Veidekke Asa · OSL:VEI
Veidekke Asa — Q1 2015 Earnings Presentation
40 slides from Veidekke Asa's earnings presentation, May 6, 2015
Slide 1: 1st Quarter 2015 Investor Presentation
1ST QUARTER 2015 Investor Presentation Wednesday 6 May 2015
Slide 2: Contents
CONTENTS Highlights CEO Arne Giske Results – segments and Group CFO Terje Larsen Status and outlook CEO Arne Giske The project Roslags Näsby, Stockholm region 2
Slide 3: Steady progress
STEADY PROGRESS + Improvements for Construction + Increased order backlog + Strong residential sales + Industrial operations well positioned Kvartal 33 at Lillestrøm 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. NOK mill. 4 -42 -52 3 -69 -63 5.2 5.0 4.3 -50 2 4.0 3.5 1 0 -100 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 4
Slide 5: Profit before tax – 1st quarter
PROFIT BEFORE TAX – 1ST QUARTER 1ST QUARTER: CONSTRUCTION 1ST QUARTER: PROPERTY DEVELOPMENT 1ST QUARTER: INDUSTRIAL 120 100 0 -20 100 80 -40 80 -60 NOK mill. NOK mill. 60 NOK mill. -141 -144 -140 -141 -149 60 -80 103 40 87 77 -100 40 45 65 -120 20 45 46 46 38 37 20 -140 0 0 -160 2011 2012 2013 2014
Slide 6: Changes in profit before tax
CHANGES IN PROFIT BEFORE TAX PROFIT BEFORE TAX 30 4 20 4 8 10 4 0 -14 NOK mill. -10 -20 -26 -30 -8 -40 -50 Construction Property Development -14 -42 Q1 2014 Norway Sweden Denmark Norway Sweden Industrial Other Q1 2105 6
Slide 7: Order backlog
ORDER BACKLOG ORDER BACKLOG* ORDERS IN REVENUE NEXT 12 MONTHS 20 20 Road Maintenance Denmark Sweden Norway 16 16 NOK bill. 12 NOK bill. 12 8 8 4 4 - 0 Q1 11 Q1 12 Q1 13 Q1 14 1Q 15 Per Q1 2014 Per Q1 2015 *Order backlog for Industrial is presented as Road Maintenance next 18 months. 7 Order backlog
Slide 8: Annual general meeting held on 5 May 2015
ANNUAL GENERAL MEETING HELD ON 5 MAY 2015 Dividend of NOK 3.50 per share adopted DIVIDENDS AND REPURCHASE • To be paid on 19 May 5.0 4.0 NOK per share Authorisation for repurchase of shares and 3.0 share issue renewed 2.0 1.0 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Ordinary dividend Re
Slide 9: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY LTI RATE* (NUMBER OF LOST-TIME INJURIES PER MILLION HOURS WORKED) SICKNESS ABSENCE (PERCENT) 20 Norway Denmark Sweden Group 8% Norway Denmark Sweden Group 15 6% 10 4% 5 2% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 1
Slide 10: Business areas
Östra Salabacke, Uppsala, Sweden BUSINESS AREAS
Slide 11: Business areas, 1st quarter
BUSINESS AREAS, 1ST QUARTER Q1 2015 Q1 2014 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway 2 724 72 2.6% 2 806 64 2.3% Construction Sweden 1 180 10 0.8% 1 093 6 0.5% Construction Denmark 456 21 4.7% 419 17 4.0% Total Construction 4 360 103 2.4% 4 318 87 2.0% P
Slide 12: Construction Norway
CONSTRUCTION NORWAY 1st quarter Full year Stable revenue Amounts in NOK million 2015 2014 2014 • Increase in Building Construction Revenue 2 724 2 806 11 878 Improved margin Operating profit (EBIT) 61 47 356 • Margins increased in Building Construction Net financial items 10 17 67 • Margins in Civil
Slide 13: Construction Sweden
CONSTRUCTION SWEDEN 1st quarter Full year 8% increase in revenue Amounts in NOK million 2015 2014 2014 • Increase in Building Construction Revenue 1 180 1 093 4 804 Improvement measures starting to impact Operating profit (EBIT) 6 6 35 • Margins remain low, but underlying profits have improved in Ne
Slide 14: Construction Denmark
CONSTRUCTION DENMARK 1st quarter Full year 9% increase in revenue Amounts in NOK million 2015 2014 2014 • High level of activity on a few large commercial building projects Revenue 456 419 1 820 Strong margins Operating profit (EBIT) 20 15 98 • Strong margins in all units Net financial items 2 2 10
Slide 15: Property Development Norway
PROPERTY DEVELOPMENT NORWAY 1st quarter Full year Very strong residential sales during the quarter Amounts in NOK million 2015 2014 2014 Four projects with a gross 226 units in total were put up Revenue 146 211 747 for sale in the quarter, of which 121 units were sold Operating profit (EBIT) 21 33 1
Slide 16: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN 1st quarter Full year Very strong residential sales in the quarter, 70% pre-sales Amounts in NOK million 2015 2014 2014 Five projects with 177 units in total were put up for sale in Revenue 316 539 1 529 the quarter, of which 137 units were sold Operating profit (EBIT) 17
Slide 17: Industrial
INDUSTRIAL 1st quarter Full year Normal seasonally low level of activity within Asphalt Amounts in NOK million 2015 2014 2014 • Equipment maintenance and preparations for the high season • Share of NPRA* asphalt tenders: 34% Revenue 433 403 4 127 Operating profit (EBIT) -144 -134 239 28% increase in
Slide 18: Financial statements
FINANCIAL STATEMENTS IFRS
Slide 19: Income statement
INCOME STATEMENT 1st quarter Full year Amounts in NOK million 2015 2014 2014 Revenue 4 967 5 306 24 027 Operating expenses -4 951 -5 219 -22 861 Share of net income from associates and JVs 51 22 217 Depreciation/impairment -86 -81 -338 Operating profit -19 28 1 045 Net financial income 6 12 10 Profi
Slide 20: Balance sheet – assets
BALANCE SHEET – ASSETS Amounts in NOK million 31.03.2015 31.03.2014 31.12.2014 Goodwill and other intangible assets 913 863 914 Deferred tax assets 54 55 54 Land and buildings 560 494 501 Plant and machinery 1 371 1 239 1 389 Investments in associates and joint ventures 1 114 951 1 151 Financial ass
Slide 21: Balance sheet – equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 31.03.2015 31.03.2014 31.12.2014 Equity 2 680 2 470 2 744 Pensions and deferred tax liabilities 758 559 744 Bonds 750 750 750 Amounts due to credit institutions 72 344 73 Other non-current liabilities 93 40 104 Total non-current liabiliti
Slide 22: Statement of cash flows
STATEMENT OF CASH FLOWS Q1 2015 Q1 2014 Construction Property Amounts in NOK million Industrial Group Group and Other Development Profit before tax 99 37 -149 -13 40 Depreciation/impairment 50 36 86 81 Other working capital -422 88 -91 -425 113 Cash flow from operating activities -273 125 -204 -351
Slide 23: Status and outlook
Resurfacing at Oslo Airport STATUS AND OUTLOOK
Slide 24: Greater uncertainty in the economy, low interest rates, positive expectations for construction
GREATER UNCERTAINTY IN LOW INTEREST POSITIVE EXPECTATIONS FOR THE ECONOMY RATES CONSTRUCTION/CIVIL ENGINEERING 24
Slide 25: Market outlook 2015-2016
MARKET OUTLOOK 2015-2016 ANNUAL GROWTH PROGNOSIS FOR INVESTMENTS IN CONSTRUCTION A high growth rate is expected for the Scandinavian construction market in 2015 12% and 2016 8% Highest market growth in Sweden 4% • High growth rate in Denmark too, but from a low level 0% Growth dominated by the publi
Slide 26: Our mission
OUR MISSION OBTAINING PROJECTS CARRYING OUT PROJECTS CUSTOMER PROJECT The right project Good production The right solution for the customer Completion and handover 26
Slide 27: Strong residential sales in the quarter
STRONG RESIDENTIAL SALES IN THE QUARTER Gartnerløkka 1-3, Oslo Kvartal 33, Lillestrøm Lilleby blokk 1, Trondheim Östra Salabacke 1, Uppsala Lomma Läge, Skåne Kronogården, Göteborg 27
Slide 28: Strong residential sales – increased production expected
STRONG RESIDENTIAL SALES – INCREASED PRODUCTION EXPECTED NORWAY: NO. OF UNITS SOLD AND UNDER CONSTRUCTION, END OF QUARTER SVERIGE: NO. SWEDEN: ANT.OF BOLIGER UNITS SOLD SOLGT AND OGUNDER I PRODUKSJON, CONSTRUCTION, KVARTALSSLUTT END OF QUARTER 250 Sold 1 500 Under construction 250 Sold 1 500 Under c
Slide 29: Order intake and revenue - Construction
ORDER INTAKE AND REVENUE - CONSTRUCTION* 20 000 18 000 NOK Mill. 16 000 14 000 12 000 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Revenue Order intake *12-month rolling 29
Slide 30: New projects in Norway…
NEW PROJECTS IN NORWAY… PORTALEN, LILLESTRØM MOHOLT 50|50 FOR STUDENTSAMSKIPNADEN, TRONDHEIM 30
Slide 31: … and in Sweden
… AND IN SWEDEN TRACKS ON THE ROSLAGS RAILWAY, STOCKHOLM REGION ELDAREN, UPPSALA 31
Slide 32: High activity within infrastructure
HIGH ACTIVITY WITHIN INFRASTRUCTURE Large market, larger contracts, tough competition Two contracts won last six months • RV80 Bodø (NOK 894 mill.) • E134 Kongsberg (NOK 727 mill.) Several major projects set for tendering in 2015/16 From Veidekke’s Q3 2014 presentation 32
Slide 33: Recent contract award in Kongsberg
RECENT CONTRACT AWARD IN KONGSBERG Veidekke to build the first section of the new E134 CONTRACT FOR E134 KONGSBERG SIGNED IN APRIL near Kongsberg (approx. 5 km) Contract value of NOK 727 mill. to be included in the Q2 2015 order backlog Completion November 2018 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% Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 *12-month rolling 34
Slide 35: Solid start to 2015 for Industrial
SOLID START TO 2015 FOR INDUSTRIAL ASPHALT: MAINTENANCE TENDERS OPENED BY NPRA* 2015 ROAD MAINTENANCE: GROWING NUMBER OF CONTRACTS 1 200 50 5% 6% 1 000 40 Veidekke 10% 800 NOK mill. 34% 30 25 600 22 17 17 18 20 400 14 17% 200 10 0 0 28% 2010 2011 2012 2013 2014 Last Revenue No. contracts 12m *NPRA:
Slide 36: The activity in Industrial is seasonal
THE ACTIVITY IN INDUSTRIAL IS SEASONAL QUARTERLY REVENUE, INDUSTRIAL ASPHALT PRODUCTION (THOUSAND TONNES) 1 600 2011 2012 2013 2014 2015 600 2013 2014 2015 1 400 500 1 200 400 1 000 NOK mill. 800 300 600 200 400 100 200 - - Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 36
Slide 37: Status and priorities
STATUS AND PRIORITIES STEADY PROGRESS OUR PRIORITIES Improvements for Construction Succeed on large infrastructure projects Increased order backlog Increase profitability in Sweden Strong residential sales Develop new residential projects Industrial operations well positioned 37
Slide 38: Announcement of 2nd quarter 2015: 13 August
Announcement of 2nd quarter 2015: 13 August
Slide 39: Appendix
APPENDIX
Slide 40: Housing portfolio
HOUSING PORTFOLIO Property Under construction Completed Start-up Under construction Completed Start-up Under construction Housing portfolio - Net at 31 Dec. 2013 2014 2014 at 31 Dec. 2014 2015 2015 at 31.03.2015 Construction - number of homes Norway 749 -508 158 399 -180 91 310 Sweden 720 -347 377 7