renew

Our vision is to

our
Annual Report
2013

industry

superior
and provide

sustainable
solutions
 NCC
will drive
renewal.
Vision and values must be translated into tangible
actions. We will develop new products, be a pioneer
in applying new methods and use proprietary inno-
vations, as well as those developed by others. By
means of tangible actions, we will show that we have
the ability and the desire to drive development in the
industry.”

Peter Wågström
President and CEO
Contents

Review by the President 2

Strategic focus 6
Market and competitors 10
NCC’s geographical markets 12

OP E R AT I ON S
Industrial 14
Construction and civil engineering 18
Development 24

S u staina bil it y report

Sustainable development 30

F I N AN C I AL R EP ORT
Report of the Board of Directors including risk analysis 42
Consolidated income statement 50
Consolidated balance sheet 52
Parent Company income statement 54
Parent Company balance sheet 55
Changes in shareholders’ equity 56
Cash-flow statements 58
Notes 60
Appropriations of profits 94
Auditors’ report 95
Multi-year review 96
Quarterly data 99

S H AR E H OLD ER IN FOR MATION

Corporate governance report 100
Report on internal control 104
Board of Directors and Auditors 106
Group Management 108
The NCC share 110
Financial information/contacts 112
Definitions/glossary 113

The formal Annual Accounts, which have been

signed by the Board of Directors and examined
by the auditors, are pages 42–94.

More information on NCC: Visit www.ncc.se

 Profitable growth
in three businesses

Sha re of ncc tota l

Net sales 19%

Operating profit 15%

Capital employed 18%

Average number
industrial of employees 23%

Net sales 60%

Operating profit 36%

Capital employed 13%

Average number
Construction and civil engineering of employees 71%

Net sales 21%

Operating profit 49%

Capital employed 69%

Average number
Development of employees 6%
 ncc 2 013 1

2013 in figures
Orders received
SEK millions 56,979
Operating profit
SEK millions 2,679
Cash flow
SEK millions 1,661
Debt/equity ratio
times 0.7
Return
on shareholders’ equity, % 26
NC C ’ S MA R K ETS
s h are o f t otal net sa l es, %

norway sweden finland

17% 54% 14%

russia
(St. petersburg)
denmark
Estonia,
1%
10% Latvia

Germany
<1%
4%
2  ncc 2 013 R e v ie w by the P resident

Review by the President

Our focus on the right business in
tough market conditions gave results

Goal-oriented efforts pay off. Profit in 2013 exceeded that of the preceding year.
Slack market conditions led us to focus on continuing to enhance operational effi-
ciency, secure our earnings, make the “right” deals and take the “right” risks.
NCC continues to grow – but we are determined to grow profitably.

Despite a sluggish market, there is a great deal to be

pleased about as we close the books for 2013. We suc-
cessfully delivered a number proprietary property proj-
Sustainable business is the right way to go
ects with reliable tenants to their new owners. Our hous-
Sustainability must be a self-evident element of our offer-
ing sales surpassed those of previous years, and we hit ing. Our customers demand sustainable solutions, which
our target of 7,000 housing units in production during are essential to being able to attract the talents we wish to
the year. Despite a lengthy winter and difficult market recruit. A sustainability perspective is not only a major
conditions, NCC Roads offset its volume decline by and integrated component of our everyday activity – it is
also a feature of sound enterprise.
focusing on the right kind of business during the latter
part of the year. We attained healthy earnings by refus-
ing to hunt volume at any price, offering instead attrac-
tive products with a higher client value. I am also pleased that we took crucial, major steps
toward our goal of attaining higher efficiency in purchas-
ing and IT support throughout the Group. These actions
are decisive to our efforts to achieve sustained improve-
Money can be made even in a challenging market ment in earnings. Simply by raising the share of direct,
Repeated use of processes and methods, plus the right selection of projects, international and coordinated purchases, we can signifi-
results in rewarding business even in a slow market. Our Danish contracting cantly reduce our purchasing costs. Our establishment
model proved itself again during 2013 and can be exported to other parts of
the Group.
of a new, central purchasing organization and a Group-
wide sales portal during the year is a key component in
efficiency-enhancement work.
TARGE T- O RIE N T E D E FFO RT S GE N E RATE RESU LTS
NCC’s housing construction venture in Germany contin- SLO W REC OVERY
ues to produce sound results. Our Danish contracting Although the market strengthened during the second
model also confirmed its effectiveness during the year. half of 2013, we did not get to see the upturn that many
Thanks to repeated use of shared methods and pro- had hoped for. The Swedish construction market is rela-
cesses, backed by target-oriented and strategic project tively stable but recovery is slow. Although we are priori-
selection, our Danish construction operations confirmed tizing healthy profitability in Sweden, the Swedish con-
that it is possible to engage in profitable business even in tracting operations did not meet expectations during the
a challenging market. past year. The market in Norway remained generally
 R e v ie w by the P resident ncc 2 013 3

favorable but we encountered serious profitability prob- A PI ONEER IN MU LTI-FA MILY HOUSING OFFE R I N G
lems in a number of projects, leading to major impair- ENERGY SURPLUSES
ments. Since a flat economy is turning the Finnish mar- Identifying procedures that facilitate industrial-style pro-
ket into a challenge, it will take time to reverse construc- duction and enhance efficiency is one of the major chal-
tion activity in Finland to reasonable profitability. lenges facing the industry. To deliver ever-rising cus-
tomer value, we must be better able to standardize our
N C C WI LL D RIV E RE N E WA L products and attain results from serial production. Backed
Over the course of 2013, we completed a renewal of our by our new vision and relentless product innovation, NCC
vision and values in a bid to challenge ourselves and pro- shows its intention to be a driver of development.
vide additional guidance and energy to the organization. NCC was the first in its industry to offer customers
Peter Wågström, climate-aligned solutions through its green tenders, and
As a result of these efforts, we added pioneering spirit to
President and CEO
our core values; which for us includes having the cour- we continue to challenge in the sustainability area. For
age to test new concepts and work methods, and to show example, NCC Roads has devised a method that permits
initiative and be proactive. Another reason for renewing us to advance from conventional fossil fuel to wood
our vision was our aim of re-shaping our industry by pro- ­pellets firing in asphalt plants. In autumn 2013, we com-
viding superior sustainable solutions. menced the building of Sweden’s first plus-energy multi-
Visions and values must be backed up by concrete family dwelling, on behalf of HFAB i Halmstad, a munici-
actions and an efficient organization. One example of pal housing company. The building will produce suffi-
renewal and simultaneous efficiency enhancement is cient heat and power to cover household requirements
that we recently introduced a mobile phone app that and also make a contribution to the electricity grid.
offers our project managers direct access to documents
relating to all projects. During 2013, NCC became a key data
global pioneer by gaining certification according to new,
rigorous requirements for land remediation. We also SEK M 2013 2012
Orders received 56,979 55,759
developed an entirely new climate-smart facility to melt
Order backlog 47,638 45,833
and treat vast volumes of snow. Deployment of this
Net sales 57,823 57,227
unique technology permits us to avoid dumping contam-
Operating profit 2,679 2,519
inated snow in lakes and at sea. Profit after financial items 2,400 2,277
NCC Construction Sweden has been reorganized. Profit for the year 1,989 1,910
Bringing market and production development closer to Earnings per share after dilution, SEK 18.40 17.62
the various customer segments empowers us to offer Dividend per share, SEK 12.001) 10.00
improved customer value, while also developing produc- Cash flow before financing 1,661 –932
tion methods using joint platforms and systems. Similarly, Cash flow before financing per share
after dilution, SEK 15.40 –8.61
NCC Roads now has a Nordic-wide organization as part of
Return on shareholders’ equity, % 26 28
efforts to boost the potential for shared deployment of Equity/assets ratio, % 22 20
expertise and equipment, attaining higher efficiency and Net indebtedness 5,656 6,467
offering uniform quality stone material and asphalt prod- Average number of employees during the year 18,360 18,175
ucts, and road services, throughout the Nordic region. 1) Proposed dividend.
4  ncc 2 013 R e v ie w by the P resident

P R A C T IC A L H EL P IN W ORK IN G E T HICA LLY

To continue winning customer confidence, we will also Lower cost base
pursue operations by using an ethically sustainable We will continue to focus on shrinking our cost
approach. Our employees are ambitious and seek pro- base. Higher efficiency, lower purchasing prices,
fessionalism, and we have a firm ambition to actively improved utilization of shared platforms and
support them as a feature of our endeavor to do right ­processes are crucial measures in supporting
­sustainable improvement in earnings.
rather than pointing out when things are done wrong.
By way of practical input in business ethics support, we
have launched a new, unique system – NCC Compass – equality in the construction sector, which many women in
which, using specially trained navigators, is designed to the industry experience. Another example among many
guide our employees by giving them concrete advice is that, in cooperation with Helsinki City Council, we are
and answering their questions. participating in a project aimed at offering training and
The efforts to achieve a sustainable environment must practical work experience that promote integration.
encompass our own organization and work environment. It is not only a matter of doing the right thing from a
NCC’s vision is zero workplace accidents. Occupational sustainability perspective; it is equally important to meet
health and safety issues and safety awareness must be growing customer demand. This clear, ambitious and
ever present and we are working hard to promote behav- sound move from a business viewpoint also means that
iors and attitudes that lead to reduced risks. All work- we find it easier to recruit the right employees and win
places conduct a program called “Awareness Days” that the confidence of our stakeholders. The fact that sus-
permits all Group employees to discuss the work environ- tainability is an essential and natural part of everyday
ment and propose improvement measures. activities and our offering is quite simply an integrated
part of the work involved in closing the “right” deals.
S USTAIN ABI L IT Y – A SE LF- E V ID E N T F EATUR E OF
T HE BU SIN E SS HO USING CR ISIS DEMA NDS A S OL UTI O N
NCC works actively to enhance diversity and counter dis- There is an urgent need in Sweden to restore and create
crimination. For example, the Swedish construction oper- the conditions for a more smoothly functioning housing
ation, in consultation with the women’s network Stella, market. While it is good that political proposals are in
has formulated targets and actions to deal with the lack of the pipeline, a concerted effort is required if the hous-
 R e v ie w by the P resident ncc 2 013 5

Office building, Copenhagen Port Company, Denmark Profitable growth

When recovery moves slowly and the market trend is
­sluggish, it becomes even more important to complete the
right deals and take the right risks. Conscious and strategic
project selection rather than hunting volume at any price
has a positive impact on profitability. We will grow, but will
do so profitably.

GR OWING WIT H PR OF ITA BI L ITY

Housing shortage hampers growth Growth while maintaining profitability is the basis of
NCC does not merely participate in the Swedish housing NCC’s strategy. In Sweden and Norway, the planned major
debate; we also ensure that rental apartments can be infrastructure investments offer considerable potential.
constructed at reasonable production costs. This Production volumes in our housing construction business
strengthens our argument when we ask the state and have established themselves at a healthy level but there is
municipalities to intensify their efforts to find a solution.
scope to do more to boost profitability. In Finland, on the
other hand, we are continuing our efforts to gain reason-
ing shortage, notably of rental units, is not to present a able profitability against a poor economic backdrop. The
serious obstacle to economic growth. application of our contracting model in Denmark confirms
NCC is actively participating in the housing debate but that it is possible to earn money even in a challenging mar-
is also conveying new, attractively priced rental units to the ket. We plan to continue to increase our profitable housing
market. We have products that are part of the solution to production in Germany in pace with rising demand. Pro-
the housing shortage. We have begun to deliver apart- grams designed to continuously add to operational effi-
ments to the public housing organization in Sundsvall in ciency throughout the Group, ­capitalize on synergism and
line with our low-cost NCC Folkboende concept. In the reduce the cost base are ­continuing.
Stockholm area, we have sold a project with more than
300 environmentally certified rental units, based on propri-
etary designs, to the KPA pension organization. The apart- Solna, February 2014
ments are built using an NCC platform and represent one
example that confirms how housing block structures with
an urban feel can be constructed cost effectively.
NCC can and will accept its responsibility for building
more housing at reasonable prices but the government
and municipalities can contribute more. They can do
this, for example, by relaxing costly regulations, speed- Peter Wågström
ing up planning processes and supplying sites at prices President and CEO
permitting the building of rental apartments.
6  ncc 2 013 S trate g ic foc u s

Strategic focus
Profitable growth – strategy for
a stronger market position

V isi on Financia l targets and dividend p o l icy

NCC’s vision is to renew our industry and provide NCC aims to generate a healthy return to shareholders
­superior sustainable solutions. under financial stability. The return on shareholders’
equity after tax shall amount to 20 percent. The level for
B U SIN E SS C O N C E P T – resp o nsib l e enterprise the return target is based on the margins that the vari-
NCC develops and builds future environments for work- ous parts of the Group are expected to generate on a
ing, living and communication. Supported by its values, sustainable basis, and on capital requirements in rela-
NCC and its customers jointly identify needs-based, tion to the prevailing business focus.
cost-effective and high-quality solutions that generate To ensure that the return target is not reached by tak-
added value for all of NCC’s stakeholders and contribute ing financial risks, net indebtedness, defined as interest-
to sustainable social development. bearing liabilities less cash and cash equivalents and
interest-bearing receivables, must never exceed 1.5
Ob jective times shareholders’ equity during any given quarter.
NCC’s overriding objective is to create value for its cus- NCC’s dividend policy is to distribute at least half of
tomers and shareholders. NCC aims to be a leading after-tax profit for the year to the shareholders. The aim
player in the markets in which it is active, offer sustain- of the policy is to generate a healthy return for NCC’s
able solutions and be the customer’s first choice. shareholders, to provide NCC with the potential to invest
in its operations and thus to ensure that future growth
can be created while maintaining financial stability.

return o n s h are ho l ders ’ eq uity Debt /e quity rati o

Objective Objective
The return on shareholders’ equity shall amount to 20 percent. Net indebtedness, defined as interest-bearing liabilities less cash and cash
equivalents and interest-bearing receivables, shall not exceed 1.5 times
Target fulfillment shareholders’ equity. The target applies to the end of every quarter.
The Group has achieved its objective of 20 percent in four of the past five
years. In 2013, NCC achieved the objective with a return of 26 percent. Target fulfillment
Both shareholders’ equity and earnings increased in 2013. The debt/equity ratio did not exceed the limit stated in NCC’s financial
objective at the end of any of the quarterly periods in 2013 and totaled 0.7
(0.8) at year-end. The debt/equity ratio is affected by seasonal variations.
More capital was tied up in the second and third quarters due to a high
pace of activity in the asphalt and civil engineering operations.

% times
30 1.5

25 1.2
20
0.9
15
0.6
10
0.3
5
0 0.0
09 10 11 12 13 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
09 10 11 12 13
Return on shareholders’ equity
Target: 20 percent Debt/equity ratio
Target: < 1.5, target before 2010 was 1.0
 S trate g ic foc u s
ncc 2 013 7

N C C ’ S BU SIN E SS M O D E L

CUSTOMER

CONSTRUCTION AND Cash flow

INDUSTRIAL DEVELOPMENT
CIVIL ENGINEERING

Operating margin and return

NCC GROUP

Dividend to shareholders

T hree businesses S ynergies between t he businesses

NCC operates three businesses with different business The industrial business supports the construction and
concepts. civil engineering business with stone materials, asphalt,
• An industrial business with a process-oriented focus ­paving and road services. For major roadworks, in
operated under NCC Roads’ aggregate and asphalt ­particular, the synergies are significant.
production. This business ties up capital in pits and The industrial business and the civil engineering
quarries, as well as in stone materials and asphalt business usually remain relatively stable when the
works, which have high fixed costs. ­economy recedes, while the construction and develop-
• A construction and civil engineering business oper- ment businesses are more economically sensitive.
ated under NCC’s Construction units. This business The develop­ment business provides internal employ-
requires little tied-up capital, has a strong cash flow ment for the construction units when housing units and
and is project oriented. commercial properties are under development.
• A development business operated under NCC Hous- Since the construction and civil engineering busi-
ing and NCC Property Development. This business nesses normally have negative working capital and
ties up capital in properties held for future develop- favorable cash flows, this also creates a financial syn-
ment and ongoing projects. The development busi- ergy. These cash flows are invested in the development
ness is transaction oriented and faces a greater mar- businesses, which will generate a high return over time.­
ket risk than NCC’s other businesses since it takes
many years to deliver a project from the time the land
is initially acquired.

Vallda Heberg, Kungsbacka, Sweden

Dividend

Dividend policy
NCC’s dividend policy is to distribute at least half of after-tax profit for
the year to the shareholders. This level has been established to generate
a healthy return for NCC’s shareholders and to provide NCC with the
potential to invest in its core operations and thus ensure that future growth
can be created while maintaining financial stability.
The proposed dividend for 2013 is SEK 12.00 (10.00) per share,
­distributed into two payments. The proposed dividend for 2013 corre-
sponds to 65 percent of profit after tax.

SEK
20

16

12

0
09 10 11 12 13

Profit after tax 50 percent of profit for the year

Ordinary dividend
8  ncc 2 013 S trate g ic foc u s

S TRAT E GY 2012–2015 NCC will capitalize on Group synergies in both support

NCC has a strong financial position and solid potential functions and operations. There are operational and
to expand its operations, provided that the market out- financial synergies.
look does not deteriorate significantly. The aim is to pri- The housing development business is a Group-wide
marily grow organically and in existing markets but this activity. Growth of the housing development business
may be supplemented with acquisitions. NCC aims to will require more efficient processes and a broadening
achieve profitable growth and be a leading player in the of the product mix. One step toward more efficient pro-
markets in which it is active. Being a leading player cesses will be further cooperation between development
entails being among the top three companies in the and production operations. Other steps include develop-
industry in terms of profitability and volumes. ing construction systems that reduce costs, improving
quality and increasing the level of specialization in devel-
Key strategic issues opment and production operations. NCC’s product mix
Achieving profitable growth is contingent on a number will be expanded to include lower price segments and
of critical conditions and key issues. NCC aims to always additional rental units.
be the customer’s first choice. To achieve this objective, NCC aims to be the leading society builder of sustain-
NCC focuses on four key areas when engaging in cus- able environments and will capitalize on this sustainabil-
tomer relations; one company – one voice, understand- ity perspective to proactively develop new businesses.
ing the customer’s business, openness and clarity, and
delivering the right product with the right quality at the Growth priorities
right time. Three markets and areas will be prioritized:
NCC operates in mature markets characterized by • Growth in Norway within all business areas
price-based competition, which means that cost reduc- • Establishing a presence in the civil engineering
tions are a prerequisite for achieving organic growth. ­market in Finland
NCC will continue working to reduce construction • Expansion of the housing development business
costs. in all markets

Profitable growth The aim is to grow – but not at the expense of profitability

Customer focus Leader in Reduced costs

K ey strategic
issues
NCC aims to be the NCC’s markets Organic growth based
customer’s first choice Leading player in on reduced costs
the Nordic region

T h ree businesses

Industrial Capita li ze o n synergies

between operations

Construction and
civil engineering
Activities > S
 trengthen position in > Develop position in the > Establish civil engineering
­Denmark and Finland value chain ­operations in Finland
– stone materials – recycling
> Expand in Norway
– road services
> Expand in Norway

Gr owt h target
fo r t h e strategic Sales growth ≥ double GDP growth rate
peri o d

Status in
2 0 1 2 – 2 0 13 Sales growth 2.0 percent (double GDP = 1.7 percent)1)

1) The average GDP growth for Sweden, Denmark, Norway and Finland amounted to 0.83 percent (0.83x2=1.66). Source: Euroconstruct.
 S trate g ic foc u s
ncc 2 013 9

Growth targets and activities mix. NCC has a project portfolio of commercial proper-
The target for the industrial business is for sales growth ties at a favorable level and the aim for the strategy
to correspond to at least double the GDP growth rate by period is to maintain the project portfolio at this level.
the end of the strategy period in 2015.
Although NCC currently has a strong position in all Development 2012-2013
markets, the company aims to further advance its posi- Now at the halfway stage of its strategy period, NCC has
tion in the stone materials market in Norway, Denmark advanced its positions in its priority areas. Thanks to
and Finland and the asphalt market in Norway. The focus organic growth and acquisitions, NCC has more exten-
on road services will continue and the recycling of con- sive operations in Norway today. Revenues in Norway
struction waste will be expanded. The target for con- in 2013 were 44 percent higher than at the outset of the
struction and civil engineering operations is to increase strategy period; and the focus is now on boosting earn-
sales by at least twice as much as GDP growth at the ings. In Finland, the establishment of civil engineering
close of the strategy period in 2015. While this growth operations is proceeding as planned. The Finnish opera-
will primarily be achieved organically, it may be supple- tions, which employ some 70 people, undertake basic
mented with acquisitions. The main focus in the con- earthworks. NCC is gradually building up competencies
struction and civil engineering business will initially be and competitiveness in its Finnish civil engineering
placed on joint strategies for Virtual Design and Con- activities. As a result of buoyant sales of housing, NCC
struction (VDC), operational systems, risk management has been able to start more housing units and expand
and further enhancement of the company’s purchasing the housing development business. At year-end, NCC
activities. had an additional 1,000 housing units in current produc-
The housing development business aims to grow tion, with the minimum target of 7,000 surpassed earlier
­during the strategy period. The target is that the num- in 2013. Growth targets for NCC’s three businesses for
ber of housing units under production will amount to at the strategy period and the trend during 2012–2013 are
least 7,000. Achieving this expansion will require more illustrated below.
efficient processes and certain changes to the product

One NCC Housing development Sustainability perspective

Capitalize on synergies ­business Proactive development
between operations Shared activity with a greater degree of of new ­businesses
­integration between construction and
­development operations

Capita l i z e o n synergies
between operatio ns Development

> F ocus on joint strategies for VDC, operational > Expand the housing development business
­systems and risk management and further enhance – more efficient processes
purchasing activities – broader product mix

≥ 7,000 housing units under construction

Sales growth ≥ double GDP growth rate
Maintained level in the property development portfolio

6,383 housing units under construction (5,363 in 2011).

Sales growth of 2.7 percent (double GDP=1.7 percent)1)
17 (23 in 2011) property projects at a total investment cost
of SEK 5.0 ­billion (5.6 in 2011)
10 ncc 2 013 M ar k et and competitors

Market and competitors

NCC holds a strong position
The Nordic construction market generated sales of SEK 882 billion (839) in 2013.
NCC is one of the largest players, with a market share of 7 percent.

T H RE E BU SIN E SSE S Development

NCC operates three businesses with different business The development business is transaction-oriented and
concepts, market conditions and driving forces. faces a relatively large market risk, since it tracks the
economic cycle. The housing market is particularly sen-
Construction and civil engineering sitive to changes in interest and employment rates.
As a rule, the construction market tracks the general Demand for investments in property projects is largely
economic trend but with a time lag of at least one year. controlled by the leasing rate, market transparency and
The housing market generally reacts the fastest to eco- access to funds in the financial system.
nomic cycles. Other building construction (offices,
industrial and public premises) and the civil engineering EX TERNA L TRENDS T HAT IMPA CT NCC
market are subject to a greater time lag, since such proj- NCC has identified four major trends in the business
ects depend on the investment plans of other industries. environment that will affect operations in the years
In general, larger projects also extend over a longer ahead and that the company must address.
period of time. The risk is local in character, although
the market for construction contracts is generally sensi- Environment and sustainability
tive to economic conditions. The high demand for energy-efficient solutions is
impacting all of NCC’s business areas. This is an area
Industrial with opportunities for new business, where NCC has
The industrial business is slightly less sensitive to eco- the potential to play a leading role.
nomic conditions than the construction and civil engi-
neering business, since large volumes pertain to mainte-
nance or are linked to major infrastructure projects with
long lead times. The market and market risk are local.

C O M P E T IT O RS
The Nordic construction market is national, highly frag- MA RKET S HA R ES IN 2013
mented and characterized by intense local competition.
The Nordic construction market is highly fragmented. NCC is
In local markets, NCC competes with thousands of small one of the largest construction companies in the Nordic region
building contractors. Large-scale civil engineering proj- with a market share of 7 percent. The Nordic construction
ects in the Nordic region are often procured in the face ­market (excluding residential refurbishment) generated sales
of approximately SEK 882 billion in 2013.
of international competition from Europe’s largest
­construction companies, with the really major projects
frequently conducted in consortia. NCC,
NCC,7 (7)%
7 (7)%
Skanska, 6 (7)%
At the Nordic level, NCC’s main competitors are Skanska, 6 (7)%
Peab, 5 (6)%
Skanska and Peab of Sweden, MT Højgaard of Den- Peab, 53 (6)%
Veidekke, (3)%
mark, Veidekke and AF-Gruppen of Norway and YIT Veidekke, 32(3)%
Lemminkäinen, (2)%
YIT, 2 (5)%
and Lemminkäinen of Finland. In Sweden, JM is a com- Lemminkäinen, 2 (2)%
MT Højgaard, 1 (1)%
petitor in residential development. In civil engineering YIT, 2 (5)%
JM, 1 (1)%
projects and road construction, as well as asphalt and MT
AF Højgaard,
Gruppen, 1 (1)%1 (1)%
JM, 172(1)%
Other, (67)%
paving in the Nordic region, central government pro-
AF Gruppen, 1 (1)%
duction units, such as Svevia in Sweden, are other signif-
Other, 72 (67)%
icant competitors. In Denmark and Finland, Colas and
CRH are also competitors in asphalt and stone materials. (Source: Euroconstruct and NCC)

From a Nordic perspective, the property development

market comprises a few major players with NCC as one of
the market leaders. Skanska is another major player. In
local markets, other players may also be significant com-
petitors, such as YIT and SRV of Finland.
 M ar k et and competitors ncc 2 013 11

IT and digital media

IT is an effective support tool for the company’s operations. NCC is EC ON OMIC A ND GDP DEVE LO PMENT
working to promote greater use of IT in its production activities.
GDP growth was noted in Norway, Sweden and Denmark during 2013.
VDC is the most significant technological advancement in the con- The growth rate diminished in Norway. In Finland, GDP declined in 2013.
struction industry in the past 30 years.
%
Generational shift 8
7
The ongoing generational shift is a key issue facing the industry. 6
The level of job mobility among production personnel is high and, 5

with the retirements expected in the future, NCC will need to hire a 4
3
large number of employees, primarily engineers, in the next five 2
years. 1
0
–1
Internationalization 10 11 12 13 F14 F15 F16

The level of international competition in the Nordic construction Sweden Finland

market is on the rise. Norway Denmark (Source: Euroconstruct)

Greater job mobility represents both a challenge and an opportu-

nity. The main challenge is that well-educated employees, particu-
larly engineers, will have access to an even larger international labor
market. At the same time, NCC will have the opportunity to attract
employees from other countries.
Internationalization is also creating excellent opportunities in the
area of purchasing.

M A JO R C O MP ETI T O R S I N T H E N O RDIC RE GI O N IN 2013

Lemmin-­ AF MT Høj-
Key figures and products NCC Skanska1) Peab Veidekke käinen YIT JM Gruppen gaard2)
Sales (SEK billion) 58 136 43 24 16 16 13 11 8
Number of employees (thousands) 18 57 13 6 6 6 2 3 5
Housing
Buildings
Civil engineering
Asphalt, stone materials, concrete
Property development
Machinery operations
Market share, Nordic region, total (%) 7 6 5 3 2 2 1 1 1
1) It is estimated that approximately SEK 56 billion of Skanska’s sales derives from Nordic operations.
2) Pertains to the period October 2012–September 2013.
12 ncc 2 013 N cc ' s g eo g raphica l mar k ets

NCC’s geographical markets

Operation / Legend

Industrial (stone materials, Construction and civil Housing development Property development
asphalt, paving and road services) engineering

All amounts are stated in SEK millions (SEK M).

NCC holds a strong market position in all segments in Sweden.

In the other Nordic countries, as well as Estonia, Latvia,
Germany and St. Petersburg, NCC occupies various
positions with a potential for strengthening, both
geographically and within different segments.

NCC In Sweden 

Sweden is NCC’s largest market by far and

NCC is a market leader in most sectors,
including civil engineering, building con-
struction, housing development, property
development and stone materialsstone mate-
rialsstone materialsstone materials, asphalt,
­paving and road services. Large customer
groups are the central government, munici-
palities and major companies in areas includ-
ing the mining industry, as well as ­private
customers who buy housing.
Orders received: 27,560 (28,659)
Order backlog: 22,366 (23,236)
Net sales: 30,547 (31,338)
Operating profit: 1,648 (1,511)
Capital employed: 7,382 (8,287)
Number of employees: 9,988 (10,060)

NCC In denmark 

In Denmark, NCC is a major player in offices,

housing and other buildings, as well as stone
materials, asphalt, paving and road services.
NCC in Germany 
NCC has also developed a number of prop-
erty ­projects. Major customers include the In Germany, NCC builds housing. NCC is active in a
central government, municipalities, various ­number of selected metropolitan regions in Germany.
investors and private customers.
Orders received: 3,255 (2,664) Operating profit: 229 (159)
Orders received: 7,683 (5,571) Operating profit: 239 (297) Order backlog: 3,256 (2,402) Capital employed: 877 (985)
Order backlog: 5,995 (3,586) Capital employed: 3,847 (3,478) Net sales: 2,508 (2,140) Number of employees: 686 (650)
Net sales: 5,671 (6,721) Number of employees: 2,114 (2,239)
 ncc 2 013 13

Operations
The operations in NCC’s three businesses
are described on the following pages.

NCC IN finland 

NCC in Finland focuses on residential and building construction.

Establishment of civil engineering operations in Finland is in progress.
NCC is a leading developer of business parks, with several projects
under way in the Helsinki region. In recent years, NCC has expanded
its presence in stone materials, asphalt, paving and road services.
Orders received: 7,381 (7,461) Operating profit: 267 (343)
Order backlog: 6,514 (6,883) Capital employed: 3,039 (2,708)
Net sales: 8,181 (8,261) Number of employees: 2,786 (2,810)

NCC In norway 

14
In Norway, NCC has a large civil engineering operation that con-
Industrial
Stone materials, asphalt, paving
structs roads, tunnels, bridges and other types of infrastructure.
and road services.
NCC also develops and constructs offices, housing and other
­buildings, and has a substantial stone materialsstone materials,
asphalt, paving and road service operation. Major customer catego-
ries include the ­Norwegian central government, municipalities,
property companies and other major companies.
Orders received: 9,691 (10,425) Operating profit: 198 (143)
Order backlog: 7,641 (8,397) Capital employed: 3,453 (3,557)
Net sales: 10,172 (8,590) Number of employees: 2,418 (2,090)

Construction and
civil engineering

18
NCC In st. petersburg 
Housing, offices, other buildings, industrial ­
NCC develops and constructs housing in St. Petersburg, Russia. premises, roads, civil engineering and other
NCC also has asphalt and paving operations. types of infrastructure.

Orders received: 1,290 (912) Operating profit: 108 (80)

Order backlog: 1,800 (1,253) Capital employed: 779 (903)
Net sales: 633 (500) Number of employees: 356 (314)

NCC in the Baltic countries1)

In Estonia and Latvia, NCC constructs housing properties and build-

24
ings. NCC has also established a property development ­operation. Development
Construction has been concentrated to the capital cities of ­Tallinn
Development of housing and
(Estonia) and Riga (Latvia). ­commercial premises.

Orders received: 118 (68) Operating loss: –11 (–20)

Order backlog: 89 (77) Capital employed: 527 (533)
Net sales: 111 (73) Number of employees: 12 (12)

1) T he Baltic Construction units are included

under NCC Construction Finland.
14 n c c 2 013 o p e r at i o n s

Industrial

The Motala bridge, Sweden

Industrial operations are conducted in the NCC NCC’s industrial operations are based on
Roads business area.
the production of stone materials and
S hare of N C C i n t otal
asphalt, as well as asphalt paving and road
services. The various areas are inter-
twined and contribute to a natural process-
19% Net sales
ing chain that is well integrated with NCC’s
15% Operating profit construction and civil-engineering opera-
tions.
18% Capital employed

23% Average number of employees Stone materials, which are primarily extracted from pro-
prietary quarries, are used in asphalt production and as
input materials in construction and civil engineering
FA ST FA C TS
projects. Asphalt is produced in proprietary asphalt
SEK M 2013 2012 Change, %
works and used in various types of paving. Road net-
Net sales 11,999 12,211 –2% works have to be maintained, and multi-year road-­
Operating profit 406 417 –3% service contracts are signed frequently.
Capital employed 3,557 3,049 17% Through a high-tech manufacturing process, input
Average number of material and asphalt are delivered to everything from
employees 4,119 4,209 –2%
garage ramps and minor roads to complex infrastructure
Stone materials
(1,000 tons) 1) 27,395 29,657 –8% projects. Deliveries are also made to other construction
Asphalt (1,000 tons) 1) 6,257 6,462 –3% and civil-engineering operations. For example, stone mate-
1) Sold volume. rials are used when laying foundations for housing, offices
and industrial sites, as well as in the concrete industry.
2 013 i n brie f
The long winter impacted NCC’s industrial operations and, despite The private sector constitutes the customer base for
a mild autumn, the sold volume of stone materials declined. How- stone materials, asphalt production, paving and road ser-
ever, the decline in volume was offset by higher prices. Operating vices, as do municipal and government administrations.
profit matched the preceding year, despite negative results from
road-­services operations. The private market for paving and deliveries of stone
materials comprises the largest portion of the customer
 o p e r at i o n s n c c 2 013 15

STRATE GI C ACTI V ITIE S 2012–2015

Stone materials, Strengthened position

asphalt, paving
in Denmark and Finland
– stone materials

and road services Develop

position in the value chain
– recycling
– road services

Sales
12
Expand
in Norway
SEK billion
G RO W TH OB J EC TI V E

0.4
The target for industrial operations is to increase
Operating profit sales at the end of the strategy period, in 2015, by at
SEK billion least twice as much as GDP growth.

27,395
Stat us i n 2012–2013
Thousand tons Revenue growth 2.0 percent
(twice GDP=1.7 percent)
of stone materials

Thousand tons
asphalt 6,257 K E Y S TRATE GIC I SSU E S

Activities in 2013
During the year, work on the prioritized key issues
continued at a high pace and the organization was
remodeled to meet the challenges faced by NCC.
base. Increasingly, NCC is offering total-package solu- Roads United – the new joint working method and IT sys-
tions, or function contracts, to public-sector customers, tem to increase synergies in the business area and the
including long-term resource planning for production, integration with customers – was implemented in Sweden
operation and maintenance of road networks. Multi-year during 2013. In the first quarter of 2014, Roads United
framework agreements are usually signed with those was also implemented in Denmark, Norway and Finland.
­customers. NCC Recycling – the establishment of a network of
The main markets are concentrated in the Nordic recycling terminals for construction and civil-engineer-
ing residue – continues. A number of new terminals
countries, where NCC is the leading player in the indus-
were opened during the year and 18 operations in the
try. Sweden is the largest single market, accounting for Nordic market are currently active within the frame-
nearly 50 percent of sales. Asphalt and paving opera- work of the NCC Recycling concept.
tions are also conducted in the St. Petersburg area.
Capital rationalization – the initiative to enhance pro-
In 2013, NCC continued its long-term strategic efforts duction efficiency and machine utilization in the busi-
to be the local market leader, secure access to stone ness area has increasingly entailed the moving of
materials from proprietary quarries near urban areas, resources across national borders, and more tons of
increase coordination within the business area and asphalt being produced with less machine resources.

NCC’s industrial business strengthen its customer focus. Pricing of stone materials – the screening of aggregate
is based on a distinct To further strengthen this leading position and to cap- operations has yielded results. All of the major quar-
value chain with four italize on the economies of scale available to a Nordic ries have been reviewed and the project has now been
steps – aggregate and established and become a vital tool for improving
asphalt production, organization, work commenced in 2013 on restructuring
­efficiency and profitability.
­paving and road services. the business area into three Nordic divisions based on
The four components are Road services – the Nordic coordination to increase
the value chain – stone materials, asphalt and road ser-
linked in a well-integrated internal efficiency and integration with key customers –
processing chain. vices. The change, which came into force on January 1, continues. Web portals and other IT solutions are to be
2014, streamlines the organization and creates improved used to facilitate cooperation across the business area.
Reorganization – during the year, work commenced on
THE VAL UE C HAI N the restructuring of operations into a trans-Nordic
organization based on the various parts of the value
chain – stone materials, asphalt, paving and road ser-
Stone materials Asphalt Paving Road services vices – to better utilize the synergies of Nordic opera-
Ogräsbekämpning medNCC NCCSpuma.
Spuma.
tions and develop strategic initiatives.
16 n c c 2 013 o p e r at i o n s

Biodiversity
In one of NCC’s largest quarries at Ohkola, Finland, a pilot The first phase of the project was to combat a non-native and poi-
project for biodiversity was initiated with the Society for Nature sonous species of lupin that was suppressing domestic meadow
Conservation in spring 2013. The project is unique for several flora. The eco-friendly method for weed control, NCC Spuma,
reasons, including the form of collaboration and method of resto- was used successfully.
ration. Ohkola has been an active quarry since the 1960s and In the next phase, a building is planned for the storage of
was acquired by NCC in 2001. The area comprises a total of 48 seeds and the sowing of meadow flora that support butterflies
hec­tares, of which the pilot project concerns four hectares, where and other insects. Aspen will also be planted in the area to pro-
operations have been discontinued. mote an environment for endangered birds to rest and breed.
Traditionally, quarries are usually restored primarily through Experiences from the pilot project will be assessed and utilized
reforestation but, in Ohkola, NCC has gone a step further to pro- for the restoration of other quarries where NCC has operations.
mote the region’s natural diversity of species and living environ-
ments. NCC and the local Society for Nature Conservation have
jointly planned to restore the four hectares of discontinued quar-
ries in the best possible manner.

conditions for a trans-Nordic mode of operation, while through energy optimization and recycling. Energy-­
further enhancing the efficiency of operations in strate- efficient paving techniques, asphalt recycling and alter-
gic areas of investment. native fuels are some of the initiatives that have been
The future also requires a far greater investment in introduced. A higher portion of total-package undertak-
business development, enabling NCC to remain at the ings enables more long-term and efficient resource
leading edge and to identify the products and services planning, thus contributing to the optimization of
demanded by customers at an early stage. As a conse- asphalt paving from a life-cycle perspective.
quence of the restructuring, business development will A range of green products and production methods
be conducted by the divisions to a greater degree, with have been developed. NCC Green Concept is the
an increased focus on the customers’ future require- Group’s identity for products and methods that reduce
ments and the aim of being the customers’ first choice in the adverse impact on the environment. The best known
the product area. of these is NCC Green Asphalt, a production method
To strengthen market positions and secure future through which carbon emissions are significantly lower
access to stone materials, a number of strategic acquisi- than in the traditional manufacture of hot asphalt.
tions of quarries in Finland and Denmark were imple- Because recycling asphalt is more energy-efficient than
mented in 2013. Within recycling operations, NCC Recy- new production, NCC continuously improves the recy-
cling also implemented acquisitions of several existing cling capacity of its asphalt plants, enabling more eco-
terminals. In addition, a number of niche asphalt and friendly operations. In 2013, recycled asphalt granulate
road services operations were acquired in Denmark. accounted for 15 percent (14) of hot asphalt production.
In 2013, NCC reduced its carbon emissions from
P RO DU C TS A N D M ETHO DS FOR RE DUC E D asphalt production in the Nordic region by 14,100 tons
­E N VIRO N MEN TAL IM PA C T through recycled asphalt and increased production of
Customer demands for eco-friendly products and ser- NCC Green Asphalt. This corresponds to emissions
vices are on the rise, as revealed by NCC Roads’ most from about 5,205 diesel-powered vehicles over one year.
recent customer survey of all of the Nordic markets. As NCC currently has 79 plants (80) that manage the
a result, NCC is taking proactive initiatives to reduce its ­recycling of asphalt, of which 36 (28) have been rebuilt
environmental impact, primarily of carbon emissions, to produce NCC Green Asphalt.

GEO G RA P HI C M AR K ET S, PRO DUC T M I X ,

SHARE OF NET SALE S SHARE OF NET SALES

The distribution among the markets is relatively constant and Asphalt and paving, which represent the dominant products,
tracks the construction trend. No major changes in the distri- declined during the year, primarily due to lower paving
bution of net sales occurred in relation to 2012. ­volumes.

Sweden,
Sweden,50 50
(49)%
(49)% Stone
Stonematerials, 17 (18)%
materials, 17 (18)%
Denmark, 18 (18)% Asphalt and paving, 63 (64)%
Denmark, 18 (18)% Asphalt and paving, 63 (64)%
Finland, 11 (12)% Road services, 20 (18)%
Finland,1911
Norway, (12)%
(19)% Road services, 20 (18)%
Norway,
St. 192 (2)%
Petersburg, (19)%
St. Petersburg, 2 (2)%
 o p e r at i o n s n c c 2 013 17

The energy requirements for asphalt production are substantial Market and business environment
and have a considerable impact on the environment. To continue
to reduce its carbon footprint, NCC launched a patented method Sto n e materia l s

for heating asphalt plants with wood pellets during 2012. The The stone materials market is generally highly fragmented.
wood-pellet method reduces the use of fossil fuels and minimizes Securing access to stone materials from proprietary quarries
the emission of greenhouse gases. Work on converting asphalt requires a long-term strategy and is critical to a sustainable oper-
plants into wood-pellet heated plants continued in 2013 in Sweden ation. Opening a new operation normally requires five to ten
and will be extended continuously to other markets. years. The general trend is that permits are becoming more diffi-
Another initiative for reducing the environmental impact is cult to receive and processing periods for the issue of extraction
NCC’s strategic focus on a Nordic recycling concept – NCC Recy- permits are becoming longer.
cling. A number of new recycling terminals were opened during
2013 and 18 operations in the Nordic market are currently active ASP HALT AND PAVI NG

within the framework of the NCC Recycling concept. Competition in the asphalt production market primarily consists
NCC Spuma is another example within the framework of the of other nationwide companies. For paving operations, however,
NCC Green Concept. This method for biological weed control large numbers of small local players are active.
has been used successfully in Denmark for many years. During The maintenance market for road networks is growing in pace
the year, the product was firmly established in Sweden and is with increased road traffic, offering potential for future asphalt
now rapidly spreading to other markets. operations. Since the energy requirements for production are
Floods and overloaded sewage systems are becoming increas- significant, actions have been taken to reduce energy depen-
ingly commonplace due to climate changes. To offset these dence and gain control over energy costs, as have initiatives
effects, NCC has developed products and methods for prevent- aimed at reducing carbon emissions.
ing inundation. NCC Drænstabil is an aggregate product with
properties that allow water to rapidly and easily penetrate the ROA D S ERVIC ES

ground. NCC DrænAf is a screeding compound that allows the The competitive pressure within road services is increasing.
water to be channeled away without the loss of bearing capacity. Although the market was previously dominated by government-
A proprietarily developed method for solving the problems owned companies, public-sector operators are becoming exposed
associated with snow management has awakened considerable to ever greater competition and are losing their market shares to
interest in the Nordic market. NCC Snow-melting is a climate- private players. The remaining government-operated companies
smart facility with the capacity to melt and clean high volumes of have begun to move across national borders, intensifying compe-
snow. Trucks dump the snow onto a melting facility on a barge. tition in certain geographic areas.
The snow is then subjected to various stages through which it is
filtered and purified. No fuel is required for melting the snow,
apart from cold lake water or seawater. The concept is conve-
nient for metropolitan areas and several municipalities have
­visited the first facility in Oslo.
In 2010, the results were published in respect of a unique
development project between NCC, Vejdirektoratet of Denmark
and a number of consultancies concerning an energy-saving
­paving method with significant benefits to the environment and
public economy involving the use of paving with lower rolling
friction. During 2013, a number of test sections were paved in
Denmark using this energy-saving paving, which will now be
assessed with the aim being included in NCC’s product portfolio
under the name, NCC Green Road, in the near future.

CUS TO M ER M I X,
SHARE OF N ET S ALE S

The customer base is evenly distributed between the private sector

and municipal and public-sector administrations.

Central
Centralgovernment, 27 (26)%
government, 27 (26)%
Municipalities/county councils, 19 (18)%
Municipalities/county councils, 19 (18)%
Private customers, 47 (49)%
Privatein customers,
Internal NCC, 7 (7)% 47 (49)%
Internal in NCC, 7 (7)%

Heater, paving in Stockholm, Sweden.

18 n c c 2 013 o p e r at i o n s

Construction and
civil engineering

Citybanan. Stockholm, Sweden.

Construction and civil-engineering operations com- NCC is one of the leading construction
prise the four business areas – NCC Construction
­companies in Northern Europe and can,
Sweden, NCC Construction Denmark, NCC Con-
struction Finland and NCC Construction Norway.
through its size and know-how in sustain-
able development, contribute to positive
S hare of N C C i n t otal social development. With several thousand
ongoing construction projects, NCC is
60% Net sales
building future environments for living,
36% Operating profit working and communication.
13% Capital employed NCC’s construction operations, the Construction units,
meet customers from the private and public sectors on a
71% Average number of employees daily basis. The results of these meetings form the foun-
dation for our shared future society. Ideas are realized
through interaction with municipalities, county coun-
FA ST FA C TS cils, government agencies and public-utility housing
SEK M 2013 2012 Change, % companies in the public sector, and with retail, industrial
Orders received 38,865 39,432 –1% and service companies in the private sector.
Net sales 39,163 41,219 –5% Internal partnership projects are also conducted on a
Operating profit 976 1,164 –16% daily basis with NCC Property Development, which
Average number
of employees 12,853 12,675 1%
develops commercial properties, and NCC Housing,
Cash flow before which builds housing. The NCC Roads business area,
­financing 312 1,392 –78% which among other produces stone materials, asphalt
and lays asphalt paving, is another key partner in, for
2 013 I N BRIEF example, earth works and infrastructure projects.
The Nordic construction market declined during the first six months
of 2013, but has since recovered slowly. Orders received matched
the preceding year. A lower order backlog at the beginning of the N ORTHER N E URO PE A S A BA SE
year led to a decline in net sales. Operating profit declined, due NCC, which has Northern Europe as its base and con-
mainly to reduced sales in Sweden and lower profit in Norway. ducts construction and civil-engineering operations in
many countries around the Baltic Sea, is active in
 o p e r at i o n s n c c 2 013 19

All of NCC’s
STRATE GI C ACTI V ITIE S 2012–2015

Focus on

­construction, joint strategies for VDC, operational systems and

risk management, as well as further enhancement

from housing to
of purchasing activities

Establish

­infrastructure civil-engineering operations in Finland

39.2
Expand
Sales in Norway
SEK billion
G RO W TH OB J EC TI V E

1.0
The target for construction and civil-engineering opera-
Operating profit tions is to increase sales at the close of the strategy
period, in 2015, by at least twice as much as GDP
SEK billion growth.

Number of
construction projects 4,000 STAT US i n 2012–2013
Revenue growth 2.7 percent
(twice GDP=1.7 percent)

­ orway, Denmark, Sweden, Finland, St. Petersburg,

N K E Y S TRATE GIC I SSU E S
Estonia and Latvia.
In Sweden, NCC is one of the very largest players in Activities in 2013
the market, with a major geographic spread and a strong Shared work methods and resources – continued
local presence. NCC is a leader in a number of strategic develop­ment of business systems and portals are
areas, including partnering and virtual construction. ­generating s­ ynergies and economies of scale across
national borders.
Orders received are relatively evenly distributed among
housing, building and civil engineering. Cooperation between Norway and Sweden – an
exchange of expertise between Sweden and Norway
NCC in Norway has a long tradition of civil engineer-
involving civil-engineering operations was initiated in
ing works, where roads, tunnels and other infrastructure 2013. The cooperation increases the expertise in civil-
form a stable base. NCC is also engaged in construction engineering construction and supports NCC’s expan-
operations in areas including housing, commercial prem- sion in Norway.
ises and public buildings, such as, schools and hospitals. New organization in Sweden – during the autumn, a
Norway is a stated growth area for NCC. new organization was presented, which will enhance
In Denmark, NCC is one of the largest construction the efficiency of NCC Construction Sweden in specific
and civil engineering companies in a fragmented market, market segments through more distinct specialization
and a strong local presence.
with operations in building and civil-engineering con-
struction, housing construction and services. Industrialization – in order to reduce production costs,
In line with the Group’s strategy for profitable NCC has prepared predefined offerings. Within the
housing sector, this will lead to increased housing
growth, NCC is also establishing a civil engineering
­production for a wider target group.
operation in Finland in order to become a more compre-
hensive contractor in the Finnish market. In this mar-
ket, NCC’s strength is primarily within housing and
office production.
NCC also has operations in Estonia, Latvia and St.
Petersburg. There is a strong, underlying need for new
housing in St. Petersburg, where NCC has significantly
increased its housing production in recent years and is
currently one of NCC’s largest housing markets.
2 0 n c c 2 013 o p e r at i o n s

THO U S A N D S OF P RO J EC TS formulate project targets and perform the work under

NCC’s construction and civil-engineering operations con- shared responsibility, has been highly successful.
duct thousands of projects annually in the Nordic region. NCC’s experience and evaluations of partnering dem-
The core expertise for NCC’s construction units is the abil- onstrate that the entire delivery has improved, both for
ity to manage the complex organization of a wide range of NCC and for customers. Partnering is ideal for complex
projects, from replacing the plumbing in a multi-family projects, which benefit from access to the knowledge of
dwelling to large-scale national infrastructure projects. more than one party. This is applicable to, for example,
The common theme, regardless of their size or mar- technically difficult projects or projects to be imple-
ket, is the uniqueness of many projects, without any mented in a complex environment.
opportunities for repetitive effects. For this reason, Many customers, in both the private and public sec-
NCC’s expertise in planning, logistics, resource alloca- tor, now request this form of collaboration and the num-
tion, technical know-how, flexibility and risk manage- ber of partnering projects, following an upward trend
ment is a critical success factor in an increasingly inter- over ­several years, holds a strong market position.
nationalized Nordic construction market. An increasing trend involves strategic partnering,
Construction production ties up relatively little capital which creates long-term customer relationships, and
and normally generates a continuous cash flow, thus longer framework agreements that are procured on the
supporting NCC’s capacity to also engage in office and basis of partnering. In a long-term cooperation that
housing development as well as asphalt and aggregate extends over several projects, partners are able to work
production, which are more capital-intensive. in a more structured format and share best practices,
while the repetition enhances quality and reduces costs.
S TRATE GY FOR P ROFITABLE G RO W TH
The construction and civil engineering business is the RI SK M AN AG EM E N T A ND P ROFITABILIT Y
backbone of NCC’s operations and contributes to achiev- Risk management is fundamental to NCC’s construction
ing the Group’s overriding objective of profitable growth operations. A one-percentage-point margin increase has
and being the customer’s first choice, through efficient a significantly larger impact on earnings than a 5–10 per-
production, innovative capacity and market leadership. cent increase in volume. Risk management is based on
The market presence of the business is strengthened by well-functioning shared business systems and well-
sustainable processes, products and services. developed procedures for tendering new projects.
A number of strategic areas are key to strengthening
competitiveness. Partnering, virtual construction, plat- P LATFOR MS G AI NI NG G RO UND
forms and coordinated purchasing contribute to more One of the advantages of being a large construction
efficient operations and create customer value. company is the solid foundation this creates for develop-
For the past few years, NCC has focused on improv- ing project engineering and planning tools, and plat-
ing its skills in such areas as project development, plat- forms. Economies of scale can also be achieved by nego-
forms and virtual construction. NCC has also developed tiating volume discounts when purchasing goods and
extensive knowledge in the partnering cooperative for- services. The platforms are developed with a strong
mat and is now a leader in this field. focus on customer requirements.
The platforms have defined technical solutions and
PART N ERIN G G EN ERATES A D DED VAL UE governing project engineering requirements, as well as
NCC leads and promotes new forms of collaboration in instructions for choosing effective production methods.
the construction industry and the purest form of collab- As a result, production becomes more repetitive which
oration is partnering. The focus on partnering, whereby thus provides opportunities for continuous improve-
the customer, NCC and other project participants jointly ment. The platform concept simplifies project engineer-

GEO G RA PHI C M AR K ET S, PRO DUC T M I X AND

SHARE OF NET SALES SHARE OF NET SALES

Sweden is the largest market for NCC’s construction and civil- Housing continues to account for a major portion of the
engineering operations, accounting for 55 percent (61) of sales. product mix. During 2013, the category, “Other,” increased
NCC Construction Norway’s share of net sales rose due to com- primarily in Denmark, as well as in Norway and Finland.
pany acquisitions in the preceding year, while NCC Construction The “Other” segment includes schools and hospitals.
Sweden’s share declined as a result of lower sales.

Sweden,
Sweden,55 55
(61)%
(61)% Infrastructure,
Infrastructure,15 (18)%
15 (18)%
Denmark, 9 (8)% Earthworks, 12 (10)%
Denmark, 9 (8)% Earthworks, 12 (10)%
Finland1), 17 (16)% Housing, 23 (24)%
Finland19, (15)%
Norway,
1)
17 (16)% Housing,
Industrial and23 (24)%
processing
plants, 10 (13)%
Norway, 19 (15)% Industrial and processing
Offices,
plants,1410 (13)%
(13)%
Business centers, etc., 5 (6)%
Offices, 14 (13)%
Other, 21 (16)%
Business centers, etc., 5 (6)%
Other, 21 (16)%
1) Including St. Petersburg, Estonia and Latvia.
 o p e r at i o n s n c c 2 013 21

ing, purchasing and construction, and ultimately facili-

tates greater control of costs and quality.
NCC has developed platforms in all business areas One of the world’s 100 most
and can offer sports centers, nursing homes, offices and sustainable solutions
logistics facilities, as well as roads, bridges and housing.
NCC has successfully developed a platform for stan- NCC developed and built the Østensjøveien 27 property in
dardized activity centers. The centers are designed for Bryn/Helsfyr, near Oslo city center. The building has a dis-
tinct environmental profile with a passive-building standard
ball sports, including handball, mini handball, floorball and it is designed to achieve a minimum of the BREEAM
and mini basketball. Despite a high level of standardiza- classi­fication, Very Good. The building has a spectacular
tion, several options are available for both the exterior open floor plan with offices around an open courtyard and
with meeting rooms suspended in the atrium. The architects
and interior design. The center can be expanded with behind Ø27 are the famous Danish architect office, H ­ enning
stands, for example, or social areas including club Larsen Architects. Østensjøveien 27 is a modern and sustain-
rooms and a café. A fully packaged product called NCC able project based on an innovative concept. It was voted
one of the world’s 100 most sustainable solutions by Sustai-
Bollhall is also offered. nia 100, a global environmental organization.

N OR D I C SWAN ECOLABELE D W ITH LOW

­C ON STRU CTIO N COS Ts
The construction systems, P303 and P404, are examples
of the integration of technological development and sus-
tainability, enabling NCC to construct Nordic Swan eco-
labeled housing for a low fixed price with a short con-
struction period. Thanks to preplanning, combined with
a controlled and standardized construction process, cus-
tomers receive a quality-assured product with very low
energy usage and a predictable construction period.
The Nordic Swan ecolabeled housing units demonstrate
the possibilities that can be achieved when the platform
concept is fully utilized.

V DC A N AT U RAL PART OF THE P ROC ESS

NCC has long experience of using virtual construction,
VDC, in more than 600 projects, ranking it as the indus-
try leader, not just in the Nordic region, but also glob-
ally. VDC is used in all types and sizes of construction creating, coordinating and reviewing models and infor-
projects, from housing and building production to civil mation. However, it is just as much about the manner in
engineering and infrastructure projects. which the parties involved in construction projects collab-
VDC enables the information flow to be managed so orate, the work methods used and the manner in which
that the right information is available to the persons who the work is followed up. NCC has created NCC Project
need it. It leads to higher quality and reduced costs in Studio to promote and develop cooperation and quality.
project planning, implementation and the delivery of Project leaders gather in the Project Studio to use models
construction projects. to visualize, optimize and assess the products that are to
VDC has now become a natural component of many be created. The result is efficient, quality-assured and
projects and is about to change the entire construction quality-controlled products that are optimized through-
process. To some extent, VDC is about the technology for out the entire process, from rough draft to management.
To maintain its lead in the area of VDC, NCC provides
continuous training to its employees.

C U S TO M ER M IX,
M ORE EFFI C IEN T PU R C HAS ING
SHARE OF NET SALES
Historically, competition in the market for building
Private customers remain the predominant customer category
for construction and civil-engineering operations. Municipali-
materials and ­subcontracting has been very weak, since
ties and county councils have grown due the demand for construction companies have usually purchased materi-
schools, homes for the elderly and hospitals. als and services locally. This is also one of the reasons
why construction costs have exceeded consumer-­price-
Internal in NCC,
Internal 17 (17)%
in NCC, 17 (17)%
index increases for so many years.
Government, 14 (15)%
Government, 14 (15)% The purchasing of materials and services accounts
Public utility housing
Public utility
companies, housing
8 (8)% for about two thirds of the NCC Group’s expenses and is
companies, 8 (8)%
Municipalities/ therefore highly significant. NCC has firmly adopted a
county councils, 23 (21)%
Municipalities/ systematic purchasing approach, which offers opportu-
Private customers, 38 (39)%
county councils, 23 (21)%
nities to reduce costs.
Private customers, 38 (39)%
During the year, NCC increased the focus on further
streamlining purchasing, by appointing a purchasing
2 2 n c c 2 013 o p e r at i o n s

manager for the Group. Functions that were earlier For the past three years, NCC has been arranging the
managed by the Swedish organization on behalf of the Awareness Day, where all employees participate and dis-
Group are currently centralized. By providing a uniform cuss EHS issues. Feedback from the discussions contrib-
front to suppliers – having all transactions conducted utes to a safer environment at the company’s worksites.
with NCC as one company – control over purchasing is
increased. NCC thus becomes a stronger business part- SUS TAI NABILIT Y S HO UL D BE S IMP LE
ner, which provides potential for reducing costs. During 2013, the sustainability work of construction and
Another positive effect of coordinated purchasing is that civil-engineering operations was developed and now fea-
the number of suppliers and range of items declines, which tures three pillars: environment, humans and economy.
has a cost-saving effect and increases control. It has long been known that the construction industry
NCC also purchases goods and services internation- has a major impact on the environment. During the year,
ally and has purchasing offices in the Baltic countries, the opportunity to influence social development in a sus-
Poland, the Czech Republic, Germany, Turkey and tainable direction was further highlighted as a new
China. On average, the cost of internationally purchased focus area. One example is the new method of recon-
goods is slightly more than 20 percent lower than an struction work, which capitalizes on human social val-
equivalent purchase made in the Nordic region. Local ues and interests through labor-market measures,
pricing is positively impacted when NCC subjects local assurance, recreation and the involvement of residents.
building-material suppliers to competition. Environmental certification has impacted the indus-
Purchasing by international subcontractors is an area try on a wide front and now encompasses the civil-engi-
that continues to grow. The most common international neering sector through the CEEQUAL system. NCC is a
purchases are frameworks, glass and aluminum leader in environmental certification and its activities
facades, and steel and concrete products. include participation in the BREEAM environmental
certification system. A relatively new addition to the
S Y S TE M ATI C W OR K FOR I N C REA S E D S AFET Y field of environmental certifications is the certification
NCC’s systematic approach to health and safety encom- of sustainable districts.
passes all processes, from the early stages of planning NCC has well-developed methods for constructing
and project engineering to the entire construction low-energy and passive buildings, aimed at satisfying
phase, aimed at minimizing risks and adopting a well- customer requirements for more energy-efficient build-
structured approach to any risks that remain. ings. NCC is one of the construction companies in the
Efficient and well-functioning construction projects Nordic region with the most extensive experience in
are characterized by low sickness absence and few occu- passive building projects, and all of NCC’s proprietary
pational injuries. Operational planning and control housing construction meets low-energy demands.
includes effective management and monitoring of ­During 2013, construction commenced on Sweden’s
­environment, health and safety (EHS) efforts. first plus-energy building.
NCC devotes considerable resources to training, sup- Green Tenders are NCC’s method of conducting busi-
porting and monitoring EHS measures in all countries ness based on the existing expertise in Green Construc-
in which the company operates. tion. A list of green alternatives is attached to every ten-
NCC’s vision is zero workplace accidents and the der exceeding SEK 50 M. The customer can then choose
company works continuously to improve its safety cul- NCC’s expertise in Green Construction and receive a
ture. Attitudes to health and safety are based on NCC’s specific environmentally adapted offer. The aim is to
core values and permeate the entire organization’s make it easy for customers to support sustainability,
stance and behavior in regard to these issues. in both the construction process and in utilization.

Riksväg 50 – one of
Sweden’s largest civil-
engineering projects
NCC has built 28 kilometers of new road
between Mjölby and Motala, 39 overpasses,
eight junctions and a 620-meter long bridge
over Skepparpinan in Motala. The project has
entailed many technical challenges, harsh win-
ters and “rainy seasons,” but NCC delivered it
ahead of schedule and at a lower-than-expected
cost. On October 2, 2013, an inspection of the
opening of traffic for the highway and the final
inspection of other sections were conducted,
both achieving excellent results. NCC will be
responsible for operation and maintenance of
the highway for an additional 20 years.
 o p e r at i o n s n c c 2 013 23

Market and business environment

Isbjerget, housing units at the port of Aarhus, Denmark

The weak economic trend in Europe also ments in such areas as infrastructure, new hospitals and
energy projects. Many renovation projects were also
impacted the Nordic construction market
started in the public utility housing sector to stimulate
in 2013. Demand weakened during the growth. Activities in the market were particularly con-
first six months of the year, but subse- centrated to the areas of Copenhagen and Aarhus,
quently showed a slow recovery. The where sustainability is playing a key role in city develop-
GDP in the Nordic region is expected to ment. In addition to the public-sector demand, activities
were driven by a greater willingness to invest in the pri-
increase in 2014 and NCC expects this to
vate sector, particularly within residential projects.
have positive effects and that the Nordic
construction market will grow. NORWEGIAN CONSTRUCTION MARKET REMAINS STRONG
Continued willingness to invest, population increases
P ROTRA C TE D P ERIO D OF LO W C O NSTR UC TIO N and a high oil price sustained the high level of the
AC TIV ITY IN SW EDEN ­Norwegian economy. The construction and the civil-
The Swedish economy showed moderately slow growth engineering market were both strong and are expected
in 2013 and was adversely impacted by low foreign trade to grow until 2015, with the civil-engineering sector
and relatively weak investment levels. The growth probably displaying growth for an even longer term.
derived from households that benefited from an expan- The share of major and more complex civil-engineering
sive fiscal policy. The trend in the construction industry projects also increased.
has been subdued and drawn out with a weak level of
incoming orders. Following a weak first half-year, con- W EA K ER E CO NOMY IN FI N LA ND
struction activity improved during the second half of the The economic trend in Finland had a relatively strong
year, primarily within residential construction. Civil- start, but weakened at the end of the year. The economic
engineering investments were essentially unchanged. outlook indicates lower construction activity in coming
Toward the end of the year, a discernible increase in years.
optimism in the construction market and more positive Despite the weakening market conditions, there is
economic ­signals were noted. underlying demand for housing in growth areas. There
is considerable demand for renovation in the areas built
S O ME A C TI V IT Y I N A C HALLE N G I N G D AN IS H M AR KET during the 1970s. Housing investors are also showing an
The Danish construction industry was also marked by interest in starting new housing projects.
crisis in 2013, which led to several major bankruptcies
in the sector. Nevertheless, a certain level of market
activity occurred, driven by significant public invest-
2 4 n c c 2 013 o p e r at i o n s

Development

Development operations, which encompass housing All professional housing development is

and commercial property, are conducted in the NCC
based on the ability to understand cus-
Housing and NCC Property Development business
areas.
tomer requirements and create favorable
housing or work environments based on
S HARE OF N C C I N TOTAL these. In line with this, sustainability is
high on NCC’s agenda and, by being at the
21% Net sales
cutting edge, NCC can offer an attractive
49% Operating profit solution to today’s discerning customers.

69% Capital employed

The value chain in NCC’s housing and property develop-
ment business extends from project concept and analy-
6% Average number of employees
sis to land acquisition, concept development, production
and finally sales, when capital is released for new devel-
FA ST FA CTS opment projects. The completion phase with aftermar-
SEK M 2013 2012 Change, % ket services and the establishment of long-term cus-
Net sales 13,841 11,459 21% tomer relations are highly prioritized.
Orders received1) 10,921 9,380 16% Both of the development operations are capital-inten-
Operating profit 1,318 1,129 17%
sive, which means that NCC’s knowledge of the areas in
Capital employed 13,847 14,965 –7%
various markets that can generate the highest return is
Average number of
employees 1,170 1,119 5%
1) Refers solely to NCC Housing. THE VAL UE CHAIN

2 013 I N BRIEF
Earnings from NCC’s development operations increased in 2013 Concept
due to the property-development operations, which reported both Analysis Land purchase
development
higher sales and profit. An increase in housing sales enabled more
housing starts.
 o p e r at i o n s n c c 2 013 2 5

6,383
STRATE GI C ACTI V ITIE S 2012–2015

Housing Expand
units in production the housing development business
– more efficient processes
– broader product mix

Sales
SEK billion 13.8 G RO W TH OB J EC TI V E
The housing development business aims to grow dur-
ing the strategy period of 2012–2015. The target is that

1.3
the number of housing units under production will
Operating profit total at least 7,000.
The spread of commercial property development
SEK billion projects is currently favorable and the objective for the
strategy period is that the project portfolio maintains

17
this positive level.
Commercial
STAT US i n 2012–2013
properties 6,383 (5,363) units in ongoing production. 17 (23)
­property projects at a total project cost of SEK 5.0
­billion (5.6). All comparative figures pertain to 2011.

K E Y S TRATE GIC I SSU E S

Activities in 2013
A strong customer focus is the principal aim.
For the housing development business, a high priority is
to broaden the product mix with more new concepts,
including rental apartments, to enable package sales to
the investor market to account for a higher share of
transactions.
The property development business is currently focused on
improving its sales process across all areas, with the aim of
strengthening customer relations and increasing effi-
vital. The entire development process is undertaken in close cooperation with
ciency and earnings.
customers, municipalities, landowners, architects and other stakeholders.
Sustainable development is a central feature in NCC’s
endeavor to systematically optimize conditions for future
Housing development owners and tenants in the housing and properties that it
NCC’s housing development business is conducted in eight geographic markets develops. By working with leading environmental-assess-
in the Nordic region, Germany, St. Petersburg and the Baltic countries, thus giv- ment systems such as BREEAM and GreenBuilding for
ing NCC the ranking of the leading housing developer in Northern Europe. The nonresidential properties, and Nordic Swan Ecolabel and
total population is rising steadily in the geographic area where NCC operates, the Sweden Green Building Council label for residential
properties, the buildings are guaranteed to maintain high
with relocation to metropolitan regions continuing to be increasingly apparent.
quality, be energy efficient, have a healthy indoor environ-
Due to the strong urbanization trend worldwide, growth will occur in the metro- ment and contain materials that are not harmful to health
politan regions. As a result, NCC’s strategy of operating solely in metropolitan or the environment.
regions that show distinct growth, and where a stable local labor market creates
demand for new housing, remains firm.

A CUS TO M ER - G U ID E D P RO C ESS GEO G RA P HI C M AR K ET S,

HOUSING UNDER PRODUCTION
All professional housing development is based on the ability to develop solu-
The diagram shows housing units for both private custom-
tions derived from customer insights and to create favorable residential environ-
ers and investors. In 2013, NCC had housing starts in all
ments based on these. The business concept entails converting developable markets, primarily in Germany, Finland, Sweden and
land into new, sustainable housing environments, where the development is St. Petersburg. The share of ongoing housing production
increased in St. Petersburg and Germany thanks to healthy
adapted to customer requests and requirements, and the unique conditions of
demand, while the share in Finland declined during 2013.
the area.

St. Petersburg, 25 (23)%

St. Petersburg, 25 (23)%
Sweden,
Sweden, 23
23 (23)% (23)%
Germany,
Germany, 22 (19)%22 (19)%
Finland, 20 (25)%
Design and Project Finland, 20 (25)%
Leasing Sales Denmark, 5 (3)%
­architecture implementation Denmark, 5 (3)%
Norway, 3 (5)%
Norway,
Estonia and Latvia,32(5)%
(2)%
Estonia and Latvia, 2 (2)%
26 n c c 2 013 o p e r at i o n s

In 2013, focus continued on a concept known as “vision-guided

urban planning,” which includes a high degree of involvement by
citizens prior to the production of blueprints and proposals concern-
ing how an area can and should be developed. When combined with
a sharpened focus on the customers’ needs and purchasing power,
this supports NCC’s ability to offer products that match demand.
A key insight revealed by several surveys is that customers pri-
marily prioritize a short period of time between purchase and occu-
pancy. NCC is continuing its efforts to drive fast and efficient pro-
cesses for housing development and production. The Group’s wide
geographical presence in North Europe provides valuable insights
into various possibilities in development and production processes.

C O NS TR UCTIO N SYS TE MS – S HORTER LEA D TIM ES W ITH HI G HER

QU ALIT Y AND LO WER COSTS
During the year, NCC sharpened its focus on creating shared con-
struction systems for housing production, thus generating economies
of scale due to lower costs, bulk purchasing and higher quality. By
using shared construction systems in its markets, NCC will be able to
develop sustainable and attractive housing that is cost-efficient, while
retaining flexibility. Process flexibility is extremely important. When
developing group-built single-family dwellings or large areas of multi-
family dwellings, dividing the project into several smaller stages is
important in order to generate time and cost savings.

FO CUS ON CUS TOM ER S EGM E NT

NCC’s customers are predominantly private customers who invest
Efficient housing production in their own homes. However, the investor market is becoming
increasingly important as a target group. Investor interest in hous-
in Germany ing projects is increasing steadily in several markets. NCC acquires
the land, designs the project, constructs and leases the object before
One of the numerous examples of efficient platform production in Germany
selling it to financial investors; this is a vital component of NCC’s
can be found at Aristotelessteig in Berlin – Lichtenberg. On the small plot of
land comprising 15,900 square meters, 52 row houses were constructed in strategy to develop and build proprietary rental units. During the
a short time. NCC has been using a structured modular construction method year, several major package deals were implemented in both Fin-
in ­Germany for more than 15 years. By using this cost-efficient and time-­
land and Germany. The number of investor transactions repre-
saving method, the construction of every new project is based on well-tested
base models that can be modified with little effort, while maintaining high sented about 23 percent of total housing sales in 2013.
quality. The housing units can be adapted to the architecture of the immedi-
ate surroundings, to the local customers’ requests and to the site itself. It is
A S IMP LE A ND S ECU RE TRA NS AC TIO N
important to note that not only the fundamental structural elements have
been standardized, but the processes too. NCC’s ambition is to offer new home-buying assistance to custom-
ers as early as possible in the process. Various types of security
packages are offered to customers purchasing a new home. The
package includes insurance policies, warranties and services that
P ORTFOLIO OF D E V ELO P ME NT RI G HT S,
protect and help customers both before and after they purchase
O NG OIN G AN D C O MP LETED HOU SI N G
their NCC home. The various features include cover for double
Of the total portfolio of 33,200 (35,000) development rights, approximately
housing costs, unemployment or illness.
16,900 (16,700) have made considerable progress in the development pro-
cess, with building permits or detailed development plans in place. For the The number of customers that find their new homes on NCC’s
remaining portion of the development rights portfolio, most have a general websites, or through linked portals, is constantly increasing. NCC
plan for residential development in place. In 2013, the portion with building
continued to develop these digital meeting places during 2013. Visu-
permits increased, while the portion with shares in earlier development
phases declined. Successful establishment of the detailed development plan, alization tools allow customers to virtually explore the housing units
and the creation of attractive living environments in partnership with munici- they are interested in and also to choose their options for the
palities, accounts for a major share of the value-generation in housing
selected apartment. The strategy to improve and develop sales tools
develop­ment. The percentage figure denotes NCC’s total development rights.
was at the center of focus of marketing and sales activities during
16,000
Number the year. A shared platform with a user-friendly interface has been
35% 34% implemented on all of NCC’s markets and increases customer will-
12,000 ingness to buy a new home at an early stage.

8,000
16% SUS TAI NABLE HO US I NG

4,000 8% NCC’s overall target is for the person who invests in and moves into
6% an NCC housing unit to have conditions conducive to a sustainable
2%
0
Not General Detailed Building Ongoing Completed
lifestyle, in which ecological values interact favorably with social and
planned plan plan permit production production economic values. NCC’s goal is to reduce the energy requirements
of buildings throughout their useful life and to develop housing with
 o p e r at i o n s n c c 2 013 27

higher energy-efficiency levels than required by law. attractive locations and characterized by a deep under-
NCC’s low-energy buildings are well insulated, with win- standing of specific customer requirements.
dows that allow for minimal energy losses and where the NCC works in close cooperation with customers to cre-
heat derived from occupants is utilized for the building’s ate a unique workplace, combining the Group’s expertise
heating. The heat generated by people, electrical equip- with in-depth understanding of customer operations, pro-
ment and the sun that shines through windows contrib- cesses and challenges. NCC endeavors to inspire, support
utes to maintaining a comfortable indoor temperature. and provide the customer with advice on a consultative
The development of low-energy housing is a step in the basis. In this manner, the cooperation is characterized by a
right direction toward achieving the EU’s climate targets shared objective to create a flexible workplace that not only
for reduced carbon emissions and energy consumption. creates conditions for efficient operations, but also
A healthy indoor environment is also an important improves the work situation for the customer’s employees
feature of the sustainable housing built by NCC. in regard to health, the work environment and comfort.
A chemicals procurement strategy is used to avoid For each project, NCC contributes solid knowledge of
building materials that are harmful to the environment how good workplaces function, based on extensive expe-
and health. A building’s qualification for the Nordic rience of working closely with the customer, and on avail-
Swan Ecolabel is confirmation that it is a low-energy able and relevant research findings in the field. Since
building with a good indoor environment, that the con- property development is a long process, gathering
struction process is eco-friendly and that the choices of knowledge of trends is vital for being able to predict the
materials were made with considerable attention to demands and requirements of tomorrow’s customers.
­people’s health and the environment. Since 2013, NCC The analyses must point in the right direction in terms of
has embraced the concept to certify both apartment the geographic locations and types of property that cus-
blocks and single-family homes with the Nordic Swan tomers will want to choose for their workplaces in five to
Ecolabel. Buildings are also certified under the Sweden ten years’ time. NCC works with a systematic method for
Green Building Council label. gathering knowledge through, for example, future stud-
The individual who lives in and manages a building is ies, customer interviews and trend monitoring.
the most important factor for how the residential unit
will maintain good environmental performance. Conse- CUS TO M ER’S C HOI CE
quently, an individual who takes up occupancy in an In the case of office buildings, the customer’s selection
NCC-built residential unit receives support for how the criteria include hard factors such as space efficiency,
unit should be utilized and cared for in a sustainable price, a communicative location for customers and
manner over the long-term. NCC also offers various employees, or that the customer requires premises in a
tools to help customers control and limit their own sustainable, environmentally certified property with a
energy consumption, thus helping them save money focus on energy optimization and an environmentally
and reduce their own environmental impact. aware choice of materials. Other criteria are that offices
and their location should reflect the customer’s brand.
Commercial properties Customers also base their choice on other values, such
NCC Property Development develops and sells com- as a business partner in whom they can trust and who
mercial properties in defined growth markets in the offers efficient and pleasant premises.
Nordic region, Estonia and Latvia. The operations focus When NCC develops a retail property, the starting
on sustainable office, retail and logistics properties in point is always an excellent shopping location that can

Ho us ing de ve lo pm e nt
Housing development, Housing development,
Group private customers investor market
2013 2012 2013 2012 2013 2012
Development rights, 33,200 35,000
of which options 13,200 11,300

Housing starts 3,715 3,196 1,095 1,328

Housing units sold 3,747 2,937 1,129 1,395
Housing under construction 4,831 4,391 1,552 1,377
Sales rate, units under construction, % 47 43 98 96
Completion rate units under construction, % 49 47 38 40
Profit-recognized housing units 2,951 2,845 903 998
Completed, not profit-recognized housing units 717 393 0 0
Housing units for sale (ongoing and completed) 2,884 2,915
During 2013, NCC sold 4,876 (4,332) housing units, including 1,129 (1,395) in projects sold to investors. A total of 2,951 (2,845)
housing units for private customers were completed and recognized in revenues in 2013. The market conditions in 2013 allowed for an
increase in the number of housing starts for private customers, mainly in Germany and St. Petersburg. In 2013, the total number of new
housing starts rose to 4,810 (4,524) housing units, of which 1,095 (1,328) were in projects sold to investors.
A complete and more detailed table is available in the year-end report on www.ncc.se.
28 n c c 2 013 o p e r at i o n s

offer major flows of customers and premises that are All commercial properties developed by NCC satisfy rig-
optimized for selling the tenant’s products or services. orous environmental requirements and, since 2010, the
A detailed analysis is conducted of traffic flows, public ambition has been to environmentally certify all projects
transport facilities and how the customer’s incoming in accordance with the BREEAM system, the world’s
goods flow can be managed, other commercial players most widely adopted environmental assessment
that could feasibly attract similar customer segments, method. Read more at: www.ncc.se/breeam.
that the catchment area is appropriate and other factors Since 2013, Danish offices have had the option of
that are vital to the customer’s business. being certified in accordance with DGNB, the German
For a customer working with warehouse and logistics environmental-certification system that Green Building
solutions, the location and a highly efficient goods flow Council Denmark has chosen to work with.
are two key criteria. NCC specializes in optimizing ware- At the end of 2013, 36 buildings had been certified, or
house solutions from both a functional and cost perspec- were about to be certified, in line with the BREEAM
tive which, in combination with standardized solutions for standard, of which 12 buildings were in Sweden, 15 in
warehouse buildings, provides highly favorable condi- Finland, five in Denmark and four in Norway. In 2013,
tions for offering the optimal solution for every customer. the Koggen 2 office building secured the Nordic
region’s first BREEAM Excellent certification. At pres-
S US TAI NABLE P RO P ERT Y D EV ELO P M EN T ent, two early-phase projects in NCC’s portfolio aim to
Sustainability is high on NCC’s agenda and, by being at achieve the BREEAM Outstanding standard, a world-
the cutting edge, NCC can offer today’s environmentally
aware customers attractive solutions. By localizing the
operations to a property with market-leading environ-
mental performance, NCC’s customers take responsibil-
ity for sustainability and strengthening their brand from
a sustainability perspective, while also acquiring NCC
premises with low operating expenses, in which their
employees can have a sound working environment and
work efficiently without adverse effects on their health.
NCC also supports the environmental initiatives of its
tenants by signing green leases, thus guaranteeing that
the sustainability performance of properties is retained
when the building is put into operation.

Market and business environment T H E H O USIN G MARKET

Market conditions were stable overall during 2013 and the year was
characterized by recovery following the unsettled global economic
situation and turbulence in the financial markets in 2012.
HO US IN G C O N S TR U C TIO N I N THE N OR D I C RE G IO N , The most favorable market conditions continued to be found in
­N UM BER OF C ON S TR U C TION STARTS FOR A PARTM EN TS Germany and St. Petersburg, and demand remains strong in both
A ND S IN G LE -FAM ILY DW ELLIN GS
locations. Although the Russian economic climate worsened during
The housing markets in the Nordic region performed differently during 2013. the year and GDP forecasts were repeatedly downgraded, St. Peters-
The number of housing starts rose in 2013 in Sweden, following the decline
burg continues to perform strongly with expected GDP growth, and
in 2012, while Denmark bottomed out at a low level. The Norwegian market
matched the high levels of the preceding year. In Finland, the number of housing prices increased during 2013.
­housing starts continued to decline due to the weak economic trend. Sales to the investor market have become an increasingly impor-
tant aspect of NCC Housing’s transactions and a number of major
000s
package deals were implemented during the year in Finland and
35 ­Germany. The housing market in Finland weakened in 2013 due to a
30 negative GDP trend and a declining consumer index. Only minor
25 increases in GDP are expected in 2014 and 2015. Households are
20
under pressure from unemployment and low increases in real wages.
15
Housing prices have generally remained unchanged since 2011, but
10
the number of housing transactions declined during the first half of
5
2013, compared with the corresponding period in 2012.
0
Sweden Denmark Finland Norway The confidence of Swedish households displayed an upward
2010 (Source: Euroconstruct.)
trend, with a weak rise in housing prices that should support growth
2011
2012
during 2014 and 2015, when unemployment levels are expected to
2013 fall. Market conditions in Gothenburg and Stockholm were favor-
able, but customers in Sweden generally remained cautious and are
completing purchases close to or after completion.
 o p e r at i o n s n c c 2 013 29

class certification level that only about 30 buildings world-wide have ever
achieved. In Denmark, three buildings had been certified at year-end, or were PRO P ERT Y D EV ELO PM ENT P RO J E C TS 1 )
about to be certified, by DGNB.
Country Completion Leasable Leasing
(number) rate, % space, m2 rate, %
P RO P ERT Y P ROJ E C T S , 2 0 13 Sverige (1) 26 20,200 100
During the year, five development projects were started at a total project cost of Danmark (7) 72 44,600 63
SEK 2.3 billion. These major projects included the office projects, Lysaker Finland (7) 65 73,500 68
Polaris in Oslo (19,500 square meters) and Ullevi Park 4 in Gothenburg (20,200 Norge (2) 53 28,700 80
square meters), as well as a half-owned retail project, the Mattby shopping ­center Totalt (17)2) 60 167,000 74
in Espoo (24,000 square meters), which comprises both retail and services. 1) The table refers to ongoing or completed property projects that
have not yet been recognized as revenue. In addition to these,
NCC is working on leasing (rental guarantees/supplementary
sales prices) for eight previously sold property projects that have
C O M P LETE D LEA S I N G C ON TRA CT S P ER S E GM E NT been recognized as revenue. A complete and more detailed
table is available in the year-end report on www.ncc.se
m2 Sweden Denmark Finland Norway Total 2) Completed and started projects at year-end included six

Offices 24,654 28,250 17,082 22,141 92,127 ­projects for which sales contracts were signed but have not
yet been recognized as revenue.
Retail 4,396 3,491 9,674 0 17,561
Other 1,830 7,645 685 221 10,381
Total 30,880 39,386 27,441 22,362 120,069
(Source: NCC.)

PRO DUC T M I X A ND
SHARE OF NET SALES

The retail segment increased the most during the year, while
logistics projects declined. Development of office properties
remains the largest segment for NCC Property Development.

Offices, 59 (58)%
Offices,
Retail, 59 (58)%
28 (11)%
Retail, 28
Logistics, (11)%
0 (14)%
Other, 13 (17)%
Logistics, 0 (14)%
Other, 13 (17)%

The Copenhagen market is showing signs of healthy recovery, nies. The single most important criterion for potential investors is to
while the recovery in other parts of Denmark is making slow prog- have an excellent yield in relation to an acceptable risk level.
ress. The housing market in Norway has cooled off and housing With continued low yields on alternative investments, demand for
prices have turned downwards from a high level, at the same time as attractively located, environmentally certified, space-efficient prop-
the supply has increased. erties has strengthened and is also expected to remain firm in the
The economies of Latvia and Estonia remain among the fastest years ahead. All Nordic metropolitan areas continued to show
growing in the EU. Latvia will become a member of the EU during strong demand for modern workplaces, which on the whole, leads
2014, although this is not expected to result in any major changes in to a stable price level, a development that is favorable for NCC.
the housing market. While the strong financial situation of the Nordic countries is
attracting international investors, the volumes mainly derive from
TH E PROPERT Y M AR KE T domestic players with a considerable need for suitable investments.
The property sector is part of the global financial industry and During the first half of 2013, the Nordic transaction market was
NCC’s offering of properties as an investment competes on the characterized by lower activity than a year earlier. During the latter
same conditions as other investment alternatives. The investor six months, sales rose but volumes failed to reach the same level as
­market comprises national and international players, such as pen- in 2012. The deepest decline was noted on the Norwegian market,
sion managers, property funds or property and insurance compa- while sales increased in Denmark. Interest is focusing primarily on
low-risk projects in attractive suburbs or major metropolitan cen-
ters. Transaction volume on the Nordic property market totaled
OFFI CE M AR K ET S I N THE N OR D I C RE G IO N , 2013 1) SEK 184 billion (210) during the year, of which Sweden accounted
for SEK 91 billion (107).
Vacancy
rate,% Rent, m2/year Yield, %
Stockholm 6.5 2,700 SEK 5.1
Oslo 5.8 2,800 NOK 5.8
Copenhagen 10.5 1,200 DKK 5.0
Helsinki 7.7 209 EUR 6.5
1) Refers to the inner city (Source: Newsec)
3 0 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

Added value through responsibility

and consideration
NCC’s sustainability work is based on a holistic approach with all three dimensions of
sustainability – the social, environmental and economical – interacting in a distinct and
thorough manner. Our long-term sustainability strategy includes the aim of being both
a leader and pioneer.

In 2013, the perspectives were increasingly intertwined holder dialog plays a prominent role in these models.
into a holistic approach whereby the social dimension in The residents and local stakeholders are allowed to
particular has been strengthened, such as with the influence the way the housing is renovated through a
development of new business models for an overhaul of well-thought-out cooperation process. People are placed
housing from the Million Program, with the aim of in the center of the process and provided the opportu-
increased social and economic integration. The stake- nity to participate and influence from the very start.

On the road toward a sustainable society, we should contribute ever

more innovative solutions for meeting climate challenges, while
­having an ever smaller and ever weaker ecological footprint. NCC
intends to be a leader by creating attractive social environments
where we, as human beings, can develop a sustainable lifestyle.
Christina Lindbäck, Senior Vice President Corporate Sustainability

Highlights of 2013
• First prize for the Fittja People’s Palace in the • Norwegian innovation prize for snow-melting
Nordic Built Challenge, Swedish event for machine
­sustainable renovation • Nordic region’s first BREEAM Excellent
• c/o CITY – a development project concerning ­certification for office building
ecosystem services • Danish work-environment award for health and
• World’s first CEEQUAL certification for ground safety
remediation went to NCC • NCC Compass launched
• Nordic Swan Ecolabel for NCC’s proprietary
single-family home concept

NCC helps customers to reduce their environ­mental

impact and increase sustainability
NCC works purposefully to reduce both its own and its imbalance in ecosystems. NCC takes these ­signals with
customers’ environmental impact and continues to fur- the utmost seriousness and, during the year, NCC intensi-
ther refine its offering with additional products and solu- fied its work on the development of urban ecosystem ser-
tions for sustainability. NCC works continuously to vices. Using nature’s own resources to preserve biologi-
develop more energy-efficient, climate-adapted and cal diversity is not only a method of offsetting the effects
resource-efficient products and services, both indepen- of climate change, but also contributes to increased eco-
dently and in partnership with customers, in order to nomic, social and cultural values. The social dimension
minimize the strain on our environment and to jointly has been assigned even greater scope in our sustainabil-
develop society in a more sustainable direction. ity work, particularly when it concerns the rejuvenation of
In 2013, a report from the Intergovernmental Panel on already-existing residential zones.
Climate Change (IPCC), which is part of the UN’s envi- During the year, NCC’s environmental work was also
ronmental program (UNEP), showed that levels of green- clarified through the introduction of new measurable
house gases responsible for climate change continued to targets, for both the long and short term, for the four
rise, that increasingly significant losses in biodiversity focus areas (see p. 37).
had been observed and that there was an increased
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 31

Our core values

The actual pillar of NCC’s way of working and acting is based on our core values
and our Code of Conduct, which when combined, function as a compass for both our
employees and our business partners. They are the foundation for how we behave
and act on a daily basis, and provide us with guidance on our decisions.

In addition to the three core values, Honesty, Respect and approach, one that results in long-term sustainable
Trust, a fourth value was introduced during the year – development – completely in line with NCC’s vision: to
pioneering spirit. With the term, “pioneering spirit,” we renew our industry and provide superior sustainable
wish to inspire and encourage both employees and busi- solutions.
ness partners to use an innovative and creative

Honesty Honesty
• We are true to ourselves and to
Respect
• We value diversity and treat others

Respect
our stakeholders respectfully
• We conduct business in a correct and • We co-operate, value the opinion of others and
responsible manner we stand behind our decisions
• We make sure that our stakeholders can • We use all resources with care

Trust
always rely on NCC

Trust Pioneering spirit

• We trust each other, say what we mean and do what • We take initiative, work proactively and

Pioneering spirit
we say with energy
• We have the courage to be forthright and clear • We have the courage to try new ways of thinking
• We honor our commitments and strive towards and working
high standards on quality, ethics and sustainability • We drive development together with our
stakeholders

NCC’s Code of Conduct

The Code of Conduct was created in consideration of voluntary employees. Monitoring and compliance work was further
initiatives adopted by NCC, such as the World Economic developed in 2013, through the launch of NCC Compass, for
Forum Partnering Against Corruption (PACI) and the UN example, a Group-wide tool that makes it easier for employ-
Global Compact, an initiative that calls the attention of compa- ees to adhere to our values and that explains in a simple and
nies to corruption, the environment, human rights and work clear manner how the more generally formulated Code of
methods. NCC’s Group Management is responsible for ensur- Conduct is to be applied in practice (see p. 32)
ing compliance with the Code of Conduct, which is continu- In 2013, NCC’s greatest initiative to date in business ethics
ously monitored within the framework of operating activities. training was initiated, within the framework of NCC Com-
NCC is also a member of the Corporate Supporters Forum, a pass. By the end of 2013, 1,200 managers in the Group had
business forum hosted by Transparency International Sweden. received the obligatory training and, in 2014, all employees
NCC has a well-developed compliance program that is will have the same training opportunities.
based on continuous training and discussions with all
32 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

Secure transactions and responsible purchasing

NCC’s entire business operation rests upon the confidence and faith of its customers.
Business with NCC is to be characterized by security and transparency, and an ethical
approach among all the parties involved.

The construction industry generates large quantities of more than 50,000 suppliers. The purchasing volumes
goods and services, and employs a considerable number mainly comprise services and materials relating to
of people. The responsibility for business transactions shafts and transports, staffing, consultants, installation,
and projects is delegated far down along the line in every foundations, prefabricated concrete and steel, as well as
market where NCC is active and the business culture and construction materials.
climate may vary from location to location. Consequently, Currently, NCC’s purchases outside the Nordic
our values and the Code of Conduct have a pivotal role to region account for 6 percent of the total purchasing vol-
play in terms of preventive efforts concerning ethical ume; the aim is to raise this proportion to 25 percent.
issues among both employees and business partners. NCC purchases goods from, for example, China, Thai-
land, Turkey, Portugal, Poland and Estonia. Over the
R ESP ON SIBLE P U RC H ASIN G years, NCC has built up a stable international supplier
Developing sustainable and competitive purchasing is a base, in part by establishing its own purchasing offices
key issue for NCC. in various locations worldwide. Close cooperation with
The Group’s purchasing of goods and services totals suppliers in the international market permits NCC to
about SEK 38 billion. In addition to direct materials pur- raise the reliability and efficiency of its supplier chain.
chasing, NCC purchases significant amounts of energy, During 2013, NCC took a further step in enhancing
consumables and various types of subcontractor and the efficiency of purchasing activities by establishing a
consultancy services. The purchases are made through function to control and coordinate the Group’s strategic

Find your way with NCC Compass

NCC Compass, which is easily accessible on NCC’s intranet and The Tell Me function is a reporting function through which
also as an app, guides employees on issues concerning gifts, employees can report their suspicions about behaviors and
business entertainment, conflicts of interest and competition actions that contradict the Code of Conduct. NCC guarantees that
law. In addition to guidelines and general advice, the tool has an whatever is said or written will be handled as confidential informa-
“Ask Me” and a “Tell Me” function. tion and that it will not reveal the identity of the person who sub-
The Ask Me function was created to assist employees in mitted the report. All reports submitted via the Tell Me function
always making the right decisions. It provides simple and con- are investigated in an impartial and thorough manner by specially
crete advice with the aim of preventing incorrect behavior. The trained internal resources jointly with external expertise.
Ask Me function is managed by 45 specially trained employees, During 2013 after the function was launched, NCC handled 57
known as navigators, who are available throughout the company questions, of which 58 percent concerned gifts and business
to answer questions in the local language. The goal is that the entertainment, 12 percent competition, 12 percent conflicts of
employees always ask first, if they are unsure of what to do. All interest and 18 percent other issues. The questions have come
questions are documented and followed up to enable procedures from all of NCC’s business areas, in all of the countries where it
and guidelines to be clarified and developed wherever uncer- has operations. All questions are registered to gain insight into
tainty prevails. areas of potential problems, thus enabling NCC to clarify its pro-
cedures and guidelines.
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 33

purchasing operations, and is ultimately aimed at boost- investors demand that the companies or projects they
ing efficiency and cutting costs simultaneously. Success lend to or invest in entail high environmental ambitions.
factors will be the ability to enhance the coordination of As early as in 2012, NCC concluded a long-term loan
purchases so as to strengthen the strategies set for each contract amounting to SEK 500 M with the Nordic
product range and increase the coordination of work Investment Bank, relating to the construction of
methods and tools to ensure improved interplay energy-efficient office buildings by NCC Property
between the purchasing organization and projects. Development. NCC believes that this type of investment
Some of NCC’s international suppliers conduct market will grow to represent an attractive financial
manu­facturing in societies marked by different condi- complement, as well as acting as a powerful driving force
tions than those in our domestic markets, in terms of in inducing adjustments toward a sustainable society.
work environment and human rights, for example.
As part of efforts to monitor and develop its interna-
tional suppliers, NCC conducts audits of social respon-
sibility, environment and quality. NCC applies a
12-month supplier-assessment audit cycle for all inter-
national suppliers to ensure compliance with and devel-
opment in these areas. Serious deviations among suppli-
ers that are not rectified after having been observed
lead to the termination of cooperation.
NCC combines its own audits conducted by in-house
personnel with those of consultants who conduct third-
party audits within the framework of NCC’s affiliation to
the Business Social Compliance Initiative (BSCI) and
the UN’s Global Compact, for example.
During 2013, a shared, Group-wide strategy was intro- NCC and Blåkläder –
duced for the purchase of materials and chemicals up a Nordic collaboration
until 2020. The strategy is aimed at clarifying the owner-
ship of environmental issues in the purchasing process beyond the usual
and to clarify NCC’s intended direction in responsible
In 2009, NCC and Blåkläder initiated a Nordic collabora-
purchasing. The strategy is based on NCC’s vision and tion that has today evolved into a unique supplier relation-
encompasses several aspects of responsible purchasing, ship for NCC. The business relationship has generated solid
business and the sustainable production of one of NCC’s
such as the control and phasing out of chemical products main indirect materials. NCC places stringent demands on
with known hazardous properties, the systematic prioriti- the work clothes used in the course of production. In addition
to safety requirements, the products must be of good comfort
zation of construction products and materials with high and quality, manufactured under healthy working conditions
environmental performance and ensuring that NCC’s and have minimal impact on the environment in respect of,
for example, chemicals, both during manufacture and as
supplier base largely comprises suppliers that work sys- ready-to-wear garments. The close business relationship with
tematically in respect of social responsibility, the environ- Blåkläder enables NCC to proactively participate in and
influence both production and product development. In addi-
ment, quality and occupational health and safety. tion to the ability to influence design and product quality, this
also creates opportunities for NCC to influence the phasing
out of chemicals known to have hazardous properties. One
SU STAIN ABLE FIN AN C IN G example is silver ions, which were removed following a joint
In recent years, NCC has noted an increasing interest in decision and which are no longer used in Blåkläder’s pro-
duction. Another central aspect of the relationship with
green transactions, partly in respect of products that Blåkläder is that NCC participates actively in the assessment
NCC supplies but also interest from players wishing to of Blåkläder’s suppliers. NCC conducts its own supplier
reviews alongside Blåkläder’s supplier assessments.
identify companies with a sustainable strategy. These

GE N E RAT E D AN D DIST RIBU T E D ECO NO MIC VA LUE

NCC’s operations in 2013, distributed by stakeholder, based on the consolidated income statement. The table shows NCC’s generated
economic value and the manner in which this has benefited various stakeholder groups.

SEK M 2013 2012

Generated economic value
Customers 57,830 57,241
Distributed economic value
Suppliers –43,600 –43,439
Employees –8,945 –8,759
Creditors –279 –241
Government (tax and social insurance contributions) –3,016 –2,891
Shareholders –1,2941) –1,080
Retained economic value 696 831
1) Proposed dividend.
3 4 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

Consideration for employees

Attracting the best talents to the Group while successfully developing and retaining
those who are already working with us is an issue of the utmost importance to NCC.
There is no doubt that having competent and motivated employees generates greater
profitability and increases customer satisfaction.

NCC believes in the ability and self-motivation of individ- already working at NCC. The women’s network Stella
uals, and its operations are based on the contribution of has a vital role to play in this effort. Stella was estab-
all employees and each individual finding his/her role lished as early as 1998 and has subsequently worked to
and having a voice. The aim is to create an open and tol- highlight women’s competencies and the percentage of
erant workplace that is characterized by Honesty, women both generally and ones in leading positions.
Respect, Trust and Pioneering Spirit. However, in autumn 2013, less positive signals
emerged in a report from the trade organization, Bygg­
D I V E RSIT Y GE N E RAT E S C RE AT IV IT Y AND INNO VATIO N cheferna. The report stated that nine out of ten women
NCC also works proactively to increase diversity and rid in the construction industry find it to be unequal and
the industry of discrimination. We wish to have creative many are considering switching to other jobs. This is
teams and workplaces, and know that creativity arises unsettling and it is a problem NCC is handling with the
from a diversity of backgrounds, competencies, experi- greatest seriousness. Consequently, the Swedish con-
ences and ideas – regardless of ethnicity, gender, age, struction operation has formulated targets and actions
religion, sexual orientation, lifestyle or other attributes. to sharpen the focus on the issue.
As early as 2006, NCC joined the Fritt Fram network, NCC also actively promotes an increase in the per-
Sweden’s first network with a focus on sexual orienta- centage of employees with other ethnic backgrounds. In
tion within trade and industry. NCC also participates in Finland, NCC participated in an integration project
several mentor programs, including Mentor Bygg together with Helsinki City, through which immigrants
through the Swedish Construction Federation, with the were offered training and trainee posts to work within
aim of increasing the percentage of women in the indus- construction and civil engineering. The course is sched-
try. It is just as important to recruit additional women as uled to be completed in March 2014. Similar initiatives
it is to retain, support and develop the women who are have also been implemented in other locations.

E M P L O Y EE S ATI S FA C TION AT N C C

Key questions in the Human Capital Index (HCI) survey are compared with the results of the European Employee Index, enabling NCC to measure its results against an
industry index. The survey provides a description of the employees’ job satisfaction and loyalty, and also encompasses questions regarding values, immediate superiors,
motivation and commitment. The results of the 2013 survey indicate that NCC is better than the industry index in most markets.

Index
80

60

40

20

0
NCC total NCC Construction NCC Construction NCC Construction NCC Construction NCC NCC NCC Property
Sweden Denmark Finland Norway Roads Housing Development

NCC 2013
EEI Benchmark (EEI = European Employee Index). Comparison with the construction industry in Sweden, Norway and Denmark,
as well as the entire labor market in Finland and Germany.
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 3 5

BROAD C OM P E T E N C Y DE V E LOP M E NT A ND A NNUA L SURVEY – A TO O L FO R IMPRO VEM E N T

RE SE ARC H IN FOC U S Workforce satisfaction and the employees’ view of NCC
NCC is a knowledge-intensive organization where train- are tracked via an employee survey – the human capital
ing and competency development are key issues. Train- index (HCI). HCI monitors issues involving attitudes,
ing courses are provided annually in a range of areas work satisfaction and loyalty so as to provide input to
and at many different levels. These include everything NCC’s continuous improvement activities. The propor-
from project-manager courses to site manager certifica- tion of committed employees remains high, higher than
tions and NCC’s proprietary foreman school, which has equivalent levels for the industry, and vis-à-vis those
been operational for several years, and which provides countries in which we are active. In comparison with
new types of development opportunities for skilled white-collar employees, fewer blue-collar workers par-
workers. ticipated in the survey in 2013 (72 percent compared
During the year, NCC launched a new high-school with 88 percent). The findings of the 2013 study
course together with Kunskapsskolan. The new Tech- included the following:
nology program is a three-year course and will be • Committed employees, higher comparative figures
offered at a number of locations in Sweden. During the than for the industry
course, students will have continuous company contact, • Employees perceived many executives as straight­
such as through trainee posts, field trips and lectures by forward, result-driven and motivational
experts from NCC. The students will also be provided • Work satisfaction remains high, but dipped in 2013
with traineeship at the company and a personal mentor.
Also in 2013, NCC continued to work with the Technical During 2013, efforts aimed at improving the dialog cen-
Leap project, whereby senior high school pupils are tered on NCC’s values and the Code of Conduct were
offered trainee positions while simultaneously providing intensified. The HCI survey for the year indicates that
insight into and boosting interest in the engineering pro- related activities are beginning to impact, as confirmed
fession. by the fact that the portion of employees familiar with
NCC also conducts extensive R&D work that is decen- the content of the Code of Conduct increased 4 percent-
tralized and conducted within each business area. This age points to 52 percent among blue-collar workers, and
may pertain to everything from knowledge-acquisition by 3 percentage points to 89 percent among their white-
research to more industrially oriented product and collar colleagues.
method development – usually in close collaboration with
customers and suppliers.
The Group also engages in continuous collaboration Diversity project, Sumak
with various universities and colleges and employs
about seven industrial PhD candidates every year, who In Malmö, NCC is participating in a project called Sumak,
which was initiated by the company Xenofelia and by
constructively contribute to NCC’s strategic develop- “Kryddor i Rosengård (“Spices of Rosengård”). The project
ment. NCC in Sweden also has six professors who are is based on a change process for companies and organiza-
attached on a part-time basis to a number of institutes of tions that wish to work with values, attitudes and diversity in
order to develop more inclusive workplaces. A total of 365
technology, thus providing a valuable network connec- persons from NCC, the accounting firm PwC and employees
tion to academic researchers. During the year, the com- of the Malmö City district, Västra inner city are participating
pany participated in several strategic research pro- in the project. In the course of one year, the participants will
work to highlight and challenge workplace norms. The tools
grams, both nationally and internationally including the that are being used are communication, food and culture.
EU project, E2ReBuild, which focuses on energy-effi- Sumak is financed by the European Social Fund.
cient refurbishments in cold climates.

M AN AGE R DE V E LOP M E N T
Manager development is a core issue for NCC. The chal-
lenges of the future require managers with vision and
coaching skills, who dare to assume responsibility for
their employees, and who want to grow in pace with the
company. In 2013, particular focus was given to creating
a Group-wide platform for change management. With
the help of the new platform, NCC’s managers will now
be better equipped to drive development and the compa-
ny’s renewal. In addition to courses and training, the
shared platform comprises a range of tools and working
models that provide practical support for analysis work,
planning and the implementation of various types of
changes – all easily accessible on the company’s
intranet.
36 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

S afe and secure w orkplaces

Occupational health and safety issues and thinking
safely are ever present in NCC’s culture.
A positive work environment and a safe workplace
are highly prioritized areas and NCC works systemati-
cally to eliminate the number of accidents, in order to
achieve its zero-accident target. It is particularly impor-
tant to strengthen the safety culture, which involves
attitudes and behavior, and create an environment in
which everybody reacts to and acts on work environ-
ment shortcomings and deviant behavior. In addition to
attitudes and behavior, the focus has been on high-risk
areas such as working at heights, heavy lifting with
cranes, and work in environments with busy traffic.
NCC invests considerable effort in training and
education on the value of safety procedures and how
to prevent worksite accidents. During the year, the
“Tysta Boken” manual was relaunched to offer simple
and easy-to-understand assistance in performing Awareness Day – a day for
tasks correctly, regardless of language.
In 2013, NCC received a national work-environment reflection and consideration
award in Denmark for its work on developing safety At the beginning of September, NCC arranged Awareness Day
for the third year in succession. At 9:00 a.m. on September 4,
culture, which led to a halving of the number worksite all work was halted at all of NCC’s workplaces in all countries,
accidents at NCC’s Danish worksites in 2012. to hold joint talks and discussions about the work environment
Safe worksites are also about safe and secure terms and safety. In 2013, several Board members from NCC and the
principal owner, Nordstjernan, participated in discussions held
of employment. In all of our markets, with the excep- at various workplaces.
tion of Russia and the Baltic countries, NCC has collec-
tive agreements that regulate minimum wages, work-
ing hours and employees’ rights in relation to the
employer. In Russia, employee interests are instead
monitored through government agencies and inspec-
tors. In the Baltic countries, minimum wages and other
terms are regulated through national legislations.

SICKN ES S A B S EN C E A CCIDENT FREQUENCY A ND DEATHS

NCC, Group 2013 2012 2011 NCC, Group 2013 2012 2011
Sickness absence, % 3.7 3.5 3,5 Accident frequency1) 10.6 10.8 14.6
Fatilities2) 1 1 2
1)  umber of occupational accidents resulting in one day or more of absence
N
from ordinary work per million working hours.
2) Including employees of subcontractors.
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 37

Consideration for the environment

In terms of the environment, this entails that NCC, at every step of the supply chain, is
to offer resources and energy-efficient products and solutions that help our customers
in reducing their environmental impact and operating more sustainably. A fundamental
component of our strategy is to promote a sound and sustainable living environment
for people, animals and nature, while generating business characterized by long-term
profitability.

All around us in our world today, raw materials and CO NTRO L A ND O BJ ECTIVES
other resources are being consumed at a rate that far As part of its sustainability strategy, a long-term target
exceeds the capacity of our planet’s production. We live has been formulated in the section concerning environ-
as though we have an additional planet at our disposal. mental work, where NCC has chosen to focus on four
The construction industry has a significant role in subareas in which the company sees an opportunity to
this regard, since it is a major user of both material push through significant improvements.
resources and energy – in terms of its own operations NCC’s environmental work is based on the four over-
and the products and services it provides to society. A all focus areas and is managed by the Group’s Head of
proactive approach to today’s challenges is needed to Sustainability, in cooperation with the environmental
transform the construction industry into an industry managers of each business area. The work group meets
that is sustainable in the long term. regularly and sets shared targets and follows up on the
As an industry leader, NCC aims to actively drive the development of environmental work.
shift toward and the development of a more sustainable During the year, clear and scheduled objectives and
society. For NCC, this entails proactively influencing key figures were formulated for each of the focus areas,
resource usage and developing new technological solu- with the aim of improving the measurement of NCC’s
tions, products and work methods that influence devel- actual improvements and indicating how we have
opments in the right direction. This also entails break- improved.
ing the traditional method of working and creating new
paths to cooperation with other players and stakehold-
ers in society.

Four focus areas – ambitions and objectives

C LIM AT E AN D E N E RGY CHEMICA LS A ND SUSTA INA BLE

NCC’s climate impact is to be continuously MATER IA L CHO ICES
reduced and energy consumption is to derive from NCC is to create healthy built environments by
renewable sources. minimizing the use of materials that could have
harmful effects on people or the environment.
Long-term objectives
• NCC is to increase the use of processes, prod- Long-term objectives
ucts and services that generate zero or low CO2 • NCC is to declare the contents of its buildings
emissions. and products
• NCC is to deliver buildings with low energy
consumption while aiming for “zero and plus-
energy buildings”

RE SOU RC E E FFIC IE N C Y, RE C YC LIN G A ND ENVIRO NMENTA L CLA SSIFICATIO N O F BUI L DI N G S

WAST E M IN IM IZAT ION A ND CIVIL ENGINEER ING STR UCTURES
NCC’s product development is to be characterized NCC is to be a driving force in the Nordic market
by resource efficiency and operations are to be for environmentally certified buildings and civil-
based on circular flows. engineering structures.

Long-term objectives Long-term objectives

• No recyclable waste is to disposed of in landfills • NCC is to deliver environmentally certified
• Gradual growth in the percentage of renewable buildings and civil-engineering projects
and recyclable materials and components in
NCC’s product range
38 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

C limate and energy emissions. With ever-higher energy optimization and a

NCC’s goal is to continuously reduce its climate impact steady increase in the percentage of recycled materials,
by reducing emissions of greenhouse gases in both its the environmental impact from factors such as asphalt
operations and the products offered to the market. production has continued to decline.
Increasingly optimized energy usage and a transition to To further drive development toward reduced depen-
more eco-friendly energy sources are high on the dency on fossil fuels, NCC has created a patented
agenda. method for converting the heating systems of asphalt
Customers are offered climate-friendly solutions plants from traditional fuels to wood pellets. The conver-
through, for example, what are known as Green Ten- sion results in significant reductions of carbon emis-
ders. NCC was the first company in the construction sions. In 2013, conversions were implemented at four
industry to launch this type of alternative tender as early plants and, in 2014, transitions of an additional nine
as in 2010, and has since developed the tenders to plants are planned.
encompass an ever broader product portfolio. The NCC is also continuing to work systematically to
Green Tenders initiative offers customers such features reduce energy usage in the buildings it develops and
as the energy-efficient and environmentally adapted constructs. An epoch-making step was taken in autumn
establishment of workplaces, climate-declared buildings 2013, when NCC, on assignment from the municipal
and climate compensation. In 2014, the next version of housing company, HFAB in Halmstad, commenced the
Green Tenders will be launched, which comprises more construction of Sweden’s first plus-energy apartment
services than the purely climate related. block. The building will generate its own heating and
NCC Roads also implements proactive investments to electricity to cover its entire energy requirements, and
reduce climate impact, such as through the creation of will also provide a surplus to the electricity grid.
new products and solutions that reduce NCC’s carbon

Nordic Swan-labeled houses at Hageby Backe, Huddinge, Sweden.

Markering för case om

Gröna anbud 2.0

D irect energy use INDIR ECT ENERGY USA GE

MWh 2013 2012

Electricity 218,078 273,196
Diesel, 44.3%
Diesel, 44.3%
Oil, 32.1% District heating 45,119 52,498
Oil,16.4%
Gas, 32.1% District cooling 283 136
Other,
Gas,7.0%
16.4% Total, all energy sources 263,480 325,830
Gasoline, 0.2%
Other, 7.0% The table shows NCC’s usage of purchased energy.
Gasoline, 0.2%
EMISSIO NS FRO M NCC’S O PER ATIO NS
The diagram shows NCC’s energy usage derived from various fuels.
Tons, 000s 2013 2012
Nitric oxide (NOx) 860 801
Sulfur oxide (SOx) 61 63
Particles (PM10) 83 78
Greenhouse gas emissions (CO2e) 266 253
– of which scope 1 240 221
– of which scope 2 25 32
The increase compared with 2012 was due in part to a larger operation than
was included in Scope 3 in 2012 but in 2013 was included in Scope 1 and 2.
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 39

H azardous substances to be removed In the past few years, NCC Roads has also reduced
Work is continuing at an unabated pace to gradually e­ nvironmental impact in the manufacture of asphalt, by
phase out from the construction process substances increasing the use of recycled asphalt, known as granu-
that could harm people and animals in the surrounding late. In 2013, the percentage was 15 percent (14).
environment. NCC’s long-term objective for 2020 is to
have the capacity to produce content-declared buildings A tool for continuous improvement
and civil-engineering structures that comprise environ- NCC offers its customers all the types of environmental
mentally sound and sustainable products – a develop- certifications that are available to both buildings and
ment that, in the long term, will result in buildings being civil-engineering structures. NCC is playing an active
designed to a greater extent to allow for their input part and is one of the founders of Green Building Coun-
materials to be recycled upon expiry of their useful life. cils in Denmark, Finland, Norway, Sweden and Estonia.
In addition to applying the rules and regulations set Green Building Councils work to promote green build-
forth by the EU such as REACH, NCC uses various tools ing and to develop and influence environmental and sus-
and databases that provide solid guidance on how to phase tainability efforts in the industry
out the most harmful substances. Examples of such data- When collaborating with external customers, the com-
bases include BASTA and ChemXchange. A crucial link in pany has the requisite experience and expertise in terms
the transition to thoroughly sound and recyclable products of the system that should be chosen. In NCC’s propri-
is to impose the appropriate requirements on suppliers and etarily developed projects, NCC has chosen to adhere to
to work with traceability throughout the entire production BREEAM for commercial buildings and city districts (in
chain – an effort that was further intensified by NCC’s pur- Denmark, NCC adheres to the German system, DGNB)
chasing organization during 2013. Another important driv- and the Nordic Swan Ecolabel and Sweden Green Build-
ing force is the environmental certification of buildings. ing Council certification for residential projects. Our civil-
engineering projects adhere to the CEEQUAL certifica-
C ircular flo w s are a long - term objective tion system.
Lifecycle analyses help us to optimize the usage of materi- Within the NCC Roads business area, NCC has also
als in production and increased resource efficiency in the started to introduce an environmental stamp on quarries –
construction process will gradually raise the volume of NCC Green Quarry. The environmental stamp, which has
recycled materials and reduce the volume of waste. In sev- already been introduced to some 70 quarries in the Nor-
eral of NCC’s operations, recycling is a central feature of dic region, comprises the measurement and monitoring of
the business, particular within NCC Roads and the busi- energy usage, transports, recycling, noise and dust, as
ness concept called NCC Recycling – recycling terminals well as communication with neighbors and other stake-
that receive and refine primarily asphalt, concrete, stone holders.
materials, earth and excavation material, as well as park
waste.

Nordic Swan Eco labeled P303

in Ytterby, Kungälv, Sweden

Nordic Swan-Ecolabeled rental apartments and

single-family dwellings
Tomorrow’s housing will require greater consideration of the envi- ing processes, energy and quality – is now approved, only mini-
ronment while maintaining high quality. By developing and build- mal work inputs are required to achieve Nordic Swan Ecolabeling
ing energy-efficient housing using healthy materials, NCC helps of future projects.
reduce climate impact. During the year, NCC gained Nordic The first of these was a multi-family dwelling containing 27
Swan Ecolabel certification for its P303 and P304 Swedish hous- rental apartments in Ytterby, outside Gothenburg, and later during
ing construction systems. Because the entire construction system – 2013 some 70 single-family dwellings in Haninge and Huddinge
featuring predefined building materials and strict control of build- in southern Stockholm will be built.
4 0 n c c 2 013 S U S TA I N A B L E D E V E LO PM E N T

Stakeholder dialog and social responsibility

NCC’s commitment to society is pursued at many different levels and aimed at several dif-
ferent stakeholder groups. In day-to-day work, this concerns tens of thousands of meet-
ings between people, and a constant exchange of thoughts and experiences that help us in
our continued development.

All of these meetings generate added value and help us which will be followed up at a more in-depth level in the
in setting our priorities in the sustainability area. To find years ahead.
out the views of NCC’s principal target groups in respect The 2013 survey showed that our stakeholders
of sustainability issues and their expectations of NCC, regard the following issues as most important:
we implemented a simplified, targeted survey in 2013,

Ensure the provision of healthy and safe workplaces

Develop products and services from a sustainability perspective

Subject suppliers to demands in terms of quality, health, security and the environment

Dome of Visions
The Dome of Visions is a dome-shaped building of wood and Plexiglas, with The project challenges the construction industry and materials manufacturers
a diameter of 21 meters and a height of 10.5 meters, which NCC jointly devel- in terms of their responsibility for solving future climate challenges.
oped with the two Danish architects Kristoffer Tejlgaard and Benny Jepsen. The dome also investigates how we can vitalize the gap between buildings
The dome forms a protective climate shell for a garden and a resource-efficient and the temporary locations that arise in the course of new construction. The
wooden house the size of a single-family home. The objective of the dome proj- building is used as an arena for cultural meetings and social activities in paral-
ect was to accumulate new experiences involving alternative structures and lel with ongoing measurements and analyses regarding the building’s climate
materials usage. However, it has also been used as a meeting place for dialog and energy performance.
and discussions about the potential appearance of future buildings.
 S U S TA I N A B L E D E V E LO PM E N T n c c 2 013 41

NCC also implements thorough market and customer-­

satisfaction surveys on a regular basis, to better under-
stand customer needs and preferences. When designing Vision-controlled city
new residential districts, NCC offers stakeholders informa- development – a socially
tion and dialog. A notable example is the development of
Norra Sigtuna, where NCC, through what is referred to as sustainable project
vision-controlled town planning, involved the inhabitants of
Sigtuna in the planning of this new residential district. In the development of Norra Sigtuna, Sigtuna Municipality,
NCC and the inhabitants of Sigtuna are cooperating to
facilitate socially, economically and ecologically sustain-
PART IC IPAT ION IN T H E GE N E RAL D EBATE able urban development. Dialogs with citizens and work-
For some years, NCC has actively participated in the shops are shaping the design of the new district.
No drafts are made without the inhabitants’ participa-
Swedish debate concerning the conditions for increased
tion and input through various consultations and citizen’s
residential construction. With experiences gained from forums. Competitions have also been arranged where chil-
the Nordic countries and Germany, where NCC is the dren living in Sigtuna, through the computer game Mine-
craft, have been included and visually expressed their opin-
largest housing developer, the company has construc-
ion on how the new district should be designed. With input
tively mediated valuable insights and experiences with from the various forums, NCC enhances its awareness and
proposals for a faster decision and construction process. gains an understanding of what is needed before construc-
tion, and why it is needed. Some of the viewpoints that have
The dialog has taken place in the form of seminars,
been captured are: the use of water mirrors as active ele-
debate contributions, articles and statements of opinion ments, surfaces for planting, mixed residential units for the
submitted to various government agencies. elderly and young; developed track area for walking, run-
ning, ­skiing, horse, bicycles, car-free streets and small-town
During the year, NCC in Denmark had major success
­characteristics, proximity to schools, retail and services.
with a project called the Dome of Visions, a mobile
visionary meeting place and multi-dimensional sustain-
ability project aimed at offering dialog and discussions
on the appearance of future construction.
NCC otherwise engages in continuous dialog with
various stakeholder organizations and meets with inves-
tors, analysts and shareholders regularly. During 2013,
a Group-wide Public Affairs function was also estab-
lished, which is tasked with increasing the company’s
internal expertise in handling contacts with the public.
NCC also has a commitment in many local sports
clubs and supported various nonprofit organizations
during the year, such as Mattehjälpen, which provides
tutoring in mathematics homework to more than
100,000 high school and senior high school students in
Sweden. The organization is provided with financial
­support and NCC employees are also offered an oppor-
tunity to serve as voluntary tutors. Another example is
Drömmarnas Hus in Rosengård in Malmö, a creative
educational meeting place for young people, where
­culture and nature experiences are in focus.
NCC also assumes responsibility for society from a
broader perspective and, in 2013, donated SEK 500,000
to victims of the natural disaster in the Philippines and,
following a vote among employees, donated SEK 1 M in
lieu of Christmas presents, as a Christmas gift to UNI-
CEF for its work in Niger on installing water pumps that
will increase accessibility to clean drinking water.

ABOU T T H IS RE P ORT AN D T H E CO NTA CT PER SO N

For the fourth consecutive year, NCC is presenting a sustainability report in accordance with the international framework of the Global
Reporting Initiative (GRI). Although the Sustainability Report has not been audited by a third party, NCC is of the opinion that the infor-
mation in the 2013 Annual and Sustainability Reports, together with information on the NCC website, fulfills the GRI disclosure require-
ments for Application Level C. Unless otherwise stated, all the information pertains to the entire NCC Group during the 2013 financial
year. The GRI index is available on NCC’s website www.ncc.se/griindex. In 2014, NCC intends to commence a transition to the
updated GRI reporting framework, G4. Contact: Christina Lindbäck, Senior Vice President Corporate Sustainability
42 n c c 2 013 financial report

Report of the Board of Directors

The Board of Directors and the President of NCC AB (publ), corpo- Prices rose slightly in Sweden, but the market in Sweden was charac-
rate registration number 556034-5174 and headquartered in Solna, terized by some caution and the fact that purchasing decisions are
hereby submit the annual report and the consolidated financial being made closer to completion of construction. The Finnish market
statements for the 2013 fiscal year. declined late in the year and was characterized by caution.
The property market was marked by lower transaction volumes
G R O UP R EL ATI O N S HI P in 2013. Modern and “green” properties with stable tenants in
Since January 2003, NCC AB has been a subsidiary of Nordstjernan attractive locations are in demand. In the leasing market, demand is
AB, corporate registration number 556000-1421. favorable and vacancies are stable, except in Finland where demand
in the office rental market is weaker.
O PE R AT IO N S
NCC is one of the leading construction and property development Changes among senior executives
companies in Northern Europe. NCC develops and constructs resi- In March 2013, Christina Lindbäck assumed the new position as
dential and commercial properties, industrial facilities and public Senior Vice President Corporate Sustainability of the NCC Group and
buildings, roads, civil engineering structures and other types of infra- thus became a member of Group Management. Christina Lindbäck
structure. NCC also offers input materials used in construction, such was previously Senior Vice President Environmental Affairs of the
as stone materials and asphalt, and provides paving and road services. NCC Group. Carola Lavén assumed the position as Business Area
NCC mainly conducts its operations in the Nordic region. In Germany, Manager for NCC Property Development in April 2013 and also
NCC primarily builds housing properties. In St. Petersburg, NCC became a member of Group Management. Carola Lavén was previ-
builds housing properties and has an asphalt and paving operation. In ously Business Development Director at Atrium Ljungberg, where
Estonia and Latvia, NCC constructs housing properties and buildings. she was a member of company management. In June 2013, it was
announced that Hakon Tjomsland had been appointed the new
O PE R AT IO N S D U R I N G THE YE AR ­Business Area Manager for NCC Construction Norway. He was
Market ­previously responsible for NCC’s civil-engineering operations in
Demand in the Nordic construction market is slowly improving. ­Norway. At the same time, Peter Gjörup, the former Business Area
The Swedish construction market is relatively stable, but recovery ­Manager of NCC Construction Norway, took over a new position as
is slow, which had an impact on Construction operations. Chief Purchasing Officer in the NCC Group. Mats Pettersson, Senior
NCC Roads’ operations were impacted by a severe winter early in Vice President Human Resources at the NCC Group, left the com-
2013, but mild weather conditions late in the year enabled opera- pany at the end of 2013. On March 12, 2014, Acting Senior Vice Presi-
tions to continue longer than usual and demand for asphalt was dent Human Resources, Jacob Blom, was appointed Senior Vice Pres-
higher towards the end of the year. However, demand for stone ident Human Resources and member of NCC’s Group Management.
materials slackened.
The most favorable market conditions currently exist in Germany Orders received
and St. Petersburg. In Denmark, the market in Copenhagen has Orders received amounted to SEK 56,979 M (55,759). The year-on-
improved, while recovery in the rest of the country is slower. The year increase was mainly attributable to an increased number of
markets in Estonia and Latvia improved towards the end of the year. starts for housing property projects but also to more projects in the

OR D E R S R EC EI V ED A ND ORD E R BAC K LOG PR O FIT/LO SS A FTER FINA NCIA L ITEMS

Orders received and the order backlog have increased since the decline in The last quarter of the year was seasonally strong, thanks to higher profit
2009. The increase in 2010 was due largely to robust demand for housing. from NCC Property Development since several property projects were rec­
In late 2011, demand for housing stagnated while demand for other build­ ognized in profit. However, the start of the year was seasonally weak. Dur­
ing projects and civil engineering projects continued to rise throughout the ing the second quarter of 2013, profit in the Norwegian operations deteri­
year. Orders received were slightly lower in 2012 compared with 2011, orated, due to impairment losses on projects. The third quarter matched the
mainly due to a decline in orders received for Construction units in Sweden, preceding year.
Denmark and Finland. During 2013, orders received increased primarily
through more housing starts but also increases in other buildings.

SEK billion SEK M

60 1,500
50 1,200
900
40
600
30
300
20
0
10 –300
0 –600
09 10 11 12 13 Q1 Q2 Q3 Q4

Orders received 2009 2011 2013

Order backlog 2010 2012
 financial report n c c 2 013 4 3

other buildings segment. Changes in exchange rates reduced Net indebtedness

orders received by SEK 714 M compared with the preceding year. Net indebtedness amounted to SEK 5,656 M (6,467), of which net
Orders received for proprietary housing projects sold to private indebtedness in ongoing projects in Swedish housing associations and
customers amounted to SEK 9,029 M (7,289). During 2013, 3,715 Finnish housing companies accounted for SEK 1,714 M (2,181). Net
(3,196) housing units for private customers and 1,095 (1,328) units for indebtedness declined at the end of 2013, for seasonal reasons and due
the investor market were started. During the year, 3,747 (2,937) hous- to higher sales of housing and property development projects.
ing units were sold to private customers and 1,129 (1,395) housing
units to the investor market. Orders received for proprietary prop- Cash flow
erty projects totaled SEK 2,309 M (1,644). The order backlog rose Cash flow before financing was SEK 1,661 M (negative: 932). Cash flow
SEK 1,805 M year-on-year to SEK 47,638 M. Changes in exchange from changes in working capital amounted to SEK 211 M (negative:
rates had an adverse impact of SEK 428 M on the order backlog. 2,484). Cash flow from operating activities was higher than the preced-
ing year thanks to strong sales of housing and property projects. Capi-
Net sales tal tied up in working capital was lower than in the preceding year due
Net sales were in line with the preceding year and totaled SEK to higher interest-free financing. Investments in housing projects dur-
57,823 M (57,227). Higher sales mainly in NCC Property Develop- ing the year were lower than in the preceding year – in Sweden due to
ment and NCC Construction Norway were offset by lower sales in few starts at the beginning of the year and in St. Petersburg due to
NCC Construction Sweden. Sales in NCC Roads fell due to lower fewer land purchases. Also refer to the Cash flow statement on p. 58.
volumes. The late start to the season caused by the long and cold
winter early in the year resulted in lower volumes of stone materials Equity/assets and debt/equity ratio
and asphalt. Higher revenues from housing sales to investors, as On December 31, the equity/assets ratio was 22 percent (20).
well as sales of land, resulted in sales for NCC Housing being higher The debt/equity ratio was a multiple of 0.7 (0.8).
than in the preceding year. Most of the net sales for NCC Property
Develop­ment derived from projects recognized in profit during the Seasonal effects
fourth quarter. Changes in exchange rates had an adverse impact of NCC Roads’ operations and certain operations in NCC’s Construc-
SEK 668 M on sales compared with the preceding year. tion units are impacted by seasonal variations due to cold weather
conditions. The first and final quarters are normally weaker than
Operating profit the rest of the year.
Operating profit amounted to SEK 2,679 M (2,519). The improve-
ment in profit was due to higher earnings for NCC Property Devel- BUSINESS A R EA S
opment, which offset the lower earnings in NCC’s Construction NCC Construction Sweden
units in Sweden and Norway, as well as NCC Housing. Orders received by NCC Construction Sweden were lower than in the
Total operating profit for NCC’s Construction units was lower than in preceding year, due to fewer projects in the other buildings segment,
the preceding year. The change was primarily due to lower volumes in and amounted to SEK 20,348 M (21,483). The recovery in the market
NCC Construction Sweden, and lower earnings in NCC Construction was weaker and set in later in the year than anticipated. Demand for
Norway, resulting from impairment losses on projects during the year. housing rose and orders received in the fourth quarter increased in
Operating profit in NCC Roads matched the preceding year, pri- the segment. Orders received in the civil engineering segment
marily due to the strong recovery in the asphalt operations during remained unchanged compared with 2012. Earnings declined to SEK
the second half of the year, which offset the weak trend in the first 637 M (801) due to the lower sales. A new organization in NCC Con-
quarter. Earnings from stone materials declined primarily due to struction Sweden, with more distinct specialization combined with a
lower volumes. Losses and weak margins in the road service opera- strong local presence, will enhance efficiency in specific market seg-
tions were charged to earnings. ments. The new organization came into effect on January 1, 2014.
Profit in NCC Housing was negatively impacted by results from
the sale of rental units in Sweden and land, impairment of land, NCC Construction Denmark
restructuring costs in Sweden and higher expenses caused by the Orders received by NCC Construction Denmark rose to SEK
increase in project volumes. 4,929 M (3,288). The increase was primarily attributable to one
NCC Property Development’s operating profit was higher than in major project, Carlsberg Byen, which is carried at SEK 1.5 billion
the preceding year. Eleven (nine) projects were recognized in profit, and was received in the first quarter of the year. As a result of higher
along with earnings from previous sales and land sales during the year. sales and continued strong profitability, operating profit was higher
“Other and eliminations” amounted to an expense of SEK 21 M than in the preceding year, amounting to SEK 208 M (189).
(expense: 192). Elimination of inter-company gains amounted to
profit of SEK 66 M (loss: 16). Profit after financial items totaled SEK NCC Construction Finland
2,400 M (2,277). Net financial items declined to an expense of SEK Orders received by NCC Construction Finland were slightly lower
279 M (expense: 241) due to higher average net indebtedness. than in 2012 and amounted to SEK 6,491 M (6,576). The decline was
Profit after tax for the year amounted to SEK 1,989 M (1,910). The due mainly to lower demand for housing. Operating profit improved
effective tax rate for NCC was 17 (16) percent. to SEK 127 M (101). However, the margin in ongoing projects
remained low although improvement measures have begun to gen-
F INANC I A L P O S I TI O N erate positive effects.
Profitability
The return on equity after tax was 26 percent (28). NCC Construction Norway
Orders received by NCC Construction Norway were lower and
Total assets amounted to SEK 7,098 M (8,086). The decline was due to a decrease
Total assets amounted to SEK 38,793 M (37,713). in orders received for housing, resulting from a slackening of the
4 4 n c c 2 013 financial report

Norwegian housing market. Orders received for civil engineering profit was higher than in the preceding year, at SEK 713 M (295). A total
projects and other buildings rose slightly. Operating profit was SEK of eleven (nine) projects were recognized in profit. Earnings from sales
3 M (74), which was lower than in the preceding year, due to impair- of land and from earlier sales also c­ ontributed to the positive result. The
ment losses mainly on a number of other buildings projects in the sec- operating net for the period amounted to SEK 68 M (36).
ond quarter. The single largest impairment loss pertained to a project At year-end 2013, NCC had 17 (23) completed and ongoing proj-
that was part of the acquisition of OKK Entreprenør AS in 2012. ects that had not been recognized in profit, with total project costs
amounting to SEK 5.0 billion (5.9). Costs incurred in all ongoing proj-
NCC Roads ects amounted to SEK 3.0 billion (3.3), equal to a completion rate of 60
Net sales for NCC Roads declined to SEK 11,999 M (12,211). The late percent (55), while the leasing rate was 74 percent (68). Leases were
start to the season caused by the long and cold winter early in the year signed for 120,100 square meters (76,400) during the year.
resulted in lower volumes of stone materials and asphalt. This was
partly offset by an increase in sales in road services compared with the BRA NCHES O UTSIDE SWEDEN
preceding year. Profit was in line with the preceding year and totaled The NCC Construction Sweden business area conducts operations
SEK 406 M (417). Strong recovery during the second half of the year via a branch in Norway. NCC also has a branch in Denmark, as well
offset the weak trend in the first quarter. Earnings from stone materials as a branch in Singapore connected to two completed projects for
declined primarily due to lower volumes. Losses and weak margins in which the guarantee periods have not yet expired.
the road service operations were charged to earnings. A new organiza-
tion became ­effective on January 1, 2014 to enhance the efficiency of the ENVIRO NMENTA L IMPA CT
operations. The Group conducts operations subject to permit and reporting
­obligations in accordance with the Environmental Code, which
NCC Housing involve the Swedish Parent Company and Swedish subsidiaries. Of
Demand for housing was favorable in NCC’s markets. A total of 3,747 the Group operations subject to permit and reporting obligations,
(2,937) housing units were sold to private customers and 1,129 (1,395) it is mainly the asphalt and gravel pit operations conducted by NCC
to the investor market. During the year, construction started on a total of Roads that affect the external environment, as well as the construc-
3,715 (3,196) housing units for private customers and 1,095 (1,328) units tion and civil engineering operations conducted by NCC’s Construc-
for the investor market. 2,951 (2,845) housing units for private custom- tion units. Within NCC Roads, quarries and harbors are subject to
ers and 903 (998) housing units for the investor market were recognized permit obligations, while asphalt production is generally subject to
in profit. The number of completed, not profit recognized housing units reporting obligations. Permits for quarries are renewed continu-
at the end of the period was 717 (393). The number of housing units ously. NCC Roads also conducts recycling operations that are sub-
under construction totaled 6,383 (5,768), of which 4,831 (4,391) for pri- ject to permit obligations. Some of these also include deposits, which
vate customers. The sales rate for units under construction for private are also subject to permit obligations. The external environment is
customers was 47 percent (43) and the completion rate was 49 percent mainly impacted by emissions to air, waste generation and noise. No
(47). The sales rate for units under construction for investors was 98 significant injunctions according to the Environmental Code exist.
percent (96) and the completion rate was 38 percent (40).
The number of development rights at year-end was 33,200 (35,000), CO MPETITIO N ISSUES
including 11,200 (12,800) located in Sweden. Capital tied up in housing In 2011, NCC’s internal investigation confirmed suspicions stated by the
projects increased to SEK 12,625 M (11,738), mainly as a result of an Norwegian Competition Authority concerning infringement of competi-
increase in ongoing projects. Profit totaled SEK 605 M (835). The mar- tion law in the Trondheim area during 2005–2008. The Norwegian Com-
gin from housing sales improved compared with the preceding year. petition Authority announced in March 2013 its ruling in the case entail-
Profit during the year was negatively impacted by the sale of rental ing that NCC was ordered to pay approximately NOK 140 M (approx.
units in Sweden and by land, impairment of land, restructuring costs SEK 150 M) in competition-infringement fees. NCC then requested a
in Sweden and higher expenses caused by higher project volumes. review of the Competition Authority’s ruling in Oslo District Court.
The District Court issued its verdict on February 19, 2014, according to
NCC Property Development which the competition-infringement fee was reduced from NOK 140 M
Sales for NCC Property Development amounted to SEK 4,811 M to NOK 40 M (SEK 43 M). This verdict can be appealed. Further infor-
(2,847). Property sales for full-year 2013 totaled SEK 4,631 M (2,722) mation is provided in Note 30, Other provisions.
and gains from the sales amounted to SEK 818 M (479). Operating

O rders received , net sales and earnings per business area

Orders received Net sales Operating profit
SEK M 2013 2012 2013 2012 2013 2012
NCC Construction Sweden 20,348 21,483 21,530 25,043 637 801
NCC Construction Denmark 4,929 3,288 3,546 3,396 208 189
NCC Construction Finland 6,491 6,576 6,680 6,709 127 101
NCC Construction Norway 7,098 8,086 7,408 6,070 3 74
NCC Roads 12,311 11,807 11,999 12,211 406 417
NCC Housing 10,921 9,380 9,030 8,612 605 835
NCC Property Development 4,811 2,847 713 295
Total 62,097 60,618 65,003 64,889 2,700 2,710
Other and eliminations –5,118 –4,859 –7,180 –7,662 –21 –192
Group 56,979 55,759 57,823 57,227 2,679 2,519
 financial report n c c 2 013 4 5

In the wake of the Finnish asphalt cartel, which took place in 1994–2002
and was finally concluded in court and regulated in 2009 with respect to MA J O R O NGO ING PRO J ECTS
competition-infringement fees, NCC and other construction companies NCC’s Completion Esti-
share of rate at mated
have received claims for damages from a number of municipalities and the order Dec. 31, comple-
the Roads Authority in Finland. For NCC Roads’ Finnish company, this Projects >SEK 300 M value 2013, % tion

means that claims totaling approximately EUR 40 M have been directed Norrström Tunnel, Stockholm SE 1,717 77 2015

at the company, jointly with other involved construction companies. New campus, housing, offices and
stores, Copenhagen DK 1,639 16 2017
These claims are being heard in general courts of law. In November National Highway 4, Hadeland NO 1,182 7 2016
2013, the Helsinki District Court handed down rulings in a number of Shopping center and travel hub,
the claims for damages in progress at the Court. NCC Roads’ Finnish Matinkylä FI 1,139 5 2016
company was ordered to pay approximately EUR 1 M, including inter- Railway tunnel, Larvik NO 1,078 33 2016
Subway depot, Stockholm SE 1,020 6 2017
est and process costs. The amount had been reserved in 2013.
Offices, Stockholm SE 965 32 2015
Light rail link, Phase 3, Stockholm SE 821 84 2015
PE R SO N N EL
Housing and property block, Stockholm SE 793 98 2014
The average number of employees in the NCC Group during the Clarion Hotel, Arlanda SE 714 99 2014
year was 18,360 (18,175). The increase was primarily due to the E6, expressway, Trondheim NO 707 99 2014
acquisition of the company OKK Entreprenør AS in Norway in 2012. Suspension bridge, Narvik NO 694 14 2017
In 2013, personal cutbacks were implemented mainly in NCC Con- Airport terminal, Oslo NO 688 98 2014
struction Sweden, NCC Housing and NCC Roads due to the reorga- Multimedia building, Aarhus DK 584 66 2014
nization of each unit. NCC’s long-term efforts involving occupational University hospital, new construction
and refurbishment, Linköping SE 580 66 2015
health and safety matters continued during the year. Raise boring, Kiruna SE 556 59 2014
Offices, Asker NO 548 91 2014
NC C S HA R E Radiotherapy clinic, Uppsala SE 533 73 2014
At December 31, 2013, NCC’s registered share capital consisted of County road 456, road and tunnel,
27,708,122 Series A shares and 80,727,700 Series B shares. The Kristiansand NO 529 99 2014
Underground and construction works,
shares have a quotient value of SEK 8.00 each. Kiruna/Malmberget SE 529 92 2014
The Annual General Meeting on April 9, 2013 authorized the Board, Municipal and regional building
until the next Meeting, to buy back a maximum of 867,486 Series B Kristianstad SE 501 86 2014
shares and to transfer a maximum of 303,620 Series B shares to partic- Highway, Östfold NO 476 70 2014
Traffic hub, Bergen NO 475 1 2015
ipants in the long-term performance-based incentive program that was
Retail and housing, Baerum NO 448 45 2015
resolved for introduction at the 2013 Annual General Meeting. During
Power station, Hissmofors SE 437 96 2014
the year, NCC utilized the mandate to buy back Series B shares. At the
E18 expressway, Gulli NO 436 91 2014
end of the year, the company had 592,500 Series B treasury shares. College of Music, Stockholm SE 415 11 2016
Series A shares carry 10 votes and Series B shares one vote each. Housing units and parking garage,
All shares provide the same entitlement to participation in the com- Copenhagen DK 412 22 2015
pany’s assets and profit and to an equally large dividend. At the E16 expressway, road and tunnel, Voss NO 397 95 2014
E4 Rotebro, road bridges, Stockholm SE 390 62 2015
request of the holder, Series A shares can be converted into Series
Local hospital, new-build, Gothenburg SE 388 27 2015
B shares. Such a request must be made in writing to the Board of
Housing, Helsinki FI 365 94 2014
Directors, which takes decisions on such matters on a continuous
Radiotherapy clinic, Lund SE 357 99 2014
basis. After a conversion decision is made, this is reported to Euro- Offices, Lillehammer NO 355 57 2015
clear Sweden AB for registration. Conversion occurs when such Offices/Workshop, Ludvika SE 351 94 2014
registration has taken place. During the year, 2,425,764 Series A Offices, Oslo NO 345 18 2015
shares were converted to Series B shares. Public baths, Malmö SE 326 28 2015
The number of NCC shareholders at year-end was 37,726 Dam safety measures, Höljes SE 318 55 2015
(37,840), with Nordstjernan AB as the largest individual holder Construction and mining works,
Copenhagen DK 313 50 2014
accounting for 22 percent (23) of the share capital and 65 percent
(66) of the voting rights. No other shareholder accounts for more
than 10 percent of the voting rights. The ten largest shareholders
jointly account for 45 percent (48) of the share capital and 73 percent
O RDER S RECEIVED BY PRO J ECT SIZ E 2013,
(76) of the voting rights. On February 1, 2012, NCC signed a five- NCC’S CO NSTRUCTIO N UNITS
year credit facility of EUR 325 M. Should any major changes occur Projects above SEK 300 M increased most in percentage terms during the
in NCC AB’s ownership structure, meaning if a shareholder other year and projects above SEK 100 M accounted for nearly half of the orders
than Nordstjernan AB acquires more than 30 percent of the voting received for the year. The diagram reflects SEK 39 billion of the total orders
received of SEK 57 billion. The Group’s total orders received also include
rights in NCC AB, or if NCC AB is delisted from the OMX NASDAQ orders received for NCC Roads and NCC Housing.
Exchange, the credit facility may be terminated by the lenders.
<5 SEK M, 5 (6)%
During 2011, Nordstjernan, NCC’s principal owner, extended an < 5 SEK M, 5 (6)%
5−10
5−10 SEK
SEK M, 5M, 5
(6)% (6)%
offer to senior executives to acquire call options in NCC at market
10−25
10−25SEKSEK
M, 10
M,(12)%
10 (12)%
terms and conditions. The options corresponded to a total of 51,223 25−50 SEK M, 14 (13)%
25−50 SEK M, 14 (13)%
Series B shares in NCC AB. The call options covered by the issue have 50−100 SEK M, 17 (20)%
50−100 SEK M, 17 (20)%
100–300 SEK M, 24 (30)%
a term of 3.3 and 5.3 years, with exercise in spring 2014 and spring
100–300
>300 SEK M, SEK M, 24
25 (13)% (30)%
2016, respectively at a price of SEK 200 and SEK 250, respectively. >300 SEK M, 25 (13)%
4 6 n c c 2 013 financial report

Significant risks and uncertainties

The trend in the global economy, which has stabilized slightly, is within the framework of the internal control established by NCC.
reducing the prevailing uncertainty concerning the potential impact The business areas assess and manage their risks using operational
on the Nordic construction and property market. In the event of systems and developed processes and procedures. The Group’s
increased uncertainty, future developments could impact on the financial risks such as interest-rate, currency, refinancing, liquidity
measurement of certain items that are based on assessments and and credit risks are managed centrally in order to minimize and con-
estimations. Values that could be impacted include land held for trol the risk exposure. Customer-credit risks are handled within
future development and ongoing property development and hous- each business area. A centralized insurance function is responsible
ing projects. for Group-wide non-life and liability insurance, primarily property
and contractor’s insurance. This function also performs preventive
R ISK M AN A G EMEN T A N D R ISK S risk-management work together with the business areas, thus
Through its business operations, NCC is exposed to various risks, resulting in cost-efficiency and coordination of insurable risks.
both operational and financial. The operational risks relate to the The most significant risks for NCC and the activities that are
day-to-day operations. These could be purely operative, apply to ten- implemented to manage these risks in a manner that NCC deems
ders or project development, seasonal exposure or assessments of efficient are described below.
the earnings capacity of a project. Operational risks are managed

Risk Activity
M A R K E T R I S KS

Price The stagnation in price rises for building materials During the year, NCC further centralized and enhanced its purchasing processes
during recent years has gradually transformed into by establishing a new Group-wide purchasing function that is to govern and coordi-
certain price increases in some of NCC’s markets. nate all purchasing. The aim of the new organization is to additionally increase effi-
During a shift in economic conditions, there is a risk ciency, while reducing purchasing costs and improving profitability.
that prices for input materials and services will A prerequisite for success in this effort is that the organization fully utilizes NCC’s
increase, and that these cannot be offset by higher approved suppliers and ensures that cooperation between the purchasing organiza-
prices for NCC’s products and services. tion and projects becomes even better.
Purchases of materials and services account for For a number of years, NCC’s Construction units have worked to increase the effi-
about two-thirds of NCC’s costs. For NCC Roads, raw ciency of the construction process, such as by using platforms that create greater pur-
material costs comprise about one-third of the price chasing volumes for individual products or by coordinating purchases of materials
for paved asphalt. The largest input material is the oil and services in the Nordic region and through international purchases. In these
product bitumen followed by aggregate products. efforts, the purchasing function, in part through non-Nordic procurements, is an
important feature and the financial key to gaining control over the price trend.
The use of joint platforms is also a prerequisite for NCC Housing and NCC
Property Development’s ability to gain control over production costs.
NCC Roads purchases bitumen from several international suppliers. Purchasing
and logistics involving bitumen are coordinated between Sweden, Denmark and
Norway. Long-term agreements with customers normally include price clauses that
reduce NCC Roads’ exposure to risks. Furthermore, known international purchasing
volumes are hedged. In several markets, NCC Roads is self-sufficient in terms of
aggregate products, through holdings of strategically located quarries.

Season The NCC Roads business area is subject to major sea- To manage these risks, NCC Roads offers the entire value chain of road-related
sonal variations. This is clearly evident in sales for the products and services. For example, operating and maintenance operations and
business area in the various quarters over an also the recycling initiative, as well as the establishment of a network of recycling
extended period. Within the asphalt operations, most terminals for construction and civil engineering debris, supplement the paving
procurement is conducted during the spring, and operation during the year.
asphalt production and paving activities are con-
ducted during the summer half year. Warm autumn
weather could have a positive impact on production,
while long, cold winters have negative effects on earn-
ings.

Development Proprietary project development of both residential NCC possesses housing and property development competencies. Every project
and commercial properties includes a development concept must be adapted to local market preferences and the regulatory require-
and sales risk, in addition to construction contract ments arising in planning work. State-of-the-art skills are required to optimize the
risk, which are handled by NCC’s Construction units. timing of projects and to guide them through, for example, municipal administra-
If mismanaged, this risk could lead to higher tied-up tion and possible appeal processes. NCC has also successively limited the markets
capital and also losses. in which the Group is active and expanding. Proprietary housing and property proj-
ects are developed primarily in large growing cities in the Nordic countries, as well
as in Germany, Estonia, Latvia and St. Petersburg. NCC has also consciously
decided to refrain from excessively niche-oriented projects intended for narrow tar-
get groups, since earnings in this sector have historically not matched the higher
inherent risks. Risk limitation is achieved through demands concerning leasing
rates for commercial properties and pre-sales of housing before a project is started.
Tied-up capital is reduced through early payment by customers.
 financial report n c c 2 013 4 7

Risk Activity
O P E R AT I O N A L R I S KS

Construction For a building contractor, the principal operational When selecting suitable contracts, NCC assigns priority to projects whose risks are
risk limitation is normally during the contract-tender- identified, and thus manageable and calculable. Most risks, such as contract risks
­contract risk
ing process. NCC adopts a selective approach to ten- and technological and production-related risks, are best managed and minimized in
dering, which is particularly important in a declining cooperation with the customer and other players during early stages of the project.
market, when a company may be tempted to accept Various types of cooperative formats, such as NCC Partnering, are ways of manag-
low-margin or high-risk projects in order to maintain ing risk. Project control is of decisive importance to minimizing problems and thus
employment. However, in a growing market, it is costs. A number of Group units are quality and environmentally certified. A short-
important to be selective since an extensive tender- age of labor and of certain competencies may arise during certain periods. Conse-
ing volume could result in a shortage of internal and quently, it is vital for NCC to have an organization with broad competences to
external resources for handling all projects, which secure the company’s ability to deliver.
could lead to both weaker internal control and
increased costs.

Competition law NCC’s operations are normally established locally For several years, NCC has provided training in NCC’s core values and competition
and are in many cases dominated by a few players. In law. Procedures have also been developed to identify and monitor employees who
a few isolated cases, NCC employees have engaged may be in a situation where they are exposed to the risk of collaboration with com-
in efforts to distort the competitive situation in petitors. In 2013, NCC further developed its compliance program; also refer to pp.
breach of the company’s ethical standards and appli- 31–32.
cable law.

Financial Financial risk taking should be viewed against the Overall, the financial risk taking is controlled by the ceiling for the debt/equity ratio
capital requirements of NCC’s various operations. that applies for the Group.
risk taking
Contracting operations normally generate a posi- NCC’s Construction units must normally not have any financial net debt but
tive cash flow at the early stage of projects. should instead continuously generate a liquidity surplus.
NCC Roads mainly has capital tied up in fixed Industrial and development operations tie up capital in their individual operation
assets, quarries, crushing plants, asphalt plants, but the same amount is tied up in assets of slightly varying character. NCC Roads
­paving machinery, road services, and so forth. To the ties up capital, firstly in plants, gravel quarries and various types of equipment,
extent possible, investments that achieve the maxi- while NCC Housing and NCC Property Development tie up capital in development
mum capacity utilization are sought. projects. In NCC Roads, the seasonal variations in tied-up capital are extensive. In
Proprietary housing and property development this respect, the operations in the three capital-intensive business areas are con-
ties up capital throughout the course of the projects; trolled by the setting of internal ceilings for tied-up capital. These are revised con-
firstly, through investment in land, then during the tinuously but are intended to apply over a medium-long period.
development phase and finally during the sale of
the project.

Financial risks Financial risks involve interest-rate, currency, refi- NCC’s finance policy for managing financial risks has been adopted by NCC AB’s
nancing, liquidity, credit and counterparty risks. Board of Directors and constitutes a framework of guidelines and rules in the form of
risk mandates and limits for finance activities. In the NCC Group’s organization,
finance activities are centralized in the NCC Corporate Finance unit in order to moni-
tor the Group’s overall financial risk positions, to achieve cost-efficiency and econo-
mies of scale and to accumulate expertise, while protecting Group-wide interests. The
Group’s financial risks are managed by the Group’s internal bank. Customer-credit
risks are managed within each business area. For a more comprehensive description
of financial instruments and financial risk management, see Note 39, Financial instru-
ments and financial risk management.

R I S K O F E R RO RS I N FI N A N C I A L R E P O R T I N G

Risk of errors in In projects with construction contracts, NCC normally The risk that the final profit will deviate from percentage-of-completion profit is mini-
applies the percentage-of-completion method for profit mized through NCC’s project-management model. This is part of NCC’s operational
profit recognition
recognition. This means that profit is recognized in control and ensures the necessary production estimates, reconciliation of work per-
parallel with completion, meaning before the final formed, final forecasts and follow-up of all construction projects on which profit recog-
result is established. nition is based. If the final result of a project is expected to be negative, the entire loss
from the project must immediately be charged against earnings, regardless of the proj-
ect’s completion rate. When the outcome of a construction project cannot be calculated
in a reliable manner, due to uncertainty in the project, revenue recognition must only
occur in the amount corresponding to the recognized project costs

Estimates and Since the recognition of certain items is based on NCC continuously monitors developments in the market and tests the assumptions
estimates and assessments, these items are subject made on an ongoing basis. Refer also to critical estimates and assessments in Note 1.
assessments
to uncertainty. Market conditions have a particular
impact on the value of land held for future develop-
ment and ongoing property development and hous-
ing projects. These items are recognized on the basis
of what, when this report was issued, were current,
difficult-to-assess assumptions, such as sales prices,
production costs, land prices, rent levels, yield
requirements and the timing of production starts
and/or sales.
4 8 n c c 2 013 financial report

S E NS I TI V I TY A N D R I S K AN ALYSIS
Effect on profit
after financial Effect on return Effect on return on
items, SEK M on equity, capital employed
Change (annual basis) (percentage points) (percentage points) Comments
NCC’s Construction units
Volume +/–5% 145 1.5 0.8 For NCC’s Construction operations, a one-­
Operating margin +/–1-percentage point 392 4.0 2.2 percentage-point increase in the margin has a
significantly larger impact on earnings than a
5–10 percent increase in volume. This reflects
the importance of pursuing a selective tender­
ing policy and focusing on risk management
in early project stages.

NCC Roads
Volume +/–5% 43 0.4 0.2 NCC Roads’ operations are affected by such
Operating margin +/–1-percentage point 120 1.2 0.7 factors as price levels and the volume of pro­
duced and paved asphalt. An extended
Capital rationalization +/–10% 11 0.1 0.3 ­season due to favorable weather conditions
increases volumes and, because the propor­
tion of fixed costs is high, the effect on the
­margin is considerable.

NCC Housing
Volume +/–10% 118 1.2 0.7 For proprietary housing projects within NCC
Operating margin +/–1-percentage point 90 0.9 0.5 Housing, the major challenge is to have the
right products and to guide them through the
planning process so they arrive in the market
at the right time.

NCC Property Development

Sales volume, projects +/–10% 90 0.9 0.5 NCC Property Development’s earnings are pre­
Sales margin, projects +/–1-percentage point 46 0.5 0.3 dominantly determined by sales. Opportunities
to sell development projects are affected by the
leases signed with tenants, whereby an
increased leasing rate facilitates higher sales.
The value of a property is also determined by the
difference between operating expenses and rent
levels, which means that a change in the rent
­levels or operating economy of projects in prog­
ress could change the value of such projects.

Group
Interest rate, borrowing +/–1-percentage point 37 0.4 The NCC Group had a favorable financial
Change in net debt SEK 500 M 16 0.2 0.4 position in 2013. On average, the net indebt­
edness was higher than in 2012, but declined
Change in equity/ –5-percentage point 8.2 to a lower level at the end of the year.
assets ratio

N OM INATI O N W O R K As a result of the evaluation of the total remuneration package for

Ahead of the 2014 Annual General Meeting (AGM), NCC’s Nomina- the company’s Group Management, the Board proposes that the
tion Committee comprises Viveca Ax:son Johnson (Chairman of the 2014 AGM adopts the current guidelines for 2014. These guidelines
Board of Nordstjernan AB), Marianne Nilsson (Executive Vice Pres- encompass Group Management, including the CEO.
ident of Swedbank Robur AB), and Johan Strandberg (Analyst at The objective of the guidelines for salary and other remuneration
SEB Fonder), with Viveca Ax:son Johnson as Chairman. Tomas of Group Management is to enable NCC to offer market-based
­Billing, Chairman of the NCC Board of Directors, is a ­co-opted remuneration that facilitates the recruitment and retention of the
­member of the Nomination Committee but has no voting right. best possible competencies within the NCC Group. The aim is that
the total remuneration package will support NCC’s long-term strat-
Remuneration egy. Remuneration of Group Management comprises fixed salary,
Board of Directors’ motion concerning guidelines for salary and variable remuneration, the long-term performance-based incentive
other remuneration of the Chief Executive Officer and other mem- program, pension and other benefits.
bers of the company’s management (Group Management) Fixed salar y. When determining the fixed salary, the individual
The Board has evaluated the application of the guidelines for salary executive’s sphere of responsibility, experience and achieved
and other remuneration of the CEO and other members of the com- results are to be taken into account. The fixed salary is to be revised
pany’s management (Group Management), as resolved by the 2013 either annually or every second year.
AGM, and the applicable remuneration structures and remunera- Short-term variable remuneration. The short-term variable
tion levels in the company. remuneration must be maximized and related to the fixed salary,
 financial report n c c 2 013 49

as well as based on the outcome in relation to established targets, PA R ENT CO MPA NY

with financial targets accounting for by far the greatest proportion. Commission agreement
The reason for paying variable remuneration is to motivate and Since January 1, 2002 and January 1, 2009, respectively, NCC Con-
reward value-generating activities that support achievement of struction Sverige AB and NCC Boende AB have been conducting
NCC’s long-term operational and financial objectives. operations on a commission basis on behalf of NCC AB.
Assuming that the long-term performance-based incentive program
is adopted by the 2014 AGM, the short-term variable remuneration Net sales and earnings
payable to the CEO will be maximized at 40 percent of fixed salary and Invoicing for the Parent Company amounted to SEK 23,357 M (25,763).
the amount payable to other members of Group Management will be Profit after financial items was SEK 1,723 M (1,556). In the Parent Com-
maximized at 30–40 percent of fixed salary. The variable short-term pany, profit is recognized when projects are completed. Income recog-
remuneration is to be revised annually. It is estimated that the compa- nition was lower and dividends from subsidiaries were higher during
ny’s undertakings in relation to the executives concerned will cost the 2013. The average number of employees was 7,173 (7,220).
company a maximum of SEK 18 M including social security fees.
Should the AGM not vote in favor of a long-term performance- CO R PO RATE GO VERNA NCE R EPO RT
based incentive program, the variable remuneration payable to the The Corporate Governance Report is included as a separate section
CEO will be maximized at 50 percent of fixed salary and that for of NCC’s 2013 Annual Report and does not constitute a feature of
other members of Group Management will be maximized at 40–50 the formal annual report documentation; refer to the Corporate
percent of fixed salary, which is equal to a maximum cost of SEK Governance section on pp. 100–105.
22 M including social security fees.
Pensions and other benefits. NCC is endeavoring to move SIGNIFICA NT EVENTS A FTER THE BA LA NCE SHEET DATE
gradually towards defined-contribution solutions, entailing that On February 19, 2014, Oslo District Court announced its verdict on the
NCC pays contributions that represent a specific percentage of the competition case, entailing a reduction in the competition-impeding fee
employee’s salary. Members of Group Management active in Swe- ordered by the Norwegian Competition Authority for breaches of com-
den are entitled, in addition to basic pension which is normally petition law in the Trondheim area. The District Court reduced the fee
based on the ITP plan, to receive a defined-contribution supplemen- from NOK 140 M (approx. SEK 150 M) to NOK 40 M (SEK 43 M).
tary pension for salary increments exceeding 30 income base On March 12, 2014, Jacob Blom took office as Senior Vice Presi-
amounts. The income base amount for 2014 is SEK 56,900. Mem- dent Human Resources and simultaneously became a member of
bers of Group Management active in another country are covered NCC’s Group Management.
by pension solutions in accordance with local practices.
NCC is endeavoring to achieve a harmonization of the retirement O UTLO O K
age of members of Group Management at 65 years. For 2014, NCC expects the Nordic construction market to grow
Other benefits. NCC provides other benefits to members of slightly. The strongest performance is expected in the Norwegian
Group Management in accordance with local practices. The com- and Swedish markets, while weaker performance is expected in
bined value of such benefits in relation to total remuneration may ­Finland, where there are concerns about the GDP trend.
constitute only a limited value and correspond essentially to the NCC believes that a general increase in construction will lead to
costs normally arising in the market. higher demand for stone materials during 2014. The asphalt market
Periods of notice and severance pay. A member of Group also has potential for growth in 2014.
Management who terminates employment at NCC’s initiative is nor- NCC expects stable demand in all housing markets in 2014,
mally entitled to a 12-month period of notice combined with sever- except for Finland and Norway, where conditions are more uncer-
ance pay corresponding 12 months of fixed salary. During the said 12 tain. Price levels are expected to remain essentially unchanged.
months, the severance pay is deductible from remuneration received NCC believes that the expected increase in GDP will have a
from a new employer. The period of notice is normally six months if ­positive effect on the Nordic property market in 2014 and that the
employment is terminated on the initiative of the employee. ­Swedish market has the best conditions.
These guidelines may be disapplied by the Board if there is spe-
cial reason to do so in individual cases. PR O PO SED DIVIDEND
The Board proposes a dividend of SEK 12.00 (10.00) per share,
Long-term performance-based incentive program divided into two payments. The proposed record date for the first
The Board proposes that the AGM resolve to introduce a long-term payment of SEK 6.00 is April 7, 2014 and for the second payment of
performance-based incentive program for senior executives and key SEK 6.00 October 28, 2014. The dividend is in line with NCC’s divi-
personnel within the NCC Group (LTI 2014). The proposal essen- dend policy and corresponds to 65 percent of profit after tax for the
tially concords with the long-term performance-based incentive pro- 2013 fiscal year. If the AGM approves the Board’s motion, it is esti-
grams earlier adopted for 2013 and 2012. A total of 132 employees mated that the first dividend will be paid via Euroclear Sweden AB
are included in LTI 2013. The Board is of the opinion that incentive on April 10, 2014 and that the second dividend will be paid on Octo-
programs of this type are of benefit to the company’s long-term ber 31, 2014. The Board’s statement regarding the proposed divi-
development. The purpose of the LTI programs is to ensure a focus dend and the buyback of NCC’s own shares will be available on the
on the company’s long-term return on equity and to minimize the company’s website and be distributed to shareholders at the AGM.
number of worksite accidents. It is proposed that LTI 2014 encom-
pass a total of approximately 150 participants within the NCC A MO UNTS A ND DATES
Group. More detailed information on the proposal and earlier long- Unless otherwise indicated, amounts are stated in SEK millions
term incentive programs is available at www.ncc.se. See also Note 5, (SEK M). The period referred to is January 1–December 31 for
Personnel expenses and remuneration of senior executives. income-statement items and December 31 for balance-sheet items.
Rounding-off differences may arise.
5 0 n c c 2 013 financial report

Consolidated income statement

with comments
SEK M Note 2013 2012
1, 19, 36
Net sales 2, 3 57,823 57,227
Production costs 5, 6, 8, 15, 25 –52,027 –51,731
Gross profit 5,796 5,495

Selling and administrative expenses 5, 6, 7, 15 –3,130 –2,988

Result from sales of owner-occupied properties 6 3
Impairment losses and reversal of impairment losses, fixed assets 8, 15 7 –2
Result from sales of Group companies 9 6
Result from participations in associated companies 1 5
Operating profit 3, 10 2,679 2,519

Financial income 165 141

Financial expense 8 –444 –382
Net financial items 12 –279 –241

Profit after financial items 2,400 2,277

Tax on net profit for the year 24 –411 –367

NET PROFIT FOR THE YEAR 13 1,989 1,910

Attributable to:
NCC’s shareholders 1,986 1,905
Non-controlling interests 3 5
Net profit for the year 1,989 1,910

Earnings per share

Before dilution
Profit after tax, SEK 18.40 17.62
After full dilution
Profit after tax, SEK 18.40 17.62

Number of shares, millions

Total number of issued shares 108.4 108.4
Average number of shares outstanding before dilution during the year 107.9 108.2
Average number of shares after full dilution 107.9 108.2
Total number of shares outstanding before dilution at year-end 107.8 108.0

Consolidated statement of comprehensive income

with comments
SEK M Note 2013 2012
Net profit/loss for the year 1,989 1,910

Items that have been recycled or could be recycled to profit for the year 1)
Translation differences during the year in translation of foreign operations –79
Gain on hedging of exchange-rate risk in foreign operations –18 37
Tax attributable to hedging of exchange-rate risk in foreign operations 24 4 –10
Fair value changes for the year in cash flow hedges 6 –23
Fair-value changes in cash flow hedges recycled to net profit for the year 13 3
Tax attributable to cash flow hedges 24 –4 3
1 –69
Items that cannot be recycled to profit for the year
Revaluation of defined-benefit pension plans 187 –137
Tax attributable to items that cannot be recycled to profit for the year –41 –27
146 –164
Other comprehensive income during the year 147 –233
Total comprehensive income for the year 2,135 1,677

Attributable to:
NCC’s shareholders 2,132 1,672
Non-controlling interests 3 5
Total comprehensive income for the year 2,135 1,677
1) Also refer to the specification of the item Reserves in shareholders’ equity, p. 57.
 financial report n c c 2 013 51

NE T S A L ES O PERATING P rofit
Net sales for the Group rose marginally to SEK 57,823 M (57,227). The higher earnings for NCC Property Development were offset
Higher sales mainly in NCC Property Development and NCC by lower earnings in NCC’s Construction units in Sweden and
Construction Norway were offset by lower sales in NCC Con- Norway, as well as in NCC Housing and NCC Roads. NCC Pro-
struction Sweden. Net sales for NCC Property Development were perty Development reported an earnings improvement, thanks to
higher than in the preceding year due to more project sales and higher earnings from profit-recognized projects. Results for NCC
profit-recognized projects. The increase in Construction Norway Construction Sweden weakened due to lower sales. Impairment
was due mainly to the acquisition of OKK Entreprenør AS in 2012 losses on projects during the year were charged against earnings
and growth in the civil-engineering segment. Orders received for for NCC Construction Norway. Earnings for NCC Roads matched
NCC Construction Sweden were lower and several major ongoing the preceding year. Strong recovery in asphalt operations during
projects with high worked-up rates in 2012 have not been replaced the second half of the year offset the weak trend in the first quar-
by new projects to the same extent, thus resulting in a decline in ter. Earnings from stone materials declined, primarily due to
net sales during the year. Net sales for NCC Roads were slightly lower volumes. Losses and weak margins in the road service ope-
lower compared with the preceding year due to lower volumes. rations were charged to earnings. NCC Housing’s margins from
The late start to the season caused by the long and cold winter profit-recognized projects improved compared with the preceding
early in the year resulted in lower volumes of stone materials and year. Profit during the year was negatively impacted by the sale of
asphalt. NCC Housing’s net sales were higher thanks to an rental units in Sweden and by land, impairment of land and res-
increase in sales to the investor market and sales of land. Changes tructuring costs in Sweden as well as by higher expenses caused
in exchange rates had a negative year-on-year impact of SEK by the increase in project volumes. Exchange-rate fluctuations
668 M on sales. reduced operating profit by SEK 23 M compared with the prece-
ding year.
GR O S S P R O F I T
Gross profit includes impairment losses and reversed impairment NET FINA NCIA L ITEMS
losses totaling SEK 17 M (44), of which SEK 23 M pertains to Net financial items deteriorated due to higher average net indeb-
impairment losses on projects and land in NCC Housing, mainly tedness.
in Denmark. Reversal of impairment losses on fixed assets
amounted to SEK 7 M. In the preceding year, impairment losses TA X ATIO N
on projects in NCC Property Development amounted to SEK The effective tax rate for NCC, 17 (16) percent, was in line with
41 M. Refer also to Note 8, Impairment losses and reversal of prior years. Refer also to Note 24, Tax on net profit for the year,
impairment losses. deferred tax assets and deferred tax liabilities.

O THER CO MPR EHENSIVE INCO ME

The change in other comprehensive income derived mainly from
net profit for the year and from the revaluation of defined-benefit
pension plans in which the actuarial gains were higher in 2013.
N ET S A L ES A N D E ARN IN GS Any tax effects of the above transactions are recognized separa-
tely; refer also to Note 24, Tax on net profit for the year, deferred
Net sales rose in 2013 thanks to higher sales, mainly in NCC Property
Development and NCC Construction Norway. However, the increase tax assets and deferred tax liabilities.
was offset by lower sales in NCC Construction Sweden. Earnings impro-
ved in 2013 as a result of higher profit in NCC Property Development,
which offset lower earnings in NCC’s Construction units in Sweden and
Norway, as well as in NCC Housing and NCC Roads.

SEK billion SEK M

60 3,000

50 2,500

40 2,000

30 1,500

20 1,000

10 500

0 0
09 10 11 12 13

Net sales, SEK billion

Profit after financial items, SEK M
52 n c c 2 013 financial report

Consolidated balance sheet

with comments
SEK M Note 2013 2012 2011
1, 19, 36
ASSETS
Fixed assets
Goodwill 15 1,802 1,827 1,607
Other intangible assets 15 267 204 167
Owner-occupied properties 16 704 662 596
Machinery and equipment 16 2,502 2,395 2,209
Participations in associated companies 18 9 9 8
Other long-term holdings of securities 21 131 158 173
Long-term receivables 23 247 230 295
Deferred tax assets 24 249 385 293
Total fixed assets 39 5,910 5,870 5,348

Current assets
Property projects 25 5,251 5,321 4,475
Housing projects 25 12,625 11,738 9,860
Materials and inventories 26 673 655 557
Tax receivables 24 92 54 23
Accounts receivable 39 7,377 7,725 7,265
Worked-up, non-invoiced revenues 27 918 782 910
Prepaid expenses and accrued income 1,325 1,544 1,114
Other receivables 23 932 1,223 1,127
Short-term investments 21 143 168 285
Cash and cash equivalents 38 3,548 2,634 796
Total current assets 39 32,883 31,844 26,414
TOTAL ASSETS 38,793 37,713 31,762

SHAREHOLDERS’ EQUITY
Share capital 28 867 867 867
Other capital contributions 1,844 1,844 1,844
Reserves –206 –207 –135
Earnings brought forward including profit for the year 6,152 5,130 4,524
Shareholders’ equity 8,658 7,634 7,100
Non-controlling interests 17 15 11
Total shareholders’ equity 8,675 7,649 7,111

LIABILITIES
Long-term liabilities
Long-term interest-bearing liabilities 29, 35 7,029 7,102 3,850
Other long-term liabilities 32 299 841 643
Provisions for pensions and similar obligations 30, 31 125 393 351
Deferred tax liabilities 24, 30 414 436 347
Other provisions 30 2,070 2,435 2,619
Total long-term liabilities 39 9,937 11,208 7,811

Current liabilities
Current interest-bearing liabilities 29, 35 2,515 2,141 1,585
Accounts payable 4,096 4,659 4,131
Tax liabilities 24 58 122 60
Invoiced revenues, not worked up 27 4,264 4,241 4,176
Accrued expenses and deferred income 34 3,888 3,748 3,274
Provisions 30 3
Other current liabilities 32 5,360 3,945 3,611
Total current liabilities 39 20,181 18,856 16,839
Total liabilities 30,118 30,063 24,651
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 38,793 37,713 31,762

Pledged assets 37 1,482 1,344 1,522

Contingent liabilities 37 2,261 1,446 1,353
 financial report n c c 2 013 5 3

FIX E D A S S ETS Accounts receivable

Goodwill Accounts receivable decreased, mainly in NCC Construction
NCC impairment tests goodwill annually or when indications of ­Sweden, due to a volume decline and, in NCC Housing, to an
changes in value arise. In 2013, no impairment losses or acquisi- increase in the number of housing units handed over to custo-
tions occurred; the goodwill value was only impacted by mers and paid for at the end of the year.
exchange-rate fluctuations. In the preceding year, two companies
were acquired in Norway, resulting in goodwill totaling SEK 230 LO NG-TERM LIA BILITIES
M. Refer also to Note 15, Intangible assets. Long-term interest-bearing liabilities
Long-term interest-bearing liabilities declined marginally during
Other intangible assets the year. See also Note 39 Financial instruments and financial risk
Other intangible assets rose, primarily due to strategic develop- management.
ment projects in NCC Roads, NCC Construction Sweden and
NCC Housing. CURR ENT LIA BILITIES
Current interest-bearing liabilities
Machinery and equipment Liabilities in the development business increased, due to
Machinery and equipment increased during the year, due mainly increased investments in housing projects. See also Note 39
to NCC Roads’ investments in equipment. Financial instruments and financial risk management.

CUR R EN T A S S ETS Other current liabilities

Property projects Other current liabilities increased, primarily due to advance pay-
More profit-recognized projects compared with 2012 reduced the ments from customers in connection with the sale of housing and
value of property projects. Refer also to Note 25, Properties classi- property projects; see also Note 32, Other liabilities.
fied as current assets.

Housing projects A MENDED A CCO UNTING PO LICY

Investments in ongoing housing projects increased compared
Comparative figures for 2012 were recalculated due to a new accounting
with the preceding year. At year-end, the number of unsold com- policy according to IAS 19, Employee benefits, which applies from Janu-
pleted housing units rose, due to relatively many housing units ary 1, 2013; see Note 1 Accounting Policies, p. 60. This applies to all
being completed close to the end of the year. Refer also to Note tables and figures pertaining to 2012 and 2011, unless otherwise stated.

25, Properties classified as current assets.

Materials and inventories

Volumes of asphalt and stone materials in NCC Roads account for
most of the material and inventories and were largely unchanged
compared with the preceding year.

C A P I TA L EMP L O Y E D , SH ARE P E R BU SIN E SS ARE A PRO FITA BILITY

In the NCC Group, capital is tied up primarily by the development and The return on shareholders’ equity declined from 2009 to 2011, due to
industrial operations. The proportion of capital employed declined in lower profitability mainly in NCC Housing. In 2012 and 2013, NCC
2013, mainly in NCC Property Development due to project sales during once again surpassed its financial objective for the return on sharehol-
the fourth quarter. ders’ equity of a minimum of 20 percent, primarily because of strong ear-
nings in the development business. In 2013, the return on capital
employed declined, due to higher average capital employed during the
year.

%
NCC
NCC Construction
Construction Sweden,
Sweden, 6 (5)% 6 (5)% 40

NCC
NCC Construction
Construction Denmark,
Denmark, 2 (1)% 2 (1)%
NCC
NCCConstruction Finland,
Construction 1 (1)%
Finland, 1 (1)% 30
NCC Construction Norway, 4 (5)%
NCC Construction Norway, 4 (5)%
NCC Roads, 18 (15)% 20
NCC
NCC Roads,
Property 18 (15)%20 (24)%
Development,
NCC
NCC Property
Housing, Development,
49 (48)% 20 (24)% 10
NCC Housing, 49 (48)%
0
09 10 11 12 13

Return on shareholders’ equity

Return on capital employed
5 4 n c c 2 013 financial report

Parent Company income statement

with comments
SEK M Note 2013 2012
1
Net sales 2, 33 23,357 25,763
Production costs 5, 6, 8 –21,341 –23,296
Gross profit 2,016 2,467

Selling and administrative expenses 5, 6, 7 –1,464 –1,412

Operating profit 553 1,055

Result from financial investments

Result from participations in Group companies 8, 9 1,308 524
Result from participations in associated companies –2 13
Result from financial current assets 124 188
Interest expense and similar items 11 –260 –223
Profit after financial items 1,723 1,556

Appropriations 14 672 –46

Tax on net profit for the year 24 –240 –289
NET PROFIT FOR THE YEAR 2,155 1,221

Parent Company statement of

comprehensive income
SEK M 2013 2012
Net profit for the year 2,155 1,221
Total comprehensive income during the year 2,155 1,221

The Parent Company income statement differs from Invoicing for the Parent Company amounted to SEK
the consolidated income statement in such ways as its 23,357 M (25,763). Profit after financial items was
presentation and designations of certain items, SEK 1,723 M (1,556). In the Parent Company, profit is
because the Parent Company’s income statement is recognized when projects are completed. Profit
compiled in accordance with the Annual Accounts Act recognition was lower and dividends from subsidia-
while the Group complies with IFRS. The Parent ries were higher during 2013. The average number of
Company comprises the operations in NCC AB, as employees was 7,173 (7,220).
well as NCC Construction Sverige AB and NCC
Boende AB, which conduct their own operations on a
commission basis on behalf of NCC AB.
 financial report n c c 2 013 5 5

Parent Company balance sheet

with comments
SEK M Note 2013 2012 SEK M Note 2013 2012
1, 36 1
ASSETS SHAREHOLDERS’ EQUITY AND LIABILITIES
Fixed assets Shareholders’ equity
Intangible fixed assets Restricted shareholders’ equity
Development expenses 15 75 35 Share capital 28 867 867
Total intangible fixed assets 75 35 Statutory reserve 174 174
Total restricted shareholders’ equity 1,041 1,041
Tangible fixed assets
Owner-occupied properties and construction in Unrestricted shareholders’ equity
progress 13 15 Earnings brought forward 4,235 4,114
Machinery and equipment 78 94 Net profit for the year 2,155 1,221
Total tangible fixed assets 16 91 109 Total unrestricted shareholders’ equity 6,391 5,335

Financial fixed assets Total shareholders’ equity 7,432 6,376

Participations in Group companies 17 6,112 5,922 Untaxed reserves 14 392 739
Receivables from Group companies 10 10
Participations in associated companies 20 175 169 Provisions
Receivables from associated companies 184 191 Provisions for pensions and similar obligations 31 2 2
Other long-term holdings of securities 5 5 Other provisions 686 874
Deferred tax assets 24 83 131 Total provisions 30 688 876
Other long-term receivables 56 60
Long-term liabilities
Total financial fixed assets 22, 39 6,624 6,487
Liabilities to credit institutions 1,500 1,500
Total fixed assets 6,790 6,631 Liabilities to Group companies 1,061 1,105
Current assets Other liabilities 9 96
Properties classed as current-assets Total long-term liabilities 29, 39 2,571 2,701
Housing projects 505 315 Current liabilities
Total properties classed as current assets 25 505 315 Advances from customers 78 159
Inventories, etc. Work in progress on another party’s account 33 1,609 2,048
Materials and inventories 26 52 35 Accounts payable 1,756 1,991
Total inventories, etc. 52 35 Liabilities to Group companies 4,674 3,237
Liabilities to associated companies 6 6
Current receivables Tax liabilities 22
Accounts receivable 2,666 3,267 Other liabilities 448 532
Receivables from Group companies 2,563 2,196 Accrued expenses and deferred income 34 1,321 1,473
Receivables from associated companies 9 6 Total current liabilities 29, 39 9,891 9,467
Other current receivables 282 239 TOTAL SHAREHOLDERS’ EQUITY
Tax receivables 27 AND LIABILITIES 36 20,974 20,160
Prepaid expenses and accrued income 274 485
Total current receivables 5,822 6,194 Pledged assets 37 12
Contingent liabilities 37 23,017 19,032
Short-term investments 38 7,100 5,725

Cash and bank balances 38 705 1,259

Total current assets 39 14,184 13,529
TOTAL ASSETS 36 20,974 20,160

The Parent Company balance sheet differs from the consolidated

balance sheet in terms of presentation and certain designations of
items, because the Parent Company’s balance sheet is prepared in
accordance with the Annual Accounts Act while the Group comp-
lies with IFRS.
56 n c c 2 013 financial report

Changes in shareholders’ equity

with comments
G roup
Shareholders’ equity attributable to Parent Company’s shareholders
Earnings Total
Share Other capital brought Non-controlling shareholders’
MSEK capital contributionsl Reserves forward Total interests equity
Opening balance, January 1, 2012 867 1,844 –135 5,710 8,286 11 8,297
Adjustment for amended accounting policies –1,186 –1,186 –1,186
Adjustment of opening balance,
January 1, 2012 867 1,844 –135 4,524 7,100 11 7,111

Total comprehensive income during the year –68 1,741 1,672 5 1,677
Transfer of depreciation of previously revalued
assets –2 2
Repurchase of treasury shares –56 –56 –56
Performance-based incentive program 2 2 2
Dividend –1,084 –1,084 –1 –1,085
Shareholders’ equity on December 31, 2012 867 1,844 –207 5,130 7,634 15 7,649

Total comprehensive income during the year 2,132 2,132 3 2,135

Acquisition of non-controlling interests –7 –7 –7
Transfer of depreciation of previously
revalued assets –1 1
Repurchase of treasury shares –28 –28 –28
Performance-based incentive program 6 6 6
Dividend –1,080 –1,080 –1 –1,081
Shareholders’ equity on December 31, 2013 867 1,844 –206 6,152 8,658 17 8,675

A C COUNTI N G O F S HA R EH OLDE RS’ E QU IT Y IN AC C ORDAN CE ­ perations that have compiled their reports in a currency other than
o
W IT H IF R S A N D S W ED I S H C OM PAN IE S AC T that in which the consolidated financial statements are presented, in
Shareholders’ equity is divided into equity attributable to the NCC’s case, SEK. The translation reserve also in­cludes exchange-
Parent Company’s shareholders and non-controlling interests. rate differences that arise from the revaluation of liabilities and
Transfer of value in the form of dividends from the Parent Com- ­currency forward contracts entered into as instruments intended to
pany and the Group is to be based on a statement prepared by the hedge net investments in foreign operations.
Board of Directors concerning the proposed dividend. This state-
ment must take into account the prudence regulation contained in FA IR VA LUE RESERVE
the Act, in order to avoid dividends being paid in an amount that The fair value reserve includes the accumulated net change in the
exceeds what there is coverage for. fair value of available-for-sale financial assets up to the time that
such assets have been sold or their value impaired.
C H ANGE I N S HA R EHO L D ERS’ E QU IT Y
The change in shareholders’ equity derives primarily from com- HEDGING RESERVE
prehensive income for the year, transactions with non-controlling The hedging reserve includes the effective portion of the accumu-
interests and dividends to shareholders. In the Parent Company, lated net change in the fair value of cash-flow hedging instru-
the changes are attributable to comprehensive income, dividends ments attributable to hedging transactions that have not yet
to shareholders and the repurchase of treasury shares, as well as occurred.
effects of the performance-based incentive programs.
R EVA LUATIO N RESERVE
S H AR E C A P I TA L The revaluation reserve arises from gradual acquisitions, multi-
On December 31, 2013, the registered share capital amounted to stage acquisitions, meaning an increase in the fair value of pre-
27,708,122 Series A shares and 80,727,700 Series B shares. The viously owned portions of net assets resulting from gradual acqui-
shares have a quotient value of SEK 8.00 each. Series A shares sitions.
carry ten votes each and Series B shares one vote each.
EA RNINGS BRO UGHT FO RWA R D INCLUDING NET PR O FIT F OR T HE
O T H E R CA P I TA L C O N TR I B U T ION S YEA R
Pertains to shareholders’ equity contributed by the owners. This item includes funds earned by the Parent Company and its
subsidiaries, associated companies and joint ventures.
TR A NS L ATI O N R ES ERV E
The translation reserve includes all exchange-rate differences that
arise from the translation of the financial statements of foreign
 financial report n c c 2 013 57

parent company
Restricted shareholders’ Unrestricted shareholders’
equity equity
Earnings
Share Statutory brought Profit for Total share­
SEK M capital reserve ­forward the year holders’ equity
Opening balance, January 1, 2012 867 174 4,901 350 6,293
Appropriations of profits 350 –350
Total comprehensive income during the year 1,221 1,221
Buyback of company shares –56 –56
Dividend –1,084 –1,084
Performance-based incentive program 2 2
Shareholders’ equity on December 31, 2012 867 174 4,114 1,221 6,376

Appropriations of profits 1,221 –1,221

Total comprehensive income during the year 2,155 2,155
Buyback of company shares –28 –28
Dividend –1,080 –1,080
Performance-based incentive program 8 8
Shareholders’ equity on December 31, 2013 867 174 4,235 2,155 7,432

SPECIFICATION OF THE ITEM RESERVES IN SHAREHOLDERS’ EQUITY CA PITA L MA NA GEMENT

group 2013 2012 The aim of the NCC Group’s strategy is to generate a healthy
Translation reserve return to shareholders under financial stability. The strategy is
Translation reserve, January 1 –161 –111 reflected in the financial objectives, which were as follows in 2013:
Translation differences during the year in translation of • A return on equity after tax of 20 percent. In 2013, the return
foreign operations –78
on equity was 26 percent.
Gain/loss on hedging of exchange-rate risk in foreign
operations –18 37 • A debt/equity ratio of less than 1.5. At December 31, 2013,
Tax attributable to hedging of exchange-rate risk in the debt/equity ratio was 0.7.
foreign operations 4 –10
Translation reserve, December 31 –175 –161
NCC’s subsidiary, NCC Försäkrings AB, as an insurance com-
Fair value reserve pany, must have investment assets that cover technical reserves
Fair value reserve, January 1 5 5 for own account. In 2012 and 2013, these requirements were ful­
Fair value reserve, December 31 5 5
filled. Otherwise, no other Group companies were subject to
Hedging reserve external capital requirements.
Hedging reserve, January 1 –52 –35
For further information on NCC Group’s financial objectives
Fair value changes for the year in cash flow hedges 6 –23
and dividend policy, see pp. 6–7.
Fair-value changes in cash flow hedges transferred to
net profit for the year –4 3
Tax attributable to cash flow hedges 12 3
Hedging reserve, December 31 –38 –52

Revaluation reserve
Revaluation reserve, January 1 3 5
Transfer to earnings brought forward –1 –2
Translation reserve, December 31 2 3

Total reserves
Reserves, January 1 –206 –135
Change in reserves during the year
– Translation reserve –14 –51
– Hedging reserve 14 –17
– Revaluation reserve –1 –2
Reserves, December 31 –206 –206
58 n c c 2 013 financial report

Cash flow statements

with comments
Group Parent Company
SEK M Note 2013 2012 2013 2012
Operating activities
Profit after financial items 2,400 2,277 1,723 1,915
Adjustments for items not included in cash flow:
– Depreciation 6 621 557 66 48
– Impairment losses and reversals of impairment losses 8 17 44 81 70
– Exchange-rate differences 148 130
– Result from sales of fixed assets –38 –43 –2 –1
– Result from associated companies 2
– Changes in provisions 30 –429 –175 –188 –246
– Restructuring costs 3
– Group contributions –325 –359
– Anticipated dividends –83
– Other 40 32 9
Total items not included in cash flow 359 548 –358 –568
Tax paid –438 –367 –241 –163
Cash flow from operating activities before changes
in working capital 2,321 2,458 1,124 1,184

Cash flow from changes in working capital

Sales of property projects 4,170 1,764
Investments in property projects –3,890 –2,692
Sales of housing projects 7,067 6,951 2,027 1,790
Investments in housing projects –7,912 –8,997 –2,022 –1,961
Other changes in working capital 775 489 –417 5
Cash flow from changes in working capital 211 –2,484 –412 –165
CASH FLOW FROM OPERATING ACTIVITIES 2,532 –26 713 1,019

INVESTING ACTIVITIES
Acquisition of subsidiaries and non-controlling interests 38 –8 –98 –258 –146
Sale of subsidiaries 38 4 –9
Acquisition of buildings and land 16 –58 –130 –3 –1
Sale of buildings and land 9 30
Acquisition of other financial fixed assets –28 –8 –15
Sale of other financial fixed assets 12
Acquisition of other fixed assets –863 –800 –85 –58
Sale of other fixed assets 78 95 3 5
Cash flow from investing activities –870 –906 –341 –215
Cash flow before financing 1,661 –932 372 804

FINANCING ACTIVITIES
Dividend paid –1,080 –1,084 –1,080 –1,084
Repurchase of treasury shares –28 –56 –28 –56
Group contributions paid 359 272
Loans raised 1,022 3,788 1,415 57
Amortization of loans –723 –91 –153
Increase (–)/Decrease (+) in long-term interest-bearing receivables 33 5 –6 2
Increase (–)/Decrease (+) in current interest-bearing receivables 34 122 –120 –114
Increase (+)/Decrease (–) in non-controlling interests, etc. 1 –1
Cash flow from financing activities –741 2,774 449 –1,076
Cash flow for the year 920 1,842 821 –271

Cash and cash equivalents, January 1 38 2,634 796 6,984 7,256

Exchange-rate difference in cash and cash equivalents –6 –4
Cash and cash equivalents, December 31 38 3,548 2,634 7,805 6,984
 financial report n c c 2 013 59

CA S H F L O W F R O M OP E RAT IN G AC T IV IT IE S N E T I N D E BT E D N ES S T R E N D
Cash flow from operating activities during the year was positive, 2013 2012
GROUP, SEK BN Jan–dec Jan–dec
SEK 2,532 M (neg: 26), thanks to strong sales of housing and
Net indebtedness, January 1 –6,467 –4,274
prop­erty projects. Capital tied-up in working capital was lower
Cash flow before financing 1,661 –932
than in the preceding year, due to higher interest-free financing. Acquisition/sale of company shares –28 –56
Investments in housing projects during the year were lower than Change in pension debt 268 –93
in the preceding year, in Sweden because of few starts at the Dividend –1,080 –1,084
beginning of the year and in St. Petersburg because of fewer land Other changes in net indebtedness –10 –29
purchases. Net indebtedness, December 311) –5,656 –6,467
Of
1) which, net indebtedness in ongoing projects in Swedish tenant owner associations
and Finnish housing companies accounted for SEK 1,714 M (2,181).
CA S H F L O W F R O M I N V E ST IN G AC T IV IT IE S
Cash flow from investing activities amounted to a negative SEK
OT H E R C H A N G ES I N WO R K I N G C A P I TA L
870 M (neg: 906). Investments in machinery and equipment pri-
Group Parent Company
marily occurred in NCC Roads and NCC Construction Norway.
SEK M 2013 2012 2013 2012
Increase (–)/Decrease
CA S H F L O W F R O M F IN AN C IN G AC T IV IT IE S (+) in inventories –19 –34 –179 –12
Cash flow from financing activities was a negative SEK 741 M Increase (–)/Decrease
(+) in receivables 189 –720 452 192
(pos: 2,774), because loans raised were lower in monetary terms
Increase (+)/Decrease
during the year, and due to repayment of loans in 2013. Dividends (–) in liabilities 606 1,243 –251 409
had a negative impact of SEK 1,080 M (neg: 1,084) on cash flow. Increase (+)/Decrease
(–) in net in work in progress –439 –583
Total cash and cash equivalents including short-term invest-
Other changes in
ments with a maturity exceeding three months amounted to SEK working capital 775 489 –417 5
3,691 M (2,802).

PA R ENT CO MPA NY
NE T I N D EB TED N ES S
Cash flow for the year in the Parent Company was higher than in
Net indebtedness (interest-bearing liabilities less cash and cash
the preceding year, which was largely due to an increase in loans
equivalents less interest-bearing receivables) on December 31
raised. Changes in working capital were primarily influenced by
amounted to SEK 5,656 M (6,467). The average capital maturity
lower debt and an increase in inventories.
period for interest-bearing liabilities, excluding loans in Finnish
housing companies and Swedish tenant-owner associations, as
well as pension commitments according to IAS 19, was 36 (40)
months at year-end. NCC’s unutilized committed lines of credit at
year-end amounted to SEK 3.9 billion (3.8), with an average
remaining maturity period of 33 (43) months.

TREND IN NET INDEBTEDNESS, PER QUA RTER

Net indebtedness is affected by seasonal variations. More capital is nor-

mally tied up during the second and third quarters due to a high degree of
activity in asphalt and stone materials operations, as well as in parts of
NCC’s Construction units. Dividends are paid to NCC’s shareholders
during the second quarter. Net indebtedness declined in 2013 thanks to
many profit-recognized housing and property projects.

SEK M
12,000

10,000

8,000

6,000

4,000

2,000

0
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
quarter 2010 2011 2012 2013
6 0 N C C 2 013 F i n a nc i a l r e p o r t

Notes

Co n t e n t s N ot es pag es
N OTE 1 ACCO U NT I NG PO L I C I ES
Note 1 Accounting polices 60
Note 2 Distribution of external net sales 68 The NCC Group applies the International Financial Reporting Standards (IFRS)
adopted by the EU and the interpretive statements issued by the International
Note 3 Reporting by operating segments 68
Financial Reporting Interpretations Committee (IFRIC). The Group also applies
Note 4 Number of employees 69
the Swedish Annual Accounts Act (1995:1554), the recommendation RFR 1 (Janu-
Note 5 Personnel expenses and renumeration of senior 70
ary 2013), Additional Accounting Regulations for Groups and statements issued
­executives
by the Swedish Financial reporting Board. The Annual Report and the consoli-
Note 6 Depreciation/amortization 72
dated financial statements were approved for issue by the Board of Directors on
Note 7 Fees and renumeration to audit firms 72
March 7, 2014. The consolidated income statement and balance sheet and the
Note 8 Impairment losses and reversal of impairment losses 72 ­Parent Company’s income statement and balance sheet will be presented to the
Note 9 Result from participations in Group companies 72 Annual General Meeting on April 2, 2014 for adoption.
Note 10 Operating expenses by type of cost 72
Note 11 Interest expense and similar income 73 N e w I FR S a n d a m e n dm e n t s to I FR S to b e a p p li e d fr o m 2013
Note 12 Net financial items 73 The following amendments to IFRS became effective as of the 2013 fiscal year:
Note 13 Effects on profit and loss of exchange-rate changes 73 • IFRS 13 Fair Value Measurement: a new uniform standard for measuring fair
Note 14 Appropriations and untaxed reserves 73 value and amended disclosure requirements.
Note 15 Intangible assests 73 • Supplement to IAS 19, Employee Benefits, entails abolition of the opportu-
Note 16 Tangible fixed assets 75 nity to accrue actuarial gains and losses by applying the corridor method. All
changes in defined-benefit pension plans are instead to be recognized
Note 17 Participations in Group companies 76
directly in profit or loss and in other comprehensive income as they arise.
Note 18 Participations in associated companies consolidated 77
in accordance with the equity method Accrued costs, such as benefits vested during the year, are to be recognized
Note 19 Participations in joint ventures consolidated in accor- 77
in operating profit and the interest-rate component, together with the antici-
dance with the proportional method pated return on plan assets, is to be recognized in net financial items.
Note 20 Participations in associated companies 78 Changes in assets and obligations stemming from experience-based adjust-
Note 21 Finacial investments 78 ments and/or changes in actuarial assumptions are to be presented in other
comprehensive income. In addition, the measurement of the anticipated
Note 22 Financial fixed assets 78
return on plan assets has been changed in that the discount interest rate on
Note 23 Long-term receivables and other receivables 79
the pension obligation is also to be used in this calculation. Further disclo-
Note 24 Tax on net profit for the year, deferred tax assets 79
sure requirements have also been added, as shown in Note 31, Pensions.
and deferred tax liabilities
• Amendment to IAS 1 Presentation of Financial Statements entails that items
Note 25 Properties classed as current assets 80
in other comprehensive income have been separated into either items that
Note 26 Materials and inventories 82
have been or will be recycled in profit or loss or items that have not been and
Note 27 Construction contracts 82
will not be recycled in profit or loss.
Note 28 Share capital 82 • Amendment of IFRS 7 Financial Instruments: The amendment entails new
Note 29 Interest-bearing liabilities 83 disclosure requirements for the offsetting of financial assets and liabilities.
Note 30 Other provisions 83 These disclosures are presented in Note 39 Financial instruments and finan-
Note 31 Pensions 84 cial risk management.
Note 32 Other liabilities 85 • Amended IAS 36 Impairment Losses (May 2013). NCC applies this amend-
Note 33 Work in progress on another party’s account 85 ment prospectively, which entails that disclosures of recoverable amounts for
and net sales goodwill need only be provided in connection with impairment of goodwill.
Note 34 Accrued expenses and prepaid income 85 Amendments of IAS 12 Income Taxes and IFRIC 20, Stripping Costs in the
Note 35 Leasing 86 ­Production Phase of a Surface Mine, will not have any impact on NCC’s finan-
Note 36 Transactions with related companies 86 cial statements.
Note 37 Pledged asstes, contingent liabilities and 87
guarantee obligations N e w I FR S a n d a m e n dm e n t s to I FR S w h o s e a p p lic at i o n h a s y e t
Note 38 Cash flow statement 87 to co mm e n c e
Note 39 Financial instruments and financial risk management 88 The amendments below to IFRS do not become effective until the 2014 fiscal
Note 40 Information about the Parent Company 93 year and have not been applied in the preparation of these financial statements.
• IFRS 11 Joint Arrangements. A new standard for recognition of joint ven-
Note 41 Events after balance sheet date 93
tures and joint operations. The new accounting policy entails that, in the
future, joint ventures are to be recognized in accordance with the equity
method rather than with the proportional method, which is currently
applied. However, the proportional method will continue to be applied for
joint operations. Since the new standard is expected to have a marginal
impact on NCC’s financial statements, NCC will not be restating comparative
figures for 2013 according to IFRS 11. Also refer to Note 19 Participations in
joint ventures consolidated in accordance with the proportional method.

Additional new IFRSs and amended IFRSs that could be applied as of 2014 or later:
• IFRS 10 Consolidated Financial Statements
• IFRS 12 Disclosure of Interests in Other Entities
• Amended IAS 27 Separate Financial Statements
• Amended IAS 28 Investments in Associates and Joint Ventures
• Amended IAS 32 Financial Instruments: Classification
• Amended IAS 39 Financial Instruments (not yet approved by the EU)
• FRIC 21 Levies (not yet approved by the EU)
These amendments are expected to have no or only a minor impact on NCC’s
financial statements.
 F i n a nc i a l r e p o r t N C C 2 013 61

Pa r e n t Co m pa n y acco u n t s co m pa r e d wi t h co n s o lidat e d classified as associated companies. Refer to Note 18 for information about the
fi n a n ci a l s tat e m e n t s Group’s participations in associated companies, and Note 20 for the Parent
The Parent Company has prepared its annual report in accordance with the Company’s participations in associated companies.
Annual Accounts Act (1995:1554) and recommendation RFR 2 (January 2013) Participations in associated companies are consolidated in accordance with
Accounting for Legal Entities as well as statements issued by the Swedish the equity method.
Financial Reporting Board. As of 2013, the Parent Company recognizes Group NCC’s share in associated companies relates to their operations and its share
contributions received and granted as appropriations, which is in accord with in the results of associated companies is recognized in profit or loss as “Result
the alternative rule in RFR 2. Comparative figures have been recalculated. For from participation in associated companies,” which is part of operating profit.
tax reasons, the Swedish Financial Reporting Board has granted exemption Amounts are recognized net after taxes.
from the requirement that listed parent companies must report certain finan- In the Parent Company, associated companies are recognized at acquisition
cial instruments at fair value. NCC applies the exemption rules and has thus value less any impairment losses. Dividends received are recognized as revenue.
refrained from reporting ­certain financial instruments at fair value.
The accounting policies for the parent company presented below differ from Joint ventures
those used in the consolidated financial statements: Joint ventures are defined as projects conducted in forms similar to those of a
• Subsidiaries consortium, meaning subject to joint control. This could take the form of, for
• Associated companies example, jointly owned companies that are governed jointly. NCC consolidates
• Joint ventures joint ventures in accordance with the proportional method. For further infor-
• Construction contracts and similar assignments mation, refer to Note 19, Participations in joint ventures that are consolidated
• Leasing in accordance with the proportional method.
• Income taxes In the Parent Company, joint ventures are recognized at acquisition value
• Financial instruments less any impairment losses. Dividends received are recognized as revenue.
• Pensions
• Borrowing costs Elimination of intra-Group transactions
The differences are presented under the respective headings below. Receivables, liabilities, revenues and costs, as well as unrealized gains and
losses, that arise when a Group company sells goods or services to another
Co n s o lidat e d fi n a n ci a l s tat e m e n t s Group company are eliminated in their entirety. Unrealized losses are elimi-
The consolidated financial statements include the Parent Company and the nated in the same way as unrealized gains, but only insofar as there are no
companies and operations in which the Parent Company, directly or indirectly, impairment requirements. This also applies to joint ventures and associated
has a controlling interest, as well as joint ventures and associated companies. companies, in an amount corresponding to the Group’s holding. Refer to
Note 36, Transactions with related companies.
Purchase method
As of January 1, 2010, the acquisition of business operations is handled in accor- Internal pricing
dance with the purchase method. This method entails that the acquisition of a Market prices are applied for transactions between Group entities.
subsidiary is regarded as a transaction whereby the Group indirectly acquires
the subsidiary’s assets and takes over its liabilities. The fair value on the date of Foreign subsidiaries, associated companies and joint ventures
acquisition of the acquired identifiable assets and assumed liabilities, as well as Foreign subsidiaries, associated companies and joint ventures are recognized
any non-controlling interests, is determined in the acquisition analysis. using the functional currency and are translated to the reporting currency. For
In the event of a business combination in which transferred compensation, NCC, the functional currency is defined as the local currency used in the
any non-controlling interests and the fair value of previously owned interests reporting entity’s accounts. The Parent Company’s functional currency is SEK.
(in connection with gradual acquisitions) exceed the fair value of the acquired The reporting currency is defined as the currency in which the Group’s overall
assets and assumed liabilities that are recognized separately, the difference is accounting is conducted, in NCC’s case SEK.
recognized as goodwill. When the difference is negative, what is known as a
bargain acquisition, this is recognized directly in profit or loss. Revenue
Acquired and divested companies are included in the consolidated income With the exception of contracting assignments, the Group recognizes revenues
statement, balance sheet and cash flow statement during the holding period. in profit or loss when, among other factors, the material risks and rewards
associated with ownership have been transferred to the purchaser.
Subsidiaries
Companies in which the Parent Company, directly or indirectly, holds shares Construction contracts and similar assignments
carrying more than 50 percent of the voting rights, or otherwise has a control- Percentage-of-completion income recognition of construction projects
ling influence, are consolidated in their entirety. Shares in subsidiaries are rec- Application of the percentage-of-completion method entails income recognition
ognized in the Parent Company at acquisition value. Should the recoverable in pace with the degree of completion of the project. To determine the amount
value of shares in subsidiaries fall below the fair value, an impairment loss is of income worked up at a specific point in time, the following components are
recognized. Dividends received are recognized as revenue. For information on required:
NCC’s subsidiaries, refer to Note 17, Participations in Group companies. • Project revenue – Revenues related to the construction contract. The reve-
nues must be of such a character that the recipient can credit them to income
Non-controlling interests in the form of actual payment received or another form of payment.
In companies that are not wholly owned subsidiaries, non-controlling interests • Project cost – Costs attributable to the construction assignment, which
are recognized as the share of the subsidiaries’ equity held by external share- ­correspond to project revenues.
holders. This item is recognized as part of the Group’s shareholders’ equity. • Completion rate (worked-up rate) – Recognized costs in relation to estimated
Non-controlling interests are recognized in profit or loss. Information about total assignment costs.
the share of profit attributable to non-controlling interests is disclosed in con-
junction with the consolidated income statement. The fundamental condition for income recognition based on percentage of
The effects of transactions with non-controlling interests are recognized in completion is that project revenues and costs can be quantified reliably.
shareholders’ equity if they do not give rise to a change in controlling influence. As a consequence of income recognition based on the percentage-of-comple-
tion method, the trend of earnings of ongoing projects is reflected immediately
Associated companies in the financial statements. Percentage-of-completion income recognition is
Associated companies are defined as companies in which the Group controls subject to a component of uncertainty. Due to unforeseen events, the final
20–50 percent of the voting rights. Companies in which the Group owns less profit of the projects may occasionally be higher or lower than expected. It is
than 20 percent of voting rights but exercises a significant influence are also
62 N C C 2 013 F i n a nc i a l r e p o r t

particularly difficult to anticipate profit at the beginning of the project period the risks and rewards have been transferred, and the second one for the con-
and for technically complex projects or projects that extend over a long period. struction contract, within NCC’s construction units, in pace with completion.
For projects that are difficult to forecast, revenue is recognized in an amount
corresponding to the worked-up cost, meaning that zero earnings are entered Result from sales of development properties
until the profit can be reliably estimated. As soon as this is possible, the project NCC’s sales include revenues from sales of properties classed as current assets.
switches to the percentage-of-completion method. Sales also include rental revenues from properties classed as current assets.
Provisions posted for potential losses are charged against income for the Property sales are recognized at the time when material risks and rewards
­relevant year. Provisions for losses are posted as soon as they become known. are transferred to the purchaser, which normally coincides with the transfer of
Balance-sheet items such as “worked up, non-invoiced revenues” and ownership rights. Property projects sold before construction is completed
“invoiced revenues not worked up” are recognized in gross amounts on a proj- may, if certain conditions have been met, be recognized as profit in two sepa-
ect-by-project basis. Projects for which worked-up revenues exceed invoiced rate transactions when the property (land or land with ongoing construction) is
revenues are recognized as current assets, while projects for which invoiced sold and, at the same time, a separate agreement is signed with the purchaser
revenues exceed worked-up revenues are recognized as a current interest-free concerning the construction of a building or completion of the ongoing con-
liability. Refer to Note 27, Construction contracts. struction. The first transaction – sale of a property project – which is recog-
The following example illustrates how the percentage-of-completion method nized in NCC Property Development, comprises the realization of a property
is applied. On January 1 of Year 1, NCC receives a contract regarding the con- value that has been accumulated at several levels, such as site acquisition, for-
struction of a building. The project is estimated to take two years to complete. mulation of a detailed development plan, design of a property project, receipt of
The contract price is 100 and the anticipated profit from the project is 5. On a building permit and leasing to tenants. This value accumulation is finally con-
December 31 of year 1, NCC’s costs for the project amount to 47.5, in line with firmed by means of the sale. The second transaction is the contracting assign-
expectations. Since NCC has completed half of the work and the project is pro- ment, meaning implementation of construction work on the sold property.
ceeding as planned, NCC recognizes half of the anticipated profit of 5, i.e. 2.5, in The first transaction is recognized as profit, provided that the material risks
the accounts for Year 1. Income recognition on completion means that profit is and rewards are deemed to have been transferred, in the manner stated above,
not recognized until the end of Year 2, or the beginning of Year 3, depending on and the second transaction is recognized as profit within NCC Construction
when the final financial settlement with the customer was agreed. units in pace with the degree of completion of the project. It could also be the
case that property projects are sold with guarantees of certain leasing to tenants
Earnings Year 1 Year 2 or with a stipulation that a supplementary purchase consideration be paid when
Income recognition on completion 0 5 a certain leasing rate has been achieved. In connection with the date of sale, any
According to percentage-of-completion 2.5 2.5 rental guarantees are recognized as prepaid income, which is then recognized
as revenue as rental activity progresses. The supplementary purchase consider-
ation is recognized as revenue when the agreed leasing rate has been achieved.
Contracts connected to operation and maintenance agreements with a central
government, county council or municipality
Result from sales of owner-occupied properties
For agreements that contain both a construction contract and an operation and
These items include the realized result of sales of owner-occupied properties.
maintenance service, the revenue must be allocated to the various parts.
Selling and administrative expenses include costs for the company’s own sales
Depending on how the payment is to be made, NCC may either receive a finan-
work. Earnings are charged with overhead costs for both completed and non-
cial asset in accordance with a predetermined payment plan or an intangible
implemented transactions. See the income statement.
asset providing the right to possible payment. The payments must be dis-
counted.
D e p r e ci at i o n/a m o r t i z at i o n
The part that pertains to the contract-related service is recognized on a per-
Straight-line depreciation according to plan is applied in accordance with the
centage-of-completion basis. Due to the above classification, the operation and
estimated useful life, with due consideration for any residual values at the close
maintenance part is recognized as revenue on an even basis over the term of
of the period, or after confirmed depletion of net asset value in those cases
the contract or when the rewards are transferred to NCC.
when the asset does not have an indefinite life. Goodwill and other assets that
have an indefinite life are not amortized but subject to systematic impairment
Work in progress in the Parent Company
testing. NCC applies so-called component depreciation, whereby each asset
NCC does not apply percentage-of-completion profit recognition in the Parent
with a considerable value is divided into a number of components that are
Company. Projects that are not completed on the balance-sheet date are recog-
depreciated on the basis of their particular useful life.
nized in the Parent Company accounts as work in progress. The invoicing
amount is equivalent to the amount billed to the customer, including amounts
Depreciation/amortization rates vary in accordance with the table below:
withheld by the customer in accordance with contract terms. Advances not
matched by work performed reduce the invoiced amount. Costs incurred by a
Intangible fixed assets
particular construction worksite include: Usufructs In line with confirmed depletion of net asset value
• Cost of installation materials, consumption materials and construction tools.
Software 20–33 percent
• Wages, salaries and remuneration, including social security fees, for super­
Other intangible assets 10–33 percent
visors and other staff on site.
Tangible fixed assets
• Cost of subcontracts and other external and internal services.
• External and internal machine rentals and transport costs. Work in progress Owner-occupied properties 1.4–10 percent
on another party’s account comprises the difference between invoicing and Land improvements 3.7–5 percent
costs incurred. Income is recognized when the project is completed. As a Pits and quarries In line with confirmed depletion of net asset value
result of this accounting method, this entry may include profits not entered Fittings in leased premises 14–20 percent
as income. When a project is expected to incur a loss, a provision is posted Plant and equipment 5–33 percent
for such a loss. For details, refer to Note 33, Work in progress on another
party’s account and net sales. The distribution of the depreciation/amortization posted in profit or loss and
balance sheet is presented in Comments to the income statement, Note 6,
Proprietary housing projects Depreciation/Amortization, Note 15, Intangible assets and Note 16, Tangible
Profit from proprietary housing projects is recognized at the time the housing fixed assets.
unit is transferred to the end customer.
I m pa irm e n t
Profit from sales of housing units to investors This section does not apply to impairment of inventories, assets that arise dur-
Sales of housing units to investors are recognized at the time when material ing the course of a construction assignment, deferred tax assets, financial
risks and rewards are transferred to the acquirer, which normally coincides instruments, assets connected to pensions or assets classified as investments
with the transfer of the right of ownership. available for sale, since the existing standards for these types of assets contain
Housing projects sold prior to completion of construction may, if certain con- specific requirements regarding recognition and valuation.
ditions have been met, be recognized as profit in two separate transactions; one When necessary, although at least once a year, NCC conducts impairment
for the development of land and housing, within NCC Housing, on condition that testing.
 F i n a nc i a l r e p o r t N C C 2 013 6 3

An impairment requirement arises when the recoverable amount is less than value based on volumes of extracted stone and gravel. For the distribution of
the carrying amount. The distribution of impairment losses in the income value, refer to Note 15, Intangible assets.
statement and balance sheet is described in comments to the income state-
ment, Note 8, Impairment losses and reversed impairment losses, Note 15, Ta n g i b l e fi x e d a s s e t s
Intangible assets, and Note 16, Tangible fixed assets. NCC’s property holdings are divided into:
The term impairment is also used in connection with revaluations of proper- • Owner-occupied properties
ties classed as current assets. Valuations of these properties are based on the • Properties classed as current assets
lowest value principle and comply with IAS 2, Inventories.
Properties classed as current assets are held for development and sale as part
Leasing of operations. The principles applied for the categorization, valuation and profit
In the consolidated financial statements, leasing is classified as either financial recognition of properties classed as current assets are presented under the
or operational. Financial leasing exists if the financial risks and rewards associ- Current assets section below.
ated with ownership are essentially transferred to the lessee. All other cases
are regarded as operational leasing. Owner-occupied properties
Owner-occupied properties are held for use in the Company’s own operations
Financial leasing for the purpose of production, the provision of services or administration. Also
Assets leased in accordance with financial leasing agreements are capitalized refer to Note 16, Tangible fixed assets.
in the consolidated balance sheet as of the date on which the agreement was
concluded and the asset delivered. Corresponding obligations are entered as Machinery and equipment
long-term and current liabilities. Machinery and equipment is recognized at acquisition value less accumulated
depreciation and any impairment losses.
Operational leases
Operational leasing is recognized in profit or loss. Leasing fees are distributed Fi n a n ci a l fi x e d a s s e t s
on the basis of use, which could differ from the leasing fee paid during the cur- Financial fixed assets are recognized at fair value or accrued acquisition value.
rent year. For further information on leasing, refer to Note 35. In the Parent Impairment losses are posted if the fair value is less than the acquisition cost.
Company, all leasing agreements are recognized according to the rule for oper- Also see the “Financial instruments” section on p. 64. For information on the
ational leasing. value and type of assets, refer to Note 22, Financial fixed assets. The Parent
Company recognizes shares in Group companies at acquisition value and,
Ta x es where applicable, taking into account write-ups or impairment losses.
Income tax comprises current and deferred tax. Taxes are recognized in profit
or loss, except when the transactions are recognized in other comprehensive C urr e n t a s s e t s
income, with the relating tax effect recognized in comprehensive income. Cur- Current-asset properties
rent tax is tax that is to be paid or received during the current fiscal year. This Group property holdings recognized as property and housing projects are
also includes adjustments of current tax attributable to prior periods. ­valued as inventories when the intention is to sell the properties on completion.
Deferred tax is recognized on the basis of temporary differences between Property projects are measured at the lower of acquisition value and net realiz-
recognized and taxable values of assets and liabilities. For information on tax able value. Property projects are defined as properties held for development
on current-year profit and deferred tax assets and liabilities, refer to Note 24. and sale within NCC Property Development. Housing projects pertain to
Deferred tax liabilities and assets are calculated on the basis of the tax rate unsold residential properties, unsold portion of proprietary residential proper-
determined for the following year in each particular country. When changes ties with ownership rights, undeveloped land and properties held for future
occur in tax rates, the change is recognized in profit or loss in the consolidated development in NCC Housing.
financial statements.
In the Parent Company, untaxed reserves are recognized that consist of the Property projects
taxable temporary difference arising because of the relationship between Property projects within NCC Property Development are divided as follows:
reporting and taxation in the legal entity. Untaxed reserves are recognized • Properties held for future development
gross in the balance sheet and the change is recognized gross in profit or loss, • Ongoing property projects
as an appropriation. Group contributions received and paid are recognized in • Completed property projects
the Parent Company’s profit or loss as appropriations.
For a distribution of values, refer to Note 25, Properties classed as current
R E COGN I T I ON O F OPE R AT I NG SEG M ENTS assets.
An operating segment is part of the Group that conducts business operations
from which it generates revenues and incurs costs and for which independent Properties held for future development, property development
financial information is available. Furthermore, the earnings of an operating Properties held for future development consist of NCC’s holding of land and
segment are followed up by the chief operating decision maker, who in NCC’s development rights intended for future property development and sale. Prop-
case is the President, for evaluation of results and for allocating resources to erties comprising of leased buildings are classified as properties held for future
the operating segment. The reporting of operating segments concurs with the development in cases where the intention is to demolish or refurbish the
reports presented to the President. Also refer to Note 3, Recognition of operat- ­buildings.
ing segments.
Ongoing property projects
Earnings per share Properties held for future development are reclassified as ongoing property
The calculation of earnings per share is based on the Group’s net profit for the projects when a definitive decision is taken about a building start and when the
year attributable to Parent Company shareholders and on the weighted aver- activities required in order to complete the property project have been initi-
age number of shares outstanding during the year. The calculation of earnings ated. An actual building start is not necessary. Ongoing property projects
per share is not affected by preferred shares or convertible debentures, since include properties under construction, extension or refurbishment.
the Group has no such items. Ongoing property projects are reclassified as completed property projects
when the property is ready for occupancy, excluding adjustments to tenant
I n ta n g i b l e a s s e t s requirements in those properties whose premises are not fully leased. The
Intangible assets are recognized at acquisition value less accumulated impair- reclassification is effective not later than the date of approved final inspection. If a
ment losses and amortization. project is divided into phases, each phase must be reclassified separately. In this
Goodwill arises from acquisitions of companies and operations. Goodwill is context, a phase always comprises an entire building that can be sold separately.
not amortized. Goodwill in foreign operations is valued in the particular func-
tional currency and is converted from this functional currency to the Group’s Completed property projects
reporting currency at the exchange rates prevailing on the balance-sheet date. Completed property projects can only be derecognized from the balance sheet
Usufructs consist primarily of the right to utilize rock pits and gravel quar- as a result of a sale or, if they remain unsold, by being reclassified as managed
ries, which are depreciated in parallel with confirmed depletion of net asset properties.
6 4 N C C 2 013 F i n a nc i a l r e p o r t

Valuation of commercial property projects Properties classed as current assets transferred from subsidiaries
The acquisition value of commercial property projects includes expenditure for Due to the commission relationship between NCC AB and NCC Construction
the acquisition of land and for building design/property development, as well as Sweden AB or NCC Boende AB, certain properties included in housing proj-
expenditure for construction, extension or refurbishment. Expenditure for bor- ects are recognized in NCC AB’s accounts, even if the ownership right remains
rowing costs related to ongoing projects is capitalized. Other borrowing costs with NCC Construction Sweden AB until the properties are sold to customers.
are expensed on a current account basis. Property development means that the
input of the developer – NCC Property Development – is concentrated to the I n v e n to ri es
activities that do not pertain to actual construction. These activities are evalua- Inventories are measured at the lower of acquisition value and net realizable
tion of project concepts, acquisition of land, work on the detailed develop­ment value. For a distribution of inventory values, refer to Note 26, Materials and
plan, project development, leasing and sale. These activities are conducted by inventories.
the company’s own employees and by external architects and other technical
consultants. Development expenditure is capitalized when it pertains to land or Fi n a n ci a l i n s t rum e n t s
properties owned by NCC or over which it has control. Acquisitions and divestments of financial instruments are recognized on the
Commercial property projects are recognized continuously in the balance date of transaction, meaning the date on which the company undertakes to
sheet at the lower of acquisition value and net realizable value, which is the acquire or divest the asset.
­selling value (market value) less estimated costs for completion and direct Financial instruments recognized on the asset side of the balance sheet
­selling costs. include cash and cash equivalents, loan receivables, accounts receivable, finan-
The market value of completed property projects is calculated in accordance cial investments and derivatives. Accounts payable, loan payables and deriva-
with the yield method, which means that the continuous yield (operating net) tives are recognized under liabilities. Financial guarantees such as sureties are
on the property at full leasing is divided by the project’s estimated yield also included in financial instruments.
requirement. Unleased space in excess of normal vacancy is taken into account A financial asset or financial liability is recognized in the balance sheet when
in the form of a deduction from the value based on the assumed leasing rate. the company becomes a party to the instrument’s contractual terms and condi-
The market value of ongoing property projects is calculated as the value in tions. Accounts receivable are recognized in the balance sheet when invoices
completed condition, as described above, less the estimated remaining cost of have been sent. Accounts payable are recognized when invoices have been
completing the project. received.
Properties held for future development that are included in the project port- A financial asset is derecognized from the balance sheet when the contrac-
folio, meaning ones that are held for development and sale, are normally valued tual rights have been realized or extinguished. The same applies to portions of
in the same manner as ongoing projects, as described above. Other properties financial assets. A financial liability is derecognized from the balance sheet
held for future development are valued on the basis of a value per square meter when the contractual obligation has been fulfilled or otherwise terminated.
of development right or a value per square meter of land. This also applies to part of the financial liability.
Financial instruments are classified in the following categories for measure-
Housing projects ment: Financial assets at fair value through profit or loss, Investments held to
Housing projects are divided between: maturity, Loan receivables and accounts receivable, Available-for-sale financial
• Properties held for future development, housing assets, Financial liabilities at fair value through profit or loss and Other finan-
• Capitalized project development costs cial liabilities. When entered for the first time, a financial instrument is classi-
• Ongoing proprietary housing projects fied on the basis of the purpose for which the instrument was acquired. This
• Completed housing classification determines how the financial instrument is measured following
the first reporting occasion, as described below.
For a distribution of values, refer to Note 25, Properties classed as current Cash and cash equivalents comprise cash funds and immediately available
assets. The reclassification from properties held for future development to balances at banks and equivalent institutions, as well as short-term investments
ongoing projects occurs when a decision to initiate construction has been with a maturity of less than three months at the date of acquisition and that are
taken. exposed to only a minor risk of value fluctuation.

Properties held for future development, housing Financial assets measured at fair value in profit or loss
Properties held for future development are NCC’s holdings of land and devel- This category includes the Group’s derivative instruments with a positive fair
opment rights for future housing development. Properties with leased build- value and short-term investments. Changes in fair value are recognized among
ings are classified as properties held for future development if the intention is net financial items in profit or loss. All instruments included in this category
to demolish or refurbish the property. are available for sale. Derivative instruments that function as identified and
Properties held for future development are valued taking into consideration effective hedging instruments are not included in this category. For an account
whether the properties will be developed or sold on. The valuation of land and of hedging instruments, see Hedge accounting below.
development rights for future development is based on a capital investment
appraisal. This appraisal is updated with regard to the established sales price Held-to-maturity investments
and cost trend when the market and other circumstances so require. In those Investments intended to be held to maturity comprise interest- bearing securi-
cases when a positive contribution margin from the development cannot be ties with fixed or calculable payments and a determined maturity that were
obtained taking into consideration normal contract profit, an impairment loss is acquired with the intention and possibility of being held to maturity. Invest-
recognized. In cases where properties are to be sold on, the holdings must be ments intended to be held to maturity are measured at amortized cost. Assets
measured at the established market value. with a remaining maturity exceeding 12 months after the balance-sheet date
are recognized as fixed assets. Other assets are recognized as current assets.
Capitalized project development costs
Development expenditure is capitalized when it pertains to land or properties Loan receivables and accounts receivable
owned by NCC or over which it has control. Loans and accounts receivable are measured at amortized cost, meaning the
amount expected to be received less an amount for doubtful receivables, which
Ongoing proprietary housing projects is assessed on an individual basis. Since the expected maturity of an account
The unsold portion of housing projects for which the purchasers, following receivable is short, a nominal value without discounting is recognized.
acquisition, will directly own their portion of the project, meaning they will Accounts receivable are measured on an ongoing basis. As soon as it is
have ownership rights, is recognized as a housing project. doubtful that an invoice will be paid, a provision is made for the amount.
Although each invoice is measured individually, provisions are noted for
Completed housing units invoices that are more than 60 days overdue unless special circumstances
Project costs for completed unsold residential properties are reclassified from apply. Provisions are made for all invoices that are more than 150 days overdue
ongoing housing projects to unsold residential properties at the date of final if payment is not secured.
inspection. Completed unsold housing units are measured at the lowest of
acquisition value and net realizable value. Available-for-sale financial assets
This category includes financial assets that do not fall into any of the other cate-
gories, or those assets that the company has elected to classify into this cate-
 F i n a nc i a l r e p o r t N C C 2 013 6 5

gory. Holdings of shares and participations that are not recognized as subsid- Financial instruments in the Parent Company
iaries, associated companies or joint ventures are recognized here. These Financial instruments in the Parent Company are recognized at acquisition
assets are measured at fair value. Impairment losses are posted when testing value less any impairment losses and taking into account earnings effects
shows that impairment is required. 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,
Financial liabilities at fair value through profit or loss since Group-wide risk management is applied for the Group.
This category includes the Group’s derivative instruments with a negative fair
value, with the exception of derivative instruments that function as identified C a s h a n d c a s h e q ui va l e n t s
and effective hedging instruments. Changes in fair value are recognized Cash and cash equivalents consist of cash, bank balances and short-term
among net financial items. investments with a maturity of less than three months at the date of acquisition.

Other financial liabilities S h a r e h o ld e r s’ e q ui t y

Loans and other financial liabilities, such as accounts payable, are included in Group contributions and shareholder contributions
this category. Liabilities are measured at amortized cost. Group contributions and shareholder contributions in the Parent Company are
recognized in accordance with their financial impact. Group contributions
Hedge accounting received and granted are recognized as appropriations. Shareholders contribu-
NCC applies hedge accounting in the following categories: Hedging of tions granted are recognized as a part of the investment in the subsidiary and
exchange-rate risk in transaction flows, Hedging of net investments and are thus subject to customary impairment testing.
­Hedging of the Group’s interest maturities.
Repurchase of shares
Hedging of exchange-rate risk in transaction flows The repurchase of shares (treasury shares), including repurchase costs, has
Currency exposure associated with future flows is hedged by using currency been charged directly against retained earnings. Similarly, the sale of such
forward contracts. The currency forward contract that hedges this cash flow is shares results in an increase in retained earnings. Refer to Note 28, Share capi-
recognized at fair value in the balance sheet. When hedge accounting is tal, for more information on treasury shares.
applied, the change in fair value attributable to changes in the exchange rate for
the currency forward contract is recognized in other comprehensive income, R e mu n e r at i o n to e m p loy e es
after taking tax effects into account. Any ineffectiveness is recognized in profit Share-based remuneration
or loss. When the hedged flow is recognized in profit or loss, the value change Instrument issued under the NCC Group’s share-based remuneration plan
of the currency forward contract is moved from other comprehensive income comprise share awards and synthetic (cash-settled) options.
to profit or loss, where it offsets the exchange-rate effect of the hedged flow. The fair value of allotted share awards is recognized as a personnel cost
The hedged flows can be both contracted and forecast transactions. accompanied by a corresponding increase in shareholders’ equity. The fair
value is estimated at the date of allotment adjusted by the discounted value of
Hedging of net investments the future dividends for which the plan participants will not qualify.
Group companies have currency hedged their net investments in foreign sub- Synthetic options give rise to an undertaking in relation to the employee,
sidiaries within NCC Housing and NCC Property Development. In the consoli- which is measured at fair value and recognized as a cost accompanied by a cor-
dated financial statements, the exchange-rate differences on these hedging responding increase in liabilities. The fair value of the synthetic options com-
positions, after taking tax effects into account, are moved directly to other com- prises the market price of the Series B NCC share at the particular financial
prehensive income, insofar as they are matched by the year’s translation differ- report occasion adjusted by the discounted value of the future dividends for
ences within other comprehensive income. Any surplus amount, so-called which the plan participants will not qualify.
in­effectiveness, is recognized among net financial items. NCC uses currency At each financial report occasion, the Parent Company makes an assessment
loans and currency forward contracts to hedge net investments. of the probability of whether the performance targets will be achieved. Costs
are calculated on the basis of the number of share awards and synthetic options
Hedging of the Group’s interest maturities that are estimated to be settled at the close of the vesting period.
Interest-rate derivatives are used to manage the interest-rate risk. Hedge When settlement of the share awards and synthetic options occurs, social
accounting occurs in cases where an effective hedging relationship can be security fees have to be paid for the value of the employees’ benefit. These vary
proved. The value change is recognized in other comprehensive income after in the different countries in which NCC is active. During the period in which
taking tax effects into account. Any ineffectiveness is recognized among net the services are performed, provisions are also posted for these calculated
financial items. What NCC achieves by hedging interest rates is that the vari- social security fees based on the fair value of the share awards and the syn-
able interest on parts of the Group’s financing becomes fixed interest. thetic options, respectively, on the reporting date.
To satisfy NCC AB’s undertakings in accordance with the option programs,
Embedded derivatives NCC AB has repurchased Series B shares. These are recognized as treasury
An embedded derivative is a part of either a financial agreement or a commer- shares and thus reduce shareholders’ equity.
cial put or call contract that is equivalent to a financial derivative instrument. For a description of the NCC Group’s share-based remuneration programs,
An embedded derivative must be recognized separately only if: refer to Note 5, p. 71
• the economic characteristics and risks of the embedded derivative are not
closely related to the characteristics and risks of the host contract’s cash Post-employment remuneration
flow, and NCC differentiates between defined-contribution pension plans and defined-
• a separate “stand alone” derivative with the same terms as the embedded benefit pension plans. Defined-contribution plans are pension plans for which
derivative would meet the definition of a derivative, and the company pays fixed fees to a separate legal entity and does not assume any
• the hybrid (combined) instrument is not measured at fair value in the bal- obligations for payments of additional fees, even if the legal entity lacks suffi-
ance sheet, while changes in its fair value are recognized in profit or loss. cient assets to pay benefits accrued for employment up to and including the
­balance-sheet date. Other pension plans are defined-benefit plans.
If the contractual terms and conditions meet the criteria for an embedded
derivative, this, in common with other financial derivatives, is measured at fair
value, with changes in value recognized in 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 differences arising from the translation of operational receivables
and liabilities are recognized in operating profit, while exchange differences
arising from the translation of financial assets and liabilities are recognized in
net financial items.
6 6 N C C 2 013 F i n a nc i a l r e p o r t

Defined-benefit Defined-contribution Other provisions

Country pension obligations pension obligations Provisions for restoration costs are posted when such obligations arise. Pro­
Sweden visions are posted for that portion of restoration that arises for start-up of a
Denmark quarry and construction of plants at pits and quarries, and on current account
Finland when activities are related to additional extractions at pits and quarries.
A provision for restructuring is recognized when a detailed or formal
Norway
restructuring plan has been established and the restructuring has either
Germany
started or been announced publicly. No provisions are posted for future
Other countries
­operating expenses.

There are several defined-contribution and defined-benefit pension plans in the BO R R OW I NG COSTS
Group, some of which are secured through assets in dedicated foundations or Borrowing costs attributable to qualifying assets are capitalized as a portion of
similar funds. The pension plans are financed through payments made by the the capitalized asset’s acquisition value when the borrowing costs total a signif-
various Group companies. Calculations of defined-benefit pension plans are icant amount. A qualifying asset is an asset that takes a substantial period of
based on the Projected Unit Credit Method, whereby each term of employment time to get ready for its intended use or sale, which in NCC’s case is more than
is considered to create a future unit of the total final obligation. All units are a year. For NCC, the capitalization of borrowing costs is most relevant in the
­computed separately and, combined, represent the total obligation on the bal- construction of property and housing projects. Other borrowing costs are
ance-sheet date. The principle is intended to provide linear expensing of pension expensed on current account in the period in which they are incurred. In the
payments during the term of employment. The calculation is made annually by Parent Company, borrowing costs are expensed in their entirety in the period
independent actuaries. The calculation is made annually by independent actuar- in which they are incurred.
ies. When there is a difference between how pension costs are established in the
legal entity and in the Group, a provision or receivable for Swedish pension plans Pl e d g e d a s s e t s
is recognized for the payroll tax based on this difference. Accordingly, the value NCC recognizes collateral pledged for company or Group liabilities and/or
of the defined-benefit liability is the present value of anticipated future disburse- obligations as pledged assets. These may be liabilities, provisions included in
ments using a discount rate that corresponds to the interest stated in Note 31, the balance sheet or obligations not included in the balance sheet. The collat-
Pensions. The interest rate on first-class housing bonds is used as the basis for eral may be related to assets entered in the balance sheet or mortgages. Assets
calculating the discount interest rate for the Swedish pension plans. Swedish are recognized at the carrying amount and mortgages at nominal value. Shares
defined-benefit pension obligations are funded in the NCC Group’s Pension in Group companies are recognized at their value in the Group.
Foundation. For funded plans, the fair value of plan assets reduces the computed For information on types of collateral, refer to Note 37, Pledged assets, guar-
obligation. Changes in plan assets and obligations stemming from experience- antees and guarantee obligations.
based adjustments and/or changes in actuarial assumptions, known as actuarial
gains and losses, are recognized directly in other comprehensive income in the C a s h flow s tat e m e n t
period in which they arise. The cash flow statement is prepared using the indirect method, in accordance
This reporting method is applied for all identified defined-benefit pension with IAS 7, Statement of Cash Flows. The recognized cash flow includes only
plans in the Group. The Group’s disbursements related to defined-benefit transactions that involve cash payments and disbursements. For information
­pension plans are recognized as an expense during the period in which the on the effects on cash flow of acquired and divested subsidiaries, refer to
employees perform the services covered by the fee. Note 38, Cash flow statement.
The Parent Company is covered by the ITP plan, which does not require any
payments by the employees. The difference, compared with the principles C R I T I C A L EST I M ATES AN D ASSESS M ENTS
applied by the Group, pertains mainly to how the discounting rate is deter- Estimates and assessments that affect the Group’s accounting records have
mined, the fact that the calculation of defined-benefit obligations is based on been made on the basis of what is known when the Annual Report was issued.
the current salary level without assuming future pay rises and the fact that all The estimates and assessments may, at a later date, be changed because of, for
actuarial gains and losses are recognized in profit or loss when they arise. example, changes in factors in the business environment. Particular attention
must be paid to this during economic conditions characterized by major uncer-
Post-employment remuneration tainty in terms of the construction market and the global financial market,
In conjunction with notice of employment termination, a provision is posted which has been the case during recent years. The assessments that are most
only if the company is contractually obliged to terminate an employment posi- critical to NCC are reported below.
tion before the normal time, or when payments are made as an offering to
encourage voluntary termination. For cases in which the company implements Percentage-of-completion profit recognition of construction projects
personnel cutbacks, a detailed plan is prepared that covers at least the work- A fundamental condition for being able to estimate percentage-of-completion
place concerned, positions, and the approximate number of affected employees profit recognition is that project revenues and project costs can be established
and disbursements for every personnel category or position, as is a time sched- reliably. This reliability is based on such factors as compliance with NCC’s sys-
ule for the plan’s implementation. If severance payment requirements arising tems for project control and that project management has the necessary skills.
from personnel cutbacks extend beyond 12 months after fiscal year-end, such The assessment of project revenues and project costs is based on a number
payments are discounted. of estimates and assessments that depend on the experience and knowledge of
project management in respect of project control, training and the prior man-
Pr ov i s i o n s agement of projects. There is a risk that the final result will differ from the
Provisions differ from other liabilities in that there is a degree of uncertainty profit accrued based on percentage-of-completion. At year-end, recognized
concerning when payment will occur or concerning the size of the amount ­revenues amounted to SEK 45.4 billion (29.2); refer to Note 27, Construction
required to settle the provision. Provisions are recognized in the balance sheet contracts.
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- Profit recognition of property development projects
ment and the amount can be estimated reliably. Property sales are recognized as of the time when significant risks and rewards
are transferred to the purchaser. The actual timing of profit recognition
Guarantee commitments depends on the agreement with the purchaser and could occur when signing
Provisions for future costs due to guarantee commitments are recognized at the agreement, at a certain leasing rate, on completion or when the right of
the amount expected to be required to settle the commitment on the balance- ownership is transferred, and it could also depend on a combination of these
sheet date. The computation is based on calculations, executive management’s variables. This is determined from agreement to agreement and is subject to
appraisal and experience from similar transactions. elements of estimations and assessments, and also applies to both direct sales
of a property and indirect sales via the sale of companies.
 F i n a nc i a l r e p o r t N C C 2 013 67

Valuation of properties classed as current assets Receivables are measured at fair value, which is affected by several assess-
NCC’s properties classed as current assets are recognized at the lower of ments, of which the one that is most important to NCC is credit risk and thus
acquisition value and net realizable value. In 2013, impairment losses on prop- any need to post provisions for doubtful receivables.
erties classed as current assets amounted to SEK 25 M (42), and the carrying Although each receivable must be valued individually, for receivables that
amount at year-end was SEK 17.9 billion (17.1). are more than 60 days past due special circumstances are generally required
The assessment of net realizable value is based on a series of assumptions for a provision not to be posted in full or in part.
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 Guarantee commitments
continuously monitors developments in the market and tests the assumptions At year-end, the guarantee provision amounted to SEK 1.5 billion (1.7); refer to
made on an ongoing basis. Note 30, Other provisions. Provisions for future costs due to guarantee commit-
In some cases, the difference between the carrying amount and the esti- ments are recognized at the amount expected to be required to settle the com-
mated net realizable value is very slight. A change in the assumptions made mitment on the balance-sheet date. This estimate is based on calculations,
could give rise to an additional impairment requirement. assessments by company management and experiences gained from past
transactions.
Valuation of goodwill
Goodwill is measured at the lower of acquisition value and the recoverable Pension obligations
amount. Goodwill in the Group is valued at SEK 1.8 billion (1.8). NCC’s net pension obligation amounts to SEK 0.1 billion (0.4)
Several assumptions and estimations are made concerning future conditions, Recognized amounts are affected by changes in the actuarial assumptions
which are taken into account when calculating the discounted cash flow upon that form the foundation for calculations of plan assets and pension obligations.
which the estimated recoverable amount has been based. Important assump- These actuarial assumptions are described in Note 31, Pensions, as is a sensi-
tions include expected growth, margins and the weighted average cost of capi- tivity analysis.
tal. If these assumptions change, the value of the remaining goodwill could be
affected; refer to Note 15, Intangible assets, for information on the assumptions Guarantee obligations, legal disputes, etc.
and estimations made. Within the framework of its regular business operations, NCC occasionally
becomes a party to legal disputes. In such cases, an assessment is made of
Valuation of receivables NCC’s obligations and the probability of a negative outcome for NCC. NCC’s
NCC’s accounts receivable, including receivables for sold property projects, assessment is made on the basis of the information and knowledge currently
amount to SEK 7.7 billion (8.4); refer to Note 39, Financial instruments and possessed by the company. In one or two cases, these are difficult assessments
financial risk management. and the final outcome could differ from the estimation made.
6 8 N C C 2 013 F i n a nc i a l r e p o r t

N ote 2 D I ST R I B U T I ON O F EXTE R NA L NET SA L ES

Group Parent Company

2013 2012 2013 2012
Construction and
civil engineering 32,872 34,467 20,727 22,490
Industrial operations 11,177 11,360
Housing development projects 9,026 8,609 2,618 3,176
Property development projects 4,649 2,744
Other 99 46 12 96
Total 57,823 57,227 23,357 25,763

Sales distributed by
business segment1)
NCC Construction Sweden 20,739 22,586
NCC Housing 2,618 3,176
Total 23,357 25,763
1) For the distribution of consolidated sales, refer to Note 3.

N ote 3 R EPO RT I NG BY OPE R AT I NG SEG M ENTS

NCC’s business operations are divided into seven operating segments based on the NCC Housing develops and sells housing in selected markets in the Nordic
parts of the organization monitored by the President and CEO, who is the chief oper- region, Germany, Estonia, Latvia and St. Petersburg.
ating decision maker. Each operating segment has a president who is responsible for NCC Property Development develops and sells commercial properties in defined
the daily operations and regularly reports on the results of the segment’s perfor- growth markets in the Nordic region, Estonia and Latvia.
mance to Group Management. The following segments were identified based on this All transactions between the various segments were conducted on a purely commer-
reporting procedure: cial basis. The segment report also recognizes Swedish pension costs using Swedish
NCC Construction Sweden, Denmark, Finland and Norway, which construct hous- accounting standards and adjustments of IFRS in “Other and eliminations.” Occasion-
ing, offices, other buildings, industrial facilities, roads, and other types of infrastructure. ally, “Other and eliminations” may also recognize certain items, primarily impairment
NCC Roads’ core business is the production of stone materials and asphalt, as well losses and provisions attributable to the activities conducted in the segments.
as asphalt paving and road services in the Nordic region and St. Petersburg.

NCC Construction
NCC NCC NCC Property Total Other and
Group, 2013 Sweden Denmark Finland Norway Roads ­Housing Development s­ egments ­eliminations Group
External net sales 19,129 2,857 4,134 6,752 11,177 9,026 4,746 57,821 2 57,823
Internal net sales 2,401 688 2,546 656 822 4 65 7,182 –7,182
Total net sales 21,530 3,546 6,680 7,408 11,999 9,030 4,811 65,003 –7,180 57,823
Depreciation/amortization –179 –19 –15 –101 –365 –15 –3 –698 –5 –703
Impairment losses and reversal
of impairment losses 7 –23 –2 –17 –171)
Share in associated
company profits 6 6 –5 1
Operating profit 637 208 127 3 406 605 713 2,700 –21 2,679
Financial items –279
Profit after financial items 2,400
Capital employed 1,250 309 271 803 3,557 9,856 3,991 20,035 –1,691 18,345

NCC Construction
NCC NCC NCC Property Total Other and
Group, 2012 Sweden Denmark Finland Norway Roads ­Housing Development ­segments ­eliminations Group
External net sales 22,080 2,849 4,029 5,510 11,360 8,609 2,783 57,220 6 57,227
Internal net sales 2,963 547 2,680 560 851 2 65 7,670 –7,670
Total net sales 25,043 3,396 6,709 6,070 12,211 8,612 2,847 64,889 –7,662 57,227
Depreciation/amortization –153 –18 –13 –71 –356 –14 –3 –628 –3 –631
Impairment losses and reversal
of impairment losses –1 –1 –1 –41 –44 –442)
Share in associated
company profits 5 5 5
Operating profit 801 189 101 74 417 835 295 2,710 –192 2,519
Financial items –241
Profit after financial items 2,277
Capital employed 1,122 288 267 984 3,049 9,976 4,989 20,675 –3,390 17,285
1) 2013 includes impairment losses on housing projects totaling SEK 23 M.
2) 2012 includes impairment losses on property projects totaling SEK 41 M.
 F i n a nc i a l r e p o r t N C C 2 013 69

N ote 3 R EPO RT I NG BY OPE R AT I NG SEG M ENTS, CONT’ D

OTHE R AN D E L I M I NAT I ONS

2013 2012
External Operating External Operating
net sales profit net sales profit
NCC’s head office, results from minor subsidiaries and associated companies,
as well as the remaining portions of NCC International 2 –36 6 –661)
Eliminations of inter-company gains 66 –16
Other Group adjustments (essentially comprising the difference in accounting policies
pertaining to Swedish pensions between the segments and the Group) –51 –110
2 –21 6 –192
1) 2012 includes a project impairment loss of SEK 37 M from the discontinued business area NCC International Projects.

GEOG R APH I C A L A R EAS 1)

Number of
Orders received Order backlog Net sales Operating profit employees Capital employed Fixed assets2)
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
Sweden 27,560 28,659 22,366 23,236 30,547 31,338 1,648 1,511 9,988 10,060 7,382 8,287 2,063 1,917
Denmark 7,683 5,571 5,995 3,586 5,671 6,721 239 297 2,114 2,239 3,847 3,478 1,331 1,261
Finland 7,381 7,461 6,514 6,883 8,181 8,261 267 343 2,786 2,810 3,039 2,708 325 320
Norway 9,691 10,425 7,641 8,397 10,172 8,590 198 143 2,418 2,090 3,453 3,557 1,432 1,482
Germany 3,255 2,664 3,256 2,402 2,508 2,140 229 159 686 650 877 985 72 68
St. Petersburg 1,290 912 1,800 1,253 633 500 108 80 356 314 779 903 5 6
Estonia/Latvia 118 68 89 77 111 73 –11 –20 12 12 527 533
1) See also p. 12, NCC’s geographical markets.
2) Pertains to fixed assets that are not financial instruments, deferred tax assets, assets pertaining to post-employment remuneration
and rights arising in accordance with insurance agreements.

I NVESTM ENTS AN D SA L ES
2013 2012
NCC Housing
Investments in civil engineering projects 28 28
Investments in housing projects 7,912 8,997
Sales of housing projects 7,067 6,951
Housing projects at year-end 12,625 11,738

NCC Property Development

Property investments 3,890 2,692
Property sales 4,170 1,764
Property projects at year-end 5,251 5,321

N ote 4 N U M BE R O F E M P LOYEES

AVE R AGE N U M BE R O F E M P LOYEES

2013 2012 Percentage of women, % 2013 2012
Number of of whom Number of of whom Distribution of company management by gender
employees men employees men Group total, including subsidiaries
Parent Company – Boards of Directors 17.5 18.7
Sweden 7,173 6,411 7,220 6,474 – Other senior executives 23.4 21.9
Subsidiaries Parent Company
Sweden 2,793 2,578 2,840 2,640 – Boards of Directors 22.2 20.0
Norway 2,440 2,251 2,093 1,909 – Other senior executives 28.6 23.1
Finland 2,714 2,244 2,740 2,254
Denmark 2,114 1,843 2,239 1,958
Germany 686 533 650 506
Russia 356 243 312 207
Estonia and Latvia 84 67 82 65
Total in subsidiaries 11,188 9,759 10,955 9,538
Group total 18,360 16,170 18,175 16,012
70 N C C 2 013 F i n a nc i a l r e p o r t

N ote 5 PE RSONNE L EXPENSES AN D R E M U NE R AT I ON O F SEN I O R EXE C U T I VES

wag es, SA L A R I ES AN D OTHE R R E M U NE R AT I ON D I ST R I B U TE D BET W EEN M E M BE R S O F THE BOA R D AN D SEN I O R EXE C U T I VES 1) AN D OTHE R E M P LOYEES
2013 2012
Board of Directors Board of Directors
and senior executives Other and senior executives Other
(of which, bonus) ­employees Total (of which, bonus) e
­ mployees Total
Parent Company
Sweden 42 3,162 3,199 30 3,214 3,244
Total in Parent Company 42 3,162 3,199 30 3,214 3,244
(5.5) (4.5)
Social security expenses 1,366 1,419
– of which, pension costs 9 262 271 7 303 310
Pension commitment 37 49

Group total 265 8,680 8,945 253 8,507 8,759

(33.7) (38.0)
Social security expenses 2,605 2,524
– of which, pension costs 702 754
Pension commitment 103 116
1) The senior executives category comprises 14 people (13) in the Parent Company and a total of 174 (169) in the Group.

Em p loym e n t co n di t i o n s a n d r e mu n e r at i o n o f s e n i o r e x e cu t i v es PENS I ON CON D I T I ONS F O R THE P R ES I D ENT

The Chairman of the Board and other Board members elected by the Annual Gen- CEO Peter Wågström has a defined-contribution pension plan with the premium
eral Meeting receive director fees only in an amount resolved by the Annual General amounting to 30 percent of his fixed salary. Peter Wågström’s retirement age is 62.
Meeting. No pensions are paid to Board members. No special fee is paid to the mem-
bers of the Nomination Committee or the other Board committees. PENS I ON CON D I T I ONS F O R OTHE R SEN I O R EXE C U T I VES
Remuneration of the CEO is proposed by the Chairman of the Board and decided Other senior executives employed in Sweden are covered by a defined-benefit ITP
by the Board. Remuneration of other senior executives in Group Management is pro- plan with a retirement age of 65 plus, in accordance with the current policy, of a sup-
posed by the CEO and approved by the Chairman of the Board. plementary defined-contribution pension obligation of 30 percent of pensionable sal-
Remuneration of the CEO and other senior executives consists of basic salary, ary exceeding 30 income base amounts. In addition, in accordance with the former
variable remuneration, other benefits and pensions. The term “other senior execu- policy for which no new subscriptions are permissible, four senior executives are
tives” pertains to the senior executives who, together with the CEO, constitute encompassed by a supplementary pension plan with retirement ages of 60 or 62. The
Group Management, as well as those senior executives who are not members of supplementary pension plan is paid until the age of 65, and has a target pension of 70
Group Management but who report directly to the CEO. At the start of 2013, there percent of pensionable salary. Pensionable salary is defined as the senior executive’s
were 12 other senior executives and there were 13 at the end of 2013. Of these, eight average fixed salary over a vesting period of at least ten years. The earned benefit is
were employed by the Parent Company and five by subsidiaries. vested and secured in a pension foundation. The company has undertaken to pay the
ITP plan in full on condition that the senior executive remains in service until the
VA R I AB L E R E M U NE R AT I ON agreed age of retirement.
The maximum variable remuneration payable to CEO Peter Wågström in 2013 For other senior executives employed outside Sweden, the various pension condi-
amounted to 40 percent of his basic salary. The variable remuneration was based on tions in those countries of employment will apply.
financial targets established by the Board. The provision recognized for 2013 corre-
sponded to 32 percent of his fixed salary, meaning SEK 1,762,497. In the preceding SEVE R AN C E PAY
year, SEK 1,830,390 was expensed. Variable remuneration for other senior execu- NCC and Peter Wågström are subject to a mutual period of notice of employment ter-
tives in 2013 corresponded to a maximum of 30 to 40 percent of fixed salary based mination of six months. Severance pay will amount to 18 months. Other senior execu-
primarily on the outcome of established, primarily financial, targets. The above maxi- tives are normally subject to 12 months’ notice from NCC, or six months’ notice if the
mal percentages for the CEO and other senior executives has been reduced by ten senior executive resigns of his/her own accord. Other senior executives are nor-
percentage points due to participation in LTI 2013. The provision posted for variable mally entitled to 12 months of severance pay, if their employment is terminated by
remuneration payments to other senior executives during 2013 corresponded to NCC. Remuneration will be reduced by an amount corresponding to any remunera-
12–37 percent (13–38) of basic salary. tion 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.
R E M U NE R AT I ON AN D OTHE R BENE F I TS I N 2 013
Total salary, of which, of which,
remuneration of which, ­variable share-based Pension Pension
SEK 000s and benefits3) ­benefits remuneration4) remuneration cost ­commitment
Chairman of the Board Tomas Billing 805
Member of the Board Antonia Ax:son Johnson 443
Member of the Board Ulf Holmlund1) 114
Member of the Board Olof Johansson 443
Member of the Board Sven-Olof Johansson 443
Member of the Board Ulla Litzén 443
Member of the Board Christoph Vitzthum 443
President and CEO Peter Wågström 8,691 55 1,762 947 1,683 568
Other senior executives (eight people)2) 30,367 336 3,746 2,614 7,794 15,192
Total Parent Company 42,192 391 5,508 3,561 9,477 15,760
Other senior executives employed by subsidiaries (five people) 17,664 618 2,754 1,662 3,344 10,436
Total senior executives 59,856 1,009 8,262 5,223 12,821 26,196
1) Ulf Holmlund stepped down at the AGM on April 9, 2013.
2) The number of senior executives employed in the Parent Company in 2013 was nine until October, and thereafter eight.
3) Remuneration and benefits pertain to vacation compensation, reduced working hours, company vehicles and, where appropriate, severance pay.

Director fees were raised following a resolution at the 2013 AGM. The amounts in the tables are subject to accrual accounting.
4) Variable remuneration pertains to the amounts expensed for each fiscal year.
 F i n a nc i a l r e p o r t N C C 2 013 71

N ote 5 PE RSONNE L EXPENSES AN D R E M U NE R AT I ON O F SEN I O R EXE C U T I VES, CONT’ D

R E M U NE R AT I ON AN D OTHE R BENE F I TS I N 2 012

Total salary, of which, of which,
remuneration of which, ­variable share-based Other Pension Pension
SEK 000s and benefits3) ­benefits remuneration4) remuneration ­remuneration cost c­ ommitment
Chairman of the Board Tomas Billing 724
Member of the Board Antonia Ax:son Johnson 425
Member of the Board Ulf Holmlund 425
Member of the Board Olof Johansson1) 314
Member of the Board Sven-Olof Johansson1) 314
Member of the Board Ulla Litzén 425
Member of the Board Marcus Storch1) 111
Member of the Board Christoph Vitzthum 425
President and CEO Peter Wågström 7,041 46 1,830 185 1,572 546
Other senior executives (nine people)2) 19,929 354 2,675 435 5,893 7,464
Total Parent Company 30,133 400 4,505 620 0 7,465 8,010
Other senior executives employed by subsidiaries
(five people) 20,033 511 4,287 468 1,532 3,782 15,373
Total senior executives 50,166 911 8,792 1,088 1,532 11,247 23,383
1) Olof Johansson and Sven-Olof Johansson were elected and Marcus Storch stepped down at the AGM on April 4, 2012.
2) The number of senior executives employed in the Parent Company in 2012 was nine until November, and thereafter eight.
3) Remuneration and benefits pertain to vacation compensation, reduced working hours, company vehicles and, where appropriate, severance pay.

Director fees were raised following a resolution at the 2012 AGM. The amounts in the tables are subject to accrual accounting.
4) Variable remuneration pertains to the amounts expensed for each fiscal year.

LONG - TE R M I N C ENT I VE P R OG R A M Scope and costs of the program

The AGM in April 2013 resolved, in accordance with the Board’s motion, to intro- Assuming a share price of SEK 165 and the maximum outcome in accordance with
duce a long-term performance-based incentive plan for senior executives and key LTI 2013 in terms of both shares and cash amount, it is estimated that the cost of LTI
personnel within the NCC Group (“LTI 2013”). The purpose of LTI 2013 is to ensure 2013, including costs for social security fees, will amount to SEK 62.5 M, correspond-
a focus on NCC’s long-term return on equity and to provide prerequisites for retain- ing to approximately 0.35 percent of the total number of shares in the company.
ing and recruiting key personnel. The value that a participant may receive at maximum allotment of Series B shares
LTI 2013 is a three-year performance-based plan under which the participants will and maximum cash payment is capped at an amount per share that corresponds to
be allotted, free of charge, performance-based share awards that provide entitlement 400 percent of the share price, calculated on the basis of the average last price paid
to Series B shares and to performance-based synthetic shares that provide entitle- during a period of ten trading days immediately following the date of the 2013 AGM,
ment to cash remuneration. In view of the introduction of LTI 2013, the maximum a period when the share is traded ex-rights to dividends.
short-term variable remuneration payable to the participants will be adjusted down-
wards by five or ten percentage points of their basic salary. LTI 2013 will run parallel Buyback of company shares
with and is in all respects identical to the LTI program that was adopted by the 2012 In order to cover commitments in accordance with LTI 2013, meaning to cover costs
AGM. for securing delivery of Series B shares, including costs for social security fees and
payments on the basis of the synthetic shares, the AGM resolved to authorize the
Performance targets Board to make decisions on one or several occasions during the period up to the fol-
The number of shares and the cash amount that will finally be allotted/disbursed lowing AGM to buy back a maximum of 867,486 Series B shares. The shares are to
depends on the extent to which certain predetermined targets are achieved during be acquired on NASDAQ OMX Stockholm and may only be acquired at a price within
the performance period (January 1, 2013 through December 31, 2015). The targets the registered span of share prices at the particular time, by which is meant the span
that have been set for LTI 2013 comprise the average return on equity in relation to between the highest price paid and the lowest asked price. The shares are to be paid
eight benchmark companies during the vesting period, as well as a reduction in the for in cash.
number of worksite accidents at the end of 2015. For achievement of the first target,
100 percent will be allotted/disbursed if the return exceeds the second best bench- Transfer of treasury shares
mark company, while 25 percent will be allotted/disbursed if the return matches the In order to secure delivery of Series B shares in accordance with LTI 2013, the Board
average for the benchmark category. In between these figures, allotment/payment proposes that the AGM resolve to permit the transfer of no more than 303,620 Series
will occur linearly. For assessment of the second target, an established benchmark B shares to the participants of LTI 2013.
figure for the industry will be used based on the number of occupational accidents
resulting in one day’s absence or more from ordinary work per million working The prerequisites and conditions for allotment are listed below, according to which
hours. At the end of 2012, NCC’s benchmark figure was 10.6. Allotment/disburse- all share awards will be regulated through physical delivery of the shares.
ment of 100 percent will occur if the ratio for 2015 is less than 7 and 25 percent will be
allotted/disbursed if the ratio is less than 10. In between these figures, allotment/ NO. O F SYNTHET I C SHA R ES

payment will occur linearly. Another prerequisite for any payment from LTI 2013 is Group Parent Company
that the NCC Group reports a pretax profit.
Share Synthetic Share Synthetic
awards options awards options
Allotment
Outstanding at the beginning
The participants are divided into three categories: President and CEO; Group Man- of the period 127,301 127,301 50,911 50,911
agement; and business area management and other key personnel. The allotment Allocated during the period 125,527 125,527 55,379 55,379
value is 40 percent of annual salary for the President and CEO, 30 percent of annual
Transferred from Group
salary for other members of Group Management and either 15 percent or a maxi- ­companies – – 14,187 14,187
mum of 30 percent of annual salary for other key personnel.
Forfeited during the period –11,066 –11,066 –5,396 –5,396
The share price that is to form the basis for calculating the number of share
Outstanding at the end
awards and synthetic shares is to correspond to the average last price paid during a
of the period 241,762 241,762 115,081 115,081
period of ten trading days immediately following the 2013 AGM, a period when the
Puttable at the end of
share is traded ex-rights to dividends (SEK 144.97).
the period 0 0 0 0

All shares and synthetic options have a redemption price of SEK 0.

Share awards and synthetic shares outstanding have a remaining contract term of
one and two years, respectively.
72 N C C 2 013 F i n a nc i a l r e p o r t

N ote 5 PE RSONNE L EXPENSES AN D R E M U NE R AT I ON N ote 7 FEES AN D R E M U NE R AT I ON TO AU D I T FI R M S

O F SEN I O R EXE C U T I VES, CONT’ D.
Group Parent Company
2013 2012 2013 2012
S h a r e awa rd s LT I 2 012
Audit firms
2013 2012
PwC
Parent Parent
Auditing assignments 18 16 7 5
Group Company Group Company
Audit in addition to the audit
Fair value on valuation date,
assignment 1 1
SEK 000s 5,064 2,406 1,833 778
Other assignments 1 2 1
Share price, SEK 123.30 123.30 123.30 123.30
Redemption price, SEK 0 0 0 0 Other auditors
Options duration, year 2 2 3 3 Auditing assignments 2 1
Risk-free interest rate, % 3.95 3.95 3.95 3.95 Total fees and remuneration
to auditors and audit firms 21 20 7 7
S h a r e awa rd s LT I 2 013
2013 Auditing assignments are defined as the statutory audit of the annual accounts and the
Parent consolidated financial statements and of the bookkeeping as well as of the administra-
Group ­Company tion of the Board of Directors and the President, and also audit and other examinations
Fair value on valuation date, KSEK 2,860 1,364 conducted pursuant to agreement or contract. This includes other duties that the com-
pany’s auditors are obliged to conduct and advice or other assistance required due to
Share price, SEK 144.97 144.97
observations made during such examinations or during the performance of such other
Redemption price, SEK 0 0
duties. All other work is defined as other assignments.
Options duration, year 3 3
Risk-free interest rate, % 3.95 3.95
N ote 8  I M PA I R M ENT LOSSES AN D R EVE RSA L
Dividend has been calculated as a five-year average of NCC AB’s dividends. All fair O F I M PA I R M ENT LOSSES
value and assumptions are identical for all participants in the program.
Group Parent Company
P e r s o n n e l e x p e n s es f o r s h a r e - b a s e d r e mu n e r at i o n s 2 013 2013 2012 2013 2012
2013 2012 Production costs
Parent Parent Housing projects –23 –1
Group Company Group Company
Properties held for future devel-
Share awards 6 3 2 1 opment in NCC Property Devel-
Synthetic options 11 5 2 1 opment –2 –41
Social security expenses 5 3 1 Result from participations in
subsidiaries
Total personnel expenses for
share-based remunerations 22 11 5 2 Shares in subsidiaries –81 –70
Total carrying amount Impairment losses and rever-
­pertaining to liability for sal of impairment losses, fixed
­synthetic options 13 6 2 1 assets
Total real value of the liability Owner-occupied properties 7 –1
pertaining to vested benefits 13 6 2 1 Machinery and equipment –1
Total –17 –44 –81 –70

N ote 6 D EP R E C I AT I ON/A M O RT I ZAT I ON

N ote 9  R ES U LT FRO M PA RT I C I PAT I ONS
Group Parent Company I N G RO U P CO M PAN I ES
2013 2012 2013 2012
Intangible assets –36 –24 –7 Group Parent Company
Owner-occupied properties –26 –28 –1 –1 2013 2012 2013 2012
Machinery and equipment1) –641 –579 –58 –47 Dividends 1,389 596
Total depreciation/ Capital gain/loss on sale 6 –3
amortization –703 –631 –66 –48 Impairment losses –81 –70
1) of which, depreciation of leased equipment in the Group amounts to 83 (74). Total 0 6 1,308 524

N ote 10  OPE R AT I NG EXPENSES D I ST R I B U TE D

BY TYPE O F COST

Group 2013 2012

Production-related goods and services,
plus raw materials and supplies 42,915 42,840
Change in inventories –19 –98
Personnel costs 11,541 11,285
Depreciation/amortization 703 631
Impairment losses 25 44
Reversal of impairment losses –7
Total cost of production, and selling
and administration costs 55,157 54,702
 F i n a nc i a l r e p o r t N C C 2 013 73

N ote 11  I NTE R EST EXPENSE AN D S I M I L A R I N CO M E N OT e 13  E FFE C TS ON P RO FI T AN D LOSS O F

STATE M ENT I TE M S ­EXC HANGE - R ATE C HANGES

Parent Company 2013 2012 2013 Exchange-

Interest expense, Group companies –121 –112 Group exchange rates 20121) 2013 rate effect
Interest expense to credit institutions –65 –81 Net sales 58,491 57,823 –668
Financial portion of pension cost –53 –34 Operating profit 2,702 2,679 –23
Interest expense, others –5 –6 Profit after financial items 2,413 2,400 –13
Exchange-rate differences –11 24 Net profit for the year 1,999 1,989 –10
Other financial items –5 –14 1) Figures for 2013 translated at 2012 exchange rates.
Total –260 –223
Average exchange rate
Jan–Dec Year-end rate
Country SEK Currency 2013 2012 2013 2012
N OT e 12  NET FI NAN C I A L I TE M S Denmark 100 DKK 116.00 117.03 119.37 115.41
EU 1 EUR 8.65 8.71 8.90 8.61
Group 2013 2012
Norway 100 NOK 110.94 116.46 105.85 116.70
Interest income on financial assets held for trading 52 44
Russia 1 RUR 0.22 0.22 0.21 0.21
Interest income on non-impaired investments held
to maturity 6 8
Interest income on non-impaired loans
and accounts receivable 6 7
N OT e 14  APP ROP R I AT I ONS AN D U NTAXE D R ESE RVES
Interest income on bank balances 8 2
Net exchange-rate changes 11 Appropriations Untaxed reserves
Other financial income 92 67 Parent Company 2013 2012 2013 2012
Financial income 165 141 Accumulated depreciation
in excess of plan
Interest expense on financial liabilities recognized – machinery and equipment 13 13
at accrued acquisition value –376 –316
Tax allocation reserve 231 –231 231
Interest expense on financial liabilities held for trading –8
Reserve in work in progress 103 –174 392 495
Net loss on financial assets/liabilities held for trading –4 –5
Group contributions received 325 359
Net exchange-rate changes –3
Total 672 –46 392 739
Other financial expenses –53 –61
Financial expense –444 –382
Net financial items –279 –241

Of which, changes in value calculated

using valuation techniques –4 5

N ote 15 I NTANG I B L E ASSETS

Parent
Group ­Company
Acquired intangible assets
Development
2013 Goodwill Usufructs Other Total other expenses
Recognized acquisition value on January 1 2,080 200 183 383 39
Investments 14 85 99 47
Translation differences during the year –24 2 2
Recognized acquisition value on December 31 2,056 214 270 484 86

Accumulated amortization on January 1 1 –102 –75 –177 –4

Translation differences during the year –1 –2 –2
Amortization according to plan during the year –13 –23 –36 –7
Accumulated amortization on December 31 0 –115 –100 –215 –11

Accumulated impairment losses on January 1 –254 –2 0 –2 0

Translation differences during the year –1
Accumulated impairment losses on December 31 –255 –2 0 –2 0

Residual value on January 1 1,827 96 108 204 35

Residual value on December 31 1,802 97 170 267 75
74 N C C 2 013 F i n a nc i a l r e p o r t

N ote 15 I NTANG I B L E ASSETS, CONT’ D

Parent
Group ­Company
Acquired intangible assets
Development
2012 Goodwill Usufructs Other Total other expenses
Recognized acquisition value on January 1 1,864 195 146 340 21
Investments 230 12 73 85 18
Divestment and scrappage –3 –10 –13
Reclassifications 15 –22 –22
Translation differences during the year –30 –3 –3 –6
Recognized acquisition value on December 31 2,080 200 183 383 39

Accumulated amortization on January 1 0 –95 –73 –168 –4

Divestment and scrappage 3 9 12
Translation differences during the year 1 1 2 3
Amortization according to plan during the year –11 –13 –24
Accumulated amortization on December 31 1 –102 –75 –177 –4

Accumulated impairment losses on January 1 –257 –2 –2 –3 0

Divestment and scrappage 2 2
Translation differences during the year 3
Accumulated impairment losses on December 31 –254 –2 0 –2 0

Residual value on January 1 1,607 96 71 167 18

Residual value on December 31 1,827 96 108 204 35

I M PA I R M ENT TEST I NG O F GOO DW I L L I N C ASH - GENE R AT I NG U N I TS The difference between the estimated value in use and the carrying amount for NCC
Goodwill totaling SEK 1,802 M is recognized in NCC’s balance sheet. The item is Roads’ Danish and Norwegian operations totals SEK 266 M (159). The following table
­distributed as follows among NCC’s business areas: illustrates the sensitivity of the value in use to changes in certain important variables:

Unit 2013 2012 IMPACT ON VALUE IN USE

NCC Construction 827 849 Discount interest rates,

basic scenario (6.7–7.3%)
– of which Sweden 400 400
0.5-percentage point reduction in operating
NCC Roads 953 956
­margin during the forecast period –332
– of which Denmark 626 605
1 percent reduction in sales growth/year during
– of which Norway 235 259 the forecast period –113
NCC Housing 22 22 0.5 percent increase in discount interest rate –202
NCC Group 1,802 1,827
OTHE R I NTANG I B L E ASSETS
Impairment testing is based on the future cash-flow of the units, taking into account Usufructs include the right to use gravel and rock pits for a determined period. The
the market’s yield requirement and their risk profile. periods may vary but the rights normally pertain to long periods.
Cash flow has been based on forecasts established by company management. Amortization of quarries occurs in pace with confirmed depletion of net asset
When deemed necessary, the forecasts have been established with a greater empha- value, based on the volume of extracted rock and gravel. The Other item consists
sis on the immediate period ahead (five years). The following key assumptions were mainly of software and licenses.
used: The periods of use range from three to five years and amortization is applied on a
straight-line basis.
Long-term growth: In all cases, a long-term sustainable growth rate of 2.0 percent
(2.0) has been assumed when the forecast period is over, which reflects anticipated A M O R T I ZAT I ON I S I N C L U D E D I N THE F O L LOW I NG
long-term growth in the market. Subject to the exceptions specified below, it is L I NES I N THE I N CO M E STATE M ENT
assumed that the growth rate also applies to sales during the forecast period. Group
2013 2012
Operating margin: The forecast operating margin has been assumed to equal the
Production costs –28 –24
average for the most recent three years.
Selling and administrative expenses –7
Working capital and reinvestment requirement: The requirement has been assumed Total –36 –24
to match the figure for 2013, with a growth rate equal to the sustainable long-term
growth rate. im pa irm e n t lo s s es a r e I N C L U D E D I N THE F O L LOW I NG
L I NES I N THE I N CO M E STATE M ENT
Discount interest rate after local tax: This has been established based on the follow- Group
ing variables: risk-free interest rate, market premium, beta ratio, capital structure
2013 2012
and local tax rates. Although the after-tax discount interest rates vary among the
Total on line Impairment of fixed assets –2
­different cash-generating units, in NCC’s scenario it amounts to 6.9 percent after tax
on the whole. In the preceding year, 7.2 percent after tax was used.

NCC’s impairment testing reveals no additional impairment requirement. The differ-

ence between the value in use and the carrying amount is lowest for NCC Road’s for-
eign operations. It is assumed that the profitability of these operations will return to
the historically achieved levels during the forecast period. The after-tax discount
interest rate varies between 6.7–7.3 percent (7.2–7.7) for NCC Roads.
 F i n a nc i a l r e p o r t N C C 2 013 75

N ote 16  TANG I B L E FI XE D ASSETS

Group Parent Company
Owner- Machinery Owner- Machinery
occupied Construction and occupied and
2013 properties in progress equipment Total properties equipment Total
Recognized acquisition value on January 1 1,245 5 7,197 8,447 22 519 541
Investments 46 12 898 956 41 41
Divestment and scrappage –11 –387 –398 –4 –4
Decrease through company divestments –7 –7
Reclassifications 10 –1 –4 5
Translation differences during the year –108 –108
Recognized acquisition value on December 31 1,290 16 7,590 8,896 22 556 578

Accumulated impairment losses and

depreciation on January 1 –589 –4,803 –5,391 –8 –424 –432
Divestment and scrappage 8 313 321 3 3
Decrease through company divestments 6 6
Reclassifications –6 –6
Translation differences during the year –2 41 38
Reversed impairment loss 7 7
Depreciation during the year –26 –641 –666 –1 –58 –59
Accumulated impairment losses
and depreciation on December 311) –602 –5,089 –5,691 –9 –478 –488

Accumulated write-ups on January 1 1 1

Accumulated write-ups on December 31 1 1

Residual value on January 1 657 5 2,395 3,057 15 94 108

Residual value on December 31 688 16 2,502 3,206 13 78 91
Carrying amount of financial leasing 279 279
1) Accumulated impairment losses at year-end –30 –55 –85

Group Parent Company

Owner- Machinery Owner- Machinery
occupied Construction and occupied and
2012 properties in progress equipment Total properties equipment Total
Recognized acquisition value on January 1 1,230 1 6,748 7,979 82 489 571
Investments 119 5 816 940 41 41
Increase through acquisitions 29 29
Divestment and scrappage –82 –356 –439 –60 –12 –72
Decrease through company divestments –2 –1 –15 –18
Reclassifications 27 27
Translation differences during the year –20 –52 –71
Recognized acquisition value on December 31 1,245 5 7,197 8,447 22 519 541

Accumulated impairment losses and

depreciation on January 1 –635 –4,540 –5,175 –68 –387 –455
Divestment and scrappage 66 276 342 60 10 70
Reclassifications –1 –1
Translation differences during the year 10 42 52
Impairment losses during the year1) –1 –1 –2
Depreciation during the year –28 –579 –607 –1 –47 –48
Accumulated impairment losses
and depreciation on December 312) –589 –4,803 –5,391 –8 –424 –432

Accumulated write-ups on January 1 1 1

Accumulated write-ups on December 31 1 1

Residual value on January 1 595 1 2,209 2,805 14 102 117

Residual value on December 31 657 5 2,395 3,057 15 94 108
Carrying amount of financial leasing 260 260
1) Impairment losses on owner-occupied properties are included
on the line “Impairment losses” in the income statement.
Impairment losses on machinery and equipment are included
on the line “Production costs.”
2) Accumulated impairment losses at year-end. –36 –61 –97
76 N C C 2 013 F i n a nc i a l r e p o r t

N ote 17  PA RT I C I PAT I ONS I N G RO U P CO M PAN I ES

Parent Company Carrying amount Parent Company Carrying amount
No. of No. of
Name of company, Ownership participa- Name of company, Ownership participa-
Corp. Reg. No., Registered office share, %1) tions2) 2013 2012 Corp. Reg. No., Registered office share, %1) tions2) 2013 2012
NCC Boende Holding 5 AB,
Real estate companies: 556824-7919, Solna 100 1 82 82
NCC Property Development BV, NCC Boende Holding 6 AB,
33.213.877, Netherlands 93 4 4 556824-7927, Solna 100 1
NCC Property Development Nordic AB, NCC Boende Holding 7 AB,
556743-6232, Solna 100 1 960 960 556824-8230, Solna 100 1
Total participations in real NCC Boende Holding 8 AB,
estate companies 965 964 556824-8248, Solna 100 1 65 65
NCC Boende Holding 9 AB,
Other companies:
556845-8797, Solna 100 1
Alsike Utvecklings AB,
NCC Boende Holding 10 AB,
556245-9452, Solna 100 16 2 2
556845-8821, Solna 100 1
Anjo Bygg AB,
NCC Boende Holding 11 AB,
556317-8515, Halmstad 100 9 29 35
556845-8692, Solna 100 1
Bergnäsets Ställningsmontage i Luleå AB,
NCC Boende Holding 12 AB,
556393-2838, Luleå 100 1 2
556887-7079, Solna 100 1 60
Däldehög AB,
NCC Bolig AS,
556268-5700, Gothenburg 100 9 1 41
32 65 55 05, Denmark 100 5 456 272
Eeg-Henriksen AB,
NCC Bolig AS,
556399-2642, Stockholm 100 5 1 1
997 671 783, Norway 100 8 41 41
Ekängens Handelsträdgård AB,
NCC Construction Danmark A/S,
556188-6903, Linköping 100 1 4 4
69 89 40 11, Denmark 100 400 115 115
Elpolerna i Malmö AB,
NCC Construction Norge AS,
556720-5934, Malmö 80 1
911 274 426, Norway 100 17,500 160 160
Frösunda Exploaterings AB,
NCC Construction Sverige AB,
556430-1876, Solna 100 1 1 1
556613-4929, Solna 100 500 52 51
Frösunda Exploaterings KB,
NCC Deutschland GmbH,
916636-6451, Stockholm 983) 1 1
HRB 8906 FF, Germany 100 410 410
Fågelbro Mark AB,
NCC Elamuarendus,
556234-0868, Stockholm 100 200 30 30
11398856, Estonia 100 6 6
Hercules Grundläggning AB,
NCC Försäkrings AB,
556129-9800, Stockholm 100 196 59 59
516401-8151, Solna 100 500 78 78
Jaktbacken AB,
NCC Hyresboende AB,
556908-8932, Solna 100 1
556889-1401, Solna 100 1
JCC Johnson Construction Company AB,
NCC Hällevik AB,
556113-5251, Solna 100 1
556749-6251, Solna 100 1
Kallax Cargo AB,
NCC Industries AB,
556565-1147, Solna 100 2 1 1
556001-8276, Stockholm 100 15 22 22
Kungsplattan AB,
NCC International AB,
556713-0850, Solna 100 1 1 1
556033-5100, Solna 100 1,000 258 258
Kvarntorget Bostad AB,
NCC International Danmark A/S,
556729-8541, Solna 100 1 1 1
26 708 621, Denmark 100 300
LLC NCC Center,
NCC Kaninen Projekt AB,
INN7841457408, Russia 100
556740-3638, Solna 30 4) 300
LLC NCC Ostland,
NCC Knallen Stockholm AB,
INN7802379530, Russia 100
556716-8637, Stockholm
LLC NCC Real Estate,
NCC Komponent AB,
INN7841322136, Russia 100 85 85
556627-4360, Solna 100 1 8
LLC NCC Village,
NCC Nordic
INN7842398917, Russia 100 9 9
Construction Company AB,
Luzern AB, 556065-8949, Solna 100 3,809 1,018 1,018
556336-4727, Solna 100 1 3 3
NCC Purchasing Group AB,
Marielund 1:7 AB, 556104-9932, Solna 100 2 1 1
556522-7369, Stockholm 1
NCC Rakennus Oy,
Mälarstadens Exploaterings AB, 1765514-2, Finland 100 4 392 391
556336-2135, Solna
NCC Roads Holding AB,
NCC Aktivt Boende AB, 556144-6732, Solna 100 275 1,635 1,634
556889-1393, Solna 100 1
NCC Södra Ekkällan AB,
NCC Beckomberga nr 1 AB, 556679-8780, Solna 100 1 1 1
556617-6243, Stockholm 100 1 1 1
NCC Treasury AB,
NCC Boende AB, 556030-7091, Solna 100 120 16 16
556726-4121, Solna 100 1
NCC Utvikling AS,
NCC Boende Holding 1 AB, 980 390 020, Norway 100 8 3 3
556761-3459, Solna 100 1
NCC Zinkensdamm AB,
NCC Boende Holding 2 AB, 556716-8652, Stockholm 1
556795-2089, Solna 100 1
Nils P Lundh, AB,
NCC Boende Holding 3 AB, 556062-7795, Solna 100 1
556866-8692, Solna 100 1
Norrströmstunneln AB, 100 1
NCC Boende Holding 4 AB, 556733-7034, Solna
556824-7901, Solna 100 1
1) Theownership share corresponds to the shareholding. Cont’d. >>>
2) Number of shares in thousands.
3) Remaining 2 percent is owned by Frösunda Exploaterings AB.
4) Remaining 70 percent owned by NCC Property Development AB.
 F i n a nc i a l r e p o r t N C C 2 013 7 7

N ote 17  PARTICIPATIONS IN GROUP COMPANIES, cont’d N ote 19  PA RT I C I PAT I ONS I N J O I NT VENT U R ES
­ ONSO L I DATE D I N ACCO R DAN C E W I TH
C
Parent Company Carrying amount THE P ROPO R T I ONA L M ETHO D
No. of
Name of company, Ownership participa- The consolidated financial statements include the items below that constitute the
Corp. Reg. No., Registered office share, %1) tions2) 2013 2012 Group’s interests in the joint ventures’ net sales, costs, assets and liabilities.
Nybergs Entreprenad AB,
556222-1845, Gotland 100 10 11 11 Group 2013 2012
Samset AB, Revenue 254 220
556931-8644, Stockholm 100 1
Expenses –226 –219
Siab Investment AB,
556495-9079, Stockholm 100 1 Profit 28 1

SIA NCC Housing, Fixed assets 62 43

40003941615, Latvia 100 24 24
Current assets 634 698
Sintrabergen Holding AB,
556498-1248, Stockholm 100 3 Total assets 696 741
Ställningsmontage och Industritjänst Long-term liabilities 270 283
i Södra Norrland AB, 556195-2226,
Solna 100 2 1 Current liabilities 231 324
Svelali AB, Total liabilities 501 607
556622-7517, Halmstad 100 1 Net assets 195 134
Svenska Industribyggen AB,
556087-2508, Stockholm 100 1
The joint venture category also includes partly owned contracts, for which NCC has
Söderby Park Fastigheter HB, a contractual joint influence together with the other partners.
916630-4817, Stockholm 100 10 10
Södertäljebyggare Exploaterings KB, SPE C I F I C AT I ON O F J O I NT VENT U R ES
916635-5900, Södertälje 100 1
Group Shareholding, %
Tipton Ylva AB,
556617-6326, Stockholm 100 1 1 1 Arandur OY 33
UAB NCC Housing, Bolig Interessentskabet Tuborg Nord 50
302477035, Lithuania 100 Entreprise 23 konsortiet 50
UAB Pletra Projects, Entreprise 26 konsortiet 50
126372247, Lithuania 100
Fastighets AB Strömstaden 32
Total participations in
Fløng-2 Konsortiet 50
other companies 5,146 4,958
Fortis DPR, konsortie 50
Total participations in
Group companies 6,112 5,922 Granitsoppen AB 50
1) Theownership share corresponds to the shareholding. Granitsoppen, KB 50
2) Number of shares in thousands. GR2012 Konsortiet I/S 50
Hercules-Trevi Foundations AB 50
Companies for which ownership shares and number of shares have not been speci- Holding Big Apple Housing Oy 50
fied were divested, merged or liquidated during the year. Kalati SIA 50
Only directly owned subsidiaries were specified. The number of indirectly owned
Korsnäs, konsortie 50
subsidiaries is 188 (199).
Koy Albergan 28
Koy Polaristontti 2 50
Koy Polaristontti 3 50
N OT e 18  PA R T I C I PAT I ONS I N ASSO C I ATE D CO M PA - Langebro 2 50
N I ES CONSO L I DATE D i n acco rda n c e wi t h
M11-Entreprenør 50
THE EQ U I TY M ETHO D
Matinkylä Holding Metrokeskus Oy 50
Group 2013 2012 Norvikudde, konsortie 50
Carrying amount on January 1 9 8 NVB Beckomberga KB 25
Acquisition of associated companies 1 NVB Sköndalsbyggarna AB 33
Share in associated company profits1) –1 NVB Sköndalsbyggarna II AB 33
Carrying amount on December 31 9 9 NVB Sköndalsbyggarna KB 33
1) Participations
in associated companies’ profit after tax and non-controlling interests in NVB Sköndalsbyggarna II KB 33
associated companies. Elinegård Utvecklings AB 50
NFO konsortiet I/S 50
Group Carrying amount NCC- LHR Gentofte Konsortiet 50
Owner- No. of NCC-MJEkonsortie I/S 50
Name of company, ship participa-
Corp. Reg. No., Registered office share, % 1) tions2) 2013 2012 Oraser AB 50

Aggder Bygg-Gjennvinning AS, Polaris Business Park Oy 50

880 704 532, Norway 50 1 1 PULS Planerad Underhållsservice AB 50
Asfalt & Maskin, 960 585 593, Norway 50 2 2 SHH Hyresproduktion AB 50
Glysisvallen AB, 556315-5125, Hudiksvall 50 1 1 Skattkärrs Byggnads AB 50
PULS-ISAB Relining i Skandinavien AB, Stora Ursvik KB 50
556813-5890, Mölndal 25 3 3 Tipton Brown AB 33
Östhammarkrossen KB, Vänerbyggen Skattkärrs Byggnads AB & Co KB 50
916673-1365, Uppsala 50 2 2
Öhusen, KB 50
Other NCC-owned associated companies
12 (12) 1 1 Örestad Down Town P/S 60
Total 9 9
1) The
ownership share corresponds to the proportion of votes for the total number of shares.
2) Number of shares in thousands.
78 N C C 2 013 F i n a nc i a l r e p o r t

Note 20 PA RT I C I PAT I O N S I N AS SO C I AT ED CO M PA N I ES N ote 21 FI N A N C I A L I N V ES TM E N T S

PA R T I C I PAT I O N S I N A S S O C I AT E D CO M PA N I ES I N C L U D E D I N F I N A N C I A L GROUP 2013 2012

FIXED ASSETS
Financial investments classified as fixed assets
PARENT COMPANY Carrying amount Available-for-sale financial assets
No. of Unlisted securities 23 22
Name of company, Ownership partici-
Corp. Reg. No., Registered office share, %1) pations2) 2013 2012 Investments held to maturity
Fastighets AB Strömstaden, Interest-bearing securities 109 136
556051-7202, Norrköping 32 2 2 2 Total 131 158
Oraser AB,
556293-2722, Stockholm 50 1 6 6 Short-term investments classified as current assets
PULS Planerad Underhålls Service AB, Financial assets at fair value through profit or loss
556379-1259, Malmö 50 15 8 8 Interest-bearing securities 21 83
Stora Ursvik KB, 969679-3172, Investments held to maturity
Stockholm 50 48 144 138
Interest-bearing securities 122 84
Tipton Brown AB,
Total 143 168
556615-8159, Stockholm 33 125 15 15
Other 9(10) 1 1
Investments held to maturity had an established interest rate ranging from 1.6 (1.7)
Total 175 169
percent to 4.0 (5.8) percent, and had due dates ranging from 1 year (3 months) to 3
1) The ownership share corresponds to the proportion of votes for the total number of shares.
years (3).
2) Number of shares in thousands.
During the year, financial fixed assets were impaired by SEK 0 M (0).

N ot e 2 2 FI N A N C I A L FI X E D A S S E T S

Participations Receivables,
Participations Receivables, in associated associated Other Other
in Group Group companies and companies and long-term long-term
PARENT COMPANY, 2013 companies companies joint ventures joint ventures securities receivables Total
Recognized acquisition value on January 1 14,762 10 467 192 11 193 15,634
Assets added 273 6 279
Assets removed –269 –7 –52 –328
Recognized acquisition value on December 31 14,766 10 473 185 11 141 15,586

Accumulated write-ups on January 1 268 268

Accumulated write-ups on December 31 268 268

Accumulated impairment losses on January 1 –9,108 –297 –1 –6 –2 –9,414

Assets removed 268 268
Impairment losses for the year –81 –81
Accumulated impairment losses on December 31 –8,922 –297 –1 –6 –2 –9,228
Residual value on December 31 6,112 10 175 184 5 139 6,624

Participations Receivables,
Participations Receivables, in associated associated Other Other
in Group Group companies and companies and long-term long-term
PARENT COMPANY, 2012 companies companies joint ventures joint ventures securities receivables Total
Recognized acquisition value on January 1 14,926 145 450 190 11 314 16,036
Assets added 146 17 2 165
Assets removed –310 –135 –121 –566
Recognized acquisition value on December 31 14,762 10 467 192 11 193 15,634

Accumulated write-ups on January 1 268 268

Accumulated write-ups on December 31 268 268

Accumulated impairment losses on January 1 –9,345 –297 –1 –6 –2 –9,651

Assets removed 308 308
Impairment losses for the year –70 –70
Accumulated impairment losses on December 31 –9,108 –297 –1 –6 –2 –9,414
Residual value on December 31 5,922 10 169 191 5 191 6,487
 F i n a nc i a l r e p o r t N C C 2 013 79

N ot e 23  LO N G -T E R M R E C E I VA B L ES A N D OT H E R N ote 24  TA X O N N E T P RO FI T F O R T H E Y E A R,

R E C E I VA B L ES D E FE R R E D TA X A S S E T S A N D D E FE R R E D
TA X L I A B I L I T I ES
Group 2013 2012
Long-term receivables classified as fixed assets Group Parent Company
Receivables from associated companies and joint ventures 92 113 2013 2012 2013 2012
Receivables from sold property and housing projects 17 Tax on net profit for the year
Derivative instruments held for hedging purposes 23 Current tax cost –364 –397 –192 –174
Other long-term receivables 114 116 Deferred tax cost/revenue –47 29 –48 –115
Long-term receivables classified as fixed assets 247 230 Total recognized tax on net
profit for the year –411 –367 –240 –289
Other receivables classified as current assets
Receivables from associated companies and joint ventures 41 24
Receivables from divested property and housing projects 139 442
Advance payments to suppliers 6 7
Derivative instruments held for hedging purposes 87 37
Other current receivables 659 713
Other receivables classified as current assets 932 1,223

Note 24 Tax on net profit for the year, deferred tax assets and deferred tax liabilities, cont’d.
Group Parent Company
2013 2012 2013 2012
Effective tax Tax, % Profit Tax, % Profit Tax, % Profit Tax, % Profit
Pretax profit 2,400 2,277 2,395 1,510
Tax according to company’s current tax rate –22% –528 –26% –599 –22% –527 –26% –397
Effect of other tax rates for non-Swedish
companies –1% –33 –2
Changed tax rates in Denmark, Finland and
Norway for 2014 and in Sweden for 2013 –1% –15 5% 120 –2% –25
Other non-tax-deductible costs –2% –36 –1% –25 –1% –23 –2% –25
Non-taxable revenues 7% 148 5% 119 12% 288 20% 156
Tax effect resulting from utilization of non-
capitalized tax loss carryforwards –1 1% 21
Tax effect resulting from non-capitalized tax
loss carryforwards 2% 36
Tax attributable to prior years 1% 20 –1 1% 22 2
Other –1
Recognized tax –17% –411 –16% –367 –10% –240 –19% –289

Current tax has been calculated based on the nominal tax prevailing in the country concerned. Insofar as the tax rate for future years has been changed, the new rate is used
for calculating deferred tax.

C H A N G E I N D E F E R R E D TA X I N T E M P O R A RY D I F F E R E N C ES
TA X I T E M S R E CO G N I Z E D D I R E C T LY I N OT H E R CO M P R E H E N S I V E I N CO M E A N D TA X LO S S C A R RY F O RWA R D S
Group Group Parent Company
2013 2012 2013 2012 2013 2012
Current tax in hedging instruments 4 –10 Opening carrying amount –51 –54 131 246
Effect of deferred tax from the changed tax rate in Acquisition of subsidiaries –1
Sweden in 2013 –3 Recognized tax on net profit for
Deferred tax on cash flow hedging –4 6 the year –32 29 –48 –90
Deferred tax attributable to the revaluation of Changed tax rates in Denmark,
defined-benefit pension plans –41 –27 Finland and Norway for 2014
Total –41 –35 and in Sweden for 2013 –15 –25
Tax items recognized in other
comprehensive income –45 –24
Translation differences –7
Other –14
Closing carrying amount –165 –51 83 131
8 0 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 24 TA X O N N E T P RO FI T F O R T H E Y E A R, D E FE R R E D TA X A S S E T S A N D D E FE R R E D TA X L I A B I L I T I ES, CO N T’ D.

Assets Liabilities Net

GROUP 2013 2012 2013 2012 2013 2012
Tangible fixed assets –14 –6 –14 –6
Financial fixed assets 33 40 33 40
Non-completed projects –511 –512 –511 –512
Properties held for future development –53 –37 –53 –37
Untaxed reserves –174 –255 –174 –255
Provisions 126 257 126 257
Personnel benefits/pension provisions 34 10 34 10
Tax loss carryforwards 304 246 304 246
Other 104 205 –12 92 205
Deferred tax asset/deferred tax liability 600 758 –764 –810 –165 –51
Offsetting –351 –373 351 373
Net deferred tax asset/tax liability 249 385 –414 –436 –165 –51

Assets Liabilities Net

Parent CompanY 2013 2012 2013 2012 2013 2012
Provisions 77 126 77 126
Personnel benefits/pension provisions 6 5 6 5
Net deferred tax asset/tax liability 83 131 83 131

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 is this the case for the participations owned by NCC companies in other countries.
Within the Group, there are also non-capitalized tax loss carryforwards corresponding to SEK 0.2 billion (0.3). These mainly derive from operations conducted outside
Sweden, primarily in Germany. During the year, it was adjudged possible to capitalize a portion of previously non-capitalized loss carryforwards.

N ot e 25 P RO P E RT I ES C L A S S ifi E D A S C U R R E N T A S S E T S

Properties
held for
Properties future
held for Ongoing Completed Total develop- Housing Completed Total
future property property property ment, projects in housing housing
GROUP, 2013 development projects projects projects2) housing production projects projects3) Total
Recognized acquisition value on January 1 2,231 2,675 495 5,401 7,119 4,183 990 12,292 17,694
Investments 328 3,111 195 3,634 1,288 6,531 83 7,902 11,536
Increase through acquisitions 270 270 270
Divestment and scrappage –159 –3,166 –504 –3,829 –441 –5,444 –1,045 –6,930 –10,759
Decrease through company divestments –232 –232 –232
Reclassifications –139 –640 865 86 –1,411 63 1,256 –92 –7
Translation differences during the year 14 15 14 43 –37 –18 1 –54 –11
Recognized acquisition value on December 31 2,276 1,996 1,065 5,337 6,556 5,315 1,286 13,157 18,494

Accumulated impairment losses on January 1 –48 –33 –81 –401 –3 –150 –554 –635
Divestment and scrappage 43 5 48 48
Reclassifications 16 –9 7 7
Translation differences during the year –1 –1 –2 –7 –3 –10 –12
Impairment losses during the year1) –2 –2 –21 –2 –23 –25
Accumulated impairment losses on December 31 –51 –34 –85 –370 –12 –150 –532 –617

Residual value on January 1 2,183 2,675 462 5,321 6,718 4,180 840 11,738 17,059
Residual value on December 31 2,224 1,996 1,031 5,251 6,186 5,303 1,136 12,625 17,876
1) Impairment losses are included in “Production costs” in the income statement.
2) Pertains to properties classified as current assets recognized in NCC Property Development.
3) Pertains mainly to properties classified as current assets recognized in NCC Housing.
 F i n a nc i a l r e p o r t N C C 2 013 81

N ot e 25  P RO P E RT I ES C L A S S ifi E D A S C U R R E N T A S S E T S, CO N T’ D.
Properties
Properties held for
held for future
future Ongoing Completed Total develop- Housing Completed Total
develop- property property property ment, projects in housing housing
GROUP, 2012 ment projects projects projects2) housing production projects projects3) Total
Recognized acquisition value on January 1 2,365 1,622 529 4,516 6,164 3,752 523 10,439 14,955
Investments 498 2,287 12 2,797 2,402 6,252 288 8,942 11,739
Increase through acquisitions 45 45 45
Divestment and scrappage –125 –768 –842 –1,735 –400 –5,761 –698 –6,859 –8,593
Decrease through company divestments –200 –200 –200
Reclassifications –473 –430 814 –89 –804 –2 895 89
Translation differences during the year –35 –35 –18 –88 –89 –58 –17 –164 –252
Recognized acquisition value on December 31 2,231 2,675 495 5,401 7,119 4,183 990 12,292 17,694

Accumulated impairment losses on January 1 –41 –41 –430 –3 –146 –579 –620
Divestment and scrappage 1 1 2 2
Reclassifications 18 18 18
Translation differences during the year 1 1 10 3 13 15
Impairment losses during the year1) –8 –33 –41 –9 –9 –50
Accumulated impairment losses on December 31 –48 –33 –81 –401 –3 –150 –554 –635

Residual value on January 1 2,325 1,622 529 4,475 5,734 3,748 377 9,860 14,335
Residual value on December 31 2,183 2,675 462 5,321 6,718 4,180 840 11,738 17,059
1) Impairment losses are included in “Production costs” in the income statement.
2)  ertains to properties classified as current assets recognized in NCC Property Development.
P
Pertains mainly to properties classifed as current assets recognized in NCC Housing.
3) 

2013 2012
Participa-
Properties tions in Properties
held for Completed tenant- Total held for Completed Total
future devel- housing owner housing future devel- housing housing
PARENT COMPANY opment projects associations projects opment projects projects
Recognized acquisition value on January 1 119 214 333 125 66 191
Investments 11 281 161 453 5 232 237
Divestment and scrappage –29 –237 –266 –11 –83 –94
Recognized acquisition value on December 31 101 258 161 520 119 214 333

Accumulated impairment losses on January 1 –9 –9 –18 –10 –1 –11

Divestment and scrappage 3 3 1 1
Impairment losses during the year1) –9 –9
Accumulated impairment losses on December 31 –9 –6 –15 –9 –9 –18

Residual value on January 1 110 205 315 115 65 180

Residual value on December 31 92 252 161 505 110 205 315
1) Impairment losses are included in “Production costs” in the income statement.
82 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 26 M AT E R I A L S A N D I N V E N TO R I ES N ote 28 S H A R E C A P I TA L , CO N T’ D.

Group Parent Company Number of

2013 2012 2013 2012 Holding of Series B shares shares
Stone materials 376 402 2000 Repurchases 2,775,289
Building materials 152 116 52 35 2001 Repurchases 699,300
Other 146 136 2002 Repurchases 2,560,800
Total 673 655 52 35 2003 Repurchases 3
2005 Sales –4,840,998
2006 Sales –843,005

N ote 27 CO N S T R U C T I O N CO N T R AC T S
2007 Sales –330,251
2011 Sales –21,138
Worked - up, non - invoiced revenues 2012 Repurchases 415,500
GROUP 2013 2012 2013 Repurchases 177,000
Worked-up revenues from ongoing contracts 16,040 10,134 2013 End of year 592,500
Invoicing for ongoing contracts –15,123 –9,352
Total 918 782 The share capital is divided into 108,435,822 shares with a quotient value of SEK 8
each. During the year, 2,425,764 Series A shares (999,939) were converted to Series
I N VO I C E D R E V E N U ES, N OT WO R K E D U P B shares.
GROUP 2013 2012
The shares are distributed as follows by class:
Invoicing for ongoing contracts 33,658 23,292
Series A Series B Total
Worked-up revenues from ongoing contracts –29,394 –19,051
Number 27,708,122 80,727,700 108,435,822
Total 4,264 4,241

Series A shares carry ten voting rights each and Series B shares carry one voting right.
Worked-up revenues from ongoing projects including recognized gains less recog-
A specification of changes in shareholders’ equity is presented on p. 56. The Board
nized loss reserves amounted to SEK 45,434 M (29,185).
of Directors proposes an ordinary dividend of SEK 12.00 per share, making a total of
Advanced payments received amounted to SEK 2,932 M (1,749).
SEK 1,294,864 to be distributed in two payments of SEK 6.00 each.
Amounts withheld by the customer amounted to SEK 749 M (818).

S eries A and B shares

Total Series A
N ote 28 S H A R E C A P I TA L Series A Series B and Series B
No. of shares on Dec. 31, 1999 63,111,682 45,324,140 108,435,822
Number of Share capital,
Changes in share capital shares SEK M Conversion of Series A to Series B
shares during 2000–2012 –32,977,796 32,977,796
1988 Start of year 6,720,000 672
Share repurchased during 2000–
Split, 1:4 20,160,000 2012 –6,450,892 –6,450,892
Directed placement in connection Sale of treasury shares
with the acquisition of ABV 16,259,454 407 during 2005–2011 6,035,392 6,035,392
1991 Conversions of debentures 1,449,111 36 No. of shares on Dec. 31, 2012 30,133,886 77,886,436 108,020,322
1993 Conversions of debentures 468,928 11
Directed placements in connection with Conversion of Series A to Series B
purchase of minority-held NK shares 1,838,437 46 shares during 2013 –2,425,764 2,425,764
1994 New issue 19,841,991 496 Repurchase of shares in 2013 –177,000 –177,000
Conversions of debentures 13,394,804 335 No. of shares on Dec. 31, 2013 27,708,122 80,135,200 107,843,322
Directed placements, in connection Number of voting rights 277,081,220 80,135,200 357,216,420
1997 with the acquisition of Siab 28,303,097 708
Percentage of voting rights 78 22 100
2004 Reduction of share capital1) –1,844
Percentage of share capital 26 74 100
2013 End of year 108,435,822 867
Closing price Dec. 31, 2013 209.50 209.90
1) The quotient value was changed from SEK 25.00 to SEK 8.00.
Market capitalization, SEK M 5,805 16,820 22,625
 F i n a nc i a l r e p o r t N C C 2 013 8 3

N ot e 29 I N T E R ES T - B E A R I N G L I A B I L I T I ES N ote 3 0 OT H E R P ROV I S I O N S, CO N T’ D.

GROUP 2013 2012 GROUP, 2012 Guarantees Other Total

Long-term liabilities On January 1 1,916 706 2,622
Liabilities to credit institutions and investors1) 5,690 5,393 Provisions during the year 351 203 554
Financial lease liabilities 179 256 Amount utilized during the year –494 –149 –643
Liabilities to Swedish tenant-owner associations and Finnish Reversed, unutilized provisions –34 –40 –74
housing companies 745 994 Reclassifications –1 –1
Liabilities to associated companies 85 80 Translation differences –17 –7 –24
Other long-term loans 330 379 On December 31 1,722 713 2,435
Total 7,029 7,102

Current liabilities Parent Company, 2013 Guarantees Other Total

Current portion of liabilities to On January 1 846 28 874

credit institutions and investors 1,095 691 Provisions during the year 29 28 56
Leasing pertaining to Swedish tenant-owner Amount utilized during the year –244 –244
associations and Finnish housing companies 1,291 1,425 On December 31 631 56 686
Liabilities to associated companies 30 23
Other current liabilities 99 2 PARENT COMPANY, 2012 Guarantees Other Total
Total 2,515 2,141 On January 1 1,060 59 1,119
Total interest-bearing liabilities 9,544 9,242 Provisions during the year –149 5 –144
1) Including reloaning of SEK 1,500 M (1,500) from the NCC Group’s Pension Foundation. Amount utilized during the year –65 –36 –101
On December 31 846 28 874
For repayment schedules and terms and conditions, refer to Note 39 “Financial
instruments and financial risk management”. S P E C I F I C AT I O N O F OT H E R P R OV I S I O N S A N D G UA R A N T E ES
Interest-bearing long-term liabilities pertaining to pensions are recognized in the
Group Parent Company
balance sheet under “Provisions for pensions and similar obligations”.
2013 2012 2013 2012
FINANCIAL LEASING Restoration reserve 144 163
For information on payment schedules for financial leasing liabilities, also see Development risk 2
Note 35 Leasing. Other 391 548 56 28
Other provisions 535 713 56 28
PARENT COMPANY 2013 2012 Guarantee commitments 1,536 1,722 631 846
Long-term liabilities Total 2,071 2,435 686 874
Reloaning from the NCC Group’s Pension Foundation 1,500 1,500
Total 1,500 1,500 G uarantee commitments
Guarantee provisions pertain to anticipated future costs. To estimate a future guaran-
Current liabilities tee cost, individual assessments are made from project to project. Standard percent-
Group companies 4,161 3,027 age rates are used for the calculation of the size of the future cost, whereby the stan-
Other current liabilities 1 2 dard percentage is varied depending on the nature of the project. In order to elimi-
Total 4,162 3,030 nate various risks, a provision for guarantee claims is posted at the rate at which the
Total interest-bearing liabilities 5,662 4,530 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 booked
gradually for each project. The longest maturity for a guarantee provision is ten
For repayment schedules and terms and conditions, refer to Note 39 Financial
years, while most of them have maturities of approximately two to three years.
instruments and financial risk management.
R ES TO R AT I O N R ES E RV E
The restoration reserve is attributable to NCC Roads. The provisions are intended to
N ot e 3 0 OT H E R P ROV I S I O N S cover future costs for restoring pits and quarries used to mine stone materials and
stone. The provisions are posted continuously, once the future costs have been iden-
GROUP, 2013 Guarantees Other Total tified. Accordingly, the reserves are utilized at the same rate as restoration occurs.
On January 1 1,722 713 2,435
Provisions during the year 367 158 525 D E V E LO PM E N T R I S K
Reclassification 1 –1 Pertains to the risk faced by the developer in connection with sold property projects.
Amount utilized during the year –511 –308 –819
Other
Reversed, unutilized provisions –56 –28 –84
The provisions comprise additional costs plus uncertainty in projects as well as out-
Reclassifications –1 –1
standing disputes and legal matters. Part of the provisions is intended to cover losses
Translation differences 13 3 14 that arise in operations and is utilized gradually as the project is worked up. The Nor-
On December 31 1,535 535 2,071 wegian Competition Authority has investigated the suspected transgressions of com-
petition legislation. The suspicions pertain to price collusion in the asphalt industry
between Kolo Veidekke and NCC Roads AS in two areas during the years 2005–2008.
NCC’s internal investigation confirmed the suspicions in respect of breaches of com-
petition legislation in the Trondheim area during the period in question. In March
2013, the Norwegian Competition Authority announced its verdict on the matter,
whereby the fine in question was set at approximately NOK 140 M (approx.
SEK 150 M). NCC, which considers the fee excessive in view of prevailing legal prac-
tice and the circumstances of the matter, requested leave to appeal the Competition
Authority’s decision in Oslo District Court. The District Court issued its verdict on
February 19, 2014, according to which the competition-impeding fee was reduced
from NOK 140 M to NOK 40 M (SEK 43 M). This verdict can be appealed.
8 4 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 31 PENSIONS
D E F I N E D - B E N E F I T O B L I GAT I O N S A N D
T H E VA L U E O F P L A N A S S E T S
The NCC Group has defined-benefit pension plans in Sweden and Norway. In Sweden, GROUP 2013 2012
NCC’s pension commitment comprises largely the ITP plan that covers employees Obligations secured in full or in part in funds:
born prior to 1979. The plan provides retirement pension based on the final salary and Present value of defined-benefit obligations 4,314 5,097
is funded in NCC Group’s Pension Foundation. The number of paid-up holders and
Fair value of plan assets 4,380 4,901
­pensioners is about 70 percent of the total portfolio. In addition, there are five small
Net value of obligations funded in full or in part –66 195
defined-benefit plans, of which a few are blocked from new earnings. Four of these
plans are funded in NCC Group’s Pension Foundation and the fifth is insured in a life Special payroll tax/employer contributions 189 187
insurance company. Net amount in balance sheet (obligation +, asset –) 123 383
The Board of Directors of NCC Group Pension Foundation consists of an equal
Net amount is recognized in the following balance-
number of representatives for the NCC Group and employees covered by the ITP
sheet items
plan. The Board holds meetings four times per year and addresses the Foundation’s
Provisions for pensions and similar obligations 123 383
quarterly accounts, investment strategy, reference portfolio and sensitivity analyses.
Under certain conditions, the NCC Group can request compensation from the Foun- Net amount in balance sheet (obligation +, asset –) 123 383
dation for pension payments. For information on the pension terms for senior execu-
Net amount is distributed among plans in the following
tives, see Note 5. countries:
Sweden 111 280
The risks associated with the Swedish pension plans are:
• Interest-rate risks; the debt will decrease if the interest level increases and thus Norway 13 103
discount rates rise. Net amount in balance sheet (obligation +, asset –) 123 383
• Salary increase risk; the debt will increase with higher salary increases.
• Volatility of assets; the portfolio contains mostly share funds, which can rise and C H A N G E I N O B L I GAT I O N F O R D E F I N E D B E N E F I T P L A N S
fall sharply in the short term, but the long-term aim of the portfolio is to generate GROUP 2013 2012
the best possible return.
Obligation for defined benefit plans on January 1 5,097 4,748
• Useful life assumption; the longer the individuals covered by the plan live, the
Benefits paid –142 –147
higher the commitment.
Current service cost plus interest expense 279 381
In Norway, the commitment comprises two small pension systems pertaining to sup- Curtailments –3
plementary pensions that are not funded and with no new earnings. Since the plans Settlements –932
are small, with no new earnings capacity, the risks in these plans are significantly Actuarial gains and losses on changed
smaller than described above. In 2013, defined-benefit plans were redeemed in Nor- demographic obligations 61 95
way and were replaced by defined-contribution plans. This had a positive impact of Actuarial gains and losses on changed
SEK 75 M on profit for 2013. financial obligations 1 7
Exchange-rate differences –50 15
P E N S I O N CO S T Obligation for defined benefit plans on December 31 4,314 5,097
GROUP 2013 2012
Defined-benefit plans: Weighted average maturity for the plans is 27.2 years.
Current service cost 208 211
Interest expense 147 168 CHANGE IN PL AN ASSETS
Estimated return on plan assets –140 –179 GROUP 2013 2012
Losses (+) or gains (–) on reductions and payments -75 1 Fair value of plan assets on January 1 4,901 4,610
Total cost of defined-benefit plans 140 201 Contribution by employer 21 141
Total cost of defined-contribution plans 562 553 Benefits paid –8 –26
Payroll taxes and yield tax 81 83 Compensation –33
Total cost of post-employment remuneration 783 837 Estimated return 140 184
Settlements –857
Current service cost is recognized in the operating profit and the interest-rate com- Actuarial gains and losses 267 –21
ponent, together with the anticipated return on plan assets, is recognized in net Exchange-rate differences –50 14
financial items. Fair value of plan assets on December 31 4,380 4,901
NCC secures commitments for disability pensions and family pensions for white-
collar employees in Sweden through insurance in Alecta. According to a statement The plan assets comprise:
from the Swedish Financial reporting Board, UFR 3, Classification of ITP plans Swedish stock market, listed 630 465
financed through insurance in Alecta, this constitutes a defined-benefit plan that cov- International stock market, listed 932 1,061
ers several employers. For the 2013 fiscal year, NCC did not have access to the type of
Hedge funds, listed 514 347
information required for reporting its proportional share of the plan’s commitment,
Properties 152
plan assets and costs, which makes it impossible to report these plans as defined-­
benefit plans. Accordingly, the ITP (individual supplementary pension) plans that are Interest-bearing securities, listed 804 1,356
secured through insurance in Alecta are reported as a defined-contribution plan. The Interest-bearing securities, unlisted 1,500 1,500
NCC Group’s share of the total savings premium for ITP2 in Alecta is 0.18 percent. Other 20
The collective solvency rate consists of the market value of Alecta’s assets as a per- Fair value of plan assets on December 31 4,380 4,901
centage of its insurance obligations, calculated in accordance with Alecta’s actuarial
accounting methods and assumptions, which do not comply with IAS 19. The collec-
There is no effect from the lowest funding requirements or asset ceiling.
tive solvency rate is normally allowed to vary between 125 and 155 percent. If Alecta’s
collective solvency rate falls below 125 percent or exceeds 155 percent, measures
must be taken to create conditions for returning the solvency rate to the normal inter-
val. In the event of low solvency, one measure can be to raise the agreed price for new
subscriptions and increase existing benefits. In the event of high solvency, one mea-
sure can be to introduce premium reductions. At the end of 2013, Alecta’s surplus in
the form of its collective solvency rate amounted to 148 percent (129).
 F i n a nc i a l r e p o r t N C C 2 013 8 5

N ot e 31 P E N S I O N S, CO N T’ D.
N E T P E N S I O N O B L I GAT I O N
PARENT COMPANY 2013 2012
AC T UA R I A L A S S U M P T I O N S, W E I G H T E D AV E R AG E VA L U E, % Capital value of pension obligations pertaining to
GROUP 2013 2012 proprietary pension on December 31 3,025 2,908
Discount interest rates, % 4.0 3.2 Fair value of especially detached assets on December 31 3,807 3,464
Future salary increases, % 3.0 3.0 Surplus on especially detached assets 784 558
Anticipated inflation, % 1.5 1.6 Net recognized pension obligation 2 2
Useful life assumption at 65 years, years 23.4 20.3
A S S U M P T I O N S F O R D E F I N E D - B E N E F I T O B L I GAT I O N S

S E N S I T I V I T Y A N A LYS I S, P E R C E N TAG E I M PAC T O N T H E S I Z E O F T H E PARENT COMPANY 2013 2012

­A S S U M P T I O N AT D E C E M B E R 31, 2 013 Discount interest rate on December 31 3.84 3.84
GROUP Increase, % Decrease, %
Discount interest rate, 0.5-percentage point change –7.5 +8.5 The pension calculations are also based on salary and pension levels on the balance-
Future salary increases, 0.5-percentage point change +3.4 –3.0 sheet date.
Anticipated inflation, 0.5-percentage point change +6.4 –5.8
Useful life assumption at 65 years, 1-year change +2.9 –2.8 N ote 32 OT H E R L I A B I L I T I ES

GROUP 2013 2012

The above sensitivity analysis does not constitute a forecast from the company but
Other long-term liabilities
only a mathematical calculation.
The sensitivity analysis is based on a change in an assumption, while all other Liabilities to associated companies 5 15
assumptions remain constant. In practice, it is not probable that this will occur and Derivative instruments held for hedging purposes 51 63
any changes in the assumptions could be correlated. When calculating the sensitivity Liabilities, property acquisitions 185 363
analysis, the same method is used as in the calculation of the pension liability in the Other long-term liabilities 59 401
balance sheet. Total 299 841
The Group’s estimates that approximately SEK 19 M will be paid in 2014 to funded
and unfunded defined-benefit plans. Other current liabilities
Advances from customers 2,932 1,749
P E N S I O N CO S T S
Liabilities to associated companies 2
PARENT COMPANY 2013 2012 Derivative instruments held for hedging purposes 35 41
Proprietary pension payments Liabilities, property acquisitions 930 789
Proprietary costs, excluding interest expense 204 205 Other current liabilities 1,460 1,367
Interest expense 52 33 Total 5,360 3,945
Cost of proprietary pension payments 256 239

Pension payments through insurance

Insurance premiums 153 147 N ote 33  WO R K I N P RO G R ES S O N A N OT H E R
Subtotal 409 386 PA RT Y ’S ACCO U N T A N D N E T S A L ES

Special payroll tax on pension costs 61 66 PARENT COMPANY 2013 2012

Pension costs during the year 470 452 Invoicing excluding withheld amount 19,143 21,662
Withheld amount 237 256
C A P I TA L VA L U E O F P E N S I O N O B L I GAT I O N S Total invoicing 19,380 21,918
PARENT COMPANY 2013 2012
Costs incurred excluding reserve for losses –17,867 –19,943
Capital value of pension obligations pertaining to
Reserve for losses 96 73
proprietary pension payments on January 1 2,908 2,786
Total costs incurred –17,771 –19,870
Cost, excluding interest expense, charged against profit 204 205
Total work in progress on another party’s account 1,609 2,048
Interest expense 53 33
Pension payments –140 –116 Profit-recognized invoicing
Capital value of pension obligations pertaining Invoicing during the year 20,819 24,429
to proprietary pension on December 31 3,025 2,908
Invoiced but not recognized as profit on January 1 21,918 23,251
Less: Invoiced but not recognized as profit on December 31 –19,380 –21,918
FA I R VA L U E O F ES P E C I A L LY D E TAC H E D A S S E T S
Total revenues 23,357 25,763
PARENT COMPANY 2013 2012
Fair value of especially detached assets on January 1 3,464 3,273
Return on especially detached assets 373 174
Payment to/from pension foundations –30 17
N ote 34  ACC R U E D E X P E N S ES A N D P R E PA I D I N CO M E
Fair value of especially detached assets on January 1 3,807 3,464 Group Parent Company
2013 2012 2013 2012
Fair value of especially detached assets
Payroll-related costs 2,110 2,014 930 940
Shares 1,252 1,616
Financial expenses 36 44
Funds 411 276
Prepaid rental revenues 10 5 1 1
Interest-bearing receivables 2,144 1,572
Prepaid revenues from rental
Fair value of especially detached assets on January 1 3,807 3,464
guarantees 219 59
Project-related costs 1,195 1,424 365 510
The NCC Group’s Pension Foundation has an interest-bearing receivable of
Administrative costs 64 21 5 1
SEK 1,500 M (1,500) from NCC AB.
Operating and sales costs 176 131
Otherwise, the pension foundations have no financial instruments issued by the
company or assets used by the company. Other expenses 77 50 19 21
Total 3,888 3,748 1,321 1,473
8 6 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 35 LEASING N ote 36 T R A N S AC T I O N S W I T H R E L AT E D CO M PA N I ES

In Finland, Norway and Denmark, framework agreements have been concluded for The main companies that are closely related to NCC are the Nordstjernan Group,
the operational leasing of cars and light goods vehicles, including relating adminis- companies in the Axel Johnson Group and associated companies and joint ventures.
trative services. The agreements are based on variable interest rates. A separate The Parent Company has a close relationship with its subsidiaries; refer to
agreement is required for the acquisition of leased objects and the extension of leas- Note 17, Participations in Group companies. For information on NCC’s senior execu-
ing agreements. tives, refer to Note 5, Personnel expenses and remuneration of senior executives.
In Sweden, NCC signed framework agreements for the financial leasing of cars and Transactions involving NCC’s associated companies and joint ventures were of a
light goods vehicles. The agreements are based on variable interest rates. NCC recom- production nature. The transactions were conducted on normal market terms.
mends purchasers and leasing agreements for individual vehicles can be extended.
Within NCC Roads and Construction Norway, there are framework agreements for GROUP 2013 2012
the operational leasing of production equipment. The agreements are based on vari- Transactions with associated companies and joint
able interest rates and pertain to Sweden, Norway, Denmark and Finland. ­ventures
In 2006, a sale-leaseback agreement was signed with the German finance group Sales to associated companies and joint ventures 120 77
HSH Nordbank and its associated company AGV pertaining to properties in the Son-
Purchases from associated companies and joint ventures 64 64
nengarten area of Berlin. At the same time, an 18-year lease was signed, which is rec-
Dividend from associated companies 1 2
ognized as an operational lease.
Long-term receivables from associated companies and joint
ventures 92 113
GROUP 2013 2012
Current receivables from associated companies
Financial lessee and joint ventures 60 31
Leasing contracts that expire: Interest-bearing liabilities to associated companies
Within one year 38 42 and joint ventures 115 103
Later than one year but earlier than five years 241 218 Current liabilities to associated companies
and joint ventures 12 21
Future minimum leasing fees Guarantees and guarantee obligation to associated compa-
Within one year 99 75 nies and joint ventures 21 147
Later than one year but earlier than five years 181 190
Transactions with the Nordstjernan Group
Present value of future leasing fees Sales to the Nordstjernan Group 2 9
Within one year 96 72 Purchases from the Nordstjernan Group 593 663
Later than one year but earlier than five years 178 187 Current receivables from the Nordstjernan Group 4
Current liabilities to the Nordstjernan Group 52 103
Reconciliation of future leasing fees and their present value
Future minimum leasing fees 280 265 Transactions with the Axel Johnson Group
Less interest charge –6 –7 Purchases from the Axel Johnson Group 5 3
Present value of future leasing fees 274 258 Current receivables from the Axel Johnson Group 2

Variable fees included in net profit for the year:

PARENT COMPANY 2013 2012
Interest on leased machinery and equipment 6 7
Transactions with Group companies
Total 6 7
Sales to Group companies 2,862 1,910
Purchases from Group companies 1,057 1,044
O P E R AT I N G L E A S ES
Interest income from Group companies 116 168
Group Parent Company
Interest expense to Group companies 121 112
2013 2012 2013 2012
Dividend from Group companies 1,389 955
Operational lessor
Long-term receivables from Group companies 10 10
Future minimum leasing fees
– lessor (leased premises) Current receivables from Group companies 10,339 9,069
Distributed by maturity period: Interest-bearing liabilities to Group companies 4,161 3,027
Within one year 4 13 Current liabilities to Group companies 1,574 1,314
Later than one year but earlier Guarantees and guarantee obligation for Group companies 20,818 17,651
than five years 15 6
Transactions with associated companies
Later than five years 3 and joint ventures

Operational lessee Sales to associated companies and joint ventures 14 23

Future minimum leasing fees – Purchases from associated companies and joint ventures 46 52
lessee Dividend from associated companies and joint ventures 5 11
Leasing contracts that expire: Long-term receivables from associated companies
Within one year 285 445 1 2 and joint ventures 184 191
Later than one year but earlier Current receivables from associated companies
than five years 580 626 1 and joint ventures 9 6
Later than five years 427 389 Current liabilities to associated companies
and joint ventures 6 6
The year’s cost for operational
leasing amounts to 548 483 2 2 Guarantees and guarantee obligation to associated compa-
nies and joint ventures 8 30

Transactions with the Nordstjernan Group

Sales to the Nordstjernan Group 1 6
Purchases from the Nordstjernan Group 394 481
Current receivables from the Nordstjernan Group 4
Current liabilities to the Nordstjernan Group 40 98

Transactions with the Axel Johnson Group

Purchases from the Axel Johnson Group 1 1
Current receivables from the Axel Johnson Group 2
 F i n a nc i a l r e p o r t N C C 2 013 87

N ot e 37  P L E D G E D A S S E T S, guarantees A N D N ote 38 C A S H FLOW S TAT E M E N T, CO N T’ D.

­G UA R A N T E E O B L I GAT I O N S
The short-term investments have been classified as cash and cash equivalents based
Group Parent Compant on the following considerations:
2013 2012 2013 2012 • They are subject to an insignificant risk of value fluctuation.
Pledged assets • They can easily be converted into cash funds.
For own liabilities: • They have a maturity of not more than three months from the date of acquisition.
Property mortgages 1,095 1,001
Acq uisition of subsidiaries and non - controlling interests
Chattel mortgages 6 6
According to the acquisition analyses, the value of acquired assets and liabilities was
Assets subject to liens, etc. 279 260 as follows:
Restricted bank deposits 30 47 12
Total 1,410 1,314 12 Group 2013 2012
Goodwill 230
Other pledged assets
Intangible fixed assets 10
Other 72 31
Tangible fixed assets 29
Total 72 31
Inventories 1
Total assets pledged 1,482 1,344 12
Accounts receivable and other current receivables 214
Guarantees and guarantee Cash and cash equivalents 220
obligations
Long-term liabilities –12
Own contingent liabilities: Accounts payable and other current liabilities –374
Guarantees on behalf of Group Non-controlling interests 8
companies 20,818 17,651
Deferred tax liability –1
Deposits and concession fees 2,081 1,182 2,081 1,182
Purchase considerations 8 318
Other guarantees and contingent
liabilities 112 90 112 90 Acquired cash and cash equivalents –220
Impact on the Group’s cash and cash equivalents 8 98
Held jointly with other
­companies:
S A L E O F S U B S I D I A R I ES
Liabilities in consortiums,
partnerships and GROUP 2013 2012
limited partnerships 68 176 6 109 Buildings and land 192
Total guarantees and Properties classified as current asset 4
­guarantee obligations 2,261 1,446 23,017 19,032
Long-term liabilities –189
Accounts payable and other current liabilities –5
A S S E T S S U B J E C T TO L I E N S
Capital gains 1
Pertains to leased equipment in the form of vehicles and light trucks
Purchase considerations 4
G UA R A N T E ES O N B E H A L F O F G R O U P CO M PA N I ES Impact on the Group’s cash and cash equivalents 4
Sureties on behalf of Group companies have mainly been issued as collateral for
• utilized guarantee limits with banks and insurance companies ACQuisition of fixe D assets
• NCC Treasury AB’s borrowing and Group
• fulfillment of construction-contract agreements. Acquisitions of intangible and tangible fixed assets during the year amounted to
SEK 923 M (917), of which SEK 0 M (0) was financed through loans.
D E P O S I T S A N D CO N C ES S I O N FE ES Acquisition of subsidiaries and non-controlling interests totaled SEK 8 M (318),
Deposit guarantees constitute collateral for investments and concession fees paid to of which SEK 0 M (220) had no effect on cash flow. Sales of subsidiaries and non-­
tenant-owner associations formed by NCC. Such guarantees shall be relinquished as controlling interests amounted to SEK 0 M (3), of which SEK 0 M (0) had no effect
soon as one year has passed after the final acquisition cost for the tenant-owner associ- on cash flow.
ation’s building has been established.
Parent Company
B U I L D I N G LOA N S Acquisitions of intangible and tangible fixed assets during the year amounted to
The guarantee provided by NCC AB as collateral for a building loan raised by a prop- SEK 88 M (59), of which SEK 0 M (0) was financed through loans.
erty-owning project company applies until these are redeemed at divestment accord- Since the Parent Company has only insignificant amounts of cash and cash equiva-
ing to the agreed sales by the each property-owning project company. For jointly lents in foreign currency, no exchange-rate differences in cash and cash equivalents
owned companies, NCC’s share is specified. arose during the year.

I N F O R M AT I O N A B O U T I N T E R ES T PA I D
N ot e 38 C A S H FLOW S TAT E M E N T Group
Interest received during the year amounted to SEK 71 M (60). Interest paid during
C ash and cash e q uivalents the year amounted to SEK 383 M (297).
GROUP 2013 2012
Cash and bank balances 2,775 1,398 Parent Company
Interest received during the year amounted to SEK 115 M (188). Interest paid during
Short-term investments 773 1,236
the year amounted to SEK 242 M (232).
Total according to balance sheet
and cash flow statement 3,548 2,634
C A S H F LOW AT T R I B U TA B L E TO J O I N T V E N T U R ES CO N S O L I DAT E D
ACCO R D I N G TO T H E P R O P O R T I O N A L M E T H O D
PARENT COMPANY 2013 2012 GROUP 2013 2012
Cash and bank balances 705 1,259 Operating activities 49 28
Short-term investments 7,100 5,725 Change in working capital –77 14
Total according to cash flow statement 7,805 6,984 Investing activities –21 –9
Financing activities 13 24
Total cash flow –36 57
8 8 N C C 2 013 F i n a nc i a l r e p o r t

N ote 38 C A S H FLOW S TAT E M E N T, CO N T’ D. N ote 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L

R I S K M A N AG E M E N T, CO N T’ D.
C A S H A N D C A S H E Q U I VA L E N T S U N AVA I L A B L E F O R U S E
GROUP 2013 2012 ­Swedish tenant-­owners’ associations, as well as pension obligations according to IAS
Restricted bank funds 30 47 19, the capital is tied up for 36 months (40).
Cash and cash equivalents in joint ventures 120 160
M AT U R I T Y S T R U C T U R E, T I E D - U P C A P I TA L , 2 013 1)
Total cash and cash equivalents unavailable for use 150 207
Interest-bearing
liabilities
T R A N S AC T I O N S T H AT H A D N O E F FE C T O N PAYM E N T S
Matures Amount Proportion, %
GROUP 2013 2012 2014 2,515 26
Acquisition of assets through financial leasing 132 108 2015 1,990 21
2016 1,751 18
2017 745 8
N ote 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L 20182) 2,265 24
R I S K M A N AG E M E N T 2019 108 1
2020– 170 2
finance policy ( principles for risk management )
Total 9,544 100
Through its business operations, the Group is exposed to financial risks, defined as
refinancing, liquidity, interest-rate, exchange-rate, credit, counterparty risks and
1) Excluding pension obligations according to IAS 19.
2) Of which, reloaning from the NCC Group’s Pension Foundation accounted for
guarantee capacity risks. NCC’s finance policy for managing financial risks has been
SEK 1,500 M.
decided by NCC’s Board of Directors and constitutes a framework of guidelines and
rules in the form of risk mandates and limits for finance activities.
NCC has established the following investor-related market-financing programs:
Within the NCC Group’s decentralized organization, finance activities are central-
ized to NCC Corporate Finance in order to monitor the Group’s overall financial risk
M ARKET FINANCING PROGR A MS
positions, to achieve cost-effectiveness and economies of scale and to accumulate
expertise, while protecting Group-wide interests. Within NCC, risks associated with Utilized
Nom. value
the Group’s interest and exchange rates, credit, refinancing, counterparty and liquid- Limit SEK M
ity are managed by NCC’s internal bank, NCC Treasury AB. Customer-credit risks
Commercial paper (CP) program in Finland 300 MEUR
are handled within each business area.
Commercial paper (CP) program in Sweden 4,000 MSEK 200
CO N T R AC T UA L CO N D I T I O N S Medium Term Note (MTN) in Sweden1) 5,000 MSEK 4,340
NCC is subject to a covenant in the form of the debt/equity ratio that is associated Total 4,540
with the syndicated credit facility of EUR 325 M that was concluded with a group of 1) Of which a nominal of SEK 3,050 M listed on NASDAQ OMX Stockholm.
banks and had a remaining term to maturity of about three years. NCC satisfies the
financial covenants Of NCC’s total interest-bearing liability, excluding pension obligations according to
IAS 19, investor-related loans accounted for 48 percent (41).
REFINANCING RISK
The refinancing risk is defined as the risk that NCC will not be able to obtain financ- LIQ U I D IT Y RISKS
ing at a given time or that creditors will have difficulty in fulfilling their commit- To achieve adequate flexibility and cost-effectiveness, while ensuring that future
ments. NCC strives to spread its risk among various sources of financing (market- financing requirements are satisfied, the Group’s payment capacity consists essen-
financing programs, bank loans and other loan structures) in order to secure the tially of committed lines of credit. NCC’s finance policy states that the Group’s pay-
Group’s long-term access to borrowed capital. ment capacity must correspond to at least 7 percent of annual consolidated sales, with
NCC’s policy for its refinancing risk is to ensure that the borrowing portfolio has a at least 5 percent of this in the form of unutilized committed lines of credit.
maturity structure that minimizes the Group’s exposure from the perspective of the Payment capacity is defined as the Group’s cash and cash equivalents, short-term
re­financing risk. The maturity periods must be well-diversified over time. The norm investments and unutilized committed lines of credit, less market-financing programs
concerning distribution is that the weighted average remaining maturity must be at with a remaining maturity of less than three months. On December 31, the volume of
least 18 months. At December 31, the tied-up capital was 32 months (35) in terms of unutilized committed lines of credit amounted to SEK 3,869 M (3,807), with a remaining
total interest-bearing liabilities less pension obligations according to IAS 19. Financ- average maturity of 2.8 years (3.6). Available cash and cash equivalents are invested in
ing of SEK 2,036 M (2,420) pertaining to construction conducted by Finnish housing banks or in interest-bearing instruments with good credit ratings and a liquid second-
companies and Swedish tenant-owners’ associations is linked to each particular ary market. At year-end, the Group’s cash and cash equivalents, including short-term
housing development project and the capital tied up, 18 months (21), in financing investments amounted to SEK 3,691 M (2,802). Payment capacity on December 31,
reflects this relationship. Excluding loans in Finnish housing companies and 2013 corresponded to 13 percent (11) of sales.

The table below shows the Group’s financial liabilities (including interest payments) and net settled derivative instruments classed as financial liabilities. For financial instru-
ments ­carrying variable interest rates, the interest rate pertaining on the balance-sheet date has been used. Amounts in foreign currency have been translated to SEK based
on the exchange rate applying on the balance-sheet date. The amounts in the tables are the contractual undiscounted cash flows.

A N A LYS I S O F M AT U R I T I ES ( A M O U N T S I N C L U D I N G I N T E R ES T )1)
2013 2012
<3 3 months 1–3 3–5 > <3 3 months 1–3 3–5 >
Total months –1 year years years 5 years Total months –1 year years years 5 years
Reloaning from the NCC Group’s Pension
Foundation 1,793 59 64 1,670 1,823 65 129 1,629
Interest-bearing liabilities 6,183 195 1,091 3,248 1,525 124 5,677 383 475 2,312 2,086 421
Interest-bearing liabilities in Finnish
housing companies and Swedish
housing companies2) 2,109 285 1,046 600 6 172 2,509 131 1,343 828 6 201
Financial lease liabilities 289 2 103 138 46 278 1 4 168 105
Interest-rate swaps 99 1 25 56 17 75 2 15 32 26
Accounts payable 4,096 4,096 4,659 4,659
Total 14,569 4,579 2,324 4,106 3,264 296 15,021 5,176 1,902 3,469 3,852 622
1) Excluding pension obligations according to IAS 19.
2) The due date for interest-bearing liabilities in unsold completed projects in Finnish housing companies is defined as the due date for the long-term loan agreements. However, the loans

will be redeemed in pace with sales of the housing units.

 F i n a nc i a l r e p o r t N C C 2 013 89

N ot e 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L R I S K M A N AG E M E N T, CO N T’ D.

The table below shows the Group’s gross settled derivatives. The amounts in the table are the contractual undiscounted cash flows.

A N A LYS I S O F M AT U R I T I ES ( A M O U N T S I N C L U D I N G I N T E R ES T )
2013 2012
<3 3 months 1–3 3–5 > <3 3 months 1–3 3–5 >
Total months –1 year years years 5 years Total months –1 year years years 5 years
Currency forward contracts and cross-cur-
rency swaps
– outflow –11,199 –9,857 –959 –158 –225 –8,025 –6,952 –864 –125 –84
– inflow 11,216 9,904 944 141 227 7,981 6,965 825 113 78
Net flow from derivatives settled gross 17 47 –15 –17 2 –44 13 –39 –12 –6

I N T E R ES T - R AT E R I S KS E XC H A N G E - R AT E R I S K S
The interest-rate risk is the risk that changes in market rates will adversely affect The exchange-rate risk is the risk that changes in exchange rates will adversely
NCC’s cash flow or the fair value of financial assets and liabilities. NCC’s main financ- affect the consolidated income statement, balance sheet or cash flow statement. In
ing sources are shareholders’ equity, cash flow from operating activities and borrow- accordance with the finance policy, transaction exposure must be eliminated as soon
ing. Interest-bearing borrowing exposes the Group to an interest-rate risk. NCC’s as it becomes known. Contracted and probable forecast flows are hedged, mainly by
finance policy for the interest-rate risk is that the weighted average remaining matu- using currency forward contracts. Contracted net exposure in each currency is
rity of the borrowing portfolio1) when exposure is reduced by the maturity for cash hedged at a rate of 100 percent. Forecast net exposure is hedged successively over
and cash equivalents2) should normally be 12 months subject to a mandate to deviate time, which entails that the quarters that are closest in time are hedged to a greater
from this figure by +/– 6 months, and that the interest-rate maturity structure of the extent than the following quarters. Accordingly, each quarter is hedged on several
borrowing portfolio should be adequately spread over time. If the interest-rate terms occasions and is covered by several hedged contracts that have been entered into at
of available borrowing vehicles are not compatible with the desired structure for the different times. The target is to hedge 90 percent of the forecast for the current quar-
loan portfolio, interest-rate swaps are the main instruments used to adapt the struc- ter and 70 percent of the forecast for the following quarter, followed by 50, 30 and 10
ture. In the financial statements, hedge accounting is applied when there is an effec- percent, respectively, in the following quarters. In the financial statements, hedge
tive connection between the hedged loan and interest-rate swaps. accounting is applied when the requirements for hedge accounting are fulfilled.
The average interest-rate maturity of the corporate borrowing portfolio1) reduced Exposure to financial flows, such as loans and investments, is mainly hedged using
by interest-rate exposure associated with cash and cash equivalents2) was 14 months currency derivatives. The main rule of NCC’s finance policy is that the Group’s trans-
(13), including interest-rate swaps linked to the borrowing portfolio. Cash and cash lation exposure should not be hedged.
equivalents2) amounted to SEK 3,623 M (2,751) and the average interest-rate matu- Development operations, such as NCC Property Development and NCC Housing,
rity for these assets was 1 month (1). are exempt from this rule and, for these operations, currency hedging is permissi-
At the end of 2013, NCC’s interest-bearing gross debt excluding pension obliga- ble. In those cases where hedging occurs, not more than 90 percent of foreign net
tions according to IAS 19 amounted to SEK 9,544 M (9,243) and the average interest- assets may be hedged, without taking the tax effect into account. The President and
rate maturity was 11 months (10). Excluding loans in Finnish tenant-owner housing CEO may decide on the hedging of foreign net assets in selected companies in
companies and Swedish tenant-owners’ associations, as well as the pension obliga- excess of the above limits.
tions according to IAS 19, the gross liability amounted to SEK 7,508 M (6,823) and External and internal borrowing in the NCC Group occurs primarily through the
the average interest-rate maturity was 14 months(13), including interest-rate swaps central treasury unit and is then transferred to the business areas and subsidiaries in
linked to the borrowing portfolio. the form of internal loans. Lending is denominated in local currency, while external
On December 31, 2013, NCC had interest-rate swaps linked to the borrowing port- financing largely occurs in SEK and EUR. Parts of the Group’s loans and liquidity are
folio with a nominal value of SEK 1,800 M (1,100). Other interest-rate swaps, converted through currency derivatives into the currencies of the Group’s assets.
intended for the hedging of the interest-rate risk in a leasing contract, had a nominal The following tables illustrate NCC’s financing and the currency swap agreements
value of SEK 312 M (301). At the same date, the interest-rate swaps (linked to the for financing. The stated values include underlying capital amounts.
borrowing portfolio) had a negative fair value of SEK 26 M (neg: 20) net, comprising
assets of SEK 0 M (0) and liabilities of SEK 26 M (20). The other interest-rate swaps I N T E R ES T - B E A R I N G L I A B I L I T I ES 2 013 1)
had a negative fair value of SEK 36 M (neg: 47) net, comprising liabilities of Counter-value in SEK M Amount Proportion, %
SEK 36 M (47). The interest-rate swaps linked to the borrowing portfolio have expi- EUR 2,011 21
ration dates ranging from 0.7 (0.2) to 4.7 years(4.3). The other interest-rate swaps
LVL 22
have expiration dates of 3.5 years(4.5).
NOK 454 5
1) Corporate borrowing portfolio: Interest-bearing liabilities excluding the Finnish tenant- SEK 7,057 74
owner housing companies and Swedish tenant-owners’ associations, as well as exclud- Total 9,544 100
ing the pension obligations according to IAS 19, including interest-rate swaps linked to
the b
­ orrowing portfolio. 1) Excluding pension obligations according to IAS 19.
2) Cash and cash equivalents and short-term investments excluding cash and cash

­equivalents in Swedish tenant-owners’ associations. F I N A N C I N G V I A C U R R E N C Y D E R I VAT I V ES 1) 2 013

Counter-value in SEK M
Sell DKK –3,294
M AT U R I T Y S T R U C T U R E, I N T E R ES T T E R M , 2 013 1)
Sell EUR –920
Interest-bearing
liabilities, incl. Sell LVL –225
interest-rate swaps Sell NOK –2,739
Matures Amount Proportion, % Sell RUB –741
2014 7,387 77 Net –7,919
2015 1) Currency swaps and cross-currency swaps.
2016 1,000 10
2017 550 6
2018 544 6
2019
2020– 63 1
Total 9,544 100
1) Excluding pension obligations according to IAS 19.
9 0 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L R I S K M A N AG E M E N T, cont ’ d.
T R A N S AC T I O N E X P O S U R E During 2013, no cash-flow hedges were closed, because it was no longer probable
The table below shows the Group’s net outflows of various currencies, and the that the expected cash flow would be achieved.
hedged portion, during the year. Transaction exposure was hedged through currency forward contracts. The forward
Counter- contracts used to hedge contracted and forecast transactions are classified as cash flow
value in SEK M 2013 2012 hedges. The fair value of currency forward contracts used for hedging transaction expo-
Of Of sure amounted to net income of SEK 7 M (expense: 2). Of this amount, assets of
Net which, Hedged Net which, Hedged SEK 9 M (3) and liabilities of SEK 2 M (5) have been recognized in the balance sheet.
Currency outflow hedged portion,% outflow hedged portion,%
EUR 902 733 81 633 474 75
Other 142 88 62 98 27 28
Total 1,044 821 79 731 501 69

The table below shows forecast currency flows during 2014–2015, the outstanding hedge position at year-end and the hedged portion.

Counter-
value in
SEK M Q1,2014 Q2,2014 Q3,2014 Q4,2014 Q1,2015– Total
Net Hedge Hedged Net Hedge Hedged Net Hedge Hedged Net Hedge Hedged Net Hedge Hedged Net Hedge Hedged
Currency outflow position portion,% outflow position portion,% outflow position portion,% outflow position portion,% outflow position portion,% outflow position portion,%
EUR 114 103 90 134 93 69 117 59 50 108 32 30 98 9 9 571 296 52
Target
value % 90 70 50 30 10 50

The outstanding hedge position (nominal volume) at year-end in terms of contracted net currency flows had a value of SEK 117 M (182), of which SEK 66 M (21) will fall due
within three months.

T ranslation exposure
The table below shows the Group’s hedged net investments in NCC Property Development and NCC Housing, and hedging positions per currency, plus the hedged portion
both with and without taking tax effects into account.

Counter-value in SEK M 2013 2012

Hedge Hedged Hedge Hedge Hedge Hedged Hedge Hedge
Net position portion position position Net position portion position position
Currency investment before tax before tax% after tax after tax % investment before tax before tax% after tax after tax %
DKK 502 445 89 347 69 365 301 82 222 61
EUR 1,099 939 85 732 67 1,041 834 80 615 59
NOK 258 219 85 171 66 170 192 113 142 84
RUB 12
LVL 44 41 91 32 71 49 47 96 35 71
Total 1,915 1,644 86 1,282 67 1,625 1,374 85 1,014 62

Net assets are hedged through the raising of loans and through currency forward NCC’s exposure to credit risks associated with accounts receivable is monitored
contracts. The carrying amount of loans and currency forward contracts (including ­continuously within the Group. On the balance-sheet date, there was no significant
underlying capital amounts) used as hedging instruments at December 31, was concentration of credit-risk exposure. The maximum exposure to credit risk is appar-
SEK 1,644 M (1,374), of which SEK 534 M (517) for loans and SEK 1,110 M (857) for ent from the carrying amount in the balance sheet.
currency forward contracts. Hedge accounting is applied when the criteria for hedge
accounting are met. An exchange-rate loss of SEK 18 M (gain: 37) before tax was rec- AG E A N A LYS I S O F ACCO U N T S R E C E I VA B L E I N C L U D I N G
ognized in other comprehensive income. For more information on hedge accounting, R E C E I VA B L ES F O R D I V ES T E D P R O P E R T Y P R O J E C T S
refer to Note 1 Accounting policies, Hedging of net investments. 2013 2012
The hedges fulfill effectiveness requirements, meaning that all changes resulting Provision Provision
from changed exchange rates are recognized in other comprehensive income. for doubtful for doubtful
Gross receivables Gross receivables
CRED IT RISKS Not due accounts receivable 6,204 6,590
Credit and counterparty risks in financial operations Past-due accounts receivable
NCC’s investment regulations for financial credit risks are revised continuously and 1–30 days 691 801
characterized by caution. Transactions are only entered into with creditworthy coun- Past-due accounts receivable
terparties with credit ratings of at least A (Standard & Poor’s) or the equivalent inter- 31–60 days 190 1 95 1
national rating. ISDA’s (International Swaps and Derivatives Association) framework
Past-due accounts receivable
agreement on netting is used with all counterparties with respect to derivative trad- 61–180 days 230 20 218 24
ing. The investment regulations specify maximum credit exposures and maturities
Past-due accounts receivable
for various counterparties. > 180 days 398 158 678 189
Total counterparty exposure with respect to derivative trading, calculated as the net
Total 7,712 180 8,381 214
receivable per counterparty, amounted to SEK 191 M (105) at the end of 2013. The net
receivable per counterparty is calculated in accordance with the market valuation method
(FFFS 2007:1). Calculated gross exposure to counterparty risks pertaining to cash and Collateral for accounts receivable was received in an amount of SEK 0 M (12).
cash equivalents and short-term investments amounted to SEK 3,691 M (2,802).
P rovision for doubtful receivables

Credit risks in accounts receivable 2013 2012

The risk that the Group’s customers will not fulfill their obligations, meaning that On January 1 214 236
­payment is not received from the customers, is a credit risk. The credit rating of the Provision for the year 77 69
Group’s customers is checked, whereby information on the customers’ financial Reversal of previously posted impairment losses –110 –77
­position is obtained from various credit information companies. For major accounts
Translation differences –2 –12
receivable, the risk of credit losses is limited through various types of collateral, such
On December 31 180 214
as bank guarantees, blocks on building loans, Parent Company guarantees and other
payment guarantees.
 F i n a nc i a l r e p o r t N C C 2 013 91

N ot e 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L R I S K M A N AG E M E N T, cont ’ d.
C A R RY I N G A M O U N T A N D FA I R VA L U E O F F I N A N C I A L I N S T R U M E N T S For financial instruments recognized at amortized cost (accounts receivables, other
The carrying amount and the fair value of financial instruments are presented in the receivables and cash and cash equivalents, accounts payable and other interest-free
following table. In NCC’s balance sheet, mainly short-term investments held for resale ­liabilities) the fair value is deemed to agree with the carrying amount. For long-term
and derivatives are measured at fair value. Short-term investments are valued accord- holdings of securities and short-term investments held to maturity, the fair value is
ing to prices quoted on a well-functioning secondary market for the same instruments. based on the price listed in a well-functioning secondary market. For short and long-
Fair-value measurement for currency-forward contracts and cross-currency swaps term bond loans listed on NASDAQ OMX Stockholm, the fair value was calculated
is based on published forward rates in an active market. The measurement of interest- according to prices listed in a well-functioning secondary market. The fair value for
rate swaps is based on forward interest rates based on observable yield curves. The unlisted long-term bonds and long-term liabilities to credit institutions was calculated
discount has no significant impact on the measurement of derivatives. by discounting future cash flows with current market rates for similar financial instru-
ments. It has been deemed that the fair value of other long-term and short-term
interest-­bearing liabilities did not materially deviate from the carrying amount.

C L A S S I F I C AT I O N O F F I N A N C I A L I N S T R U M E N T S
Financial Financial
assets liabilities
measured at measured at
fair value Derivatives Accounts Investments Available-for- fair value Total
through profit used in hedge and loan held to sale financial through profit Other carrying Total fair
GROUP, 2013 and loss 1) accounting receivables maturity assets and loss1) liabilities amount value
Other long-term holdings of securities 108 23 131 134
Long-term receivables 23 145 168 168
Accounts receivable 7,377 7,377 7,377
Prepaid expenses and
accrued income –2 1 –1 –1
Other receivables 72 14 254 340 340
Short-term investments 21 122 143 143
Cash and cash equivalents 3,548 3,548 3,548
Total assets 114 14 11,325 230 23 11,706 11,709

Long-term interest-bearing liabilities2) 7,029 7,029 7,140

Other long-term liabilities 47 4 248 299 299
Provisions for pensions and similar
obligations 125 125 125
Current interest-bearing liabilities 2,515 2,515 2,517
Accounts payable 4,096 4,096 4,096
Accrued expenses and
deferred income 9 1 36 46 46
Other current liabilities 11 23 932 966 966
Total liabilities 67 28 14,981 15,076 15,189

Financial Financial
assets liabilities
measured at measured at
fair value Derivatives Accounts Investments Available-for- fair value Total
through profit used in hedge and loan held to sale financial through profit Other carrying Total fair
GROUP, 2012 and loss 1) accounting receivables maturity assets and loss1) liabilities amount value
Other long-term holdings of securities 136 22 158 164
Long-term receivables 143 143 143
Accounts receivable 7,725 7,725 7,725
Prepaid expenses and
accrued income 1 1 1
Other receivables 26 11 566 603 603
Short-term investments 84 84 168 168
Cash and cash equivalents 2,634 2,634 2,634
Total assets 110 11 11,069 220 22 11,432 11,438

Long-term interest-bearing liabilities2) 7,102 7,102 7,121

Other long-term liabilities 59 4 778 841 841
Provisions for pensions and
similar obligations 393 393 393
Current interest-bearing liabilities 2,141 2,141 2,141
Accounts payable 4,659 4,659 4,659
Accrued expenses and
deferred income 5 1 38 44 44
Other current liabilities 5 36 789 830 830
Total liabilities 69 41 15,900 16,010 16,029
1) Held for resale.
2) Reloaning of SEK 1,500 M (1,500) from NCC’s Pension Foundation is included.
9 2 N C C 2 013 F i n a nc i a l r e p o r t

N ot e 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L R I S K M A N AG E M E N T, CO N T’ D.
Derivatives used in Accounts and Available-for-sale Other Total carrying Total
PARENT COMPANY, 2013 hedge accounting loan receivables financial assets liabilities amount fair value
Receivables from associated companies 184 184 184
Other long-term holdings of securities 5 5 5
Other long-term receivables 24 24 24
Accounts receivable 2,666 2,666 2,666
Current receivables from Group companies 3 2,560 2,563 2,563
Current receivables from associated companies 9 9 9
Other current receivables 67 67 67
Short-term investments 7,100 7,100 7,100
Cash and bank balances 705 705 705
Total assets 3 13,315 5 13,323 13,323

Long-term liabilities to credit institutions1) 1,500 1,500 1,500

Long-term liabilities to Group companies 1,061 1,061 1,061
Other long-term liabilities 9 9 9
Accounts payable 1,756 1,756 1,756
Current liabilities to Group companies 10 4,664 4,674 4,674
Current liabilities to associated companies 6 6 6
Other current liabilities 1 1 1
Total liabilities 10 8,997 9,007 9,007

Derivatives used in Accounts and Available-for-sale Other Total carrying Total

PARENT COMPANY, 2012 hedge accounting loan receivables financial assets liabilities amount fair value
Receivables from associated companies 191 191 191
Other long-term holdings of securities 5 5 5
Other long-term receivables 28 28 28
Accounts receivable 3,267 3,267 3,267
Current receivables from Group companies 9 2,187 2,196 2,196
Current receivables from associated companies 6 6 6
Other current receivables 95 95 95
Short-term investments 5,725 5,725 5,725
Cash and bank balances 1,259 1,259 1,259
Total assets 9 12,758 5 12,772 12,772

Long-term liabilities to credit institutions1) 1,500 1,500 1,500

Long-term liabilities to Group companies 1,105 1,105 1,105
Other long-term liabilities 96 96 96
Accounts payable 1,991 1,991 1,991
Current liabilities to Group companies 3,237 3,237 3,237
Current liabilities to associated companies 6 6 6
Other current liabilities 2 2 2
Total liabilities 7,936 7,936 7,936
1) Reloaning of SEK 1,500 M (1,500) from NCC’s Pension Foundation is included.

The classification categories Financial assets measured at fair value through profit and loss, Investments held to maturity and Financial liabilities measured at fair value
through profit and loss are not applicable for the Parent Company. No financial assets and liabilities were reclassified among the above categories during the year.
 F i n a nc i a l r e p o r t N C C 2 013 9 3

N ot e 39  FI N A N C I A L I N S T R U M E N T S A N D FI N A N C I A L R I S K M A N AG E M E N T, CO N T’ D.
In the tables below, disclosures are made concerning how fair value was determined for the financial instruments that are continuously measured at fair value and the finan-
cial instruments not recognized at fair value in NCC’s balance sheet. When determining fair value, assets were divided into the following 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.

Level 2: on the basis of directly or indirectly observable market data that is not included in Level 1.

Level 3: on the basis of input data that is not observable in the market (which is not applicable for NCC).

2013 2012
GROUP Level 1 Level 2 Total Level 1 Level 2 Total
Financial assets measured at fair value
Financial assets at fair value through profit or loss
– Derivative instruments held for trading 93 93 26 26
– Securities held for trading 21 21 84 84
Derivative instruments used for hedging purposes 14 14 11 11
Available-for-sale financial assets 23 23 22 22
Financial assets not recognized at fair value
Investments held to maturity 234 234 226 226
Total assets 255 130 385 310 59 369
Financial liabilities measured at fair value
Financial liabilities measured at fair value through profit and loss
– Derivative instruments held for trading 28 28 41 41
Derivative instruments used for hedging purposes 67 67 69 69
Financial liabilities not recognized at fair value
Other liabilities (interest-bearing liabilities) 3,116 6,541 9,657 1,868 7,394 9,262
Total liabilities 3,116 6,636 9,752 1,868 7,504 9,372

2013 2012
PARENT COMPANY Level 1 Level 2 Total Level 1 Level 2 Total
Financial assets measured at fair value
Derivative instruments used for hedging purposes 3 3 9 9
Total assets 0 3 3 0 9 9

Financial liabilities measured at fair value

Derivative instruments used for hedging purposes 10 10
Total liabilities 0 10 10 0 0 0

O F FS E T T I N G F I N A N C I A L I N S T R U M E N T S
NCC has binding netting arrangements (ISDA agreements) with all counterparties for
N ote 4 0 INFOR M ATION ABOUT THE PARENT COM PANY
derivative trading, whereby NCC can offset receivables and liabilities should a counter- NCC AB, Corporation Registration Number 556034-5174, is a limited liability com-
party become insolvent or in another event. The following table sets out the gross pany registered in Sweden, with its Head Office in Solna. NCC AB’s shares are listed
financial assets and liabilities recognized and the amounts available for offsetting. on the Stockholm Exchange (NASDAQ OMX Exchange Stockholm/Large Cap List).

2013 2012 The address to the Head Office is:

Financial Financial Financial Financial NCC AB
GROUP assets liabilities assets liabilities Vallgatan 3
Recognized gross amount 107 95 37 110 SE-170 80 Solna, Sweden
Amount included in an offset
agreement –61 –61 –17 –17 The consolidated financial statements for 2013 relate to the Parent Company and its
Net amount after subsidiaries, jointly designated the Group. The Group also includes shareholdings in
offset agreement 46 34 20 93 associated companies and joint ventures.
NCC AB is consolidated as a subsidiary in Nordstjernan AB’s consolidated finan-
cial statements. Nordstjernan AB accounts for 21.6 percent of the share capital and
The Parent Company’s derivatives pertain to holdings in the Group’s internal bank,
65.0 percent of the voting rights in NCC AB. Nordstjernan AB, Corporate Registra-
NCC Treasury AB, which are offsettable.
tion Number 556000-1421, has its registered Head Office in Stockholm

2013 2012

PARENT COMPANY
Financial
assets
Financial
liabilities
Financial
assets
Financial
liabilities N ote 41 E V E N T S A F T E R B A L A N C E S H E E T DAT E
Recognized gross amount 3 10 9 On February 19, 2014, Oslo District Court announced its verdict on the competition
Amounts possible for case, entailing a reduction of the competition-infringement fee ordered by the Nor-
offsetting –3 –3 wegian Competition Authority for infringement of competition law in the Trondheim
Net amount 0 7 9 0 area. The District Court reduced the fee from NOK 140 M (approx. SEK 150 M) to
NOK 40 M (SEK 43 M).
On March 12, 2014, Jacob Blom took office as Senior Vice President Human
Resources and simultaneously became a member of NCC’s Group Management.
94 N C C 2 013 F i n a nc i a l r e p o r t

Proposed distribution of unappropriated earnings

The Board of Directors proposes

that the funds available for distribution 6,390,932,328
by the Annual General Meeting be appropriated as follows:
Ordinary dividend to shareholders of SEK 12.00 per share 1,294,119,864
To be carried forward 5,096,812,464
Total, SEK 6,390,932,328
The total amount of the proposed dividend is calculated on the basis of the number of outstanding shares on March 7, 2014.

The Board of Directors and President hereby give their assurance that the Annual Report and the consolidated
financial statements have been compiled in compliance with the European Parliament’s and Council of Europe’s
Regulation (EC) No. 1606/2002 dated July 19, 2002 regarding the application of international accounting standards
and with generally acceptable accounting practices and thus provide a fair and accurate impression of the financial
position and earnings of the Group and the Parent Company. The Reports of the Board of Directors for both the
Group and the Parent Company accurately review the Group’s and the Parent Company’s operations, financial posi-
tions and earnings and describe the significant risks and uncertainties facing the Parent Company and the compa-
nies included in the Group.

The Annual Report and the consolidated financial statements were approved for issue by the Board of Directors on
March 7, 2014. 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 on April 2, 2014 for adoption.

Solna, March 7, 2014

Tomas Billing Antonia Ax:son Johnson Olof Johansson

Chairman of the Board Member of the Board Member of the Board

Sven-Olof Johansson Ulla Litzén Christoph Vitzthum

Member of the Board Member of the Board Member of the Board

Karl-Johan Andersson Lars Bergqvist Karl G Sivertsson

Member of the Board Member of the Board Member of the Board
Employee representative Employee representative Employee representative

Peter Wågström
President and CEO

Our audit report was submitted on March 7, 2014

PricewaterhouseCoopers AB

Håkan Malmström
Authorized Public Accountant
 F i n a nc i a l r e p o r t N C C 2 013 95

Auditors’ Report
To the Annual General Meeting of NCC AB, Corp. Reg. No. 556034-5174

R E P O R T O N T H E A N N UA L ACCO U N T S ended in accordance with the Annual Accounts Act. The consolidated
A N D CO N S O L I DAT E D ACCO U N T S accounts have been prepared in accordance with the Annual Accounts
We have audited the annual accounts and consolidated accounts of Act and present fairly, in all material respects, the financial position of
NCC AB for the year 2013. The company’s annual accounts and con- the Group as of December 31, 2013 and of its financial performance and
solidated accounts are included in the printed version of this docu- cash flows in accordance with International Financial Reporting Stan-
ment on pp 42–94. dards, as adopted by the EU, and the Annual Accounts Act. The Report
of the Board of Directors is consistent with the other parts of the annual
Responsibilities of the Board of Directors and the President for the accounts and consolidated accounts.
annual accounts and consolidated accounts We therefore recommend that the annual meeting of shareholders
The Board of Directors and the President are responsible for the adopt the income statement and balance sheet for the Parent Com-
preparation and fair presentation of these annual accounts and consol- pany and the Group.
idated accounts in accordance with International Financial Reporting
Standards , as adopted by the EU, and the Annual Accounts Act, and R E P O R T O N OT H E R L E GA L A N D R E G U L ATO RY R E Q U I R E M E N T S
for such internal control as the Board of Directors and the President In addition to our audit of the annual accounts and consolidated
determine is necessary to enable the preparation of annual accounts accounts, we have examined the proposed appropriations of the com-
and consolidated accounts that are free from material misstatement, pany’s profit or loss and the administration of the Board of Directors
whether due to fraud or error. and the President of NCC AB for the year 2013.

Auditor’s responsibility Responsibilities of the Board of Directors and the President

Our responsibility is to express an opinion on these annual accounts The Board of Directors is responsible for the proposal for appropria-
and consolidated accounts based on our audit. We conducted our audit tions of the company’s profit or loss, and the Board of Directors and the
in accordance with International Standards on Auditing and generally President are responsible for administration under the Companies Act.
accepted auditing standards in Sweden. Those standards require that
we comply with ethical requirements and plan and perform the audit to Auditor’s responsibility
obtain reasonable assurance about whether the annual accounts and Our responsibility is to express an opinion with reasonable assurance
consolidated accounts are free from material misstatement. on the proposed appropriations of the company’s profit or loss and on
An audit involves performing procedures to obtain audit evidence the administration based on our audit. We conducted the audit in
about the amounts and disclosures in the annual accounts and consol- accordance with generally accepted auditing standards in Sweden.
idated accounts. The procedures selected depend on the auditor’s As a basis for our opinion on the Board of Directors’ proposed
judgment, including the assessment of the risks of material misstate- appropriations of the company’s profit or loss, we examined the Board
ment of the annual accounts and consolidated accounts, whether due of Directors’ reasoned statement and a selection of supporting evi-
to fraud or error. In making those risk assessments, the auditor con- dence in order to be able to assess whether the proposal is in accor-
siders internal control relevant to the company’s preparation and fair dance with the Companies Act.
presentation of the annual accounts and consolidated accounts in As a basis for our opinion concerning discharge from liability, in
order to design audit procedures that are appropriate in the circum- addition to our audit of the annual accounts and consolidated accounts,
stances, but not for the purpose of expressing an opinion on the effec- we examined significant decisions, actions taken and circumstances of
tiveness of the company’s internal control. An audit also includes the company in order to determine whether any member of the Board
evaluating the appropriateness of accounting policies used and the of Directors or the President is liable to the company. We also exam-
reasonableness of accounting estimates made by the Board of Direc- ined whether any member of the Board of Directors or the President
tors and the President, as well as evaluating the overall presentation has, in any other way, acted in contravention of the Companies Act, the
of the annual accounts and consolidated accounts. Annual Accounts Act or the Articles of Association.
We believe that the audit evidence we have obtained is sufficient and We believe that the audit evidence we have obtained is sufficient
appropriate to provide a basis for our audit opinion. and appropriate to provide a basis for our audit opinion.

Opinions Opinions
In our opinion, the annual accounts have been prepared in accordance We recommend to the annual meeting of shareholders that the profit
with the Annual Accounts Act and present fairly, in all material respects, be appropriated in accordance with the proposal in the statutory
the financial position of the Parent Company as of December 31, 2013 administration report and that the members of the Board of Directors
and of its financial performance and its cash flows for the year then and the President be discharged from liability for the financial year.

Stockholm, March 7, 2014

PricewaterhouseCoopers AB

Håkan Malmström
Authorized Public Accountant
96 N C C 2 013 F i n a nc i a l r e p o r t

Multi-year review
IFRS IFRIC 15 IAS 19
INCOME STATEMENT, SEK M 2004 2004 2005 2006 2007 2008 2009 2009 2010 2011 2012 2012 2013
Net sales 45,437 46,534 49,506 55,876 58,397 57,465 51,817 56,005 49,420 52,535 57,227 57,227 57,823
Production costs –41,809 –42,749 –45,158 –50,729 –52,572 –52,005 –46,544 –50,263 –44,487 –47,721 –51,724 –51,731 –52,027
Gross profit 3,628 3,785 4,347 5,147 5,825 5,460 5,273 5,742 4,933 4,814 5,503 5,495 5,796

Selling and administrative expenses –2,523 –2,577 –2,677 –2,795 –3,059 –3,197 –3,035 –3,035 –2,682 –2,774 –2,978 –2,988 –3,130
Result from property management 29 45 17 –5
Result from sales of managed properties 51 –60 92 9
Result from sales of owner-occupied prop-
erties 6 6 19 22 19 15 10 10 2 7 3 3 6
Impairment losses on fixed assets –138 –149 –94 –22 –245 –76 –7 –7 –2 –38 –2 –2 7
Impairment losses/reversal of
impairment losses on properties, NCC
Property Development1) –69
Result from sales of Group companies 73 64 –5 7 415 8 5 5 3 6 6
Competition-infringement fee –175 –95 –95
Result from participations in associated
companies 60 33 49 29 11 9 –1 –1 4 5 5 5 1
Operating profit 1,117 1,147 1,748 2,392 2,790 2,219 2,150 2,619 2,254 2,017 2,537 2,519 2,679

Financial income 148 209 116 116 131 615 70 78 99 76 141 141 165
Financial expense –310 –412 –284 –245 –313 –449 –526 –592 –345 –284 –415 –382 –444
Net financial items –162 –203 –168 –129 –182 166 –456 –514 –246 –208 –274 –241 –279

Profit after financial items 955 945 1,580 2,263 2,608 2,385 1,694 2,105 2,008 1,808 2,263 2,277 2,400

Tax on profit for the period –96 –68 –393 –555 –357 –565 –432 –449 –481 –496 –364 –367 –411
Profit for the period 859 876 1,187 1,708 2,252 1,820 1,262 1,656 1,527 1,312 1,899 1,910 1,989

Attributable to:
NCC’s shareholders 856 873 1,178 1,706 2,247 1,809 1,261 1,654 1,524 1,310 1,894 1,905 1,986
Non-controlling interests 3 3 9 1 4 11 1 1 4 2 5 5 3
Profit for the period 859 876 1,187 1,708 2,252 1,820 1,262 1,656 1,527 1,312 1,899 1,910 1,989
1) As of 2004, impairment losses/reversal of impairment losses on properties in NCC Property Development are reported as production costs.

2004: Properties were sold for nearly SEK 5 billion and net indebtedness was 2009: The year was characterized by recession and reduced demand in the Nordic
reduced by SEK 3.7 billion to SEK 1.1 billion. construction market. While volumes declined, margins remained healthy. Although
sales of housing units were favorable, they were impacted by price discounts. Earn-
2005: Earnings increased, primarily as a result of a strong housing market in the
ings were charged with SEK 192 M for impairment losses on land and unsold housing
Nordic region and also because of improved profitability in the Nordic contracting
units.
operations. Impairment losses of approximately SEK 220 M were incurred for such
assets as goodwill, property projects and associated companies. 2010: The economic recovery had a favorable impact on the year’s earnings. The
lower volume was due mainly to fewer completed and handed over projects in NCC
2006: A boom in the Nordic region gave rise to considerable activity, resulting in
Housing and NCC Property Development, a reduction in orders received by the Con-
­rising sales and earnings. Sales of housing, above all else, contributed to the healthy
struction units in 2009 and a cold winter, which resulted in delays and lower activity.
earnings, as did contracting operations, which showed increased profitability. Costs
of SEK 186 M for the NCC Complete development project were charged against 2011: The market trend was positive in 2011 and demand was favorable in the build-
­earnings. ing, civil engineering and housing operations. Favorable earnings were reported, pri-
marily as a result of more completed and handed over projects in NCC Housing and
2007: The economic boom in combination with strong earnings from property
high volumes in NCC Roads thanks to a long season. SEK 172 M was charged against
develop­ment operations contributed to the highest earnings in NCC’s history and all
profit for impairment losses on goodwill in Finland and land in Denmark and Latvia.
of the financial objectives were achieved. Costs of SEK 645 M for the NCC Complete
development project were charged against earnings, as was a competition-infringe- 2012: Operating profit was high, where development business accounted for 45 per-
ment fee of SEK 175 M. Operating profit included SEK 383 M from the sale of the cent due to more completed and handed over projects, which contributed to the
­Polish asphalt and stone materials operations. strong cash flow. During the year, construction and civil-engineering operations
reported higher sales and earnings than in the preceding year.
2008: NCC reported historically high earnings and all of the financial objectives
were achieved. This was also the year that the housing market came to an abrupt halt 2013: The construction market strengthened slightly during the second half of 2013
and a recession started, which was compounded by a global financial crisis. Impair- and operating profit for the year improved thanks to more completed and handed
ment losses and restructuring costs totaling SEK 741 M were charged against earn- over projects in NCC Property Development. The Norwegian operation reported
ings. The divestment of NCC’s share in the Polish concession company AWSA con- weaker earnings due to impairment losses on projects.
tributed SEK 493 M to earnings.

REVISED ACCOUNTING POLICIES – IFRIC 15 AMENDED ACCOUNTING POLICY – IAS 19

COMPARATIVE FIGURES FOR 2009 HAVE BEEN RECALCULATED. COMPARATIVE FIGURES FOR 2012 HAVE BEEN RECALCULATED.
In the Annual Report, comparative figures for 2009 have been recalculated due to the Changes have occurred in the reporting of employee benefits, for which the revised
application of IFRIC 15, Agreements for the Construction of Real Estate, as of January 1, IAS 19 has been applied since January 1, 2013. Comparative figures for 2012 have
2010. This applies for all tables and figures pertaining to 2009, unless otherwise been recalculated. In brief, the amendment of IAS 19 entailed that the opportunity to
­stated. In brief, the change entails that revenues and earnings from the sale of property utilize the corridor method has been discontinued whereby actuarial gains and losses
and housing projects are normally not to be recognized until the property or the home arising must be recognized directly in Other comprehensive income in the period they
has been sold, completed and handed over to the customer. This usually results in recog- arise. The return on plan assets must also be calculated using the same rate as the dis-
nition of a sale being delayed compared with the past. Application of IFRIC 15 also count rate for the pension commitment. The interest-rate component in the pension
affects assets and liabilities. Among other consequences, tenant-owner associations and commitment and the anticipated return on plan assets are now recognized in net finan-
Finnish housing companies are recognized, in contrast to the past, in NCC’s balance cial items.
sheet. This primarily increases interest-bearing liabilities but also has an impact on
NCC’s other key figures.
 F i n a nc i a l r e p o r t N C C 2 013 97

IFRS IFRIC 15 IFRIC 15 IAS 19

BALANCE SHEET, SEK M 2004 2004 2005 2006 2007 2008 2008 2009 2009 2010 2011 2012 2012 2013
ASSETS
Fixed assets
Goodwill 1,597 1,790 1,772 1,700 1,651 1,772 1,772 1,750 1,750 1,613 1,607 1,827 1,827 1,802
Other intangible assets 31 31 61 113 96 122 122 120 120 115 167 204 204 267
Managed properties 41 449 71 65 21 12 12
Owner-occupied properties and
construction in progress 821 830 865 796 640 682 682 647 647 576 596 662 662 704
Machinery and equipment 1,803 1,848 1,937 1,940 1,774 1,975 1,975 1,910 1,910 1,816 2,209 2,395 2,395 2,502
Participations in associated companies 609 200 44 47 25 10 10 9 9 7 8 9 9 9
Other long-term holdings of securities 311 311 265 242 250 227 227 203 203 182 173 158 158 131
Long-term receivables 1,392 1,363 1,246 2,739 1,968 1,338 1,366 1,378 1,397 1,431 1,750 1,859 615 496
Total fixed assets 6,605 6,822 6,263 7,642 6,424 6,139 6,166 6,016 6,035 5,739 6,511 7,114 5,870 5,910

Current assets
Property projects 2,002 2,105 2,005 1,955 2,145 3,439 4,018 2,835 2,835 2,931 4,475 5,321 5,321 5,251
Housing projects 3,495 4,345 4,395 5,979 8,553 11,377 15,060 8,363 10,137 8,745 9,860 11,738 11,738 12,625
Materials and inventories 604 609 502 443 474 624 624 514 514 537 557 655 655 673
Participations in associated companies 53
Accounts receivable 6,185 6,476 7,137 7,934 8,323 7,820 7,794 6,355 6,340 6,481 7,265 7,725 7,725 7,377
Worked-up, non-invoiced revenues 2,696 2,998 2,737 2,840 2,956 1,854 841 1,459 777 804 910 782 782 918
Prepaid expenses and accrued income 582 587 638 852 1,048 1,169 1,119 844 982 988 1,114 1,544 1,544 1,325
Other receivables 1,912 1,819 1,361 1,532 1,979 1,778 1,602 1,472 1,747 1,425 1,151 1,277 1,277 1,024
Short-term investments 32 113 153 173 483 215 215 286 286 741 285 168 168 143
Cash and cash equivalents 2,574 2,514 1,919 1,253 1,685 1,832 1,919 1,831 2,317 2,713 796 2,634 2,634 3,548
Total current assets 20,133 21,567 20,848 22,961 27,645 30,108 33,193 23,959 25,935 25,366 26,414 31,844 31,844 32,883
TOTAL ASSETS 26,738 28,389 27,110 30,603 34,069 36,247 39,359 29,976 31,970 31,104 32,924 38,958 37,713 38,793

SHAREHOLDERS’ EQUITY
Shareholders’ equity 6,728 6,715 6,785 6,796 7,207 6,840 6,243 7,667 7,470 8,111 8,286 8,974 7,634 8,658
Non-controlling interests 84 84 94 75 30 25 25 18 18 21 11 15 15 17
Total shareholders’ equity 6,812 6,799 6,879 6,870 7,237 6,865 6,268 7,685 7,488 8,132 8,297 8,988 7,649 8,675

LIABILITIES
Long-term liabilities
Long-term interest-bearing liabilities 3,148 3,485 2,004 2,023 1,590 2,620 2,721 2,941 2,972 2,712 3,850 7,102 7,102 7,029
Other long-term liabilities 34 343 392 561 816 837 837 558 558 921 643 841 841 299
Deferred tax liabilities 502 481 199 461 431 492 436 710 641 439 669 725 436 414
Provisions for pensions and similar
obligations 180 180 143 119 112 42 42 18 18 1 6 9 393 125
Other provisions 1,641 1,683 1,611 2,157 2,729 3,190 3,029 3,023 2,932 2,722 2,619 2,435 2,435 2,070
Total long-term liabilities 5,506 6,172 4,348 5,321 5,678 7,180 7,065 7,250 7,121 6,796 7,788 11,113 11,208 9,937

Current liabilities
Current interest-bearing liabilities 1,107 1,187 1,052 552 1,701 2,929 7,036 391 1,739 1,546 1,585 2,141 2,141 2,515
Accounts payable 3,891 3,908 4,520 4,874 4,974 4,356 4,356 3,545 3,536 3,414 4,131 4,659 4,659 4,096
Tax liabilities 261 260 137 170 101 140 140 38 38 449 60 122 122 58
Invoiced revenues, not worked up 3,563 4,375 4,367 4,823 4,971 5,300 4,784 4,516 4,250 4,092 4,176 4,241 4,241 4,264
Accrued expenses and deferred income 3,231 3,305 3,271 4,592 5,177 4,371 4,234 3,598 3,682 3,336 3,277 3,748 3,748 3,888
Other current liabilities 2,368 2,383 2,535 3,400 4,231 5,106 5,474 2,954 4,117 3,341 3,611 3,945 3,945 5,360
Total current liabilities 14,421 15,418 15,883 18,411 21,154 22,202 26,026 15,041 17,361 16,177 16,839 18,855 18,856 20,181
Total liabilities 19,926 21,590 20,231 23,732 26,832 29,382 33,090 22,291 24,482 22,973 24,627 29,968 30,063 30,118
TOTAL SHAREHOLDERS’ EQUITY AND
LIABILITIES 26,738 28,389 27,110 30,603 34,069 36,247 39,359 29,976 31,970 31,104 32,924 38,958 37,713 38,793
1) As of 2004, impairment losses/reversal of impairment losses on properties in NCC Property Development are reported as production costs.

2004: Total assets declined compared with 2003. The changes were mainly due to 2009: Total assets declined as a result of an intensified focus on cash flow and tied-up
sold managed properties in NCC Property Development and by the divestment of a capital, resulting in, for example, higher sales of property and housing projects.
number of subsidiaries.
2010: Increased investments in properties held for future development were offset
2005: NCC Property Development divested managed properties and received pay- by higher sales of housing units, which resulted in a decrease in housing projects.
ment for properties sold in the preceding years, which led to a reduction in total NCC’s positive cash flow resulted in an increase in cash and cash equivalents and
assets. All financial objectives were achieved and net indebtedness was reduced to short-term investments. Interest-bearing liabilities were amortized.
SEK 0.5 billion.
2011: Continued investments in housing projects at NCC Housing and in property
2006: As a result of additional sales of property projects within NCC Property Devel- projects at NCC Property Development resulted in an increased need for financing,
opment, long-term receivables from sales of property projects increased. Investments which is the main reason for the rise in net indebtedness by SEK 3.5 billion.
in land for housing projects increased. All financial objectives were achieved and net
2012: Total assets increased mainly due to continued investment in housing and
indebtedness was reduced to SEK 0.4 billion.
property projects in the development operation. Cash and cash equivalents also
2007: Capital tied-up in property projects increased at NCC Property Development, increased due to higher payment preparedness.
and in housing projects within NCC’s Construction units in Sweden, Denmark and
2013: Continued investments in housing projects in NCC Housing generated an
Finland.
increase in total assets. Cash and cash equivalents were at a high level thanks to the
2008: Continued increase in tied-up capital, primarily in housing operations. healthy cash flow in the fourth quarter.
98 N C C 2 013 F i n a nc i a l r e p o r t

Multi-year review, cont.

IFRS IFRIC 15 IAS 19
KEY DATA 2004 2004 2005 2006 2007 2008 2009 2009 2010 2011 2012 2012 2013
Financial statements, SEK M
Net sales 45,437 46,534 49,506 55,876 58,397 57,465 51,817 56,005 49,420 52,535 57,227 57,227 57,823
Operating profit 1,117 1,147 1,748 2,392 2,790 2,219 2,150 2,619 2,254 2,017 2,537 2,519 2,679
Profit after financial items 955 945 1,580 2,263 2,608 2,385 1,694 2,105 2,008 1,808 2,263 2,277 2,400
Profit for the year 859 876 1,187 1,708 2,252 1,820 1,262 1,656 1,527 1,312 1,899 1,910 1,989
Investments in fixed assets 850 866 901 798 780 983 584 584 667 1,257 1,345 1,345 1,055
Investments in property projects 413 438 626 1,049 1,493 2,210 1,054 1,215 1,533 2,333 2,692 2,692 3,890
Investments in housing projects1) 1,921 1,920 2,140 3,908 5,392 5,010 1,262 3,193 3,171 7,529 8,997 8,997 7,912
Cash flow, SEK M
Cash flow from operating activities 3,399 4,161 2,046 2,171 1,031 128 3,318 6,440 2,423 –1,547 –26 –26 2,532
Cash flow from investing activities 1,097 1,083 69 –514 134 –306 –481 –481 –489 –857 –906 –906 –870
Cash flow before financing 4,517 5,244 2,115 1,657 1,165 –178 2,837 5,960 1,935 –2,404 –932 –932 1,661
Cash flow from financing activities –4,380 –5,264 –2,745 –2,307 –763 298 –2,827 –5,549 –1,504 491 2,774 2,774 –741
Change in cash and cash equivalents 115 –20 –596 –666 432 147 –1 399 396 –1,916 1,838 1,838 914
Profitability ratios
Return on shareholders’ equity, % 14 14 18 27 34 27 18 25 20 17 23 28 26
Return on capital employed, % 10 9 17 24 28 23 17 17 19 16 15 17 15
Financial ratios at year-end, SEK M
Interest-coverage ratio, % 3.6 3.6 6.9 11.5 10.2 7.0 4.5 5.0 5.3 7.4 6.5 7.0 6.4
Equity/assets ratio, % 25 24 25 22 21 19 26 23 26 25 23 20 22
Interest-bearing liabilities/total assets, % 16 17 12 9 10 15 11 15 14 17 24 26 25
Net indebtedness 679 1,149 496 430 744 3,207 754 1,784 431 3,960 6,061 6,467 5,656
Debt/equity ratio, times 0.1 0.2 0.1 0.1 0.1 0.5 0.1 0.2 0.1 0.5 0.7 0.8 0.7
Capital employed at year-end 11,098 11,503 10,032 9,565 10,639 12,456 11,034 12,217 12,390 13,739 18,241 17,285 18,345
Capital employed, average 13,152 14,054 10,930 10,198 10,521 11,990 12,659 15,389 12,033 13,101 16,632 15,755 18,005
Capital turnover rate, times 3.5 3.3 4.5 5.5 5.6 4.8 4.1 3.6 4.1 4.0 3.4 3.6 3.2
Share of risk-bearing capital, % 27 26 26 24 23 20 28 25 28 27 25 21 23
Average interest rate, %2) 4.8 4.8 4.8 4.8 5.2 5.9 4.5 4.5 4.6 4.2 3.6 3.6 3.3
Average period of fixed interest, years2) 1.3 1.3 1.1 2.6 1.8 1.6 1.8 1.8 1.5 0.8 1.1 1.1 1.2
Average interest rate, %3) 2.3 2.7 2.4 2.4 2.7
Average period of fixed interest, years3) 0.1 0.1 0.1 0.1 0.1
Order status, SEK M
Orders received 45,362 45,624 52,413 57,213 63,344 51,864 45,957 46,475 54,942 57,867 55,759 55,759 56,979
Order backlog 27,077 27,429 32,607 36,292 44,740 40,426 34,084 35,951 40,426 46,314 45,833 45,833 47,638
Per share data, SEK
Profit after taxes, before dilution 8.36 8.53 11.07 15.80 20.75 16.69 11.63 15.26 14.05 12.08 17.51 17.62 18.40
Profit after taxes, after dilution 7.89 8.05 10.86 15.74 20.73 16.69 11.63 15.26 14.05 12.08 17.51 17.62 18.40
Cash flow from operating activities,
after dilution 31.35 38.39 18.88 20.03 9.51 1.18 30.60 59.39 22.35 –14.27 –0.24 –0.24 23.46
Cash flow before financing, after dilution 41.67 48.38 19.52 15.29 10.75 –1.64 26.17 54.96 17.84 –22.17 –8.61 –8.61 15.40
P/E ratio, before dilution 10 10 13 12 7 3 10 8 11 10 8 8 11
Dividend, ordinary 4.50 4.50 5.50 8.00 11.00 4.00 6.00 6.00 10.00 10.00 10.00 10.00 12,004)
Extraordinary dividend 10.00 10.00 10.00 10.00 10.00
Dividend yield, % 16.5 16.5 10.9 9.6 15.1 8.1 5.1 5.1 6.8 8.3 7.3 7.3 5.7
Dividend yield excl. extraordinary dividend, % 5.1 5.1 3.9 4.3 7.9 8.1 5.1 5.1 6.8 8.3 7.3 7.3 5.7
Shareholders’ equity before dilution 65.70 65.58 63.30 62.86 66.48 63.10 70.72 68.91 74.81 76.41 82.97 70.58 80.24
Shareholders’ equity after dilution 62.07 61.95 62.60 62.69 66.48 63.10 70.70 68.90 74.80 76.41 82.97 70.58 80.24
Share price/shareholders’ equity, % 134 134 225 298 209 78 167 172 198 158 164 193 262
Share price at year-end, NCC B 88.00 88.00 142.50 187.50 139.00 49.50 118.25 118.25 147.80 121.00 136.20 136.20 209.90
Number of shares, millions
Total number of issued shares5) 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4 108.4
Treasury shares at year-end 6.0 6.0 1.2 0.3 0.4 0.4 0.6
Total number of shares outstanding
at year-end 102.4 102.4 107.2 108.1 108.4 108.4 108.4 108.4 108.4 108.4 108.0 108.0 107.8
Average number of shares outstanding
before dilution during the year 102.4 102.4 106.4 108.0 108.3 108.4 108.4 108.4 108.4 108.4 108.2 108.2 107.9
Market capitalization before dilution, SEK M 8,984 8,984 15,282 20,242 14,999 5,209 12,809 12,809 16,005 13,136 14,706 14,706 22,625
Personnel
Average number of employees 22,214 22,375 21,001 21,784 21,047 19,942 17,745 17,745 16,731 17,459 18,175 18,175 18,360
As
1)  of 2007, investments are included in the unsold share of ongoing proprietary Figures for 2004 to 2008 are not IFRIC 15 adjusted.
housing projects. As of 2008, costs incurred are included prior to project start. Figures for 2004 are not adjusted for IAS 39, Financial Instruments.
Excluding liabilities pertaining to Swedish tenant-owners’ associations and Finnish
2) 
Figures for 2004 to 2011 are not IAS 19 adjusted, Employee benefits.
housing companies and pension obligations in accordance with IAS 19. For definitions of key figures, see p. 113.
Pertains to liabilities of Swedish tenant-owners’ associations and Finnish
3) 

housing companies.
Dividend for 2013 pertains to the Board of Directors’ motion to the AGM.
4) 

All shares issued by NCC are common shares.

5) 
 F i n a nc i a l r e p o r t N C C 2 013 9 9

Quarterly data
Quarterly amounts, 2013 Full year Quarterly amounts, 2012 Full year
SEK M Q1 Q2 Q3 Q4 2013 Q1 Q2 Q3 Q4 2012
Group
Orders received 11,675 17,798 13,143 14,363 56,979 11,723 15,453 13,160 15,423 55,759
Order backlog 46,917 52,079 51,065 47,638 47,638 47,899 49,116 48,548 45,833 45,833
Net sales 10,084 13,535 13,129 21,073 57,823 10,659 13,733 13,765 19,069 57,227
Operating profit/loss –217 526 823 1,547 2,679 –139 512 814 1,332 2,519
Operating margin, % –2.2 3.9 6.3 7.3 4.6 –1.3 3.7 5.9 7.0 4.4
Profit/loss after financial items –276 457 748 1,472 2,400 –173 451 742 1,258 2,277
Profit/loss for the period attributable
to NCC’s shareholders –215 362 611 1,229 1,986 –131 342 568 1,127 1,905
Cash flow before financing –950 –1,402 –227 4,240 1,661 –1,242 –2,179 –492 2,981 –932
Net indebtedness –7,250 –9,722 –9,893 –5,656 –5,656 –5,493 –8,979 –9,430 –6,467 –6,467
Earnings per share after dilution, SEK –1.99 3.35 5.67 11.39 18.40 –1.21 3.16 5.25 10.43 17.62
Average number of shares outstanding
after dilution during the period, million 108.0 107.9 107.8 107.8 107.9 108.4 108.2 108.0 108.0 108.2
NCC Construction Sweden
Orders received 3,535 6,893 4,715 5,205 20,348 4,916 5,328 4,471 6,767 21,483
Order backlog 16,271 17,570 17,334 16,211 16,211 20,154 19,030 18,001 17,378 17,378
Net sales 4,659 5,592 4,947 6,332 21,530 5,686 6,453 5,506 7,399 25,043
Operating profit 57 145 192 243 637 117 134 227 325 801
Operating margin, % 1.2 2.6 3.9 3.8 3.0 2.1 2.1 4.1 4.4 3.2
Capital employed 573 642 767 1,250 1,250 294 336 462 1,122 1,122
NCC Construction Denmark
Orders received 2,128 859 571 1,370 4,929 560 550 720 1,458 3,288
Order backlog 4,179 4,443 4,167 4,447 4,447 2,968 2,608 2,399 2,924 2,924
Net sales 759 806 784 1,196 3,546 724 879 819 974 3,396
Operating profit 39 47 55 67 208 38 46 58 48 189
Operating margin, % 5.2 5.8 7.1 5.6 5.9 5.2 5.2 7.0 4.9 5.6
Capital employed 310 214 251 309 309 368 211 247 288 288
NCC Construction Finland
Orders received 1,090 2,717 739 1,945 6,491 1,552 1,777 1,328 1,919 6,576
Order backlog 5,164 6,404 5,353 5,630 5,630 6,187 6,211 5,631 5,667 5,667
Net sales 1,423 1,752 1,698 1,808 6,680 1,331 1,671 1,702 2,005 6,709
Operating profit/loss 19 25 38 45 127 –13 13 48 53 101
Operating margin, % 1.3 1.4 2.2 2.5 1.9 –1.0 0.8 2.8 2.6 1.5
Capital employed 265 234 260 271 271 212 199 228 267 267
NCC Construction Norway
Orders received 1,758 2,013 1,701 1,626 7,098 1,945 3,165 1,923 1,053 8,086
Order backlog 6,993 7,235 6,968 6,364 6,364 4,812 6,690 8,193 7,265 7,265
Net sales 1,703 1,780 1,671 2,253 7,408 1,154 1,276 1,507 2,133 6,070
Operating profit/loss 13 –115 28 77 3 –14 17 30 41 74
Operating margin, % 0.8 –6.4 1.7 3.4 0.0 –1.2 1.3 2.0 1.9 1.2
Capital employed 930 957 808 803 803 602 632 972 984 984
NCC Roads
Orders received 1,972 3,555 3,784 3,001 12,311 2,102 3,569 3,299 2,836 11,807
Order backlog 5,067 5,507 5,003 4,598 4,598 5,512 5,553 4,719 4,250 4,250
Net sales 1,156 3,185 4,242 3,416 11,999 1,292 3,510 4,056 3,354 12,211
Operating profit/loss –468 230 538 106 406 –394 249 442 120 417
Operating margin, % –40.5 7.1 12.6 3.1 3.4 –30.5 7.1 10.9 3.6 3.4
Capital employed 2,801 3,777 3,806 3,557 3,557 2,842 3,534 3,594 3,049 3,049
NCC Housing
Orders received 1,794 3,252 2,628 3,247 10,921 1,972 1,798 2,154 3,455 9,380
Order backlog 12,264 14,357 15,440 14,200 14,200 12,100 12,217 12,678 11,932 11,932
Net sales 1,329 1,524 1,506 4,670 9,030 1,045 1,605 1,530 4,432 8,612
Operating profit 61 45 15 483 605 81 104 77 573 835
Operating margin, % 4.6 3.0 1.0 10.3 6.7 7.8 6.5 5.0 12.9 9.7
Capital employed 10,215 10,619 10,537 9,856 9,856 9,051 10,039 10,401 9,976 9,976
NCC Property Development
Net sales 609 656 102 3,443 4,811 1,043 392 318 1,095 2,847
Operating profit/loss 78 152 8 475 713 112 –4 –27 214 295
Capital employed 5,097 5,552 6,085 3,991 3,991 4,341 4,592 5,125 4,989 4,989

The asphalt and civil-engineering operations of NCC Roads and certain activities within NCC’s Construction units are affected by seasonal variations in their production
caused by cold weather conditions. The first and final quarters are normally weaker than the rest of the year.
10 0 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Corporate governance report

NCC AB is a Swedish public limited liability company whose shares the Code, refer to www.corporategovernanceboard.se). NCC has
are registered for trading on NASDAQ OMX Stockholm. NCC AB is applied the Code since it was introduced in 2005. This report has
governed in accordance with Swedish company law and the regula- been issued by the Board of Directors but is not part of the formal
tions of NASDAQ OMX Stockholm, which include the Swedish Annual Report documentation.
Code of Corporate Governance (for further information concerning

This is how NCC is governed

GE NE RA L S HA R EHO L D E R M E E T IN GS SHA RE STRUCTURE A ND VO TING RIGHTS
The procedures for notifying shareholders of General Meetings are NCC shares are issued in two series, designated Series A and Series B shares.
stipulated in the Articles of Association. Official notice of meetings Each Series A share carries ten votes and each Series B share one vote. All
shall be made in the form of an announcement in Post- och Inrikes shares provide the same entitlement to participation in the company’s assets
Tidningar and on the company’s website www.ncc.se. Confirmation and profit and to an equally large dividend. For a breakdown of the number of
that the official notice has been issued will be announced in and shares and voting rights, as well as the shareholder structure, see pp. 110–
Dagens Nyheter och Svenska Dagbladet. 111. On request, Series A shares may be converted into Series B shares. A
According to the Swedish Companies Act, notice of the Annual written conversion request must be submitted to the Company’s Board, which
General Meeting (AGM) shall be issued not earlier than six weeks makes continuous decisions on conversion matters. After a conversion decision
and not later than four weeks prior to the Meeting. Notice of Extra­ is made, this is reported to Euroclear Sweden AB for registration. Conversions
ordinary General Meetings convened to address amendments to the become effective when the shares are registered.
Articles of Association shall be issued not earlier than six weeks and
not later than four weeks prior to the Meeting. Notice of other Extra­
ordinary General Meetings shall be issued not earlier than six weeks
and not later than two weeks prior to the Meeting. General Meetings NCC’s control structure 2013
may be held in the municipalities of Stockholm, Solna or Sigtuna. At
General Meetings, shareholders may be accompanied by not more
than two advisors, on condition that the shareholder has given the General shareholders meeting
company prior notice of this. (37,726 shareholders)

COM P O S I TI O N O F THE BOARD Board of Directors

The Board shall consist of not fewer than five and not 6 elected members
more than ten members elected by the AGM. The 3 employee representatives
employees are represented on the Board. The Board
Members are elected for a period of one year. During
2013, six Board Members were elected by the AGM.
The Board also included three representatives and
President and CEO
two deputies for the employees. For information on
individual Members of the Board, see pp. 106–107. Group Management (12 members)

STAFF UNITS

Business areas
CH AIR MA N O F THE B O ARD
The Chairman of the Board directs the work conducted NCC Construction NCC Construction NCC Construction NCC Construction
by the Board and maintains continuous contact with the Sweden Denmark Finland Norway
CEO, in order to continuously monitor the Group’s
operations and development. The Chairman represents NCC Roads NCC Housing NCC Property Development
the Company in ownership matters. The Chairman of
the Board is a co-opted member of the Nomination
Committee but has no voting right.

P R E SID EN T A N D C HI EF E XE C U T IV E OFFIC E R GRO UP MA NA GEMENT

The President and Chief Executive Officer of the company is Peter Wågström In 2013, NCC’s Group Management consisted of the CEO, the Heads
(for details concerning the CEO’s age, professional experience, assignments of NCC Construction Sweden, NCC Construction Denmark, NCC
­outside the company and holdings of shares in the company, refer to p. 108). The ­Construction Finland, NCC Construction Norway, NCC Property
Board of Directors has established instructions for the division of duties between Development, NCC Housing and NCC Roads, plus the Chief Financial
the Board and the CEO, and for financial reporting to the Board (also refer to Officer and the Senior Vice Presidents for Corporate Communications,
p. 104, “Board of Directors’ report on internal control”). Human Resources (up to November 7, 2013), Sustainability (as of
March 1, 2013) and Corporate Legal Affairs. For information on the
D E PUT Y C HI EF EXEC U TI V E OFFIC E RS members of Group Management, see pp. 108–109.
The company has not appointed any Deputy Chief Executive Officers. Group Management mainly focuses on strategic matters and
­generally meets once per month.
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 101

NOM I N ATI O N C O MMIT T E E A UDITO R S

The AGM elects a Nomination Committee whose task is to For the purpose of examining the company’s Annual Report, consolidated financial statements,
nominate candidates to the AGM for election as Chairman accounting records and the company’s management by the Board of Directors and President,
of the Meeting, Chairman of the Board and Board members, the AGM appoints a maximum of three Authorized Public Accountants, with a maximum of
and to propose the fees to these officers. The Nomination three deputies. A registered firm of accountants may also be appointed auditor of the com-
Committee shall also nominate auditors and propose the fees pany. The Nomination Committee nominates auditors. Auditors are currently appointed for
to be paid to them. a period of one year. Until the close of the AGM in 2014, the registered firm of accountants
The Nomination Committee complies with the instructions PricewaterhouseCoopers AB is serving as NCC’s auditors. Authorized Public Accountant
adopted by the AGM. Håkan Malmström has been elected PricewaterhouseCoopers AB’s auditor-in-charge. For
more information on the elected auditors, see p. 107.

E VAL U ATI O N O F THE BOARD OF DIRE C T ORS

A ND A U D I TO R S INTER NA L GO VERNA NCE A ND CO NTRO L

The Board of Directors is evaluated within the framework of NCC’s operations require a considerable amount of delegated responsibility. Group-wide deci-
the Nomination Committee’s work. In addition, the Board sion-making procedures are in place to clarify exactly who is entitled to make decisions at each
performs an annual evaluation of its work and the format for stage of the decision-making process. In addition to strategic and organizational matters, the
performing Board work, which also constitutes part of the areas regulated include investments and divestments, rental and leasing agreements, financing,
Nomination Committee’s evaluation. sureties, guarantees, the assessment of tenders and business agreements.
The Board also assists the Nomination Committee in evalu- The number of ongoing projects in production varies from year to year but totals several thou-
ating the work of the auditors. sands. The organization of each project varies according to the specific project’s size and com-
plexity. Each project is led by a project manager who is responsible 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 President, the CEO, Chief
Financial Officer and the Senior Legal Counsel. Tenders for projects exceeding SEK 300 M are
subject to special assessment and must be approved by the CEO. Tenders for projects exceeding
SEK 500 M must be confirmed by NCC AB’s Board. Proprietary housing and property projects
representing an investment exceeding SEK 50 M must be approved by the CEO and such proj-
ects exceeding SEK 150 M must be authorized by NCC AB’s Board. Decisions regarding invest-
ments corresponding to less than SEK 50 M are the responsibility of the particular business area.

CO DE O F CO NDUCT
A comprehensive program to formulate and implement the values that are to hallmark NCC’s
operations has been under way in recent years. These values have been translated into norms
and rules governing how NCC employees are to behave in various situations. These regulations
are summarized in a Code of Conduct. The Code of Conduct describes the requirements that
Nominating Committee NCC – the Board of Directors, management and all employees – have to meet in terms of
Nomination and remuneration behavior and conduct and that NCC in turn expects its business partners to respect.
of Board Members and auditors Every manager has an obligation, within his or her area of responsibility, to ensure that
employees and business partners are informed about the contents of the Code of Conduct
and the requirement that they be observed. NCC managers must always set a good exam-
ple. Adherence to the Code of Conduct is followed up continuously as a natural part of
External audit
ongoing operations.
(Auditing firm)
During 2013, NCC refined its compliance program and a Group-wide, needs-adapted pro-
cess was launched during the year (see p. 32). NCC Compass focuses on providing straightfor-
ward and tangible advice to the organization, in order to prevent the risk of irregularities. NCC
Compass is available via NCC’s intranet (Starnet) and via a special mobile application, thus
enabling all NCC employees to make use of the content of NCC Compass and seek guidance.
NCC has also appointed and provided training in business ethics and how NCC Compass is to
be applied in various situations to slightly more than 45 employees in all business areas. These
employees are called navigators. NCC has also introduced advanced system support for the
reporting of irregularities, all within the framework of the value-driven and transparent corpo-
Internal control rate culture that NCC is working to retain and refine. Moreover, NCC has undertaken a com-
­environment prehensive overhaul of the operations and identified risk areas and risk processes. The purpose
of NCC’s new procedures is to make it easier for employees to dare to ask questions in difficult
situations, rather than letting ignorance or thoughtlessness lead them to take the wrong deci-
sions or to behave in an undesired manner. The work methods include guidelines covering such
areas as how to handle the most prevalent risk situations. Implementation of the new methods
has started in the form of training programs and discussions with NCC employees during
2013. All NCC employees must participate in the training programs.
Employees who have suspicions of unethical behavior or improper action should primar-
GO V ER N A N C E O F B USIN E SS ARE AS ily report this to the immediate superior. A procedure for reporting anonymously is also in
place. The function has two purposes: firstly, to protect the reporting party and, secondly, to
The Group is composed of business areas. In all significant respects,
make sure that the reported matter is dealt with in a secure manner. All tips containing suffi-
the legal corporate structure matches the operational structure. Each
cient information will result in an investigation and a written report compiled by an inde-
business area is headed by a business area manager and has a Board
pendent party. Disciplinary action will be taken where called for.
of Directors, of which, among others, NCC AB’s CEO, Chief Financial
Officer and Senior Legal Counsel are members. For certain decisions,
the approval of the CEO, NCC AB’s Board Chairman or Board of
Directors is required. The decision-making procedure consists of pro- IMPO RTA NT EX TER NA L R ULES A ND INTERNAL RULES AND REGULATIONS
posals, endorsement, decisions and confirmation. A matter requiring a REGULATIO NS • Articles of Association
decision is normally processed by the entity that initiated the matter or • Swedish Companies Act • Operating procedures for Board work
which is responsible for it in terms of function. Many types of decisions • Listing agreement of NASDAQ OMX • Division of work between Board/CEO
are preceded by consultation. Country managers (the heads of NCC’s Stockholm • Decision-making procedures for Group
Construction units in each country and the heads of NCC’s Housing • Swedish Code of Corporate ­Governance and business areas
units in Germany and St. Petersburg) are responsible for initiating coor- • Annual Accounts Act • NCC’s Code of Conduct
dination in matters involving several NCC units in the particular coun- • Bookkeeping Act • NCC Compass
try. Such matters include the Group’s brands and image, as well as uti- • Policies, regulations, guidelines and
lization of synergism. instructions
10 2 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Corporate governance at NCC in 2013

A NNUA L G EN ER A L MEETI N G 2013 WO RK O F THE BO A RD O F DIRECTO R S

The 2013 Annual General Meeting was held in Stockholm on April 9 In 2013, NCC’s Board held six scheduled meetings and the statu-
and was attended by 470 shareholders representing 56 percent of tory meeting held directly after the AGM. The Board’s work focuses
the share capital and 81 percent of the total number of voting rights. primarily on strategic issues, the adoption and follow-up of opera-
The minutes from the 2013 Annual General Meeting and from previ- tional goals, business plans, the financial accounts and major invest-
ous AGMs are available at www.ncc.se/bolagsstyrning. The 2013 ments and divestments, plus other decisions that, in accordance
AGM passed the following resolutions, among others: with NCC’s decision-making procedures, have to be addressed by
Payment of cash dividend of SEK 10.00 (10.00) per share for the the Board. Reporting on the progress of the company’s operations
2012 fiscal year. and financial position was a standing item on the agenda. The Board
Antonia Ax:son Johnson, Tomas Billing, Ulla Litzén, Olof Johans- has established operating procedures for its work and instructions
son, Sven-Olof Johansson and Christoph Vitzthum were reelected for the division of duties between the Board and the CEO, as well as
Members of the Board. Reelection of Tomas Billing as Chairman of for financial reporting to the Board. The Board made a number of
the Board. worksite visits in connection with Board meetings. In addition to the
It was resolved that director fees be paid in a total amount of SEK CEO and the Chief Financial Officer, other senior NCC executives
3,075,000, distributed in the amount of SEK 825,000 to the Chairman participated in Board meetings in order to present matters. NCC’s
of the Board and SEK 450,000 to each other AGM-elected member. senior legal counsel was secretary of the Board.
Viveca Ax:son Johnson (chairman), Marianne Nilsson and Johan On several occasions, the Board has evaluated the matter of
Strandberg were elected members of the Nomination Committee establishing committees to deal with remuneration and audit-related
(see “Nomination Committee 2013” on p. 103). issues. The Board has decided not to establish such committees and
Guiding principles were adopted for determining the salary and instead to address remuneration and audit-related issues within the
other remuneration of the President and other members of the com- framework of ordinary Board work (also see “Board of Directors’
pany’s management. The introduction of a long-term performance- report on internal control” on p. 104).
based incentive plan (LTI 2013) for senior executives and key
­personnel was also resolved (see “Remuneration” on p. 48). BUYBA CK O F CO MPA NY SHA R ES
To cover the commitment according to LTI 2013, the AGM autho- During the second quarter of 2013, the company repurchased
rized the Board, until the next Meeting, to buy back a maximum of 177,000 Series B shares to cover its commitments under the long-
867,486 Series B shares and to transfer a maximum of 303,620 term incentive program approved by the 2013 AGM (LTI 2013). The
Series B shares to participants of LTI 2013. The Board of Directors shares were bought back at the prevailing market price. After the
exercised this authorization during the year and bought back buyback, the total number of non-treasury shares is 107,843,322.
177,000 Series B shares.
Income statements and balance sheets for 2012 were adopted and
discharge from personal liability was granted to the Board of Direc-
tors and the President.

Board of Directors 2013

Independent in
relation to the com- Independent in
pany and executive relation to major Fee,
Elected management shareholders SEK 000s Board meetings and attendance 2013
Jan 29 Apr 9 Apr 91) May 2 Aug 15 Oct 24 Dec 12
Board Members
­elected by the AGM
Tomas Billing 1999 yes no 805
Antonia Ax:son Johnson 1999 yes no 443 – –
Ulf Holmlund2) 2004 yes yes 114
Olof Johansson 2012 yes yes 443
Sven-Olof Johansson 2012 yes yes 443
Ulla Litzén 2008 yes yes 443 –
Christoph Vitzthum 2010 yes yes 443 –

Regular employee
representatives
Lars Bergqvist 1991 –
Karl G. Sivertsson 2009 –
Karl-Johan Andersson 2011 –
1) Statutory Board meeting.
2) Stepped down at the AGM on April 9, 2013.
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 10 3

R E M UNE R ATI O N O F EX EC U T IV E M AN AGE M E N T NO MINATIO N CO MMITTEE 2013

According to the Swedish Code of Corporate Governance, the At the AGM on April 9, 2013, Viveca Ax:son Johnson (Chairman of
Board must establish a remuneration committee to prepare matters the Board of Nordstjernan AB), Marianne Nilsson (newly elected),
relating to remuneration and other terms of employment for execu- Executive Vice President of Swedbank Robur AB, and Johan Strand-
tive management. If, as in the case at NCC, the Board considers it berg (newly elected), Analyst at SEB Fonder, were elected as mem-
more appropriate, the entire Board of Directors may fulfill the bers of the Nomination Committee, with Viveca Ax:son Johnson as
duties of a remuneration committee. Guidelines for salary and other Chairman of the Nomination Committee. Tomas Billing, Chairman
remuneration for the company’s senior executives are resolved by of the NCC Board of Directors, is a co-opted member of the Nomina-
the AGM. Remuneration paid to the CEO is proposed by the Chair- tion Committee but has no voting right. No remuneration was paid
man and established by the Board. The CEO does not participate in to members of the Nomination Committee.
this decision. Remuneration of other senior executives is proposed
by the CEO and approved by the Chairman of the Board. Remunera- NO MINATIO N CO MMITTEE’S PRO PO SA LS
tion of the CEO and other senior executives consists of a fixed sal- The Nomination Committee proposes that the Board of Directors,
ary, variable remuneration, pension and other benefits. Framework to the extent it is elected by the AGM, comprise seven ordinary
conditions for variable remuneration are decided by the Board. The members with no deputy members. Antonia Ax:son Johnson has
variable remuneration potentially payable to the CEO and other declined re-election after 15 years as a member. The Nomination
senior executives is linked to predetermined and measurable crite- Committee proposes the re-election of the current members: Tomas
ria, which have also been designed to promote long-term value gen- Billing, Ulla Litzén, Christoph Vitzthum, Olof Johansson and Sven-
eration in the company. In addition, the maximum outcome of vari- Olof Johansson. The Nomination Committee proposes the new
able remuneration is subject to distinct limits. In the Swedish Code ­election of Carina Edblad and Viveca Ax:son Johnson and the
of Corporate Governance, it is stipulated that for agreements signed ­re-election of Tomas Billing as Chairman.
as of July 1, 2010, the total amount of pay during a period of notice A report on the Nomination Committee’s work and motions
and severance pay may not exceed a sum corresponding to two ahead of the 2014 AGM is presented on NCC’s website www.ncc.se
years of fixed salary. The Board of Directors follows up and evalu- under the “Corporate Governance” tab.
ates application of the remuneration program applicable for senior
executives. The term “other senior executives” pertains to the exec-
utives who, in addition to the CEO, comprise Group Management. A
specification of salaries and other remuneration paid to Board mem-
bers, the CEO and senior executives is presented in Note 5, p. 70.

The B oard of D irectors ’ working year 2013 – in addition to standing points on the agenda
such as business plans , investments and divestments, as well as funding

B OAR D MEETI N G D EC EMBE R 12 BO A RD MEETING J A NU ARY 29

• Strategy • Year-end accounts 2012
• Evaluation of the Board of Directors’ work • Annual Report
• Audit • Proposed distribution of profits
• Budget for 2014 dec jan • Motions to the AGM
• Talent management • Guidelines for salary and other remuneration
• Corporate Governance Report
nov feb
• Definitive audit report
B OAR D MEETI N G O C TO BE R 24
• Quarterly report
• Forecast for the year oct march BO A R D MEETING A PR I L 9
• Strategy • Preparations for the AGM
• NCC’s vision and brand position • Date set for 2015 and 2016 AGMs
sept april
ANNUAL GENERAL MEETING APRIL 9

B OAR D MEETI N G A U G U ST 15 STATUTO RY MEETING A P R I L 9

• Semi-annual report • Company signatories appointed
aug may
• Forecast for the year • Rules of procedure
• Financial control and reporting • Decision-making regulations
july june
• Workplace visit Aarhus • Instructions for the CEO

BO A R D MEETING MAY 2
• Quarterly report
• Forecast for the year
• Workplace visit Helsinki
10 4 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Board of Directors’ report on internal control

The Board of Directors’ 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 disclo-
sures concerning the principal features of the company’s internal-­
control and risk-management systems in connection with the financial
reporting and the preparation of the consolidated financial statements.
Information on this is provided in this section.

F O L LOW - U P 5
Follow-ups to safeguard the quality of the internal controls are conducted in
various ways within NCC. NCC has developed a system (framework) for docu-
mented self-evaluation of internal controls. Self-assessments are performed reg- R ISK A SSESSMENT
ularly for NCC’s business areas and Group offices and comprise a component
for the Board of Directors’ assessment of the internal control.
Operational control systems, the very basis of NCC’s operations, are evalu-
ated through audits of the operations, following which any shortcomings are
rectified.
The internal controls are also followed up via Board work within the various FO LLO W-UP CO N T R OL
business areas and, in cases where it is considered that targeted action is ENVI R ON ME N T
required, the financial control and controller organization is utilized.
In view of the follow-ups conducted via the operational audits and through
the financial control and controller organization, the Board is of the opinion
that there is no need for a special internal examination function, except for the
operational audits.
As part of its audit of the financial statements and the administration, NCC’s
INFO RMATIO N A ND CO NTRO L AC T I VI T Y
auditor, PricewaterhouseCoopers AB, also examines a selection of NCC’s con-
CO MMUNICATIO N
trols. The Board of Directors receives the auditors’ reports and meets the audi-
tors twice annually, including one meeting without the presence of executive
management. In addition, the Chairman of the Board has direct contact with
the auditors on a number of occasions during the year. Prior to these meetings,
views from the audit of the business areas and subsidiaries have been pre-
sented to the Board meetings held in the particular business area/subsidiary or
to the respective business area management. The views that arise are to be
addressed and followed up systematically within the particular unit. NCC’s
auditor also reviews the company’s nine-month report.

I N F O R M AT I O N A N D CO M M U N I C AT I O N 4
Information and communication regarding the internal policies, guidelines, manu- All financial reporting must comply with the rules and regulations found on Starnet
als and codes to which the financial reporting is subject are available on NCC’s Ekonomi.
Intranet (Starnet Ekonomi). The information also contains methodology, instructions Financial reporting occurs in part in the form of figures in the Group-wide report-
and supporting documentation in the form of checklists etc. as well as overall time ing system and in part in the form of written comments in accordance with specially
schedules. Starnet Ekonomi is a living regulatory system that is updated regularly formulated templates. Instructions and regulations concerning both written and fig-
through the addition of, for example, new regulations concerning IFRS and NAS- ure-based reporting are available on Starnet Ekonomi. The rules and regulations
DAQ OMX Stockholm. NCC’s Chief Financial Officer has principal responsibility are updated regularly under the auspices of the Chief Financial Officer. In addi-
for Starnet Economy, which includes the following: tion, regular training programs and conferences are arranged for management
• Policies and regulations for the valuation and classification of assets, liabilities, and financial control personnel in respect of joint principles concerning the require-
revenues and expenses. ments to which the internal control is subject. This is within the Chief Financial
• Definitions of the terms used within NCC. ­Officer’s sphere of responsibility.
• Accounting and reporting instructions. The status of the internal control set-up is reported annually at a meeting of the
• Framework for self-evaluation of internal controls. NCC AB Board. Such reporting also occurs at business area level.
• The organization of the financial control function.
• Time schedules for audit and reporting occasions, among others.
• Decision-making regulations.
• Attestation instructions
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 10 5

CO NTR O L ENVIRO NMENT 2

The Board has overall responsibility for the internal control of financial reporting.
Each year, the Board establishes rules of procedure for the Board’s work and an
instruction concerning the division of work between the Board and the Chief

1
Executive Officer. According to this instruction, the President and CEO is respon-
sible for the internal control and for contributing to an efficient control environ-
R ISK- A S S ES S MEN T A ND RISK - M AN AGE M E N T ment. According to the Companies Act, the Board is obligated to establish an
Audit Committee. If the Board finds it more appropriate, the entire Board of
NCC applies a risk-assessment and risk-management method for ensuring that
Directors may fulfill the duties of the Audit Committee, the method applied in
the risks to which the company is exposed, and that can impact the internal
NCC’s case, since three independent Board members have auditing and
control and financial statements, are addressed within the processes that have
accounting competencies. The fact that the Board is relatively small also facili-
been established. The material risks that have to be taken into account include
tates this work.
market risks, operating risks and the risk of errors in financial recognition. With
The NCC Group is a decentralized international organization with business
respect to the latter, systematic and documented updates occur once annually.
areas structured in a corporate format based on rules concerning the compa-
The material risks that have to be considered mainly comprise the risk of errors
nies’ governance in accordance with company law. At Board meetings, the
in percentage-of-completion profit recognition and items based on assessments
CEO and, where applicable, subsidiary presidents present the ­matters that
and estimates, such as valuations of land held for future development and
require treatment by the Board. Operational management of the Group is
ongoing property development, goodwill and provisions.
based on decision-making regulations within the NCC Group that are adopted
annually by the Board. The decision-making regulations stipulate the matters
Within NCC, risks are followed up in several different ways, including via:
that require the Board’s approval or confirmation. In turn, this is reflected in the
• Monthly status checks with the Business Area Manager and financial
corresponding decision-making regulations and attestation regulations apply-
manager of each particular business area. Representing NCC AB, these
ing for the subsidiaries. The basis for the internal control of financial reporting
meetings are always attended by the CEO and the Chief Financial Officer.
comprises everything that is documented and communicated in control docu-
The status checks address such matters as orders received, earnings, major
ments, such as internal policies, guidelines and manuals.
ongoing and problematical projects, cash flow and outstanding accounts
receivable. The meetings also address tenders and major investments, in
accordance with the decision-making regulations.
• Board meetings in the various business areas, which are held at least five
times per year. Board meetings are minuted. The members of each particular For more information on governance and control, see the Group’s website
board include NCC AB’s CEO and the Chief Financial Officer, as well as the www.ncc.se, where you will find such documents as the Articles of Association
Senior Legal Counsel. These meetings address the complete income state- and the Code of Conduct.
ment, balance sheet and cash flow statement in terms of both outcome and
forecast, alternatively budget. Forecasts are formulated and are checked on
three occasions: in connection with the quarters ending March, June and
September, and in the following-year budget in November. The meetings
also address tenders, investments and sales, in accordance with the decision-
making regulations. Investments and divestments of real estate exceeding
SEK 150 M must be approved by NCC AB’s Board. All investments exceed-
ing SEK 50 M must be approved by NCC AB’s CEO.
• Major tenders to be submitted by the business area (exceeding
SEK 300 M) must be approved by NCC AB’s CEO. Tenders exceeding
SEK 500 M must be endorsed by NCC AB’s Board.
• NCC AB’s Board receives monthly financial reports and NCC’s current
financial status is presented at each Board meeting.
AU D I TO RS’ S TAT E M E N T O N T H E CO R P O R AT E
Financial risk positions, such as interest rate, credit, liquidity, exchange rate
and refinancing risks, are managed by the specialist function, NCC Corporate G OV E R N A N C E R E P O R T
Finance. NCC’s finance policy stipulates that NCC Corporate Finance must
always be consulted and, in cases where Corporate Finance sees fit, that it To the Annual General Meeting of NCC AB,
must manage financial matters.
Corp. Reg. No. 556034-5174
It is the Board of Directors that is responsible for the 2013
­Corporate Governance Report on pp. 100–105 and that it has

CO N T RO L AC T I V I T I ES 3
At NCC, financial reporting and the management of risks are based on a num-
been prepared in accordance with the Annual Accounts Act.
We have read the Corporate Governance Report and, based on
this reading and our knowledge of the company and the Group,
ber of control activities that are conducted at various levels for the companies we believe that we have sufficient grounds for our opinions. This
and business areas. The purpose of the control activities is to ensure the effi- means that our statutory review of the Corporate Governance
ciency of the Group’s processes and that the internal controls are adequate.
Report has a different orientation and a significantly more limited
For the business operations, operational control systems form the basis for
the control structure established and these focus on stages in the business oper- scope than the orientation and scope of an audit conducted in
ations, such as investment decisions, assessment of tenders and permission to accordance with the International Standards on Auditing and
start up projects, which occur in part via the IT systems that support the various
generally accepted auditing practices in Sweden.
operational processes and in part through appropriately designed manual con-
trols intended to prevent, discover and correct faults and nonconformities. In our opinion, a Corporate Governance Report has been
NCC attaches considerable weight to the follow-up of projects. ­prepared and its statutory content is consistent with the annual
In addition, a strong focus is placed on ensuring the correctness of the busi-
accounts and consolidated accounts.
ness transactions included in the financial reporting. For a number of years,
NCC has had a shared service center, NCC Business Services (NBS), which
manages most of the transactions of the Nordic operations. A demand Stockholm, March 7, 2014
imposed on NBS is that its processes must include control activities that man-
age identified risks in a manner that is efficient for NCC in relation to the cost
incurred. NBS systematically and continuously develops its processes. Since PricewaterhouseCoopers AB
November 2013, the Group also has a shared service center, Human
Recourses Services (HRS), which accounts for NCC’s payroll administration for
Håkan Malmström
the Nordic countries and is subject to corresponding requirements as NBS.
Authorized Public Accountant
10 6 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Board of Directors
and Auditors

olof johans s on U l l a Li t z é n

tom a s b i lli n g

C hr i s top h V i t z t hu m

sve n -olof johans so n

Anton i a Ax: son J o hns on

tomas billing olof johansson Ulla L it z é n

Chairman. Born 1963. Born 1960. Born 1956.
Board member since 1999 and Chairman since 2001. Board member since 2012. Chairman and partner in Board member since 2008. Board member of Alfa Laval
President of Nordstjernan AB. Board member of Stenas Pangea Property Partners. Previous experience: Active in AB, Atlas Copco AB, Boliden AB, Husqvarna AB and AB
Sfärråd and Parkinson Research Foundation. Previous the Skanska Group (1986–2002), in charge of Skans- SKF. Previous experience: President of W Capital Man-
experience: President of Hufvudstaden AB and Monark ka’s project-­development operations (1996–2002) agement AB (2001– 2005) and Vice President of Inves-
Bodyguard AB, among other positions. among other positions. tor AB (1996–2001), among other positions.
Shareholding in NCC AB: 20,600 Series A shares and Shareholding in NCC AB: 4,000 Series B shares. Shareholding in NCC AB: 3,400 Series B shares.
75,400 Series B shares.
sven- olof johansson Christoph Vitz thum
Antonia A x :son J ohnson Born 1945. Born 1969.
Born 1943. Board member since 2012. President and principal Board member since 2010. President and CEO of Oy
Board member since 1999. Chairman of the Board of Axel owner of FastPartner AB since 1996. Board member of Karl Fazer AB. Previous experience: VP Wärtsilä
Johnson AB and the Axel and Margaret Ax:son ­Johnson Allenex AB and Autoropa AB. Previous experience: own ­Services 2009–2013, VP Wärtsilä Power Plants (2006–
Foundation. Deputy Chairman of the Board of N ­ ordstjernan business and entrepreneur, among other positions. 2009), President of Wärtsilä Propulsion (2002–2006)
AB. Member of the Board of Axel Johnson Inc., Axfast AB, Shareholding in NCC AB: 100,000 Series B shares via and CFO at Wärtsilä Oyj Abp, Ship Power (1999–
Axfood AB, Mekonomen AB and the Axel and Margaret companies. 2002), among other positions.
Ax:son Johnson Foundation for Public Benefit. Shareholding in NCC AB: 0
Shareholding in NCC AB: 167,400 Series A shares and
72,400 Series B shares via private companies.

The details regarding shareholdings in NCC pertain to shares that were directly owned, owned via related parties or owned via companies at December 31, 2013. For updated
­information about shareholdings, see the Group’s www.ncc.se website, under investor relations/The NCC share, which includes information from the Swedish Financial Supervisory
Authority’s insider register.
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 107

L a rs Be rgqvis t k a r l g. si v e rtsso n K a r l- J o ha n A n d e r s s o n

l is k a r leh em

M ats j o ha nsso n

E mployee representatives

K arl -Johan Andersson karl g. sivertsson lis karlehem

Born 1964. Paver. Born 1961. Carpenter. Born 1963. Services Manager Group IT.
Board member since 2011. Employed since 1984. Shop Board member since 2009. Employed since 1986. Deputy Board member since 2009. Employed since
steward at NCC. Employee representative of SEKO Shop steward at NCC. Employee representative of Sven- 1999. Employee representative of Unionen (formerly SF,
(Union for Employees in the Service and Communication ska Byggnadsarbetareförbundet (Swedish Building Work- Swedish Industrial Salaried Employees’ Association).
Sectors). Other assignments: Member of SEKO’s Road ers’ Union). Other assignments: Vice Chairman of Systems manager at IT Sverige.
and Rail Department in Skåne. Senior shop steward of ­Svenska Byggnadsarbetareförbundet, Central Norrland Shareholding in NCC AB: 0
the paving section in Skåne. Region, and deputy member of Federation Board of
Shareholding in NCC AB: 0 ­Svenska Byggnadsarbetareförbundet.
Shareholding in NCC AB: 0 Auditors –
Lars B ergqv ist PricewaterhouseCoopers AB
Born 1951. Construction engineer. M ats johansson
Hå kan Malmström
Board member since 1991. Employed since 1975. Shop Born 1955. Carpenter.
Auditor-in-charge. Born 1965.
steward at NCC. Employee representative of Ledarna Deputy Board member since 2011. Employed since
Other significant assignments: auditor of Axel
(Swedish Association of Supervisors). Other assign- 1977. Construction carpenter and shop steward at
Johnson AB, Karo Bio AB, Nord­stjernan AB and
ments: President of Byggcheferna (union of construction NCC, as well as chief safety officer. Employee represen-
Saab AB.
managers). tative of Svenska Byggnadsarbetareförbundet (Swedish
Shareholding in NCC AB: 1,140 Series A shares and Building Workers’ Union). Other assignments: Regular
200 Series B shares (including related-party holdings). Board member of Byggnadsarbetareförbundet in the
SECRETA RY O F THE BO A RD
Småland/Blekinge region.
Shareholding in NCC AB: 100 Series B shares. Hå kan Broman
Born 1962. General Counsel at NCC AB. NCC
AB’s Board Secretary since 2009.
Shareholding in NCC AB: 500 Series B shares.
10 8 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Group Management

J oac hi m H a lle n g r e n

P e te r wågs t röm hå k a n b ro m a n

k l au s k a a e

sva nte hag m a n

J oachim H allengren
Born 1964. President of NCC Housing since 2012.
Employed by NCC since 1995. Previous experience:
A n n -S ofi e Da n i el sson Head of NCC Property Development (2009–2013),
Head of NCC Property Development’s Swedish opera-
tions (2007–2009), Regional Manager NCC Property
Peter Wå gstr ö m H å kan Broman Development Western Sweden (2004– 2007), Regional
Manager NCC Property Development Southern Sweden
Born 1964. President and CEO since 2011. Born 1962. General Counsel in NCC AB since 2009.
(2003– 2004), various positions within NCC’s Property
President of NCC Housing (2009–2010). Employed by Employed by NCC since 2000. Previous experience:
Development operations (1995–2003), among other
NCC since 2004. Previous experience: President of NCC corporate lawyer at NCC International Projects and
positions.
Property Development (2007– 2008), Head of NCC NCC Property Development (2000– 2008), corporate
Shareholding in NCC AB: 0
­Property Development’s Swedish operations (2004–2006), lawyer at ABB/Daimler Chrysler Transportation (1996–
various management positions in Drott (currently Fabege) 2000), lawyer at Ekelunds advokatbyrå (1993–1996)
(1998–2004) and various positions in Skanska’s real and positions in Swedish court system (1991–1993), klaus kaae
estate operations (1991–1998), among other positions. among other positions; active in the European Born 1959. President of NCC Construction Denmark
Shareholding in NCC AB: 10,360 Series B shares (includ- ­International Contractors (EIC) (2001–2010) and since 2012. Employed by NCC since 1985.
ing related-party holdings) and 19,319 call options on ­Member of the Board (2008–2010). Previous experience: Deputy President of NCC
Series B shares. Shareholding in NCC AB: 500 Series B shares. ­Construction Denmark (2009–2012), among other
­positions. Corporate Director of NCC Construction
A nn -Sofie D anielsson S vante hagman ­Denmark 2002–2009. Member of the Board of Dansk
Byggeri.
Born 1959. Chief Financial Officer since 2007 and Born 1961. Head of NCC Construction Sweden since
Shareholding in NCC AB: 0
Financial ­Director since 2003. Employed by NCC since 2012. Employed by NCC since 1987. Previous experi-
1996. Previous experience: Finance Director and Group ence: Head of NCC Housing (2011–2012), Head of
­controller at NCC AB (1999–2003), Group Accounts Stockholm/Mälardalen Region at NCC Construction
Manager at NCC AB (1996–1999) and Group Accounts S
­ weden and Head of Market and Business Development
Manager at Nynäs AB (1993–1995) and Authorized at NCC Construction Sweden, among other positions.
Public Accountant at Tönnerviksgruppen and KPMG Other assignments: Board member of Swedish Construc-
(1984–1992), among other positions. Other assign­ tion Federation.
ments: Member of the Board of RNB Retail and Brands. Shareholding in NCC AB: 7,244 call options on
Shareholding in NCC AB: 3,000 Series B shares. Series B shares.

The details regarding shareholdings in NCC pertain to shares that were directly owned, owned via related parties or owned via companies at December 31, 2013. For updated
­information about shareholdings, see the Group’s www.ncc.se website, under investor relations/The NCC share, which includes information from the Swedish Financial Supervisory
Authority’s insider register.
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 10 9

CAROLA LAVÉN g öran l a nd g r e n c hr i s ti n a li nd bäc k Jaco b b lo m

A n n L i n d ell Sa eby H å ko n tjo m sl a nd

N
HARRI SAVOLAINEN

CA R OL A L AV ÉN Göran L andgren jacob blom

Born 1972. Head of NCC Property Development since Born 1956. Head of NCC Roads since 2006. Employed Born 1970. Senior Vice President Human Resources
May 2013. Employed by NCC since 2013. by NCC since 1981. since March 12, 2014. Employed by NCC since
Previous experience: Business Development Director at Deputy President of NCC Construction Sweden with 2013. Previous experience: Business Support Man-
Atrium Ljungberg (2006–2013), Business Development responsibility for marketing, business development ager at NCC Construction Denmark (2013–2014), VP
Director at Ljungberg-Gruppen (2003–2006) and and subsidiaries (2004–2006) and various positions Human Resources at TDC Business & TDC Nordic
­Property Manager for Stockholm/Uppsala at Drott in ­building and civil engineering operations at NCC (2009–2013), VP Human Resources at NCC
(1998–2003), among other positions. Other assign­ (1981–2001). Employed by Peab as Head of the ­Construction Denmark (2008-2009) and VP Human
ments: Member of the Board of BRIS. Civil Engineering Division (2001–2003). Resources at Merck Sharp & Dohme in Denmark and
Shareholding in NCC AB: 0 Shareholding in NCC AB: 500 Series B shares later in Sweden (2000–2005), among other positions.
­(including related-party holdings). Shareholding in NCC AB: 0.
A nn L indell S aeby
Born 1962. Senior Vice President Corporate Communica- H ARRI SAV OLA INEN Hå kon tjomsland
tions since 2012. Employed by NCC since 2012. Born 1971. Head of NCC Construction Finland since Born 1964. Head of NCC Construction Norway since
Previous experience: Senior Vice President Corporate 2012. Employed by NCC since 2001. Regional Man- June, 2013. Employed by NCC since 1992. Previous
Communications at Fortum (2004–2012) and communi- ager of NCC’s residential construction in Helsinki and experience: Regional Head of NCC’s civil-engineering
cations consultant and partner at Kreab Gavin Anderson various executive positions at NCC Construction Finland operations in Norway (2009-2013), among other posi-
(1998–2004), among other positions. since 2001. Other assignments: Member of the Board of tions. District Manager in Civil ­Engineering Region
Shareholding in NCC AB: 0 Ömsesidiga Pensionsförsäkringsbolaget Etera and (2003-2009). Prior to that, senior engineer and civil
B
­ yggnadsindustri RT. engineering manager at NCC ­Construction Norway.
christina lindbä ck Shareholding in NCC AB: 800 Series B shares. Shareholding in NCC AB: 0

Born 1963. Senior Vice President Corporate Sustain­ability,

since March, 2013. Previous experience: Senior Vice Pres- O ther senior executives *
ident Environmental Affairs at NCC AB 2010– 2013,
Quality and Environmental Manager, Ragn-Sells AB, Peter gjö rup Greeg Nordqv ist
2002–2010, Assistant Undersecretary, Acting Permanent Born 1959. Chief Purchasing Officer NCC AB. Born 1955. Senior Vice President Strategy and
Undersecretary of State, Deputy Assistant Undersecretary, Employed by NCC since 1984. Previous experience: Mergers & Acquisitions (M&A). Employed by NCC
etc. at the Ministry of the Environment (1991–2002), Head of NCC Construction Norway, Manager of since 1996. Previous experience includes Head of
among other positions. Other assignments: Chairman of Norrland Region in NCC Construction Sweden, M&A at NCC AB 1996– 2011, responsibility for
the Board of Miljömärkning Sweden AB, Nordic Swan among other positions in both civil engineering and M&A at Price Waterhouse 1991–1996, president/
Ecolabel. building. owner of a group of companies active in machine
Shareholding in NCC AB: 0 Shareholding in NCC AB: 53 Series A shares, 2,000 sales and service 1986 – 1993.
series B shares and 13,571 call options on Series B Shareholding in NCC AB: 0
shares.
* Reports directly to the Chief Executive Officer.
110 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

The NCC share

NCC’s shares were initially listed on the Stockholm SHA R E R EPUR CHA SES A ND CO NVERSIO NS
During the year, 177,000 shares were bought back and the number
Stock Exchange in 1988, under the Nordstjernan of treasury shares at year-end was 592,500.
name. The shares are traded on Nasdaq OMX In 1996, holders of Series A shares were provided with the oppor-
Stockholm/Large Cap. tunity to convert their Series A shares to B shares. During 2013,
2,425,764 shares were converted. A total of 36.1 million shares have
S H AR E PER F O R MA N C E A N D T RAD IN G been converted since 1996. Written requests regarding conversion
Following a couple of years characterized by uncertainty, primarily must be submitted to the Board of Directors.
due to financial problems in Europe, stock markets stabilized in 2013
and performed favorably. The NASDAQ OMX Stockholm exchange DIVIDEND A ND DIVIDEND PO LICY
ended the year up by 23 percent. NCC’s Series B share noted a price NCC’s dividend policy is to distribute at least half of profit after taxes
increase of 54 percent, which may be compared with the OMX sector as dividends. For 2013, the Board proposes a dividend of SEK 12.00
index, which rose 38 percent. The year-end price of the NCC share (10.00) per share, divided into two payments. The proposed divi-
corresponded to market capitalization of SEK 22.7 billion. dend amounts to SEK 1,294 M (1,080), corresponding to 65 percent
During the year, a total of about 166 million (161) NCC shares of profit after tax. The total return (based on the share performance
were traded in a total of 781,139 (572,405) completed transactions at and dividend paid in relation to the price of NCC’s share at the
a total value of SEK 27.9 billion (21.1). NASDAQ OMX Stockholm beginning of the year) in 2013 was approximately 64 percent (21) for
accounted for 95 percent (83) of trading in Series A NCC shares. For Series B NCC shares. The NASDAQ OMX Stockholm average,
Series B shares, NASDAQ OMX Stockholm accounted for 51 per- according to Six Return Index, was 28 percent (17).
cent (59) of trading, which means that other marketplaces
accounted for 49 percent (41).1) Over the past five years, trading in THE NCC SHA R E IN 2013

Series B shares on marketplaces other than NASDAQ OMX Stock- Series A shares Series B shares
holm has risen from 16 to 49 percent. The turnover rate for Series A Total number of shares1) 27,708,122 80,135,200
shares totaled 10 percent (6) on all marketplaces and 10 percent (5) Voting rights 10 votes 1 vote
on NASDAQ OMX Stockholm. The turnover rates for Series B Total share turnover, including late entries, millions 2.7 163.3
shares were 204 percent (204) in total and 104 percent (119) on – of which, on NASDAQ OMX Stockholm 2.7 83.2
Total value of share turnover, SEK M 461 27,400
NASDAQ OMX Stockholm. The turnover rate for NASDAQ OMX
– of which, on NASDAQ OMX Stockholm 461 14,063
Stockholm as a whole declined to 67 percent (74) during the year.
Turnover rate, %
– total, all marketplaces 10 204
O WNE R SH I P S TR U C TU R E
– on NASDAQ OMX Stockholm 10 104
Nordstjernan AB is the largest NCC shareholder. During the year, Share price at start of year, SEK 136.00 136.20
Norges Bank Investment Management joined the list of the ten larg- Share price at year-end, SEK 209.50 209.90
est shareholders. The proportion of foreign shareholders rose to 22 Highest price paid, SEK 212.70 212.90
percent (16) of the share capital and, in addition to Norway, the US Lowest price paid, SEK 136.00 138.00
accounted for the largest holdings. The current list of shareholders Beta value 0.905 0.967
is available on www.ncc.se Paid-out dividend, SEK 10.00 10.00
Total return, including dividend, % 64.33 64.44
1) Excluding treasury shares.
1) Followingthe deregulation of stock markets, shares can be traded on marketplaces other
than the exchange on which the share is listed, whereby additional players have estab-
lished a position and trading has become more fragmented. Important marketplaces for
­Swedish shares are BATS Chi-X, Burgundy, Turquoise and London.

Shareholder categories, percentage of share capital Share - price trend and turnover , 2013

The share of foreign ownership of NCC rose from 16 to 22 percent in Number of shares
2013. SEK in thousands
225 35,000

200 28,000
Private companies
Private companies
(including Nordstjernan), 24 (26)%
(including Nordstjernan), 24 (26)% 175 21,000
Swedish mutual funds, 19 (20)%
Swedish mutual funds, 19 (20)%
Swedish private individuals, 10 (11)% 150 14,000
Swedish
Foreign private individuals,
shareholders, 22 (16)% 10 (11)%
Pension
Foreignsavings funds, 9 (9)%22
shareholders, (16)% 125 7,000
Insurance companies, 4 (5)%
Pension savings funds, 9 (9)% 100 0
Other shareholders, 12 (13)% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Insurance companies, 4 (5)%
NCC B Number of shares
Other shareholders, 12 (13)% traded in thousands
OMX Stockholm
OMX Stockholm Construction & Materials (Source: © Fidessa and SIX Trust.)
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 111

FIVE -Y E A R TR EN D I N N C C SH ARE S Distribution of shares by holding , December 31, 2013 1 )

2009 2010 2011 2012 2013 Percentage

Market price at year-end, NCC B of total no. Percentage
share, SEK 118.25 147.80 121.00 136.20 209.90 No. of of share­ of share
s­ hareholders holders No. of shares capital
Market capitalization, SEK M 12,809 16,005 13,136 14,706 22,748
1–500 28,802 76.3 4,886,131 4.5
Earnings per share, SEK1) 11.634) 14.05 12.08 17.51 18.40
501–1,000 4,793 12.7 3,986,806 3.7
Ordinary dividend, SEK 6.00 10.00 10.00 10.00 12.002)
1,001–10,000 3,635 9.7 9,997,714 9.2
Dividend yield, % 5.1 6.8 8.3 7.3 5.7
10,001–100,000 378 1.0 11,949,569 11.1
Total return, %3) 1474) 30 –11 21 64
100,001–1,000,000 105 0.2 33,742,117 31.6
Number of shares outstanding
at year-end (millions) 108.4 108.4 108.4 108.0 107.8 1,000,001– 13 0.1 43,280,985 39.9
Total 37,726 100.0 107,843,322 100.0
Key figures per share are presented in the Multi-year review on p. 98.
1) After tax and full dilution. 1) Excluding treasury shares.
2) Proposed dividend. (Source: Euroclear Sweden AB.)
3) Share performance and dividend paid in relation to the price of NCC’s share

at the beginning of the year.

4) Not restated according to IFRIC 15.

S eries A and B shares

Series A Series B Total Series A Ownership structure at D ecember 31, 2013 1 )

­shares shares and Series B
No. of shares on Dec. 31, 1999 63,111,682 45,324,140 108,435,822 Percentage of
Conversion of Series A to Series B No. of Series No. of Series Share Voting
shares 2000–2012 –32,977,796 32,977,796 A shares B shares capital rights
Share buybacks 2000–2012 –6,450,892 –6,450,892 Nordstjernan AB 23,200,000 200,000 21.6 65.0
Sale of treasury shares SEB funds 6,688,254 6.2 1.9
2005–2011 6,035,392 6,035,392 Swedbank Robur funds 420,392 3,758,156 3.9 2.2
Number of shares outstanding AMF Insurance & Funds 2,986,720 2.8 0.8
at December 31, 2012 30,133,886 77,886,436 108,020,322 Lannebo funds 2,400,000 2.2 0.7
Conversion of Series A to Norges Bank Investment
Series B shares 2013 –2,425,764 2,425,764 Management 4,239 2,329,133 2.2 0.7
Repurchase of shares in 2013 –177,000 –177,000 Second AP Fund 2,309,317 2.1 0.6
Number of shares outstanding SHB funds 32,028 1,960,891 1.8 0.6
at December 31, 2013 27,708,122 80,135,200 107,843,322 Fourth AP Fund 1,410,753 1.3 0.4
AFA Försäkring 1,380,250 1.3 0.4
Number of voting rights 277,081,220 80,135,200 357,216,420
Total ten largest
Percentage of voting rights 78 22 100 shareholders 23,656,659 25,423,474 45.4 73.3
Percentage of share capital 26 74 100 Other shareholders in Sweden 3,759,295 34,055,734 35.3 20.1
Closing price Shareholders outside Sweden 292,168 20,655,992 19.3 6.6
Dec. 31, 2013, SEK 209.50 209.90
Total number of shares 27,708,122 80,135,200 100.0 100.0
Market capitalization, SEK M 5,805 16,820 22,625
1) Excluding treasury shares.
(Source: Euroclear Sweden AB.)

S H A R E- P R I C E TR EN D AN D T U RN OV E R, 2009–2013 TO TA L R ETUR N, 2009–2013

Number of shares
SEK in thousands SEK
300 40,000 350

300
225 30,000 250
200
150 20,000
150

100
75 10,000
50

0 0 0
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

NCC B Number of shares Total return, NCC B

OMX Stockholm traded in thousands SIX Return Index
OMX Stockholm Construction & Materials (Source: © Fidessa and SIX Trust.) SIX Building & Construction Return Index (Source: SIX Trust.)
112 n c c 2 013 s h a r e h o l d e r i n f o r m at i o n

Financial information/contacts
NCC will publish financial information regarding the 2014 fiscal The person within the NCC Group responsible for shareholder-
year on the following dates: related issues and financial information is Johan Bergman, IR Man-
ager (Tel: +46 8 585 523 53; e-mail: [email protected]).
April 2 Annual General Meeting
April 29 Interim report, January–March A nnual G eneral M eeting
July 18 Interim report, January–June The Annual General Meeting will be held at 4:30 p.m. on April 2, 2014.
October 24 Interim report, January–September Venue: Grand Hôtel, Vinterträdgården, Royals entrance, Stall-
January 2015 Year-end report 2014 gatan 6, Stockholm. Notification can be made by post to the follow-
ing address: NCC AB, Agneta Hammarbäck, SE-170 80, Solna, via
NCC’s interim reports are downloadable from the NCC Group’s the Group’s website www.ncc.se, by telephone to +46 8 585 521 10,
website, www.ncc.se, where all information regarding the NCC by fax ­+­46-8-624 00 95, or by e-mail to [email protected].
Group is organized in English and Swedish versions. The website Notification should include name, personal identification number
also includes an archive of interim reports dating back to 1997 and (corporate ­registration number), address, telephone number and
annual reports dating back to 1996. NCC does not print or distribute registered ­shareholding.
its interim reports. The printed Annual Report is sent to those who Registration at the Meeting will begin at 3:30 p.m. The official
request it. notification of the Annual General Meeting is available on the NCC
The price performance of NCC’s Series A and B shares, updated Group’s website, www.ncc.se, and was published in Post- and
every 15th minute of each day of trading, is presented under the Inrikes­tidningar on February 25, 2014. Confirmation that the ­official
“Investor Relations” tab, as are relevant financial figures. Press notification had been issued was announced the same day in Dagens
releases issued by the Group, NCC AB, and local press releases Nyheter and Svenska Dagbladet.
from the various countries are available on the website.
NCC’s financial information can be ordered either by using the NCC AB (publ), Corp. Reg. No. 556034-5174,
order form available on the www.ncc.se, website, by e-mailing Registered Head Office: Solna.
[email protected], writing to NCC AB, SE-170 80 Solna, Sweden, or calling Addresses of companies included in the NCC Group are
NCC AB at +46 8 585 510 00. available at www.ncc.se.

Shareholder information on ncc . se

All financial information concerning the NCC Group and everything that concerns you
as a NCC shareholder is available on NCC’s website under the Investor Relations tab.

Share-price information.
Share-price information with a
15-minute delay is available and
it will also be possible to see the
total return (including reinvested
dividends) and compare the per-
formance of the NCC share with
MORE INFORMATION/
that of Nordic competitors.
CONTACT PERSON.
Johan Bergman
IR Manager
List of analysts. Here, you Tel: +46 (0)8-585 523 53
will find a list of the analysts who E-mail: [email protected]
regularly monitor NCC and their
expectations of the company.

Shareholder service. From

our Shareholder Service, you can
subscribe for the information you
would like to receive – and also
decide the format in which you
will receive it, on paper or by
e-mail.
 s h a r e h o l d e r i n f o r m at i o n n c c 2 013 113

Definitions/glossary
F inancial key figures Return on equity: Net profit for the year according to the income statement excluding
non-controlling interests, as a percentage of average shareholders’ equity.
Average interest rate: Nominal interest weighted by interest-bearing liabilities out-
standing on the balance-sheet date. Return on total capital: Profit after financial items including results from participa-
tions in associated companies plus financial expense in relation to average total assets.
Average period of fixed interest: The remaining period of fixed interest weighted
by interest-bearing liabilities outstanding. Share of risk-bearing capital: The total of shareholders’ equity and deferred tax
­liabilities as a percentage of total assets.
Average shareholders’ equity: Average of the balances at January 1, March 31,
June 30, September 30 and December 31. Total return: Share-price performance during the year plus dividend paid divided by
share price at the beginning of the year.
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. SECTO R-RELATED DEFINITIO NS

Capital turnover rate: Net sales divided by average capital employed. Buildings/other buildings: In descriptions of operations, this term pertains in part to
commercial buildings, mainly offices, retail outlets, shopping malls, garages, hotels and
Debt/equity ratio: Net indebtedness divided by shareholders’ equity.
industrial buildings and in part to public premises and buildings such as hospitals,
Dividend yield: The dividend as a percentage of the market price at year-end. schools, healthcare and care facilities and public administration buildings.

Earnings per share, after taxes: Net profit for the year attributable to NCC share- Construction costs: The cost of constructing a building, including building accesso-
holders divided by the weighted number of shares during the year in question. ries, utility-connection fees, other contractor-related costs and VAT. Construction costs
do not include the cost of land.
Equity/assets ratio: Shareholders’ equity as a percentage of total assets.
Detailed development plan: Municipal plan for the use of land in a certain area, which
Exchange-rate difference: Exchange-rate changes attributable to movements in various
is legally binding and can form the foundation for the granting of building permits.
exchange rates when receivables and liabilities in foreign currencies are translated into SEK.
Development rights: Estimated possibility to develop a site. With respect to housing,
Exchange-rate effect: The impact of changes in various exchange rates on current
a development right corresponds to an apartment or semi-detached or detached house.
reporting in NCC’s consolidated accounts on translation into SEK.
Either ownership of a site or an option on ownership of the site concerned is a prerequi-
Interest-coverage ratio: Profit after financial items plus financial expense divided by site for being granted access to a development right. For commercial properties,
financial expense. develop­ment rights are measured in square meters.

Net indebtedness: Interest-bearing liabilities and provisions less financial assets Function contract: Usually a multi-year contract in which the customer imposes func-
including cash and cash equivalents. tional requirements rather than detailed requirements concerning materials and design.

Net investments: Closing balance less opening balance plus depreciation and impairment General plan: Municipal plan for the use of land in a certain area, which is not legally
losses less write-ups pertaining to fixed assets and properties classed as current assets. binding and normally necessitates being followed up and defined in greater detail in
detailed development plans.
Net margin: Profit after net financial items as a percentage of net sales.
Leasing rate: The percentage of anticipated rental revenues that corresponds to
Net sales: The net sales of construction operations are recognized in accordance with
signed leases (also called leasing rate based on revenues).
the percentage-of-completion principle. These revenues are recognized in pace with the
gradual completion of construction projects within the company. For NCC Housing, net NCC Partnering: A cooperation format applied in the construction and civil engineer-
sales are recognized when the housing unit is transferred to the end customer. Prop- ing industry, whereby the client, consultants and contractor establish open and trusting
erty sales are recognized on the date on which significant risks and benefits are trans- cooperation at an early stage of the process based on shared goals, joint activities and
ferred to the buyer, which normally coincides with the transfer of ownership. In the joint financial targets in order to optimize the project.
­Parent Company, net sales correspond to income-recognized sales from completed
Platforms: Group-wide standardized technical solutions. Have been developed for
projects.
everything from sports arenas, offices, logistics facilities and bridges to single-family
Operating margin: Operating profit as a percentage of net sales. and multi-family housing.

Operating net: Result from property management before depreciation. Properties: In descriptions of operations, “properties” refers to buildings, housing or land.

Order backlog: Period-end value of the remaining non-worked-up project revenues for Proprietary project: When NCC, for its own development purposes, acquires land,
projects received, including proprietary projects for sale that have not been completed. designs a project, conducts construction work and then sells the project. Pertains to
both housing projects and commercial property projects.
Orders received: Value of received projects and changes in existing projects during
the period concerned. Proprietary projects for sale, if a decision to initiate the assign- Required yield: The yield required by purchasers in connection with acquisitions of
ment has been taken, are also included among assignments received, as are finished property and housing projects. Operating revenues less operating and maintenance
properties included in inventory. expenses (operating net) divided by the investment value.

P/E ratio: Market price of the shares at year-end, divided by earnings per share after taxes. VDC: Virtual Design and Construction.

Profit margin: Profit after financial items as a percentage of net sales.

Repurchase of treasury shares in share data: Treasury shares have been excluded
from calculations of key figures based on the number of shares o
­ utstanding.
Emissions of greenhouse gases
Return on capital employed: Profit after financial items including results from partic- from the production of this printed
matter, including paper, other mate-
ipations in associated companies following the reversal of interest expense in relation to rials and transport, have been offset
average capital employed. through investment in a correspond-
ing amount of certified reduction
units in the Kikonda Forest Reserve
project, forest plantation in Uganda.

Production: NCC and Hallvarsson & Halvarsson. Translation: The Bugli Company

Photographers: Søren Aagaard p. 40. Klas Andersson p. 35, cover flap. Niklas S Bernstone p. 2, 7. David H Carriere/ Getty Images p. 16. Ulf Celander p. 24.
DesignGroup Architects A/S p. 5. Diakrit p. 38. Thomas Fahlander p. 13. Louise Falborg p. 23. Felix Gerlach p. 11, 29. Casper Hedberg p. 13, 32, 33,
cover front and back, cover flap. Steffen Hoeft Photography p. 26. Ulf Huett p. 11, 34. Sten Jansin pp. 106–109. Rickard Kilström/ Kontinent p. 4, 17, 36. Håkan Lindgren p. 3.
Micke Lundström p. 9. Terhi Paavilainen p. 11. Mika Pajo p. 19. Sini Pennanen p. 9. Per Pixel Petterson p. 14, 22. Kimm Saatvedt p. 21. Dalibor Sandic p. 8, cover flap.
Conny Sillén p. 3, 36. Strategisk Arkitektur p. 41. Mikael Ullén p. 2, 18. Anders Wejrot/ BLR Fotograferna p. 39. www.omelettfoto.se p. 13.

Print: Elanders Sverige, 2014.

NCC is one of the leading construction and
property development companies in North-
ern Europe, with sales of SEK 58 billion and
18,500 employees. With the Nordic region
as its home market, NCC is active through-
out the entire value chain – developing and
building residential and commercial proper-
ties, and constructing industrial facilities
and public buildings, roads, civil engineer-
ing structures and other types of infrastruc-
ture. NCC also offers input materials used in
construction and accounts for paving and
road services. NCC creates future environ-
ments for working, living and communica-
tion based on responsible construction oper-
ations that result in sustainable interaction
between people and the environment.

NCC AB
SE-170 80 Solna, Sweden
Tel +46 8 585 510 00
ncc.se