Börsiteade

Pealkiri

2025 IV quarter and 12 months consolidated interim report (unaudited)

Teade

Compared  to the  optimistic forecasts  at the  beginning of the year, Estonia's
economy   grew   modestly   by   1%, according  to  preliminary  estimates.  The
construction market stabilised, with a slight increase in activity in the second
half  of  the  year  in  both  the  buildings  and  infrastructure segments. The
construction  price index increased by  1.5% in 2025 compared to 2024, primarily
due to an upward trend in material prices.
Nordecon's  revenue  for  2025 decreased  compared  to  2024, primarily due to a
roughly  10% decline  in  revenue  generated  by  the Buildings segment. Revenue
generated  by  the  Infrastructure  segment  grew  by 10%. The Buildings segment
accounted  for 81% of the  group's total revenue,  with no significant change in
the  revenue breakdown between segments compared to the prior year. In 2025, the
group  substantially increased its order book, paving the way for revenue growth
in 2026.
The  group's gross margin was 6.5% and operating margin was 2.7%. Net profit for
the  period was primarily  affected by the  foreign exchange loss  caused by the
weakening of the Ukrainian hryvnia against the euro.
During  the year, i.e. compared to 31 December 2024, the group's order book grew
by  30%, driven  by  a  nearly  threefold  increase  in  the  order  book of the
Infrastructure  segment. Approximately  69% of the  group's order book comprises
work scheduled for 2026, with the remainder spread across 2027-2028.

Condensed consolidated interim statement of financial position

 EUR'000                                        31 December 2025 31 December 2024
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               5,266            8,195

 Other investments                                       1,088                0

 Trade and other receivables                            46,348           29,449

 Prepayments                                             3,274            3,543

 Inventories                                            26,022           28,091

 Total current assets                                   81,998           69,278

 Non-current assets

 Other investments                                       1,887               77

 Trade and other receivables                            10,142           10,681

 Investment property                                     5,517            5,517

 Property, plant and equipment                          12,234           13,247

 Intangible assets                                      14,922           14,951

 Total non-current assets                               44,702           44,473

 TOTAL ASSETS                                          126,700          113,751



 LIABILITIES

 Current liabilities

 Borrowings                                             12,049           12,626

 Trade payables                                         49,547           36,819

 Other payables                                          9,993           10,260

 Deferred income                                        15,249           12,472

 Provisions                                              1,125            1,333

 Total current liabilities                              87,963           73,510

 Non-current liabilities

 Borrowings                                              5,708            5,720

 Trade payables                                          1,605            5,091

 Provisions                                              2,424            2,826

 Total non-current liabilities                           9,737           13,637

 TOTAL LIABILITIES                                      97,700           87,147



 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                                     4,522            4,034

 Retained earnings                                       6,185            4,746

 Total equity attributable to owners of the
 parent                                                 27,615           25,688

 Non-controlling interests                               1,385              916

 TOTAL EQUITY                                           29,000           26,604

 TOTAL LIABILITIES AND EQUITY                          126,700          113,751

Condensed consolidated interim statement of comprehensive income

 EUR'000                                   Q4 2025  12M 2025  Q4 2024  12M 2024
------------------------------------------------------------------------------
 Revenue                                  60,615   208,281   45,203   223,925

 Cost of sales                          (56,999) (194,746) (41,200) (207,155)

 Gross profit                              3,616    13,535    4,003    16,770



 Marketing and distribution expenses       (154)     (433)    (121)     (422)

 Administrative expenses                 (2,056)   (6,814)  (2,867)   (7,878)

 Other operating income                       84       154     141)       286

 Other operating expenses                  (595)     (791)     (67)     (695)

 Operating profit                            895     5,651    1,089     8,061



 Finance income                              150       499      241       678

 Finance costs                             (947)   (3,464)    (386)   (3,011)

 Net finance costs                         (797)   (2,965)    (145)   (2,333)



 Profit before tax                            98     2,686      944     5,728

 Income tax expense                        (141)     (141)    (326)     (563)

 Profit (loss) for the period               (43)     2,545      618     5,165



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

 Exchange differences on translating
 foreign operations                           93       488    (254)       248

 Total other comprehensive income
 (expense)                                    93       488    (254)       248

 TOTAL COMPREHENSIVE INCOME                   50     3,033      364     5,413



 Profit (loss) attributable to:

 - Owners of the parent                    (299)     1,439      454     3,827

 - Non-controlling interests                 256     1,106      164     1,338

 Profit (loss) for the period               (43)     2,545      618     5,165



 Comprehensive income (expense)
 attributable to:

 - Owners of the parent                    (206)     1,927      200     4,075

 - Non-controlling interests                 256     1,106      164     1,338

 Comprehensive income for the period          50     3,033      364     5,413



 Earnings per share attributable to
 owners of the parent:

 Basic earnings per share (EUR)             (0.01)      0.05     0.01        0.12

 Diluted earnings per share (EUR)           (0.01)      0.05     0.01        0.12

Condensed consolidated interim statement of cash flows

 EUR'000                                                  12M 2025  12M 2024
--------------------------------------------------------------------------
 Cash flows from operating activities

 Cash receipts from customers                            243,613   273,153

 Cash paid to suppliers                                (210,621) (242,605)

 VAT paid                                                (8,583)   (9,272)

 Cash paid to and for employees                         (22,855)  (19,964)

 Income tax paid                                           (350)     (237)

 Net cash from operating activities                        1,204     1,075



 Cash flows from investing activities

 Paid for acquisition of property, plant and equipment     (409)     (328)

 Proceeds from sale of property, plant and equipment         478       319

 Loans provided                                             (60)     (876)

 Repayments of loans provided                                 10         5

 Dividends received                                            0         6

 Interest received                                           112       307

 Cash placed in long-term deposits                       (2,898)         0

 Net cash used in investing activities                   (2,767)     (567)



 Cash flows from financing activities

 Proceeds from loans received                              3,802     1,896

 Repayments of loans received                            (1,571)   (1,633)

 Lease payments made                                     (2,458)   (2,220)

 Lease interest paid                                       (256)     (339)

 Interest paid                                             (716)     (651)

 Dividends paid                                                0   (1,347)

 Other payments                                                5       116

 Net cash used in financing activities                   (1,194)   (4,178)



 Net cash flow                                           (2,757)   (3,670)



 Cash and cash equivalents at beginning of period          8,195    11,892

 Effect of movements in foreign exchange rates             (172)      (27)

 Change in cash and cash equivalents                     (2,757)   (3,670)

 Cash and cash equivalents at end of period                5,266     8,195

Financial review

Financial performance

Nordecon's  gross profit for 2025 was EUR13,535 thousand (2024: EUR16,770 thousand).
Compared  to 2024, the group's  gross margin decreased  by 1 percentage point to
6.5% (2024:  7.5%). The  gross  margin  for  the  fourth  quarter  was  5.9% (Q4
2024: 9.0%). The  group's gross  margin continues  to be  strongly influenced by
that  of the Buildings  segment, which was  7.7% for both the  full year and the
fourth  quarter of 2025 (2024: 8.9% and Q4 2024: 10.7%). The gross margin of the
Infrastructure  segment was lower, reaching 4.8% for  the full year and 2.9% for
the fourth quarter of 2025, but higher than in the previous year (2024: 4.0% and
Q4 2024: (0.3)%).
The   group's   administrative   expenses  for  2025 totalled  EUR6,814  thousand,
reflecting  a decline of around 14% compared  to the previous year (2024: EUR7,878
thousand).  The  decrease  is  due  to  lower staff costs, resulting from weaker
financial  performance and therefore the recognition  of a smaller liability for
performance-based pay. The ratio of administrative expenses to revenue was 3.3%
(2024: 3.5%).
The  group's operating profit for 2025 amounted to EUR5,651 thousand (2024: 8,061
thousand).  EBITDA was EUR8,250 thousand and EBITDA margin was 4.0% (2024: EUR11,025
thousand and 4.9%).
The  group's finance income and costs are affected by exchange rate fluctuations
in  the group's foreign markets, particularly  movements in the exchange rate of
the  Ukrainian  hryvnia.  In  2025, the  exchange  rate of the Ukrainian hryvnia
weakened  against  the  euro  by  around  12% and  the  translation of the loans
provided  to the group's Ukrainian subsidiaries in euros into the local currency
gave  rise to a foreign exchange loss of EUR750 thousand (2024: exchange losses of
EUR258 thousand).
The  group ended the period  with a net profit  of EUR2,545 thousand (2024: EUR5,165
thousand).  Net  profit  attributable  to  owners  of  the  parent, Nordecon AS,
amounted to EUR1,439 thousand (2024: EUR3,827 thousand).

Cash flows

The  group's operating activities produced a  net cash inflow of EUR1,204 thousand
in  2025 (2024:  an  inflow  of  EUR1,075  thousand). The items with the strongest
impact  on operating  cash flow  were receipts  from customers  and cash paid to
suppliers,  which decreased due to  the decline in revenue.  Payments to and for
employees (including payroll taxes) increased year on year due to the payment of
the performance-based pay for 2024.
Investing activities resulted in a net cash outflow of EUR2,767 thousand (2024: an
outflow of EUR567 thousand). Investments in property, plant and equipment totalled
EUR409  thousand (2024:  EUR328 thousand)  and proceeds  from the  sale of property,
plant  and  equipment  amounted  to  EUR478  thousand (2024: EUR319 thousand). Loans
provided amounted to EUR60 thousand (2024: EUR876 thousand) and interest received to
EUR112  thousand  (2024:  EUR307  thousand).  In  2025, cash  flows  from  investing
activities  were also influenced by the placement  of cash of EUR2,898 thousand in
long-term deposits to secure guarantee limits.
Financing  activities generated a net cash  outflow of EUR1,194 thousand (2024: an
outflow of EUR4,178 thousand). The largest items were related to loans and leases.
Proceeds  from loans received amounted to  EUR3,802 thousand, consisting mainly of
the  use  of  development  loans  (2024:  EUR1,896  thousand). Repayments of loans
received totalled EUR1,571 thousand (2024: EUR1,633 thousand), consisting of regular
repayments  of long-term investment and development  loans and the change in the
overdraft  balance.  Lease  payments  amounted  to EUR2,458 thousand (2024: EUR2,220
thousand). Dividends paid in 2024 amounted to EUR1,347 thousand. No dividends were
paid in 2025.
At  31 December 2025, the group's  cash and cash  equivalents amounted to EUR5,266
thousand (31 December 2024: EUR8,195 thousand).

Key financial figures and ratios

 Figure/ratio                                        2025       2024       2023
-------------------------------------------------------------------------------
 Revenue (EUR'000)                                  208,281    223,925    186,464

 Revenue change                                      (7)%      20.1%    (15.4)%

 Net profit (loss) (EUR'000)                          2,545      5,165    (6,418)

 Net  profit (loss) attributable  to owners of
 the parent (EUR'000)                                 1,439      3,827      (942)

 Average number of shares                      31,528,585 31,528,585 31,528,585

 Earnings per share (EUR)                              0.05       0.12     (0.03)

 Administrative expenses to revenue                  3.3%       3.5%       3.5%

 EBITDA (EUR'000)                                     8,250     11,025      (412)

 EBITDA margin                                       4.0%       4.9%     (0.2)%

 Gross margin                                        6.5%       7.5%       2.0%

 Operating margin                                    2.7%       3.6%     (1.8)%

 Operating  margin  excluding  gain  on  asset
 sales                                               2.7%       3.5%     (2.0)%

 Net margin                                          1.2%       2.3%     (3.4)%

 Return on invested capital                          8.0%      15.6%       8.0%

 Return on equity                                    9.2%      21.0%       8.3%

 Equity ratio                                       22.9%      23.4%      18.7%

 Return on assets                                    2.1%       4.4%       1.6%

 Gearing                                            26.7%      22.6%      16.6%

 Current ratio                                       0.93       0.94       0.95



 At 31 December                                      2025       2024       2023

 Order book (EUR'000)                               273,060    209,489    216,732

Performance by geographical market

For the second consecutive year, Ukraine was our only foreign market, accounting
for  around  2% of  the  group's  revenue.  During  the  period,  a  significant
proportion  of our Ukrainian revenue came  from the reconstruction of a building
in  Ovruch, Zhytomyr Oblast, into an apartment building for internally displaced
persons,  and  the  restoration  of  the  administrative building of the Kiev TV
tower.  In addition, we continued to provide services under the contracts signed
in 2023 for the reconstruction of substations and the installation of associated
physical  protection systems in the Poltava, Zhytomyr, Volyn and Ivano-Frankivsk
oblasts.  Work  in  these  areas  is  taking  longer than originally planned and
depends  on the consumption needs of the national grid. No revenue was generated
in  Sweden  during  the  period  under  review  as  Nordecon had no construction
contracts in progress in the Swedish market.

            2025   2024   2023
-------------------------------
  Estonia    98%    98%    97%

  Ukraine     2%     2%     2%

  Finland      -      -     1%

Performance by business line

Segment revenues

The  group's goals include maintaining a balance between the revenues of the two
main  operating segments (Buildings and Infrastructure), where market conditions
permit.  This  helps  us  diversify  risk  and  provides better opportunities to
continue  construction activities  in challenging  market conditions  where, for
example,  volumes in  one subsegment  decline sharply  while volumes  in another
start to grow more rapidly.
The  group's revenue for 2025 was EUR208,281 thousand, approximately 7% lower than
in  2024, when  revenue  amounted  to  EUR223,925  thousand. The Buildings segment
generated revenue of EUR168,302 thousand and the Infrastructure segment revenue of
EUR39,902  thousand. The corresponding figures for 2024 were EUR187,573 thousand and
EUR36,299 thousand. Revenue generated by the Buildings segment decreased by around
10%, while  revenue generated  by the  Infrastructure segment  increased by 10%
compared to 2024.

  Revenue by operating segment           2025   2024   2023
------------------------------------------------------------
  Buildings                               81%    84%    74%

  Infrastructure                          19%    16%    26%

Subsegment revenues

In  2025, most of the revenue  generated by the Buildings  segment came from the
public and commercial buildings subsegments, with the latter contributing at its
highest  level in recent  years. Revenue from  commercial buildings increased by
around 71% year on year, while revenue from public buildings decreased by around
32%. Revenue generated by the apartment buildings subsegment mainly consisted of
revenue from own development operations.
The  largest projects  in the  public buildings  subsegment were  the design and
construction  of a new  study and sports  building for the  Saku Upper Secondary
School  near Tallinn, the construction  of the Tiskre School  in the Harku rural
municipality,  the design and construction of  a study building for the Estonian
Centre  for Defence Investment on the Raadi  campus in Tartu, and the design and
construction  of  Loodusmaja  (Nature  Hub)  and  the new television building of
Estonian Public Broadcasting in Tallinn.
The   largest   projects   in  the  commercial  buildings  subsegment  were  the
construction of the LEED Platinum compliant Golden Gate office building at Ahtri
6 in  Tallinn, a  commercial building  at Väike-Turu  7 in Tartu,  the LEED Gold
compliant  Uusküla  spa  hotel  on  the  northern  shore  of  Lake Peipus in the
Alutaguse  rural municipality, a  spa hotel and  a swimming complex in Viljandi,
and Lidl stores in Viljandi and Võru.
Revenue  from our own property development  operations, which is reported in the
apartment buildings subsegment, increased compared to the same period last year,
reaching  EUR9,750 thousand (2024: EUR7,685 thousand). The figure primarily reflects
the sale of apartments in phase 1 of the Seileri Kvartal housing estate in Pärnu
(https://seileri.ee)  and the  Tammepärja Kodu  housing estate  in the Tammelinn
district in Tartu (https://tammelinn.ee). Preparations for, and the construction
of, the next phases are underway in both developments. When carrying out our own
development  activities,  we  carefully  monitor  potential risks in the housing
development market.

  Buildings segment                     2025   2024   2023
-----------------------------------------------------------
  Public buildings                       52%    70%    37%

  Commercial buildings                   39%    21%    23%

  Apartment buildings                     8%     6%    27%

  Industrial and warehouse facilities     1%     3%    13%

The  largest revenue contributor in the Infrastructure segment is still the road
construction  and maintenance subsegment, whose revenue remained stable compared
to the previous year. A major share of its revenue came from the construction of
the  Rail Baltica  main line  railway infrastructure:  the Hagudi-Alu section of
stage  III in  Rapla County  and the  Selja-Tootsi section  of stage  I in Pärnu
County.  A  significant  share  of  revenue  also  came from the sale of asphalt
concrete and the provision of road maintenance services in Järva County. Most of
the  other engineering revenue resulted from the construction of a platform area
for Class E aircraft at Tallinn Airport.

  Infrastructure segment                  2025   2024   2023
-------------------------------------------------------------
  Road construction and maintenance        87%    90%    63%

  Other engineering                        13%    10%    30%

  Environmental engineering                 0%     0%     7%

Order book

The group's order book (backlog of contracts signed but not yet performed) stood
at  EUR273,060 thousand at 31 December 2025, reflecting an increase of around 30%
compared  to  the  end  of  2024. In  2025, we signed new contracts for EUR234,994
thousand,  of  which  EUR43,137  thousand  in  the  fourth quarter (2024: EUR181,437
thousand and Q4 2024: EUR49,636 thousand).
In  terms of  the breakdown  of the  order book  between the  two main operating
segments,  the share of the Infrastructure segment has increased compared to the
end  of  2024. The  Buildings  segment  accounts  for 58% and the Infrastructure
segment for 42% of the group's total order book (31 December 2024: 82% and 18%,
respectively).  Compared to  31 December 2024, the  order book  of the Buildings
segment has decreased by 7% and the order book of the Infrastructure segment has
increased  nearly threefold.  The order  book of  the Buildings segment includes
mainly contracts secured in the commercial and public buildings subsegments. The
order  book of  the Infrastructure  segment has  grown primarily through a major
Rail  Baltica  contract  and  a  contract  signed  with  the  Estonian Transport
Administration for the construction of the Päädeva-Orgita and Haimre sections of
the Tallinn-Pärnu-Ikla road.
The  contracts of  the Rail  Baltica project  and the road construction projects
financed   by   the  European  Cohesion  Fund  through  the  Estonian  Transport
Administration  have revitalised the infrastructure  segment. However, this does
not  fully offset  the underfunding  of road  construction. The volume of public
investment in the buildings sector has decreased. The market is supported by the
defence  sector, with some  activity also coming  from local governments and the
private sector.

  At 31 December          2025      2024      2023
---------------------------------------------------
  Order book (EUR'000)   273,060   209,489   261,732

Major contracts secured in 2025 include:

  * Construction of a spa hotel and a swimming complex in Viljandi with an
    approximate cost of EUR30,000 thousand.
  * Construction of the Punamütsike Kindergarten in Võru with an approximate
    cost of EUR6,370 thousand.
  * Construction of the Selja-Tootsi section of stage I of the Rail Baltica
    Pärnu County main line railway infrastructure with an approximate cost of
    EUR62,300 thousand.
  * Design and construction of a barracks at the Tapa Army Base for the Estonian
    Centre for Defence Investment with an approximate cost of EUR5,300 thousand.
  * Design and construction of a building for the Estonian Centre for Defence
    Investment in Harju County with an approximate cost of EUR3,700 thousand.
  * Construction of the Tiskre School in the Harku rural municipality with an
    approximate cost of EUR14,500 thousand.
  * Design and construction of a technological warehouse for Cristella in Võru
    with an approximate cost of EUR4,000 thousand.
  * Design and construction of buildings for the Estonian Centre for Defence
    Investment with an approximate cost of EUR34,300 thousand.
  * Reconstruction of a state building in Võru with an approximate cost of
    EUR4,700 thousand.
  * Construction of a commercial building in Narva with an approximate cost of
    EUR5,005 thousand.
  * Construction of the Päädeva-Orgita road section on km 62.2-64.8 and the
    Haimre traffic junction and road section on km 68.2-70.2 of national road
    no. 4 (E67), Tallinn-Pärnu-Ikla, into a 2+2 road with an approximate cost of
    EUR27,780 thousand.
  * Design and construction of special training infrastructure in Võru under a
    contract following an alliance procurement model with an approximate cost of
    EUR8,050 thousand.

Based  on the  size of  the group's  order book  and the general outlook for the
economy  and  the  construction  market,  the  group's  management  team expects
business  volumes  to  increase  in  2026. In  a highly competitive environment,
management  has avoided taking  unjustified risks that  could materialise during
contract  execution and adversely affect the  group's results. The main focus is
on  managing fixed costs, increasing productivity and executing pre-construction
and  design  activities  effectively  to  leverage  our professional competitive
advantages.

People

Employees and staff costs

In  2025, the  group's  average  number  of  employees  was  431, including 274
engineers  and  technical  professionals  (ETPs).  The  figure  remained  stable
compared to 2024.

Average  number  of  employees  at  group  companies (the parent company and the
subsidiaries):

                  2025   2024   2023
-------------------------------------
  ETPs             274    283    374

  Workers          157    152    184

  Total average    431    435    558

The  group's  staff  costs  for  2025, including  all taxes, amounted to EUR21,355
thousand  compared with EUR24,145 thousand in 2024. Staff costs decreased compared
to the previous year due to a decline in performance-based pay.

Remuneration of the council and the board

In  2025, the service fees of the members of the council of Nordecon AS totalled
EUR241  thousand and the related social  security charges amounted to EUR80 thousand
(2024: EUR199 thousand and EUR66 thousand, respectively).
During  the period, the group recognised a liability of EUR34 thousand (2024: EUR198
thousand)  for the performance-based compensation of  the members of the council
and  a liability for the related social  security charges of EUR11 thousand (2024:
EUR65 thousand). Of the liability for performance-based compensation recognised in
2024, EUR125 thousand was paid out in 2025 and the remainder will not be paid.
In  2025, the service fees of  the members of the  board of Nordecon AS totalled
EUR568  thousand and the related social security charges amounted to EUR187 thousand
(2024: EUR527 thousand and EUR174 thousand, respectively).
During the period, the group recognised a liability of EUR123 thousand (2024: EUR741
thousand) for the performance-based compensation of the members of the board and
a  liability for the related social security charges of EUR40 thousand (2024: EUR245
thousand).  Of the  liability for  performance-based compensation  recognised in
2024, EUR467 thousand was paid out in 2025 and the remainder will not be paid.

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 the staff costs incurred:

                                                     2025     2024      2023
-----------------------------------------------------------------------------
  Nominal labour productivity (rolling), (EUR'000)    483.2    514.3     499.3

  Change against the comparative period, %         (6.0)%     3.0%      1.8%



  Nominal labour cost efficiency (rolling), (EUR)       9.8      9.3      10.3

  Change against the comparative period, %           5.3%   (9.7)%   (13.4)%

While the group's nominal labour productivity decreased compared to the previous
year  due to a decline in revenue, its nominal labour cost efficiency increased,
as the decrease in staff costs exceeded the decline in revenue.

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)