Market announcement

Title

2020 first quarter consolidated interim report (unaudited)

Message

Financial results of Nordecon Group for the first quarter of 2020 as compared to
the  first  quarter  of  2019 are  characterized  by the significant increase in
revenue,  improvements in gross  and operating margins  and exchange losses from
weakening Ukrainian hryvnia and Swedish krona. Worldwide COVID-19 virus pandemic
did not have significant impact on the Group's results in this quarter.
The  Group's revenue for  the first quarter  of 2020 amounted to 54,924 thousand
euros,  a roughly 59% improvement compared to the first quarter of 2019. Revenue
grew  in  the  Buildings  segment,  which  increased  sales by 71%, but remained
practically at the same level as a year ago in the Infrastructure segment. Based
on  the order book at the end  of 2019, revenue growth met expectations. Group's
profitability  improved.  Gross  profit  amounted  to  1,188 thousand  euros (Q1
2019: 46 thousand  euros) and gross margin was 2.2% (Q1 2019: 0,1%). Despite the
Group ending the first quarter with operating loss due to the seasonal nature of
the  construction activities, the figure  decreased significantly as compared to
the  first quarter of 2019. The operating loss  of the first quarter of 2020 was
643 thousand  euros  (Q1  2019: 1,750 thousand  euros).  The  Group's  net  loss
amounted  to  2,196 thousand  euros  (Q1  2019: 1,893 thousand  euros)  of which
significant  amount of 1,338 thousand euros  is attributable to foreign exchange
loss from the Group's foreign markets. The foreign exchange differences resulted
from the translation of loans provided to the Ukrainian and Swedish subsidiaries
in  euros into the local currency.  Ukrainian hryvnia and Swedish krona weakened
against the euro by 14.7% and 5.6%, respectively. In the first quarter of 2019,
the Group recognised a net exchange gain of 52 thousand euros.

Condensed consolidated interim statement of financial position

 EUR '000                                        31 March 2020 31 December 2019
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               7,129            7,032

 Trade and other receivables                            37,610           37,563

 Prepayments                                             2,514            1,813

 Inventories                                            21,382           21,142

 Total current assets                                   68,635           67,550


 Non-current assets

 Investments in equity-accounted investees                 806            2,369

 Other investments                                          26               26

 Trade and other receivables                             8,494            8,435

 Investment property                                     6,301            5,530

 Property, plant and equipment                          18,922           19,002

 Intangible assets                                      14,664           14,736

 Total non-current assets                               49,213           50,098

 TOTAL ASSETS                                          117,848          117,648



 LIABILITIES

 Current liabilities

 Borrowings                                             16,270           11,058

 Trade payables                                         38,665           40,730

 Other payables                                          9,252            7,954

 Deferred income                                         7,301            6,391

 Provisions                                                835              716

 Total current liabilities                              72,323           66,849


 Non-current liabilities

 Borrowings                                             10,409           16,326

 Trade payables                                             98               98

 Other payables                                             80              177

 Provisions                                              1,743            1,425

 Total non-current liabilities                          12,330           18,026

 TOTAL LIABILITIES                                      84,653           84,875



 EQUITY

 Share capital                                          14,379           14,379

 Own (treasury) shares                                    -660             -660

 Share premium                                             635              635

 Statutory capital reserve                               2,554            2,554

 Translation reserve                                     2,417            1,169

 Retained earnings                                      11,209           12,383

 Total equity attributable to owners of the
 parent                                                 30,534           30,460

 Non-controlling interests                               2,661            2,313

 TOTAL EQUITY                                           33,195           32,773

 TOTAL LIABILITIES AND EQUITY                          117,848          117,648

Condensed consolidated interim statement of comprehensive income

 EUR '000                                              Q1 2020 Q1 2019     2019
-------------------------------------------------------------------------------

 Revenue                                                54,924  34,524  234,071

 Cost of sales                                         -53,736 -34,478 -222,302

 Gross profit                                            1,188      46   11,769



 Marketing and distribution expenses                      -128    -346     -784

 Administrative expenses                                -1,799  -1,493   -6,837

 Other operating income                                    149      56      315

 Other operating expenses                                  -53     -13     -193

 Operating loss/profit                                    -643  -1,750    4,270



 Finance income                                             56     271    1,277

 Finance costs                                          -1,579    -364   -1,219

 Net finance costs/income                               -1,523     -93       58



 Share of loss/profit of equity-accounted investees        -30     -50      585



 Loss/profit before income tax                          -2,196  -1,893    4,913

 Income tax expense                                          0       0     -764

 Loss/profit for the period                             -2,196  -1,893    4,149



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

 Exchange differences on translating foreign
 operations                                              1,248     -44     -823

 Total other comprehensive income/expense                1,248     -44     -823

 TOTAL COMPREHENSIVE EXPENSE/INCOME                       -948  -1,937    3,326



 Loss/profit attributable to:

 - Owners of the parent                                 -2,669  -1,962    3,378

 - Non-controlling interests                               473      69      771

 Loss/profit for the period                             -2,196  -1,893    4,149



 Total comprehensive expense/income attributable to:

 - Owners of the parent                                 -1,421  -2,006    2,555

 - Non-controlling interests                               473      69      771

 Total comprehensive expense/income for the period        -948  -1,937    3,326



 Earnings per share attributable to owners of the
 parent:

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

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

Condensed consolidated interim statement of cash flows

  EUR '000                                               Q1 2020   Q1 2019
---------------------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers                            70,309    46,964

  Cash paid to suppliers                                 -63,575   -43,997

  VAT paid                                                -2,936      -846

  Cash paid to and for employees                          -6,116    -5,292

  Income tax paid                                              0       -11

  Net cash used in operating activities                   -2,318    -3,182



  Cash flows from investing activities

  Paid on acquisition of property, plant and equipment       -58       -43

  Proceeds from sale of property, plant and equipment        138        18

  Loans provided                                              -5        -9

  Repayment of loans provided                                  3         2

  Acquisition of a subsidiary                                 -2         0

  Cash received on the acquisition of a subsidiary         3,605         0

  Dividends received                                         245       238

  Interest received                                            3         2

  Net cash from investing activities                       3,929       208



  Cash flows from financing activities

  Proceeds from loans received                               393     1,737

  Repayment of loans received                               -891        -9

  Lease payments made                                       -737      -828

  Interest paid                                             -276      -208

  Net cash used in/from financing activities              -1,511       692



  Net cash flow                                              100    -2,282



  Cash and cash equivalents at beginning of period         7,032     7,678

  Effect of movements in foreign exchange rates               -3        -5

  Increase/decrease in cash and cash equivalents             100    -2,282

  Cash and cash equivalents at end of period               7,129     5,391

Financial review

Financial performance

Nordecon  ended the first quarter of  2020 with a gross profit of 1,188 thousand
euros  (Q1 2019: 46 thousand euros) and a gross margin of 2.2% (Q1 2019: 0.1%).
Due  to  the  seasonality  of  the construction business, first-quarter results,
particularly  in the  Infrastructure segment,  are affected  by a large share of
uncovered fixed costs. 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  costs related  to asphalt  concrete production and laying
equipment.  Although the  loss of  the Infrastructure  segment decreased year on
year, its negative result had a strong impact on the Group's overall result. The
Group's  first-quarter gross profit  was earned in  the Buildings segment, where
the  gross margin remained at the same level as in the comparative period: 4.5%
(Q1 2019: 4.5%).
The  Group's  administrative  expenses  for  the  first quarter of 2020 totalled
1,799 thousand  euros.  Compared  to  the  same  period  in 2019, administrative
expenses  increased by around  20% (Q1 2019: 1,493 thousand euros).  The rise is
attributable  to growth  in personnel  expenses and  depreciation as well as the
fact  that  Embach  Ehitus  OÜ  became  a  subsidiary of the Group. The ratio of
administrative expenses to revenue (12 months rolling) decreased compared to the
same period last year and was 2.8% (Q1 2019: 3.1%).
The Group ended the first quarter of 2020 with an operating loss of 643 thousand
euros (Q1 2019: 1,750 thousand euros). EBITDA was positive at 194 thousand euros
(Q1 2019: negative at 1,018 thousand euros).
Finance   costs  of  the  period  were  strongly  influenced  by  exchange  rate
fluctuations in the Group's foreign markets. In the first quarter, the Ukrainian
hryvnia  and  Swedish  krona  weakened  against  the  euro  by  14.7% and 5.6%,
respectively.  As  a  result,  the  Group  recognised foreign exchange losses of
1,338 thousand  euros. In the first quarter  of 2019, the Group recognised a net
exchange  gain of 52 thousand  euros. The foreign  exchange differences resulted
from the translation of loans provided to the Ukrainian and Swedish subsidiaries
in  euros into the local  currency. On the other  hand, the movements in foreign
exchange  rates increased the foreign currency  translation reserve in equity by
1,248 thousand  euros (Q1 2019: reduced by 44 thousand euros). The net effect of
exchange  differences on the Group's net assets  was a loss of 90 thousand euros
(Q1 2019: a gain of 8 thousand euros).
The  Group's net loss amounted  to 2,196 thousand euros (Q1 2019: 1,893 thousand
euros)  of which the net loss attributable to owners of the parent, Nordecon AS,
was 2,669 thousand euros (Q1 2019: 1,962 thousand euros).

Cash flows

In  the first quarter of 2020, operating  activities produced a net cash outflow
of  2,318 thousand euros (Q1 2019: an outflow of 3,182 thousand euros). Negative
operating  cash flow is typical of the first quarter and stems from the cyclical
nature  of the construction  business. Larger fixed  costs and preparations made
for  starting  more  active  construction  operations  in  the  second  quarter,
particularly  in the Infrastructure  segment, cause outflows  to exceed inflows.
Operating  cash flow is also strongly influenced  by the fact that the contracts
signed with most public and private sector customers do not require them 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.  The Group  has concluded  a frame  agreement for
reverse  factoring which enables our subcontractors  that do not have sufficient
credit  standing to obtain a factoring  facility from a financing institution to
use the Group's facility.
Investing  activities resulted in a net  cash inflow of 3,929 thousand euros (Q1
2019: 208 thousand  euros). The  transaction with  the strongest  impact was the
transformation  of Embach Ehitus  OÜ from an  associate into a subsidiary, which
generated  cash inflow of 3,605 thousand euros. Cash flow was also influenced by
payments  made  for  the  acquisition  of  property,  plant and equipment of 58
thousand euros (Q1 2019: 43 thousand euros), proceeds from the sale of property,
plant  and  equipment  of  138 thousand  euros  (Q1 2019: 18 thousand euros) and
dividends received of 245 thousand euros (Q1 2019: 238 thousand euros).
Financing  activities generated a  net cash outflow  of 1,511 thousand euros (Q1
2019: an  inflow of 692 thousand  euros). The largest  items were loan and lease
payments.  Proceeds from loans received  totalled 393 thousand euros, consisting
of  the use  of the  overdraft facility  and development  loans (Q1 2019: 1,737
thousand  euros), loan  repayments amounted  to 891 thousand  euros (Q1 2019: 9
thousand  euros) and lease  payments totalled 737 thousand  euros (Q1 2019: 828
thousand euros). Interest payments amounted to 276 thousand euros (Q1 2019: 208
thousand euros).
The  Group's cash and cash equivalents totalled 7,129 thousand euros at 31 March
2020 (31 March 2019: 5,391 thousand euros).

Key financial figures and ratios

 Figure/ratio                          Q1 2020    Q1 2019    Q1 2018       2019
-------------------------------------------------------------------------------
 Revenue (EUR '000)                     54,924     34,524     43,662    234,071

 Revenue change                          59.1%     -20.9%       4.9%       4.7%

 Net loss/profit (EUR '000)             -2,196     -1,893     -1,883      4,149

 Net loss/profit attributable to
 owners of the parent
 (EUR '000)                             -2,669     -1,962     -1,806      3,378

 Average number of shares           31,528,585 31,528,585 30,913,031 31,528,585

 Earnings per share (EUR)                -0.08      -0.06      -0.06       0.11

 Administrative expenses to revenue       3.3%       4.3%       3.8%       2.9%

 Administrative expenses to revenue
 (rolling)                                2.8%       3.1%       3.1%       2.9%

 EBITDA (EUR '000)                         194     -1,018       -944      7,311

 EBITDA margin                            0.4%      -2.9%      -2.2%       3.1%

 Gross margin                             2.2%       0.1%       1.0%       5.0%

 Operating margin                        -1.2%      -5.1%      -3.3%       1.8%

 Operating margin excluding gain on
 asset sales                             -1.2%      -5.2%      -3.3%       1.7%

 Net margin                              -4.0%      -5.5%      -4.3%       1.8%

 Return on invested capital              -3.3%      -2.9%      -2.6%      10.0%

 Return on equity                        -6.7%      -5.8%      -5.0%      12.5%

 Equity ratio                            28.2%      30.2%      31.1%      27.9%

 Return on assets                        -2.1%      -1.8%      -1.9%       3.7%

 Gearing                                 32.7%      38.4%      35.3%      33.8%

 Current ratio                            0.95       0.97       1.01       1.01

 As at 31 March                           2020       2019       2018       2019
-------------------------------------------------------------------------------
 Order book (EUR '000)                 229,018    170,509    143,589    227,545
-------------------------------------------------------------------------------

Performance by geographical market

The  revenue contribution of  foreign markets continued  to grow. Revenue earned
outside  Estonia accounted  for 14% of  total revenue  for the  first quarter of
2020 compared with 10% for the same period in 2019.

            Q1 2020   Q1 2019   Q1 2018   2019
-----------------------------------------------
  Estonia       86%       90%       92%    89%

  Sweden         8%        1%        4%     5%

  Finland        5%        4%        1%     4%

  Ukraine        1%        5%        3%     2%

The  revenue contribution of the Swedish market grew significantly year on year.
We  are currently providing  general contractor's services  under three building
construction contracts in Sweden. Finnish revenues remained stable compared with
the  same period  last year  and resulted  from concrete  works in  the building
construction  segment.  Revenue  generated  in  the  Ukrainian  market  and  its
proportionate share in our total revenue decreased.
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  have  a  strong  effect  on  our  current results. Increasing the
contribution of foreign markets is one of Nordecon's strategic targets.

Performance by business line

Segment revenues

We  strive to  maintain the  revenues of  our operating  segments (Buildings and
Infrastructure)  as even as possible as  this helps diversify risks and provides
better  opportunities for continuing construction operations in more challenging
circumstances where the volumes of one subsegment decline sharply.
The  Group's revenue for  the first quarter  of 2020 amounted to 54,924 thousand
euros,  a roughly 59% improvement on the  34,524 thousand euros generated in the
first  quarter of 2019. Revenue  grew in the  Buildings segment, which increased
sales  by 71%, but remained practically  at the same level  as a year ago in the
Infrastructure  segment. Based  on the  order book  at the  end of 2019, revenue
growth met expectations.
The  limited volume of infrastructure  construction projects, which is affecting
the  entire  Estonian  construction  market,  is  also  reflected in our revenue
structure.  In  the  first  quarter  of  2020, our  Buildings and Infrastructure
segments  generated revenue  of 48,954 thousand  euros and 5,959 thousand euros,
respectively.  The  corresponding  figures  for  the  first quarter of 2019 were
28,638 thousand euros and 5,791 thousand euros.

  Operating segments   Q1 2020   Q1 2019   Q1 2018   2019
----------------------------------------------------------
  Buildings                89%       82%       86%    70%

  Infrastructure           11%       18%       14%    30%

Subsegment revenues

All subsegments improved their revenue compared with the same period last year.
Commercial  buildings  remained  the  largest  revenue  source  in the Buildings
segment.  The subsegment's largest  projects of the  period were in Tallinn: the
reconstruction  and extension  of the  building of  Terminal D  in the  Old City
Harbour,  construction works in  phase I and  concrete works in  phase II of the
Porto  Franco commercial and office development next to the Admiralty Basin, and
the  construction of a  seven-floor commercial building  in Rotermann City and a
multi-storey car park at Sepapaja 1.
The   fastest   year-on-year  growth  was  delivered  by  the  public  buildings
subsegment,  which increased its  revenue more than  two times. The subsegment's
biggest  projects  were  the  Estonian  Academy  of  Security  Sciences  and the
University  of Tartu Learning Centre in Narva , a storage complex at the defence
forces'  base at  Tapa, Kindluse  Kool - a  new basic  school in  Järveküla near
Tallinn and the Annelinn upper secondary school in Tartu.
A  significant share of  our Estonian apartment  building projects is located in
Tallinn.  In  the  first  quarter,  the  largest  of  them  were  the design and
construction of the first two phases of the Kalaranna quarter and the design and
construction of the Tiskreoja residential area on the western border of Tallinn.
A  significant contributor  to the  subsegment's revenue  is the Swedish market,
where we continue to provide services under three housing development contracts.
We  continue to build our own housing  development projects in Tallinn and Tartu
(reported  in  the  apartment  buildings  subsegment).  During  the  period,  we
continued  to  build  a  five-floor  apartment  building  with  24 apartments at
Võidujooksu  8c in Tallinn  (www.voidujooksu.ee). In  carrying out  our own real
estate development activities, we monitor closely potential risks in the housing
development market.
Although  the revenue of the industrial and warehouse facilities subsegment grew
slightly year on year, its proportionate contribution continued to decrease. The
contractual costs of projects in progress have decreased, amounting to 2 million
euros  on average.  Based on  the order  book, we  expect that  the subsegment's
revenue contribution will remain modest in 2020.

 Revenue breakdown in the Buildings segment Q1 2020 Q1 2019 Q1 2018 2019
------------------------------------------------------------------------
 Commercial buildings                           36%     39%     38%  36%

 Public buildings                               30%     21%     23%  29%

 Apartment buildings                            27%     30%     25%  27%

 Industrial and warehouse facilities             7%     10%     14%   8%

Similarly  to previous  periods, the  main revenue  source in the Infrastructure
segment  was road  construction and  maintenance whose  first-quarter revenue is
generally  modest  due  to  seasonal  factors.  A  significant  share of revenue
resulted  from the  performance of  construction contracts  secured in 2019: the
construction  of  the  Kernu  bypass,  the  Kernu  filling station and the Haiba
junctions  on the Tallinn-Pärnu-Ikla  road and the  construction of roads in the
northern  and southern  parts of  the defence  forces' central training area, as
well as forest road improvement services provided to the State Forest Management
Centre  under a number of  smaller contracts. We also  continued to provide road
maintenance services in Järva and Hiiu counties and the Kose maintenance area in
Harju county.
Work  continued  on  the  construction  of  a  640-metre waterfront promenade at
Sillamäe,  which  accounted  for  a  significant  share  of  the  revenue of the
specialist engineering subsegment.

 Revenue breakdown in the Infrastructure segment   Q1 2020 Q1 2019 Q1 2018 2019
-------------------------------------------------------------------------------
 Road construction and maintenance                     77%     65%     85%  78%

 Specialist engineering (including hydraulic
 engineering)                                          14%      0%      0%   1%

 Other engineering                                      5%     33%     12%  18%

 Environmental engineering                              4%      2%      3%   3%

Order book

The Group's order book (backlog of contracts signed but not yet performed) stood
at  229,018 thousand euros at  31 March 2020, an increase  of around 34% year on
year.  In the first quarter of  2020, we signed new contracts of 43,325 thousand
euros (Q1 2019: 92,556 thousand euros).

 As at               31 March 2020 31 March 2019 31 March 2018 31 December 2019
-------------------------------------------------------------------------------
 Order book (EUR
 '000)                     229,018       170,509       143,589          227,545

At  the  reporting  date,  contracts  secured  by  the Buildings segment and the
Infrastructure  segment  accounted  for  81% and  19% of the Group's total order
book,  respectively (31 March 2019: 86% and  14%, respectively). Compared to 31
March 2019, the order book of the Buildings segment has increased by 26% and the
order book of the Infrastructure segment by 84%.
Both  the apartment buildings and the  public buildings subsegment account for a
third  of the order book of  the Buildings segment: 33% and 31%, respectively. A
significant  share of  the order  book of  the apartment buildings subsegment is
made up of a contract of around 40 million euros for the design and construction
of  the first two phases  of the Kalaranna quarter  in Tallinn. The subsegment's
order  book also includes the work secured but not yet performed in Sweden where
the  Group continues  to build  two apartment  buildings: one  near Uppsala city
centre  and the other in the Bromma district  in Stockholm. A major share of the
order  book of the public buildings subsegment is made up of contracts signed in
2019 for  the construction of the Estonian  Academy of Security Sciences and the
University of Tartu Learning Centre in Narva, the Kohtla-Järve sports and health
centre,  a storage complex at the defence forces' base at Tapa and Kindluse Kool
- a basic school in Järveküla near Tallinn. In 2020, the portfolio has increased
by  contracts for the extension  of the office building  of the Estonian Foreign
Intelligence  Service in Rahumäe tee in Tallinn and the construction of a family
health  centre and multi-storey car park  for Tartu Kesklinna Perearstikeskus in
Tartu.  A significant share  of the order  book of the  industrial and warehouse
facilities  subsegment is made up of a  contract for the construction of a dairy
complex  for  E?Piim  in  Paide.  The  order  book  of  the commercial buildings
subsegment  has decreased  substantially year  on year.  The largest projects in
progress  are  in  Tallinn:  the  construction  of  a new seven-floor commercial
building  in Rotermann  City and  the design  and construction  of phase II of a
multi-storey car park in Ülemiste City.
Around  two thirds of the order book of the Infrastructure segment is made up of
contracts  secured  by  the  road  construction  and maintenance subsegment. The
largest projects were secured in 2019: the construction of the Kernu bypass, the
Kernu filling station and the Haiba junctions on the Tallinn-Pärnu-Ikla road and
the  reconstruction  of  the  Vinso-Kirmsi  section  of the Võru-Räpina road. In
2020, the  Group  as  signed  five  contracts  of 2-3 million euros each and 12
million  euros in  total with  the National  Road Administration. The Group also
continues  to provide road maintenance services in three road maintenance areas:
Järva,  Hiiu and Kose. Other engineering  contracts account for 31% of the order
book of the Infrastructure segment. A major share of the order book of the other
engineering  subsegment  is  made  up  of  a  contract  secured  in 2019 for the
construction  of foundations  for 73 wind  turbines in  the Nysäter wind farm in
northern Sweden, near Sundsvall.
At  present it is not possible to  assess the impacts of the coronavirus (COVID-
19) pandemic on the Group's financial performance as a whole. Based on our order
book  of which around  a third is  made up of  contracts that will continue into
2021, we expect that in 2020 the Group's revenue will increase somewhat compared
with  2019. In  an  environment  of  stiff  competition,  we have avoided 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 (31  March 2020) and  the date  of release  of this
report,  Group companies have  secured additional construction  contracts in the
region  of 30,024 thousand  euros, a  significant part  of which  is made  up of
contracts signed by the Infrastructure segment.

People

Employees and personnel expenses

In  the  first  quarter  of  2020, the  Group  (the parent and the subsidiaries)
employed,   on   average,  695 people,  including  429 engineers  and  technical
personnel  (ETP). Headcount increased by around 5% compared with the same period
in  2019. The number of  ETP staff grew,  partly due to  a change in the Group's
structure: Embach Ehitus OÜ became a subsidiary.

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

                  Q1 2020   Q1 2019   Q1 2018   2019
-----------------------------------------------------
  ETP                 429       391       427    414

  Workers             266       271       264    273

  Total average       695       662       691    687

The  Group's  personnel  expenses  for  the  first quarter of 2020 including all
taxes,  totalled 6,660 thousand euros. The figure for the first quarter of 2019
was  5,363 thousand euros. Personnel expenses grew by around 24% due to both pay
rises and the payment of performance-related bonuses.
The  service fees  of the  members of  the council  of Nordecon AS for the first
quarter  of 2020 amounted  to 47 thousand  euros and  associated social security
charges  totalled 15 thousand euros (Q1  2019: 47 thousand euros and 15 thousand
euros, respectively).
The  service fees of  the members of  the board of  Nordecon AS amounted to 132
thousand euros and associated social security charges totalled 44 thousand euros
(Q1 2019: 123 thousand euros and 42 thousand euros, respectively).

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:

                                                  Q1 2020 Q1 2019 Q1 2018  2019
-------------------------------------------------------------------------------
 Nominal labour productivity (rolling), (EUR
 '000)                                              365.8   315.5   320.4 340.6

 Change against the comparative period, %             16%   -1.5%   13.7%  4.7%



 Nominal labour cost efficiency (rolling), (EUR)      9.6     9.2    10.0   9.2

 Change against the comparative period, %            4.3%   -8.4%    5.4% -5.0%

The  Group's  nominal  labour  productivity  and  nominal labour cost efficiency
increased year on year in connection with 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, Sweden, Finland and Ukraine. The parent of the Group
is  Nordecon  AS,  a  company  registered  and  located in Tallinn, Estonia. The
consolidated  revenue  of  the  Group  in  2019 was 234 million euros. Currently
Nordecon  Group  employs  close  to  700 people. Since 18 May 2006 the company's
shares have been quoted in the main list of the NASDAQ Tallinn Stock Exchange.

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