Slide 1: Presentation 4th quarter 2019
Presentation th 4 quarter 2019 11 February 2020
Slide 2: Occupational health and safety come first
Occupational health and safety come first Veidekke to reach the goal of zero serious injuries Number of serious injuries 12-month rolling; Veidekke employees, hired staff and sub-contractors 25 20 15 10 5 0 Q4 15 Q4 16 Q4 17 Q4 18 Q4 19 2 © Veidekke
Slide 3: Highlights
Highlights • Construction: restructuring costs as a result of strategic adjustments and provisions for future losses in Sweden totalling NOK 330 million • Good results in Industrial and Property development • Underlying operations are solid and the improvement measures are working • Good cash flow i
Slide 4: Revenue and earnings for the year
Revenue and earnings for the year Revenue Profit before tax NOK bill. NOK mill. 40 1 500 108 1 250 30 330 1 000 550 20 38.8 750 35.6 1 352 1 311 30.1 31.4 1 043 500 941 24.5 10 591 250 0 0 2015 2016 2017 2018 2019 2015 2016* 2017 2018** 2019*** * NOK 108 mill. in positive one-off effect from changes
Slide 5: Profit before tax per business area
Profit before tax per business area Construction Property development Industrial NOK million NOK million NOK million 900 900 900 800 800 800 81 700 700 700 330 600 600 600 500 550 500 500 400 400 400 723 300 644 629 300 300 563 549 516 200 200 388 200 306 344 219 19 100 100 100 190 206 183 117 0 0 0
Slide 6: Sustainability, climate, and social responsibility
Sustainability, climate, and social responsibility Veidekke is in the lead → → Working to reduce the climate Continuously assessing risks Leading in climate and footprint associated with climate change sustainability reporting To reduce greenhouse gas emissions from its More emphasis on how clim
Slide 7: Proposed dividend of NOK 5.0 per share
Proposed dividend of NOK 5.0 per share Dividend (NOK per share) • Proposed dividend*: NOK 5.0 (5.0) 6 • Earnings per share** (IFRS): NOK 4.6 (4.0) 5 4 • Pay-out-ratio: 109 % (125 %) 3 • Earnings per share 4.5 5.0 5.0 5.0 segment accounts: NOK 5.5 (4.0) 2 3.5 4.0 3.0 2.5 1 0 2012 2013 2014 2015 2016
Slide 8: Results
Results segments and group Terje Larsen, CFO
Slide 9: Revenue and earnings for 4th quarter
Revenue and earnings for 4th quarter 4th quarter: Revenue 4th quarter: Profit before tax NOK billion NOK million 12 500 18 400 9 300 6 10.5 10.8 200 376 411 381 8.7 8.7 330 341 7.3 3 100 16 0 0 2015 2016 2017 2018 2019 2015 2016* 2017 2018 2019** * NOK 18 mill. effect from changes to the disability
Slide 10: Profit before tax per business area for 4th quarter
Profit before tax per business area for 4th quarter Construction Property development Industrial NOK million NOK million NOK million 300 300 300 250 250 250 200 200 200 150 150 150 252 219 226 100 186 197 187 100 100 162 117 115 70 50 50 96 50 64 33 17 -3 30 0 0 0 -78 -50 -50 -50 -100 -100 -100 2015
Slide 11: Construction
Construction 4TH QUARTER 2019 REVENUE AND MARGIN NOK billion 10 5% Building constr. • Result impacted by restructuring costs of NOK 70 million 8 9.1 4% 8.6 Norway related to liquidation in northern Norway and restructuring 6 7.5 8.1 7.4 3% in Follo / Østfold 4 3.1% 2% 2.6% • Good result in Oslo 2 2.
Slide 12: Industrial
Industrial 4TH QUARTER 2019 REVENUE AND 12M MARGIN* NOK million 2 100 6% • Result for the quarter on par with the previous year 1 800 5% 1 841 and included a refund of NOK 15 million in CO2 tax 1 500 Asphalt 3.5% 4% 1 499 1 379 2.8% • Slightly lower asphalt volume, partly due to lower volume 1 200 3
Slide 13: Property development
Property development 4TH QUARTER 2019 REVENUE AND MARGIN NOK million 200 • Good result from ongoing residential production • Strong sales in ongoing projects (73 units) 150 91 • One project in Sandnes and one in Trondheim, Norway 100 39 6 with 124 units in total, were released for sale 54 50 19 73 7
Slide 14: Income statement (IFRS)
Income statement (IFRS) Amounts in NOK million 2019 2018 Revenue 36 569 33 974 Operating expenses -35 020 -33 273 Share of net income from associates and JVs -67 39 Depreciation/impairment -887 -587 Operating profit 595 153 Net financial income 2 42 Profit before tax 596 195 Income tax expense -145
Slide 15: Balance sheet – Assets
Balance sheet – Assets Amounts in NOK million 31.12.2019 1.1.2019 31.12.2018 Goodwill and other intangible assets 1 884 1 957 1 957 Deferred tax assets 8 - - Land and buildings 1 253 1 393 646 Plant and machinery 2 644 2 892 2 694 Investments in associates and joint ventures 219 1 433 1 433 Financia
Slide 16: Balance sheet – Equity and liabilities
Balance sheet – Equity and liabilities Amounts in NOK million 31.12.2019 1.1.2019 31.12.2018 Equity 3 998 3 983 3 983 Pensions and deferred tax liabilities 917 846 846 Bonds 1 600 1 600 1 600 Amounts due to credit institutions 1 507 248 248 Other non-current liabilities 1 161 1 099 414 Total non-cur
Slide 17: Cash flow statement
Cash flow statement 2019 2018 Amounts in NOK million Property Construction Development Industrial Other1) Group Group Profit after tax continued business 516 -7 183 -96 596 602 Profit after tax for business held for sale - 351 - -142 209 - Depreciation/impairment 568 6 262 57 893 594 Other working c
Slide 18: Financial position
Financial position Net interest-bearing position (NOK million) Capital spending 0 0 • Acquisitions and PP&E NOK 0.5 bill.(1.4) -606 -764 -500 • Sale of PP&E NOK 0.2 bill. (0.2) -1 470 -1 000 -2 653 Invested capital -1 500 • Property development NOK 6.9 bill. (4.7) -2 000 Solid long-term financing -2
Slide 19: Construction and Industrial
Construction and Industrial CEO Jimmy Bengtsson Veidekke is building a residential care facility with capacity for 132 occupants in Verdal. The project will be environmentally certified and ready for occupancy in December 2021.
Slide 20: The construction business
The construction business Target of 3.0–3.5% margin in 2020 maintained Revenue growth and unsatisfactory profitability The improvement work continues and is showing results Revenue and margin development, NOK billion and % • Restructuring, cost reduction, and risk management 40 8% • Hoffmann remains
Slide 21: Construction: Strategy and restructuring
Construction: Strategy and restructuring Measures to improve profitability Restructuring in line with strategy in Selectivity and adjustment of cost Reorganisation and focus on risk Building construction Norway level in Civil eng. Norway management in Sweden ● Risk reduction through project selectio
Slide 22: Increased profit and margin for Industrial
Increased profit and margin for Industrial Measures provide the desired effect Profit before tax Margin NOK million % 300 15% 200 10% 100 5% 0 0% -100 -5% -200 -10% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Road Maintenance Aggregates Asphalt Development gain Road Maintenance Asphalt Aggrega
Slide 23: External conditions impacting the asphalt industry in 2020
External conditions impacting the asphalt industry in 2020 1 Uncertainty regarding public demand • The National Budget indicates a decline for main roads • Regional reform creates uncertainty related to volume and progress 2 Bitumen deliveries and price • Dominant supplier in the Nordic region is un
Slide 24: Property development
Jørgen W. Porsmyr, Ko Property development SVP Jørgen W. Porsmyr Cederhusen in central Stockholm will be Sweden's largest residential block built in wood/CLT. Sales commenced in January
Slide 25: An important strategic change
An important strategic change Progress according to plan ● The work to split the group into two separate entities and establish the property development operation under a new ownership structure progressing according to plan ● We are actively pursuing both tracks – a stock exchange listing, or a div
Slide 26: A well-positioned land bank
A well-positioned land bank Geographical location Units in Region Land bank* production* Mälardalen Stockholm and Uppsala 6 800 116 Eastern Norway Oslo area 1 600 616 South, West and Flex Gothenburg and Skåne 3 450 641 South and West Stavanger and Bergen 1 500 57 Mid-Norway Trondheim 1 850 145 Total
Slide 27: Strong local positions in the capital regions
Strong local positions in the capital regions Selected positions in Oslo Selected positions in Stockholm 2 4 5 1 7 7 3 8 6 4 5 1 6 8 3 2 # Project District Number of units * Status # Project District Number of units * Status 1 Gartnerkvartalet Løren 211 Ongoing 1 Svea Östermalm 232 Ongoing 2 Nygaard
Slide 28: Book value and land bank
Book value and land bank Excess land bank value of NOK 1.5 billion Invested capital Extent and number of units Book value as at 31 Dec. 2019 (NOK billion) 18 550 15 200 7 200 Norway 5 000 6.9 11 350 Sweden 10 200 Including JV projects Veidekke's share Type of acquisition Land Projects JV Other Short
Slide 29: Good prospects for increased activity in Sweden
Good prospects for increased activity in Sweden Sales starts residential units, Norway Sales starts residential units, Sweden Expectation of good sales in a healthy market Expectation of increase in 2020 1 200 1 200 1 000 1 000 800 800 600 600 400 400 200 200 - - 2014 2015 2016 2017 2018 2019 2020 2
Slide 30: Summary
Summary • The work to split the group into two separate entities is progressing according to plan • Improvement measures and restructuring • Targeting a 3.0–3.5 % pre-tax profit margin in 2020 for the Construction and Industrial operations • Refinancing ensures a solid financial platform with substa
Slide 31: Appendix
Appendix 31 © Veidekke
Slide 32: Business areas 4th quarter
Business areas 4th quarter 4th quarter 2019 4th quarter 2018 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building construction Norway 4 146 34 0.8 % 3 603 109 3.0 % Civil engineering Norway 1 105 -17 -1.6 % 1 394 -25 -1.8 % Construction Sweden 3 215 -165 -5.1 % , 3 086 68 2.2
Slide 33: Business areas full year
Business areas full year 2019 2018 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Building construction Norway 14 356 387 2.7 % 13 070 443 3.4 % Civil engineering Norway 4 641 -16 -0.3 % 4 427 -584 -13.2 % Construction Sweden 10 803 -25 -0.2 % 9 855 214 2.2 % Construction Denmark
Slide 34: Order book Construction
Order book Construction Project portfolio above NOK 34 billion Order book* Orders in revenue next 12 months NOK billion NOK billion 36 Civil Engineering Building Construction 36 Norway Sweden Denmark 32 32 28 28 24 24 22,2 22,0 20 20 16 16 12 12 8 8 4 4 0 0 Q4 16 Q2 17 Q4 17 Q2 18 Q4 18 Q2 19 Q4 19
Slide 35: Order intake and segment distribution Construction
Ordre intake and segment distribution Construction A growing and diversified portfolio Revenue and order intake Order book per product NOK billion - “Book-to-bill ratio”: 1.02 Strong focus on commercial and public buildings 36 Other 32 infrastructure 7% 28 Public Commercial 24 infrastructure buildin
Slide 36: Results and activity in Property development
Results and activity in Property development Good value creation over time Profits and return on capital Units sold Units under construction NOK million Veidekke’s share Veidekke’s share 600 25% 1 600 3 000 1 400 500 2 500 20% 1 200 400 2 000 1 000 15% 300 800 1 500 10% 600 200 1 000 400 5% 100 500
Slide 37: 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 31.12.2019 Construction - number of units Norway 557 -343 385 599