Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (March 2014)
55 slides from Veidekke Asa's investor presentation, Mar 12, 2014
Slide 1: Economic Activity Report for the Scandinavian Countries
Economic Activity Report for the Scandinavian Countries 12 March 2014
Slide 2: Outline
Outline ■ International economy ■ Norway ■ Sweden ■ Denmark ■ Summary
Slide 3: Highlights
Highlights ■ Positive new impetus from international economy Positive change of pace for construction operations in northern Europe ■ Norway – still a positive outlook Construction investments flattening out ■ Sweden – economic trends picking up Construction investments on the rise ■ Denmark –
Slide 4: International economy
International economy
Slide 5: Positive new impetus from the international economy
Positive new impetus from the international economy ■ Clear improvement in the US and the EU this autumn Uncertainties persist in emerging economies ■ Stronger growth figures in our region Providing new impetus to the construction sector in northern Europe ■ Positive impulses from the internatio
Slide 6: Positive new impetus from international economy
Positive new impetus from international economy ■ Clear improvement in the US and the EU this autumn Uncertainties persist in emerging GDP growth in 2013 2014 2015 economies per cent The Eurozone -0.4 1.0 1.4 ■ Stronger growth figures in our region Germany 0.5 1.6 1.4 Providing new impetus to th
Slide 7: Positive new impetus from the international economy
Positive new impetus from the international economy ■ Clear improvement in the US Production in the construction industry as of Q4 2013 and the EU this autumn Uncertainties persist in emerging economies ■ Stronger growth figures in our region Providing new impetus to the construction sector in n
Slide 8: Positive new impetus from the international economy
Positive new impetus from the international economy ■ Clear improvement in the US Exports and the EU this autumn Uncertainties persist in emerging economies Investments ■ Stronger growth figures in our region Providing new impetus to the construction sector in northern Europe Households ■ Positi
Slide 9: The situation in Norway
The situation in Norway
Slide 10: Norway – still a positive outlook
Norway – still a positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of the year ■ Household economies are strong Confidence in the economy is good The labour market is robust with 19 000 new jobs created in autumn 2013 (14 000 in autumn 2012) Low interest rates
Slide 11: Photo: Hans Olav Sørlie
Photo: Hans Olav Sørlie Photo: Hans Olav Sørli
Slide 12: Norway – still positive outlook
Norway – still positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of the year ■ Household economies are strong Confidence in the economy is good The labour market is robust with 19 000 new jobs created in autumn 2013 (14 000 in autumn 2012) Low interest rates o
Slide 13: Norway – still positive outlook
Norway – still positive outlook Car sales, autumn 2006-2013* ■ GDP growth diminished in 2013 Autum 2008 Autumn 2013 But picked up in the latter half of -23% +6% the year 60000 ■ Household economies are strong Confidence in the economy is 50000 good The labour market is robust with 40000 19 000
Slide 14: Norway – still positive outlook
Norway – still positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of the year ■ Household economies are strong Confidence in the economy is good The labour market is robust with 19 000 new jobs created in autumn 2013 (14 000 in autumn 2012) Low interest rates t
Slide 15: Norway – still positive outlook
Norway – still positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of the year ■ Household economies are strong Confidence in the economy is good The labour market is robust with 19 000 new jobs created in autumn 2013 (14 000 in autumn 2012) Low interest rates t
Slide 16: Norway – still positive outlook
Norway – still positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of the year ■ Household economies are strong Confidence in the economy is good The labour market is robust with 19 000 new jobs created in autumn 2013 (14 000 in autumn 2012) Low interest rates t
Slide 17: Norway – still positive outlook
Norway – still positive outlook ■ GDP growth diminished in 2013 But picked up in the latter half of Some forecasts: the year Mainland GDP in 2013 2014 2015 ■ Household economies are strong per cent Confidence in the economy is Norges Bank 3.4 2.0 2½ good Nordea 1.3 1.2 The labour market is rob
Slide 18: The construction market in Norway
E18 Sky-Langangen The construction market in Norway
Slide 19: Assumptions for the construction market in 2014 and 2015
Assumptions for the construction market in 2014 and 2015 ■ More normal economic growth ■ Household and industrial expectations about the future soften from a high level ■ Unemployment remains virtually unchanged ■ Slower growth in oil investments, but level remains high ■ Investments in public const
Slide 20: Housing market: Number of units sold
Housing market: Number of units sold ■ Three years of high housing sales ■ The sale of used dwellings is 6 per cent lower than at the peak in 2012 ■ However, the level remains high
Slide 21: Housing market: Sales prices of used dwellings
Housing market: Sales prices of used dwellings ■ Housing prices dropped 2.5 per cent in 2013 ■ Growth had resumed in 2014, 0.9 per cent in January and February ■ 2014: More moderate growth rates: Slower economic growth, continued low unemployment rate Somewhat less net immigration Fewer housin
Slide 22: Housing market: Regional development
Housing market: Regional development ■ Regional differences more Price level Feb. 13/Feb. Price trend past distinct than before Apartments January 2014 14 3 months ■ Largest decline in Stavanger Oslo NOK 48 193 -3.5% and Oslo over the past 12 Bergen NOK 39 164 0.6% months Trondheim NOK 39 760 -1.0%
Slide 23: Housing market: Housing starts picked up in the autumn
Housing market: Housing starts picked up in the autumn Some 30 000 dwellings started in 2013 The sale of new dwellings dropped steeply during the year Slower housing starts, compared with 26 000 housing units in 2015 More hesitant households Capacity/access to land and projects Source: Sta
Slide 24: Non-residential buildings: Starts are down
Non-residential buildings: Starts are down ■ Following vigorous growth in the early half of the year, slower for start ups in the autumn Private non-residential buildings accounted for most of the decline Public buildings maintain level of activity, especially school buildings ■ Anticipated grow
Slide 25: Non-residential buildings: Improvement in 2014
Non-residential buildings: Improvement in 2014 ■ Continued investment growth in non-residential buildings ■ Many major projects enhance growth Ørlandet Air Station Flesland Airport Media House in Bergen ■ For private-sector non-residential buildings, investments are expected to increase by 5 p
Slide 26: Busy for civil engineering in the run-up to 2016
Busy for civil engineering in the run-up to 2016 Investment Bill. NOK 2011 ■ Overall growth of 6 per cent in the run- up to 2016 Roads Railways Energy sector Other civil engineering ■ Road investments 7 per cent in 2014 and 5 per cent in 2015 35 ■ Railway construction 10 per cent annual 30 growth 29
Slide 27: The overall construction market
The overall construction market ■ Somewhat slower growth in the Investment Bill. NOK 2011 Norwegian economy Residental Commercial buildings Continued high level of activity Public buildings Civil engineering ■ Construction investments stable 120 (-1 per cent) in 2014 100 102 Climbing to 3 per ce
Slide 28: The situation in Sweden
Skälderviken, Stockholm The situation in Sweden
Slide 29: Sweden – cyclical upturn begins
Sweden – cyclical upturn begins ■ Weak cyclical trend in large parts of 2013 Q4 showed clear progress ■ Demand from trading partners is on the rise ■ Investments driven by higher residential construction ■ Income growth and low interest rates drive consumption ■ GDP growth between 2.5–3.0 per cent
Slide 30: Sweden – cyclical upturn begins
Sweden – cyclical upturn begins ■ Continued improvement in the labour market through 2014 and 2015 Enterprises use the resources available to them more efficiently before hiring new people ■ The labour market will reach equilibrium (6 per cent) (CPI) first in 2017 Source: SCB (Red line shows our f
Slide 31: Sweden – cyclical upturn begins
Sweden – cyclical upturn begins ■ 1.5 per cent growth retail trade through 2013 ■ Households' financial situation improved in 2014 ■ Lower unemployment rate ■ This contributes to estimated growth of 2.5 per cent in 2014 Source: SCB (Red line shows our forecasts)
Slide 32: Sweden – cyclical upturn begins
Sweden – cyclical upturn begins ■ Industrial production improves as the autumn progresses ■ Enterprises now more optimistic ■ Estimated 4 per cent growth in 2014 Source: SCB (Red line shows our forecasts)
Slide 33: Sweden – cyclical upturn begins
Sweden – cyclical upturn begins GDP in market prices Percentage growth in volume from preceding year 2013 2014 2015 The National Institute of 1.5 2.4 3.1 Economic Research Swedbank 3.2 2.9 Nordea 2.4 2.4 Veidekke 2.5–3.0 2.5–3.0
Slide 34: The construction market in Sweden
The construction market in Sweden
Slide 35: Assumptions for the construction market in 2014 and 2015
Assumptions for the construction market in 2014 and 2015 ■ Swedish economy in recovery GDP growth of 2.5 – 3 per cent in 2014 and 2015 ■ Significant improvement in construction enterprises’ expectations ■ Political uncertainty Housing prices and rising debt Freedom of action for financial poli
Slide 36: Housing market: Several indicators looking up
Housing market Several indicators looking up Better purchasing power in 2013 ■ Low interest rates ■ Higher earnings Source: Swedbank Housing Index = 100, an ordinary household is considered to have good purchasing power after its housing costs are covered. A higher index means more purchasing power
Slide 37: Housing market: Several indicators looking up
Housing market Several indicators looking up ■ Population growth continued in the major cities in 2013 Stockholm +2 per cent Malmö and Gothenburg: +1 per cent ■ Housing prices increased significantly in 2013 Stockholm +14 per cent* Gothenburg +8 per cent* Malmö +10 per cent* ■ Regional dif
Slide 38: Housing market: Several indicators looking up
Housing market Several indicators looking up ■ Housing starts up steeply throughout 2013 ■ Starts increased from roughly 21 000 in Q1 2013 to 27 000 in Q4 ■ Growth will continue in 2014 and 2015 to some 30 000 Source: SCB
Slide 39: Non-residential buildings: 2014 will be a flat year
Non-residential buildings 2014 will be a "flat" year ■ Declining trend through 2013 ■ Private-sector non- residential buildings Low capacity utilisation postpones the need for investment Positive tendencies in the major cities as early as in 2014 ■ Public-sector non- residential buildings The
Slide 40: Civil engineering market: Continued high level of activity
Civil engineering market Continued high level of activity SEK billion Forecast Budget 2014 Budget 2015 Budget 2016 ■ High level of State civil 2013 engineering investments 20 per cent growth in roads Roads 11.8 12.9 13.9 14.8 from 2013 to 2015 Continued decline for Railway 10.1 8.9 8.4 9.8 railw
Slide 41: Civil engineering market: Continued high level of activity
Civil engineering market Continued high level of activity Investment ■ High level of State civil Bill. SEK 2011 engineering investments Roads Railway 20 per cent growth for Energy sector Other civil engineering roads from 2013 to 2015 30 Continued decline for 25 railway 23 20 22 ■ The power sect
Slide 42: Overall construction market
Overall construction market Investment Bill. SEK 2011 ■ Construction investments up Residental Commercial buildings by ~5 per cent in both 2014 140 Public buildings Civil engineering and 2015 120 ■ Housing investments 112 trending upwards already in 100 2014 80 72 ■ Growth in private-sector 60 non-r
Slide 43: The situation in Denmark
Glostrup Center The situation in Denmark
Slide 44: Denmark – gradual progress
Denmark – gradual progress ■ Recovery started, but a long way to go Q4 better than indicated by the figures Upturn for business and industry ■ Positive trends in the households Growing confidence in the economy Underlying growth in the consumption ■ Broader platform for growth GDP growth o
Slide 45: Denmark – gradual progress
Denmark – gradual progress ■ Recovery started, but a long way to go Q4 better than indicated by the figures Upturn for business and industry ■ Positive trends in the households Growing confidence in the economy Underlying growth in the consumption ■ Broader platform for growth GDP growth o
Slide 46: Denmark – gradual progress
Denmark – gradual progress Some forecasts from the past 12 months: ■ Recovery started, but a long way to go GDP growth in 2013e 2014 2015 Q4 better than indicated by the per cent figures Upturn for business and Ministry of 0.4 1.6 1.9 industry Finance Danske Bank 1.5 2.1 ■ Positive trends in the
Slide 47: Construction market in Denmark
Rabalder Park, Roskilde Construction market in Denmark
Slide 48: Contribution from the Danish economy
Contribution from the Danish economy ■ GDP growth picking up again ■ Brighter prospects for the labour market ■ Households slightly more optimistic
Slide 49: Housing prices on the way up
Housing prices on the way up ■ Housing prices on the way up Prices up 17 per cent in Copenhagen from 2012 to 2013 ■ Little building for several years reduces availability ■ Residential construction still at a low level, about 12 000 starts in 2014 Source: Association of Danish Mortgage Banks (Red
Slide 50: Residential construction still lags behind
Residential construction still lags behind Source: DST (Red line shows our forecasts)
Slide 51: Overall construction market
Overall construction market Investment Bill. DKK 2011 ■ Danish construction market Residental Commercial buildings down 5 per cent in 2013 Public buildings Civil engineering 70 ■ Market up 4 per cent in 2014 60 Public projects contributing to growth 50 Private sector will take over in 40 2014 an
Slide 52: Summary
Summary ■ International upturn continues, fewer uncertain factors ■ Construction market: Housing draws the overall market down in Norway, but upturns in Sweden and Denmark ■ 2014 and 2015 may offer a good market throughout Scandinavia
Slide 53: The Scandinavian construction market
The Scandinavian construction market Investment Bill. NOK 2011, currency pr Q4 2013 300 Sweden Norway Denmark 254 250 250 200 150 119 100 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014f 2015f Source: DST, SCB, Statistics Norway, Norges Bank and Veidekke 53
Slide 54: Economic cycle wheel: Macro overview for the next months
Economic cycle wheel: Macro overview for the next 6 months. Norway Sweden Denmark Source: Veidekke
Slide 55: The next Economic Activity Report will be published in September 2014
The next Economic Activity Report will be published on 15 September 2014