the Senior Management Team. The following operating segments were identified based on this reporting procedure: NCC Infrastructure supplies entire infrastructure projects (such as tunnels, roads and railways), from design and construction to production and maintenance. NCC Building Sweden and NCC Building Nordics build residential buildings, offices, and construct such public premises as schools and hospitals and commercial premises as stores and warehouses. NCC Industry’s operations are based on production of stone materials, asphalt and paving. NCC Property Development develops and sells commercial properties in metropolitan regions in Sweden, Norway, Denmark and Finland. All transactions between the various operating segments are conducted on a purely commercial basis. Other and eliminations includes NCC’s Group functions and the NCC Green Industry Transformation business area. Further, the figures include eliminations of internal profits and other Group adjustments primarly related to pensions and leases. Accounting policies An operating segment is part of the Group that conducts business operations from which it generates revenues and incurs costs and for which independent financial information is available. Furthermore, the earnings of an operating segment are followed up by the chief operating decision maker, who in NCC’s case is the CEO, for evaluation of results and for allocating resources to the operating segment. The reporting of operating segments concurs with the reports pre- sented to the CEO. Group, 2024 NCC Infrastructure NCC Building Nordics NCC Building Sweden NCC Industry NCC Property Development Total operating segments Other and eliminations Group Orders received 18,919 11,392 12,239 12,884 55,433 –704 54,730 Order backlog 16,824 16,720 14,980 2,281 50,805 –81 50,723 External net sales 17,867 13,439 13,228 12,157 4,849 61,540 70 61,609 Internal net sales 238 445 784 477 4 1,948 –1,948 – Total net sales 18,105 13,884 14,012 12,634 4,853 63,488 –1,879 61,609 Depreciation/amortization –349 –129 –79 –571 –14 –1,142 –128 –1,271 Share in associated company profits – – – 5 –11 –6 – –6 Operating profit/loss 535 426 30 584 719 2,294 –262 2,032 Net financial items –169 Profit after financial items 1,863 Operating capital employed 3,844 7,938 Return on operating capital employed, % 14.0 7.6 Note 2 cont’d. NCC 2024 91Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Group, 2023 NCC Infrastructure NCC Building Nordics NCC Building Sweden NCC Industry NCC Property Development Total operating segments Other and eliminations Group Orders received 16,707 16,654 12,661 11,459 57,481 –662 56,819 Order backlog 16,074 18,684 16,753 2,015 53,525 –104 53,422 External net sales 17,288 13,833 13,314 10,972 1,373 56,782 151 56,932 Internal net sales 379 782 1,161 513 3 2,837 –2,837 – Total net sales 17,667 14,615 14,475 11,485 1,376 59,619 –2,686 56,932 Depreciation/amortization –342 –100 –74 –586 –16 –1,118 –101 –1,219 Share in associated company profits 0 – – 5 –16 –11 – –11 Operating profit/loss 723 343 272 400 243 1,982 –179 1,802 Net financial items 1 Profit after financial items 1,803 Operating capital employed 4,090 9,592 Return on operating capital employed, % 8.9 2.8 Net sales per product segment 2024 NCC Infrastructure NCC Building Nordics NCC Building Sweden NCC Industry Roads 1,032 – – – Railways 5,071 – – – Energy & Water Treatment 5,619 – – – Groundworks 3,501 – – – Industry 989 – – – Offices – 2,040 1,689 – Residential – 1,913 2,785 – Refurbishment/ Conversion – 2,916 2,558 – Public buildings – 5,108 5,119 – Asphalt & paving – – – 9,504 Stone materials – – – 3,130 Foundation engineering 1,260 – – – Other 634 1,907 1,861 – Total 18,105 13,884 14,012 12,634 Net sales per product segment 2023 NCC Infrastructure NCC Building Nordics NCC Building Sweden NCC Industry Roads 1,677 – – – Railways 4,180 – – – Energy & Water Treatment 4,491 – – – Groundworks 4,359 – – – Industry 769 – – – Offices – 2,509 2,078 – Residential – 3,228 3,854 – Refurbishment/ Conversion – 2,674 2,563 – Public buildings – 4,502 4,527 – Asphalt & paving – – – 8,421 Stone materials – – – 3,064 Foundation engineering 1,140 – – – Other 1,051 1,703 1,453 – Total 17,667 14,623 14,475 11,485 Other and eliminations External net sales Operating profit/loss 2024 2023 2024 2023 NCC’s Head Office, results from minor subsidiaries and associated companies 69 151 –436 –315 Eliminations of inter-company gains 78 –18 Other Group adjustments (essentially comprising the difference in accounting policies between operating segments and the Group, such items as pensions1) and sale and leaseback) 0 – 96 155 Total 70 151 –262 –179 1) For more information, refer to Note 29 Pensions. Geographical areas Orders received Order backlog Net sales Fixed assets1) 2024 2023 2024 2023 2024 2023 2024 2023 Sweden 31,078 30,673 28,357 30,178 36,843 32,435 3,327 3,191 Denmark 12,485 15,934 14,424 14,463 12,989 12,655 2,030 1,947 Norway 7,493 7,317 4,635 4,954 7,793 7,082 1,504 1,586 Finland 3,673 2,895 3,307 3,827 3,985 4,760 258 210 1) Pertains to fixed assets (incl. right-of-use assets according to Note 33) that are not financial instruments, deferred tax assets, assets pertaining to post-employment remuneration and rights arising in accordance with insurance agreements. Note 3 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 92Financial statements
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Notes Note 4 Number of employees, personnel expenses and remuneration of senior executives Average number of employees 1) 2024 2023 Number of employees of whom, men % of whom, women % Number of employees of whom, men % of whom, women % Parent Company Sweden 68 29 43 39 57 63 24 39 38 61 Subsidiaries Sweden 6,862 5,556 81 1,306 19 7,289 5,978 82 1,311 18 Norway 1,778 1,575 89 203 11 1,743 1,546 89 197 11 Finland 950 742 78 208 22 1,105 851 77 254 23 Denmark 2,110 1,808 86 302 14 2,036 1,754 86 281 14 Other countries 8 6 75 2 25 8 6 75 2 25 Total in subsidiaries 11,708 9,686 83 2,021 17 12,180 10,136 83 2,045 17 Group total 11,776 9,715 83 2,060 17 12,243 10,160 83 2,083 17 1) The average number of employees is based on the average number of employees during the period January 1 to December 31, calculated on the basis of the number of salaried employees, recalculated to full-year positions. Men and women in the Board of Directors and Senior Management Team on balance sheet date Dec. 31, 2024 Dec. 31, 2023 men, % women, % men, % women, % Board of Directors 70 30 70 30 AGM-elected Board members 57 43 57 43 Senior Management Team 50 50 45 55 Senior Management Team, employed in the Parent Company 50 50 33 67 Salaries and other remuneration distributed between members of the Board and senior executives 1) and other employees 2024 2023 Board of Directors and senior executives Other employees Total Board of Directors and senior executives Other employees Total Parent Company, Sweden Salaries and other remuneration 53 76 129 47 70 117 Social security expenses 72 69 – of which, pension costs 8 17 25 7 15 22 Change in pension obligation 4 4 Group Salaries and other remuneration 88 8,964 9,052 72 8,854 8,927 – of which, bonus and similar 22 20 Social security expenses 2,990 2,936 – of which, pension costs 13 1,079 12 978 Change in pension obligation 13 8 1) The senior executives category comprises six individuals (six) in the Parent Company and six individuals (five) in subsidiaries. The definition senior executive applies to the Senior Management Team, incl. the CEO. Employment conditions and remuneration of senior executives The Chairman of the Board and other AGM-elected Board members receive director fees according to an AGM resolution for work on the Board of Directors and committees. No pensions are paid to Board members. No special fee is paid to the Nomination Committee. Salary and other remuneration for the CEO is proposed by the Chairman of the Board and decided by the Board. STI target levels are proposed by the Chairman of the Board and decided by the Board. Remuneration of other senior executives in the Senior Management Team (SMT) is proposed by the CEO and approved by the Chairman of the Board. Remuneration of the CEO and other senior executives consists of fixed and variable remuneration, other benefits and pensions. The term “other senior executives” refers to the people who together with the CEO constitute the SMT. Fixed remuneration of the CEO President and CEO Tomas Carlsson receives a fixed monthly salary of SEK 920,000. Variable remuneration For the CEO, the short-term variable remuneration is capped at 80 percent of fixed remuneration and based on the outcome of established targets, which are mainly financial. Short-term variable remuneration for other senior executives in 2024 is capped at 42.5 or 55 percent of fixed remuneration. Pension conditions NCC is endeavoring to move gradually toward defined-contribution pension solutions, which entail that NCC pays contributions that represent a specific percentage of the employee’s salary. The CEO has a pension with a premium frame capped at 42 percent of contractual fixed monthly salary. Other members of the SMT, who are active in Sweden and have an employment contract subject to Swedish terms and conditions, have a collectively agreed ITP plan (the collectively bargained occupational pension for salaried employees). ITP 1 is applied to new employment contracts where possible. In addition to the collec- tively bargained ITP plan, members of the SMT are also entitled to receive a defined-contribution supplementary pension capped at 30 percent of pension- able salary increments exceeding 30 income base amounts. The definition of pensionable salary as stipulated in ITP 2 is to be used for this supplementary pension. Variable remuneration and other benefits are pensionable to the extent NCC 2024 93Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes specified by law and collective agreements. Members of the SMT who have employment contracts under the terms and conditions of another country are covered by pension solutions in accordance with local practices, which must to the extent possible comply with the principles stated in these guidelines. The retirement age for all members of the SMT is 65 years. Other benefits NCC provides other benefits, such as medical insurance and a car benefit, to members of the SMT. The combined amount of such benefits in relation to total remuneration may constitute only a limited value and correspond essentially to the benefits normally arising in the market, in total not more than 5 percent of annual cash salary. Termination terms The CEO has a period of notice of six months from NCC and six months should he resign at his own request. If employment is terminated by NCC, severance pay is payable for 18 months. The severance pay is not pensionable and does not carry entitlement to vacation pay or other benefits. For a period of six months following the period of notice, the CEO, should NCC so demand, is required to observe a ban on working for competitors. During such a period, the CEO receives remuneration corresponding to basic monthly salary. Remuneration is not payable for periods when the CEO receives severance pay. Other senior executives are subject to six to 12 months’ period of notice from NCC, or six months’ notice if the senior executive resigns of his/her own accord. If employment is terminated by NCC, severance pay is normally payable for 12 months. The severance pay will, with one exception, be reduced by an amount corresponding to any remuneration received from a new employer or own business. During the period of notice, senior executives may not take up a new position with another employer or conduct their own business activities without NCC’s written consent. Share-based remuneration Long-term share-based incentive programs that are performance-based have been established in the company. The prerequisites and conditions for allotment are listed below. LTI 2021 The performance period for LTI 2021 expired on December 31, 2023. The target for the program, which consisted exclusively of a financial performance target, accumulated EPS of SEK 38–43, was achieved in part at SEK 40.42. The out- come was 48.40 percent of the maximum outcome. Shares were delivered in May 2024 to remaining participants in the program. A total of 130,632 shares were delivered/disbursed to 132 participants. The share price on the redemption date was SEK 131.60. LTI 2023 In March 2023, the AGM resolved in accordance with the Board’s proposal to introduce a long-term performance-based incentive program for senior executives and key personnel within the NCC Group – LTI 2023. Apart from the performance targets, the program has essentially the same structure as the LTI 2021 program. The purposes of the LTI 2023 are to ensure continued focus on the company’s long-term profitability and value growth, create prerequisites for retaining and recruiting key personnel, provide competitive remuneration, and create increased focus on the company’s long-term sustainability targets in respect of reductions in work-related accidents and carbon emissions. LTI 2023 entails that the participants themselves invest in company shares, savings shares. After the period expires, each savings share provides entitlement, depending on the degree to which the targets have been achieved, to the receipt of 3–6 perfor- mance shares free of charge. LTI 2024 In April 2024, the AGM resolved in accordance with the Board’s proposal to introduce a long-term performance-based incentive program for senior execu- tives and key personnel within the NCC Group – LTI 2024. The program has essentially the same structure as the LTI 2023 program. The purposes of the LTI 2024 are to ensure continued focus on the company’s long-term profitability and value growth, create prerequisites for retaining and recruiting key personnel, provide competitive remuneration, and create increased focus on the company’s long-term sustainability targets in respect of reductions in work-related accidents and carbon emissions. LTI 2024 entails that the participants themselves invest in company shares, savings shares. After the period expires, each savings share provides entitlement, depending on the degree to which the targets have been achieved, to the receipt of 2–5 perfor- mance shares free of charge. Performance targets for LTI 2024 The performance targets during the savings period focus on long-term value performance in the form of earnings per share (“performance target 1”), a reduction in the Group’s carbon emissions (“performance target 2”) and a reduction in the number of work-related accidents (“performance target 3”). Of the allotment of performance shares, 90 percent will pertain to performance target 1, 5 percent to performance target 2 and 5 percent to performance target 3. Each year, the Board sets specific target levels in all three areas, based on current and possibly updated targets for NCC. These will be communicated in the Annual Report or remuneration report for 2026. Targets for 2024 have been communicated to participants in the program and an annual target will be communicated in early 2025 and 2026, respectively. Performance target 1: Earnings per share Performance target 1 pertains to NCC’s earnings per share (EPS) for the period 2024, 2025 and 2026. The allotment of performance shares will be based on the minimum and maximum target levels established by the Board for each year during the period. The outcome will be calculated annually, whereby one third of the performance shares will be measured against the outcome for 2024, one third will be measured against the outcome for 2025 and one third will be measured against the outcome for 2026: i.e. 30 percent of the total outcome for each year. The targets will be well-balanced in the opinion of the Board. If the minimum level for the year in question is not achieved, no performance shares will be awarded for the relevant year. If the maximum target level for the year in question is achieved or exceeded, performance shares will be awarded at a rate of 100 percent. If the minimum level is exceeded but the maximum level is not achieved, allotment will occur linearly within the span. Performance target 2: Climate and environment NCC strives to eliminate emissions from the entire value chain, increase energy efficiency and enable climate change adaptation. NCC’s target is to achieve a 60-percent reduction in CO 2e tons/SEK M within Scope 1 and 2 by 2030 compared with 2015. Scope 1 pertains to emissions related to fuel consumption in asphalt plants, and from own vehicles and machinery. Scope 2 pertains to emissions related to the production of electricity, district heating and district cooling used in the operations. The Board will establish appropriate targets based primarily on the Group’s own emissions in Scope 1 and 2 or other appropriate and measurable target number. If the target level is not achieved, no performance shares will be awarded. If the target level is achieved, performance shares connected to performance target 2 will be awarded at a rate of 100 percent. Performance target 3: Health and safety NCC strives to reduce the number of accidents and completely eliminate serious accidents and incidents. This is to be measured through the metric of LTIF4, meaning work-related accidents resulting in more than four calendar days of absence per million hours worked by NCC’s employees. If the target level is not achieved, no performance shares will be awarded. If the target level is achieved, Performance Shares connected to performance target 3 will be awarded at a rate of 100 percent. Participants The participants are divided into four categories. The CEO (one person) is entitled to acquire savings shares for an amount corresponding to not more than 8 percent of his basic salary and may receive a maximum of five performance shares for each savings share held. Other members of the Senior Management Team (11 persons) are entitled to acquire savings shares for an amount corre- sponding to not more than 6 percent of their respective basic salary and may receive a maximum of four performance shares for each savings share held. Division Managers (about 40 persons) are entitled to acquire savings shares for an amount corresponding to not more than 4 percent of their respective basic salary and may receive a maximum of three performance shares for each savings share held. Key personnel line/staff units (about 190 persons) are entitled to acquire savings shares for an amount corresponding to not more than 4 percent of their respective basic salary and may receive a maximum of two performance shares for each savings share held. Expenses Assuming a share price of SEK 126 at the date of acquisition and the maximum outcome, meaning full achievement of the performance targets, the cost for the LTI 2024, including costs for social security fees, will be about SEK 55.9 M, which corresponds to a value of approximately 0.45 percent of the total number of shares in the company. Repurchase of own shares No repurchases of own shares due to the LTI programs took place in 2024. Transfer of treasury shares To secure delivery of Series B shares, and to cover costs for social security fees, arising from previously outstanding long-term performance-based incentive programs (LTI 2021 and LTI 2023), the AGM resolved to permit the transfer of no more than 100,000 Series B shares. Note 4 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 94Financial statements
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Notes Remuneration, provisions and other benefits in 2024 SEK 000s Basic salary1) 2) Variable remuneration3) Share-based remuneration4) Other benefits Pension costs Pension obligations Chairman of the Board Alf Göransson 1,760 Other Board members Ida Aall Gram 495 Simon de Château 526 Cecilia Fasth 564 Mats Jönsson 651 Daniel Kjørberg Siraj 683 Angela Langemar Olsson 169 Birgit Nørgaard 689 Total Board of Directors 5,536 CEO Tomas Carlsson 12,103 8,280 2,523 221 4,637 3,292 Other senior executives5) 16,575 6,010 1,393 390 2,990 14,384 Total Parent Company 34,214 14,290 3,916 611 7,627 17,676 Other senior executives in subsidiaries6) 24,853 7,964 1,857 619 5,582 27,421 Total senior executives 59,067 22,254 5,773 1,230 13,208 45,097 1) For the Board of Directors, basic salary includes fees for Board and committee membership and for others, in addition to salary, also vacation compensation and, where appropriate, reduced working hours and severance pay. 2) Of fees paid to Board members, about three months are attributable to fees adopted by the 2023 AGM and about nine months to resolutions adopted at the 2024 AGM. At the AGM on April 9, 2024, Angela Langemar Olsson resigned and Ida Aall Gram took office. 3) Variable remuneration refers to amounts expensed in the fiscal year. 4) Amounts reserved/reversed for the completed LTI program 2021 and ongoing LTI programs 2023 and 2024. 5) This includes the five positions: the CFO and Head of Finance & IT, Head of Communications, Senior Legal Counsel, Head of Human Resources and Head of Purchasing. 6) This includes the six positions for NCC Infrastructure, NCC Building Sweden, NCC Building Nordics, NCC Industry, NCC Property Development and NCC Green Industry Transformation. Remuneration, provisions and other benefits in 2023 SEK 000s Basic salary1) 2) Variable remuneration3) Share-based remuneration4) Other benefits Pension costs Pension obligations Chairman of the Board Alf Göransson 1,625 Other Board members Geir Magne Aarstad 150 Simon de Château 500 Cecilia Fasth 375 Mats Jönsson 625 Daniel Kjørberg Siraj 450 Angela Langemar Olsson 675 Birgit Nørgaard 625 Total Board of Directors 5,025 CEO Tomas Carlsson 11,420 7,560 55 166 4,234 2,669 Other senior executives5) 16,395 6,517 –146 381 2,905 10,964 Total Parent Company 32,839 14,077 –91 547 7,139 13,634 Other senior executives in subsidiaries6) 18,469 5,638 270 494 4,756 18,685 Total senior executives 51,308 19,715 179 1,041 11,895 32,319 1) For the Board of Directors, basic salary includes fees for Board and committee membership and for others, in addition to salary, also vacation compensation, reduced working hours and, where appropriate, severance pay. 2) Of fees paid to Board members, about three months are attributable to fees adopted by the 2022 AGM and about nine months to resolutions adopted at the 2023 AGM. At the time of the AGM on March 31, 2023, Geir Magne Aarstad resigned. At the same Cecilia Fasth and Daniel Kjørberg Siraj took office. 3) Variable remuneration refers to amounts expensed in the fiscal year. 4) Amounts reserved/reversed for the completed LTI program 2020 and ongoing LTI programs 2021 and 2023. 5) This includes the five positions: the CFO and Head of Finance & IT, Head of Communications, Senior Legal Counsel, Head of Human Resources and Head of Purchasing. 6) This includes the five positions for NCC Infrastructure, NCC Building Sweden, NCC Building Nordics, NCC Industry and NCC Property Development. Note 4 cont’d. NCC 2024 95Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Share rights Group Parent Company Number Share rights Share rights Outstanding at the beginning of the period 823,218 192,356 Allotted during the period 234,298 56,628 Expired, unallocated –150,553 –36,323 Compensation shares allotted LTI 2021 –130,632 –34,060 Forfeited during the period –33,304 –1,119 Outstanding at the end of the period 743,027 177,482 Puttable at the end of the period 0 0 All share rights have an exercise price of SEK 0. Share rights outstanding have a remaining maturity of two and a half years to one and a half years. The share price for exercised shares on the exercise date was SEK 131.60. Personnel expenses for share-based remuneration 2024 2023 Group Parent Company Group Parent Company Share rights 18 5 –1 0 Synthetic shares 0 0 –3 0 Social security expenses 8 3 1 0 Total personnel costs for share-based remunerations 25 7 –2 0 Fair value and assumptions for share rights LTI 2023 LTI 2024 Group Parent Company Group Parent Company Fair value on date of valuation, SEK 000s 14,478 3,436 3,358 812 Share price, SEK 79.25 79.25 114.95 114.95 Redemption price, SEK 0 0 0 0 Maturity of share rights, years 1.5 1.5 2.5 2.5 Risk-free interest rate, % 3.50 3.50 0 0 Dividend has been calculated as a three-year average of NCC AB’s dividends. All fair values and assumptions are the same for all participants in the program. Accounting policies Share-based remuneration Instrument issued under the NCC Group’s share-based remuneration plan comprise share rights and synthetic (cash-settled) shares. The fair value of allotted share rights is recognized as a personnel cost accompanied by a corresponding increase in shareholders’ equity. The fair value is estimated at the date of allotment by means of an adjustment of the discounted value of the future dividends for which the plan participants will not qualify. The fair value is based on the average share price for the ten days following the AGM in the relevant year. Adjustments are continuously made for the share rights that are not expected to be vested, meaning that the final degree of fulfillment is estimated on a quarterly basis and the fair value is adjusted thereafter. At each financial report occasion, the Parent Company makes an assessment of the probability of whether the performance targets will be achieved. Costs are calculated on the basis of the number of shares and synthetic shares that are estimated to be settled at the close of the vesting period. When settlement of the share rights occurs, social security fees must be paid for the value of the employees’ benefit. These vary in the different countries in which NCC is active. During the period in which the services are performed, provisions are also posted for these calculated social security fees based on the market price of NCC’s Series B share on each reporting date. To satisfy NCC AB’s undertakings in accordance with the long-term incentive programs, NCC AB has repurchased Series B shares. These are recognized as shares held in treasury and thus reduce equity. Severance payments In conjunction with notice of employment termination, a provision is recognized only if the company is contractually obliged to terminate an employment position before the normal time, or when payments are made as an offering to encourage voluntary redundancy. For cases in which the company implements personnel cutbacks, a detailed plan is prepared that covers at least the workplace concerned, positions, and the approximate number of affected employees and remuneration for every personnel category or position, as is a time schedule for the plan’s implementation. Note 4 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 96Financial statements
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Notes Note 5 Depreciation/amortization Group 2024 2023 Intangible assets –73 –58 Owner-occupied properties –44 –44 Owner-occupied properties, right-of-use assets –272 –270 Machinery and equipment –523 –529 Machinery and equipment, right-of-use assets –359 –318 Total depreciation/amortization –1,271 –1,219 Accounting policies Straight-line depreciation based on estimated useful life, or on utilization rate, is applied with due consideration for any residual values at the close of the period. Goodwill and other assets that have an indefinite life are not amortized but subject to systematic impairment testing. NCC applies so-called component depreciation, whereby each asset with a considerable value is divided into a number of components that are depreciated on the basis of their particular useful life. Depreciation/amortization rates vary in accordance with the table below: Intangible fixed assets Right-of-use assets In pace with confirmed depletion of net asset value Software 10–33 percent Other intangible assets 10–33 percent Tangible fixed assets Owner-occupied properties 1.4–10 percent Land improvements 3.7–5 percent Pits and quarries In pace with confirmed depletion of net asset value Fittings in let premises 14–20 percent Machinery and equipment, right-of-use assets 5–33 percent Note 6 Fees and remuneration to audit firms Group Parent Company 2024 2023 2024 2023 Audit firms PwC Auditing assignments 25 22 7 6 Audit in addition to the audit assignment 1 1 0 1 Tax consultations – – – – Other services 1 1 – – Other auditors Auditing assignments 0 0 – – Audit in addition to the audit assignment – – – – Tax consultations – – – – Other services – 0 – – Total fees and remu- neration to auditors and audit firms 26 24 7 7 During 2024, PwC received approximately SEK 1 M for non-audit services. The services primarily comprised various types of consultations in accounting and related matters, but no valuation services. Audit assignments amounted to SEK 25 M, of which SEK 14 M to Öhrlings PricewaterhouseCoopers AB. Accounting activities in addition to the audit assignment amounted to SEK 1 M, of which SEK 1 M to Öhrlings PricewaterhouseCoopers AB. Öhrlings PricewaterhouseCoopers AB did not perform any tax consultancy for NCC. Other services amounted to SEK 1 M, of which SEK 1 M to Öhrlings PricewaterhouseCoopers AB. Note 7 Impairment losses Group 2024 2023 Impairment losses on other fixed assets Owner-occupied properties – – Machinery and equipment –1 –2 Other intangible assets –27 0 Total impairment losses and reversal of impair- ment losses for other fixed assets –27 –2 Total impairment losses –27 –2 Accounting policies When necessary, although at least once a year, NCC conducts impairment testing of the assets’ carrying amounts. An impairment requirement arises when the recoverable amount is less than the carrying amount. Note 8 Result from participations in Group companies Group Parent Company 2024 2023 2024 2023 Dividend – – 1,888 1,125 Capital gain/loss on sale 3 265 – – Total 3 265 1,888 1,125 Note 9 Operating expenses by type of cost Group 2024 2023 Production-related goods and services, plus raw materials and supplies –46,144 –42,359 Change in inventory –68 41 Personnel expenses –12,042 –11,862 Depreciation/amortization –1,271 –1,219 Impairment losses –27 –2 Total production costs, and selling and administra- tive costs –59,552 –55,401 NCC 2024 97Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Note 10 Interest expense and similar items Parent Company 2024 2023 Interest expense, Group companies –16 –9 Financial portion of pension cost –6 –5 Total –22 –15 Accounting policies In the Parent Company, borrowing costs are expensed in their entirety in the period in which they are incurred. Note 11 Net financial items Group 2024 2023 Interest income and financial assets measured at fair value 17 12 Interest income on financial assets measured at amortized cost 12 17 Interest income on bank balances 11 14 Net gain on financial assets/liabilities measured at fair value 33 36 Net exchange rate changes 0 –2 Other financial income 1 3 Financial income 75 80 Interest expense on financial liabilities measured at amortized cost –224 –60 Other financial expenses –21 –19 Financial expenses1) –244 –79 Net financial items –169 1 Of which, changes in value calculated using valua- tion techniques 29 33 1) Refer to Note 24 Properties classified as current assets for more information concerning capitalized interest. Note 12 Effects on profit or loss of exchange rate changes Group 2024 exchange rates 20231) 2024 Exchange rate effect Net sales 61,184 61,609 425 Operating profit 2,015 2,032 17 Profit after financial items 1,848 1,863 15 Net profit for the year 1,560 1,571 11 1) Figures for 2024 converted at 2023 exchange rates. Average exchange rate Jan–Dec Year-end rate, Dec 31 Country SEK Currency 2024 2023 2024 2023 Denmark 100 DKK 153.27 150.34 153.99 148.58 Euro countries 1 EUR 11.43 11.21 11.49 11.07 Norway 100 NOK 98.33 97.07 96.85 98.49 Note 13 Appropriations Appropriations Parent Company 2024 2023 Group contributions received 267 164 Group contributions granted –151 –30 Total 116 134 Note 14 Equity Specification of the item reserves in equity Group 2024 2023 Translation reserve Translation reserve, January 1 169 243 Year’s exchange differences on translating foreign operations 95 –74 Translation reserve, December 31 264 169 Hedging reserve Hedging reserve, January 1 –35 87 Fair value changes for the year in cash flow hedges 5 –54 Fair value changes in cash flow hedges transferred to net profit/loss for the year 30 –100 Tax attributable to cash flow hedges –7 32 Hedging reserve, December 31 –7 –35 Revaluation reserve Revaluation reserve, January 1 0 0 Revaluation reserve, December 31 0 0 Total reserves Reserves, January 1 135 331 Change in reserves during the year – Translation reserve 95 –74 – Hedging reserve 28 –123 – Revaluation reserve – 0 Reserves, December 31 258 135 Translation reserve The translation reserve includes all exchange rate differences that arise from the translation of the financial statements of foreign operations that have compiled their reports in a currency other than the currency in which the consolidated financial statements are presented, in NCC’s case, SEK. Hedging reserve The hedging reserve includes the effective portion of the accumulated net change in the fair value of cash flow hedging instruments attributable to hedging transactions that have not yet occurred. Revaluation reserve The revaluation reserve arises from step acquisitions, multi-stage acquisitions, meaning an increase in the fair value of previously owned participations in net assets resulting from step acquisitions. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 98Financial statements
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Notes Note 15 Intangible fixed assets Group Other acquired intangible assets 2024 Goodwill Right-of-use assets Capitalized devel- opment expenses Other Total other Recognized cost on January 1 2,142 236 696 176 1,108 Investments – 4 272 10 286 Divestment and scrappage – –1 –122 – –123 Reclassifications 3 –4 – – –4 Translation differences during the year 30 1 0 3 5 Recognized cost on December 31 2,175 236 847 189 1,272 Accumulated amortization on January 1 – –122 –272 –154 –547 Divestment and scrappage – 1 120 – 121 Reclassifications – 3 – – 3 Translation differences during the year – –1 – –3 –4 Amortization according to plan during the year – –6 –58 –8 –73 Accumulated amortization on December 31 – –124 –209 –165 –499 Accumulated impairment losses on January 1 –228 –16 – – –16 Translation differences during the year –4 – – – – Impairment losses for the year – – –27 – –27 Accumulated impairment losses on December 31 –232 –16 –27 – –42 Residual value on January 1 1,913 98 425 22 545 Residual value on December 31 1,942 96 611 24 731 Group Other acquired intangible assets 2023 Goodwill Right-of-use assets Capitalized devel- opment expenses Other Total other Recognized cost on January 1 2,174 244 481 217 942 Investments 11 7 161 12 180 Divestment and scrappage – –10 – –102 –112 Reclassifications 1 0 61 49 109 Translation differences during the year –45 –5 –7 – –12 Recognized cost on December 31 2,142 236 696 176 1,108 Accumulated amortization on January 1 – –127 –258 –216 –601 Divestment and scrappage – 10 – 96 105 Reclassifications – 1 2 –2 1 Translation differences during the year – 3 2 – 5 Amortization according to plan during the year – –8 –18 –31 –58 Accumulated amortization on December 31 – –122 –272 –154 –547 Accumulated impairment losses on January 1 –227 –16 – – –16 Translation differences during the year –1 – – – – Accumulated impairment losses on December 31 –228 –16 – – –16 Residual value on January 1 1,943 101 224 – 326 Residual value on December 31 1,913 98 425 22 545 Goodwill per operating segment Operating segments 2024 2023 NCC Infrastructure 272 270 NCC Building Nordics 324 322 NCC Building Sweden 233 233 NCC Industry 1,113 1,088 Total, NCC Group 1,942 1,913 Impairment testing of goodwill in cash-generating units Impairment testing of goodwill in the Group occurs annually or more often if there are indications that the value of goodwill has declined. To test the impair- ment requirement, goodwill was allocated to cash-generating units in accor- dance with NCC’s commercial organization, meaning NCC’s business areas, the outcome of which is regularly monitored by the Senior Management Team. The lowest cash-generating unit identified by NCC is at the business area level, meaning the segment level. The business areas are responsible for con- ducting business operations and the operating results of these are routinely reviewed by NCC’s chief operating decision maker. For example, separate financial information relating to the business areas is disclosed to the market. The decisions taken by NCC’s management are based on this specific, separate financial information. Some Group adjustments are made only at the business area level and thus the business area is the lowest level at which a complete balance sheet and income statement can be prepared that includes all assets and liabilities based on IFRS requirements and recommendations. The business areas are thus NCC’s lowest cash-generating units. Impairment testing is conducted based on the business areas’ future cash flow, taking into account the market’s yield requirement and the units’ risk profile. The calculations of the recoverable amount are based on assessments by corporate management that are considered the best available information on the test date. Significant assumptions: • Long-term growth: In all cases, a long-term sustainable growth rate of 2.0 percent (1.8) has been assumed when the forecast period is over, which reflects anticipated long-term growth in the market. Management does not believe the terminal value used for growth in any case exceeds the average growth rate for the markets in which NCC operates. NCC 2024 99Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes • Operating margin: The assumption regarding the forecast operating margin is based on approved forecasts by management, which in their opinion reflects historical experience and other externally available information • Working capital and reinvestment requirement: The requirement has been assumed to match the figure for 2024, with a growth rate equal to the sustain- able long-term growth rate. The assumption has been based on previous experience and estimates of future requirements. In the event of a –0.5 percent change in the operating margin over the 2025– 2028 forecast period or a +0.5 percent change in the WACC, no impairment was identified. Nor have any other reasonable changes in significant assumptions resulted in an impairment requirement for any business area. Weighted average cost of capital, WACC Is calculated for the various units on the basis of beta value, and local conditions in respect of market rates and tax, as well as a planned, long-term market-based capital structure for the various operations. The latter is based on the operational risk and the opportunities to leverage the operation. The weighted average cost of capital after tax for the various cash-generating units are as follows: NCC Infrastructure: 9.2 (9.0), NCC Building Nordics 9.7 (9.2), NCC Building Sweden 8.9 (8.6) and NCC Industry 7.2 (7.3). For NCC Industry, the weighted average cost of capital is lower than for other business areas due to another capital structure. Of NCC Industry’s assets, approximately 40 percent is estimated to be eligible as collateral, which enables a higher degree of indebtedness compared with other business areas and therefore reduces the cost of capital. The calculations are iterative and conditions are tested annually. NCC Infrastructure, NCC Building Nordics and NCC Building Sweden have essentially no assets eligible as collat- eral, their operational capital employed is negative. Impairment and risk analyses The year’s impairment testing was based on cash flow forecasts for 2025–2028. The average growth rate during the forecast period corresponds to about 2 percent for all business areas. The anticipated operating margin is based on the latest available forecast for each of the business areas. No impairment requirement was identified. Other intangible assets NCC primarily has two types of other intangible assets: right-of-use assets to utilize gravel and rock pits and capitalized expenses for computer systems, software and licenses. Right-of-use assets include the right to use gravel and rock pits for a determined period. The periods may vary but the rights normally pertain to longer periods. Accounting policies Intangible fixed assets are recognized at cost less accumulated impairment losses and amortization. Expenses that do not meet the criteria for recognition as an intangible fixed asset and expenses for day-to-day servicing and modifica- tion of existing products, processes and systems are expensed on an ongoing basis. Goodwill arises from acquisitions of companies and operations, and is measured at the lower of cost and recoverable amount. Goodwill is not amor- tized but is impairment tested annually. Goodwill in foreign operations is valued in the particular functional currency and is converted from this functional currency to the Group’s reporting currency at the exchange rates prevailing on the balance sheet date. Right-of-use assets consist primarily of the right to utilize rock pits and gravel quarries, which are amortized in parallel with confirmed depletion of net asset value based on volumes of extracted stone and gravel. This type of right-of-use asset is not covered by IFRS 16 Leases but by IAS 38 Intangible Assets. Intangible assets with determinable useful lives are amortized straight-line from the date on which the asset is available for use. The useful lives can vary. Assessed useful lives: • capitalized development expenses 3–10 years • right-of-use assets 3–25 years • other 3–5 years Refer also to Note 5. Impairment losses When necessary, although at least once a year, NCC conducts impairment testing of the assets’ carrying amounts. An impairment requirement arises when the recoverable amount is less than the carrying amount. Important estimates and assessments Several assumptions and estimates are made concerning future conditions, which are taken into account when calculating the discounted cash flow upon which the estimated recoverable amount of goodwill has been based. Important assumptions include expected growth, margins and the discount rate. If these assumptions change, the value of the remaining goodwill could be affected. Investments in IT are assessed individually and at December 31, 2024, NCC made the assessment that certain systems or parts of systems can be consid- ered to be an intangible fixed asset. The concept of control is central to this assessment and certain contracts with suppliers have been designed to ensure that NCC retains a contractual right to take possession of the software. NCC has done an analysis that shows that it even would be practically feasible. NCC makes the assessment that it would not involve a deterioration of essential functions of the software, nor would it involve significant costs. It would be feasible to operate the software inhouse or with another third party. NCC there- fore considers that there is support for capitalizing the costs that create a separately identifiable resource that is controlled by the Group. Expenses that do not meet these criteria are expensed. Each investment is also individually assessed based on the criteria stipulated in IAS 38 Intangible Assets. NCC has made the assessment that the investments will also generate future economic benefits since technological advances make it possible to use the systems in a manner that significantly surpasses existing systems. Established project organizations reinforce the Group’s intent, ability and possibility to complete the systems. Financial follow-ups of the investments take place separately and are broken down to effectively analyze the costs incurred. If the intended benefits are not achieved, it may impact the value in the future. The useful life reflects the expected period in which the asset will generate economic benefits. Material investments that comprise a central and necessary part of NCC’s technological ecosystem are deemed to have a lifecycle of up to ten years. A useful life of up to ten years is deemed to reflect the economic benefit since it also facilitates adjustments for future business needs. Note 15 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 100Financial statements
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Notes Note 16 Tangible fixed assets Group 2024 Owner- occupied properties Machinery and equipment Total Recognized cost on January 1 1,574 7,276 8,849 Investments 44 435 479 Divestment and scrappage –22 –388 –409 Reclassifications 19 –17 2 Translation differences during the year 19 28 47 Recognized cost on December 31 1,634 7,333 8,968 Accumulated impairment losses and depreciation on January 1 –707 –4,967 –5,674 Divestment and scrappage 16 333 349 Reclassifications 0 1 1 Translation differences during the year –8 –19 –27 Impairment losses for the year – –2 –2 Depreciation during the year –44 –523 –567 Accumulated impairment losses and depreciation on December 311) –743 –5,176 –5,919 Residual value on January 1 867 2,310 3,177 Residual value on December 31 892 2,157 3,049 1) Accumulated impairment losses on December 31 –47 –22 –70 Group 2023 Owner- occupied properties Machinery and equipment Total Recognized cost on January 1 1,631 7,415 9,046 Investments 19 625 644 Divestment and scrappage –44 –486 –529 Reclassifications –10 –130 –140 Translation differences during the year –23 –148 –171 Recognized cost on December 31 1,574 7,276 8,849 Accumulated impairment losses and depreciation on January 1 –723 –4,912 –5,634 Divestment and scrappage 22 378 400 Reclassifications 27 3 30 Translation differences during the year 10 94 104 Impairment losses for the year – –2 –2 Depreciation during the year –44 –529 –573 Accumulated impairment losses and depreciation on December 311) –707 –4,967 –5,674 Residual value on January 1 909 2,504 3,413 Residual value on December 31 867 2,310 3,177 1) Accumulated impairment losses on December 31 –47 –23 –70 Accounting policies Owner-occupied properties Owner-occupied properties are held for use in the company’s own operations for the purpose of production, the provision of services or administration and are recognized in accordance with IAS 16 Tangible fixed assets. They are recognized at cost, based on an external valuation conducted in connection with the acquisi- tion, less accumulated depreciation and any impairment losses. Land is not depreciated. Machinery and equipment Machinery and equipment are recognized, according to IAS 16 Tangible fixed assets, at cost less accumulated depreciation and any impairment losses. Cost includes the purchase price and expenses directly attributable to the asset for bringing it to the place and condition for use according to the purpose of the acquisition. For all depreciation periods, refer to Note 5. Important estimates and assessments Additional expenses are added to carrying amount of the asset only when it is probable that the future economic benefits associated with the asset will accrue to the Group and the cost of the asset can be reliably measured. All other types of maintenance of tangible fixed assets is expensed in the income statement. NCC 2024 101Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Note 17 Participations in Group companies Parent Company Carrying amount Name of company, Corp. Reg. No., Reg. office Ownership share %1) No. of participa- tions2) 2024 2023 Property companies: NCC Property Development Nordic AB, 556743-6232, Solna 100 1 966 964 Total participations in property companies 966 964 Other companies: NCC Danmark A/S, 69 89 40 11, Denmark 100 400 139 136 NCC Norge AS, 911 274 426, Norway 100 17,500 1,683 1,682 NCC Sverige AB, 556613-4929, Solna 100 500 427 421 NCC Försäkringsaktiebolag, 516401-8151, Solna 100 500 78 78 NCC International AB, 556033-5100, Solna 100 1,000 4 4 NCC Purchasing Group AB, 556104-9932, Solna 100 2 7 7 NCC Suomi Oy, 1765514-2, Finland 100 5 96 95 NCC Industry Nordic AB, 556144-6732, Solna 100 275 1,645 1,643 NCC Treasury AB, 556030-7091, Solna 100 120 16 16 Nordic Road Services Holding AB, 559172-2227, Stockholm 100 50 – – Total shares in other companies 4,095 4,084 Total participations in Group companies 5,061 5,048 1) Ownership share corresponds to the shareholding. 2) Number of shares in thousands. NCC essentially owns 100 percent of all subsidiaries, whereby these are consoli- dated in their entirety according to the purchase method. NCC’s assessment is that it has no controlling interest in any holdings in which the ownership share amounts to 50 percent or less. Only directly owned subsidiaries have been specified. The number of indirectly owned subsidiaries is 126 (129). Accounting policies Companies in which the Parent Company has a controlling interest, normally through a direct or indirect holding carrying more than 50 percent of the voting rights, are consolidated in their entirety. Controlling interest is defined as power over the investee, exposure or the right to variable returns from its involvement with the investee and the ability to exercise its power over the investee to affect the returns. Participations in subsidiaries are recognized in the Parent Company at cost. Should the recoverable amount of shares in subsidiaries fall below the fair value, an impairment loss is recognized. Dividends received are recognized as revenue. Note 18 Investments in associated companies and joint ventures Group Carrying amount Name of company, Corp. Reg. No., Reg. office Ownership share %1) No. of participa- tions2) 2024 2023 Hercules-Trevi Foundations AB, 556185-3788, Solna 50 1 1 1 Oraser AB, 556293-2722, Stockholm 50 1 5 5 Sjællands Emulsionsfabrik I/S, 18004968, Vedbæk, Denmark 50 – 12 9 Other NCC-owned associated companies 7(7) 0 0 Total 19 16 1) The ownership share corresponds to the proportion of votes for the total number of shares. 2) Number of shares in thousands. Accounting policies Associated companies are defined as companies in which the Group controls 20–50 percent of the voting rights. Companies in which the Group owns less than 20 percent of voting rights but exercises a significant influence are also classified as associated companies. In accordance IFRS 11 Joint Arrangements, joint ventures recognized are those joint arrangements in which the parties involved have a joint influence and the parties have the right to the net assets. Participations in associated companies and joint ventures are consolidated in accordance with the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures. NCC’s share in associated companies relates to their operations and its share in the results of associated companies is recognized in profit or loss as “Result from participations in associated companies,” which is part of operating profit. Amounts are recognized net after taxes. Note 19 Joint operations The consolidated financial statements include the items below that constitute the Group’s interests in the joint operations’ net sales, costs, assets and liabilities. Group 2024 2023 Revenue 1,420 1,408 Expenses –1,368 –1,356 Profit 52 53 Fixed assets 31 40 Current assets 668 7,192 Total assets 699 7,232 Long-term liabilities 64 53 Current liabilities 346 6,884 Total liabilities 410 6,938 Net assets 289 294 The joint operations category also includes partly owned construction contracts, over which NCC has a contractual joint influence together with the other partners. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 102Financial statements
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Notes Note 20 Financial investments Group 2024 2023 Financial investments classified as fixed assets Fair value through other comprehensive income, equity instruments Unlisted securities 68 68 Total 68 68 Short-term investments classified as current assets Financial assets measured at fair value through profit or loss Short-term investments 506 450 Financial assets measured at amortized cost Short-term investments 70 51 Total 576 501 Investments measured at amortized cost have an established interest rate ranging from 0.5 percent (0.2) to 3.0 percent (4.0), and have due dates between five months and three years. During the year, financial fixed assets were impaired by SEK 0 M (0). Specification of joint operations Group Shareholding, % Arandur OY 33 HB NCC-DPR Data Centre Contractors 50 HNB Fjernvarme I/S 70 Konsortiet Nyt Assens Resenanlæg I/S 50 Konsortium NCC - Brøndum I/S 70 Koy Polaristontti 2 50 Koy Polaristontti 3 50 Miljöfabriken 2000 AB 50 Milman Miljömudring 50 NCC SMET Kalvebod Konsortiet I/S 77 NCC W&F West Link Contr HB 60 NCC_OHL Lund Arlöv HB 50 Polaris Business Park OY 50 Vandlinjen Entreprise Konsortium, VEK I/S 50 Accounting policies Joint arrangements are defined by NCC as projects conducted in forms similar to those of a consortium, meaning subject to joint control. This could take the form of, for example, jointly owned companies that are governed jointly. Joint arrangements are divided into joint ventures, which are consolidated according to the equity method, or into joint operations, which are consolidated according to the proportional method. For information on joint ventures, refer to Note 18, Investments in associated companies and joint ventures. A joint arrangement is recognized as a joint operation in accordance IFRS 11 Joint Arrangements when NCC has a right to the assets and also has obligations related to the liabilities that the arrangement entails. Note 21 Financial fixed assets Parent Company, 2024 Participations in Group companies Other long-term securities Other long-term receivables1) Total Recognized cost on January 1 7,261 45 33 7,338 Assets added 13 – 3 16 Recognized cost on December 31 7,274 45 35 7,354 Accumulated impairment losses on January 1 –2,213 – – –2,213 Accumulated impairment losses on December 31 –2,213 – – –2,213 Residual value on December 31 5,061 45 35 5,141 Parent Company, 2023 Participations in Group companies Other long-term securities Other long-term receivables1) Total Recognized cost on January 1 6,700 45 29 6,775 Assets added 561 – 3 564 Recognized cost on December 31 7,261 45 33 7,338 Accumulated impairment losses on January 1 –2,213 – – –2,213 Accumulated impairment losses on December 31 –2,213 – – –2,213 Residual value on December 31 5,048 45 33 5,125 1) The item also includes deferred tax assets. Accounting policies The Parent Company recognizes participations in subsidiaries at cost and, where applicable, taking into account write-ups or impairment losses. Note 19 cont’d. NCC 2024 103Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Note 22 Long-term interest-bearing receivables and other receivables Group 2024 2023 Long-term interest-bearing receivables classified as fixed assets, January 1 204 184 Receivables from associated companies and joint ventures 6 32 Interest-bearing securities1) –9 2 Other long-term interest-bearing receivables 0 –14 Long-term interest-bearing receivables classified as fixed assets, December 31 201 204 1) Carrying amount is a reasonable estimation of fair value. For due dates, refer to Note 20 Financial investments. NCC’s subsidiary, NCC Försäkringsaktiebolag, as an insurance company, must have investment assets that cover technical liabilities for own account. In 2024 and 2023, these requirements were fulfilled. These investment assets pertain to interest-bearing securities, as specified in the table. Long-term interest-bearing receivables pertaining to pensions are recognized in the balance sheet under Pension receivable. Group 2024 2023 Other receivables classified as current assets Receivables from associated companies and joint ventures 7 4 Receivables from divested property and residential projects 14 62 Advance payments to suppliers 1 1 Derivative instruments held for hedging 12 32 Other current receivables 334 316 Other receivables classified as current assets 368 415 Note 23 Tax on profit for the year, deferred tax assets and deferred tax liabilities Group Parent Company 2024 2023 2024 2023 Tax on profit for the year Current tax cost –119 –112 – 0 Deferred tax revenue/cost –172 –118 3 3 Total recognized tax on profit for the year –292 –230 3 3 Tax items recognized directly in Other comprehensive income Group 2024 2023 Deferred tax on cash flow hedges –7 32 Deferred tax attributable to the revaluation of defined-benefit pension plans –106 168 Total –113 200 Group Parent Company 2024 2023 2024 2023 Effective tax Tax, % Profit Tax, % Profit Tax, % Profit Tax, % Profit Pretax profit 1,863 1,803 1,917 1,130 Tax according to Swedish current tax rate –21 –384 –21 –371 –21 –395 –21 –233 Effect of other tax rates for non-Swedish companies –1 –12 –1 –12 – – – – Other non-tax-deductible costs –1 –11 –1 –14 0 0 0 0 Non-taxable revenues 9 172 9 163 21 392 21 235 Tax effects resulting from non-capitalized tax loss carryforwards for the year –2 –43 0 –8 – – – – Tax effects resulting from utilization of previously non-capitalized tax loss carryforwards 1 11 2 28 – – – – Tax effects resulting from changed measurement of tax loss carryforwards – – – – – – – – Tax effects resulting from limitation rule for interest deductions –1 –22 –1 –16 0 4 0 1 Tax attributable to prior years 0 –4 0 6 – – 0 0 Other 0 0 0 –5 0 3 0 0 Average tax rate/recognized tax –16 –292 –13 –230 0 3 0 3 Current tax has been calculated based on the nominal tax prevailing in the country concerned. NCC follows the OECD Pillar Two model rules, which means the company is subject to international tax rules to ensure fair taxation. NCC applies the excep- tion from recognizing and disclosing information on deferred tax assets and deferred tax liabilities that are related to the Pillar Two income taxes. As far as possible, NCC also applies the temporary exemptions. Due to the fact that the Property Development business area conducts share sales, NCC prepares Global Anti-Base Erosion (GloBE) calculations in the countries where tax-free share sales are conducted to determine the effective tax rate. For 2024, the result of this calculation was that the effective tax rate in Sweden exceeded 15 percent, which means that NCC meets the international requirements for fair taxation. Change in deferred tax in temporary differences and tax loss carryforwards Group Parent Company 2024 2023 2024 2023 Opening carrying amount –305 –379 33 29 Sale / merger of subsidiaries 2 29 – – Tax items attributable to cash flow hedges recognized in Other com- prehensive income –7 32 – – Recognized tax on profit for the year –172 –118 3 3 Tax item, revaluation of defined-benefit pension plans recognized in other comprehensive income –106 168 – – Translation differences –19 –32 – – Other 0 –5 – – Closing carrying amount –607 –305 35 33 Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 104Financial statements
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Notes Assets Liabilities Net Group 2024 2023 2024 2023 2024 2023 Tangible fixed assets 71 65 – – 71 65 Right-of-use assets – – –321 –302 –321 –302 Financial fixed assets 13 1 – – 13 1 Non-completed projects – – –1,264 –1,149 –1,264 –1,149 Properties held for future development – 13 –8 – –8 13 Untaxed reserves – – –216 –221 –216 –221 Provisions 238 210 – – 238 210 Lease liabilities 350 332 – – 350 332 Personnel benefits/Pension provisions – 115 –19 – –19 115 Loss carryforwards1) 501 576 – – 501 576 Other 47 55 – – 47 55 Deferred tax assets/deferred tax liabilities 1,220 1,367 –1,827 –1,672 –607 –305 Offsetting –523 –447 523 447 – – Net deferred tax assets/tax liabilities 697 920 –1,304 –1,225 –607 –305 1) Of the Group’s deferred tax assets concerning loss carryforwards totaling SEK 501 M (576), SEK 447 M (558) pertains to operations in Norway. Accumulated non-capitalized deferred tax assets on tax loss carryforwards amounted to SEK 77 M (42) of which SEK 74 M (39) are attributable to operations in Norway. Assets Liabilities Net Parent Company 2024 2023 2024 2023 2024 2023 Provisions 35 31 – – 35 31 Other – 2 – – – 2 Deferred tax assets / tax liabilities, net 35 33 – – 35 33 Temporary differences between the carrying amount and the taxable value of directly owned participations do not normally arise for participations held as business assets in Swedish companies. Nor do they arise from other participa- tions owned by NCC companies in other countries. Accounting policies Income taxes comprise current tax and deferred tax. Taxes are recognized in profit or loss, except when the underlying transactions are recognized in other comprehensive income, whereby the relating tax effects are also recognized in other comprehensive income. Current tax is tax that is to be paid or received during the current fiscal year. This also includes adjustments of current tax attributable to prior periods. Deferred tax is recognized on the basis of tempo- rary differences between recognized and taxable values of assets and liabilities and for carry-forward of unused tax losses. Deferred tax assets and liabilities are calculated based on the tax rate deter- mined for the following year in each particular country. When changes occur in tax rates, the change is recognized in net profit for the year in the consolidated financial statements or in other comprehensive income for the tax items included there. In the Parent Company, untaxed reserves are recognized that consist of the taxable temporary difference arising because of the relationship between reporting and taxation in the legal entity. Untaxed reserves are recognized gross in the balance sheet and the change is recognized gross in profit or loss, as an appropriation. Group contributions received and granted are recognized in the Parent Company’s profit or loss as appropriations. Important estimates and assessments Valuation of tax losses The utilization of deferred tax assets is dependent on future taxable profits. The majority of the Group’s deferred tax assets concerning loss carryforwards relate to the Norwegian operations. The loss carryforwards in Norway may be utilized against future profits, with no time limitations, and NCC’s assessment is that there are factors that convincingly indicate that this will be the case. Several assumptions and estimates are made concerning future conditions, which are taken into account when calculating future cash flows that form the basis for assessing the Norwegian operations. Changes to key assumptions may impact the value of tax losses. The assessment has been made on the basis of the future cash flows of the Norwegian operations, taking into account the market’s yield requirement and the unit’s risk profile. The calculations are based on assessments by corporate man- agement, which NCC considers reasonable given the best available information on the balance sheet date. Historically, the operations have turned a profit and the losses of recent years have primarily arisen due to impairment of a few projects. A sensitivity analysis of key assumptions (volume) has not resulted in a change in the estimate of future taxable profits within a reasonable period of time. Note 24 Properties classified as current assets Group, 2024 Properties held for future development Ongoing property projects Completed property projects Total property projects1) Participations in associated companies Total Recognized cost on January 1 1,374 3,806 4,986 10,166 201 10,367 Investments2) 26 1,220 164 1,410 38 1,448 Increase through acquisition of operations 356 – – 356 – 356 Divestment and scrappage –7 –359 –3,183 –3,549 – –3,549 Discontinued operations 0 –343 343 0 – 0 Reclassifications –356 –3,589 3,945 –0 – 0 Translation differences during the year 31 26 48 105 –1 103 Recognized cost on December 31 1,424 762 6,302 8,487 238 8,725 Accumulated impairment losses on January 1 –109 –12 – –121 – –121 Translation differences during the year –1 0 0 –1 – –1 Accumulated impairment losses on December 31 –110 –13 0 –122 – –122 Residual value on January 1 1,265 3,794 4,986 10,045 201 10,246 Residual value on December 31 1,314 749 6,302 8,365 238 8,603 1) Pertains primarily to properties classified as current assets recognized in NCC Property Development. 2) Capitalized interest for ongoing property projects totaled SEK 131 M during the year. The interest rate on these loans during the year was 5.5–5.9 percent. Note 23 cont’d. NCC 2024 105Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Accounting policies Properties classified as current assets are held for development and sale as part of operations. The Group’s property holdings classified as property projects are recognized continuously in the balance sheet according to IAS 2, Inventories as the intention is to sell the properties on completion. The property holdings are measured at the lower of cost and net realizable value, which is the selling value (market value) less estimated costs for completion and direct selling costs. Cost includes a reasonable share of indirect costs. Property projects are defined as properties held for development and sale in NCC Property Development. Property projects Property projects within NCC Property Development are recognized divided as follows: • Properties held for future development • Ongoing property projects • Completed property projects Properties held for future development Properties held for future development consist of NCC’s holding of land and development rights intended for future property development and sale. Prop- erties comprising leased buildings are classified as properties held for future development in cases where the intention is to demolish or refurbish the build- ings. Any rental revenues that may accrue from these properties are recognized continuously in profit or loss until letting ceases. Ongoing property projects Properties held for future development are classified as ongoing property projects when a definitive decision is taken about a building start and when the activities required in order to complete the property project have been initiated. An actual building start is not necessary. Ongoing property projects include properties under construction, extension or refurbishment. Ongoing property projects are classified as completed property projects when the property is ready for occupancy, excluding tenant adaptations in those properties whose premises are not fully let. The reclassification is effective not later than the date of approved final inspection. If a project is divided into phases, each phase must be reclassified separately. The smallest unit that can be classified is an entire building that can be sold separately. Borrowing costs attributable to qualifying assets are capitalized as a portion of the capitalized asset’s cost when the borrowing costs total a significant amount. A qualifying asset is an asset that takes a significant period of time to complete for its intended use or sale, which in NCC’s case is more than a year. For NCC, the capitalization of borrowing costs is most relevant in the construc- tion of property projects. Completed property projects Completed property projects can only be derecognized from the balance sheet due to a sale. Valuation of commercial property projects The cost of commercial property projects includes expenditure for the acquisi- tion of land and for building design/property development, as well as expenditure for construction, extension or refurbishment. Expenditure for borrowing costs related to ongoing projects is capitalized. Other borrowing costs are expensed continuously. Property development means that the input of the developer – NCC Property Development – is concentrated to the activities that do not pertain to actual construction. These activities are evaluation of project concepts, acquisition of land, work on the detailed development plan, project development, letting and sale. These activities are conducted by the company’s own employ- ees and by external architects and other technical consultants. Development expenditure is capitalized when it pertains to land or properties owned by NCC or over which it has control. Properties held for future development that are included in the project port- folio, meaning ones that are held for development and sale, are normally valued in the same manner as ongoing projects, as described above. Other properties held for future development are valued on the basis of a value per square meter of development right or a value per square meter of land. Important estimates and assessments Valuation of properties classified as current assets The assessment of net realizable value is based on a series of assumptions such as sales prices, production costs, the price of land, rent levels and yield requirements plus the possible timing of production start and/or sale. NCC continuously monitors developments in the market and tests the assumptions made on an ongoing basis. A change in the assumptions made could give rise to impairment requirement. A reasonable change in material assumptions has not resulted in a need for impairment during the year. Group, 2023 Properties held for future development Ongoing property projects Completed property projects Total property projects1) Participations in associated companies Total Recognized cost on January 1 1,326 7,184 103 8,613 74 8,687 Investments2) 167 2,205 16 2,388 132 2,520 Increase through acquisition of operations 27 – 9 36 – 36 Divestment and scrappage –94 –608 0 –703 – –703 Reclassifications –38 –4,969 4,865 –141 – –141 Translation differences during the year –13 –6 –7 –27 –5 –32 Recognized cost on December 31 1,374 3,806 4,986 10,166 201 10,367 Accumulated impairment losses on January 1 –147 –12 –103 –262 – –262 Reclassifications 38 – 104 141 – 141 Accumulated impairment losses on December 31 –109 –12 0 –121 – –121 Residual value on January 1 1,179 7,171 – 8,350 74 8,424 Residual value on December 31 1,265 3,794 4,986 10,045 201 10,246 1) Pertains primarily to properties classified as current assets recognized in NCC Property Development. 2) Capitalized interest for ongoing property projects totaled SEK 206 M during the year. The interest rate on these loans during the year was 3.8–6.0 percent. For further information concerning ongoing property projects, refer to the property table in the Report of the Board of Directors. Note 24 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 106Financial statements
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Notes Note 25 Inventory Group 2024 2023 Stone materials 670 710 Building materials 70 72 Other 311 339 Total 1,052 1,120 Accounting policies Inventory is measured at the lower of cost and net realizable value according to IAS 2 Inventories. Cost is established using the first-in-first-out method (FIFO). Note 26 Share capital Changes in share capital Number of shares Share capital, SEK M 2023 End of year 99,760,956 867 2024 End of year 99,760,956 867 Series B treasury shares Number of shares 2022 End of year 10,843,582 2023 Withdrawal –8,674,866 2023 Allotment –69,495 2023 End of year 2,099,221 2024 Allotment –130,632 2024 End of year 1,968,589 The share capital is divided into 99,760,956 shares with a quotient value of SEK 8.70 each. Series A shares carry ten voting rights each and Series B shares one voting right. A specification of changes in equity is presented in Note 14. Series A and B shares, excluding shares held in treasury Series A shares Series B shares Total Series A and Series B shares No. of shares on Dec. 31, 2022 12,914,123 84,678,117 97,592,240 Conversion of Series A shares to Series B shares –1,365,270 1,365,270 – Distribution of shares to partici- pants in incentive programs – 69,495 69,495 No. of shares on Dec. 31, 2023 11,548,853 86,112,882 97,661,735 Conversion of Series A shares to Series B shares –4,751,186 4,751,186 – Distribution of shares to partici- pants in incentive programs – 130,632 130,632 No. of shares on Dec. 31, 2024 6,797,667 90,994,700 97,792,367 Number of voting rights 67,976,670 90,994,700 158,971,370 Percentage of voting rights, % 43 57 100 Percentage of share capital, % 7 93 100 Closing price, Dec. 31, 2024 162.00 162.40 Market capitalization, SEK M 1,101 14,778 15,879 Earnings per share before and after dilution 2024 2023 Net profit for the year attributable to Parent Company shareholders, SEK M 1,571 1,573 Weighted average number of outstanding common shares during the year, millions 97.7 97.6 Earnings per share before dilution, SEK 16.08 16.11 Weighted average number of outstanding common shares after dilution, millions 97.7 97.6 Earnings per share after dilution, SEK 16.08 16.11 Accounting policies Repurchase of shares The repurchase of shares, including repurchase costs, is charged directly against profit brought forward. Similarly, the sale of such shares results in an increase in profit brought forward. Earnings per share Earnings per share has been calculated by dividing net profit for the year in the Group attributable to Parent Company shareholders with a weighted number of shares outstanding during the reporting period. When calculating earnings per share after dilution, the average number of shares outstanding during the period is adjusted for all potential dilutive shares. Shares held in treasury are not included in the calculation of earnings per share. NCC takes account on an ongoing basis of the dilutive effect of the Performance-based Share Program in the calculation, though this had no material impact in 2024 or 2023. Note 27 Interest-bearing liabilities Group 2024 2023 Long-term liabilities Liabilities to credit institutions and investors 2,350 2,100 Lease liabilities 964 906 Other long-term loans 0 0 Total 3,314 3,006 Current liabilities Current portion of liabilities to credit institutions and investors 1,266 1,808 Liabilities to associated companies 1 6 Lease liabilities, current portion 499 473 Other current liabilities 2 1 Total 1,769 2,289 Total interest-bearing liabilities 5,082 5,295 Interest-bearing long-term liabilities pertaining to pensions is recognized in the balance sheet under Provisions for pensions and similar obligations. Parent Company 2024 2023 Current liabilities Liabilities to Group companies 151 380 Total interest-bearing liabilities 151 380 For repayment schedules and terms and conditions, refer to Note 36 Financial instruments and financial risk management. NCC 2024 107Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Note 28 Other provisions Group, 2024 Guarantees Other Total On January 1 1,147 1,071 2,218 Provisions during the year 287 475 762 Amount utilized during the year –223 –143 –366 Reversed, unutilized provisions –25 –163 –188 Translation differences 13 10 23 On December 31 1,200 1,250 2,450 Group, 2023 Guarantees Other Total On January 1 1,276 1,212 2,488 Provisions during the year 322 396 718 Amount utilized during the year –315 –382 –697 Reversed, unutilized provisions –124 –145 –270 Reclassifications – 1 1 Translation differences –11 –11 –22 On December 31 1,147 1,071 2,218 Parent Company, 2024 Guarantees Other Total On January 1 – 6 6 Reversed, unutilized provisions – –6 –6 On December 31 – – – Parent Company, 2023 Guarantees Other Total On January 1 – 6 6 On December 31 – 6 6 Specification of other provisions and guarantees Group Parent Company 2024 2023 2024 2023 Restoration reserve 277 262 – – Restructuring costs 2 – – – Other 971 809 – 6 Other provisions 1,250 1,071 – 6 Guarantee commitments 1,200 1,147 – – Total 2,450 2,218 – 6 Accounting policies Provisions differ from other liabilities in that there is a degree of uncertainty concerning when payment will occur or concerning the size of the amount required to settle the provision. Provisions are recognized in the balance sheet when a legal or informal commitment exists due to an event that has occurred, it is probable that an outflow of resources will be required to settle the commit- ment and the amount can be estimated reliably. Guarantee commitments Guarantee provisions pertain to anticipated future expenses. To estimate a future guarantee cost, individual assessments are made from project to project. Standard percentage rates are used for the calculation of the size of the future cost, whereby the standard percentage is varied depending on the nature of the project. In order to eliminate various risks, a provision for guarantee claims is posted at the rate at which the risks are expected to arise after having been identified. Initially, the guarantee cost is posted for each project. This means that the cost can be recognized and reported gradually for each project. The longest maturity for a guarantee provision is ten years, while most of them have matur- ities of approximately two to three years. Restoration reserve Provisions for restoration costs are made when such commitments arise and are designed to cover future costs. Provisions are made for that portion of restoration that arises for start-up of a quarry and construction of plants at pits and quarries, and on a continuous basis when activities are related to additional extractions at pits and quarries. The provisions are posted continuously, once the future costs have been identified. Accordingly, the reserves are utilized at the same rate as restoration occurs. Other provisions The provisions comprise additional costs plus uncertainty in projects as well as outstanding claims and legal matters. Some provisions are intended to cover project losses arising in operations and is utilized gradually as the project is worked up. A restructuring provision is recognized when a detailed or formal restructuring plan has been established and the restructuring has either started or been announced publicly. No provisions are posted for future operating expenses. Important estimates and assessments Guarantee commitments Provisions for future costs arising due to guarantee commitments are rec- ognized at the estimated amounts required to settle the commitment on the balance sheet date. This estimate is based on calculations, assessments and experience from previous transactions. Restoration reserve Provisions for future costs of restoring pits and quarries are associated with uncertainties and actual costs may differ from these estimates and assessments. Claims and legal procedures In its continuous business operations, NCC occasionally becomes a party to claims or legal procedures. Within the framework of particularly its contract- ing operations, NCC makes what it considers to be justifiable claims against cli- ents but the clients may partially or fully contest such claims. In many cases, the client may make counterclaims. In other cases, clients may direct claims against NCC for, inter alia, alleged shortcomings in NCC’s execution of the ordered work. The aggregated amounts may be material. NCC’s financial statements reflect NCC’s best assessment of the outcome but it cannot be excluded that the final outcome could in certain cases differ significantly from assessments made. Operations subject to permit obligations NCC conducts operations subject to permit obligations in the form of, for example, asphalt and gravel pit operations, plants and landfills. NCC occasionally engages in a dialogue with the authorities concerned compliance with the terms and conditions for conducting the operations. Such matters are handled within the framework of the operating activities. In the unlikely event that NCC is found to have breached the applicable permits without being able to take necessary actions, this could result in material costs. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 108Financial statements
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Notes Note 29 Pensions Pensions are recognized in accordance with IAS 19 Employee Benefits. The NCC Group has defined-benefit pension plans in Sweden, as well as two very minor pension arrangements in Norway. In Sweden, NCC’s pension obligations largely comprise the ITP2 plan that covers employees born prior to 1979. The plan provides retirement pension based on the final salary and is funded in NCC Group’s Pension Foundation. The number of paid-up holders and pensioners is about 80 percent of the total portfolio. In addition, there are three small defined-benefit plans, all of which are blocked from new vesting. All of these plans are funded in the NCC Group’s Pension Foundation. The Board of Directors of NCC Group’s Pension Foundation consists of an equal number of representatives for the NCC Group and the employees covered by the ITP2 plan. The Board holds meetings six times per year and addresses the Foundation’s quarterly accounts, investment strategy, reference portfolio and sensitivity analyses. Under certain conditions, the NCC Group can request compensation from the Foundation for pension payments. There are no mini- mum funding requirements for the ITP2 plan. The risks associated with the Swedish pension plans are: • Interest rate risk: with lower interest rates and the resulting lower discount rate, the debt will increase • Salary increase risk: the debt will increase with higher pay rises • Volatility of assets: the portfolio contains mostly share funds, whose prices can rise and fall sharply in the short term, but the long-term aim of the portfolio is to generate the best possible return • Life expectancy assumption: the longer the individuals covered by the plan live, the higher the obligation Pension cost Group 2024 2023 Defined-benefit plans: Current service cost –145 –127 Interest expense –264 –255 Estimated return on plan assets 248 257 Total cost of defined-benefit plans –160 –124 Total cost of defined-contribution plans –919 –854 Total cost of post-employment remuneration excluding special payroll tax –1,079 –978 Current service cost is recognized in operating profit and in net financial items. The estimated return on plan assets is recognized in net financial items. NCC secures obligations for disability pensions and family pensions for white-collar employees in Sweden through insurance in Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 10, Recognition of ITP2 Pension Plan financed through insurance in Alecta, this constitutes a multi-employer defined-benefit plan. For the 2024 fiscal year, NCC did not have access to the type of information required for recognizing its proportional share of the plan’s obligation, plan assets and costs, which makes it impossible to recognize these plans as defined-benefit plans. Accordingly, the ITP (individual supplementary pension) plans that are secured through insurance in Alecta are recognized as a defined-contribution plan. The NCC Group’s share of the total savings premium for ITP2 in Alecta is 0.11 percent (0.11). The collective solvency rate consists of the market value of Alecta’s assets as a percentage of its insurance obligations, calculated in accordance with Alecta’s actuarial accounting methods and assumptions, which do not comply with IAS 19. The collective solvency rate is normally allowed to vary between 125 and 170 percent. If Alecta’s collective solvency rate falls below 125 percent or exceeds 170 percent, measures must be taken to create conditions for returning the solvency rate to the normal interval. In the event of low solvency, one measure could be to raise the agreed price for new subscriptions and increase existing benefits. In the event of high solvency, one measure can be to introduce premium reductions. At the end of 2024, Alecta’s surplus in the form of its collective solvency rate was 162 percent (157). Defined-benefit obligations and the value of plan assets Group 2024 2023 Obligations secured in full or in part in funds: Present value of defined-benefit obligations 7,991 7,746 Fair value of plan assets 8,064 7,296 Net value of obligations funded in full or in part –74 449 Special payroll tax/employer contributions –20 107 Net amount in balance sheet (obligation +, asset –) –94 556 Net amount is recognized in the following balance sheet items: Pension receivable/provisions for pensions and similar obligations –94 556 Net amount in balance sheet (obligation +, asset –) –94 556 Net amount is distributed among plans in the following countries: Sweden –102 547 Norway 9 9 Net amount in balance sheet (obligation +, asset –) –94 556 Change in obligation for defined-benefit plans Group 2024 2023 Obligation for defined- benefit plans on January 1 7,746 6,616 Remuneration paid –274 –253 Current service cost plus interest expense 408 381 Actuarial gains and losses on changed experience-based assumptions –7 419 Actuarial gains and losses on changed financial assumptions 118 583 Obligation for defined-benefit plans on December 31 7,991 7,745 The weighted average maturity for the plans is 20 years (20). Change in plan assets Group 2024 2023 Fair value of plan assets on January 1 7,296 6,669 Compensation –6 –7 Estimated return 248 257 Funds contributed – 34 Actuarial gains and losses 526 344 Fair value of plan assets on December 31 8,064 7,296 The plan assets comprise: Swedish stock market, listed 1,158 1,040 International stock market, listed 2,786 2,151 Hedge funds, listed 456 620 Interest-bearing securities, listed 3,211 3,055 Interest-bearing securities, unlisted 454 430 Fair value of plan assets on December 31 8,064 7,296 There is no effect of the lowest funding requirements or asset ceiling. Actuarial assumptions, weighted average value Group 2024 2023 Discount rate, % 3.30 3.40 Future salary increases, % 3.00 3.00 Anticipated inflation, % 2.00 2.00 Life expectancy assumption at 65 years, years 22.4 22.4 NCC 2024 109Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Sensitivity analysis; percentage impact on the size of the assumption, at December 31 Group Increase, % Decrease, % Discount rate, 0.5 percentage points change –7.1 7.9 Future salary increases, 0.5 percentage points change 2.1 –1.9 Anticipated inflation, 0.5 percentage points change 6.5 –6.0 Life expectancy assumption at 65 years, 1 year change 3.7 –3.7 The above sensitivity analysis does not constitute a forecast from the company but only a mathematical calculation. The sensitivity analysis is based on a change in an assumption, while all other assumptions remain constant. In practice, it is not probable that this will occur and any changes in the assump- tions could be correlated. When calculating the sensitivity analysis, the same method is used as in the calculation of the pension receivable/pension debt in the balance sheet. The Group estimates that SEK 0 M (30) will be paid in 2024 to funded and unfunded defined-benefit plans. The indexation decided by Alecta of 1.6 percent (6.48) for 2025 was taken into account in the year’s measurement in accordance with IAS 19 and led to an increase of approximately 0.3 percent (3) in the obligation. Pension costs Parent Company 2024 2023 Proprietary pension payments Proprietary costs, excluding interest expense –19 –29 Interest expense –6 –5 Cost of proprietary pension payments –25 –34 Pension payments through insurance Insurance premiums –26 –22 Subtotal –51 –56 Special payroll tax on pension costs –6 –5 Pension costs during the year –57 –61 Capital value of pension obligations Parent Company 2024 2023 Capital value of pension obligations pertaining to proprietary pension payments on January 1 255 230 Cost, excluding interest expense, charged against profit 19 29 Interest expense 6 5 Pension payments –9 –9 Capital value of pension obligations pertaining to proprietary pension payments on December 31 271 255 Fair value of especially detached assets Parent Company 2024 2023 Fair value of especially detached assets on January 1 274 268 Return on especially detached assets 15 5 Fair value of especially detached assets on December 31 289 274 Fair value of especially detached assets distributed as: Shares 141 120 Funds 16 23 Interest-bearing receivables 131 131 Fair value of especially detached assets on December 31 289 274 The pension foundations have no financial instruments issued by NCC AB or assets used by the company. Net pension obligations Parent Company 2024 2023 Capital value of pension obligations pertaining to proprietary pension payments on December 31 271 255 Fair value of especially detached assets on December 31 289 274 Surplus on especially detached assets 18 19 Net recognized pension obligations 0 0 Assumptions for defined-benefit obligations Parent Company 2024 2023 Discount rate on December 31 3.30 3.40 The pension calculations are based on the salary and pension level on the balance sheet date. Accounting policies NCC differentiates between defined-contribution pension plans and defined-benefit pension plans. Defined-contribution plans are pension plans for which the company pays fixed fees to a separate legal entity and does not assume any obligations for payments of additional fees, even if the legal entity lacks sufficient assets to pay benefits accrued for employment up to and including the balance sheet date. Other pension plans are defined-benefit plans. Country Defined-benefit pension obligations Defined-contribution pension obligations Sweden X X Denmark X Finland X Norway X X Other countries X There are several defined-contribution and defined-benefit pension plans in the Group, some of which are secured through assets in dedicated foundations or similar funds. The pension plans are financed through payments made by the various Group companies. Calculations of defined-benefit pension plans are based on the Projected Unit Credit Method, whereby each term of employment is considered to create a future unit of the total final obligation. Each unit is calculated separately and they jointly constitute the total obligation on the bal- ance sheet date. The intention of the principle is to expense pension payments straight-line over the term of employment. The calculation is made annually by independent actuaries. When the way pension costs are established in the legal entity and in the Group differs, a provision or receivable for Swedish pension plans is recognized for the payroll tax based on this difference. Accordingly, the value of the defined-benefit liability is the present value of anticipated future dis- bursements using a discount rate that corresponds to the interest stated above. The interest rate on first-class housing bonds is used as the basis for calculating the discount rate for Swedish pension plans. Swedish defined-benefit pension obligations are funded in the NCC Group’s Pension Foundation. For funded plans, the fair value of plan assets reduces the computed obligation. Changes in plan assets and obligations stemming from experience-based adjustments and/or changes in actuarial assumptions, known as actuarial gains and losses, are recognized directly in other comprehensive income in the period in which they arise. This reporting method is applied for all identified defined-benefit pension plans in the Group. The Group’s disbursements related to defined-contribution pension plans are recognized as an expense during the period in which the employees perform the services covered by the fee. The Parent Company is covered by the ITP plan, which does not require any payments by the employees. The difference, compared with the principles applied by the Group for recognizing pension debt, pertains mainly to how the discount rate is determined, the fact that the calculation of defined-benefit obligations is based on the current salary level without assuming future salary increases and that all actuarial gains and losses are recognized in profit or loss when they arise. Important estimates and assessments Pension obligations Carrying amounts are affected by changes in the actuarial assumptions that form the basis for calculations of the plan assets and pension obligations. These actuarial assumptions, and a sensitivity analysis, are described above. Note 29 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 110Financial statements
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Notes Note 30 Other liabilities Group 2024 2023 Other long-term liabilities Derivative instruments held for hedging 1 2 Other long-term liabilities 16 11 Total 17 13 Other current liabilities Advances from customers 206 107 Derivative instruments held for hedging 22 110 Other current liabilities 788 880 Total 1,016 1,096 Note 31 Accrued expenses and deferred income Group Parent Company 2024 2023 2024 2023 Payroll-related costs 1,960 1,869 63 60 Financial expenses 39 24 – – Prepaid rental revenues 21 27 – – Prepaid revenues from rental guarantees 2 16 – – Project-related costs 874 910 – – Administrative costs 35 41 12 10 Operating and selling costs 503 404 – – Other expenses 118 105 – – Total 3,552 3,396 75 71 Note 32 Related party transactions The companies classified as being closely related to the NCC Group are primarily NCC’s subsidiaries, associated companies and joint arrangements. The Parent Company has a related party relationship with its subsidiaries; refer to Note 17, Participations in Group companies. For information on NCC’s senior executives, refer to Note 4, Number of employees, personnel expenses and remuneration of senior executives. Transactions involving NCC’s associated companies and joint operations were of a production nature. A model based on the arm’s length principle is applied to the pricing of trans- actions between the Group’s entities. Group 2024 2023 Transactions with associated companies and joint arrangements Sales to associated companies and joint arrangements 34 38 Purchases from associated companies and joint arrangements –16 –17 Long-term receivables from associated companies and joint arrangements 45 39 Current receivables from associated companies and joint arrangements 9 5 Interest-bearing liabilities to associated companies and joint arrangements 1 6 Operating liabilities to associated companies and joint arrangements 3 1 Guarantee obligations for associated companies and joint arrangements 142 132 Parent Company 2024 2023 Transactions with Group companies Sales to Group companies 145 172 Purchases from Group companies –35 –24 Interest income from Group companies 34 16 Interest expense to Group companies –16 –9 Dividend from Group companies 1,888 1,125 Current receivables from Group companies 1,353 447 Interest-bearing liabilities to Group companies 151 380 Operating liabilities to Group companies 7 7 Sureties and guarantee obligations to Group companies 26,260 25,142 Note 33 Leasing The NCC Group recognizes leases in accordance to IFRS 16 Leases. The Group’s leases primarily pertain to the framework leases held by the Group concerning cars, trucks, heavy production machinery, owner-occupied properties, such as leased commercial premises, and site leaseholds/land leases. Group 2024 2023 Income statement Depreciation of right-of-use assets –631 –588 Interest expense for lease liabilities –65 –58 Total costs, capitalized leases –696 –647 Low-value and short-term leases –1,707 –1,688 Total costs, non-capitalized leases –1,707 –1,688 Total costs, leases –2,403 –2,335 Cash flow, leases1) –697 –646 1) Corresponding amortization of lease debt. Group – Lease liabilities 2024 2023 Current lease liabilities 499 473 Long-term lease liabilities 964 906 Total lease liabilities 1,463 1,380 For an analysis of the lease liability’s maturities, refer to Note 36. Group 2024 2023 Lessor Future lease payments Non-discounted future lease payments that expire: Within one year 285 239 Later than one year but earlier than five years 556 203 that expire after five years 531 – Total future non-discounted lease payments 1,372 442 Parent Company 2024 2023 Lessee Future lease payments Non-discounted leases that expire: Within one year 2 2 Later than one year but earlier than five years 1 3 Total future non-discounted lease payments 3 5 The Parent Company’s expensed lease payments amounted to SEK 14 M (12). NCC 2024 111Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Right-of-use assets 2024 Owner-occupied properties Machinery & equipment Land leases Total Recognized cost on January 1 1,605 1,189 3 2,797 Increase in leases during the year 220 517 1 737 Divestment and scrappage –173 –401 0 –574 Translation differences during the year 10 7 0 16 Recognized cost on December 31 1,662 1,311 3 2,976 Accumulated depreciation on January 1 –808 –686 –2 –1,496 Divestment and scrappage 173 387 – 560 Depreciation during the year –271 –359 – –631 Translation differences during the year –8 –5 – –12 Accumulated depreciation on December 31 –914 –662 –2 –1,579 Residual value on January 1 797 503 1 1,301 Residual value on December 31 747 649 1 1,397 2023 Owner-occupied properties Machinery & equipment Land leases Total Recognized cost on January 1 1,472 1,398 4 2,874 Increase in leases during the year 214 289 –1 502 Divestment and scrappage –63 –475 0 –537 Translation differences during the year –19 –23 0 –42 Recognized cost on December 31 1,605 1,189 3 2,797 Accumulated depreciation on January 1 –608 –842 –2 –1,450 Divestment and scrappage 63 461 – 524 Depreciation during the year –270 –318 – –588 Translation differences during the year 7 14 – 21 Accumulated depreciation on December 31 –808 –686 –2 –1,496 Residual value on January 1 864 555 2 1,422 Residual value on December 31 797 503 1 1,301 Accounting policies NCC as a lessee IFRS 16 Leases is solely applied in the consolidated financial statements and NCC, in accordance with RFR 2, has elected not to apply IFRS 16 for NCC AB. All lease payments in NCC AB are expensed continuously. The Group’s leases are recognized as right-of-use assets and the correspond- ing lease liability as of the date the leased asset becomes available for use by the Group. Assets and liabilities arising from leases are initially recognized at present value. Lease liabilities include the present value of lease payments in the form of fixed charges, and variable charges linked to indexes. Lease payments that will be defrayed for reasonably certain extension options are also included in the liability measurement. Right-of-use assets are measured at cost and include the amount at which the lease liability was originally measured as well as lease payments paid on or before the commencement date. Where appropriate, any initial direct fees are included, as well as an estimation of costs for dismantling and disposal of the asset. Exceptions are leases with a term of less than 12 months and low-value leases, less than SEK 250,000, which are thus expensed continuously. The right-of-use asset represents a right to use the underlying asset and the lease liability represents a commitment to pay lease payments. NCC has right-of-use assets with associated lease liability for vehicles, heavy production machinery, leased premises and site leaseholds/land leases. Right-of-use assets are recognized under tangible fixed assets and current assets, respectively. The associated lease liability is included in current and long-term interest-bearing liabilities. Right-of-use assets are depreciated over the term of the lease. The costs for these capitalized leases are recognized as depreciation and interest expense, respectively. The lease payment is divided into an interest component and a amortization component. When discounting future lease payments for most of the vehicles and heavy machinery leased by the Group, NCC uses the interest rate implicit in each lease as the discount rate. In respect of other lease payments, such as leased commercial premises and site leaseholds/land leases, the respective subsidi- ary’s incremental borrowing rate is used as the discount rate. The incremental borrowing rate of the individual subsidiary is based on the legal entity’s financial strength, the country and the term of the lease in question. NCC as a lessor A lessor must classify its leases as either operating or finance leases. A finance lease is a lease under which the financial risks and advantages associated with ownership of an asset are transferred in all significant respects from the lessor to the lessee. An operating lease is a lease that is not a finance lease. NCC as a lessor only has operating leases and income from these are recognized as revenue continuously. Sale-and-leaseback A sale-and-leaseback transaction means that NCC as the seller transfers an asset to a buyer at the same time as NCC as a lessee enters into a lease with the buyer. This occurs, for example, when NCC sells an office project and simultane- ously signs a lease covering all or parts of the property. When NCC’s sale fulfills the requirements for profit recognition according to IFRS 15, NCC as the seller and lessee must assess the value of the right-of-use asset attributable to the lease at the share of the carrying amount on the date of sale that accrues to the right of use retained by NCC. This also means that NCC can only recognize a capital gain on that part of the right of use that is not retained by NCC. Important estimates and assessments Measurement of leases When measuring leases according to IFRS 16, NCC uses a discount rate, either for the measurement of vehicles and heavy machinery or the interest rate implicit in the respective lease, or for leased premises and site leaseholds/land leases, the incremental borrowing rate of the respective subsidiary. Note 33 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 112Financial statements
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Notes Note 34 Pledged assets and contingent liabilities Group Parent Company 2024 2023 2024 2023 Pledged assets For own liabilities: Assets subject to liens, etc. 627 422 – – Total 627 422 – – Other pledged assets 9 9 Total assets pledged 636 431 – – Contingent liabilities Own contingent liabilities: Sureties on behalf of Group companies 26,254 25,136 Other sureties and contingent liabilities1) 2,987 2,296 6 5 Held jointly with other companies: Liabilities in consortiums, partner- ships and limited partnerships 142 132 – – Total contingent liabilities2) 3,129 2,428 26,260 25,142 1) As of 2024, guarantees issued in connection with the establishment of share transfer agreements within Property Development are recognized in surety and guarantee obligations. The comparative amount has been adjusted. 2) Sureties for former wholly owned subsidiaries of NCC AB in the Bonava Group have not been eliminated. Sureties recognized in the comparative period as outstanding in NCC AB on behalf of Bonava companies were included in this item (for the Group 0 (0) and for the Parent Company 0 (0)). All commitments to Bonava had been completed as per June 2023. Pledged assets Assets subject to liens Primarily pertains to leased assets in the form of cars and trucks. Contingent liabilities Sureties on behalf of Group companies Sureties on behalf of Group companies have mainly been issued as collateral for: • fulfillment of construction contracts • utilized guarantee limits with banks and insurance companies • NCC Treasury AB’s borrowing • NCC’s pension debt Accounting policies Pledged assets NCC recognizes collateral pledged for company or Group liabilities and/or commitments as pledged assets. These may be liabilities, provisions included in the balance sheet or commitments not recognized in the balance sheet. The collateral may be related to assets entered in the balance sheet or mortgages. Assets are recognized at the carrying amount and mortgages at nominal value. Shares in Group companies are recognized at their value in the Group. Note 35 Cash flow statement Cash and cash equivalents Group 2024 2023 Cash and bank balances 2,910 707 Total cash and cash equivalents 2,910 707 Parent Company 2024 2023 Balance in NCC Treasury AB 930 133 Total according to cash flow statement 930 133 Acquisition of fixed assets Group Acquisitions of intangible and tangible fixed assets, excluding assets acquired via finance leases, amounted to SEK 765 M (835) during the year, of which SEK 0 M (0) was financed through loans. Acquisitions of non-controlling interests totaled SEK 0 M (0), of which SEK 0 M (0) had no effect on cash flow. Sales of subsidiaries and non-controlling interests amounted to SEK 0 M (280), of which SEK 0 M (15) had no effect on cash flow. Parent Company Acquisitions of intangible and tangible fixed assets during the year amounted to SEK 0 M (0), of which SEK 0 M (0) was financed through loans. Since the Parent Company has only insignificant amounts of cash and cash equivalents in foreign currency, no exchange rate differences in cash and cash equivalents arose. Disclosures about interest received and paid Group Interest received during the period amounted to SEK 41 M (26). Interest paid during the period amounted to SEK 291 M (188). Parent Company Interest received during the period amounted to SEK 34 M (16). Interest paid during the period amounted to SEK 16 M (9). Cash flow derived from participations in joint operations Group 2024 2023 Operating activities 78 73 Change in working capital –167 –93 Investing activities –11 –24 Financing activities –55 –3 Total cash flow –155 –47 NCC 2024 113Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Changes in financing activities of which non-cash items Group CB 2023 Cash flow Change in leases Interest indexing Exchange rate differences/ other CB 2024 Interest-bearing liabilities 3,916 –282 – – –15 3,619 Interest-bearing receivables –834 –30 – – –51 –915 Lease liabilities 1,380 –697 841 –65 4 1,463 Total 4,462 –1,009 841 –65 –62 4,167 Dividends –781 Cash flow from financing activities –1,790 of which non-cash items Parent Company CB 2023 Cash flow Group contribu- tions Exchange rate differences/ other CB 2024 Interest-bearing liabilities 381 –350 – 123 154 Interest-bearing receivables –166 134 –116 –121 –269 Total 215 –216 –116 2 –115 Dividend 1,107 Cash flow from financing activities 891 of which non-cash items Group CB 2022 Cash flow Change in leases Interest indexing Exchange rate differences/ other CB 2023 Interest-bearing liabilities 2,849 1,070 – – –3 3,916 Interest-bearing receivables –695 –26 – – –113 –834 Lease liabilities 1,507 –646 599 –59 –21 1,380 Total 3,661 399 599 –59 –137 4,462 Dividends –586 Cash flow from financing activities –187 of which non-cash items Parent Company CB 2022 Cash flow Group contribu- tions Exchange rate differences/ other CB 2023 Interest-bearing liabilities 700 –250 – –69 381 Interest-bearing receivables –343 245 –134 66 –166 Total 357 –5 –134 –3 215 Dividend 539 Cash flow from financing activities 534 Trend in net debt Group, SEK M 2024 2023 Net debt, January 1 –4,310 –3,000 Cash flow before financing 3,990 361 Change in lease liability –714 –461 Acquisition/sale of company shares – – Change in pension debt 650 –624 Exchange rate difference in cash and cash equivalents 2 0 Dividend paid –781 –586 Net debt, closing balance –1,164 –4,310 Of which, pension debt 94 –556 Of which, lease liability according to IFRS 16 –1,463 –1,380 Of which, other net cash/net debt 205 –2,374 Other changes in working capital Group SEK M 2024 2023 Increase (–) / Decrease (+) in inventory 75 –46 Increase (–) / Decrease (+) in receivables 527 –1,175 Increase (+) / Decrease (–) in liabilities –958 1,590 Other changes in working capital –356 369 Accounting policies The cash flow statement is prepared using the indirect method, pursuant to IAS 7 Statement of Cash Flows. The recognized cash flow includes only transactions that involve cash payments and disbursements. Cash and cash equivalents Cash and cash equivalents consist of cash, bank balances and short-term investments with a maturity of less than three months at the date of acquisition. Cash and cash equivalents unavailable for use Group 2024 2023 Cash and cash equivalents in joint operations 136 294 Total cash and cash equivalents unavailable for use 136 294 Transactions that had no effect on payments Group 2024 2023 Increase in right-of-use assets, leases 737 503 Note 35 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 114Financial statements
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Notes Note 36 Financial instruments and financial risk management Group Treasury Policy (Principles for risk management) Through its business operations, the Group is exposed to financial risks. These financial risks are defined as refinancing, liquidity, interest rate, exchange rate, credit, counterparty and guarantee capacity risks. NCC’s Group Treasury Policy for managing financial risks is adopted by NCC AB’s Board of Directors and con- stitutes a framework of guidelines and rules in the form of risk mandates and limits for Group Treasury’s activities. Within the NCC Group’s decentralized organization, financial activities are centralized to NCC Group Treasury, partly in order to monitor the Group’s overall financial risk positions, and partly to achieve cost-effectiveness and economies of scale and to accumulate expertise, while protecting Group-wide interests. Within NCC, risks associated with the Group’s interest and exchange rate, credit, refinancing, counterparty, liquidity and price risks associated with oil-based products are managed by NCC’s internal bank, NCC Treasury AB. Price risks associated with electrical products and customer credit risks are handled within each business area. Contractual conditions NCC is subject to a net debt/equity ratio financial covenant associated with committed lines of credit in EUR (in 2023 also SEK), at a counter-value of SEK 3,216 M (5,101). NCC meets the requirements for the financial covenants. Reference rate reform NCC is tracking the transition from IBOR to RFR (risk-free reference rate) and adapting its operations through a flexible work process based on assumptions that can be adjusted on the basis of the changes occurring in the market. Refinancing risk The refinancing risk is defined as the risk that NCC will not be able to obtain financing at a given time or that creditors will have difficulty in meeting their commitments. NCC strives to spread its risk among various sources of financ- ing (market financing programs, bank loans and other loan structures) in order to secure the Group’s long-term access to borrowed capital. NCC’s policy for its refinancing risk is to ensure that NCC’s interest-bearing corporate debt will have a maturity structure that minimizes the Group’s exposure from the perspective of the refinancing risk. The maturities of the debt portfolio must be well-diversified over time. The distribution norm is that the capital maturity period must be at least 18 months. At December 31, the capital maturity period for NCC’s interest-bearing corporate debt of SEK 3,619 M (3,916) was 24 months (18). Maturity structure, loans 1) 2024 2023 Interest-bearing liabilities Matures Amount Proportion, % Amount Proportion, % 2024 – – 1,816 46 2025 1,269 35 1,000 25 2026 600 16 600 15 2027 1,000 28 500 13 2028 – – – – 2029 750 21 – – Total 3,619 100 3,916 100 1) Excluding pension debt and lease liability. NCC has the following market financing programs: Market financing programs Limit Utilized nom SEK M Commercial paper (CP) program in Finland EUR 300 M – Commercial paper (CP) program in Sweden SEK 4,000 M 270 Medium Term Note (MTN) in Sweden1) SEK 5,000 M 3,350 Total 3,620 1) Green bonds of SEK 3,350 M (2,850), of which SEK 2,250 M (1,750) is listed on Nasdaq Stockholm. Market financing programs accounted for 100 percent (100) of NCC’s interest -bearing corporate debt. Liquidity risks The liquidity risk refers to the risk that NCC does not have sufficient payment capacity at a given time, which could adversely impact the Group’s ability to fulfill its payment obligations. To achieve adequate flexibility and cost-effectiveness, while ensuring that future financing requirements are satisfied, the Group Treasury Policy states that the Group’s payment capacity must correspond to at least 7 percent of annual consolidated sales, with at least 5 percent of this in the form of unutilized committed lines of credit. Payment capacity is defined as the Group’s cash and cash equivalents, short-term investments and unutilized committed lines of credit, less market financing programs with a remaining maturity of less than three months. At the end of the year, the volume of unuti- lized committed lines of credit was SEK 3,481 M (5,361), with an average remain- ing maturity of 1.9 years (2.0). Available cash and cash equivalents are invested in banks or in interest-bearing instruments with good creditworthiness and a liquid secondary market. At December 31, the Group’s cash and cash equiv- alents, including short-term investments, amounted to SEK 3,486 M (1,208). Payment capacity on December 31 corresponded to 11 percent (10) of sales. Maturity structure unutilized committed lines of credit 2024 2023 Matures Amount Proportion, % Amount Proportion, % 2024 – – 2,260 42 2025 265 8 – – 2026 3,216 92 3,101 58 Total 3,481 100 5,361 100 The table below shows the Group’s financial liabilities (including interest pay- ments) and net settled derivative instruments classified as financial liabilities. Financial instruments carrying variable interest rates are based on forward interest rates using observable yield curves. Amounts in foreign currency have been translated to SEK based on the exchange rate applying on the bal- ance sheet date. The amounts in the tables are the contractual undiscounted cash flows. NCC 2024 115Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Analysis of maturities (amounts including interest) 1) 2024 2023 Total <3 months 3 months– 1 year 1–3 years 3–5 years >5 years Total <3 months 3 months– 1 year 1–3 years 3–5 years >5 years Interest-bearing liabilities 4,031 303 1,143 1,771 814 – 4,233 1,015 963 1,745 511 – Lease liabilities 1,574 – 546 680 311 37 1,487 – 522 619 278 69 Interest rate swaps 1 0 0 1 – – 1 – 0 1 – – Oil forward contracts 0 0 0 0 – – 4 0 4 0 – – Electricity forward contracts 15 4 9 2 – – 17 2 4 11 – – Accounts payable 4,841 4,841 – – – – 6,105 6,105 – – – – Total 10,462 5,148 1,698 2,454 1,125 37 11,847 7,122 1,492 2,376 789 69 1) Excluding pension debt. The table below shows the Group’s gross settled currency derivatives. The amounts in the table are the contractual undiscounted cash flows. Analysis of maturities (amounts including interest) 2024 2023 Total <3 months 3 months–1 year >1 year Total <3 months 3 months–1 year >1 year Currency forward contracts – outflow –3,445 –3,121 –265 –59 –4,859 –3,983 –836 –40 – inflow 3,448 3,122 267 59 4,790 3,938 813 39 Net flow from gross settled derivatives 3 1 2 0 –69 –45 –23 –1 Interest rate risks The interest rate risk is the risk that changes in market rates will adversely affect NCC’s cash flow or the fair value of financial assets and liabilities. NCC’s main financing sources are shareholders’ equity, cash flow from operating activities and external financing. NCC’s policy for the interest rate risk is that the weighted average remaining period of fixed interest for NCC’s interest-bearing corporate debt when exposure is reduced by the period of fixed interest on cash and cash equivalents and short-term investments including interest rate swaps, should normally be 12 months subject to a mandate to deviate from this figure by +/–6 months, and that the interest rate maturity structure of the debt portfolio should be adequately spread over time. If the available borrowing vehicles are not compatible with the desired interest rate structure for the corporate debt, interest rate swaps are the main instruments used to adapt the structure. In the financial statements, hedge accounting is applied when there is an effective con- nection between the hedged loan and the interest rate swap. When assessing effectiveness, NCC ensures that the financial correlation between interest rate swaps and underlying loans has been fulfilled by having the interest rate swaps denominated in the same currency, and that maturities, the timing of interest payments, nominal amounts and interest rate bases correspond with underlying loans. Interest rate swaps have the same quantity as underlying loans (hedge ratio 1-for-1). NCC applies hedge accounting for a nominal amount of SEK 300 M (575), with STIBOR as the interest base, which will be affected by the reference rate reform. Ineffectiveness may arise if the points in time for the cash flow in the interest rate swaps do not fully match those of underlying loans and if the point in time for the switch in the reference rate deviates between the interest rate swap and the underlying loans. Ineffectiveness attributable to interest rate swaps was negligible in 2024. The fixed interest rate maturity period for NCC’s interest-bearing corporate debt reduced by the interest exposure in cash and cash equivalents and short- term investments was 14 months (10), including interest rate swaps. Cash and cash equivalents and short-term investments amounted to SEK 3,486 M (1,208) and the average interest rate maturity for these assets was four months (six). At the end of the year, NCC’s interest-bearing corporate debt amounted to SEK 3,619 M (3,916) and the average interest rate maturity period was 10 months (eight). On December 31, 2024, NCC had interest rate swaps with a nominal value of SEK 300 M (575) that were linked to interest-bearing corporate debt. On December 31, 2024, the interest rate swaps had a fair value of SEK 1 M (5) net, comprising long-term receivables of SEK 2 M (0), current receivables of SEK 0 M (7) and long-term liabilities of SEK 1 M (2). The interest rate swaps have due dates ranging from 1.5 (0.8) to 4.3 (3.5) years with an average fixed interest rate of 3.0 percent (2.0). An increase in interest rates by one percentage point would result in a change of SEK 0 M (–15) in net profit for the year, based on the interest-bearing assets and liabilities, including interest rate swaps, existing on the balance sheet date. Regarding the change in fair value of the Group’s interest rate swaps, an increase in interest rates by one percentage point would result in a change of SEK 0 M (0) in net profit for the year and a change of SEK 6 M (6) in other comprehensive income. Maturity structure, fixed interest 1) 2024 2023 Interest-bearing liabilities, incl. interest rate swaps Matures Amount Proportion, % Amount Proportion, % 2024 – – 2,966 76 2025 2,919 81 650 17 2026 200 5 200 5 2027 100 3 100 3 2028 – – – – 2029 400 11 – – Total 3,619 100 3,916 100 1) Excluding pension debt and lease liability. Exchange rate risks The exchange rate risk is the risk that changes in exchange rates will adversely affect the consolidated income statement, balance sheet or cash flow statement. Transaction exposure In accordance with the Group Treasury Policy, all currency exposure must be hedged. Hedges relate to contractual and probable forecast flows, mainly through currency forward contracts. In the financial statements, hedge accounting is applied when the requirements for hedge accounting are fulfilled. Currency forward contracts that hedge the cash flow are denominated in the same currency, are in the same amount (hedge ratio 1-for-1) and have the same due date as the hedged cash flow. Ineffectiveness may arise if a change occurs at the point of time when the future cash flow will arise or if there is a change in the contractual or forecast cash flow. Currency outflows The following table shows the Group’s gross outflows of various currencies during the year, the portion hedged and the exchange rate risk for each currency in the unhedged currency flows. The exchange rate risk shows the change in net profit for the year and in equity should the SEK exchange rate change by 5 percent in relation to every single currency due to losses from the translation of unhedged accounts payable. Note 36 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 116Financial statements
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Notes 2024 2023 Counter-value in SEK M Gross outflow Hedged share, SEK M Hedged share, % Exchange rate risk, 5%, after tax on unhedged share Gross outflow Hedged share, SEK M Hedged share, % Exchange rate risk, 5%, after tax on unhedged share EUR 2,198 2,086 95 4 2,376 2,064 87 12 DKK 93 47 51 2 59 30 51 1 NOK 193 4 2 8 230 78 34 6 Other 43 13 30 1 114 49 43 3 Total 2,527 2,150 85 15 2,779 2,221 80 22 Currency inflows The following table shows the Group’s gross inflows of various currencies during the year, the portion hedged and the exchange rate risk for each currency in the unhedged currency flows. The exchange rate risk shows the change in net profit for the year should the SEK exchange rate change by 5 percent in relation to every single currency due to losses from the translation of unhedged accounts receivable. 2024 2023 Counter-value in SEK M Gross inflow Hedged share, SEK M Hedged share, % Exchange rate risk, 5%, after tax on unhedged share Gross inflow Hedged share, SEK M Hedged share, % Exchange rate risk, 5%, after tax on unhedged share DKK 87 24 28 3 81 44 54 1 Other 29 – – 1 48 – – 2 Total 116 24 21 4 129 44 34 3 The forward contracts used to hedge contracts, and forecast transactions, are classified as cash flow hedges. During 2024, no cash flow hedges were closed, due to the expected cash flow was no longer likely to occur. Contracted and forecast currency outflows, outstanding hedge position The table below shows the outstanding total hedge positions per currency at year-end pertaining to forecast and contractual currency outflows, the hedged portion and average forward rates per currency in SEK. 2024 2023 Counter-value in SEK M Total <3 months 3 months–1 year >1 year Total <3 months 3 months–1 year >1 year EUR 483 184 246 53 954 321 593 39 Other 23 16 6 – 6 6 0 – Total hedge position 506 201 252 53 960 328 594 39 Total contracted and forecast currency outflows. 813 210 435 168 1,307 345 798 165 Hedged share, % 62 96 58 32 73 95 74 24 Average forward rate in SEK regarding total hedge position for currency outflows: EUR currency forward contracts 11.38 11.33 11.38 11.56 11.41 11.29 11.48 11.32 The hedges pertaining to forecast and contractual currency outflows fulfill effectiveness requirements, meaning that all changes resulting from changed exchange rates are recognized in other comprehensive income. The net fair value of currency forward contracts used for hedging transaction exposure amounted to SEK 5 M (–27). Of this amount, other receivables of SEK 6 M (9), other long-term liabilities of SEK 0 M (1) and other current liabilities of SEK 1 M (35) have been recognized in the balance sheet. Currency distribution of financing According to the Group Treasury Policy, Group assets are to be financed in local currency. External and internal borrowing in the NCC Group occurs mainly through Group Treasury and is then transferred to the business areas and sub- sidiaries in the form of internal loans. Lending is denominated in local currency, while external financing largely occurs in SEK. Parts of the Group’s loans and liquidity are converted through currency derivatives into the currencies of the Group’s assets. The following tables illustrate NCC’s financing and the currency swap agree- ments for financing. The stated values include underlying principals. Interest-bearing liabilities 1) 2024 2023 Counter-value in SEK M Amount Proportion, % Amount Proportion, % SEK 3,619 100 3,916 100 Total 3,619 100 3,916 100 1) Excluding pension debt and lease liability. Financing via currency derivatives (currency swaps) Counter-value in SEK M 2024 2023 Buy +/ Sell – DKK 1,368 2,305 Buy +/ Sell – EUR –1,322 –700 Buy +/ Sell – NOK –23 – Buy +/ Sell – PLN 30 33 Buy +/ Sell – USD 1010 – Net 62 1,638 Note 36 cont’d. NCC 2024 117Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Translation exposure According to the Group Treasury Policy, the Group’s translation exposure is not to be hedged. Group’s net investments in foreign subsidiaries The table below shows the Group’s net investments in foreign subsidiaries and the exchange rate risk associated with translation exposure. At December 31, 2024, a 5-percent depreciation of the SEK in relation to other currencies would result in a change of SEK 220 M (216) in other comprehensive income; see the table below. 2024 2023 Counter-value in SEK M Net investment Exchange rate risk, 5% Net investment Exchange rate risk, 5% DKK 2,694 135 2,512 126 EUR 511 26 480 24 NOK 1,195 60 1,323 66 Total 4,400 220 4,315 216 Price risks Price risks associated with bitumen A part of NCC Industry’s sales of paving contracts in NCC Industry are subject to indexed prices, whereby the index in relation to the customer matches the index used by the supplier for pricing bitumen, which means that NCC Industry is not exposed to any risk arising from a change in the price of bitumen. There are also cases of fixed price contracts that are not indexed, whereby NCC Industry is exposed to a risk should the price of bitumen change. The price risk is managed by Group Treasury via oil forward contracts. The policy is to hedge customer contracts when the work is to be performed later than two months from the ordering date. NCC ensures that oil derivatives are priced using the same underlying index as that applying to suppliers and that the number of purchased tons of bitumen per month exceeds the number of hedged tons of bitumen per month. The hedged quantity of purchased bitumen matches the quantity stated in the derivative (hedge ratio 1-for-1). Ineffectiveness may arise if the point in time of the purchases of bitumen deviates from the derivatives’ due date. The net fair value of oil forward contracts used for hedging the price risk when purchasing bitumen was SEK 1 M (–4). Of this amount, other receivables of SEK 1 M (0) and other current liabilities of SEK 0 M (4) have been recognized in the balance sheet. Given outstanding oil forward contracts on the balance sheet date, a 10-per- cent increase in the price of bitumen at December 31, 2024 would give rise to a change of SEK 2 M (2) in other comprehensive income and of SEK 0 M (0) in net profit for the year. The sensitivity analysis assumes that all other factors remain unchanged. Purchases of bitumen The table below shows the Group’s total purchases of bitumen, regarding both customer contracts with fixed price and those subject to indexed prices, and the portion hedged via oil forward contracts during the year. NCC hedges only fixed price customer contracts. 2024 2023 Purchases bitumen tons Hedged share tons Hedged share via oil forward contracts, % Purchases bitumen tons Hedged share tons Hedged share via oil forward contracts, % Total 212,265 38,971 18 196,000 31,816 16 The following table shows the Group’s forecast volume of total purchases of bitumen, the outstanding hedge position at year-end and the portion hedged via oil forward contracts. The hedges fulfill effectiveness requirements. The forward contracts used to hedge forecast purchases of bitumen are classified as cash flow hedges. 2024 2023 Total <3 months 3 months–1 year >1 year Total <3 months 3 months–1 year >1 year Forecast volume of purchases of bitumen (tons)1) 480,299 9,843 230,307 240,149 474,093 9,715 227,331 237,047 Hedge position through oil forward contracts (tons) 6,729 924 5,748 57 7,498 459 6,840 199 Hedged share, % 1 9 2 0 2 5 3 0 Hedge position counter-value, SEK M 30 5 25 0 35 2 32 1 Hedged price per ton (average price in SEK) 4,447 4,917 4,371 4,448 4,611 4,472 4,626 4,415 1) The forecast volume for 2024 is until the end of 2026 and for 2023 until the end of 2025. Price risks associated with electricity As part of efforts to ensure calculable costs for electricity, NCC has elected to use electricity derivatives to smooth out price fluctuations occurring in the electricity market. NCC progressively hedges the price for up to four years and builds up the volume of electricity contracts until the particular delivery date. The hedges fulfill effectiveness requirements, meaning that all changes due to price adjustments are recognized in other comprehensive income. The forward contracts used to hedge contracted purchases of electricity are classified as cash flow hedges. At year-end, the outstanding volume of electricity derivatives amounted to 144,066 MWh (136,508), of which 24,867 MWh (24,728) fall due within three months, 50,070 MWh (47,288) fall due in 3–12 months and 69,130 MWh (64,492) fall due after one year. The net fair value of electricity forward contracts used for hedging the price risk related to electricity was SEK –15 M (–17). Of this amount, other liabilities of SEK 15 M (17) were recognized in the balance sheet. Given outstanding electricity forward contracts on the balance sheet date, a 10-percent increase in electricity prices at December 31, 2024 would give rise to a change of SEK 5 M (6) in other comprehensive income and of SEK 0 M (0) in profit or loss. The sensitivity analysis assumes that all other factors remain unchanged. Credit risks Credit and counterparty risks in financial operations NCC’s investment regulations for financial credit risks are revised continuously and are characterized by caution. Transactions are only entered into with creditworthy counterparties with credit ratings of at least A– (Standard & Poor’s) or the equivalent international rating, as well as local banks with a minimum rating equal to the creditworthiness of the country in which NCC has operations. ISDA’s (International Swaps and Derivatives Association) framework agreement on netting is used with all counterparties with respect to derivative trading. The investment regulations specify maximum credit exposure and maturity for various counterparties. Total counterparty exposure with respect to derivative trading, calculated as the net receivable per counterparty, amounted to SEK 39 M (45) at the end of 2024. The net receivable per counterparty is calculated in accordance with the market valuation method, i.e. the market value of the derivative plus a supplement for the change in risk (1 percent of the nominal amount). Calculated gross exposure to counterparty risks pertaining to cash and cash equivalents and short-term investments amounted to SEK 3,486 M (1,208). Credit risks in accounts receivable The risk that the Group’s customers will not fulfill their commitments, meaning that payment is not received from the customers, is a credit risk. The credit rating of the Group’s customers is checked, whereby information on the custom- ers’ financial position is obtained from various credit rating agencies. For major accounts receivable, the risk of credit losses is limited through various types of collateral, such as bank guarantees, blocks on building loans, parent company guarantees and other payment guarantees. The proportion of accounts receiv- able subject to some type of collateral was 18.9 percent (17.4) during the year. Age analysis of accounts receivable 2024 2023 Group Gross Reserve for doubtful receivables Gross Reserve for doubtful receivables Not past-due accounts receivable 6,495 – 6,334 – Past-due accounts receivable 1–30 days 574 –3 935 – Past-due accounts receivable 31–60 days 74 0 93 – Past-due accounts receivable 61–180 days 145 –10 148 –33 Past-due accounts receivable >180 days 1,381 –334 1,651 –432 Total 8,669 –347 9,161 –465 Note 36 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 118Financial statements
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Notes Within NCC, there are, firstly, estimated/potential customer losses that mainly relate to ongoing discussions or claims with the client and, secondly, confirmed/ potential credit losses that mainly relate to shortcomings in the client’s payment capacity. Receivables expired >180 days are essentially caused by ongoing discus- sions/claims with the client and do not involve an issue about the client’s creditworthiness. Thus the reserve for doubtful receivables expired >180 days essentially relates to former claims and not to anticipated payment capacity. Apart from these, customer bad debts are low, whereby the reserve for doubtful receivables expired <180 days is low. Provisions for doubtful accounts receivable and reversals of these, which essentially relate to ongoing discussions/claims with the client, known as performance obligations, are recognized as reduced revenues in the company’s construction projects and are thus included as net sales in profit or loss. The confirmed/potential credit losses that arise due to shortcomings in the client’s payment capacity are instead recognized as production costs or as selling and administrative costs in profit or loss. In 2024, reversed bad debt losses arising from 2023 or earlier are not expected to amount to significant amounts. Refer also to under Accounting policies. Reserve for doubtful receivables Group 2024 2023 On January 1 –465 –723 Provision for the year –408 –324 Reversal of previously posted impairment losses 524 548 Translation differences 1 36 On December 31 –347 –465 Carrying amount and fair value of financial instruments The carrying amount and fair value of financial instruments are presented in the tables below. In NCC’s balance sheet, mainly short-term investments in housing bonds and fixed-income funds and derivatives are measured at fair value. Short-term investments are measured according to prices quoted on a well-functioning secondary market for the same instruments. The measurement at fair value of currency forward contracts, oil forward contracts and electricity forward contracts is based on customary models with observable input data such as interest rates, exchange rates and commodity prices. The measurement of interest rate swaps is based on forward interest rates based on observable yield curves. For financial instruments recognized at amortized cost – accounts receiv- ables, current interest-bearing receivables, other receivables, cash and cash equivalents, accounts payable and other interest-free liabilities – the fair value does not materially deviate from the carrying amount. For long-term holdings of bonds (long-term interest-bearing receivables) and short-term investments recognized at amortized cost, the fair value is based on prices listed in a well-functioning secondary market. For short and long-term bond loans listed on Nasdaq Stockholm, the fair value was calculated according to prices listed in a well-functioning secondary market. The fair value for unlisted long-term bonds was calculated by discounting future cash flows with current market rates for similar financial instruments. The assessment is that the fair value of other long-term and current interest-bearing liabilities did not materially deviate from the carrying amount. The carrying amount and fair value of financial instruments are presented in the following table. Classification of financial instruments Group, 2024 Financial assets measured at fair value through profit or loss1) Derivatives used in hedge accounting Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income, equity instruments Financial liabili- ties measured at fair value through profit or loss1) Other liabilities Total carrying amount Total fair value Long-term holdings of securities – – – 68 68 68 Long-term interest-bearing receivables – – 201 – 201 202 Pension receivable – – 94 – 94 94 Other long-term receivables – 2 – – 2 2 Accounts receivable – – 8,322 – 8,322 8,322 Prepaid expenses and accrued income – – 3 – 3 3 Current interest-bearing receivables – – 138 – 138 138 Other receivables 5 7 21 – 33 33 Short-term investments 506 – 70 – 576 575 Cash and cash equivalents – – 2,910 – 2,910 2,910 Total assets 511 9 11,760 68 12,348 12,348 Long-term interest-bearing liabilities – – 3,314 3,314 3,348 Other long-term liabilities 1 – 16 17 17 Provisions for pensions and similar obligations – – – – – Current interest-bearing liabilities – – 1,769 1,769 1,779 Accounts payable – – 4,841 4,841 4,841 Accrued expenses and deferred income – – 39 39 39 Other current liabilities 16 6 – 22 22 Total liabilities 18 6 9,979 10,002 10,046 1) Statutorily measured at fair value. Note 36 cont’d. NCC 2024 119Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Group, 2023 Financial assets measured at fair value through profit or loss1) Derivatives used in hedge accounting Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income, equity instruments Financial liabili- ties measured at fair value through profit or loss1) Other liabilities Total carrying amount Total fair value Long-term holdings of securities – – – 68 68 68 Long-term interest-bearing receivables – – 204 – 204 203 Pension receivable – – – – – – Other long-term receivables – – – – – – Accounts receivable – – 8,696 – 8,696 8,696 Current interest-bearing receivables – – 129 – 129 129 Other receivables 16 16 66 – 98 98 Short-term investments 450 – 51 – 501 500 Cash and cash equivalents – – 707 – 707 707 Total assets 467 16 9,852 68 – 10,403 10,402 Long-term interest-bearing liabilities – – 3,006 3,006 2,987 Other long-term liabilities 2 – 11 13 13 Provisions for pensions and similar obligations – – 556 556 556 Current interest-bearing liabilities – – 2,289 2,289 2,285 Accounts payable – – 6,105 6,105 6,105 Accrued expenses and deferred income – – 24 24 24 Other current liabilities 57 53 – 110 110 Total liabilities 59 53 11,991 12,103 12,080 1) Statutorily measured at fair value. Parent Company, 2024 Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income, equity instruments Other liabilities Total carrying amount Total fair value Other long-term holdings of securities – 45 45 45 Accounts receivable 1 – 1 1 Current receivables from Group companies 423 – 423 423 Other current receivables 2 – 2 2 Balance in NCC Treasury AB 930 – 930 930 Total assets 1,357 45 1,402 1,402 Other long-term liabilities 3 3 3 Accounts payable 14 14 14 Current liabilities to Group companies 158 158 158 Total liabilities 175 175 175 Parent Company, 2023 Financial assets measured at amortized cost Financial assets measured at fair value through other comprehensive income, equity instruments Other liabilities Total carrying amount Total fair value Other long-term holdings of securities – 45 45 45 Accounts receivable 1 – 1 1 Current receivables from Group companies 314 – 314 314 Other current receivables 1 – 1 1 Balance in NCC Treasury AB 133 – 133 133 Total assets 449 45 494 494 Other long-term liabilities 2 2 2 Accounts payable 19 19 19 Current liabilities to Group companies 387 387 387 Total liabilities 408 408 408 The classification categories Financial assets measured at fair value through profit or loss and Financial liabilities measured at fair value through profit or loss are not applicable for the Parent Company. No reclassifications of financial assets and liabilities among the above categories were effected during the year. It has been determined that the fair value of the Parent Company’s financial instruments did not materially deviate from the carrying amount. In the forthcoming tables, disclosures are made concerning how fair value was determined for the financial instruments that are continuously measured at fair value and the financial instruments not measured at fair value in NCC’s balance sheet. When determining fair value, assets have been divided into three levels. No transfers were made between the levels during the period and no significant changes were made with respect to measurement methods, data or assumptions used. Level 1: in accordance with prices quoted on an active market for the same instruments. This category does not apply for the Parent Company. Level 2: on the basis of directly or indirectly observable market data that is not included in Level 1. This category does not apply for the Parent Company. Level 3: on the basis of input data that is not observable in the market. Note 36 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 120Financial statements
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Notes 2024 2023 Group Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets measured at fair value Financial assets measured at fair value through profit or loss Short-term investments 506 – – 506 450 – – 450 Derivative instruments – 5 – 5 – 16 – 16 Derivative instruments used in hedge accounting – 9 – 9 – 16 – 16 Financial assets measured at fair value through other comprehensive income Equity instruments – – 68 68 – – 68 68 Financial assets not measured at fair value Long-term interest-bearing receivables 202 – – 202 203 – – 203 Short-term investments 69 – – 69 49 – – 49 Total assets 777 14 68 859 702 32 68 802 Financial liabilities measured at fair value Financial liabilities measured at fair value through profit or loss Derivative instruments – 6 – 6 – 53 – 53 Derivative instruments used in hedge accounting – 18 – 18 – 59 – 59 Financial liabilities not measured at fair value Other interest-bearing liabilities 2,284 2,843 – 5,127 1,747 3,525 – 5,272 Total liabilities 2,284 2,867 – 5,151 1,747 3,637 – 5,384 Offsetting of financial instruments NCC has binding framework agreements on netting (ISDA agreements) with all counterparties for derivative trading, whereby NCC can offset receivables and liabilities should a counterparty become insolvent or in another event. The following table sets out the gross financial assets and liabilities recognized and the amounts available for offsetting. NCC has not offset any amounts in the balance sheet. 2024 2023 Group Financial assets Financial liabilities Financial assets Financial liabilities Recognized gross amount1) 14 24 32 112 Amount included in netting agreements –7 –7 –29 –29 Net amount after netting agreement 7 17 3 83 1) The gross recognized carrying amount of financial assets includes SEK 5 M (16) for deriva- tives measured at fair value through profit or loss in other receivables, SEK 2 M (0) for deriva- tives used in hedge accounting for other long-term receivables and SEK 7 M (16) in other receivables. The gross recognized carrying amount of financial liabilities includes derivatives measured at fair value through profit or loss in other current liabilities of SEK 6 M (53), and derivatives used in hedge accounting in long-term liabilities of SEK 1 M (2) and in other cur- rent liabilities of SEK 17 M (57). The Parent Company has no derivatives outstanding. Accounting policies Acquisitions and divestments of financial instruments are recognized on the date of transaction, meaning the date on which the company undertakes to acquire or divest the asset. Financial instruments recognized on the asset side of the balance sheet include cash and cash equivalents, loan receivables, accounts receivable, financial investments and derivatives. Accounts payable, loan payables and derivatives are recognized under liabilities. Financial guarantees such as sure- ties are also included in financial instruments. A financial asset or financial liability is recognized in the balance sheet when the company becomes a party to the instrument’s contractual terms and conditions. Accounts receivable are recognized in the balance sheet when invoices have been sent. Accounts payable are recognized when invoices have been received. A financial asset is derecognized from the balance sheet when the contractual rights have been realized or extinguished. The same applies to portions of financial assets. A financial liability is derecognized from the balance sheet when the contractual commitment has been fulfilled or otherwise terminated. This also applies to part of the financial liability. Financial instruments are classified in the following categories for measurement: • Financial assets measured at fair value through profit or loss • Financial assets measured at fair value through other comprehensive income, equity instruments • Financial assets measured at amortized cost • Financial liabilities measured at fair value through profit or loss • Derivatives used in hedge accounting • Other liabilities When entered for the first time, a financial asset is classified on the basis of NCC’s business model for managing the financial asset and the character of the expected cash flows. Financial assets are only reclassified if the business model for the asset has been modified. A financial liability is recognized at amortized cost, apart from derivatives measured at fair value. Financial assets measured at fair value through profit or loss This category includes the Group’s derivatives with a positive fair value and interest-bearing securities for which NCC’s business model is to maximize the return on the asset within given risk limits. Fair value changes are recognized in net financial items in profit or loss. A derivative instrument that is an identified and effective hedging instrument is not included in this category. For an account of hedging instruments, see Derivatives used in hedge accounting below. Financial assets measured at amortized cost These include accounts receivable and loan receivables, as well as investments in interest-bearing securities where the objective of the business model is to receive contractual cash flows up to maturity. These cash flows are received at predetermined points in time and solely comprise payment of principals and interest on the outstanding principals. Investments in interest-bearing securities with a remaining maturity exceeding 12 months after the balance sheet date are recognized as long-term interest-bearing receivables. Other investments are recognized as short-term investments. Financial assets measured at fair value through other comprehensive income (equity instruments) Holdings of shares and participations that are not recognized as subsidiaries, associated companies or joint arrangements are recognized here. These assets are measured at fair value. Financial liabilities measured at fair value through profit or loss This category includes the Group’s derivatives with a negative fair value, with the exception of derivatives that function as an identified and effective hedging instrument; see Derivatives used in hedge accounting below. Fair value changes are recognized in net financial items. Derivatives used in hedge accounting Derivatives used in hedge accounting are measured at fair value in the balance sheet. The change in value of an effective hedging instrument is recognized in the hedging reserve in equity through other comprehensive income. Other financial liabilities Loans and other financial liabilities, such as accounts payable, are included in this category. Liabilities are recognized at amortized cost. Note 36 cont’d. NCC 2024 121Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Notes Impairment NCC applies impairment requirements for expected credit losses on financial assets and a loss allowance for them is recognized as a deduction from the asset. This applies to financial assets recognized at amortized cost and fair value through other comprehensive income. A loss allowance is established in one of the following ways: • for loss events that may be expected to be incurred within 12 months • for loss events that may be expected to be incurred during the full lifetime of the asset A loss risk reserve for the full lifetime of the asset is established if, on the report- ing date, the credit risk for the financial asset has risen significantly since initial recognition and, if this is not the case, a loss risk reserve is established within 12 months. For accounts receivable, contract assets and lease receivables, loss risk reserves are always posted for the full lifetime of the asset according to the simplified model in IFRS 9. The measurement of expected credit losses must reflect an unbiased and probability-weighted amount, the time value of money, reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. Although each invoice is measured individually, provisions are made for invoices that are more than 180 days overdue unless special circumstances apply. Accounts receivable, contract assets and lease receivables are then written off when there is no reasonable expectation of repayment. Hedge accounting NCC applies hedge accounting in the following categories: hedging of exchange rate risk in transaction flows, hedging of the Group’s interest maturities and hedging of the price risk associated with bitumen and electricity. If the hedge no longer fulfills the criteria for hedge accounting or the hedging instrument is sold, matures, is settled or redeemed, hedge accounting ceases prospectively. When the hedge accounting of cash flow hedges has ceased, the amount that has been accumulated in the hedging reserve is kept in shareholders’ equity until: • it is included in the cost of the non-financial item at initial recognition (applies for hedging of a transaction that results in recognition of a non- financial item), or • it is reclassified to profit or loss in the same period or periods that the hedged expected cash flow impacts profit/loss (applies for other cash flow hedges) If the hedged cash flow is no longer expected to arise, the amount that has been accumulated in the hedging reserve is reclassified immediately to profit or loss. Hedging of exchange rate risk in transaction flows Currency exposure associated with future flows is hedged by using currency forward contracts. The currency forward contract that hedges this cash flow is measured at fair value in the balance sheet. When hedge accounting is applied, the change in fair value attributable to changes in the forward rate of currency forward contracts is recognized in other comprehensive income, after taking tax effects into account and being accumulated in the hedging reserve. Any ineffec- tiveness is recognized in profit or loss. Transfers of amounts from the hedging reserve to reflect the carrying amount of the purchase are effected so that this is recognized at the forward rate. The hedged flows can be both contracted and forecast transactions. Hedging of the Group’s interest maturities Interest rate derivatives are used to manage the interest rate risk. Hedge accounting occurs where effective hedging relationships can be proved. Changes in value, after considering income tax effects, are recognized in other comprehensive income and accumulated in the hedging reserve. Any ineffectiveness is recognized in net financial items. By hedging interest rates, the variable interest rate on parts of NCC’s financing becomes fixed. Hedging of price risks associated with bitumen and electricity By entering into oil forward contracts, NCC Industry hedges its price risk for bitumen when major contracts are to be performed later than two months following receipt of the order. These oil forward contracts are classified as cash flow hedges. Changes in effective hedges due to changed prices are recognized in other comprehensive income and accumulated in the hedging reserve, and any ineffectiveness is recognized in operating profit or loss. To smooth out fluctuations in the Swedish electricity market, NCC has elected, using electricity derivatives entered into gradually over a period of four years, to accumulate the volume of electricity until the particular date of delivery. Changes in effective hedges are recognized in other comprehensive income and accumulated in the hedging reserve, and any ineffectiveness is recognized in operating profit or loss. Receivables and liabilities in foreign currency Receivables and liabilities in foreign currency are restated at the exchange rates prevailing on the balance sheet date. Exchange rate differences arising from the translation of operating receivables and liabilities are recognized in operating profit or loss, while exchange rate differences arising from the translation of financial assets and liabilities are recognized in net financial items. Financial instruments in the Parent Company Financial instruments in the Parent Company are recognized at cost less any impairment losses and taking into account the impact on earnings accrued up to fiscal year-end. In respect of the qualitative and quantitative risk information, reference is made to the disclosures made for the Group above, since Group- wide risk management is applied. Important estimates and assessments Measurement of receivables NCC’s accounts receivable, including receivables for sold property projects, are measured at amortized cost, meaning the amount expected to be received less an amount for doubtful receivables. Note 37 Information about the Parent Company NCC AB, Corporate Registration Number 556034-5174, is a limited liability company registered in Sweden, with its Head Office in Solna, Sweden. NCC AB’s shares are listed on the Nasdaq Exchange Stockholm/Large Cap List. The address of the Head Office is NCC AB, Herrjärva Torg 4, SE–170 80 Solna, Sweden. The consolidated financial statements relate to the Parent Company and its subsidiaries, jointly designated the Group. The Group also includes investments in associated companies, joint ventures and joint operations. Note 38 Events after the balance sheet date In February, NCC announced that it will conduct a strategic review of the NCC Industry business area in 2025. Various options will be evaluated, including a possible divestment of the business area. Note 39 Appropriation of the company’s profit The Board of Directors proposes that the available funds 5,194,085,018 Be appropriated as follows: Ordinary dividend to the shareholders of SEK 9.00 per share 1) Extra dividend to the shareholders of SEK 2.00 per share 1) Total dividend 1,075,716,037 To be carried forward 4,118,368,981 Total, SEK 5,194,085,018 1) The total amount of the proposed dividend is calculated based on the number of shares out- standing as of December 31, 2024 and may change if the number of shares outstanding has changed on the payment date. Decisions regarding dividend proposals are made taking into account the company’s future profits, financial position, capital needs and the macroeco- nomic conditions. NCC’s Board has proposed a regular dividend of SEK 9.00 (8.00) per share and an extra dividend of SEK 2.00 per share to be paid on two occasions. The proposed record date for the first payment of SEK 6.50 per share, which includes an extra dividend of SEK 2.00 per share, is May 9, 2025 with payment occurring on May 14, 2025. For the second payment of SEK 4.50 per share, November 7, 2025 is the proposed record date with payment occurring on November 12, 2025. Note 36 cont’d. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 122Financial statements
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The Board of Directors and the CEO hereby give their assurance that the consolidated fi nancial statements and the Annual Report have been compiled in compliance with international accounting standards, IFRS, as adopted by the EU, and with generally acceptable accounting prac- tices and thus provide a fair and accurate impression of the fi nancial position and earnings of the Group and the Parent Company. The Report of the Board of Directors for both the Group and the Parent Company accurately review the Group’s and the Parent Company’s operations, fi nancial positions and earnings and describe the material risks and uncertainties facing the Parent Company and the companies included in the Group. The Annual Report and the consolidated fi nancial statements were approved for issue by the Board of Directors on April 9, 2025. The con- solidated income statement and balance sheet and the Parent Company’s income statement and balance sheet will be presented to the Annual General Meeting (AGM) for adoption on May 7, 2025. Adoption Solna, April 9, 2025 Alf Göransson Chairman of the Board Ida Aall Gram Board member Simon de Château Board member Cecilia Fasth Board member Mats Jönsson Board member Daniel Kjørberg Siraj Board member Birgit Nørgaard Board member Karl-Johan Andersson Board member employee representative Karl G Sivertsson Board member employee representative Harald Stjernström Board member employee representative Tomas Carlsson President and CEO Our audit report was submitted on April 10, 2025 Öhrlings PricewaterhouseCoopers AB Patrik Adolfson Authorized Public Accountant NCC 2024 123Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Report on the annual accounts and consolidated accounts Opinions We have performed an audit of the annual accounts and consolidated accounts of NCC AB for year 2024 except for the corporate governance statement on pages 69–79. The annual accounts and consolidated accounts of the company are included on pages 52–123 in this document. In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the parent company as of 31 December 2024 and its fi nancial performance and cash fl ow for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the fi nancial position of the group as of 31 December 2024 and their fi nancial performance and cash fl ow for the year then ended in accordance with IFRS Accounting Standards, as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 69–79. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the general meeting of shareholders adopts the income statement and balance sheet for the parent company and the group. Our opinions in this report on the annual accounts and consolidated accounts are consistent with the content of the additional report that has been submitted to the parent company’s audit committee in accordance with the Audit Regulation (537/2014/EU) Article 11. Basis for Opinions We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Audi- tor’s Responsibilities section. We are indepen- dent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfi lled our ethical responsibilities in accor- dance with these requirements. This includes that, based on the best of our knowledge and belief, no prohibited services referred to in the Audit Regulation (537/2014/EU) Article 5.1 have been provided to the audited company or, where applicable, its parent company or its controlled companies within the EU. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinions. Our audit approach Focus and scope of the audit We designed our audit by determining materi- ality and assessing the risks of material misstatement in the consolidated fi nancial statements. In particular, we considered where the Board of Directors and the Managing Director made subjective judgements; for example, in respect of signifi cant accounting estimates that involved making assumptions and considering future events that are inher- ently uncertain. As in all of our audits, we also addressed the risk of the Board of Directors override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform suffi cient work to enable us to provide an opinion on the consolidated fi nancial statements as a whole, taking into account the structure of the Group, the accounting pro- cesses and controls, and the industry in which the group operates. In a business such as NCC’s, our risk assessment is particularly infl uenced by the impact of the Board of Directors’ and manage- ment’s estimates and judgements on the fi nancial statements. We have assessed the individually highest risk for misstatements in the fi nancial statements to be the percent- age-of-completion revenue recognition in some of the ongoing projects in NCC Building Sweden, NCC Building Nordics, NCC Infra- structure and Industry. In addition, we have identifi ed a number of other risks that also refl ect components of estimates and judge- ments, e.g., warranty provisions and disputes. Based on the risk assessment the central audit team developed an audit strategy according to which the group audit mirrors NCC’s organisation, and which starts in an audit of the fi ve business areas. As a part of this strategy, the largest units within each business area has been audited. The central audit team is responsible for the audit of the parent company, the consolidated accounts and Treasury and issues, based on the audit strategy, instructions to the audit teams for each business area. We also perform a cen- tralised audit of, e.g., selected controls in the fi nancial processes handled by NCC’s group common shared service centre as well as of relevant controls over NCC’s group common information systems. The results of these examinations are then shared with component audit teams. In addition to the examinations in Sweden, the auditor in charge and other audit staff, has visited four operations in Denmark, Finland and Norway during the year with the aim of creating an understanding of the operations in these countries, conducting a general review of important parts of the fi nancial reporting based on the Group’s accounting principles, and evaluating compliance with selected parts of NCC’s internal control framework. We have also made project visits to NCC’s Swedish operations. Materiality The scope of our audit was infl uenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the fi nancial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of the consolidated fi nancial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materi- ality for the consolidated fi nancial statements as a whole. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the fi nancial statements as a whole. Key audit matters Key audit matters of the audit are those mat- ters that, in our professional judgment, were of most signifi cance in our audit of the annual accounts and consolidated accounts of the current period. These matters were addressed in the context of our audit of, and in forming our opinion thereon, the annual accounts and consolidated accounts as a whole, but we do not provide a separate opinion on these matters. Other information than the annual accounts and consolidated accounts This document also contains other informa- tion than the annual accounts and consoli- dated accounts and is found on pages 1–50 and 128–137. The Board of Directors and the Auditor’s report To the general meeting of the shareholders of NCC AB, corporate identity number 556034-5174 This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 124Financial statements
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Auditor’s report Managing Director are responsible for this other information. The other information also consists of the compensation report for 2024 that we obtained prior to the date of this auditor’s report. The Board of Directors and the Manag- ing Director are responsible for this other information. Our opinion on the annual accounts and consolidated accounts does not cover this other information and we do not express any form of assurance conclusion regarding this other information. In connection with our audit of the annual accounts and consolidated accounts, our responsibility is to read the information identi- fi ed above and consider whether the informa- tion is materially inconsistent with the annual accounts and consolidated accounts. In this procedure we also take into account our knowledge otherwise obtained in the audit and assess whether the information otherwise appears to be materially misstated. If we, based on the work performed con- cerning this information, conclude that there is a material misstatement of this other informa- tion, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation of the annual accounts and con- solidated accounts and that they give a fair presentation in accordance with the Annual Accounts Act and, concerning the consoli- dated accounts, in accordance with IFRS Accounting Standards, as adopted by the EU, and the Annual Accounts Act. The Board of Directors is also responsible for such internal control as they determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the annual accounts and consolidated accounts, the Board of Directors is responsible for the assessment of the company and group’s ability to continue as a going concern. They disclose, as applicable, matters related to going concern and using the going concern basis of accounting. The going concern basis of accounting is however not applied if the Board of Directors intends to liquidate the company, cease operations or has no realistic alternative to doing any of this. The Audit Committee shall, without preju- dice to the Board of Director’s responsibilities and tasks in general, among other things oversee the company’s fi nancial reporting process. Auditor’s responsibility Our objectives are to obtain reasonable assur- ance about whether the annual accounts and consolidated accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assur- ance is a high level of assurance, but is not a guarantee that an audit conducted in accor- dance with ISAs and generally accepted auditing standards in Sweden will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. A further description of our responsibility for the audit of the annual accounts and consoli- dated accounts is available on Revisorsinspek- tionen’s website: www.revisorsinspektionen.se/ revisornsansvar. This description is part of the auditor’s report. Key audit matter How our audit considered the key audit matter Revenue and results recognition in construction projects Total revenue in NCC’s construction and civil engineering operations in 2024 amounts to approximately SEK 45 (44) billion. In all material respects revenue is related to construction projects and is recognised over time, i.e., applying the percentage-of-completion method. This means that recognised revenue and costs in construction projects are based on assumptions and estimates on future outcome as documented in the projects’ fi nal forecasts. Where applicable, assessments of require- ments presented to the customer for, for example, modifi cation and additional work, target price adjustments and insuffi cient tender conditions are also included. The elements of assumptions and assessments mean that fi nal results may deviate from those currently reported. Given the large element of estimates and assessments, this constitutes a key audit matter. Refer to the sections “Revenue from construc- tion and similar projects”, “Critical estimates and assessments” (subsections “Percentage-of-com- pletion profi t recognition of projects”, “Guarantee commitments” and “Guarantee obligations, legal disputes, etc”) in note 2 Order stock and distribu- tion of external net sales, note 28 Other provisions and note 34 Pledged assets, sureties, guarantees and contingent liabilities (subsection “Contingent liabilities etc”). NCC reports revenue and results in construction projects in accordance with IFRS 15. The accounting for ongoing projects is based, in accordance with this standard, on assessment about the assumptions of the fi nal outcome of the projects. Based on this, an important part of our audit is to discuss with NCC, management and the audit committee, NCC’s assessments and the principles, methods and assumptions on which assessments are based. In addition, our audit is based on substantive procedures, various analyses and examination of controls. In the audit, we have, in order to ensure foremost the valuation, allocation over time and accuracy, performed the following audit procedures, among others: • We have evaluated and, on a sample basis, examined selected key controls in NCC’s project process, from calculation to ongoing project reporting and forecasts for the projects. We have also evaluated processes, routines and methodology for fi nalisation of projects. • We have performed, among others, a computer-based analytical review of reported revenues and margins and evaluated management’s procedures for monitoring the fi nancial results of the projects and also discussed the latter with management. • On a sample basis, we have examined revenues and the reported project costs that form the basis for determining the degree of completion. We have also tested the mathematical accuracy of the calculation of the recognition of results over time. • For selected projects, we have performed in-depth audit procedures including, for example, reading contract excerpts, reviewing fi nal forecasts and discussions with project managers and controllers regarding assessments, assumptions and estimates, including those that form the basis for warranty provisions for already completed projects. • For selected disputes, we have obtained statements from NCC’s legal counsel. In addition to this, we have examined NCC’s documentation, discussed assessments made with represen- tatives of NCC, and the company’s internal legal department at divisional and group level for some of the more signifi cant matters. Based on this, we have evaluated the accounting treatment. It is our overall view that NCC’s accounting and the assumptions and estimates applied are within an acceptable range. We have communicated to the audit committee that this often regards diffi cult judgmental matters. Final outcomes may deviate from the assumptions, estimates and assessments currently made. NCC 2024 125Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Auditor’s report Report on other legal and regulatory requirements The auditor’s examination of the administration of the company and the proposed appropriations of the company’s profit or loss Opinions In addition to our audit of the annual accounts and consolidated accounts, we have also audited the administration of the Board of Directors of NCC AB for year 2024 and the proposed appropriations of the company’s profi t or loss. We recommend to the general meeting of shareholders that the profi t be appropriated in accordance with the proposal in the statutory administration report and that the member of the Board of Directors be discharged from liability for the fi nancial year. Basis for Opinions We conducted the audit in accordance with generally accepted auditing standards in Sweden. Our responsibilities under those standards are further described in the Audi- tor’s Responsibilities section. We are inde- pendent of the parent company and the group in accordance with professional ethics for accountants in Sweden and have otherwise fulfi lled our ethical responsibilities in accor- dance with these requirements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinions. Responsibilities of the Board of Directors The Board of Directors is responsible for the proposal for appropriations of the company’s profi t or loss. At the proposal of a dividend, this includes an assessment of whether the dividend is justifi able considering the requirements which the company and group’s type of operations, size and risks place on the size of the parent company’s equity, consolida- tion requirements, liquidity and position in general. The Board of Directors is responsible for the company’s organization and the management of the company’s affairs. This includes among other things continuous assessment of the company and group’s fi nancial situation and ensuring that the company’s organization is designed so that the accounting, management of assets and the company’s fi nancial affairs otherwise are controlled in a reassuring manner. Auditor’s responsibility Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. Our objective concerning the audit of the proposed appropriations of the company’s profi t or loss, and thereby our opinion about this, is to assess with reasonable degree of assurance whether the proposal is in accor- dance with the Companies Act. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions or omissions that can give rise to liability to the company, or that the proposed appropriations of the company’s profi t or loss are not in accordance with the Companies Act. A further description of our responsibility for the audit of the administration is available on Revisorsinspektionen’s website: www.revisors- inspektionen.se/revisornsansvar. This descrip- tion is part of the auditor’s report. Introduction Report of the Board of DirectorsSustainability Report Other NCC 2024 126Financial statements
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Auditor’s report The auditor’s examination of the Esef report Opinion In addition to our audit of the annual accounts and consolidated accounts, we have also examined that the Board of Directors have prepared the annual accounts and consoli- dated accounts in a format that enables uniform electronic reporting (the Esef report) pursuant to Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528) for NCC AB (publ) for the year 2024. Our examination and our opinion relate only to the statutory requirements. In our opinion, the Esef report has been prepared in a format that, in all material respects, enables uniform electronic reporting. Basis for Opinion We have performed the examination in accor- dance with FAR’s recommendation RevR 18 Examination of the Esef report. Our responsi- bility under this recommendation is described in more detail in the Auditors’ responsibility section. We are independent of NCC AB (publ) in accordance with professional ethics for accountants in Sweden and have otherwise fulfi lled our ethical responsibilities in accor- dance with these requirements. We believe that the evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion. Responsibilities of the Board of Directors The Board of Directors is responsible for the preparation of the Esef report in accordance with the Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), and for such internal control that the Board of Directors determine is necessary to prepare the Esef report without material misstatements, whether due to fraud or error. Auditor’s responsibility Our responsibility is to obtain reasonable assurance whether the Esef report is in all material respects prepared in a format that meets the requirements of Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528), based on the procedures performed. RevR 18 requires us to plan and execute procedures to achieve reasonable assurance that the Esef report is prepared in a format that meets these requirements. Reasonable assurance is a high level of assurance, but it is not a guarantee that an engagement carried out according to RevR 18 and generally accepted auditing standards in Sweden will always detect a material misstate- ment when it exists. Misstatements can arise from fraud or error and are considered mate- rial if, individually or in aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of the Esef report. The fi rm applies International Standard on Quality Management 1, which requires the fi rm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The examination involves obtaining evi- dence, through various procedures, that the Esef report has been prepared in a format that enables uniform electronic reporting of the annual accounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material mis- statement in the report, whether due to fraud or error. In carrying out this risk assessment, and in order to design audit procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors, but not for the purpose of expressing an opinion on the effectiveness of those internal controls. The examination also includes an evaluation of the appropriateness and reasonableness of assumptions made by the Board of Directors. The procedures mainly include a validation that the Esef report has been prepared in a valid XHTML format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts. Furthermore, the procedures also include an assessment of whether the consolidated statement of fi nancial performance, fi nancial position, changes in equity, cash fl ow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. The auditor’s examination of the corporate governance statement It is the Board of Directors who is responsible for that the corporate governance statement on pages 69–79 has been prepared in accor- dance with the Annual Accounts Act. Our examination of the corporate gover- nance statement is conducted in accordance with FAR’s auditing standard RevR 16 The auditor’s examination of the corporate gover- nance statement. This means that our exam- ination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with Inter- national Standards on Auditing and generally accepted auditing standards in Sweden. We believe that the examination has provided us with suffi cient basis for our opinions. A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2–6 of the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the other parts of the annual accounts and consolidated accounts and are in accordance with the Annual Accounts Act/the Annual Accounts Act for Credit Institutions and Securities Compa- nies/the Annual Accounts Act for Insurance Companies. Öhrlings PricewaterhouseCoopers AB, 113 97 Stockholm, was appointed as NCC AB’s auditor by the general meeting of shareholders on 9 April 2024 and has been the company’s auditor since 5 April 2017. Stockholm 10 April 2025 Öhrlings PricewaterhouseCoopers AB Patrik Adolfson Authorized Public Accountant This is a translation of the Swedish language original. In the event of any differences between this translation and the Swedish language original, the latter shall prevail. NCC 2024 127Introduction Report of the Board of DirectorsSustainability Report OtherFinancial statements
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Other Multi-year review 129 Quarterly data 132 Definitions 133 Financial information 136 Contact details 137 Introduction Report of the Board of Directors Financial statementsSustainability Report NCC 2024 128Other
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Multi-year review INCOME STATEMENT , SEK M 2020 2021 2022 2023 2024 Net sales 53,922 53,414 54,198 56,932 61,609 Production costs –49,589 –48,894 –50,202 –52,245 –56,330 Gross profit 4,333 4,520 3,996 4,687 5,280 Selling and administrative costs –2,967 –2,808 –2,981 –3,156 –3,223 Result from sales of owner-occupied properties –3 165 22 19 5 Impairment losses on fixed assets –24 –16 0 –2 –27 Result from sales of Group companies 9 –46 59 265 3 Result from participations in associated companies 12 10 262 –11 –6 Operating profit 1,360 1,825 1,358 1,802 2,032 Financial income 30 20 29 80 75 Financial expenses –110 –80 –87 –79 –244 Net financial items –80 –60 –59 1 –169 Profit after financial items 1,281 1,765 1,299 1,803 1,863 Tax –22 –257 –230 –230 –292 Profit for the period 1,259 1,508 1,069 1,573 1,571 Attributable to: NCC’s shareholders 1,259 1,508 1,069 1,573 1,571 Non-controlling interests – – – – – Profit for the period 1,259 1,508 1,069 1,573 1,571 NCC 2024 129Introduction Report of the Board of Directors Financial statementsSustainability Report Other
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Multi-year review BALANCE SHEET , SEK M 2020 2021 2022 2023 2024 Assets Fixed assets Goodwill 1,800 1,852 1,943 1,913 1,942 Other intangible assets 342 335 326 545 731 Right-of-use assets 1,952 1,600 1,420 1,300 1,396 Owner-occupied properties 875 790 909 867 892 Machinery and equipment 2,306 2,296 2,504 2,310 2,158 Long-term holdings of securities 93 82 83 84 88 Long-term interest-bearing receivables 125 128 184 204 201 Pension receivable – – 68 – 94 Other long-term receivables 19 23 36 21 23 Deferred tax assets 587 609 564 583 557 Total fixed assets 8,099 7,714 8,037 7,827 8,082 Current assets Right-of-use assets 11 2 2 1 1 Properties held for future development 1,492 1,005 1,179 1,265 1,314 Ongoing property projects 4,610 5,370 7,171 3,794 749 Completed property projects 496 – 0 4,986 6,302 Participations in associated companies 295 431 74 201 238 Inventory 953 1,059 1,079 1,120 1,052 Tax receivables 58 70 118 43 42 Accounts receivable 7,084 7,748 8,205 8,696 8,322 Worked-up non-invoiced revenues 1,349 1,367 1,410 1,076 837 Prepaid expenses and accrued income 907 952 857 1,190 1,096 Current interest-bearing receivables 126 103 117 129 138 Other receivables 740 552 386 415 368 Short-term investments 174 487 394 501 576 Cash and cash equivalents 2,155 2,561 534 707 2,910 Total current assets 20,450 21,707 21,528 24,124 23,945 TOTAL ASSETS 28,549 29,421 29,565 31,950 32,026 Equity Shareholders’ equity 3,972 5,844 7,183 7,324 8,663 Non-controlling interests – – – – – Total equity 3,972 5,844 7,183 7,324 8,663 Liabilities Long-term liabilities Long-term interest-bearing liabilities 3,965 2,038 3,286 3,006 3,314 Other long-term liabilities 60 47 60 13 17 Provisions for pensions and similar obligations 2,832 1,997 – 556 0 Deferred tax liabilities 196 464 943 889 1,165 Other provisions 2,586 2,608 2,481 2,218 2,448 Total long-term liabilities 9,639 7,154 6,770 6,683 6,944 Current liabilities Current interest-bearing liabilities 606 2,176 1,012 2,289 1,769 Accounts payable 4,487 4,567 5,165 6,105 4,841 Tax liabilities 66 22 14 –0 14 Invoiced revenues not worked up 4,104 4,830 4,754 5,058 5,226 Accrued expenses and deferred income 3,727 3,588 3,512 3,396 3,552 Provisions 19 13 7 – 2 Other current liabilities 1,930 1,227 1,148 1,096 1,016 Total current liabilities 14,938 16,422 15,612 17,944 16,419 Total liabilities 24,577 23,577 22,382 24,627 23,363 TOTAL EQUITY AND LIABILITIES 28,549 29,421 29,565 31,950 32,026 Introduction Report of the Board of Directors Financial statementsSustainability Report NCC 2024 130Other
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Multi-year review KEY FIGURES 2020 2021 2022 2023 2024 Financial statements, SEK M Net sales 53,922 53,414 54,198 56,932 61,609 Operating profit 1,360 1,825 1,358 1,802 2,032 Profit after financial items 1,281 1,765 1,299 1,803 1,863 Profit for the period 1,259 1,508 1,069 1,573 1,571 Investments in property projects 3,353 3,467 2,924 2,432 –1,672 Cash flow, SEK M Cash flow from operating activities 1,569 2,260 265 807 4,638 Cash flow from investing activities –463 –363 –401 –446 –647 Cash flow before financing 1,106 1,896 –136 361 3,990 Cash flow from financing activities –1,322 –1,492 –1,896 –187 –1,790 Change in cash and cash equivalents –260 406 –2,027 173 2,203 Profitability ratios Return on equity, % 37 32 17 21 21 Return on capital employed, % 12 16 12 15 15 Financial ratios at year-end, SEK M EBITDA % 5.2 5.9 4.8 5.3 5.4 Interest coverage ratio, multiple 12.7 23.0 15.9 23.9 9 Equity/assets ratio, % 14 20 24 23 27 Interest-bearing liabilities/total assets, % 26 21 15 18 16 Net cash +/Net debt – –4,823 –2,932 –3,000 –4,310 –1,164 Debt/equity ratio, multiple 1.2 0.5 0.4 0.6 0.1 Capital employed at year-end 11,375 12,055 11,480 13,175 13,746 Capital employed, average 10,983 11,430 11,766 12,776 13,818 Capital turnover rate, multiple 4.9 4.7 4.6 4.5 4.5 Closing date interest rate, %1) 1.1 1.1 4.1 5.1 4.9 Average interest rate maturity, years1) 1.0 0.5 1.0 0.7 0.8 Order status, SEK M Orders received 51,199 55,786 53,285 56,819 54,730 Order backlog 50,945 55,763 54,995 53,422 50,723 Per share data, SEK Profit after tax, before and after dilution 11.68 14.02 10.29 16.11 16.08 Cash flow from operating activities, after dilution 14.56 21.00 2.55 8.27 47.45 Cash flow before financing, after dilution 10.26 17.62 –1.30 3.70 40.83 P/E ratio, before dilution 13 12 9 8 10 Dividend, ordinary, SEK 5.00 6.00 6.00 8.00 9.002) Extra dividend, SEK 2.002) Dividend yield, % 3.3 3.6 6.2 6.4 6.8 Dividend yield excl. extra dividend, % 3.3 3.6 6.2 6.4 5.5 Equity, before and after dilution 36.89 54.32 73.60 74.99 88.59 Share price/equity, % 407 309 132 167 183 Share price at year-end, NCC B 150.00 167.70 97.25 125.60 162.40 Number of shares, millions Total number of issued shares3)4) 108.4 108.4 108.4 99.8 99.8 Treasury shares at year-end 0.8 0.8 10.8 2.1 2.0 Total number of shares outstanding before dilution at year-end 107.7 107.6 97.6 97.7 97.8 Average number of shares outstanding before dilution for the period 107.8 107.6 103.9 97.6 97.7 Market capitalization before dilution, SEK M 16,144 18,035 9,636 12,271 15,879 Personnel Average no. of employees 14,388 13,002 12,485 12,243 11,776 1) Pertains to interest-bearing liabilities excluding pension debt according to IAS 19 and leases according to IFRS 16. 2) Dividend for 2024 pertains to the Board of Directors’ motion to the AGM. 3) All shares issued by NCC are common shares. 4) 8,674,866 Series B treasury shares were withdrawn during the second quarter of 2023. NCC 2024 131Introduction Report of the Board of Directors Financial statementsSustainability Report Other
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Quarterly data Quarterly amounts, 2024 Full year Quarterly amounts, 2023 Full year SEK M Q1 Q2 Q3 Q4 2024 Q1 Q2 Q3 Q4 2023 Group Orders received 13,353 14,664 13,264 13,449 54,730 16,288 14,691 9,681 16,159 56,819 Order backlog 56,270 54,956 53,498 50,723 50,723 58,910 59,359 54,594 53,422 53,422 Net sales 11,561 15,448 14,277 20,323 61,609 12,464 14,854 14,022 15,592 56,932 Operating profit/loss –100 623 665 844 2,032 152 503 789 358 1,802 Profit/loss after financial items –117 589 612 779 1,863 185 493 771 354 1,803 Profit/loss after tax –93 472 472 721 1,571 153 407 621 392 1,573 Earnings per share after dilution, SEK –0.95 4.83 4.83 7.37 16.08 1.56 4.17 6.36 4.02 16.11 Cash flow before financing 42 –383 –309 4,640 3,990 19 –1,274 764 851 361 Equity/assets ratio, % 24 21 22 27 27 24 22 24 23 23 Net cash +/Net debt – –4,530 –5,215 –5,948 –1,164 –1,164 –3,251 –4,472 –3,710 –4,310 –4,310 NCC Infrastructure Orders received 5,002 4,638 4,725 4,554 18,919 4,617 3,522 2,655 5,913 16,707 Order backlog 17,484 17,263 17,639 16,824 16,824 17,845 16,921 15,397 16,074 16,074 Net sales 3,690 4,740 4,250 5,425 18,105 3,935 4,602 4,114 5,017 17,667 Operating profit 68 145 151 172 535 67 140 333 182 723 Operating margin, % 1.8 3.1 3.6 3.2 3.0 1.7 3.0 8.1 3.6 4.1 NCC Building Nordics Orders received 1,818 3,824 2,075 3,676 11,392 5,098 4,731 2,461 4,363 16,654 Order backlog 17,880 17,951 16,637 16,720 16,720 18,545 20,306 18,747 18,684 18,684 Net sales 3,231 3,582 3,210 3,861 13,884 3,503 3,756 3,576 3,780 14,615 Operating profit 38 100 104 184 426 18 94 93 139 343 Operating margin, % 1.2 2.8 3.2 4.8 3.1 0.5 2.5 2.6 3.7 2.3 NCC Building Sweden Orders received 2,643 2,620 4,579 2,397 12,239 3,398 3,543 2,510 3,210 12,661 Order backlog 15,987 14,954 16,574 14,980 14,980 18,480 18,295 18,293 16,753 16,753 Net sales 3,409 3,653 2,959 3,991 14,012 3,490 3,743 2,970 4,272 14,475 Operating profit/loss 55 71 45 –142 30 60 73 59 80 272 Operating margin, % 1.6 2.0 1.5 –3.6 0.2 1.7 2.0 2.0 1.9 1.9 NCC Industry Orders received 4,018 3,778 2,137 2,951 12,884 3,307 3,089 2,218 2,846 11,459 Net sales 1,015 3,910 4,140 3,569 12,634 1,058 3,471 3,862 3,094 11,485 Operating profit/loss –313 368 338 191 584 –261 281 281 99 400 Operating margin, % –30.8 9.4 8.2 5.4 4.6 –24.7 8.1 7.3 3.2 3.5 Operating capital employed 4,162 4,855 4,580 3,844 3,844 4,411 5,378 4,820 4,090 4,090 NCC Property Development Net sales 637 124 104 3,988 4,853 1,146 61 69 100 1,376 Operating profit/loss 87 30 37 564 719 256 –37 –18 42 243 Operating margin, % 13.7 24.3 36.1 14.1 14.8 22.3 –59.6 –26.7 42.2 17.7 Operating capital employed 9,625 9,926 10,157 7,938 7,938 8,046 8,787 9,225 9,592 9,592 NCC Industry’s operations and certain operations in NCC Building Sweden, NCC Building Nordics and NCC Infrastructure are impacted by seasonal variations due to weather conditions. Earnings in the fi rst quarter are normally weaker than the rest of the year. Introduction Report of the Board of Directors Financial statementsSustainability Report NCC 2024 132Other
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Financial key fi gures Average equity Average of recognized equity at January 1, March 31, June 30, September 30 and December 31. Average interest rate maturity The remaining interest rate maturity weighted by interest-bearing liabilities outstanding. Capital employed Total assets less interest-free liabilities including deferred tax liabilities. Average capital employed is calculated as the average of the balances at January 1, March 31, June 30, September 30 and December 31. Capital turnover rate Net sales divided by average capital employed. Closing date interest rate Nominal interest weighted by interest-bearing liabilities outstanding on the balance sheet date. Corporate net debt Total net debt excluding lease liability and excluding pension debt. Debt/equity ratio Net debt divided by equity. Dividend yield Dividend as a percentage of the share price at year-end. Earnings per share, after taxes Net profit for the year attributable to NCC’s sharehold- ers divided by the weighted number of shares during the year in question. EBITDA Operating profit in accordance with the income statement with depreciation and impairment losses reversed (not construction-related projects) includ- ing impairment losses on properties classified as current assets and excluding depreciation of leases. Equity/assets ratio Equity as a percentage of total assets. Equity per share before and after dilution Closing equity, before and after dilution, in relation to the number of shares outstanding at the end of the period. Exchange rate difference Exchange rate changes attributable to movements in various exchange rates when receivables and liabilities in foreign currency are translated into SEK. Exchange rate effect Impact of changes in various exchange rates on current reporting in NCC’s consolidated accounts on translation into SEK. Interest-bearing corporate debt Interest-bearing liabilities excluding lease liability and excluding pension debt. Interest coverage ratio Profit after net financial items following the reversal of financial expenses divided by financial expenses. Net debt/EBITDA Corporate net debt divided by EBITDA. Net investments Closing balance less opening balance plus depreci- ation and impairment losses less write-ups of fixed assets and properties classified as current assets. Net sales The net sales of construction operations are recog- nized in accordance with the percentage-of-com- pletion profit recognition principle. These revenues are recognized in pace with the gradual completion of construction projects within the company. Prop- erty sales are recognized on the date when material risks and benefits are transferred to the buyer, which normally coincides with the transfer of ownership. In the Parent Company, net sales correspond to recognized sales from completed projects. Operating capital employed Total assets less interest-free liabilities (including current and deferred tax liabilities), financial fixed assets, current tax assets, interest-bearing current receivables and cash and bank balances. Average operating capital employed is calculated as the average of the balances at January 1, March 31, June 30, September 30 and December 31. Operating margin Operating profit as a percentage of net sales. Operating net Profit from property management before depreciation. Order backlog Year-end value of the remaining project revenues not worked up for projects received, including proprietary projects for sale that have not been completed. Orders received Value of received projects and changes in existing projects during the period concerned. Proprietary projects for sale are also included among assign- ments received, assuming that a decision to initiate the assignment has been taken, as well as sold completed residential units from inventory. P/E ratio Year-end share price divided by earnings per share after taxes. Repurchase of company shares (treasury shares) in share data Treasury shares have been excluded from calcula- tions of key figures based on the number of shares outstanding. Return on capital employed Profit after net financial items including results from participations in associated companies following the reversal of interest expense as a percentage of average capital employed. Return on capital employed is used to optimize the Group’s capital allocation and value generation. Return on equity Net profit for the year according to the income statement excluding non-controlling interests, as a percentage of average equity. Return on operating capital employed Profit after net financial items including results from participations in associated companies following the reversal of interest expense as a percentage of average operating capital employed. Total return Share-price performance during the year plus dividend paid divided by share price at the beginning of the year. Total net debt Interest-bearing liabilities and provisions for pensions and similar obligations less cash and cash equivalents, short-term investments and interest-bearing receivables. Definitions NCC 2024 133Introduction Report of the Board of Directors Financial statementsSustainability Report Other
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Our core is construction NCC Annual and Sustainability Report 2023 Annual and Sustainability Report 2023 The central treatment plant in Kristianstad was on the cover of the 2023 Annual Report This has happened during 2024 at the central treatment plant in Kristianstad Central treatment plant in Kristianstad, Sweden. In 2024, Kristianstad’s new state-of-the-art treatment plant, built by NCC in collaboration with Kristianstad Municipality, was commissioned. The project was complex, which is why the partnering form of collaboration was successful. The parties were able to jointly identify solutions that were feasible and cost-effective early in the planning process. The new plant features the latest process technology. For example, it is one of the first treatment plants in Sweden to be equipped with a membrane bioreactor (MBR), which removes even very small particles such as microplastics. It has also been prepared for the removal of pharmaceutical residues. The new treatment plant is an important piece of the puzzle to drive development in the municipality forward, increase capacity and meet more stringent environmental standards. Introduction Report of the Board of Directors Financial statementsSustainability Report NCC 2024 134Other
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At the commissioning ceremony in October 2024, the ribbon was cut by Camilla Palm and Pia Dahlin from Kristianstad Municipality, accompanied by NCC Project Manager Sonja Högvall and Jimmy Källström, Head of Department, Kristianstad Municipality. The facility is an extremely effi cient wastewater treatment plant – ultra-modern, featuring the latest technology and cost-effective, and serves as a blueprint for other treatment plants to be built in the future. NCC 2024 135Introduction Report of the Board of Directors Financial statementsSustainability Report Other
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NCC will publish fi nancial information regarding the 2025 fi scal year on the following dates: April 29 Interim report Q1 2025 July 15 Interim report Q2 and Jan–Jun 2025 October 23 Interim report Q3 and Jan–Sep 2025 NCC’s interim reports are downloadable from the NCC Group’s website, ncc.com, where all information regarding the NCC Group is organized in English and Swedish versions. The website also includes an archive of interim reports dating back to 2011 and annual reports dating back to 1996. NCC does not print or distribute its interim reports or Annual Report. However, it is possible to order a copy by contacting the company. The share price performance of NCC’s Series A and B shares, updated every 15th minute of each day of trading, is presented under the “Investor Relations” tab, as are relevant key fi gures. NCC normally publishes press releases in English and Swedish for all orders and con- tracts exceeding an amount of SEK 150 M. A list of communicated orders exceeding SEK 150 M is available on NCC’s website. Minor orders may be announced only in the local language. All press releases are available on NCC’s website. NCC’s fi nancial information can be ordered either by using the order form available on the ncc.com website, by e-mailing ir@ncc.se, writing to NCC AB, SE-170 80 Solna, Sweden, or calling NCC AB at +46 8 585 510 00. The person at the NCC Group responsible for shareholder-related issues and fi nancial information is Andreas Koch, tel: +46 70 509 77 61, e-mail: ir@ncc.se. Annual General Meeting The Annual General Meeting will be held on May 7 at 3:30 p.m. at Hotel At Six, Brunke- bergstorg 6, Stockholm. For more information concerning registration, refer to the offi cial notifi cation of the AGM. Notice of the AGM is available on the NCC Group’s website, ncc.com, and was published in Post- och Inrikes Tidningar on April 3, 2025. Confi rmation that the offi cial notifi cation had been issued was announced in Dagens Nyheter and Svenska Dagbladet. NCC AB (publ), Corp. Reg. No. 556034-5174, Registered Head Offi ce: Solna. Addresses to the companies in the NCC Group are available at ncc.com. Shareholder information on ncc.com All fi nancial information concerning the NCC Group and everything that concerns you as an NCC shareholder is available on NCC’s website under the Investor Relations tab. Here you can also fi nd a list of the analysts who continu- ously monitor NCC. For information on the current ownership structure, refer to our website, ncc.com/investor-relations/ncc-share/ distribution-of-shareholding. Financial information NCC’s ten largest shareholders at Dec. 31, 2024 Name NCC A NCC B Share capital Voting rights OBOS BBL 4,000,000 6,028,116 10.05% 28.60% Första AP-fonden (AP1) 4,979,374 4.99% 3.09% Carnegie Fonder 4,793,527 4.81% 2.98% Handelsbanken Fonder 3,894,628 3.90% 2.42% Nordea Funds 3,756,961 3.77% 2.33% Vanguard 136,321 3,203,284 3.35% 2.84% ODIN Fonder 2,917,681 2.92% 1.81% Lannebo Kapitalförvaltning 2,785,518 2.79% 1.73% Unionen 2,590,000 2.60% 1.61% Dimensional Fund Advisors 2,532,075 2.54% 1.57% Total, ten largest shareholders 4,136,321 37,481,164 41.73% 48.99% Other 2,661,346 55,482,125 58.29% 51.01% Introduction Report of the Board of Directors Financial statementsSustainability Report NCC 2024 136Other
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Subscription service Via our subscription service, you can subscribe to receive NCC’s fi nancial reports and press releases. NCC share and fi nancial key fi gures Share-price information with a 15-minute delay is available and you can also see the total return (including reinvested dividends) and compare NCC’s share performance with that of Nordic competitors. More information/contact Andreas Koch Head of Communications Tel: +46 70 509 77 61 E-mail: ir@ncc.se Please read our virtual Annual Report: ncc.com/annualreport2024 Production: NCC in cooperation with Hallvarsson & Halvarsson Print: Åtta45
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NCC is one of the leading construction companies in the Nordics. Based on its expertise in managing complex construction processes, NCC contributes to the positive impact of construction for its customers and society. Operations include building and infrastructure project contracting, asphalt and stone materials production, and commercial property development. In 2024, NCC had sales of about SEK 62 bn and approximately 11,800 employees. NCC AB, SE-170 80 Solna, Sweden +46 8 585 510 00, ncc.com