Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (March 2013)
44 slides from Veidekke Asa's investor presentation, March 2013
Slide 1: Economic Activity Report for the Scandinavian Countries
Economic Activity Report for the Scandinavian Countries March 2013
Slide 2: Contents
Contents ■ Global economy ■ Norway ■ Sweden ■ Denmark ■ Summary 2
Slide 3: Global economy
Global economy
Slide 4: Global economy
Global economy ■ The optimists are on the offensive But the growth must materialise 4
Slide 5: Estimated GDP growth in 2013
Global economy Estimated GDP growth in 2013 in per cent ■ The optimists are on the offensive But the growth must materialise Source: Consensus Forecast 5
Slide 6: Production volume in the Euro zone and selected countries
Global economy Production volume in the Euro zone and selected countries ■ The optimists are on Growth Q4 2012/ Level 2012 in % of the offensive Q4 2011 2007 But the growth Euro zone -5 % 76 % must materialise Germany -2 % 112 % Poland -12 % 133 % ■ Marked fall in Finland* -3 % 111 % European buil
Slide 7: Percentage of immigrants in building and construction
Global economy Percentage of immigrants in building and construction ■ The optimists are on the offensive But the growth must 50 20 Immigrants materialise Natives Percent Immigrants ■ Marked fall in European building and construction 40 markets 15 Percent Immigrants ■ Effects of the economic situa
Slide 8: The situation in Norway
The situation in Norway
Slide 9: Norway - growth continues
Norway - growth continues ■ Weak conclusion to a strong year 9
Slide 10: Norway - growth continues
Norway - growth continues ■ Weak conclusion to a strong year ■ Positive prospects for 2013 too But dependency on oil is increasing (Red line shows our forecast) 10
Slide 11: Norway - growth continues
Norway - growth continues ■ Weak conclusion to a strong year ■ Positive prospects for 2013 too But dependency on oil is increasing 11
Slide 12: Capacity pressure not the same in all regions
Norway - growth continues Capacity pressure not the same in all regions ■ Weak conclusion to a The proportion of companies that will have problems in increasing production strong year ■ Positive prospects for 2013 too But dependency on oil is increasing ■ Regional differences in capacity situation
Slide 13: The building and construction market in Norway
The building and construction market in Norway
Slide 14: Assumptions for the building and construction market 2013
Assumptions for the building and construction market 2013 ■ Around 3 per cent GDP growth in 2013 and 2014 ■ Growth in consumption to continue in the years to come ■ Unemployment remains low, workforce need increases ■ Movement to the cities continues, biggest capacity shortage in Western Norway ■ De
Slide 15: The housing market: Sales prices of homes
The housing market: Sales prices of homes ■ 2012 was another strong year for the housing market in Norway Sales prices increased by 8.5 per cent in total Blocks 9.2 per cent ■ 2013: Prospects of further growth are in place: Economic growth, low unemployment Movement to metropolitan areas con
Slide 16: Building costs for homes
Building costs for homes ■ Building cost index held at around 3 per cent ■ The real cost growth is probably considerably above 3 per cent ■ The index does not include increased margins, wage drift, raising standards, new public requirements or productivity ■ High utilisation of capacity could push c
Slide 17: Housebuilding starts down from a high level
Housebuilding starts down from a high level ■ Strong growth in housebuilding in 2012 ■ More than 30,000 homes were started Growth of at least 10 per cent ■ Increasing building costs and capacity problems in some regions will slow housing starts ■ We predict at least 27,000 starts in 2013 ■ Continu
Slide 18: Steady development in non-residential building
Steady development in non-residential building 18
Slide 19: Steady development in non-residential building
Steady development in non-residential building ■ Growth trend to come in starts of non-residential buildings ■ Development is good in both private and public building ■ The following is forecast for 2013: Office and commercial building around 2 per cent growth Buildings for the public sector aro
Slide 20: Construction is dominated by major transport infrastructure projects
Construction is dominated by major transport infrastructure projects Examples of large projects coming onto the market in 2014-15: Projects Estimated cost (NOK mill.) RV13 Ryfast 5,500 20,000 Oslo-Ski, Follo Railway E6 Vinstra-Sjoa 1,200 E16 Filefjell, Varpe Bridge-Smedalsosen 800 E39 Svegatjørn-Råd
Slide 21: High level of activity in construction
High level of activity in construction ■ Combined growth in Norway: Construction construction of 7 per cent 30000 Good growth in all segments Industry 25000 ■ Growth in transport infrastructure steadily 20000 Transport increasing Mill NOK ■ 15000 Industrial construction 10000 dominated by oil and
Slide 22: The combined building and construction market
The combined building and construction market ■ Building and construction combined: Norway: Growth in Building and Construction Market Growth of 6 per cent in 12,0 % 2013, lessening to 3 per cent in 2014 10,0 % 8,0 % ■ High housing investment in 2013, at least 11 per 6,0 % cent, lessening to just 4,
Slide 23: The combined building and construction market
The combined building and construction market Norway: Building and Construction Marked fixed 2007 prices 60000 Construction 50000 Residential Buildings 40000 Mill kroner Private Buildings 30000 20000 Public Buildings 10000 Sources: SSB, own estimates 0 2000 2002 2004 2006 2008 2010 2012 2014 23
Slide 24: The situation in Sweden
The situation in Sweden
Slide 25: Sweden - worse before it gets better
Sweden - worse before it gets better ■ Marked by international depression 25
Slide 26: Sweden - worse before it gets better
Sweden - worse before it gets better ■ Marked by international depression ■ Rays of light and expectation of increased growth from the autumn 26
Slide 27: Sweden - worse before it gets better
Sweden - worse before it gets better ■ Marked by international depression ■ Rays of light and expectation of increased growth from the autumn (Red line shows our forecast) 27
Slide 28: Sweden - worse before it gets better
Sweden - worse before it gets better ■ Marked by international depression ■ Rays of light and expectation of increased growth from the autumn ■ Much depends on the labour market (Red line shows our forecast) 28
Slide 29: The building and construction market in Sweden
The building and construction market in Sweden
Slide 30: Assumptions for the housing market
Assumptions for the housing market ■ Households' financial situation has improved The housing affordability index was at 30 per cent at the end of 2012 Low interest rates More optimism at the start of 2013 But credit restrictions could slow demand for homes Growth in real incomes of 2 per
Slide 31: The housing market
The housing market ■ 2012: Sales prices for used homes increased more during the year than we expected: But turnover times increased The number of transactions went down Indicates future growth in the housing market ■ 2013: We expect slightly slower growth in house prices during the year: 5
Slide 32: Housebuilding gradually increasing again
Housebuilding gradually increasing again ■ Substantial fall in housebuilding during 2012 Number of Dwellings Started 1000 units Around 20,000 housing 50 starts 45 Singel Detached Fall in starts evenly 40 divided between blocks Flats in Blocks 35 and terraced houses 30 25 ■ Better economic prospe
Slide 33: Non-residential buildings
Non-residential buildings ■ The weak economic development in 2013 affects the private sector ■ Lower investment in private non-residential building contributes to 6 per cent fall in combined investment in non-residential building Investment in rebuilding of non-residential buildings considerably d
Slide 34: The construction market – high level of activity
The construction market – high level of activity ■ Small reduction in 2013 Sweden: Construction (-1 per cent) 25 000 Late start-up of projects Roads and Streets 20 000 Railwais and Airports ■ Private construction Private Infrastructures somewhat down 15 000 Electricity and Gas ■ Here too, transpor
Slide 35: The combined building and construction market
The combined building and construction market ■ Building and construction Sweden: Construction investment down 3 per cent 25 000 in 2013 Roads and Streets 20 000 Railwais and Airports ■ Housing investment down Private Infrastructures 2 per cent in 2013 15 000 Electricity and Gas ■ Investment in non-
Slide 36: The situation in Denmark
The situation in Denmark
Slide 37: Denmark – improvement in sight?
Denmark – improvement in sight? ■ Very weak 2012 37
Slide 38: Denmark – improvement in sight?
Denmark – improvement in sight? ■ Very weak 2012 ■ Improvement in sight 38
Slide 39: Denmark – improvement in sight?
Denmark – improvement in sight? Gross investment in building and construction ■ Very weak 2012 ■ Improvement in sight ■ Investment deficit gives an upside when it turns around Source: Veidekke 39
Slide 40: The building and construction market in Denmark
The building and construction market in Denmark
Slide 41: Housing market a little better
Housing market a little better ■ Housebuilding still at low level, about 10,000 building starts 40,000 vacant homes ■ House prices still low Price rise of about 4 per cent in Copenhagen New economic upturn could give positive signals to the housing market (Red line shows our forecast) 41
Slide 42: The combined building and construction market
The combined building and construction market Denmark: Building and Construction Marked fixed 2012 prices ■ Slightly brighter prospects for 35,0 Construction Danish building and 30,0 construction But level of activity still low 25,0 20,0 ■ Combined building and Mrd Dkr construction investment up 2
Slide 43: Summary
Summary ■ Macro European economy – much of the uncertainty has been cleared away Norway – growth continues Sweden – worse before it gets better Denmark – improvement in sight ■ The building and construction market Growth in all segments in Norway Some decline in the building and construc
Slide 44: Economic cycle wheel
Economic cycle wheel Norway Sweden Denmark 44