Slide 1: Presentation 2nd quarter 2020
Presentation 2 quarter 2020 nd 13 August 2020 CEO Jimmy Bengtsson and CFO Terje Larsen
Slide 2: Highlights 2nd quarter 2020
Highlights 2nd quarter 2020 ● The COVID-19 pandemic had limited impact on projects and residential sales in Q2 ● Revenue and profit increased over Q2 2019 ● Solid order intake ● Signed agreement for sale of property development operation ● Enables development of a streamlined construction business ●
Slide 3: Financial key figures: Revenue and earnings 2nd quarter
Financial key figures Revenue and earnings 2nd quarter 2nd quarter: Revenue 2nd quarter: Profit before tax NOK billion NOK million 12 600 500 400 9 300 450 501 451 200 385 351 6 10.2 100 10.1 9.1 8.1 8.3 0 3 -100 -199 -200 0 -300 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Q2 2018 includes NOK
Slide 4: Limited COVID-19 effect on value and supply chain
Limited COVID-19 effect on value and supply chain Continued uncertainty related to market development ● Veidekke has avoided significant operational disruptions from quarantines and lock-down ● Disruptions of supply chain were manageable ● Continued uncertainty related to market development conseque
Slide 5: Veidekke divests property development operation
Veidekke divests property development operation Sale completed in 3rd quarter Transaction details Time schedule and dividend ● The buyer is a consortium comprising Fredensborg AS, ● The transaction is expected to be completed in September 2020 Fredensborg Bolig AS, Norwegian Property ASA and Union R
Slide 6: Occupational health and safety
Occupational health and safety Serious injuries significantly reduced in recent years Number of serious injuries 12-month rolling* 24 20 16 12 8 4 0 Q2 16 Q2 17 Q2 18 Q2 19 Q2 20 *Veidekke employees, hired staff and sub-contractors 6 © Veidekke
Slide 7: Results: Segments and group
Results Segments and group Terje Larsen, CFO 2nd quarter 2020
Slide 8: Business areas 2nd quarter
Business areas 2nd quarter 2nd quarter 2020 2nd quarter 2019 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building Construction Norway 3 569 140 3.9% 3 518 131 3.7% Civil Engineering Norway 1 277 25 1.9% 1 258 16 1.2% Construction Sweden 3 339 91 2.7% 2 762 72 2.6% Construction
Slide 9: Construction
Construction 2nd quarter 2020 Revenue and margin 10 5% Building Constr. ● Revenue on a par with last year; slight increase in Eastern Norway 8 4% Norway 6 3% NOK bill. ● Profit margin 3.9% (3.7%) 4 2% ● Good order intake 2 1% 0 0% ● Profit margin 1.9% (1.2%) -2 -1% Civil Eng. Norway Q2 19 Q3 19 Q4 1
Slide 10: Industrial
Industrial 2nd quarter 2020 Revenue and 12m margin ● Revenue declined 30% from second quarter last year 2,0 5% ● Significantly lower profit than last year; partly offset by a positive 1,5 4% NOK 17 million one-off from the realisation of a currency position NOK bill. 3% 1,0 ● Asphalt price achieved
Slide 11: Property Development
Property Development 2nd quarter 2020 Profit before tax 200 150 NOK mill. ● Good result from ongoing residential production, with strong sales in 47 ongoing projects (80 units, Veidekke's share) 100 39 Norway 6 46 54 ● No new projects released for sale in the quarter 50 73 73 91 ● Decline in residen
Slide 12: Income statement (IFRS)
Income statement (IFRS) 2nd quarter Full year Amounts in NOK million 2020 2019 2019 Revenue 9 890 9 502 36 569 Operating expenses -9 341 -8 971 -35 034 Share of net income from associates and JVs 6 13 -67 Depreciation/impairment -230 -214 -887 Operating profit 325 331 581 Net financial income 34 9 2
Slide 13: Balance sheet: Assets
Balance sheet: Assets Amounts in NOK million 30 June 2020 30 June 2019 31 Dec. 2019 Goodwill and other intangible assets 1 922 1 926 1 884 Deferred tax assets 7 - 8 Land and buildings 1 302 1 312 1 253 Plant and machinery 2 540 2 765 2 644 Investments in associates and joint ventures 192 1 262 219 F
Slide 14: Balance sheet: Equity and liabilities
Balance sheet: Equity and liabilities Amounts in NOK million 30 June 2020 30 June 2019 31 Dec. 2019 Equity 4 293 3 267 3 949 Pensions and deferred tax liabilities 910 833 915 Bonds 1 600 1 600 1 600 Amounts due to credit institutions 786 2 001 1 507 Other non-current liabilities 1 119 1 026 1 161 To
Slide 15: Cash flow statement
Cash flow statement Q2 2020 Q2 2019 Continued Held Continued Amounts in NOK million Construction Industrial Other1) operations for sale Group operations Pre-tax profit 497 -142 -162 194 212 406 225 Depreciation/impairment 299 129 28 456 3 459 427 Other working capital 396 -200 23 220 -162 57 -819 Ca
Slide 16: Priorities ahead
Priorities ahead CEO Jimmy Bengtsson
Slide 17: Veidekke after the sale of Property Development
Veidekke after the sale of Property Development A leading Scandinavian construction company • Streamlined construction business • Distinct market position in and around population centres in Scandinavia • Large potential from the initiated improvement programme, improved capital structure and more t
Slide 18: Veidekke's business
Veidekke’s business Building construction: Civil Engineering: Industrial: Infrastructure Commercial and residential Groundworks and infrastructure and road maintenance ● Development, design and construction ● All types of construction projects ● Production of aggregates and asphalt, of residential a
Slide 19: Order book Construction
Order book Construction Revenue and order intake Order book Order book per segment Orders in revenue next 12m 12-month rolling, NOK billion NOK billion Percent NOK billion 100 % 36 36 36 32 32 32 80 % 28 28 28 24 24 24 60 % 20 20 20 16 16 16 40 % 12 12 12 8 8 20 % 8 4 4 4 0 - 0% 0 June-18 June-19 Ju
Slide 20: Veidekke as a streamlined construction company: Main priorities
Veidekke as a streamlined construction company Main priorities 1 Increase profitability ● Organisation, priorities and strategies under review ● >4 % profit margin target for 2022 is reiterated 2 Selective growth in main markets ● Commercial and residential buildings in population centres ● Good bal
Slide 21: Concluding remarks
Concluding remarks ● Reached agreement on the sale of property development operation ● Good order intake and increased sales and profit in the quarter ● COVID-19 pandemic had limited effect on projects and residential sales ● Veidekke as a streamlined construction company ● Increase profitability ●
Slide 22: Appendix
Appendix
Slide 23: Business areas first six months
Business areas first six months First six months 2020 First six months 2019 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building Construction Norway 7 132 258 3.6 % 6 908 241 3.5 % Civil Engineering Norway 2 397 40 1.7 % 2 401 -10 -0.4 % Construction Sweden 5 934 119 2.0 % 5 1
Slide 24: Residential portfolio
Residential portfolio Under Under Under Property Development construction Completed Building starts construction Completed Building starts construction Residential portfolio - Veidekke's share 31.12.2018 2019 2019 31.12.2019 2020 2020 30.06.2020 Construction - number of units Norway 599 190 409 818