Börsiteade

Pealkiri

2026 first quarter consolidated interim report (unaudited)

Teade

Construction  market: The war in the Middle East and the resulting sharp rise in
energy  prices  in  the  first  quarter  of  the year have caused the previously
optimistic  economic growth  forecast to  be revised  downwards. Growth for this
year  is projected at 2.1-2.5%, with the construction sector expected to grow by
2% in  constant  prices.  The  construction  sector  is  not  expected  to  grow
significantly;  rather,  stabilisation  will  continue.  Although rapidly rising
input prices are putting strong pressure on profitability, the risk is mitigated
to some extent by the construction price index included in public contracts.
Revenue:  Nordecon's revenue for the first  quarter increased by 32% compared to
the  same period last year. The  Buildings and Infrastructure segments accounted
for  86% and 14% of  the group's  total revenue,  respectively. Revenue from the
Buildings  segment grew  by 22%, while  revenue from  the Infrastructure segment
increased  by more than 2.5 times. Given the  size of the group's order book and
its   breakdown   between   the  segments,  revenue  growth  was  in  line  with
expectations.
Profitability:  Compared to the first quarter of 2025, the group's profitability
improved.  The  overall  gross  margin  was  5.6%, with  profit  coming from the
Buildings  segment. The loss  from the Infrastructure  segment, which was due to
seasonal factors, decreased year on year.
Order book: Compared to 31 March 2025, the group's order book increased by 31%.
The  order book of the Buildings segment grew significantly, driven by contracts
secured  by the public buildings subsegment, which account for 74% of the total.
Growth  in the Infrastructure segment's order book was more modest. Based on the
size  of the order book and the general outlook for the economy and construction
market,  the group's  management team  forecasts growth  in business volumes for
2026.

Condensed consolidated interim statement of financial position

 EUR'000                                           31 March 2026 31 December 2025
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               2,859            5,266

 Other financial assets                                  1,111            1,088

 Trade and other receivables                            36,730           46,348

 Prepayments                                             3,650            3,274

 Inventories                                            43,039           26,022

 Total current assets                                   87,389           81,998

 Non-current assets

 Other investments                                          77               77

 Other financial assets                                  2,110            1,810

 Trade and other receivables                            10,248           10,142

 Investment property                                     3,814            5,517

 Property, plant and equipment                          13,374           12,234

 Intangible assets                                      14,931           14,922

 Total non-current assets                               44,554           44,702

 TOTAL ASSETS                                          131,943          126,700



 LIABILITIES

 Current liabilities

 Borrowings                                             12,075           12,049

 Trade payables                                         51,522           49,569

 Other payables                                         10,802            9,971

 Deferred income                                        12,226           15,249

 Provisions                                                865            3,863

 Total current liabilities                              87,490           90,701

 Non-current liabilities

 Borrowings                                             13,808            5,708

 Trade payables                                          1,477            1,605

 Other payables                                          3,305                0

 Provisions                                              2,565            5,730

 Total non-current liabilities                          21,155           13,043

 TOTAL LIABILITIES                                     108,645          103,744



 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                                     4,603            4,522

 Retained earnings                                         243              141

 Total equity attributable to owners of the
 parent                                                 21,754           21,571

 Non-controlling interests                               1,544            1,385

 TOTAL EQUITY                                           23,298           22,956

 TOTAL LIABILITIES AND EQUITY                          131,943          126,700

Condensed consolidated interim statement of comprehensive income

 EUR'000                                               Q1 2026  Q1 2025      2025
-------------------------------------------------------------------------------
 Revenue                                              52,003   39,355   208,281

 Cost of sales                                      (49,065) (37,553) (194,746)

 Gross profit                                          2,938    1,802    13,535



 Marketing and distribution expenses                    (76)     (83)     (433)

 Administrative expenses                             (1,747)  (1,546)   (6,814)

 Other operating income                                   17       52       154

 Other operating expenses                               (13)     (34)   (6,835)

 Operating profit (loss)                               1,119      191     (393)



 Finance income                                          111      145       499

 Finance costs                                         (969)    (739)   (3,464)

 Net finance costs                                     (858)    (594)   (2,965)



 Profit (loss) before tax                                261    (403)   (3,358)

 Income tax expense                                        0        0     (141)

 Profit (loss) for the period                            261    (403)   (3,499)



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

 Exchange differences on translating foreign
 operations                                               81     (96)       488

 Total other comprehensive income (expense)               81     (96)       488

 TOTAL COMPREHENSIVE INCOME (EXPENSE)                    342    (499)   (3,011)



 Profit (loss) attributable to:

 - Owners of the parent                                  102    (616)   (4,605)

 - Non-controlling interests                             159      213     1,106

 Profit (loss) for the period                            261    (403)   (3,499)



 Comprehensive income (expense) attributable to:

 - Owners of the parent                                  183    (712)   (4,117)

 - Non-controlling interests                             159      213     1,106

 Comprehensive income (expense) for the period           342    (499)   (3,011)



 Earnings per share attributable to owners of the
 parent:

 Basic earnings per share (EUR)                           0.00   (0.02)    (0.15)

 Diluted earnings per share (EUR)                         0.00   (0.02)    (0.15)

Condensed consolidated interim statement of cash flows

  EUR'000                                                    Q1 2026    Q1 2025
------------------------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers                              64,173     46,622

  Cash paid to suppliers                                  (57,997)   (41,349)

  VAT paid                                                 (1,199)    (1,249)

  Cash paid to and for employees                           (5,204)    (3,923)

  Income tax paid                                            (367)      (350)

  Net cash used in operating activities                      (594)      (249)



  Cash flows from investing activities

  Paid for acquisition of property, plant and equipment      (385)       (35)

  Proceeds from sale of property, plant and equipment            7        207

  Loans provided                                              (17)       (26)

  Repayments of loans provided                                   2          3

  Dividends received                                            12          0

  Interest received                                             21         12

  Cash placed in long-term deposits                          (332)          0

  Net cash (used in) from investing activities               (692)        161



  Cash flows from financing activities

  Proceeds from loans received                               1,395        633

  Repayments of loans received                               (842)      (406)

  Payments of lease principal                                (728)      (633)

  Lease interest paid                                         (62)       (68)

  Dividends paid                                             (637)          0

  Interest paid                                              (241)      (209)

  Other payments                                               (1)          1

  Net cash used in financing activities                    (1,116)      (682)



  Net cash flow                                            (2,402)      (770)



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

  Effect of movements in foreign exchange rates                (5)       (26)

  Change in cash and cash equivalents                      (2,402)      (770)

  Cash and cash equivalents at end of period                 2,859      7,399

Financial review

Financial performance

In  the first quarter  of 2026, the Nordecon  group delivered a  gross profit of
EUR2,938  thousand  (Q1  2025: EUR1,802  thousand)  and  a  gross margin of 5.6% (Q1
2025: 4.6%). The gross margin improved year on year, supported by both operating
segments.  The  gross  margin  of  the  Buildings  segment increased to 8.8% (Q1
2025: 7.5%). Although  the gross margin of  the Infrastructure segment, which in
the  first quarter is  affected by a  large share of  uncovered fixed costs, was
negative  at (5.8)%, it improved significantly  compared with the (24.6)% in the
first quarter of 2025.
The  group's administrative expenses  for the first  quarter of 2026 were EUR1,747
thousand   (Q1   2025: EUR1,546   thousand).   The  13% year-on-year  increase  in
administrative  expenses  was  mainly  due  to  higher staff costs. The ratio of
administrative  expenses to revenue (12 months  rolling) decreased year on year,
declining to 3.2% (Q1 2025: 3.6%).
The  group's operating profit for the  first quarter of 2026 was EUR1,119 thousand
(Q1   2025: EUR191  thousand)  and  EBITDA  was  EUR1,784  thousand  (Q1  2025: EUR858
thousand).
The  group's finance income and costs are affected by exchange rate fluctuations
in  the group's foreign markets. However, in  the reporting period the impact of
those  fluctuations was  smaller than  a year  earlier. In  the first quarter of
2026, the  Ukrainian hryvnia  weakened against  the euro  by around 0.9% and the
translation of the loans provided to the group's Ukrainian subsidiaries in euros
into the local currency gave rise to an exchange loss of EUR59 thousand (Q1 2025:
an  exchange loss of EUR117 thousand). The Swedish krona weakened against the euro
by  around 1.1% and the translation of a loan provided to the Swedish subsidiary
in  euros into the local  currency gave rise to  an exchange loss of EUR3 thousand
(Q1 2025: an exchange gain of EUR41 thousand).
The  group ended the period  with a net profit  of EUR261 thousand (Q1 2025: a net
loss  of  EUR403  thousand).  Net  profit  attributable  to  owners of the parent,
Nordecon AS, amounted to EUR102 thousand (Q1 2025: a net loss of EUR616 thousand).

Cash flows

In  the first quarter of 2026, operating  activities produced a net cash outflow
of  EUR594 thousand (Q1 2025: an outflow of EUR249 thousand). Due to revenue growth,
both  cash receipts from customers and cash paid to suppliers increased compared
to the first quarter of 2025. Cash paid to and for employees also increased.
Investing  activities resulted in a net cash outflow of EUR692 thousand (Q1 2025:
an  inflow  of  EUR161  thousand).  Payments  made  to acquire property, plant and
equipment  totalled EUR385 thousand (Q1 2025: EUR35  thousand) and proceeds from the
sale  of property,  plant and  equipment amounted  to EUR7 thousand (Q1 2025: EUR207
thousand).  Loans  provided  totalled  EUR17  thousand (Q1 2025: EUR26 thousand) and
interest  received amounted to EUR21 thousand (Q1 2025: EUR12 thousand). Cash placed
in long-term deposits during the period amounted to EUR332 thousand.
Financing  activities generated a net cash outflow of EUR1,116 thousand (Q1 2025:
an  outflow of EUR682  thousand). The items  with the strongest  impact were loans
received  and loan repayments of EUR1,395 thousand and EUR842 thousand, respectively
(Q1  2025: EUR633  thousand  and  EUR406  thousand).  Lease  payments  totalled EUR728
thousand  (Q1 2025: EUR633 thousand) and  interest payments totalled EUR241 thousand
(Q1  2025: EUR209 thousand). Dividends paid in  the first quarter of 2026 amounted
to EUR637 thousand. In the first quarter of 2025, no dividends were paid.
At  31 March  2026, the  group's  cash  and  cash equivalents amounted to EUR2,859
thousand (31 March 2025: EUR7,399 thousand).

Key financial figures and ratios

 Figure/ratio                   Q1 2026       Q1 2025       Q1 2024        2025
-------------------------------------------------------------------------------
 Revenue (EUR'000)                 52,003        39,355        46,245     208,281

 Revenue change                   32.1%       (14.9)%         37.8%        (7)%

 Net profit (loss) (EUR'000)          261         (403)         (182)     (3,499)

 Net      profit      (loss)
 attributable  to  owners of
 the parent (EUR'000)                 102         (616)         (593)     (4,605)

 Weighted  average number of
 shares                      31,528,585    31,528,585    31,528,585  31,528,585

 Earnings per share (EUR)            0.00        (0.02)        (0.02)      (0.15)

 Administrative  expenses to
 revenue                           3.4%          3.9%          3.4%        3.3%

 Administrative  expenses to
 revenue (rolling)                 3.2%          3.6%          3.3%        3.3%

 EBITDA (EUR'000)                   1,784           858         1,094       2,206

 EBITDA margin                     3.4%          2.2%          2.4%        1.1%

 Gross margin                      5.6%          4.6%          4.6%        6.5%

 Operating margin                  2.2%          0.5%          0.8%      (0.2)%

 Operating  margin excluding
 gain  on  non-current asset
 sales                             2.1%          0.4%          0.8%      (0.2)%

 Net margin                        0.5%        (1.0)%        (0.4)%      (1.7)%

 Return on invested capital        1.2%        (0.5)%          0.1%      (5.5)%

 Return on equity                  1.1%        (1.5)%        (0.8)%     (14.1)%

 Equity ratio                     17.7%         22.9%         19.1%       18.1%

 Return on assets                  0.2%        (0.4)%        (0.2)%      (2.9)%

 Gearing                          46.8%         24.4%          4.4%       30.7%

 Current ratio                     1.00          0.94          0.85        0.90

                          31 March 2026 31 March 2025 31 March 2024 31 Dec 2025
-------------------------------------------------------------------------------
 Order     book
 (EUR'000)                        372,192       283,548       198,737     273,060
-------------------------------------------------------------------------------

Performance by geographical market

Revenue generated outside Estonia, in Ukraine, accounted for approximately 1% of
the  group's total  revenue in  the first  quarter of 2026. Revenue generated in
Ukraine,  as well as its share of  the Group's total revenue, decreased compared
to  the same period in 2025. This was primarily due to the extremely challenging
conditions  in  the  country.  Constant  power  outages  and  a very cold winter
hindered work at construction sites and in the production of building materials.
No  revenue  was  generated  in  Sweden  as  we had no construction contracts in
progress in that market.

            Q1 2026   Q1 2025   Q1 2024   2025
------------------------------------------------
  Estonia       99%       98%       99%    98%

  Ukraine        1%        2%        1%     2%

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) if market conditions
permit.  This helps diversify risk and provides better opportunities to continue
construction  activities in challenging  market conditions, when  volumes in one
subsegment decline sharply, while volumes in another start to grow more rapidly.
The  group's  revenue  for  the  first  quarter  of  2026 was  EUR52,003 thousand,
approximately  32% higher  than  in  the  first  quarter  of  2025, when revenue
amounted to EUR39,355 thousand. The Buildings segment generated revenue of EUR44,596
thousand  and the Infrastructure  segment generated revenue  of EUR7,402 thousand.
The  corresponding figures for  the first quarter  of 2025 were EUR36,584 thousand
and  EUR2,766 thousand, respectively.  Revenue from the  Buildings segment grew by
22%, while  revenue  from  the  Infrastructure  segment increased more than 2.5
times.  In view of the size of the  group's order book and its breakdown between
the segments, revenue growth was in line with expectations.

  Revenue by operating segment   Q1 2026   Q1 2025   Q1 2024   2025
--------------------------------------------------------------------
  Buildings                          86%       93%       94%    81%

  Infrastructure                     14%        7%        6%    19%

Subsegment revenues

Most  of  the  revenue  in  the  Buildings  segment  currently  comes  from  the
construction  of  public  and  commercial  buildings. During the period, revenue
generated  by the  public buildings  subsegment increased  by around 53% year on
year,  whereas revenue from  the industrial and  warehouse facilities subsegment
decreased  and revenue from  the commercial and  apartment buildings subsegments
remained  comparable  to  the  same  period  last  year. The apartment buildings
subsegment  did not  have any  major ongoing  projects and  the revenue from own
development operations was not significant.
In  the  first  quarter  of  2026, the  largest projects in the public buildings
subsegment  were  the  construction  of  the  Tiskre  School  in the Harku rural
municipality, and the design and construction of Loodusmaja (Nature Hub) and the
new  television building of  Estonian Public Broadcasting  in Tallinn. Work also
continued  on the construction  of a barracks  at Tapa as  well as various other
buildings procured by the Estonian Centre for Defence Investments.
The   largest   projects   in  the  commercial  buildings  subsegment  were  the
construction  of 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,  and  a  spa  hotel  and  a  swimming complex in
Viljandi.
Revenue  from own  development operations,  which is  included in  the apartment
buildings  subsegment, amounted to EUR319  thousand (Q1 2025: EUR6 thousand). During
the  period,  we  started  preparations  for  the construction of phase 2 of the
Seileri  Kvartal  housing  estate  in  Pärnu  (https://seileri.ee) and continued
building  the Tammepärja Kodu housing estate  in the Tammelinn district in Tartu
(https://tammelinn.ee)  and the Pärnasalu residential development project on the
outskirts   of  Tartu  (https://parnasalutee.ee).  When  carrying  out  our  own
development  activities,  we  carefully  monitor  potential risks in the housing
development market.

  Buildings segment                     Q1 2026   Q1 2025   Q1 2024   2025
---------------------------------------------------------------------------
  Public buildings                          63%       52%       67%    52%

  Commercial buildings                      35%       46%       19%    39%

  Apartment buildings                        1%        1%       14%     8%

  Industrial and warehouse facilities        1%        1%        0%     1%

In the first quarter of 2026, all of the revenue generated by the Infrastructure
segment  came from  road construction  and maintenance.  Compared with  the same
period  last  year,  the  segment's  revenue  has  increased  significantly. The
period's  largest projects were  the construction of  the Rail Baltica main line
railway  infrastructure, including the Hagudi-Alu section  of stage III in Rapla
County  and  the  Selja-Tootsi  section  of  stage  I  in  Pärnu County, and the
construction of the Päädeva-Orgita road section on km 62.2-64.8 of national road
no. 4 (E67), Tallinn-Pärnu-Ikla.

  Infrastructure segment              Q1 2026   Q1 2025   Q1 2024   2025
-------------------------------------------------------------------------
  Road construction and maintenance      100%       77%       83%    87%

  Other engineering                        0%       23%       17%    13%

Order book

The group's order book (backlog of contracts signed but not yet performed) stood
at  EUR372,192 thousand at 31 March  2026, reflecting an increase of approximately
31% year  on year.  In the  first quarter  of 2026, we  signed new contracts for
EUR155,787  thousand (Q1  2025: EUR111,276 thousand).  After the  reporting date, we
have signed new contracts for EUR13,911 thousand.

                    31 March 2026 31 March 2025 31 March 2024 31 Dec 2025
-------------------------------------------------------------------------
 Order book (EUR'000)       372,192       283,548       198,737     273,060

At 31 March 2026, the Buildings segment accounted for 71% and the Infrastructure
segment  for 29% of the  group's total order  book (31 March 2025: 66% and 34%,
respectively).  Compared to 31 March 2025, the order  books of the Buildings and
Infrastructure  segments have increased  by 43% and 10%, respectively. Contracts
relating to the public buildings subsegment account for 74% of the order book of
the  Buildings segment and significant proportion of these contracts is for work
to  be performed for the Estonian Centre for Defence Investments. The order book
of  the Infrastructure segment has grown primarily through large-scale contracts
relating  to Rail  Baltica as  well as  a contract  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 building construction  has decreased. The  market is supported by
the  defence sector, with  some activity also  coming from local governments and
the private sector.
Major contracts secured in the reporting period include:

  * Construction of the first building and the related outdoor areas of the
    logistics and light industrial park Park Rae in Rae rural municipality, with
    an approximate cost of EUR15,800 thousand.
  * Construction of a new school building for Tallinn Helen's School in Põhja-
    Tallinn, with an approximate cost of EUR12,600 thousand.
  * Construction of a building and infrastructure for AS Tallinna Vesi at the
    Ülemiste Water Treatment Plant site in Tallinn, with an approximate cost of
    EUR11,800 thousand.
  * Construction of supporting infrastructure for the Estonian Centre for
    Defence Investments in Pärnu County, with an approximate cost of EUR110,400
    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. Our main focus is
on  assessing and mitigating the risks arising from market changes, particularly
rising  input  costs.  We  also  prioritise  managing  fixed  costs,  increasing
productivity and executing pre-construction and design activities effectively to
leverage our professional competitive advantages.

People

Employees and staff costs

The  group's average number of employees in  the first quarter of 2026 was 450,
including  284 engineers and technical professionals (ETP). Compared to the same
period last year, the number of employees increased by around 9%.

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

                  Q1 2026   Q1 2025   Q1 2024   2025
-----------------------------------------------------
  ETPs                284       263       281    275

  Workers             166       148       142    156

  Total average       450       411       423    431

The group's staff costs for the first quarter of 2026, including all taxes, were
EUR5,670  thousand compared  with EUR4,795  thousand in  the first quarter of 2025.
Staff  costs grew by 18% year on  year due to an increase  in both the number of
employees and salaries.
In  the first quarter of 2026, the service fees of the members of the council of
Nordecon  AS  totalled  EUR68  thousand  and  the  related social security charges
amounted to EUR22 thousand (Q1 2025: EUR50 thousand and EUR17 thousand, respectively).
The  service  fees  of  the  members  of  the board of Nordecon AS totalled EUR146
thousand  and the related  social security charges  amounted to EUR48 thousand (Q1
2025: EUR139 thousand and EUR46 thousand, 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 the staff costs incurred:

                                                Q1 2026 Q1 2025 Q1 2024   2025
------------------------------------------------------------------------------
 Nominal labour productivity (rolling), (EUR'000)   501.4   501.8   535.4  483.3

 Change against the comparative period, %        (0.1)%  (6.3)%   13.4% (6.0)%



 Nominal labour cost efficiency (rolling), (EUR)      9.9     8.7    11.1    9.8

 Change against the comparative period, %         14.6% (21.8)%    0.5%   5.4%

Compared  to the  same period  in 2025, the  group's nominal labour productivity
remained  stable. However, its nominal labour cost efficiency improved due to an
increase in revenue and a decrease in staff costs over the past four quarters.

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)