Slide 1: 3rd Quarter 2015 Investor presentation
3RD QUARTER 2015 Investor presentation 4 November 2015
Slide 2: Contents
CONTENTS Highlights Results – segments and Group Strengthening our positions Research facilities at Karolinska Institutet in Huddinge, Sweden 2
Slide 3: Strengthened positions
STRENGTHENED POSITIONS + Improved results + Increased order backlog + Good residential sales + Strengthening our operational and financial positions Danish Centre for Particle Therapy in Aarhus, Denmark 3
Slide 4: Revenue and earnings – 3rd quarter
REVENUE AND EARNINGS – 3RD QUARTER REVENUE PROFIT BEFORE TAX 7 400 6 300 5 NOK mill. NOK bill. 4 200 370 390 3 6.0 5.9 358 5.2 5.6 4.6 274 2 100 225 1 0 0 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 4
Slide 5: Profit before tax – 3rd quarter
PROFIT BEFORE TAX – 3RD QUARTER 3RD QUARTER: CONSTRUCTION 3RD QUARTER: PROPERTY DEVELOPMENT 3RD QUARTER: INDUSTRIAL 200 75 250 200 150 50 NOK mill. NOK mill. 150 NOK mill. 100 163 60 57 100 193 192 148 25 52 178 128 50 106 37 136 31 50 115 73 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2
Slide 6: Changes in profit before tax
CHANGES IN PROFIT BEFORE TAX PROFIT BEFORE TAX 425 30 400 390 17 1 -1 370 -11 NOK mill. 375 -2 -16 350 325 300 Construction Property Development Q3 2014 Norway Sweden Denmark Norway Sweden Industrial Other Q3 2015 6
Slide 7: Order backlog
ORDER BACKLOG ORDER BACKLOG CONSTRUCTION AND INDUSTRIAL ORDERS IN REVENUE NEXT 12 MONTHS 28 28 Road Maintenance Denmark Sweden Norway 24 24 20 20 NOK bill. NOK bill. 16 16 12 12 8 8 4 4 - 0 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Per Q3 2014 Per Q3 2015 Order backlog for Industrial is presented as Road Mainte
Slide 8: Positive margin development construction
POSITIVE MARGIN DEVELOPMENT CONSTRUCTION CONSTRUCTION NORWAY* CONSTRUCTION SWEDEN* CONSTRUCTION DENMARK (HOFFMANN)* 8% 8% 8% 6% 6% 6% 4% 4% 4% 2% 2% 2% 0% 0% 0% Q3 09 Q3 10 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 *12-month rol
Slide 9: Strong residential sales – increasing production
STRONG RESIDENTIAL SALES – INCREASING PRODUCTION NORWAY: NO. OF UNITS SOLD AND UNDER CONSTRUCTION, END OF QUARTER SVERIGE:NO. SWEDEN: ANT. OF BOLIGER SOLGT UNITS SOLD OG I PRODUKSJON, AND UNDER CONSTRUCTION,KVARTALSSLUTT END OF QUARTER 400 Sold 1 500 Under construction 400 Sold 1 500 Under construct
Slide 10: High level of activity in Industrial
HIGH LEVEL OF ACTIVITY IN INDUSTRIAL QUARTERLY REVENUE, INDUSTRIAL ASPHALT PRODUCTION (THOUSAND TONNES) 1 600 2011 2012 2013 2014 2015 3.0 2012 2013 2014 2015 1 400 2.5 1 200 2.0 1 000 NOK mill. 800 1.5 600 1.0 400 0.5 200 - 0.0 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 10
Slide 11: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY REPORTED INJURIES* LTI RATE** SICKNESS ABSENCE** 120 All injuries Lost-time injuries 10 6% 100 5% 8 80 4% 6 60 3% 4 40 2% 20 2 1% - 0 0% * Veidekke employees, hired staff and sub-contractors **12-month rolling (LTI = Number of lost-time injuries per million hours worke
Slide 12: Business areas
Student accommodation at Campus Ringerike, Hønefoss BUSINESS AREAS
Slide 13: Business areas, 3rd quarter
BUSINESS AREAS, 3RD QUARTER 3rd quarter 2015 3rd quarter 2014 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway 2 742 127 4.6% 2 842 110 3.9% Construction Sweden 1 405 12 0.9% 1 092 14 1.3% Construction Denmark 354 24 6.8% 468 23 5.0% Total Construction 4 501 163
Slide 14: Construction Norway
CONSTRUCTION NORWAY 3rd quarter YTD Stable revenue Amounts in NOK million 2015 2014 2015 2014 • Increase in Building Construction with regional variations Revenue 2 742 2 842 8 406 8 681 • Decrease in Civil Engineering Operating profit (EBIT) 115 95 278 228 Increased profit margin, primarily in Buil
Slide 15: Construction Sweden
CONSTRUCTION SWEDEN 3rd quarter YTD Significant increase in revenue Amounts in NOK million 2015 2014 2015 2014 • Increase in Building Construction, stable in Civil Revenue 1 405 1 092 4 067 3 452 Engineering Operating profit (EBIT) 17 17 49 18 Low profit margin Net financial items -5 -3 -1 -7 • Incr
Slide 16: Construction Denmark
CONSTRUCTION DENMARK 3rd quarter YTD Revenues impacted by completion of large projects Amounts in NOK million 2015 2014 2015 2014 High profit margin Revenue 354 468 1 186 1 335 • Strong profitability in the project portfolio Operating profit (EBIT) 23 21 59 55 Increased order backlog Net financial i
Slide 17: Property Development in Norway
PROPERTY DEVELOPMENT IN NORWAY 3rd quarter YTD High level of activity and many project start-ups Amounts in NOK million 2015 2014 2015 2014 • Projects in joint venture operations do not generate accounting revenues Revenue 43 141 326 550 Low quarterly result Operating profit (EBIT) 4 23 92 93 • Many
Slide 18: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN 3rd quarter YTD Substantial result improvement Amounts in NOK million 2015 2014 2015 2014 Strong sales, particularly in Stockholm and Gothenburg Revenue 436 197 1 225 960 • 65% of the sales are pre-sales Operating profit (EBIT) 44 13 97 68 Substantial increase in number o
Slide 19: Industrial
INDUSTRIAL 3rd quarter YTD Margin improvement and a good result Amounts in NOK million 2015 2014 2015 2014 Improved result in Asphalt Revenue 1 359 1 500 2 924 3 014 • Lower volumes due to fewer new-build projects this year Operating profit (EBIT) 197 203 141 161 • Good project portfolio and operati
Slide 20: Financial statements
Brf Hovås Park, Göteborg FINANCIAL STATEMENTS IFRS
Slide 21: Income statement
INCOME STATEMENT 3rd quarter YTD Amounts in NOK million 2015 2014 2015 2014 Revenue 5 548 5 784 16 855 17 309 Operating expenses -5 177 -5 394 -16 119 -16 571 Share of net income from associates and JVs 13 57 85 134 Depreciation/impairment -90 -87 -266 -247 Operating profit 294 359 555 624 Net finan
Slide 22: Balance sheet – assets
BALANCE SHEET – ASSETS Amounts in NOK million 30.09.2015 30.09.2014 31.12.2014 Goodwill and other intangible assets 1 024 860 914 Deferred tax assets 54 55 54 Land and buildings 545 504 501 Plant and machinery 1 422 1 356 1 389 Investments in associates and joint ventures 1 069 1 068 1 151 Financial
Slide 23: Balance sheet – equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 30.09.2015 30.09.2014 31.12.2014 Equity 2 766 2 486 2 744 Pensions and deferred tax liabilities 691 555 744 Bonds 750 750 750 Amounts due to credit institutions 80 1 076 73 Other non-current liabilities 107 117 104 Total non-current liabi
Slide 24: Statement of cash flows
STATEMENT OF CASH FLOWS YTD 2015 YTD 2014 Construction Property Amounts in NOK million Industrial Group Group and Other Development Profit before tax 264 189 125 577 656 Depreciation/impairment 151 1 114 266 247 Other working capital -1 018 332 -431 -1 117 -229 Cash flow from operating activities -6
Slide 25: Strengthening our positions
STRENGTHENING OUR POSITIONS
Slide 26: Markets and outlook
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Slide 27: Construction market forecasts
CONSTRUCTION MARKET FORECASTS 2014 2015 2016 2014 2015 2016 2014 2015 2016 NOK bill. growth growth NOK bill. growth growth NOK bill. growth growth Residential 122 3% 1% 111 15% 3% 55 0% 10% units Private comm. buildings 55 -2% -1% 80 5% 7% 18 0% 10% Public comm. 33 3% 3% 35 0% -5% 20 -5% 0% building
Slide 28: Higher transport infrastructure investments
HIGHER TRANSPORT INFRASTRUCTURE INVESTMENTS ANNUAL ALLOCATION OF FUNDS NATIONAL TRANSPORT PLAN ANNUAL ALLOCATION OF FUNDS IN NATIONAL PLAN 60 25 23.6 48.0 50 20 +90% +54% 40 SEK bill. NOK bill. 31.1 15 12.4 30 10 20 10 5 0 0 NTP 2010-2019 NTP 2014-2023 2014 2015 2016 2017 2018 2019 Railway Road Rail
Slide 29: Strengthening our positions
STRENGTHENING OUR POSITIONS INCREASED ORDER BACKLOG SALE OF RESIDENTIAL UNITS, INCREASED ACTIVITY IN ACQUISITIONS CONSTRUCTION GROSS SWEDEN (NOK bill.) (Number of units, 12m) (12m revenue, NOK bill.) 24.2 1 580 6.5 +58% 15.3 906 3.6 Per Q3 2014 Per Q3 2015 Q3 12 Q3 13 Q3 14 Q3 15 Q3 12 Q3 13 Q3 14 Q
Slide 30: Order intake and revenue - Construction
ORDER INTAKE AND REVENUE - CONSTRUCTION 12-MONTH ROLLING REVENUE AND ORDER INTAKE (“BOOK-TO-BILL” 1.47) ORDER INTAKE PER QUARTER 30 000 12 000 10 000 25 000 8 000 NOK mill. 20 000 6 000 4 000 15 000 2 000 10 000 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 - Revenue Order intake 30
Slide 31: Examples of new contracts this quarter
EXAMPLES OF NEW CONTRACTS THIS QUARTER Health-care building at Södersjukhuset, Stockholm Rehabilitation of the Høyanger tunnel Danish Centre for Particle Therapy, Aarhus Western Corridor for Statnett Railway construction at Værnes Research facilities at Karolinska Institutet, Huddinge Sjøparken Agne
Slide 32: Acquisition of resources and expertise
ACQUISITION OF RESOURCES AND EXPERTISE Veidekke grows in construction and civil engineering Regional strengthening through acquisition of Reinertsen Entreprenør, Rekab Uppsala, Martin Haraldstad, Grimsrud* and Tore Løkke* Increased resources, projects and expertise 600 new Veidekke employees Combine
Slide 33: Property development at Skøyen, Oslo
PROPERTY DEVELOPMENT AT SKØYEN, OSLO ACQUISITION OF NEDRE SKØYENVEI 24-26 IN OSLO Build over 400 residential units Build new headquarters for Veidekke • 15 000 sqm Project in partnership between Property Development and Construction The purchase price of NOK 799 million is mainly due upon takeover T
Slide 34: Property development partnerships, Sweden
PROPERTY DEVELOPMENT PARTNERSHIPS, SWEDEN RIKSHEM + VEIDEKKE Joint venture company established in October Rikshem is one of Sweden’s largest residential property companies Veidekke brings in property development and construction expertise Three projects planned in the initial phase ICA FASTIGHETER +
Slide 35: Growth in Sweden
GROWTH IN SWEDEN ORDER BACKLOG - SWEDEN SALE OF RESIDENTIAL UNITS - SWEDEN MAIN FOCUS 8 1 000 Building Construction Civil Engineering Construction 7 • Increase profitability 800 No. of units, 12-months rolling 6 • Succeed within infrastructure 5 • Negotiated contracts NOK bill. 600 4 3 400 Property
Slide 36: Good positions within Industrial
GOOD POSITIONS WITHIN INDUSTRIAL Veidekke’s installations are Tromsø Trondheim well positioned for the many AL TA planned road projects Ålesund Asphalt plants covering the most important markets Bergen Oslo Bodø Stavanger Large projects1 Asphalt plants Kristiansand Smaller projects Quarries and plan
Slide 37: Increased financial capacity
INCREASED FINANCIAL CAPACITY NEW FINANCING AGREEMENT WITH DNB Five-year multi-currency loan agreement of NOK 3.6 billion entered into in October Fixed margin above NIBOR NOK 1.1 billion has currently been drawn under the credit facility Guarantee limit Construction at NOK 1.4 billion New railway par
Slide 38: Summing up
SUMMING UP A GOOD DEVELOPMENT MAIN FOCUS + A solid quarter Increase profitability in the Swedish construction operations + Strengthening our positions Project execution 38
Slide 39: Announcement of 4th quarter 2015: 11 February 2016
Announcement of 4th quarter 2015: 11 February 2016
Slide 40: Appendix
APPENDIX
Slide 41: Business areas, year to date
BUSINESS AREAS, YEAR TO DATE First 9 months 2015 First 9 months 2014 Amounts in NOK mill. Revenues Profit Margin Revenues Profit Margin Construction Norway 8 406 313 3.7% 8 681 278 3.2% Construction Sweden 4 067 49 1.2% 3 452 11 0.3% Construction Denmark 1 186 63 5.3% 1 335 62 4.6% Total Constructio
Slide 42: 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 30.09.2015 Construction - number of homes Norway 749 -508 158 399 -208 370 561 Sweden 720 -347 377
Slide 43: Solid land bank
200 SOLID LAND BANK A total of 14 350 units 1 700 • Veidekke’s share 11 650 200 In Norway 950 • 7 200 units 3 000 • Veidekke’s share 4 750 900 In Sweden • 7 150 units 3 850 250 • Veidekke’s share 6 900 2 200 • 70% options 1 100 43