Slide 1: 1st Quarter 2016 Investor Presentation
1ST QUARTER 2016 Investor Presentation Wednesday 11 May 2016
Slide 2: Contents
CONTENTS Highlights CEO Arne Giske Results – segments and Group CFO Terje Larsen Good outlook CEO Arne Giske Veidekke builds the new Baksalen school in Hammerfest 2
Slide 3: The good development continues
THE GOOD DEVELOPMENT CONTINUES + Improved revenues and results + Further increase in the order backlog to a historically high level + High residential sales High residential sales at Sjödalsterrassen, Brandstegen in Huddinge, Stockholm 3
Slide 4: Revenue and earnings – 1st quarter
REVENUE AND EARNINGS – 1ST QUARTER REVENUE PROFIT BEFORE TAX 7 50 6 5 4 0 NOK bill. -15 NOK mill. 4 -52 -42 3 -63 5,9 5,2 5,0 4,3 -50 2 4,0 1 0 -100 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 4
Slide 5: Profit before tax per business area
PROFIT BEFORE TAX PER BUSINESS AREA 1ST QUARTER: CONSTRUCTION 1ST QUARTER: PROPERTY DEVELOPMENT 1ST QUARTER: INDUSTRIAL 120 100 0 100 80 -50 80 -144 -140 -141 -149 NOK mill. NOK mill. 60 NOK mill. -180 60 -100 103 107 40 77 40 87 65 38 55 -150 20 45 20 46 37 0 0 -200 2012 2013 2014 2015 2016 2012 20
Slide 6: Changes in profit before tax
CHANGES IN PROFIT BEFORE TAX 60 40 20 NOK mill. 0 -15 -20 -42 -40 -60 Q1 2015 Construction Property Dev. Other (incl. Construction Construction Property Dev. Industrial Q1 2016 Norway Sweden OPS) Denmark Sweden Norge 6
Slide 7: Solid development in important value drivers
SOLID DEVELOPMENT IN IMPORTANT VALUE DRIVERS INCREASED SHARE OF NPRA* STRONG ORDER BACKLOG HIGH RESIDENTIAL SALES (12M) ASPHALT TENDERS 28 1 800 Maintenance Denmark Sweden Norway 60% 49% No. of units, Veidekke’s share 24 1 500 50% 20 1 200 40% 34% NOK bill. 16 900 30% 12 Sweden 600 20% 8 Norway 300
Slide 8: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY INJURIES* LTI RATE** SICKNESS ABSENCE** 120 All injuries Lost-time injuries 10 6% 100 5% 8 80 4% 6 60 3% 4 40 2% 20 2 1% - 0 0% * Veidekke employees, hired staff and sub-contractors **12-month rolling (LTI = Number of lost-time injuries per million hours worked for Vei
Slide 9: Annual general meeting held on 10 May 2016
ANNUAL GENERAL MEETING HELD ON 10 MAY 2016 Dividend of NOK 4.00 per share adopted DIVIDENDS • To be paid on 24 May 5 100% Dividend Pay-out-ratio 3-yrs average 4,0 Authorisation to repurchase of shares and 4 75% share issue renewed NOK per share 3 65% 50% Dividend policy: 2 • Minimum 50% of earnings
Slide 10: Business areas
i BUSINESS AREAS
Slide 11: Business areas, 1st quarter
BUSINESS AREAS, 1ST QUARTER 1st quarter 2016 1st quarter 2015 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway 3 208 93 2.9% 2 724 72 2.6% Construction Sweden 1 773 1 0.1% 1 180 10 0.8% Construction Denmark 350 14 3.9% 456 21 4.7% Total Construction 5 331 107 2.
Slide 12: Construction Norway
CONSTRUCTION NORWAY 1st quarter Full year Significantly increased revenues Amounts in NOK million 2016 2015 2015 • 24% increase in Building Construction with Revenue 3 208 2 724 12 031 regional variations Operating profit (EBIT) 82 61 454 • 8% increase in Civil Engineering Net financial items 10 10
Slide 13: Construction Sweden
CONSTRUCTION SWEDEN 1st quarter Full year Significantly increased revenues Amounts in NOK million 2016 2015 2015 • The increase mainly in Building Construction Revenue 1 773 1 180 6 156 Low profitability Operating profit (EBIT) 4 6 66 • Project write-down on NOK 20 mill. due to a supplier Net financ
Slide 14: Construction Denmark
CONSTRUCTION DENMARK 1st quarter Full year Lower level of activity Amounts in NOK million 2016 2015 2015 • Fewer large ongoing projects Revenue 350 456 1 608 Earnings impacted by lower revenue Operating profit (EBIT) 12 20 91 • Solid profitability in the project portfolio Net financial items 1 2 5 I
Slide 15: Property Development in Norway
PROPERTY DEVELOPMENT IN NORWAY 1st quarter Full year Continued high residential sales Amounts in NOK million 2016 2015 2015 • Mainly in the Oslo area Revenue 34 146 413 Number of residential units under construction at same Operating profit (EBIT) 3 21 150 level as at the start of the year Net finan
Slide 16: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN 1st quarter Full year High level of activity Amounts in NOK million 2016 2015 2015 Solid results improvement Revenue 517 316 1 712 High residential sales Operating profit (EBIT) 47 17 155 • Both in Stockholm and Gothenburg Net financial items 1 1 5 Increase in number of r
Slide 17: Industrial
INDUSTRIAL 1st quarter Full year Stable revenue and lower result Amounts in NOK million 2016 2015 2015 Low season within Asphalt and Aggregates Revenue 439 433 4 033 • Maintenance and preparations for the high season Operating profit (EBIT) -176 -144 211 • Somewhat higher capacity cost Net financial
Slide 18: Financial statements
FINANCIAL STATEMENTS IFRS
Slide 19: Income statement
INCOME STATEMENT 1st quarter Full year Amounts in NOK million 2016 2015 2015 Revenue 5 489 4 967 24 225 Operating expenses -5 554 -4 951 -23 039 Share of net income from associates and JVs 25 51 130 Depreciation/impairment -107 -86 -372 Operating profit -148 -19 944 Net financial income 34 6 6 Profi
Slide 20: Balance sheet – assets
BALANCE SHEET – ASSETS Beløp i mill. NOK 31.03.2016 31.03.2015 31.12.2015 Goodwill and other intangible assets 1 297 913 1 255 Deferred tax assets 65 54 65 Land and buildings 555 560 556 Plant and machinery 1 780 1 371 1 689 Investments in associates and joint ventures 1 197 1 114 1 134 Financial as
Slide 21: Balance sheet – equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 31.03.2016 31.03.2015 31.12.2015 Equity 3 092 2 680 3 218 Pensions and deferred tax liabilities 925 758 939 Bonds 750 750 750 Amounts due to credit institutions 1 038 72 517 Other non-current liabilities 115 93 103 Total non-current liabi
Slide 22: Statement of cash flows
STATEMENT OF CASH FLOWS Q1 2016 Q1 2015 Property Beløp i mill. NOK Construction Industrial Other1) Group Group Development Profit before tax 107 55 -180 -96 -114 -13 Depreciation/impairment 69 - 38 - 107 86 Other working capital -320 -240 8 28 -524 -425 Cash flow from operating activities -144 -184
Slide 23: Good outlook
GOOD OUTLOOK
Slide 24: Veidekke builds «Utsikten» at Gaularfjellet, Norway
24 Veidekke builds «Utsikten» at Gaularfjellet, Norway
Slide 25: Construction market forecasts
CONSTRUCTION MARKET FORECASTS 2015 2016 2017 2015 2016 2017 2015 2016 2017 NOK bill. growth growth NOK bill. growth growth NOK bill. growth growth Residential 120 0% -1% 137 5% 2% 60 5% 10% Private comm. 51 -2% -2% 100 4% 4% 19 3% 7% buildings Public comm. 33 3% 3% 41 5% 5% 18 5% 5% buildings Civil
Slide 26: Strong order development construction
STRONG ORDER DEVELOPMENT CONSTRUCTION REVENUE AND ORDER INTAKE (“BOOK-TO-BILL” 1.43) BUILDING CONSTR. ACCOUNTS FOR >70 % OF THE ORDER RESERVE 35 Revenue Order intake Civil Engineering Building Construction 25 30 20 25 NOK bill. 15 NOK bill. 20 10 15 5 10 0 Q1 13 Q1 14 1Q 15 1Q 16 Q1 13 Q1 14 1Q 15 1
Slide 27: Project at Storo in Oslo
PROJECT AT STORO IN OSLO 60 000 m2 at Storo in Oslo • Hotel, a large cineplex, commercial premises,149 apartments and a day care centre Contract value of NOK 1.0 billion for Olav Thon Gruppen Completed Q1 2019 27
Slide 28: Diagonale by the Oslo Opera House
DIAGONALE BY THE OSLO OPERA HOUSE Student homes and commercial premises • 400 student homes and 18.000 m2 offices, retail premises and restaurants Contract value of NOK 800 million for Olav Thon Gruppen and HAV Eiendom Completed in 2018 28
Slide 29: Norsk Hydro's new plant at Karmøy
NORSK HYDRO’S NEW PLANT AT KARMØY New plant for aluminium production • Build infrastructure, an electrolysis hall, a rectifier building and a transformer building. An area of 20,000 m2 is to be developed Contract value of NOK 527 million for Norsk Hydro Completed second half 2017 29
Slide 30: New Swedish residential building projects
NEW SWEDISH RESIDENTIAL BUILDING PROJECTS* Rosendal, Uppsala Branddörren, Högdalen, Stockholm Barkarbystaden, Järfälla, Stockholm Kallhällsparken, Järfälla, Stockholm Brandstegen, etapp 2, Huddinge, Stockholm Kv Sirius, Malmø Cirkelvägen, Stockholm Brf Bryggan, Kungsbacka, Gøteborg * Total project v
Slide 31: Focus on school projects
FOCUS ON SCHOOL PROJECTS PROJECTS FOR OVER NOK 3.5 BILLION Competence in school projects Baksalen skole, Hammerfest • School network in Veidekke Frederiksbjergbyggeriet, Århus Glömstaskolan, Huddinge Gystadmarka ungdomss., Jessheim (OPS) Jessheim vgs (OPS) Justvik skole, Kristiansand (OPS) Competiti
Slide 32: Several large infrastructure projects are due for tendering
SEVERAL LARGE INFRASTRUCTURE E6 Sjømanskirka - Ornes PROJECTS ARE DUE FOR TENDERING E6 Mørsvikbotn - Ballangen E10 Evenes - Gullesfjord The projects amount to around NOK 120 Fv 17 Steinkjer - Namsos billion for Norway and Sweden combined Trønder- og Meråkerbanen E6 Vindåsliene - Korporalsbrua FV659
Slide 33: Our priorities in infrastructure projects
OUR PRIORITIES IN INFRASTRUCTURE PROJECTS Selectivity: Project characteristics and complexity Selectivity Right tender Risk assessments Competition Available competence and resources Tender cost Contract form Good Satisfied production customers 33
Slide 34: Profit margin construction
PROFIT MARGIN CONSTRUCTION CONSTRUCTION NORWAY* CONSTRUCTION SWEDEN* CONSTRUCTION DENMARK (HOFFMANN)* 8% 8% 8% 6% 6% 6% 4% 4% 4% 2% 2% 2% 0% 0% 0% *12-month rolling 34
Slide 35: Strong position in Sweden
STRONG POSITION IN SWEDEN FOCUSED IN GROWTH AREAS REVENUE AND PROFIT NUMBER OF UNITS SOLD (12M) ORDER BACKLOG (NOK BILL.) 10 NOK bill.. NOK mill. 300 1 200 8 000 250 7 000 8 1 000 200 6 000 6 800 5 000 150 4 600 4 000 100 3 000 2 400 50 2 000 0 0 200 1 000 0 0 Revenue (NOK mrd.) Profit (NOK mill.) 3
Slide 36: Improve profitability Construction Sweden
IMPROVE PROFITABILITY CONSTRUCTION SWEDEN Stable margins in Civil Engineering REVENUE AND MARGIN ORDER BACKLOG • Strengthened our position in aggregates and 8 NOK bill. 8% 8 NOK bill. Tusener Tusener disposal sites in the Stockholm area 7 7% 7 6 6% 6 Good profitability development in commercial 5 5%
Slide 37: We sold residential units for NOK 1.7 bill.
WE SOLD RESIDENTIAL UNITS FOR NOK 1.7 BILL. Hagaterrassen, Stockholm Gartnerløkka, Oslo Branddörren, Högdalen Hovås Park, Göteborg Vildapeln, Hildedal, Göteborg Rydebäck, Helsingborg Konsul Lorcks Hage, Trondheim Portalen, Lillestrøm Brandstegen, Huddinge 37
Slide 38: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN PROFIT AND RETURN NO. OF UNITS SOLD* NO. OF UNITS UNDER CONSTRUCTION 250 NOK mill. 25% 1 400 1 600 1 200 1 400 200 20% 1 200 1 000 150 15% 1 000 800 800 100 10% 600 600 400 400 50 5% 200 200 0 0% - - Profit Return (%) Veidekke’s share Joint venture *12-month rolling 38
Slide 39: Property Development Norway
PROPERTY DEVELOPMENT NORWAY PROFIT AND RETURN NO. OF UNITS SOLD* NO. OF UNITS UNDER CONSTRUCTION 200 NOK mill. 20% 1 400 1 400 1 200 1 200 150 15% 1 000 1 000 800 800 100 10% 600 600 50 5% 400 400 200 200 0 0% - - Profit Return (%) Veidekke’s share Joint venture *12-month rolling 39
Slide 40: The Industrial business is seasonal
THE INDUSTRIAL BUSINESS IS SEASONAL QUARTERLY REVENUE, (NOK MILL.) ASPHALT PRODUCTION (MILL. TONNES) ASPHALT : TENDERS WON (NPRA**) 2016 1 600 2013 2014 2015 2016 3,0 2013 2014 2015 2016 1 400 2,5 1 200 6% 3% 2,0 5% 1 000 Veidekke 800 1,5 15% 49% 600 1,0 400 22% 0,5 200 0 0,0 Q1 Q2 Q3 Q4 Jan Feb Mar
Slide 41: Summing up
SUMMING UP Improved revenues and results Increased level of activity • Solid order intake • High residential sales • Increased share of asphalt tenders Main focus • Good operations • Increase profitability • Exploit opportunities The project «Pyramiden» in Stockholm on plan and ca. 40% completed 41
Slide 42: Appendix
APPENDIX
Slide 43: Solid land bank
200 SOLID LAND BANK A total of 15 800 units 1 650 • Veidekke’s share 12 650 200 In Norway • 7 700 units 950 3 300 • Veidekke’s share 5 000 1 200 In Sweden • 8 100 units 4 900 • Veidekke’s share 7 650 200 2 050 • 70% options 1 150 43
Slide 44: Housing portfolio
HOUSING PORTFOLIO Property Development Under construction Completed Start-up Under construction Completed Start-up Under construction Housing portfolio - Veidekke's share at 31 Dec. 2014 2015 2015 at 31 Dec. 2015 2016 2016 at 31 Mar. 2016 Construction - number of units Norway 399 -248 390 541 -24 -
Slide 45: Veidekke's order backlog
VEIDEKKE’S ORDER BACKLOG ORDER BACKLOG CONSTRUCTION AND INDUSTRIAL ORDERS IN REVENUE NEXT 12 MONTHS 28 28 Road Maintenance Denmark Sweden Norway 24 24 20 20 16.9 NOK bill. NOK bill. 16 16 12.8 12 12 8 8 4 4 0 0 Q1 12 Q1 13 Q1 14 1Q 15 1Q 16 Per Q1 2015 Per Q1 2016 Order backlog for Industrial is pre