Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (March 2025)
55 slides from Veidekke Asa's investor presentation, Mar 20, 2025
Slide 1: Questions?
20 March 2025 Questions? Kristoffer Eide Hoen | Head of Insight and Analysis kristoffer.eide.hoen@veidekke.no Anders Wettre | Senior analyst Amna Rasool | Analyst anders.wettre@veidekke.no amna.rasool@veidekke.no
Slide 2: Agenda
Agenda 01 Introduction 02 Economic environment 03 The contracting markets 04 Contruction costs 05 Summary 06 Annex: Reconstruction in Ukraine 2
Slide 3: Introduction
O01 Introduction
Slide 4: About Veidekke's market report
About Veidekke’s market report • Veidekke prepares figures for the Scandinavian markets based on statistics published by Statistics Norway, Statistics Sweden and Statistics Denmark. Other information sources include major construction clients like the Swedish Transport Administration and the Norwegi
Slide 5: Our focus: the Scandinavian contracting markets
Our focus: the Scandinavian contracting markets Not included: - Detached houses and holiday homes - “Off-the-books work” and household DIY The contracting markets in 2024 Production of buildings* and infrastructure in NOK billion Total Scandinavian market 2024: ~ NOK 920 billion Private commercial A
Slide 6: Contracting markets in 2025 and 2026
Contracting markets in 2025 and 2026 Signs of stabilisation, growth from 2026 onwards Comment Production in the Scandinavian contracting markets • Activity fell by 4% in 2025, following an 11% drop in 2024. The forecast is Percentage change compared to previous year, current prices somewhat weaker t
Slide 7: Forecast accuracy for 2024
Forecast accuracy for 2024 Comment: With 2024 behind us, we have undertaken a simple evaluation of our forecasting accuracy for different periods. The overview Results for 2024* and Veidekke’s forecasts shows that we over-estimated the residential market in 2024 but under-estimated commercial buildi
Slide 8: Economic environment
02 Economic environment
Slide 9: Geopolitical snapshot
Geopolitical snapshot Geopolitical unrest and risk premium on European corporate debt • The geopolitical risk indicator (GPR) has remained Geopolitical Risk (GPR-index) Risk premium European company bonds stable since the summer. The most recent Average 2010-td measurement was taken in February. 350
Slide 10: Geopolitical unrest and impacts
Geopolitical unrest and impacts Large-scale investment in defence sends interest rates up Comment Higher interest rates due to defence investment How high will defence expenditure go? • The Scandinavian contracting markets have Basis points, five-year government bonds Development and possible goals,
Slide 11: Economic growth
Economic growth Accelerating growth in Norway and Sweden Comment GDP growth • Growth in Norway and Sweden is expected to accelerate in 2025 and Percentage change compared to previous year 2026. In Sweden, growth of some 3.1% is forecast for 2026, driven by factors including increased industrial acti
Slide 12: Household purchasing power and job security
Household purchasing power and job security Improved purchasing power, stable unemployment Comment Household purchasing power is increasing … … while job security remains stable • The outlook for future household finances is Annual growth in real disposable income, households, % Unemployment, % of w
Slide 13: Interest rates and inflation
Interest rates and inflation Key rates on the way down, market rates remain high Market rates remain high… …while key policy rates have been cut Inflation is close to the 2% target Five-year swap rates, %, most recent observation 14 March Policy rates, %, most recent observation 14 March Core inflat
Slide 14: Exchange rates
Exchange rates Largely stable over the past year, with exception of USD Comment NOK SEK • Both NOK and SEK have fluctuated against NOK v. USD, EUR and SEK SEK v. USD, EUR and GBP USD in recent months, not least due to geopolitical turbulence. In recent weeks, 12,5 14,0 however, both currencies have
Slide 15: Demographic developments
Demographic developments Declining population growth in Norway and Sweden Comment Population growth Annual growth, % • Population growth is an important long-term driver of both the 1,3 % 1,5 % construction and the infrastructure market. There are indications of declining growth compared to earlier
Slide 16: Foreign labour in Norway
Foreign labour in Norway No signs of a lack of foreign labour Non-resident workers Net immigration to Norway Number of workers up to and including January 2025, seasonally adjusted Rolling 12-month net immigration 120 70 Thousands Thousands 100 60 85 84 50 80 40 60 30 40 20 20 10 24 21 0 0 2011K1 20
Slide 17: The contracting markets
03 The contracting markets
Slide 18: Estimated order intake, construction operations
Estimated order intake, construction operations Reduced construction order intake, stable for infrastructure Order book, Nordic construction operations Estimated order intake, Scandinavian construction projects Reporting companies, estimates in NOK/SEK billion according to reported currencies NOK bi
Slide 19: The Scandinavian contracting markets (current prices)
The Scandinavian contracting markets Historical figures and forecasts, current prices Norway, production by sector Sweden, production by sector Denmark, production by sector NOK billion, current prices NOK billion, current prices NOK billion, current prices Forecast Forecast Forecast 180 180 180 CAG
Slide 20: The Scandinavian contracting markets (fixed prices)
The Scandinavian contracting markets Historical figures and forecasts, fixed prices Norway, production by sector Sweden, production by sector Denmark, production by sector NOK billion, fixed prices NOK billion, fixed prices NOK billion, fixed prices Forecast Forecast Forecast 180 180 180 CAGR 2025–2
Slide 21: Forecast 2025–2026: approximately 50% recovery?
Forecast 2025–2026: approximately 50% recovery? Sector and country distribution Sector distribution Year-on-year change by sector Country distribution NOK billion. 2025–2026 forecast NOK billion. 2025–2026 forecast NOK billion. 2025–2026 forecast 1 200 200 20% 450 424 1 060 1 029 16% 385 964 150 400
Slide 22: Construction and engineering industry employment
Construction and engineering industry employment Surprisingly stable development thus far Comment Employed persons • Norway: employment rates are falling gradually, 1,000 persons, as at Q4 of each year from 266,000 in 2022 to 254,000 in 2024. -24 000 • Denmark: the number of employed persons is stab
Slide 23: The contracting markets: Construction
The contracting markets Construction
Slide 24: The secondhand residential market
The secondhand residential market Prices are rising Comment Prices, secondhand residential units in Scandinavia, apartments • Residential prices in Norway and Sweden Index: January 2020 = 100 developed positively from February 2024 to February 2025. Price growth stayed flat in 130 129 Denmark. 125 1
Slide 25: New residential unit sales in Norway
New residential unit sales in Norway Moderate upturn after bottoming out Comment Ready-for-sale and sold apartments • There is an upturn in new residential unit sales in Number of units, 12-month rolling total and last two months Norway after demand bottomed out in 2023. 25 000 • Approximately 10,80
Slide 26: Apartments and small houses, Norway and Sweden
Apartments and small houses, Norway and Sweden Strong growth in Sweden, continued decline in Norway Comment Norway, estimated order intake Sweden, estimated order intake • The estimated order intake related to new NOK billion NOK billion apartments and small houses in Norway was 22% lower in 2024 th
Slide 27: Commercial buildings in Norway and Sweden
Commercial buildings in Norway and Sweden Downturn from high levels, but the market remains robust Comment Norway, estimated order intake Sweden, estimated order intake • The order intake related to commercial buildings NOK billion NOK billion shrank by 5% in Norway and 15% in Sweden in 2024, follow
Slide 28: Public buildings in Norway and Sweden
Public buildings in Norway and Sweden Growth driven by healthcare projects Comment Norway, estimated order intake Sweden, estimated order intake • The number of new public building starts in NOK billion NOK billion Norway increased markedly in 2024 (+27%), primarily thanks to new hospital projects.
Slide 29: Commercial buildings in Denmark
Commercial buildings in Denmark Comment Commercial buildings Public buildings • Provisional data on building starts in the Danish Estimated order inflow, NOK billion Estimated order inflow, NOK billion commercial buildings market indicate a strong drop in 2024.* 140 Buildings for primary industry 30
Slide 30: The contracting markets: Infrastructure
The contracting markets Infrastructure
Slide 31: Characteristics of the civil engineering market
Characteristics of the civil engineering market A fragmented and highly competitive sector Numerous clients and contractors Varying contract sizes Broad segments Clients Small projects: (< NOK 25 million) Transport infrastructure • Public sector: state-owned infrastructure • Minor road maintenance,
Slide 32: The civil engineering market in Norway and Sweden
The civil engineering market in Norway and Sweden Broad-based growth in multiple segments Comment Norway, production Sweden, production • Several segments will contribute to growth in NOK billion, current prices NOK billion, current prices 2025 and 2026. Forecast Forecast 60 Roads 60 Roads • In Norw
Slide 33: The civil engineering market in Norway and Sweden
The civil engineering market in Norway and Sweden Broad-based growth in multiple segments Comment Norway, production Sweden, production • Several segments will contribute to growth in NOK billion, current prices NOK billion, current prices 2025 and 2026. Forecast Forecast • In Norway, growth is indi
Slide 34: Infrastructure: Related defence investments
Infrastructure Related defence investments
Slide 35: Norway: infrastructure-related defence investment
Norway: infrastructure-related defence investment Broad impact expected on the civil engineering sector Examples of major projects in recent years Expansive plans Relevant roads ≈ NOK 1 600 billion Important railway lines Cross-border logistics Ørland Evenes Hangars and related Hangars and related i
Slide 36: Infrastructure: Major transport infrastructure projects
Infrastructure Major transport infrastructure projects
Slide 37: Transport infrastructure projects >500 million
Transport infrastructure projects >500 million Veidekke project monitoring for the transport infrastructure sector • Project documentation is based on publicly available information Screenshot from Veidekke project monitoring tool and plans developed by the Norwegian Public Roads Administration, Nye
Slide 38: Transport infrastructure projects >500 million: Order intake
Transport infrastructure projects >500 million Order intake based on current plans Comment Norway, order intake Sweden, order intake Norway Project value in NOK billion Project value in SEK billion • We can look back on two years of very high order 45 Total Visibility 45 Total Visibility intake in t
Slide 39: Transport infrastructure projects >500 million: Order intake
Transport infrastructure projects >500 million Order intake based on current plans Comment Norway, order intake Sweden, order intake Norway Project value by project size Project value by project size • We can look back on two years of very high order Visibility Visibility intake in the major project
Slide 40: Infrastructure: Road maintenance
Infrastructure Road maintenance
Slide 41: Road maintenance, Norway
Road maintenance, Norway High priority going forward Comment Road maintenance by clients and segment • The market for municipal and county road maintenance is expected to NOK billion grow steadily this year and next. Municipal roads Forecast 18 • As regards national roads, higher prioritisation in p
Slide 42: Construction costs
04 Construction costs
Slide 43: Cost inflation has slowed
Cost inflation has slowed Flat trend in construction cost indices Comment Construction cost index, residential blocks, Norway Construction cost index, residential blocks, Sweden • Inflation in construction costs has been Percentage change compared to same month last year Percentage change compared t
Slide 44: Construction cost index, civil engineering (Norway)
Construction cost index, civil engineering (Norway) Prices are stabilising Comment Construction cost index, roads • Towards year-end 2024, the construction cost indices for civil engineering Percentage change compared to same month last year and road maintenance were 1.6% and 0.4%, respectively. • G
Slide 45: Construction cost indices by material
Construction cost indices by material Planed timber, steel and concrete Norway Sweden Denmark Index Jan. 2020 = 100, latest observation Feb. 2025 Index Jan. 2020 = 100, latest observation Jan. 2025 Index Q1 2020 = 100, latest observation Q4 2024 274 263 262 205 181 169 179 168 172 155 154 143 115 14
Slide 46: Key inflation drivers
Key inflation drivers Energy and foreign exchange… Foreign exchange (trade-weighted indices) Energy prices Latest observation 14 March Jan. 2020 = 100. Latest observation 14 March 500 123,6 129,1 450 127,5 400 375 125,8 350 122,6 300 235 120,9 282 120,0 250 117,3 200 117,1 124,6 150 189 152 Sweden's
Slide 47: Summary
05 Summary
Slide 48: Contracting markets in 2025 and 2026
Contracting markets in 2025 and 2026 Signs of stabilisation, growth from 2026 onwards Comment Production in the Scandinavian contracting markets • Activity fell by 4% in 2025, following an 11% drop in 2024. The forecast is Percentage change compared to previous year, current prices somewhat weaker t
Slide 49: Annex: Reconstruction in Ukraine
06 Annex: Reconstruction in Ukraine
Slide 50: Sources
Sources Ukraine – Fourth Rapid Damage and Needs Assessment (RDNA4) • Issued in February 2025 in cooperation with the World Bank, Ukrainian authorities, the UN and the European Commission. • This is the fourth report in the series Rapid Damage and Needs Assessment (RDNA). • The report assesses the sc
Slide 51: Regions by war status
Regions by war status Comment Regions entirely or partly under Russian control • RDNA4 divides Ukraine into five regions depending on their war status as Updated March 2025 at December 2024. The division follows oblast/county borders. • The Institute for the Study of War identifies areas which are w
Slide 52: Estimated reconstruction costs
Estimated reconstruction costs Comment Estimated reconstruction needs 2025–2035 USD billion, annual average • The total estimated need for reconstruction and restoration in Ukraine in the period 2025–2035 is estimated at USD 524 billion, with an annual 52,4 average of USD 52.4 billion. 3,6 • The amo
Slide 53: European construction sector vs. reconstruction needs
European construction sector vs. reconstruction needs Adjusted axis relative to European production European construction and civil Comment Estimated reconstruction needs engineering sector, production • The European construction and civil engineering 2025–2035, USD billion, annual average USD billi
Slide 54: Summary
Summary • The total estimated need for reconstruction and restoration in Ukraine in the period 2025–2035 is estimated at USD 524 billion, with an annual average of USD 52.4 billion. • Considering only buildings and facilities in areas under Ukrainian control, the costs are lowered to USD 19.8 billio
Slide 55: Takk for
Takk for 5 5