Slide 1: Presentation Q4 2020
Presentation Q4 2020 12 February 2020 Jimmy Bengtsson, CEO Jørgen Wiese Porsmyr. CFO
Slide 2: Occupational health and safety
Occupational health and safety Our primary priority Number of serious injuries Sickness absence 12-month rolling, Veidekke employees, Veidekke employees hired staff and sub-contractors 25 6% 5% 20 4% 15 3% 10 2% 5 1% 0 0% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2 © Veidekke
Slide 3: A risk profile impacted by the Covid-19 pandemic
A risk profile impacted by the Covid-19 pandemic ● Limited impact on Veidekke’s fourth-quarter production ● Extraordinary infection-control measures, including travel restrictions, may affect production capacity and deliveries of goods and services ● Uncertainty about further market developments Fac
Slide 4: Highlights Q4 2020
Highlights Q4 2020 ● Revenues on a par with 2019 ● Strong profits and improved profitability ● Satisfactory quarterly order intake ● Proposed dividend of NOK 5.75/share for 2020 Veidekke will be building a new care centre at Fosslia in Stjørdal, including 76 residential units and a service building,
Slide 5: Key financial figures: Q4 revenue and profits
Key financial figures Q4 revenue and profits Q4 revenue Q4 pre-tax profit NOK billion NOK million 12 600 9 400 6 200 391 9.8 10.0 10.3 180 3 0 -83 0 2018 2019 2020 -200 2018 2019* 2020 * Project allocations and restructuring costs in the construction operation totalled 5 NOK 330 million in 2019. © V
Slide 6: Key financial figures: Full-year revenue and profits
Key financial figures Full-year revenue and profits Revenue Pre-tax profit NOK billion, continued operations NOK million, continued operations 40 1 200 35 1 000 30 800 25 20 600 36.6 38.1 1 134 34.0 15 400 10 596 200 5 189 0 0 2018 2019 2020 2018* 2019** 2020 * Impairment of the civil engineering po
Slide 7: Strong order book
Strong order book Order book Converted into revenue, next 12 months NOK billion NOK billion 40 40 36 36 32 32 28 28 24 24 20 20 16 16 12 12 8 8 4 4 0 0 Dec-18 Dec-19 Dec-20 Dec-18 Dec-19 Dec-20 Construction Norway Sweden Infrastructure Norway Denmark 7 © Veidekke The order book includes construction
Slide 8: ESG: Sustainability and climate
ESG: Sustainability and climate Solution-focused and taking responsibility Veidekke has laid Norway’s first kilometre Veidekke has signed an agreement with Veidekke was awarded top rating from CDP of asphalt made with a plant-based adhesive SEB on a credit facility with terms linked to for its clima
Slide 9: Results: Group and segments
Results Group and segments Jørgen Wiese Porsmyr, CFO Q4 2020
Slide 10: Revenue, profits and margins: Group and segments
Revenue, profits and margins Group and segments Q4 2020 Q4 2019 Amounts in NOK million Revenue Pre-tax profit Margin Revenue Pre-tax profit Margin Construction Norway 4 076 155 3.8% 4 178 34 0.8% Infrastructure Norway 2 049 82 3.6% 2 115 12 0.6% Sweden 3 525 98 2.8% 3 215 -165 -5.1% Denmark/Hoffmann
Slide 11: Construction Norway
Construction Norway Q4 2020 REVENUE AND MARGIN BY QUARTER NOK billion • Stable revenues, with local variations 5 5% 3.9% • Growth in Bergen, decline in the Trondheim region 4 3.5% 4% 4.2 4.1 • Profits and margins above last year’s levels 3 3.6 3.3% 3.6 3.4 3.8% 3% • Profit margin 3.8%, compared to 2
Slide 12: Infrastructure Norway
Infrastructure Norway Q4 2020 REVENUE AND MARGIN BY QUARTER Q4 PRE-TAX PROFIT NOK billion NOK billion • High activity, but a 3% drop in revenues 4 15% 60 9.5% 48 50 • Stable revenues for the civil engineering operation and a decline 3 10% 40 34 2 2.8 for asphalt and aggregates 2.1 2.3 2.0 5% 30 1 1.
Slide 13: Sweden
Sweden Q4 2020 REVENUE AND MARGIN BY QUARTER NOK billion • Revenues increased by 4%, measured in local currency 6 2.7% 3.0% 2.8% 4% • Higher revenues for the construction operation, 4 2% particularly in Gothenburg and Skåne 2 3.2 2.6 2.8 3.5 3.3 0% 1.1% • Stable revenues for the infrastructure opera
Slide 14: Denmark/Hoffmann
Denmark/Hoffmann Q4 2020 REVENUE AND MARGIN BY QUARTER NOK million • Revenue growth of 3% measured in local currency 1 200 11.2% 11.4% 12% • Strong quarterly profit 1 000 7.4% 10% 800 8% • Generally strong project profitability 6.2% 600 678 686 6% 653 • Order book 400 626 635 4% 5.0% • Strong quarte
Slide 15: Financial position
Financial position Balance sheet Amounts in NOK million 31 Dec. 2020 31 Dec. 2019 Fixed assets 6 452 6 535 Current assets (excluding cash, cash equivalents and financial investments) 7 330 6 281 Cash, cash equivalents and financial investments 3 759 241 Assets held for sale - 8 920 Assets 17 541 21
Slide 16: Financial position: change in net interest-bearing assets
Financial position Change in net interest-bearing assets Key points NOK million • Strong operational cash flow throughout 2020 • Net investment in current assets totalling NOK 682 million • New bank financing agreements signed • Main banking relationship with DNB (NOK 1.75 billion) • Credit facility
Slide 17: NOK 20/share: Distributing 100% of the profit per share
Distributing 100% of the profit per share Proposed dividend of NOK 5.75 per share for 2020 Dividend NOK per share 12 140% NOK 20/share ● Proposed dividend*: NOK 5.75 (2.5) 120% 10 100% 8 ● Profit per share**: NOK 5.8 (4.6) 80% 6 5.75 60% ● Dividend ratio: 100% (54%) 4 4.50 5.00 5.00 4.00 40% 3.50 3.
Slide 18: Closing comments
Closing comments Jimmy Bengtsson, CEO
Slide 19: Veidekke as a streamlined construction company
Veidekke as a streamlined construction company Our main priorities remain unchanged 1 Increase profitability ● Organisation, priorities and strategies under assessment ● The 2022 margin target of >4% is maintained 2 Selective growth in our main markets ● Commercial and residential buildings in popul
Slide 20: 2019 CMU: Targeting increased profitability
2019 CMU : Targeting increased profitability 1 Strong development in most operations Norway Sweden Denmark ● The initiated improvement projects Construction Civil eng. Industrial Construction Civil eng. Hoffmann are contributing to improved 2018 3.4% -13.2% 0.8% 1% 4% 6.6% profitability in most enti
Slide 21: Priority areas for improvement efforts
Priority areas for improvement efforts 1 Focus on profitability over growth Construction Norway Infrastructure Norway Veidekke Sweden Hoffmann ● Selective project strategy ● Profitability before growth ● Selective customer ● Restructuring strategy of operations with ● Reduce tied-up capital ● From 2
Slide 22: Balanced order situation
Balanced order situation 2 Weaker growth – reorientation towards residential and public buildings Revenue and order intake Order book by segment 12-month rolling, NOK billion Percentage 36 100 % Construction ● Stable non-residential buildings 32 80 % – public replacing private ● Increasing residenti
Slide 23: Increasing dividend capacity by reducing tied-up capital
Increasing dividend capacity by reducing tied-up capital 3 Streamlined and lightly capitalised contractor Optimisation of financial structure High dividend capacity ● As a streamlined contractor, Veidekke will reduce its tied-up ● Veidekke is prioritising capital distributions and giving its capital
Slide 24: Closing comments
Closing comments ● Robust profits and increased profitability ● Strong quarterly order intake NYTT BILDE ● Proposed dividend of NOK 5.75/share for 2020 ● Profitability initiatives are continuing Veidekke has been contracted to build the ALO office building at Sluppen in Trondheim – likely to be the
Slide 25: Vedlegg
VEDLEGG • • • 2
Slide 26: Full-year figures for business areas
Full-year figures for business areas 2020 2019 Amounts in NOK million Revenue Pre-tax profit Margin Revenue Pre-tax profit Margin Construction Norway 14 638 532 3.6% 14 464 387 2.7% Infrastructure Norway 8 847 244 2.8% 9 905 168 1.7% Sweden 12 293 303 2.5% 10 803 -25 -0.2% Denmark 2 652 200 7.5% 2 3
Slide 27: Order book as at 31 December 2020
Order book as at 31 December 2020 Amounts in NOK million Construction Norway Infrastructure Norway Sweden Denmark Total Residential units 4 735 - 3 533 125 8 393 Commercial buildings 3 577 - 3 542 1 545 8 664 Public buildings 5 027 - 4 019 693 9 739 Transportation infrastructure - 3 408 1 082 - 4 49