Veidekke Asa · OSL:VEI
Veidekke Asa — Q1 2020 Earnings Presentation
24 slides from Veidekke Asa's earnings presentation, May 7, 2020
Slide 1: Presentation 1st quarter 2020
Presentation 1 quarter 2020 st 7 May 2020 Group CEO Jimmy Bengtsson, CFO Terje Larsen, and EVP Jørgen Wiese Porsmyr
Slide 2: Highlights 1st quarter 2020
Highlights 1st quarter 2020 Limited impact from COVID-19 ● The COVID-19 pandemic had limited impact on production in construction and civil engineering projects and residential sales in the first quarter ● Solid underlying operations and good cash flow in the quarter ● Demerger of the property devel
Slide 3: Employees and organisation
Employees and organisation Safety and health are first priority • Veidekke has implemented a number of measures to protect Sickness absence Number of serious injuries employees and those working on Veidekke’s projects against Per quarter, Veidekke employees 12-month rolling* spread of the coronaviru
Slide 4: Value and supply chains
Value and supply chains Different challenges on the supply and demand side 1 Challenges in ongoing projects (short term) ● Strict national infection control measures can cause Investors Builders Owners Users operational disruptions and increased absence from work 2 Supply chain constraints (medium t
Slide 5: Operational flexibility
Operational flexibility Capacity and cost Share per cost category (illustration) Veidekke has a flexible business model Other operational cost ● Operates between 450 and 600 projects across Scandinavia 10–20% ● Large proportion of cost base is directly related to project deliveries Salaries ● Flexib
Slide 6: Main financial figures
Main financial figures Revenue and earnings 1st quarter 1st quarter: Revenue 1st quarter: Pre-tax profit NOK billion NOK million 47 8.5 9.0 7.1 6.5 5.9 -11 -15 -16 -21 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 6 Veidekke ASA: 1st quarter 2020 © Veidekke
Slide 7: Pre-tax profit 1st quarter, per business area
Pre-tax profit 1st quarter, per business area Construction Industrial Property Development NOK million NOK million NOK million 194 158 148 135 108 112 101 72 55 57 -180 -183 -202 -217 -222 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 7 Veidekke ASA: 1st quarter 2020 © V
Slide 8: Order book Construction
Order book Construction Revenue and order intake Order book Order book per segment Orders in revenue next 12 mos. 12-month rolling, NOK billion NOK billion Percent NOK billion 100 % 35 35 35 90 % 30 30 30 80 % 70 % 25 Book-to-Bill = 1.0 25 25 60 % 20 20 20 50 % 15 15 15 40 % 30 % 10 10 10 20 % 5 5 5
Slide 9: Robust financial position provides satisfactory financial capacity
Robust financial position provides satisfactory financial capacity Unutilised credit facility Free cashflow and unrestricted cash Net interest-bearing debt 12-month rolling, NOK billion NOK billion, quarter-end NOK billion, quarter-end • Increased free cashflow 2,0 5,0 0,0 • Improved operations and
Slide 10: Construction
Construction 1st quarter 2020 Revenue and margin 10 5% Building Constr. 8 4% Norway ● 5% increase in revenue, primarily in Oslo and Bergen regions 6 3% NOK bill. ● Profit margin 3.3% (3.2%) 4 2% 2 1% 0 0% ● Profit margin 1.3% (-2.2%) -2 -1% Civil Eng. Norway Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 ● Improveme
Slide 11: Industrial
Industrial 1st quarter 2020 Revenue and 12m margin 2,0 5% ● Seasonal downturn in Q1 and unrealised foreign exchange loss 1,5 4% Asphalt ● Approx. 30% lower demand from Norwegian Public Roads Administration NOK bill. 3% and counties, in addition to lower road construction activity 1,0 2% ● Bitumen so
Slide 12: A leading residential development company
A leading residential development company A strong position in Norway and Sweden Solid platform for growth Established organisation and experienced Large and attractive pipeline of land management team for future residential development Strong project development and Well positioned in the
Slide 13: Property Development
Property Development 1st quarter 2020 Pre-tax profit 200 150 ● Good result from ongoing residential production NOK mill. 100 ● Strong sales in ongoing projects (85 units) 39 Norway 6 46 54 ● Two projects in Oslo with a total of 111 units released for sale 50 19 73 73 56 ● Residential production incr
Slide 14: Results and activity in Property Development
Results and activity in Property Development Good value creation over time Profits and return on capital Units sold Units under construction NOK million Veidekke’s share Veidekke’s share 600 25% 1 600 3 000 1 400 500 2 500 20% 1 200 400 2 000 1 000 15% 300 800 1 500 10% 600 200 1 000 400 5% 100 500
Slide 15: An important strategic change
An important strategic change Progressing according to plan ● Work to split the group and establish the property development operation under a new ownership structure is progressing according to plan ● We are actively pursuing both tracks – a stock exchange listing or an industrial sale ● The soluti
Slide 16: Summary and concluding remarks
Summary and concluding remarks 7 May 2020 Jimmy Bengtsson, group CEO
Slide 17: 1st quarter summary
1st quarter summary ● The COVID-19 pandemic had limited impact on 1st quarter results ● The demerger of the property development operation is progressing according to plan ● Solid underlying operations and good cash flow in 1st quarter ● The proposed distribution of dividend for 2019 was suspended,
Slide 18: Outlook for 2020
Outlook for 2020 ● High uncertainty related to the consequences of COVID-19 measures and the financial impacts from the pandemic ● Activities and cost base to be adapted to market developments and order intake ● Veidekke’s long-term objectives are maintained, but the previously communicated profit f
Slide 19: Appendix
Appendix
Slide 20: Business areas 1st quarter
Business areas 1st quarter 1st quarter 2020 1st quarter 2019 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building Construction Norway 3 563 119 3.3 % 3 390 110 3.2 % Civil Engineering Norway 1 119 15 1.3 % 1 143 -25 -2.2 % Construction Sweden 2 596 28 1.1 % 2 409 33 1.4 % Cons
Slide 21: Income statement (IFRS)
Income statement (IFRS) 1st quarter Full year Amounts in NOK million 2020 2019 2019 Revenue 8 443 8 076 36 569 Operating expenses -8 331 -7 990 -35 034 Share of net income from associates and JVs 5 8 -67 Depreciation/impairment -226 -214 -887 Operating profit -109 -120 581 Net financial income -56 5
Slide 22: Balance sheet: Assets
Balance sheet: Assets Amounts in NOK million 31.03.2020 31.03.2019 31.12.2019 Goodwill and other intangible assets 1 939 1 924 1 884 Deferred tax assets 7 - 8 Land and buildings 1 321 1 346 1 253 Plant and machinery 2 575 2 815 2 644 Investments in associates and joint ventures 196 1 355 219 Financi
Slide 23: Balance sheet: Equity and liabilities
Balance sheet: Equity and liabilities Amounts in NOK million 31.03.2020 31.03.2019 31.12.2019 Equity 3 935 3 462 3 949 Pensions and deferred tax liabilities 862 846 915 Bonds 1 600 1 600 1 600 Amounts due to credit institutions 1 944 2 190 1 507 Other non-current liabilities 1 154 1 046 1 161 Total
Slide 24: Cash flow statement
Cash flow statement Q1 2020 Q1 2019 Continued Held Amounts in NOK million Construction Industrial Other1) business for sale Group Group Pre-tax profit 194 -222 -136 -165 51 -114 -115 Depreciation/impairment 147 64 15 226 2 228 214 Other working capital 171 -37 35 168 -151 17 -484 Cash flow from oper