Börsiteade

Pealkiri

2022 first quarter consolidated interim report (unaudited)

Teade

The  key words for the first quarter of 2022 for the group are, firstly, a sharp
increase  in sales revenue and, at the same  time, a sharp rise in input prices.
The  increase in  sales revenue  is related  to the  fulfillment of construction
contracts  concluded in  previous periods.  Input prices  have risen mainly as a
result  of sanctions  imposed on  Russia and  Belarus, and  in addition to price
rises,  supply difficulties have a significant impact. These have led to a sharp
rise  in the  price of  projects in  the construction  market and a delay in the
start  of new  projects. Market  participants are  waiting for  the situation to
clarify  and for a  new equilibrium in  prices to continue  to operate normally,
which requires long-term agreements and security of supply.
The  Group's sales  revenue for  the first  quarter of  2022 was 68,453 thousand
euros. Compared to the same period last year, sales revenue increased by 39.7%.
The  increase in sales revenue is based on  the increase in sales revenue in the
buildings segment, while the sales revenue in the facilities segment decreased.
The  Group's gross profit  margin for the  first quarter of 2022 was 1.7% (first
quarter  of  2021: -0.2%).  Profit  for  the  reporting period was earned in the
building  construction  segment.  Due  to  the  seasonality of construction, the
result  of the first quarter, especially  in the facilities segment, is affected
by  a large share of uncovered fixed costs. This mainly concerns the part of the
production  and installation of asphalt concrete for road construction, of which
a  large part  of the  fixed costs  is the  cost of the necessary equipment. The
decline  in the margins of  the facilities segment is  also affected by the 50%
decrease in sales revenue.
The  Group's net  profit was  significantly affected  by developments in foreign
markets. The creditors of Swencn AB approved a reorganization plan, according to
which  the creditors will be entitled to  25% of the claims. As a result, 1,560
thousand  euros  have  been  recognized  in  other  operating  income during the
reporting period. During the reporting period, the Group's associate V.I. Center
TOV  granted a loan in the amount of 825 thousand euros. The need for a discount
has arisen due to the postponement of the completion of development projects.
The  order book  of the  Group as  of 31 March  2022 was 251,781 thousand euros,
which is approximately 11% less than as of 31 March 2021.

Condensed consolidated interim statement of financial position

 EUR'000                                           31 March 2022 31 December 2021
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               5,617            9,031

 Trade and other receivables                            50,815           48,091

 Prepayments                                             6,396            4,947

 Inventories                                            24,922           25,637

 Total current assets                                   87,750           87,706

 Non-current assets

 Other investments                                          76               76

 Trade and other receivables                             8,434            9,206

 Investment property                                     8,233            5,599

 Property, plant and equipment                          17,626           17,433

 Intangible assets                                      15,070           15,051

 Total non-current assets                               49,439           47,365

 TOTAL ASSETS                                          137,189          135,071



 LIABILITIES

 Current liabilities

 Borrowings                                             17,401           16,289

 Trade payables                                         56,119           57,324

 Other payables                                          8,683            7,459

 Deferred income                                        13,076           11,539

 Provisions                                              1,286              707

 Total current liabilities                              96,565           93,318

 Non-current liabilities

 Borrowings                                              7,153            7,405

 Trade payables                                          3,433            4,178

 Provisions                                              2,076            2,044

 Total non-current liabilities                          12,662           13,627

 TOTAL LIABILITIES                                     109,227          106,945



 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                                     2,102            1,948

 Retained earnings                                       5,422            6,341

 Total equity attributable to owners of the
 parent                                                 24,432           25,197

 Non-controlling interests                               3,530            2,929

 TOTAL EQUITY                                           27,962           28,126

 TOTAL LIABILITIES AND EQUITY                          137,189          135,071

Condensed consolidated interim statement of comprehensive income

 EUR'000                                               Q1 2022  Q1 2021      2021
-------------------------------------------------------------------------------
 Revenue                                              68,453   48,987   288,534

 Cost of sales                                      (67,306) (49,079) (284,513)

 Gross profit (loss)                                   1,147     (92)     4,021



 Marketing and distribution expenses                    (71)    (107)     (559)

 Administrative expenses                             (1,601)  (1,471)   (6,053)

 Other operating income                                1,753       35       519

 Other operating expenses                              (278)     (23)   (2,264)

 Operating profit (loss)                                 950  (1,658)   (4,336)



 Finance income                                           67      405       958

 Finance costs                                       (1,335)    (289)   (1,320)

 Net finance income (costs)                          (1,268)      116     (362)





 Loss before income tax                                (318)  (1,542)   (4,698)

 Income tax expense                                        0    (369)     (808)

 Loss for the period                                   (318)  (1,911)   (5,506)



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

 Exchange differences on translating foreign
 operations                                              154    (181)     (475)

 Total other comprehensive income (expense)              154    (181)     (475)

 TOTAL COMPREHENSIVE EXPENSE                           (164)  (2,092)   (5,981)



 Profit (loss) attributable to:

 - Owners of the parent                                (919)  (1,564)   (6,310)

 - Non-controlling interests                             601    (347)       804

 Loss for the period                                   (318)  (1,911)   (5,506)



 Comprehensive income (expense) attributable to:

 - Owners of the parent                                (765)  (1,745)   (6,785)

 - Non-controlling interests                             601    (347)       804

 Comprehensive expense for the period                  (164)  (2,092)   (5,981)



 Earnings per share attributable to owners of the
 parent:

 Basic earnings per share (EUR)                         (0.03)   (0.05)    (0.20)

 Diluted earnings per share (EUR)                       (0.03)   (0.05)    (0.20)

Condensed consolidated interim statement of cash flows

  EUR'000                                                   Q1 2022    Q1 2021
-----------------------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers                             81,287     68,075

  Cash paid to suppliers                                 (76,240)   (59,677)

  VAT paid                                                (2,011)    (2,338)

  Cash paid to and for employees                          (5,947)    (6,215)

  Income tax paid                                           (150)      (458)

  Net cash used in operating activities                   (3,061)      (613)



  Cash flows from investing activities

  Paid on acquisition of property, plant and equipment       (63)       (43)

  Proceeds from sale of property, plant and equipment         200         71

  Loans provided                                                0        (5)

  Repayments of loans provided                                  3          5

  Dividends received                                            6          0

  Interest received                                             2          2

  Net cash from investing activities                          148         30



  Cash flows from financing activities

  Proceeds from loans received                                832          5

  Repayments of loans received                              (300)      (606)

  Dividends paid                                                0    (1,884)

  Lease payments made                                       (786)      (806)

  Interest paid                                             (239)      (277)

  Other payments                                              (3)       (10)

  Net cash used in financing activities                     (496)    (3,578)



  Net cash flow                                           (3,409)    (4,161)



  Cash and cash equivalents at beginning of period          9,031     12,576

  Effect of movements in foreign exchange rates               (5)          1

  Decrease in cash and cash equivalents                   (3,409)    (4,161)

  Cash and cash equivalents at end of period                5,617      8,416

Financial review

Financial performance

The  reporting period was strongly affected by materials supply issues and price
inflation,  the impact  of which  has not  yet fully  emerged due to the ongoing
supply  chain disruptions  and volatility.  The Nordecon  group ended  the first
quarter of 2022 with a gross profit of EUR1,147 thousand (Q1 2021: a gross loss of
EUR92  thousand) and a gross  margin of 1.7% (Q1 2021: a  negative gross margin of
0.2%). The  period's gross  profit was  earned in  the Buildings  segment, which
delivered  a gross margin of 4.1% (Q1 2021: 2.1%). Due to the seasonal nature of
the  construction business, first-quarter results are  affected by a large share
of uncovered fixed costs, particularly in the Infrastructure segment. Above all,
this  applies to  asphalt concrete  production and  laying in road construction,
where  plant and equipment expenses account for  a major share of fixed costs. A
large  share  of  fixed  costs  in  combination  with  a 50% decrease in revenue
triggered  a sharp margin decline in the Infrastructure segment, which delivered
a negative gross margin of 23.0% (Q1 2021: a negative gross margin of 5.7%).
The  group's administrative expenses  for the first  quarter of 2022 amounted to
EUR1,601  thousand.  Compared  with  the  same  period  last  year, administrative
expenses  grew by around  9% (Q1 2021: EUR1,471 thousand).  The increase is mainly
attributable  to  growth  in  personnel  expenses.  The  ratio of administrative
expenses  to revenue  (12 months  rolling) declined  year on year, decreasing to
2.0% (Q1 2021: 2.3%).
The  group ended  the first  quarter of  2022 with an  operating profit  of EUR950
thousand  (Q1 2021: an operating loss of EUR1,658 thousand). EBITDA for the period
was  positive at EUR1,817 thousand (Q1 2021: negative at EUR811 thousand). According
to  the restructuring plan approved by the creditors of Swencn AB, the claims of
the  entity's creditors are to be settled to the extent of 25%. As a result, the
group recognised other income of EUR1,560 thousand.
The  group's finance income and costs are affected by exchange rate fluctuations
in  the  group's  foreign  markets.  During  the  period,  the Ukrainian hryvnia
weakened  against the euro  by around 5% and  the Swedish krona weakened against
the  euro by  around 1%. The  translation of  the loans  provided to the group's
subsidiaries in euros into the Ukrainian hryvnias and Swedish krona gave rise to
exchange  losses of EUR313 thousand  (Q1 2021: a gain of  EUR346 thousand in Ukraine
and a loss of EUR28 thousand in Sweden). Finance costs were strongly influenced by
the write-down of a loan provided to the group's Ukrainian associate V.I. Center
TOV  by EUR825 thousand.  Due to the  lack of more  recent reliable data, the fair
value  of the loan was measured using the inputs of the valuation reports issued
at  the end of 2021 by an  internationally recognised independent appraiser. The
asset  had to be written down  due to the time factor,  i.e. the deferral of the
completion of the development projects.
The  group incurred a net  loss of EUR318 thousand  (Q1 2021: a net loss of EUR1,911
thousand).  The loss attributable to owners of the parent, Nordecon AS, was EUR919
thousand (Q1 2021: a loss of EUR1,564 thousand).

Cash flows

Operating  activities produced a  net cash outflow  of EUR3,061 thousand the first
quarter  of 2022 (Q1 2021: an outflow of EUR613 thousand). Negative operating cash
flow  in  the  first  quarter  is  attributable  to  the  cyclical nature of the
construction  business. The  period's larger  fixed costs  and expenses  on pre-
construction activities 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 and materials suppliers.
Prepayments  have increased sharply compared with the same time last year due to
rapid  price inflation and  continuing supply chain  disruptions. 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 EUR148 thousand (Q1 2021:
EUR30  thousand). Payments made to purchase property, plant and equipment amounted
to  EUR63 thousand (Q1 2021: EUR43 thousand) and proceeds from the sale of property,
plant and equipment amounted to EUR200 thousand (Q1 2021: EUR71 thousand).
Financing  activities generated a net cash outflow of EUR496 thousand (Q1 2021: an
outflow  of EUR3,578 thousand).  The largest items  were loan repayments and lease
payments  of  EUR300  thousand  and  EUR786  thousand,  respectively  (Q1 2021: EUR606
thousand and EUR806 thousand, respectively). Proceeds from loans received amounted
to  EUR832 thousand  (Q1 2021: EUR5  thousand) and  interest payments  totalled EUR239
thousand  (Q1 2021: EUR277 thousand). The largest  item in financing cash flows in
the comparative period was a dividend distribution of EUR1,884 thousand.
The  group's cash and cash equivalents at 31 March 2022 totalled EUR5,617 thousand
(31 March 2021: EUR8,416 thousand).

Key financial figures and ratios

 Figure/ratio                   Q1 2022       Q1 2021       Q1 2020        2021
-------------------------------------------------------------------------------
 Revenue (EUR'000)                 68,453        48,987        54,924     288,534

 Revenue change                   39.7%       (10.8)%         59.1%      (2.5)%

 Net profit (loss)
 (EUR'000)                          (318)       (1,911)       (2,196)     (5,506)

 Net profit (loss)
 attributable to owners
 of the
 parent (EUR'000)                   (919)       (1,564)       (2,669)     (6,310)

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

 Earnings per share (EUR)          (0.03)        (0.05)        (0.08)      (0.20)

 Administrative expenses
 to revenue                        2.3%          3.0%          3.3%        2.1%

 Administrative expenses
 to revenue (rolling)              2.0%          2.3%          2.8%        2.1%

 EBITDA (EUR'000)                   1,817         (811)           194       (797)

 EBITDA margin                     2.7%        (1.7)%          0.4%      (0.3)%

 Gross margin                      1.7%        (0.2)%          2.2%        1.4%

 Operating margin                  1.4%        (3.4)%        (1.2)%      (1.5)%

 Operating margin
 excluding gain on asset
 sales                             1.2%        (3.4)%        (1.2)%      (1.6)%

 Net margin                      (0.5)%        (3.9)%        (4.0)%      (1.9)%

 Return on invested
 capital                         (0.2)%        (2.1)%        (3.3)%      (6.5)%

 Return on equity                (1.1)%        (5.3)%        (6.7)%     (16.8)%

 Equity ratio                     20.4%         28.0%         28.2%       20.8%

 Return on assets                (0.2)%        (1.8)%        (2.1)%      (4.1)%

 Gearing                          36.1%         27.8%         32.7%       28.3%

 Current ratio                     0.91          0.99          0.95        0.94

                          31 March 2022 31 March 2021 31 March 2020 31 Dec 2021
-------------------------------------------------------------------------------
 Order book (EUR'000)             251,781       281,431       229,018     266,856
-------------------------------------------------------------------------------

Performance by geographical market

Revenue  generated  outside  Estonia  in  the  first  quarter  of  2022 remained
practically  at the same level  as in the first  quarter of 2021, accounting for
5% of  the group's total revenue. However,  the revenue contributions of foreign
markets  changed. The  group did  not generate  any revenue  and had  no ongoing
construction contracts in the Swedish market. Revenue generated in the Ukrainian
market  amounted  to  EUR231  thousand  and  due  to Russia's military invasion of
Ukraine  the activity of  the Ukrainian subsidiary  Eurocon Ukraine TOV has been
temporarily  suspended. The  group also  operates on  a project  basis in Latvia
where it was building a wind farm in the reporting period.

            Q1 2022   Q1 2021    Q1 2020   2021
------------------------------------------------
  Estonia       95%       96%        86%    94%

  Latvia         3%        0%         0%     1%

  Finland        2%        2%         5%     3%

  Sweden         0%        1%         8%     0%

  Ukraine        0%        1%         1%     2%

Geographical  diversification  of  the  revenue  base  is a consciously deployed
strategy  by which we mitigate the risks  resulting from excessive reliance on a
single  market. However,  conditions in  some of  our chosen foreign markets are
also  volatile  and  noticeably  affect  our  current  results.  Increasing  the
contribution of foreign markets is one of Nordecon's strategic goals.

Performance by business line

Segment revenues

We strive to maintain the revenues of our two main operating segments (Buildings
and  Infrastructure) as balanced as possible in the light of market developments
because  this  helps  diversify  risks  and  provides  better  opportunities for
continuing  construction operations in more  challenging market conditions where
the volumes of one subsegment substantially decline while another begins to grow
more rapidly
The group's revenue for the first quarter of 2022 was EUR68,453 thousand, 39.7% up
on  a year earlier when revenue amounted to EUR48,987 thousand. Revenue growth was
attributable  to the  revenue of  the Buildings  segment, which grew by 66%. The
revenue of the Infrastructure segment decreased by around 50%.
The  low volumes  of infrastructure  construction that  are affecting the entire
construction  market also influence the group's  revenue structure. In the first
quarter  of 2022, the Buildings and the Infrastructure segment generated revenue
of EUR62,814 thousand and EUR5,569 thousand, respectively. The corresponding figures
for the first quarter of 2021 were EUR37,833 thousand and EUR11,094 thousand.

  Revenue by operating segment   Q1 2022   Q1 2021   Q1 2020   2021
--------------------------------------------------------------------
  Buildings                          89%       80%       89%    75%

  Infrastructure                     11%       20%       11%    25%

Subsegment revenues

In the Buildings segment, the revenues of all subsegments grew compared with the
same  period last year. The revenue contributions of the apartment buildings and
the  public  buildings  subsegments  were  practically  equal  while the revenue
contributions  of  the  commercial  buildings  and  the industrial and warehouse
facilities subsegments were somewhat smaller.
The  largest projects under construction  in the commercial buildings subsegment
were  the LEED Gold compliant Alma Tomingas  office building in Ülemiste City in
Tallinn and an IKEA store in Rae rural municipality near Tallinn.
The  revenue of the public buildings subsegment has increased significantly year
on  year. The largest  projects in progress  during the period were construction
works  in the  Medical Campus  of the  Tartu University  Hospital in  Tartu, the
construction  of the main building of  the Estonian Internal Security Service in
Tallinn  and the design and construction of warehouses and external networks for
the Centre for Defence Investment in Harju county.
A  significant share  of the  group's apartment  building projects is located in
Tallinn. During the period under review, 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 and  Luccaranna housing  estates on  the western
border of the city.
The  group  also  continues  to  build  its  own housing development projects in
Tallinn  and Tartu (reported in the  apartment buildings subsegment). During the
period,  work continued on the construction of the Mõisavahe Kodu housing estate
in  Tartu (https://moisavahe.ee) and the development of plots for Kivimäe Süda -
a new housing estate in the Nõmme district in Tallinn. The period's revenue from
own  development projects amounted to EUR2,893 thousand (Q1 2021: EUR0). In carrying
out  our own development activities, we carefully monitor potential risks in the
housing development market.
The  revenue contribution of the  industrial and warehouse facilities subsegment
has grown considerably compared with the first quarter of 2021. The subsegment's
largest  ongoing project is the construction of  a factory complex for the dairy
company  E-Piim in Paide  but there also  numerous smaller projects  such as the
construction of a production building at Kurna tee in Harju county.

  Buildings segment                     Q1 2022   Q1 2021   Q1 2020   2021
---------------------------------------------------------------------------
  Apartment buildings                       31%       30%       27%    29%

  Public buildings                          28%       31%       30%    28%

  Commercial buildings                      23%       33%       36%    29%

  Industrial and warehouse facilities       18%        6%        7%    14%

In  the Infrastructure  segment, the  largest revenue  contributor is still road
construction and maintenance although its revenue and proportionate contribution
have  decreased. During  the period,  most of  the subsegment's revenue resulted
from the performance of contracts secured in 2021, the largest of which were the
construction  of  2+2 passing  lanes  on  the  Kärevere-Kardla  section  of  the
Tallinn-Tartu-Võru-Luhamaa road and the design and construction of outdoor space
around  Terminal D in Old City Harbour  in Tallinn. We also continued to deliver
road maintenance services in Järva county.
The  group has  won several  contracts for  the construction  of small harbours.
During  the  period,  work  was  done  on  the expansion of quays in Roomassaare
harbour,  which  accounted  for  a  major  share  of  the specialist engineering
revenue.  The revenue of  the other engineering  subsegment resulted mostly from
the construction of the Vanessa wind farm in Latvia.

  Infrastructure segment              Q1 2022   Q1 2021   Q1 2020   2021
-------------------------------------------------------------------------
  Road construction and maintenance       66%       88%       77%    87%

  Specialist engineering                   7%        6%       14%     4%

  Environmental engineering                0%        5%        4%     3%

  Other engineering                       27%        1%        5%     6%

Order book

The group's order book (backlog of contracts signed but not yet performed) stood
at  EUR251,781 thousand at 31 March 2022, a roughly  11% decrease year on year. In
the  first  quarter  of  2022, we  signed  new contracts of EUR63,167 thousand (Q1
2021: EUR104,882   thousand).  Russia's  military  invasion  of  Ukraine  and  the
consequent sanctions on Russia and Belarus have disrupted the supply of building
materials,  particularly  metal,  wood  and  oil-based  products,  which is also
affecting  the prices of  relevant materials. The  surge in materials prices has
caused  a sharp  increase in  the costs  of development  projects as well as the
postponement of new projects.

                    31 March 2022 31 March 2021 31 March 2020 31 Dec 2021
-------------------------------------------------------------------------
 Order book (EUR'000)       251,781       281,431       229,018     266,856

The  share of the Buildings segment in the group's order book has increased: the
Buildings  segment accounted for  88% and the Infrastructure  segment for 12% of
the  group's total  order book  at 31 March  2022 (31 March 2021: the respective
shares  were 80% and 20%). Compared with 31 March  2021, the order books of both
segments  have  decreased:  by  3% in  the  Buildings  segment  and  44% in  the
Infrastructure segment.
A major share of new contracts was secured by the Buildings segment. The largest
of them are:

  * the design and construction of the Uus-Järveküla housing estate in Rae rural
    municipality (28 terraced houses and 8 semi-detached houses with a total of
    165 housing units) with a cost of around EUR28,300 thousand.
  * construction works on floors 2 to 4 of Wing A of the Medical Campus of the
    Tartu University Hospital with a cost of around EUR4,200 thousand.
  * the design and construction of the Ülemiste City education complex with an
    estimated cost of EUR16,000 thousand (the cost will be specified in the design
    phase).

Besides the above, a significant share of the segment's order book is made up of
contracts  signed in 2021, the largest of  which are the design and construction
of  the commercial and residential complex  Vektor, the construction of the main
building  of  the  Estonian  Internal  Security  Service and the office building
Roseni Maja in Tallinn, phase III of the Maarjamõisa Medical Campus of the Tartu
University Hospital in Tartu and a factory complex for E?Piim in Paide.
In  the Infrastructure segment, new contracts were signed in various subsegments
but  the order book of the road construction and maintenance subsegment is still
the  largest, accounting for nearly 88% of the segment's order book. The largest
contracts signed in the reporting period were:

  * design and construction works for the removal of residual contamination from
    the Erra river and Kiviõli ditch with a cost of around EUR2,100 thousand;
  * reconstruction of the Tubala-Tammela section of national road no. 81
    Kärdla-Käina, km 4.9-11.36, on the island of Hiiumaa with a cost of around
    EUR2,480 thousand.

The  segment's largest ongoing contracts signed  in 2021 are the construction of
2+2 passing     lanes     on     the     Kärevere-Kardla    section    of    the
Tallinn-Tartu-Võru-Luhamaa road and the design and construction of outdoor space
around  Terminal D in Old  City Harbour in Tallinn.  We also continue to deliver
road  maintenance services in Järva county  under a five-year contract signed in
2020.
Based  on the size of the group's order  book, including the share of work to be
performed in 2023, management expects that in 2022 the group's revenue will grow
compared  with 2021. The uptrend in the prices of materials, energy carriers and
labour  costs  will  continue  to  increase  input prices and pressure on profit
margins.  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. To mitigate input price risk, we have
been  signing cost-plus contracts with  private sector customers (contracts with
an  open book arrangement under  which we can invoice  the customer based on the
actual  costs incurred plus an agreed margin). Our focus remains on cost control
as  well as  pre-construction and  design activities,  where we  can harness our
professional competitive advantages.

People

Employees and personnel expenses

The  group's average number of employees in  the first quarter of 2022 was 659,
including  434 engineers and  technical personnel  (ETP). Headcount decreased by
around 2% year on year.

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

                  Q1 2022   Q1 2021   Q1 2020   2021
-----------------------------------------------------
  ETP                 434       422       429    434

  Workers             225       253       266    251

  Total average       659       675       695    685

The  group's personnel  expenses for  the first  quarter of  2022, including all
taxes,  totalled EUR6,030  thousand compared  with EUR5,931  thousand for  the first
quarter  of 2021. While  the number  of employees  decreased, personnel expenses
grew  because wages and  salaries increased by  around 2% compared with the same
period last year.
The  service fees  of the  members of  the council  of Nordecon AS for the first
quarter  of 2022 amounted to EUR37 thousand and associated social security charges
totalled EUR12 thousand (Q1 2021: EUR37 thousand and EUR12 thousand, respectively).
The  service fees  of the  members of  the board  of Nordecon AS amounted to EUR99
thousand and associated social security charges totalled EUR33 thousand (Q1 2021:
EUR99 thousand and EUR33 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 personnel expenses incurred:

                                                 Q1 2022 Q1 2021 Q1 2020   2021
-------------------------------------------------------------------------------
 Nominal labour productivity (rolling), (EUR '000)   451.9   417.4   365.8  420.8

 Change against the comparative period, %           8.3%   14.1%     16% (0.5)%



 Nominal labour cost efficiency (rolling), (EUR)      12.2    11.0     9.6   11.5

 Change against the comparative period, %          11.4%   14.9%    4.3%   5.5%

The  group's  nominal  labour  productivity  and  nominal labour cost efficiency
improved  year on  year. The  rise is  attributable to  growth in  the past four
quarters' revenue compared with a year earlier.

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)