Slide 1: 4th Quarter 2014 Investor Presentation
Foreløpig bilde av Bjørnsletta skole 4TH QUARTER 2014 Investor Presentation Thursday 12 February 2015
Slide 2: Contents
CONTENTS Highlights Results - segments and Group Status and priorities CC Stadion, Hamar 2
Slide 3: High activity level and good development
HIGH ACTIVITY LEVEL AND GOOD DEVELOPMENT + Revenue growth + Earnings improvement + Stable order backlog + Solid financial position Veidekke Bostad, Stureby, Stockholm 3
Slide 4: Revenues and earnings - full-year
REVENUES AND EARNINGS - FULL-YEAR REVENUE PROFIT BEFORE TAX 25 1 000 20 800 125 113 NOK mill. NOK bill. 15 600 23,9 967 10 20,5 21,2 400 17,9 776 16,3 590 626 567 5 200 0 0 2010 2011 2012 2013 2014 2010 2011* 2012** 2013 2014 * NOK 125 mill. is related to sales gain from Veidekke Gjenvinning in 2011
Slide 5: Revenues and earnings - 4th quarter
REVENUES AND EARNINGS - 4TH QUARTER REVENUE PROFIT BEFORE TAX 7 400 6 300 5 NOK bill. NOK mill. 4 113 6,6 200 3 6,1 368 5,6 336 5,1 2 4,4 100 206 170 179 1 0 0 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 * NOK 113 mill. is related to changes in the pension scheme in Norway in Q4 2012
Slide 6: Profit before tax
PROFIT BEFORE TAX 4TH QUARTER: CONSTRUCTION 4TH QUARTER: PROPERTY DEVELOPMENT 4TH QUARTER: INDUSTRIAL 250 120 100 100 200 80 94 80 NOK mill. NOK mill. 60 NOK mill. 150 60 117 40 79 40 84 100 199 76 186 185 20 49 60 132 28 50 110 -9 20 0 18 7 2 0 -20 0 2010 2011 2012* 2013 2014 2010 2011 2012 2013 20
Slide 7: Changes in profit before tax
CHANGES IN PROFIT BEFORE TAX PROFIT BEFORE TAX 400 36 2 368 360 9 -9 336 6 -12 -1 NOK mill. 320 280 240 200 Construction Property development Q4 2013 Norway Sweden Denmark Norway Sweden Industrial Other Q4 2014 7
Slide 8: Order backlog
ORDER BACKLOG ORDER BACKLOG ORDERS IN REVENUE NEXT 12 MONTHS 20 20 Industrial Denmark 16 16 Sweden Norway NOK bill. 12 NOK bill. 12 8 8 4 4 0 0 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Per Q4 2013 Per Q4 2014 8
Slide 9: Financial position
FINANCIAL POSITION Net cash position NET INTEREST-BEARING POSITION AT YEAR-END (NOK MILL.) • Good project liquidity in Construction 274 • Less capital tied-up in Property Development -162 Expecting land acquisitions and increased -274 -396 capital tied-up in Property Development -1 506 2010 2011 201
Slide 10: Dividends 2014
DIVIDENDS 2014 Earnings per share*: NOK 6.3 (4.1) DIVIDENDS AND BUY BACKS 5 Proposed dividend: NOK 3.5 (3.0) 4 NOK per share Dividend pay-out ratio: 55% (74%) 3 2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* Ordinary dividend Buy backs * From the Consolidated Financial Statement (IFRS) * P
Slide 11: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY LTI RATE (NUMBER OF LOST-TIME INJURIES PER MILLION HOURS WORKED) SICKNESS ABSENCE (PERCENT) 20 Norway Sweden Denmark 6% Norway Sweden Denmark 5% 15 4% 10 3% 2% 5 1% 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 2005 2006 2
Slide 12: Improvement in all business areas, strong financial position, positive outlook
Improvement in all Strong financial Positive outlook business areas position
Slide 13: Business areas
StreetDome on South Jutland: the largest street sport facility in Northern Europe BUSINESS AREAS
Slide 14: Business areas, 4th quarter
BUSINESS AREAS, 4TH QUARTER Q4 2014 Q4 2013 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway 3 196 145 4.5 % 3 413 139 4.1 % Construction Sweden 1 353 8 0.6 % 1 097 9 0.9 % Construction Denmark 485 46 9.5 % 392 37 9.4 % Total Construction 5 034 199 4.0 % 4 902 1
Slide 15: Construction Norway
CONSTRUCTION NORWAY 6% decrease in revenues 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 • Increase in Building Construction, decrease in Civil Engineering Revenue 3 196 3 413 11 878 12 132 Operating profit (EBIT) 127 134 356 334 Good result and further margin improvement Net fin
Slide 16: Construction Sweden
CONSTRUCTION SWEDEN 23% increase in revenues 4th quarter Full year • Increase in Building Construction, decrease in Civil Engineering Amounts in NOK million 2014 2013 2014 2013 Revenue 1 353 1 097 4 804 3 499 Still weak results Operating profit (EBIT) 18 10 35 13 • Loss in parts of the building cons
Slide 17: Construction Denmark
CONSTRUCTION DENMARK 24% increase in revenues 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 • High activity level in connection with three large commercial buildings Revenue 485 392 1 820 1 336 Operating profit (EBIT) 43 32 98 66 Very strong margins Net financial items 2 5 10 9 A
Slide 18: Property Development Norway
PROPERTY DEVELOPMENT NORWAY A strong result 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 • Significant property development gains in the quarter Revenue 198 244 746 1 070 Return on invested capital of 14.1%* Operating profit (EBIT) 92 44 185 160 Lower production Net financial ite
Slide 19: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN Significant increase in revenues 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 • Increased residential sales • Project sales Revenue 569 252 1 529 713 Operating profit (EBIT) 40 30 108 55 Stable earnings Net financial items -5 4 -3 -4 • Property develop
Slide 20: Capital tied-up - Property
CAPITAL TIED-UP - PROPERTY CAPITAL DEVELOPMENT STATUS PER YEAR-END 2014 (AMOUNTS IN NOK BILL.) Land for development Housing units under production Invested capital Invested capital: 3.0 5 • Norway 1.9 4 • Sweden 1.1 NOK bill. 3 Maximum invested capital 3.5 2 Total assets: 4.2 1 • Housing units under
Slide 21: Industrial
INDUSTRIAL A strong quarter 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 • High revenues and a good result • The increased revenues are primarily due to Road Revenue 1 114 1 050 4 127 3 476 Maintenance Operating profit (EBIT) 78 88 239 178 Net financial items -2 -3 -29 -20 Asphal
Slide 22: Volume development asphalt
VOLUME DEVELOPMENT ASPHALT ASPHALT PRODUCTION (THOUSAND TONNES) ACCUMULATED ASPHALT PRODUCTION (MILLION TONNES) 600 2012 2013 2014 3,0 2012 2013 2014 500 2,5 +7% +19% 400 2,0 300 1,5 200 1,0 100 0,5 - 0,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Slide 23: Financial statements
Classified road 80, Bodø FINANCIAL STATEMENTS IFRS
Slide 24: Income statement
INCOME STATEMENT 4th quarter Full year Amounts in NOK million 2014 2013 2014 2013 Revenue 6 719 6 582 24 027 21 781 Operating expenses -6 290 -6 168 -22 861 -20 833 Share of net income from associates and J/Vs 83 30 217 65 Depreciation/impairment -91 -90 -338 -321 Operating profit 421 355 1 045 692
Slide 25: Balance sheet – assets
BALANCE SHEET – ASSETS Amounts in NOK million 31.12.2014 31.12.2013 Goodwill and other intangible assets 914 880 Deferred tax assets 54 55 Land and buildings 501 499 Plant and machinery 1 389 1 230 Investments in associates and joint ventures 1 151 908 Financial assets 408 417 Total non-current asse
Slide 26: Balance sheet – equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 31.12.2014 31.12.2013 Equity 2 744 2 466 Pensions and deferred tax liabilities 744 558 Bonds 750 750 Amounts due to credit institutions 73 53 Other non-current liabilities 104 36 Total non-current liabilities 1 671 1 398 Commercial papers
Slide 27: Statement of cash flows
STATEMENT OF CASH FLOWS 2014 2013 Construction Property Amounts in NOK million Industrial Dividend Group Group and Other development Profit before tax 565 280 210 - 1 055 718 Depreciation/impairment 192 1 145 - 338 321 Other working capital 10 371 -27 - 353 608 Cash flow from operating activities 76
Slide 28: Status and priorities
STATUS AND PRIORITIES
Slide 29: Quality and scope of our deliveries
QUALITY AND SCOPE OF OUR DELIVERIES CC Stadium, Hamar Bjørnsletta school E16 - Slomarka-Kongsvinger Vestfold railroad Kvarteret Perukmakaren, Gothenburg Microsoft’s main office in Denmark Classified road 13, Norway Lomma-Läge, Skåne Äppelblom, Gothenburg Marienfryd, Oslo 2.6 million tonnes asphalt p
Slide 30: Drop in oil price – how will it impact Veidekke?
DROP IN OIL PRICE– HOW WILL IT IMPACT VEIDEKKE? $150 $100 $50 $0 30
Slide 31: Market outlook 2015 and 2016 - Norway
MARKET OUTLOOK 2015 AND 2016 NORWAY The oil sector negatively impacts the INVESTMENTS IN CONSTRUCTION, NOK BILL. (2011) economic growth 140 • Uncertain duration and effect 120 • A moderate market growth for residential and private +1 %* 100 commercial buildings is likely, but regional differences 80
Slide 32: Market outlook 2015 and 2016 - Sweden
MARKET OUTLOOK 2015 AND 2016 SWEDEN Still high economic activity – low interest INVESTMENTS IN CONSTRUCTION, SEK BILL. (2011) rates 140 • Strong residential market 120 +4 %* • Increased growth rate for private commercial 100 buildings 80 +5 %* Public commercial buildings levelling out 60 +5 %* after
Slide 33: Market outlook 2015 and 2016 - Denmark
MARKET OUTLOOK 2015 AND 2016 DENMARK INVESTMENTS IN CONSTRUCTION, DKK BILL. (2011) Improved economic activity • GDP growth towards 2% in 2016 60 • Strong development in government finances 50 Increased growth rate in the private 40 +7 %* segments 30 +3 %* Copenhagen area and some larger cities 20 +7
Slide 34: Market outlook 2015 and 2016 - Construction
MARKET OUTLOOK 2015 AND 2016 CONSTRUCTION ANNUAL GROWTH PROGNOSIS FOR INVESTMENTS IN CONSTRUCTION A high growth rate is expected for the Scandinavian construction market in 2015 10% and 2016 8% 6% Highest market growth in Sweden 4% • High growth rate in Denmark too, but from a 2% low level 0% -2% Gr
Slide 35: Construction
CONSTRUCTION REVENUE AND MARGIN* NOK bill. 20 5% 16 4% 12 3% 8 2% 4 1% 0 0% 2011 2012 2013 2014 E18 Gulli-Langåker, Norway The Winery Hotel, Stockholm Copenhagen Designer Outlets * 2012 is adjusted for changes in the pension scheme 35
Slide 36: Construction Norway
CONSTRUCTION NORWAY REVENUE (NOK MILL.) ORDER BACKLOG (NOK MILL.) Strong position in all segments Increasing profitability 12 000 12 000 • Margins up in 2014; Building Construction 4.2%, 10 000 10 000 Civil Engineering 2.3% 8 000 8 000 • Several business units reached profitability 6 000 6 000 targe
Slide 37: Construction Sweden
CONSTRUCTION SWEDEN REVENUE BUILDING REVENUE CIVIL ENGINEERING Our position is strengthened CONSTRUCTION (NOK MILL.) (NOK MILL.) • Commercial buildings and residential 3 000 3 000 • Civil engineering Focus on negotiated contracts 2 000 2 000 • Contract for SEB’s new office signed in 2014 Improve pro
Slide 38: Construction Denmark
CONSTRUCTION DENMARK REVENUE (NOK MILL.) ORDER BACKLOG (NOK MILL.) High activity level in 2014, large private commercial projects completed 2 000 2 000 Very good profitability 1 500 1 500 Project approach based on customer 1 000 1 000 and supplier involvement Lower activity level expected for 2015 5
Slide 39: Property Development
PROPERTY DEVELOPMENT RESULTS AND ROIC* NOK mill. 300 15% 240 12% 180 9% 120 6% 60 3% 0 0% 2011 2012 2013 2014 Sädesärlan, Stockholm Sørengstranda, Oslo Veidekke MAX, Sweden * Return on Invested Capital 39
Slide 40: Large development projects
LARGE DEVELOPMENT PROJECTS NYE LILLEBY, TRONDHEIM SVEA FANFAR, STOCKHOLM 40
Slide 41: Property Development Norway
PROPERTY DEVELOPMENT NORWAY NORWAY: NO. OF UNITS SOLD AND IN PRODUCTION, END OF QUARTER Renewal of project portfolio 250 1 500 • Large projects in Oslo completed Sold In production • Start-up of new large projects in 200 1 200 Oslo and Trondheim 150 900 Production level influenced by low 100 600 sal
Slide 42: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN SWEDEN: NO. OF UNITS SOLD AND IN PRODUCTION, END OF QUARTER Capitalised on a good market 250 Sold 1 500 In production Strong sales and production 200 1 200 Start-up of several large projects in 150 900 Stockholm 100 600 Land bank in Stockholm strengthened 50 300 0 0 Q1 13
Slide 43: Industrial
INDUSTRIAL REVENUE AND MARGIN* NOK bill. 5 10% 4 8% 3 6% 2 4% 1 2% 0 0% 2011 2012 2013 2014 Asphalt Aggregates Road Maintenance * Adjusted for sales gain in 2011 and for changes in the pension scheme in 2012 43
Slide 44: Industrial business areas
INDUSTRIAL BUSINESS AREAS MARGIN PER BUSINESS AREA Asphalt: Market leader with 35% share • Price- and market strategies 16% Revenue split 2014 14% • Cost efficiency 23 % 12% NOK Aggregates: Strong local positions 10% 10 % 4.1 bill.. • Positioning towards growth areas 8% 67 % 6% Road Maintenance: Sec
Slide 45: Result before tax per business area
RESULT BEFORE TAX PER BUSINESS AREA CONSTRUCTION PROPERTY DEVELOPMENT INDUSTRIAL 600 300 250 500 250 200 94 400 200 NOK mill. NOK mill. 150 NOK mill. 125 300 150 568 549 281 280 100 210 446 221 200 403 100 158 173 301 50 91 100 50 64 18 14 20 - - - 2010 2011 2012* 2013 2014 2010 2011 2012 2013 2014
Slide 46: Our mission
OUR MISSION OBTAIN PROJECTS EXECUTE PROJECTS CUSTOMER PROJECT The right project Good production The right customer solution Completion and handover 46
Slide 47: Financial goals and results
FINANCIAL GOALS AND RESULTS BUSINESS AREA LONG TERM GOAL AVG 2011-13 2014 Construction Margin (EBT) 5.0% 2.6% 3.0% Norway 2.7% 3.6% Sweden 1.5% 0.4% Denmark 4.4% 5.9% Industrial Margin (EBT) 6.5% 2.9% 5.1% Return on Property Development 15.0% 7.6% 13.0% invested capital Norway 10.2% 14.1% Sweden 4.7
Slide 48: Our strategic priorities
OUR STRATEGIC PRIORITIES CONSTRUCTION PROPERTY DEVELOPMENT INDUSTRIAL Customer- and market Strengthen the land bank in Market positioning strategies the largest cities Cost efficiency and further Succeed in the infrastructure Develop new projects improvement of operations segment Increase profitabil
Slide 49: Improvement in all business areas, strong financial position, positive outlook
Improvement in all Strong financial Positive outlook business areas position
Slide 50: Veidekke's upcoming reports
VEIDEKKE’S UPCOMING REPORTS - Economic activity: 9 March 2015 - 1st quarter: 6 May 2015 50
Slide 51: Appendix
APPENDIX
Slide 52: Business areas
BUSINESS AREAS 2014 2013 Amounts in NOK million Omsetning Resultat Margin Omsetning Resultat Margin Construction Norway 11 878 423 3.6% 12 132 360 3.0% Construction Sweden 4 804 19 0.4% 3 499 11 0.3% Construction Denmark 1 820 108 5.9% 1 337 74 5.6% Total Construction 18 502 549 3.0% 16 968 446 2.6%
Slide 53: Profit margin Construction
PROFIT MARGIN CONSTRUCTION CONSTRUCTION NORWAY CONSTRUCTION SWEDEN CONSTRUCTION DENMARK (HOFFMANN) 8% 8% 8% 6% 6% 6% 4% 4% 4% 2% 2% 2% 0% 0% 0% Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 12 months rolling 53
Slide 54: Housing portfolio
HOUSING PORTFOLIO Property Under construction Completed Start-up Under construction Completed Start-up Under construction Housing portfolio - Net at 31 Dec. 2012 2013 2013 at 31 Dec. 2013 2014 2014 at 31 Dec. 2014 Construction - number of homes Norway 906 -500 343 749 -508 158 399 Sweden 371 -135 48