Market announcement

Title

2019 III quarter and 9 months consolidated interim report (unaudited)

Message

This  announcement includes Nordecon AS's  consolidated financial statements for
the  third quarter and nine  months of 2019 (unaudited) and  overview of the key
events influencing the period's financial result.
Interim  report is attached to the announcement  and is also published on NASDAQ
Tallinn and Nordecon's web page (http://www.nordecon.com/for-investor/financial-
reports/interim-reports).
Period's  investor presentation  are attached  to the  announcement and are also
published on Nordecon's web page (http://www.nordecon.com/for-investor/investor-
presentations).

Condensed consolidated interim statement of financial position

 EUR '000                                    30 September 2019 31 December 2018
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               8,630            7,678

 Trade and other receivables                            42,128           31,627

 Prepayments                                             3,656            1,383

 Inventories                                            20,355           20,444

 Total current assets                                   74,769           61,132


 Non-current assets

 Investments in equity-accounted investees               2,406            2,266

 Other investments                                          26               26

 Trade and other receivables                             8,394            8,225

 Investment property                                     5,526            5,526

 Property, plant and equipment                          16,114           12,288

 Intangible assets                                      14,665           14,674

 Total non-current assets                               47,131           43,005

 TOTAL ASSETS                                          121,900          104,137



 LIABILITIES

 Current liabilities

 Borrowings                                             17,243            9,374

 Trade payables                                         52,258           34,954

 Other payables                                          8,176            5,187

 Deferred income                                         2,577            3,932

 Provisions                                                444            1,013

 Total current liabilities                              80,698           54,460


 Non-current liabilities

 Borrowings                                              8,569           14,830

 Trade payables                                             98               98

 Other payables                                            177               71

 Provisions                                                812              969

 Total non-current liabilities                           9,656           15,968

 TOTAL LIABILITIES                                      90,354           70,428



 EQUITY

 Share capital                                          14,379           16,321

 Own (treasury) shares                                    -660             -693

 Share premium                                             635              618

 Statutory capital reserve                               2,554            2,554

 Translation reserve                                     1,215            1,992

 Retained earnings                                      11,537           10,896

 Total equity attributable to owners of the
 parent                                                 29,660           31,688

 Non-controlling interests                               1,886            2,021

 TOTAL EQUITY                                           31,546           33,709

 TOTAL LIABILITIES AND EQUITY                          121,900          104,137

Condensed consolidated interim statement of comprehensive income

 EUR '000                             9M 2019 Q3 2019  9M 2018 Q3 2018     2018
-------------------------------------------------------------------------------

 Revenue                              172,237  71,796  167,588  61,930  223,496

 Cost of sales                       -164,516 -67,369 -160,900 -58,441 -213,463

 Gross profit                           7,721   4,427    6,688   3,489   10,033



 Marketing and distribution
 expenses                                -635    -137     -470    -139     -626

 Administrative expenses               -4,668  -1,620   -4,977  -1,591   -6,725

 Other operating income                   128      61    1,225   1,005    1,471

 Other operating expenses                 -48     -28      -74       3     -122

 Operating profit                       2,498   2,703    2,392   2,767    4,031



 Finance income                         1,215     720      241    -144      431

 Finance costs                         -1,006    -343     -741    -155     -909

 Net finance income/costs                 209     377     -500    -299     -478



 Share of profit of equity-
 accounted investees                      622     370      844     392      835



 Profit before income tax               3,329   3,450    2,736   2,860    4,388

 Income tax expense                      -453       0     -582    -182     -567

 Profit for the period                  2,876   3,450    2,154   2,678    3,821



 Other comprehensive income
 Items that may be reclassified
 subsequently to profit or loss

 Exchange differences on
 translating foreign operations          -777    -514      102     162       -3

 Total other comprehensive
 expense/income                          -777    -514      102     162       -3

 TOTAL COMPREHENSIVE INCOME             2,099   2,936    2,256   2,840    3,818



 Profit attributable to:

 - Owners of the parent                 2,532   3,325    1,972   2,504    3,381

 - Non-controlling interests              344     125      182     174      440

 Profit for the period                  2,876   3,450    2,154   2,678    3,821



 Total comprehensive income
 attributable to:

 - Owners of the parent                 1,755   2,811    2,074   2,666    3,378

 - Non-controlling interests              344     125      182     174      440

 Total comprehensive income for
 the period
                                        2,099   2,936    2,256   2,840    3,818



 Earnings per share attributable
 to owners of the parent:

 Basic earnings per share (EUR)          0.08    0.10     0.06    0.08     0.11

 Diluted earnings per share (EUR)        0.08    0.10     0.06    0.08     0.11

Condensed consolidated interim statement of cash flows

  EUR '000                                                9M 2019    9M 2018
-----------------------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers                            193,567    201,839

  Cash paid to suppliers                                 -165,291   -171,860

  VAT paid                                                 -4,606     -5,892

  Cash paid to and for employees                          -17,332    -16,764

  Income tax paid                                            -149       -582

  Net cash from operating activities                        6,189      6,741



  Cash flows from investing activities

  Paid on acquisition of property, plant and equipment       -216       -384

  Proceeds from sale of property, plant and equipment         215         22

  Loans provided                                              -14        -22

  Repayment of loans provided                                   9         10

  Dividends received                                          489        249

  Interest received                                             6          8

  Net cash from/used in investing activities                  489       -117



  Cash flows from financing activities

  Proceeds from loans received                              3,036      1,916

  Repayment of loans received                              -3,245     -3,513

  Finance lease payments made                              -1,532     -1,365

  Settlements of lease liability                             -868          0

  Interest paid                                              -744       -588

  Dividends paid                                           -2,360     -2,627

  Net cash used in financing activities                    -5,713     -6,177



  Net cash flow                                               965        447



  Cash and cash equivalents at beginning of period          7,678      8,915

  Effect of movements in foreign exchange rates               -13          2

  Increase in cash and cash equivalents                       965        447

  Cash and cash equivalents at end of period                8,630      9,364

Financial review

Financial performance

Nordecon  ended the  first nine  months of  2019 with a  gross profit  of 7,721
thousand  euros (9M  2018: 6,688 thousand euros).  The Group's  gross margin was
4.5% for   nine   months  (9M  2018: 4%) and  6.2% for  the  third  quarter  (Q3
2018: 5.6%). In  contrast to  the gross  margin of  the Buildings segment, which
improved significantly, rising to 5.4% for nine months (9M 2018: 3.4%) and 5.1%
for  the third quarter  (Q3 2018: 3.7%), the gross  margin of the Infrastructure
segment   moved   in  the  opposite  direction,  decreasing  substantially.  The
Infrastructure  segment's nine-month  gross margin  was 4.0% (9M 2018: 6.7%) and
third-quarter gross margin was 9.2% (Q3 2018: 10.1%). The Infrastructure segment
is  mainly  involved  in  the  performance  of road construction and maintenance
contracts.  Road construction,  which is  capital intensive,  requires a certain
critical  amount of work to cover its fixed costs, the largest share of which is
made up of expenses related to asphalt production and laying equipment. The road
maintenance   result   is   mainly  influenced  by  the  weather.  Exceptionally
challenging  weather conditions in  the first two  months of 2019 had an adverse
impact  on the profitability of national road maintenance contracts. The average
cost  of new road construction projects put  out to tender in 2019 has decreased
compared to 2018, which, in turn, has increased the number of bidders. Also, the
gap  between contractors' asphalt concrete production capacity and market demand
has  widened: according to  estimates, production capacity  exceeds demand by at
least  25%. All this has had  a negative impact on  bid prices and the Group has
not been sufficiently successful in winning public road construction contracts.
The  Group's administrative expenses for the  first nine months of 2019 totalled
4,668 thousand  euros.  Compared  to  the  same period last year, administrative
expenses  decreased by around 6% (9M  2018: 4,977  thousand euros) and the ratio
of  administrative expenses to  revenue (12 months  rolling) dropped to 2.8% (9M
2018: 2.9%).
The Group ended the first nine months of 2019 with an operating profit of 2,498
thousand  euros  (9M  2018: 2,392  thousand euros).  EBITDA  amounted  to 4,732
thousand euros (9M 2018: 3,879  thousand euros).
Finance  income and costs of  the period continued to  be influenced by exchange
rate  fluctuations  in  the  Group's  foreign  markets.  The  Ukrainian  hryvnia
strengthened against the euro by around 20% and the Group recognised an exchange
gain  of 1,040 thousand euros (9M 2018: 29 thousand euros) on the translation of
the loans provided to the Ukrainian subsidiaries in euros. The Swedish krona, on
the  other hand, weakened against the euro by around 4% and the Group recognised
an  exchange loss  of 258 thousand  euros (9M  2018: 124 thousand euros)  on the
translation of a loan provided to the Swedish subsidiary in euros.
The  Group earned a  net profit of2,876 thousand  euros (9M 2018: 2,154 thousand
euros)  of which the net  profit attributable to owners  of the parent, Nordecon
AS, was 2,532  thousand euros (9M 2018: 1,972 thousand euros).

Cash flows

Operating activities of the first nine months of 2019 produced a net cash inflow
of  6,189 thousand euros  (9M 2018: 6,741 thousand  euros). The  key factor that
affects  operating cash flow  is the mismatch  between customers' and suppliers'
settlement  terms. Cash flow  is also strongly  influenced by the  fact that the
contracts  signed with both public- and  private-sector customers do not require
the customer to make advance payments while the Group has to make prepayments to
subcontractors,  materials  suppliers,  etc.  Cash  inflow  is  also  reduced by
contractual retentions, which extend from 5 to 10% of the contract price and are
released at the end of the construction period only.
Investing  activities resulted  in a  net cash  inflow of 489 thousand euros (9M
2018: an  outflow 117 thousand euros).  The largest items  were amounts paid for
the  acquisition  of  property,  plant  and  equipment of 216 thousand euros (9M
2018: 384 thousand  euros)  and  proceeds  from  sales  of  property,  plant and
equipment of 215 thousand euros (9M 2018: 22 thousand euros). Dividends received
amounted to 489 thousand euros (9M 2018: 249 thousand euros).
Financing  activities generated a  net cash outflow  of 5,713 thousand euros (9M
2018: 6,177 thousand  euros).  The  largest  items  were loan, finance lease and
dividend  payments. Proceeds from loans received totalled 3,036  thousand euros,
comprising  development  loans  and  overdrafts  used  (9M  2018: 1,916 thousand
euros).  Loan repayments totalled 3,245  thousand euros (9M 2018: 3,513 thousand
euros),   consisting   of  scheduled  repayments  of  long-term  investment  and
development  loans.  Finance  lease  payments  totalled 1,532 thousand euros (9M
2018: 1,365  thousand euros).  Dividends paid  amounted to  2,360 thousand euros
(9M 2018: 2,627 thousand euros).
At  30 September  2019, the  Group's  cash  and cash equivalents totalled 8,630
thousand euros (30 September 2018: 9,364 thousand euros).

Key financial figures and ratios

 Figure/ratio     for    the
 period                           9M 2019      9M 2018      9M 2017        2018
-------------------------------------------------------------------------------
 Revenue (EUR '000)               172,237      167,588      174,909     223,496

 Revenue change                      2.8%        -4.2%        30.9%       -3.4%

 Net profit (EUR '000)              2,876        2,154        2,716       3,821

 Net profit attributable to
 owners of the parent (EUR
 '000)                              2,532        1,972        2,978       3,381

 Weighted average number of
 shares                        30,986,585   30,986,585   30,913,031  31,528,585

 Earnings per share (EUR)            0.08         0.06         0.10        0.11

 Administrative expenses to
 revenue                             2.7%         3.0%         3.1%        3.0%

 Administrative expenses to
 revenue (rolling)                   2.8%         2.9%         3.0%        3.0%

 EBITDA (EUR '000)                  4,732        3,879        2,419       6,021

 EBITDA margin                       2.7%         2.3%         1.4%        2.7%

 Gross margin                        4.5%         4.0%         3.9%        4.5%

 Operating margin                    1.5%         1.4%         0.5%        1.8%

 Operating margin excluding
 gain on asset sales                 1.4%         0.8%         0.5%        1.3%

 Net margin                          1.7%         1.3%         1.6%        1.7%

 Return on invested capital          5.8%         5.4%         6.5%        8.4%

 Return on equity                    8.8%         6.4%         7.2%       11.2%

 Equity ratio                       25.9%        28.6%        29.3%       32.4%

 Return on assets                    2.5%         1.9%         2.4%        3.5%

 Gearing                              30%        29.1%        31.6%       28.5%

 Current ratio                       0.93         0.96         1.04        1.12

 As at                       30 Sept 2019 30 Sept 2018 30 Sept 2017 31 Dec 2018
-------------------------------------------------------------------------------
 Order book
 (EUR '000)                       196,493      131,953      142,553     100,352
-------------------------------------------------------------------------------

Performance by geographical market

In  the  first  nine  months  of  2019, the  contribution of the Group's foreign
markets  increased compared to the same period last year, rising to around 9% of
total revenue.

            9M 2019   9M 2018   9M 2017   2018
-----------------------------------------------
  Estonia       91%       94%       95%    93%

  Finland        4%        1%        1%     1%

  Sweden         3%        2%        3%     2%

  Ukraine        2%        3%        1%     4%

It  is worth noting that  the share of revenue  earned in Finland has increased.
Based  on  nine-month  results  and  our  Finnish  order book, where the largest
project   is   a  subcontract  for  supplying  concrete  constructions  for  the
Raitinkartano  commercial and residential building, in 2019 our Finnish revenues
will  be the largest  ever. The Group's Swedish  revenue has also  grown year on
year, underpinned by two new general construction contracts secured in 2019. The
contribution  of the Ukrainian  market where we  are currently providing general
contractor's  services under  two building  construction contracts has decreased
compared to the same period last year.
Geographical  diversification  of  the  revenue  base  is a consciously deployed
strategy by which we mitigate the risks resulting from excessive reliance on one
market.  However,  conditions  in  some  of  our chosen foreign markets are also
volatile  and affect our current results. Increasing the contribution of foreign
markets is one of Nordecon's strategic targets.

Performance by business line

Segment revenues

In the first nine months of 2019, Nordecon generated revenue of 172,237 thousand
euros,  roughly 3% more than in the same  period last year when revenue amounted
to   167,588 thousand  euros.  Revenue  grew  in  both  the  Buildings  and  the
Infrastructure  segment, by 2% and 6% respectively. In  the light of the Group's
order book, revenue growth met expectations.
The  limited volume  of infrastructure  projects, which  is affecting the entire
Estonian construction market, is also reflected in our revenue structure. In the
first  nine months of 2019, our  Buildings and Infrastructure segments generated
revenue of 122,825 thousand euros and 49,138 thousand euros respectively. In the
same period last year, the corresponding figures were 120,766 thousand euros and
46,454 thousand euros (see note 8).

  Operating segments   9M 2019   9M 2018   9M 2017   2018
----------------------------------------------------------
  Buildings                70%       71%       75%    72%

  Infrastructure           30%       29%       25%    28%

Sub-segment revenues

The  largest  revenue  source  in  the  Buildings  segment  continues  to be the
commercial  buildings  sub-segment.  The  period's  largest  projects  were  the
reconstruction  and extension  of the  building of  Terminal D  in the  Old City
Harbour,  the construction of phase I of  the Porto Franco commercial and office
development  next to the Admiralty Basin and a multi-storey car park at Sepapaja
1, and  the design and construction of  an eight-floor accommodation building at
Liimi  1B and  a  concrete  frame  for  an  eight-floor  car park and commercial
building at Tammsaare tee 92 in Tallinn.
Based  on the  Group's order  book, we  expect that  in 2019 the  revenue of the
public  buildings sub-segment will increase  compared to 2018. The sub-segment's
revenue for the period was influenced the most by the construction of the Peetri
sports  and leisure centre in  Rae parish and a  state upper secondary school at
Kohtla-Järve.  The state's investments in national defence also continue to play
an  important role. During the period, we continued to build an assembly area at
the  defence forces' base at  Tapa and a barracks  for 300 people at the defence
forces'  base  at  Jõhvi.  The  buildings  of  the  Estonian Academy of Security
Sciences in Tallinn and Kohtla-Järve state upper secondary school were delivered
to the customer on schedule.
A  significant  share  of  the  Group's  Estonian apartment building projects is
located in Tallinn and its immediate vicinity. During the period, the largest of
them  were  located  at  Lesta  10, Sammu  6 and  Valge 16. Sweden, where we are
providing  services under three housing development contracts, also continues to
influence the sub-segment's revenue. Apartment buildings in phases III and IV of
the  Sõjakooli  project  and  at  Lesta  10 were  delivered  to  the customer on
schedule.
We  continue to carry  out our own  housing development projects  in Tallinn and
Tartu  (reported in the apartment buildings  sub-segment). During the period, we
completed  a four-floor apartment building with 21 apartments at Nõmme tee 97 in
Tallinn  and three apartment buildings with 10 apartments each at Aruküla tee in
Tartu.  Work continues on a five-floor  apartment building with 24 apartments at
Võidujooksu  8c in  Tallinn  (www.voidujooksu.ee  (http://www.voidujooksu.ee/)).
During  the period,  our own  housing developments  generated revenue  of 6,388
thousand  euros  (9M  2018: 5,566 thousand  euros).  In  conducting  real estate
development  activities,  we  monitor  closely  potential  risks  in the housing
development market.
The  largest projects in the industrial and warehouse facilities sub-segment are
the  construction of a warehouse  and office building at  Kaldase tee in Maardu,
the  reconstruction (phase  V) of  the fattening  unit of  a pig farm of Rakvere
Farmid AS (EKSEKO) and the construction of micro-warehouses in Betooni street in
Tallinn.  Compared to previous  periods, the share  of contracts signed with the
agricultural sector has decreased significantly, which is one of the reasons for
the sub-segment's revenue decline.

 Revenue breakdown in the Buildings segment 9M 2019  9M 2018 9M 2017 2018
-------------------------------------------------------------------------
 Commercial buildings                            35%     36%     24%  35%

 Apartment buildings                             30%     22%     31%  25%

 Public buildings                                28%     27%     22%  25%

 Industrial and warehouse facilities              7%     15%     23%  15%

We  do  not  expect  revenue  breakdown  in the Infrastructure segment to change
significantly  in  2019. The  segment  will  continue  to  be  dominated by road
construction  and maintenance  despite the  fact that  the contribution of other
engineering  work has grown. During the period,  a major share of the revenue of
the  road  construction  and  maintenance  sub-segment  resulted  from contracts
secured  in 2018: the  construction of passing  lanes on  the Pikknurme-Puurmani
section  of the Tallinn-Tartu-Võru-Luhamaa  road (a 2+1 road  section) and roads
and bridges for the defence forces' central training area in Kuusalu parish. The
strongest  revenue contributors among  contracts secured in  2019 were two large
projects:  one for the  construction of the  Missokülä-Hindsa section (8 km) and
the  Misso small  town section  (2 km)  of main  road no. 7 (Riga-Pskov) and the
other  for the construction of  the Kernu bypass, and  the Kernu filling station
and  Haiba junctions. A  significant share of  the sub-segment's revenue results
from  forest road improvement  services provided to  the State Forest Management
Centre.  The Group also continues to  provide road maintenance services in Järva
and Hiiu counties and the Kose maintenance area in Harju county.
During  the period, the Group continued earthworks on the Kiili-Paldiski section
of  the  onshore  part  of  Balticconnector  (a gas pipeline between Estonia and
Finland)  that generated  a major  share of  other engineering revenue. The sub-
segment's  revenue is also influenced by the construction of foundations for 73
wind  turbines in  the Nysäter  wind farm  being built  in northern Sweden, near
Sundsvall.

 Revenue breakdown in the Infrastructure segment 9M 2019 9M 2018 9M 2017 2018
-----------------------------------------------------------------------------
 Road construction and maintenance                   81%     91%     84%  89%

 Other engineering                                   16%      6%     12%   7%

 Environmental engineering                            3%      3%      4%   4%

Order book

At  30 September 2019, the Group's  order book (backlog  of contracts signed but
not  yet performed) stood at 196,493 thousand  euros, an increase of 49% year on
year.  In the third quarter of  2019, we signed new contracts of 69,894 thousand
euros (Q3 2018: 61,761 thousand euros).

 As at                 30 Sept 2019 30 Sept 2018 30 Sept 2017 31 Dec 2018
-------------------------------------------------------------------------
 Order book (EUR '000)      196,493      131,953      142,553     100,352

At  the  reporting  date,  contracts  secured  by  the Buildings segment and the
Infrastructure segment accounted for 80% and 20% of the Group's total order book
respectively  (30  September  2018: 73% and  27% respectively).  Compared to 30
September  2018, the order book of the Buildings segment has increased by around
65% and that of the Infrastructure segment by around 6%.
In  the Buildings segment, the  largest order books are  those of the commercial
and  the public buildings sub-segments, which  account for 29% and 27% of the of
the  segment's order book respectively. Besides the above, the order book of the
industrial  and  warehouse  facilities  sub-segment  has also grown considerably
compared to the same period last year. The order book of the apartment buildings
sub-segment  has decreased  slightly year  on year.  In the commercial buildings
sub-segment,  the  largest  projects  in  progress  are  mostly  in Tallinn: the
construction  of a  new seven-floor  commercial building  in Rotermann  City and
phase  I of the Porto Franco development  as well as the design and construction
of a concrete load-bearing structure for an office building and multi-storey car
park  at Veskiposti 2. A  large part of  the order book  of the public buildings
sub-segment  is made  up of  contracts signed  at the  beginning of 2019 for the
construction  of the Estonian Academy of Security Sciences and the University of
Tartu Training Centre in Narva, a sports and health centre at Kohtla-Järve and a
storage  area at the  defence forces' base  at Tapa, and  the reconstruction and
extension  of  a  research  and  academic  building  of  Tallinn  University  of
Technology at Mäepealse 3. The order book of the apartment buildings sub-segment
includes  contracts for the  construction of apartment  buildings in Tallinn and
its  immediate vicinity. At the beginning of 2019 we were also awarded contracts
for the construction of two apartment buildings in Sweden: one near Uppsala city
centre and the other in the Bromma district in Stockholm.
For  a long time, the order book  of the Infrastructure segment was dominated by
contracts secured by the road construction and maintenance sub-segment. However,
in  the  reporting  period  the  structure  of  the segment's order book changed
significantly.  At the reporting date, other engineering contracts accounted for
roughly a half of the order book of the Infrastructure segment. A major share of
the  order book of  the other engineering  sub-segment is made  up of a contract
secured  in the  third quarter  for the  construction of foundations for 73 wind
turbines  in the Nysäter wind farm in northern Sweden, near Sundsvall. The other
half  of the Infrastructure  order book is  made up of  contracts awarded to the
road  construction and maintenance sub-segment  whose largest projects include a
contract secured in the second quarter of 2019 for building the Kernu bypass and
the Kernu filling station and Haiba junctions on the Tallinn-Pärnu-Ikla road and
roads in the target area of the defence forces' central training area. The Group
continues  to provide road maintenance services in three road maintenance areas:
Järva, Hiiu and Kose.
Based on the size of the Group's order book and known developments in our chosen
markets,  we expect that in 2019 the Group's revenue will grow slightly compared
to  2018. In an environment of exceptionally  stiff competition, we avoid taking
unjustified risks whose realisation in the contract performance phase would have
an  adverse  impact  on  the  Group's  results.  Despite  this,  where  suitable
opportunities  arise,  we  strive  to  increase  the portfolio to counteract the
pressure on margins that is caused by the market situation. Our preferred policy
is to keep fixed costs under control and monitor market developments closely.
Between  the reporting date (30 September 2019) and  the date of release of this
report,  Group companies have  secured additional construction  contracts in the
region of 58,238 thousand euros.

People

Employees and personnel expenses

In  the first nine months  of 2019, the Group (the  parent and the subsidiaries)
employed, on average, 689 people including 413 engineers and technical personnel
(ETP). Headcount decreased by around 1% compared to the same period last year.

Average  number of  employees at  Group entities  (including the  parent and the
subsidiaries)

                  9M 2019   9M 2018   9M 2017   2018
-----------------------------------------------------
  ETP                 413       425       425    419

  Workers             276       272       314    268

  Total average       689       697       739    687

The  Group's personnel expenses for the first nine months of 2019, including all
taxes,  totalled 17,772 thousand euros. In the  same period last year, personnel
expenses  amounted to 16,820 thousand euros. Despite  a decline in the number of
staff,  personnel expenses grew by around 5.7% year on year. Due to a persisting
shortage  of  qualified  and  experienced  labour,  employers  are  under strong
pressure to increase wages and salaries.
The service fees of the members of the council of Nordecon AS for the first nine
months  of 2019 amounted  to 140 thousand  euros and  associated social security
charges  totalled 46 thousand euros (9M 2018: 140 thousand euros and 46 thousand
euros respectively).
The  service fees of  the members of  the board of  Nordecon AS amounted to 356
thousand  euros  and  associated  social  security charges totalled 117 thousand
euros  (9M 2018: 536 thousand  euros and  177 thousand euros  respectively). The
figures  for the first nine months  of 2018 include termination benefits of 180
thousand  euros paid  to a  member of  the board  and associated social security
charges of 60 thousand euros

Labour productivity and labour cost efficiency

We  measure  the  efficiency  of  our  operating  activities using the following
productivity  and  efficiency  indicators,  which  are  based  on  the number of
employees and personnel expenses incurred:

                                                  9M 2019 9M 2018 9M 2017  2018
-------------------------------------------------------------------------------
 Nominal labour productivity (rolling), (EUR
 '000)                                              335.0   318.6   308.1 325.4

 Change against the comparative period, %            5.1%    3.4%   25.7%  3.3%



 Nominal labour cost efficiency (rolling), (EUR)      9.5     9.6    10.3   9.7

 Change against the comparative period, %           -0.6%   -6.7%   24.8% -3.8%

The  Group's  nominal  labour  productivity  increased  year  on year, mostly in
connection with revenue growth. At the same time, nominal labour cost efficiency
decreased because the rise in personnel expenses outpaced revenue growth.

Nordecon   (www.nordecon.com   (http://www.nordecon.com/))   is   a   group   of
construction  companies whose  core business  is construction project management
and   general   contracting   in  the  buildings  and  infrastructures  segment.
Geographically  the Group operates in Estonia,  Ukraine, Finland and Sweden. The
parent of the Group is Nordecon AS, a company registered and located in Tallinn,
Estonia.  The consolidated revenue  of the Group  in 2018 was 223 million euros.
Currently  Nordecon  Group  employs  close  to 690 people. Since 18 May 2006 the
company's  shares have been quoted in the  main list of the NASDAQ Tallinn Stock
Exchange.

Andri Hõbemägi
NordeconAS
Head of Investor Relations
Tel: +372 6272 022
Email:[email protected] (mailto:[email protected])
www.nordecon.com (http://www.nordecon.com/)