AF Gruppen builds buildings and civil infrastructure across Norway/Sweden, plus energy/environment and offshore decommissioning. FY2025 was cyclically strong — revenue ~NOK 32bn, EBIT margin up to 5.2% (from 3.8%), net profit ~NOK 1.3bn — with a record backlog. The balance sheet is structurally net cash, but largely because customers pre-fund projects (a working-capital float), so the headline ~36% ROIC overstates durable returns; the through-cycle figure is closer to ~24%.
Quality is real but cyclicality and valuation cap it: contracting carries thin structural margins and project risk, FY2025's margin is above-trend, and the stock trades ~30% above the ~NOK 142 consensus target with order intake softening. A good operator at a full cyclical-peak price.
On a normalized ~24% through-cycle ROIC and mid-cycle margins, the current ~NOK 186 prices in continued peak execution; consensus sits ~NOK 142.
Base NOK 165 (a premium to consensus for quality + backlog, below the peak-year price); bull NOK 205 if margins and order intake hold; bear NOK 130 on a construction-cycle downturn.
The market pays today’s enterprise value for roughly 7.0% NOPAT growth over 5 years. The business earns 36% on capital against a 10% cost of capital (spread +26.0 pp); the no-growth value is NOK 149/share (80% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 205 | +10% | +10% | 30% | Margins + order intake hold |
| Base | NOK 165 | +3% | -11% | 45% | Premium to consensus for quality + backlog |
| Bear | NOK 130 | -4% | -30% | 25% | Construction-cycle downturn |
| Prob-weighted | NOK 168 | — | -10% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 8.50% | 183 | 202 | 217 | 240 | 256 | 303 |
| 9.25% | 164 | 181 | 193 | 213 | 227 | 267 |
| 10.00% (base) | 149 | 164 | 174 | 192 | 204 | 238 |
| 10.75% | 137 | 150 | 159 | 174 | 185 | 214 |
| 11.50% | 127 | 138 | 147 | 160 | 169 | 195 |
Green = fair value above the current price of NOK 186.00. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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A large order book underpins near-term revenue visibility.
5.2% EBIT margin (up from 3.8%) — execution + mix.
Prepayment-funded net cash supports a high payout.
Offshore decommissioning is a differentiated growth leg.
AF Gruppen is a quality contractor with a record backlog and net-cash balance sheet, but FY2025's margin is cyclically strong and the stock trades ~30% above consensus. HOLD/cautious; base NOK 165.
Through-cycle ROIC ~24% is the fair anchor; accumulate on a cyclical pullback, not at the peak.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Revenue (FY2025) | 31,992 | Condensed consolidated statement of income | Revenue line, 2025 full-year column = 31,992 (prior year 30,638), +4.4% YoY. Confirmed on the key-figures summary (p. 4). |
| EBIT (earnings before financial items and tax, FY2025) | 1,662 | Condensed consolidated statement of income | EBIT line, 2025 = 1,662 (prior year 1,149). Operating-profit margin 5.2% (from 3.8%). Used directly as adjusted EBIT (no verified add-backs). |
| EBITDA (FY2025) | 2,434 | Condensed consolidated statement of income | EBITDA 2,434 (prior 1,850). Includes net gains/profit from associates +179, which is part of the recurring operating model and retained above EBIT. |
| Earnings before tax (FY2025) | 1,653 | Condensed consolidated statement of income | EBT 1,653 = EBIT 1,662 + net financial items -9. Used with tax expense to derive the effective tax rate (22.1%). |
| Income tax expense (FY2025) | -365 | Condensed consolidated statement of income | Income tax expense -365 on EBT 1,653 = effective rate 22.08%, essentially equal to the Norwegian statutory 22% used for NOPAT. |
| Profit for the period / attributable split (FY2025) | 1,289 | Condensed consolidated statement of income | Net profit 1,289 = 1,093 to parent shareholders + 196 to non-controlling interests. EPS 9.99 (diluted 9.93). |
| Order backlog / order intake (FY2025) | 44,716 | Key figures summary | Order backlog 44,716 at 31 Dec 2025 (prior 40,351); FY2025 order intake 36,357 (prior 28,998). Backlog ~1.4x revenue. Q4'25 intake 9,587 fell vs Q4'24 12,505 — leading indicator softening. |
| Total equity / NCI / parent equity (31 Dec 2025) | 3,949 | Consolidated statement of financial position | Total equity 3,949 = equity attributable to parent 2,900 + non-controlling interests 1,048. Equity ratio 23.1%. |
| AOCI components (31 Dec 2025) | 103 | Statement of changes in equity | Translation differences +144 + actuarial pension gain/(loss) -21 + cash-flow hedge -20 = net AOCI +103. equity_ex_oci = total equity 3,949 - 103 = 3,846. |
| Interest-bearing debt ex-lease (31 Dec 2025) | 47 | Consolidated statement of financial position | Interest-bearing debt 37 (non-current) + 10 (current) = 47. AF carries virtually no conventional financial debt; the bulk of 'gross interest-bearing liabilities' (1,508) is IFRS 16 leases. |
| Lease liabilities (IFRS 16, 31 Dec 2025) | 1,460 | Consolidated statement of financial position / IFRS 16 note p. 42 | Lease liability 1,103 (non-current) + 357 (current) = 1,460 (right-of-use assets 1,420). INCLUDED in invested capital: leased plant/equipment/facilities are genuine operating assets for a contractor and lease depreciation (368) is inside EBIT. |
| Cash and cash equivalents / interest-bearing receivables (31 Dec 2025) | 2,391 | Consolidated statement of financial position | Cash 2,391 (prior 1,033). Plus interest-bearing receivables 365 (NC) + 26 (C) = 391. Cash is overwhelmingly customer-prepayment-funded (operating WC ~ -3,939); 639.8 (~2% revenue) retained as operational cash, 1,751.2 treated as excess and stripped from IC. |
| Net interest-bearing debt (receivables) / capital employed (31 Dec 2025) | -1,274 | Key figures / Capital-employed reconciliation | Company net interest-bearing debt (receivables) = -1,274 (net cash, incl leases). Company 'capital employed' = equity 3,949 + gross interest-bearing liabilities 1,508 = 5,457 (the conservative IC reference base; NOPAT-basis ROIC 23.8%). |
| Shares outstanding / dividend proposed | 110 | The share / shareholders | Total number of shares 110,056,631 as at 31 Dec 2025; own shares 0, so shares outstanding net of treasury = 110,056,631. Board proposed dividend NOK 6.50/share for 2026 (prior 5.00). Used for market cap with verified price NOK 186.00. Note third-party ~113.6m reflects the Q1 2026 share issue. |
How the mttssn view has evolved — each prior dated note is preserved.