Veidekke Asa · OSL:VEI

Veidekke Asa — Q2 2019 Earnings Presentation

30 slides from Veidekke Asa's earnings presentation, Aug 15, 2019

  1. Slide 1: Presentation 2nd quarter 2019

    Presentation 2 quarter 2019 nd 15 August 2019 Arne Giske, CEO, and Terje Larsen, CFO

  2. Slide 2: Highlights 2nd quarter 2019

    Highlights 2nd quarter 2019 • Improvement initiatives continue • Improved margin and results • Increased order book • A stable residential market in Norway and signs of improvements in Sweden Veidekke is building the second stage of Frysjaparken residential project in Oslo for OBOS Nye Hjem and Stor

  3. Slide 3: Revenue and earnings 2nd quarter

    Revenue and earnings 2nd quarter 2nd quarter: Revenue 2nd quarter: Profit before tax NOK billion NOK million 12 500 400 9 300 450 451 200 385 318 351 6 100 10.1 9.1 0 8.1 8.3 3 6.2 -100 -199 -200 0 -300 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Q2 2018 includes NOK 550 million write-downs in

  4. Slide 4: Profit before tax 2nd quarter per business area

    Profit before tax 2nd quarter per business area Construction* Property Development Industrial NOK million NOK million NOK million 8 28 250 250 250 9 -8 200 200 200 150 150 150 37 251 12 215 4 100 100 -14 100 26 50 50 111 108 88 50 66 0 2Q 2018 Building Civil Sweden Denmark 2Q 2019 0 2Q 2018 Norway S

  5. Slide 5: Order intake segment breakdown Construction

    Order intake segment breakdown Construction Growing and diversified product portfolio Revenue and order intake Order book per product NOK billion – “Book-to-bill ratio” 1.07 Strong focus on commercial and public buildings 36 Other Civil 32 Engineering 11% 28 Transport Commercial 24 11% buildings 34%

  6. Slide 6: Order book Construction

    Order book Construction Project portfolio in excess of NOK 35 billion Order book* Orders in revenue next 12 months NOK billion NOK billion 36 Building Construction Civil Engineering 36 Norway Sweden Denmark 32 32 28 28 24 24 22.6 23.3 20 20 16 16 12 12 8 8 4 4 0 0 Q2 16 Q2 17 Q2 18 Q2 19 Per Q2 2018

  7. Slide 7: Residential sales and construction

    Residential sales and construction No. of units sold* Units under construction* 600 1,600 3,000 1,400 500 2,500 1,200 Sales per quarter 400 2,000 1,000 12m rolling 300 800 1,500 600 200 1,000 400 100 500 200 - 0 - *Veidekke’s share 12m rolling sales Sweden Norway 7 © Veidekke

  8. Slide 8: Occupational health and safety

    Occupational health and safety Number of serious injuries 12-month rolling; Veidekke employees, hired staff and sub-contractors 35 30 25 20 15 10 5 0 Q2 15 Q2 16 Q2 17 Q2 18 Q2 19 Facsimile from www.bygg.no 8 © Veidekke

  9. Slide 9: Results

    Results Segments and group Terje Larsen, CFO 2nd quarter 2019

  10. Slide 10: Business areas 2nd quarter

    Business areas 2nd quarter 2nd quarter 2019 2nd quarter 2018 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building Construction Norway 3 518 131 3.7% 3 449 122 3.5% Civil Engineering Norway 1 258 16 1.2% 928 -562 -60.5% Construction Sweden 2 762 72 2.6% 2 511 64 2.5% Constructi

  11. Slide 11: Building Construction Norway

    Building Construction Norway 2ND QUARTER 2019 REVENUE AND MARGIN NOK billion • Revenue on a par with last quarter and 2nd quarter 2018 4 7% • Increased result and margin 3 3.6 3.4 3.5 6% 3.4 5% 3.0 • The majority of profits generated by operations in central east Norway 4% 2 • Performance improvemen

  12. Slide 12: Civil Engineering Norway

    Civil Engineering Norway 2ND QUARTER 2019 REVENUE AND MARGIN* NOK billion • High level of activity in ongoing transport projects 1.5 6% 1.4 • The profitability of the project portfolio is weak 1.0 1.1 1.1 1.3 4% 0.9 • Several ongoing large-scale projects were written down in 2018 0.5 1.2 % 2% and do

  13. Slide 13: Construction Sweden

    Construction Sweden 2ND QUARTER 2019 REVENUE AND MARGIN NOK billion • Revenue growth 4 7% • Growth in both building construction and civil engineering 6% 3 5% 3.1 • Lower activity level in residential 2.8 4% 2 2.5 2.4 • Higher result and margin 2.3 3% 2.5 % 2% • High level of activity and improved p

  14. Slide 14: Construction Denmark

    Construction Denmark 2ND QUARTER 2019 REVENUE AND MARGIN NOK billion • Stable revenue 0.7 10% • Still high level of activity in the Copenhagen area 0.6 0.6 0.6 0.6 8% 0.5 0.6 0.5 0.4 7.0 % 7.0 % 6.9 % 6% • Solid overall project profitability in the portfolio 0.3 5.3 % 5.4 % 4% 0.2 2% • Strong order

  15. Slide 15: Property Development Norway

    Property Development Norway 2ND QUARTER 2019 PROFIT BEFORE TAX Million NOK • A good result 80 • Good sales in ongoing projects, especially in Oslo 71 73 60 • Development gain of NOK 43 million from sale of a residential project • Increase in residential production 40 39 35 • Construction started on

  16. Slide 16: Property Development Sweden

    Property Development Sweden 2ND QUARTER 2019 PROFIT BEFORE TAX NOK million • Increased residential sales 120 • Small houses are selling very well, and demand for new residential units 90 is strong in both Gothenburg and Malmö 91 • Stockholm market remains cautious, but signs of improvement are emerg

  17. Slide 17: Industrial

    Industrial 2ND QUARTER 2019 REVENUE AND 12M MARGIN* NOK million • Asphalt: Result improvement 1,800 6% • Changed pricing strategy and cost control 1,500 1,701 5% 1,499 1,200 1,339 1,379 4% • Aggregates: A good result 900 1.8 % 3% 600 1.3 % 2% • Increased level of activity and good product mix 0.8 %

  18. Slide 18: Financial Statements

    Financial Statements IFRS 18 © Veidekke

  19. Slide 19: Income statement (IFRS)

    Income statement (IFRS) 2nd quarter Full year Amounts in NOK million 2019 2018 2018 Revenue 10 031 9 465 35 667 Operating expenses -9 405 -9 531 -34 656 Share of net income from associates and JVs 56 55 163 Depreciation/impairment -214 -143 -594 Operating profit 469 -154 580 Net financial income 1 7

  20. Slide 20: Balance sheet – Assets

    Balance sheet – Assets Amounts in NOK million 30.06.2019 30.06.2018 31.12.2018 Goodwill and other intangible assets 1 926 1 834 1 957 Deferred tax assets - 19 - Land and buildings 1 312 703 646 Plant and machinery 2 765 2 480 2 694 Investments in associates and joint ventures 1 403 1 452 1 433 Finan

  21. Slide 21: Balance sheet – Equity and liabilities

    Balance sheet – Equity and liabilities Amounts in NOK million 30.06.2019 30.06.2018 31.12.2018 Equity 3 453 3 133 3 983 Pensions and deferred tax liabilities 837 920 846 Bonds 1 600 1 600 1 600 Amounts due to credit institutions 2 001 1 643 248 Other non-current liabilities 1 026 365 414 Total non-c

  22. Slide 22: Cash flow statement

    Cash flow statement Per 2Q 2019 Per 2Q 2018 Property Amounts in NOK million Construction Development Industrial Other1) Group Group Profit before tax 399 169 -95 -117 356 -213 Depreciation/impairment 269 1 129 28 428 281 Other working capital -689 -1 422 -348 3 -2 455 -142 Cash flow from operating a

  23. Slide 23: Veidekke shall be a solid company

    Veidekke shall be a solid company Significant ratio improvement expected Net interest bearing debt/EBITDA (12m) Expect to satisfy requirements with solid margin • Significant improvement expected in second half 4.0 of 2019 Covenant 3.5 • Large land investments and low season in first half 3.0 of 201

  24. Slide 24: Concluding remarks

    Concluding remarks Arne Giske, CEO 2nd quarter 2019

  25. Slide 25: Efforts to improve profitability continue

    Efforts to improve profitability continue 25 From Veidekke’s Capital Markets Update 9 May 2019 © Veidekke

  26. Slide 26: Positive outlook in our main markets

    Positive outlook in our main markets • High growth in public buildings markets • High growth in public and commercial • Moderate growth in commercial buildings markets buildings market • Stable civil engineering market • Growing civil engineering market • Expected total growth 2-4% p.a. • Expected t

  27. Slide 27: Veidekke's ambitions towards 2022

    Veidekke’s ambitions towards 2022 Increased profitability and attractive dividend Revenue growth Margin 2022 Dividends Serious injuries 3–5% >4.5% >50% 0 p.a. before tax of net results 27 © Veidekke

  28. Slide 28: Appendix

    Appendix 28 © Veidekke

  29. Slide 29: Business areas first six months

    Business areas first six months First six months 2019 First six months 2018 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building Construction Norway 6 908 241 3.5% 6 467 224 3.5% Civil Engineering Norway 2 401 -10 -0.4% 1 937 -559 -28.9% Construction Sweden 5 171 105 2.0% 4 47

  30. Slide 30: Residential portfolio

    Residential portfolio Under Under Under Property Development construction Completed Building starts construction Completed Building starts construction Residential portfolio - Veidekke's share 31.12.2017 2018 2018 31.12.2018 2019 2019 30.06.2019 Construction - number of units Norway 557 -343 385 599

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