Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (March 2015)
45 slides from Veidekke Asa's investor presentation, Mar 9, 2015
Slide 1: Economic Activity Report
ECONOMIC ACTIVITY REPORT Skøyen, 9 March Rolf Albriktsen Kristoffer Eide Hoen
Slide 2: How did we do....?
HOW DID WE DO....? Our forecast for 2014 Actual figures for 2014 Norway Construction and -1% -1.5% * civil engineering market House prices 3% 8.6% Residential building 26 000 27 000 Sweden Construction and 5% 12% civil engineering market 8% 9% House prices (Stockholm) Residential building 34 000 38
Slide 3: Highlights
HIGHLIGHTS Norway: Lower GDP growth • Lower activity in the oil sector will have repercussions • Civil engineering operations are driving investments in construction and civil engineering Sweden: The Swedish economy continues to perform well • Growth across the board in the construction and civil en
Slide 4: The economy in general
Photo: Arbyreed/Creative Commons THE ECONOMY IN GENERAL
Slide 5: International economies
INTERNATIONAL ECONOMIES GDP GROWTH 2014–2016 HIGHLIGHTS 2014 2015 2016 Continued economic recovery globally • Moderate improvement in our export markets Euro zone 0.8 1.2 1.4 Commodity prices have fallen, especially for oil Germany 1.5 1.3 1.5 • With both positive and negative effects on growth in S
Slide 6: Slower growth in the Norwegian economy
SLOWER GROWTH IN THE NORWEGIAN ECONOMY GROWTH FORECASTS FOR NORWAY HIGHLIGHTS Annual average (%) 2012–2014 2015–2016* Uncertainty regarding the effect of reduced oil GDP growth for mainland activity on the Norwegian economy 2.9 1.6 Norway • Negative forces: Growth in employment 1.5 0.2 • Lower deman
Slide 7: Continuing growth
CONTINUING GROWTH GROWTH FORECASTS FOR SWEDEN HIGHLIGHTS Annual average (%) 2012–2014 2015–2016* Increase in GDP growth towards 2016 • Further boosted by the export sector GDP growth 0.9 2.7 Positive development for households Employment growth 1.1 1.2 • The employment market will develop positively
Slide 8: Growth from low level
GROWTH FROM LOW LEVEL GROWTH FORECASTS FOR DENMARK HIGHLIGHTS Annual average (%) 2012–2014 2015–2016* Growth at long last ... (?) • Expect ~ 2 per cent GDP growth in 2016 GDP growth -0.1 1.8 • Interest rates will remain low Employment growth 0.1 0.5 Positive signals in the Copenhagen region • Growth
Slide 9: Norwegian construction and civil engineering market: new growth with regional differences
NORWEGIAN CONSTRUCTION AND CIVIL ENGINEERING MARKET: NEW GROWTH WITH REGIONAL DIFFERENCES
Slide 10: Stable production
STABLE PRODUCTION PRODUCTION INDEX FOR CONTRACTORS HIGHLIGHTS Rising trend in production among contractors • Matches our investment estimates Civil engineering: decline in production in the last half year • Major transport projects play a key role Building construction: Residential and commercial bu
Slide 11: New residential and civil engineering projects
NEW RESIDENTIAL AND CIVIL ENGINEERING PROJECTS CONTINUED NEW INFLOW OF NEW ORDERS 11
Slide 12: The residential market: house prices rose more quickly than expected
THE RESIDENTIAL MARKET: HOUSE PRICES ROSE MORE QUICKLY THAN EXPECTED HOUSE PRICES HIGHLIGHTS Prices of resale homes rose 8.6 per cent in 2014 • Low interest rates, low unemployment and good income growth • Growth has continued into 2015 • High turnover rate Prices up 5 per cent in 2015 and 3 per cen
Slide 13: Weaker market in Rogaland
WEAKER MARKET IN ROGALAND DECLINING DEMAND FOR COMMERCIAL BUILDINGS IN ROGALAND 13
Slide 14: Residential market: regional differences
RESIDENTIAL MARKET: REGIONAL DIFFERENCES HOUSE PRICES AND TRENDS HIGHLIGHTS Price level January Change Jan. 14 to The metropolitan regions continue to have Apartments 2015 NOK per m2 Jan. 15 rapidly rising prices The Stavanger area is pulling the figures Oslo 53 360 10.3% down Bergen 39 923 10.3% Ce
Slide 15: The residential market: housing starts
THE RESIDENTIAL MARKET: HOUSING STARTS REGISTERED RESIDENTIAL BUILDING PERMITS HIGHLIGHTS Over 27,000 residential building permits in 2014 • Good sales of new homes in autumn 2014 have boosted residential building Residential building on the same level (27,000) in 2015 too • The metropolitan regions
Slide 16: Commercial buildings: more schools
COMMERCIAL BUILDINGS: MORE SCHOOLS STABLE MARKET FOR COMMERCIAL BUILDINGS 16
Slide 17: Slower growth within commercial buildings
SLOWER GROWTH WITHIN COMMERCIAL BUILDINGS REGISTERED COMMERCIAL BUILDING PERMITS HIGHLIGHTS Drivers for the start-up of commercial buildings • Private: Employment, interest rates and income trends • Public: State and municipal finances, centralisation Stable development in commercial buildings • Unc
Slide 18: Civil engineering investments
CIVIL ENGINEERING INVESTMENTS INVESTMENTS IN CIVIL ENGINEERING (VOLUME 2011 PRICES) HIGHLIGHTS Mrd. NOK 6 per cent growth in the civil engineering market 35 this year and next year 30 +3%* • Capacity challenges in respect of planning of new 25 facilities 20 Road investments are still dominated by la
Slide 19: Examples of major civil engineering projects
CIVIL ENGINEERING INVESTMENTS EXAMPLES OF MAJOR CIVIL ENGINEERING PROJECTS EXAMPLES OF PROJECTS WORTH OVER NOK 1 BILLION 2015–16 Project County E 39 Svegatjørn – Rådal Hordaland E 134 Damåsen – Saggrenda Buskerud E 136 Ålesund – Breivika Møre og Romsdal Rv 4 Roa – Gran Oppland E18 Rugtvedt – Dørdal
Slide 20: Construction and civil engineering markets in Norway
CONSTRUCTION AND CIVIL ENGINEERING MARKETS IN NORWAY INVESTMENTS IN CONSTRUCTION AND CIVIL ENGINEERING HIGHLIGHTS (VOLUME 2011 PRICES) Continued high levels of activity in the construction Bill. NOK and civil engineering market in 2015 and 2016 120 +1%* • Growth of around 2 per cent in the total mar
Slide 21: Swedish construction and civil engineering market: 2015 got off to a good start
SWEDISH CONSTRUCTION AND CIVIL ENGINEERING MARKET: 2015 GOT OFF TO A GOOD START
Slide 22: Construction and civil engineering companies' expectations
CONSTRUCTION AND CIVIL ENGINEERING COMPANIES' EXPECTATIONS 22
Slide 23: Healthy residential market
HEALTHY RESIDENTIAL MARKET BUILDING PERMITS FOR COMMERCIAL BUILDINGS HIGHLIGHTS The market performed exceptionally well in 2014 • Housing starts were up 22 per cent • Prices continued to rise sharply in the largest cities Annual investment growth of approx. 4 per cent in 2015 and 2016 • Improvements
Slide 24: Healthy residential market
HEALTHY RESIDENTIAL MARKET HOUSE PRICES AND FORECASTS HIGHLIGHTS The market performed exceptionally well in 2014 • Housing starts were up 22 per cent • Prices continued to rise sharply in the largest cities Annual investment growth of approx. 4 per cent in 2015 and 2016 • Improvements in the employm
Slide 25: Healthy residential market
HEALTHY RESIDENTIAL MARKET UNEMPLOYMENT HIGHLIGHTS The market performed exceptionally well in 2014 • Housing starts were up 22 per cent • Prices continued to rise sharply in the largest cities Annual investment growth of approx. 4 per cent in 2015 and 2016 • Improvements in the employment market • P
Slide 26: Healthy residential market
HEALTHY RESIDENTIAL MARKET POPULATION. ANNUAL GROWTH (%) HIGHLIGHTS The market performed exceptionally well in 2014 • Housing starts were up 22 per cent • Prices continued to rise sharply in the largest cities Annual investment growth of approx. 4 per cent in 2015 and 2016 • Improvements in the empl
Slide 27: Healthy residential market
HEALTHY RESIDENTIAL MARKET THE COST OF BUYING A HOME HIGHLIGHTS The market performed exceptionally well in 2014 • Housing starts were up 22 per cent • Prices continued to rise sharply in the largest cities Annual investment growth of 4 per cent in 2015 and 2016 • Improvements in the employment marke
Slide 28: Progress for private commercial buildings
PROGRESS FOR PRIVATE COMMERCIAL BUILDINGS BUILDING PERMITS FOR PRIVATE COMMERCIAL BUILDINGS HIGHLIGHTS Market developments were mixed in 2014 • Industrial and storage went up, then declined • Positive trends in the office market • The shops segment hit a new low ... 6 per cent annual investment grow
Slide 29: Progress for private commercial buildings
PROGRESS FOR PRIVATE COMMERCIAL BUILDINGS HIGHLIGHTS Market developments were mixed in 2014 • Industrial and storage went up, then declined • Positive trends in the office market • The shops segment hit a new low ... 6 per cent annual investment growth in 2015 and 2016 • Only positive driving forces
Slide 30: Progress for private commercial buildings
PROGRESS FOR PRIVATE COMMERCIAL BUILDINGS INVESTMENT ESTIMATES FOR 2014 AND 2015 MADE THE PREVIOUS HIGHLIGHTS YEAR Forecasts made 1 year 2014 2015 Diff. % Market developments were mixed in 2014 earlier • Industrial and storage went up, then declined Industrial 5.5 bill. 5.6 bill. +0% • Positive tren
Slide 31: Public commercial buildings more moderate
PUBLIC COMMERCIAL BUILDINGS MORE MODERATE BUILDING PERMITS – PUBLIC COMMERCIAL BUILDINGS HIGHLIGHTS 2014 was another year of strong growth with ~12 per cent investment growth • 2015 got off to a flying start Market growth will slow down through 2015 • Expect a 5 per cent decline in 2016 • Tighter bu
Slide 32: The civil engineering market
THE CIVIL ENGINEERING MARKET INVESTMENTS IN CIVIL ENGINEERING (VOLUME 2011 PRICES) HIGHLIGHTS Strong market growth in 2014 with 6 per cent growth SEK bill. 30 Annual investment growth of 3 per cent in 2015 and 2016 +1%* 25 • The power sector has solid growth plans for 2015 too +5%* 20 • Weaker growt
Slide 33: Construction and civil engineering markets in Sweden – summary
CONSTRUCTION AND CIVIL ENGINEERING MARKETS IN SWEDEN – SUMMARY INVESTMENTS IN CONSTRUCTION AND CIVIL ENGINEERING HIGHLIGHTS (VOLUME 2011 PRICES) SEK bill. 140 General upturn 120 +4%* • Residential +4% 100 +6%* • Private commercial buildings +6% 80 +3%* • Civil engineering +3% 60 Weaker in public com
Slide 34: Danish construction and civil engineering market: growth, but markets are still demanding
DANISH CONSTRUCTION AND CIVIL ENGINEERING MARKET: GROWTH, BUT MARKETS ARE STILL DEMANDING
Slide 35: Denmark – growth from a low level
DENMARK – GROWTH FROM A LOW LEVEL HOUSE PRICES HIGHLIGHTS Residential: Prices continuing to rise • Trend being seen in more cities • 7 per cent annual growth in residential investments in 2015 and 2016 Private commercial buildings: 2014 was a weak year • Helped by the economic situation – employment
Slide 36: Denmark – growth from a low level
DENMARK – GROWTH FROM A LOW LEVEL HOUSE PRICES ANNUAL GROWTH (%) HIGHLIGHTS Residential: Prices continuing to rise • Trend being seen in more cities • 7 per cent annual growth in residential investments in 2015 and 2016 Private commercial buildings: 2014 was a weak year • Helped by the economic situ
Slide 37: Denmark – growth from a low level
DENMARK – GROWTH FROM A LOW LEVEL LABOUR MARKET HIGHLIGHTS Residential: Prices continuing to rise • Trend being seen in more cities • 7 per cent annual growth in residential investments in 2015 and 2016 Private commercial buildings: 2014 was a weak year • Helped by the economic situation – employmen
Slide 38: Denmark – growth from a low level
DENMARK – GROWTH FROM A LOW LEVEL HOUSING STARTS HIGHLIGHTS Residential: Prices continuing to rise • Trend being seen in more cities • 7 per cent annual growth in residential investments in 2015 and 2016 Private commercial buildings: 2014 was a weak year • Helped by the economic situation – employme
Slide 39: Denmark – growth from a low level
DENMARK – GROWTH FROM A LOW LEVEL COMMERCIAL BUILDING STARTS HIGHLIGHTS Residential: Prices continuing to rise • Trend being seen in more cities • 7 per cent annual growth in residential investments in 2015 and 2016 Private commercial buildings: 2014 was a weak year • Helped by the economic situatio
Slide 40: Construction and civil engineering markets in Denmark – summary
CONSTRUCTION AND CIVIL ENGINEERING MARKETS IN DENMARK – SUMMARY INVESTMENTS IN CONSTRUCTION AND CIVIL ENGINEERING HIGHLIGHTS (VOLUME 2011 PRICES) DKK, bill Rapid growth for new homes in 2015-2016, from a low 60 level 50 +7%* Growth for private commercial buildings, but the market 40 in coming years
Slide 41: Scandinavian construction and civil engineering market towards 2016
SCANDINAVIAN CONSTRUCTION AND CIVIL ENGINEERING MARKET TOWARDS 2016 Investments in construction and civil engineering NOK billion* 2011 prices (volume) 350 300 +4%** 250 +2%** 200 150 +4%** 100 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015f 2016f 2014e Source: Veidekk
Slide 42: Appendix
APPENDIX 42
Slide 43: Forecasts
FORECASTS Level 2013 2014 2015 2016 Growth Growth Growth Growth rate 15–16 SEK bill. Residential 114 -10% 1% 1% 1% Private 50 5% 1% 1% 4% commercial Public 25 5% 3% 3% 3% commercial Civil engineering 59 6% 6% 4% 5% Construction and civil engineering 248 -2% 2% 2% 2% – total 2013 2014 2015 2016 Numbe
Slide 44: Forecasts
FORECASTS Level 2013 2014 Growth 2015 Growth 2016 Growth Growth rate 15–16 SEK bill. Residential 100 19% 5% 3% 4% Private 76 6% 5% 7% 6% commercial Public 33 13% 5% -5% 0% commercial Civil engineering 68 7% 3% 2% 3% Construction and civil engineering 278 12% 5% 4% 4% – total 2013 2014 2015 2016 Numb
Slide 45: Forecasts
FORECASTS Level 2014 2015 2016 Growth 2013 Growth Growth Growth rate 15–16 DKK bill. Residential 35 1% 5% 10% 7% Private 17 -5% 5% 10% 7% commercial Public 15 0% -5% 0% -3% commercial Civil engineering 32 10% 0% 3% 1% Construction and civil engineering 100 4% 2% 6% 4% – total Legend: Unchanged forec