Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (September 2010)
39 slides from Veidekke Asa's investor presentation, Sep 20, 2010
Slide 1: Veidekke's Economic Activity Report
Veidekke's Economic Activity Report 20 September 2010 Rolf Albriktsen Strategy and Market Director www.veidekke.com www.veidekke.no
Slide 2: Outline
Outline Important observations The global economy Norway – The Norwegian economy – Building and construction Sweden – The Swedish economy – Building and construction Denmark – The Danish economy – Building and construction Summary Economic Activity Report 200910
Slide 3: Important observations since the previous report
Important observations since the previous report New growth in the global economy The Eurozone crisis appears to be under control Unemployment is levelling off, but marginal growth in employment Building and construction investments in Scandinavia adjusted up Residential building has not g
Slide 4: The global economy
The global economy
Slide 5: Labour market still lagging behind
The global economy Labour market still lagging behind Economic Activity Report 200910
Slide 6: Outlook improved
The global economy Outlook improved Growth is back internationally – Expansive policy and stockpiling responsible Global GDP growth of 4% this year – 3.5% in 2011 Complex risk outlook – The effect of the economic policy – Deflation – Credit and labour market – The housing market in the USA – T
Slide 7: The Norwegian economy
The Norwegian economy
Slide 8: GDP development as expected
The Norwegian economy GDP development as expected GDP growth of 2 - 2.5% this and next year – Export, building and construction and petroleum investments are the driving forces Consumption and investments will contribute in 2011 Monetary and financial policy normalizes Economic Activity Report
Slide 9: Retail sales showing weaker development
The Norwegian economy Retail sales showing weaker development 2% decline in first six months Households are saving more than before Growth in July may be the start of an upturn Growth expected for the Our estimate autumn Economic Activity Report 200910
Slide 10: Unemployment levelling off
The Norwegian economy Unemployment levelling off 2.9% unemployed in August Those laid off in building and construction returning Businesses utilizing labour better than before – Number of work hours Our estimate increasing – Low demand for labour Economic Activity Report 200910
Slide 11: Inflation as expected
The Norwegian economy Inflation as expected Inflation at 2% in 2010 – Import prices pulling inflation down Energy prices pulling it up Economic Activity Report 200910
Slide 12: Interest rate levels remain low
The Norwegian economy Interest rate levels remain low International uncertainty and domestic demand and production indicate unchanged interest rates into 2011 A strengthened krone and lower inflation may result in a low interest rate level Our estimate Economic Activity Report 200910
Slide 13: The building and construction market in Norway
The building and construction market in Norway
Slide 14: What affects the housing market?
Building and construction market in Norway What affects the housing market? In the short term: – The households' current and future income – Interest rate changes – The cost of producing homes in relation to the prices of homes – The labour market – General expectations In the long term: – Popul
Slide 15: Housing prices developing as expected
Building and construction market in Norway Housing prices developing as expected Housing prices increased by 6% as of August – Shorter turnover times – Fewer homes for sale Low supply of new homes in the market Continued regional Our estimate differences Economic Activity Report 200910
Slide 16: It will take some time before residential building turns around
Building and construction market in Norway It will take some time before residential building turns around Economic Activity Report 200910 Our estimate
Slide 17: Forecasts unchanged
Building and construction market in Norway Forecasts unchanged Number of Housing Starts 40000 Flats in blocks 23,000 housing starts 35000 Detached dwellings in 2010 Number of dwellings 30000 25000 23,000 in 2010 20000 (estimate) 15000 10000 25,000 in 2011 5000 (estimate) 0 2000 2002 2004 2006
Slide 18: Non-residential rising once again
Building and construction market in Norway Non-residential rising once again 61% more square metres of non-residential buildings started in second quarter – Offices and commercial buildings – Industrial and storage buildings Unchanged starts in the public sector Our estimate Economic Activity Re
Slide 19: Continued growth in construction market
Building and construction market in Norway Continued growth in construction market Construction market, Constant prices 20000 Construction activities 18000 increase this year and next 16000 year 14000 – 7% and 3% respectively Roads 12000 Transport investments are 10000 driving growth 8000 – Sign
Slide 20: Better outlook than expected
Building and construction market in Norway Better outlook than expected Available contractor market: Total market in NOK minus production carried out on public and private own accord, minus production carried out by small businesses 60000 Combined building and construction Building and constructio
Slide 21: The Swedish economy
The Swedish economy
Slide 22: Strong growth in industrial production
The Swedish economy Strong growth in industrial production 10% growth in first six months – Export sector pulling it up Lower international growth – More moderate growth ahead Our estimate Economic Activity Report 200910
Slide 23: Expectations of interest rate increase
The Swedish economy Expectations of interest rate increase The economic upturn has not led to inflation so far – Around 1% growth Better key figures from households and industry Riksbanken has commenced normalization of interest rates Signals of further interest rate Our estimate hikes in 20
Slide 24: GDP development significantly increased
The Swedish economy GDP development significantly increased GDP adjusted up from 2.5% to 4% growth this year – Investments, export and public consumption driving forces Estimate of 3% for 2011 – Domestic demand must take over Continued good government finances allow further stimulation Economi
Slide 25: The building and construction market Sweden
The building and construction market Sweden
Slide 26: Housing market still good in growth regions
Building and construction market in Sweden Housing market still good in growth regions House prices fell 6% in Stockholm – Strong growth the previous year – Large supply of houses Gothenburg has increased by 5% so far this year Skåne has increased by Source: Mäklarsamfundet, own estimates 6% s
Slide 27: Residential building on the way up from a low level
Building and construction market in Sweden Residential building on the way up from a low level Economic Activity Report 200910
Slide 28: Forecasts unchanged
Building and construction market in Sweden Forecasts unchanged 50 Sweden: Number of Dwellings started (1000 units) 45 Single detached dwellings Flats in blocks 40 35 18,000 in 2010 (estimate) 30 25 27,000 in 2011 (estimate) 20 Small drop in residential 15 building in 2012/13 is due to 10 a poo
Slide 29: Increased optimism, but Q2 developments level
Building and construction market in Sweden Increased optimism, but Q2 developments level Economic Activity Report 200910
Slide 30: Market improving significantly
Building and construction market in Sweden Market improving significantly Growth in building and construction investments in 2010 adjusted upwards to 3% (from 0.5%) Housing investments to increase by 4 – 5% in the next two years Fall in private non-residential buildings continues (-6%), but in
Slide 31: The Danish economy
The Danish economy
Slide 32: Significant improvement in Danish economy
The Danish economy Significant improvement in Danish economy Two quarters of positive annual growth 1.5% GDP growth this year A further 2% in 2011 Unemployment with downward tendency Industrial production increasing from low level Domestic demand still weak Economic Activity Report 20091
Slide 33: The building and construction market Denmark
The building and construction market Denmark
Slide 34: Housing market improving
Building and construction market in Denmark Housing market improving Housing prices increased by 8% from bottom 13% growth in Copenhagen Combination of low supply and increased optimism contributing Our estimate Economic Activity Report 200910
Slide 35: Residential building low this year and next
Building and construction market in Denmark Residential building low this year and next Economic Activity Report 200910
Slide 36: More positive outlook for building and construction in Denmark
Building and construction market in Denmark More positive outlook for building and construction in Denmark Building and construction investments down 2 % this year New growth of 2% from low level in 2011 Decline in housing investments levelling off Focus on hospitals and care accommodation
Slide 37: Summary
Summary Economic Activity Report 200910
Slide 38: Market
Summary Market 180,0 Building and Construction Market, Scandinavia 160,0 (local currency) We are out of the Sweden depression 140,0 Norway We expect growth in the 120,0 market in 2010 and further 100,0 growth in 2011 Denmark 80,0 House building is increasing in Norway and 60,0 Sweden 40,0 Co
Slide 39: Veidekke in 2010
Summary Veidekke in 2010 From depression to a more normal market situation We expect gradually higher turnover in the group Contracting activities will experiences slim margins, but has a good point of departure Property indicates a gradual increase in housing production The target of 1500