Veidekke Asa · OSL:VEI
Veidekke Asa — Investor Presentation (September 2013)
56 slides from Veidekke Asa's investor presentation, Sep 23, 2013
Slide 1: Economic Activity Report for the Scandinavian Countries
Economic Activity Report for the Scandinavian Countries 23 September 2013
Slide 2: Agenda
Agenda ■ Global economy ■ Norway ■ Sweden ■ Denmark ■ Summary
Slide 3: Highlights
Highlights ■ At the international level – improvement in the EU and the US ■ Norway – normalisation of the market ■ Sweden – picking up momentum into 2014 ■ Denmark – on the road to improvement
Slide 4: The global economy
The global economy
Slide 5: Old economies rebounding?
Old economies rebounding? ■ Q2: better figures from the US, growth rebounding in the Eurozone ■ Weaker GDP growth in emerging economies More uncertainty in respect of China ■ For Scandinavia: Help from the export sector More optimistic households and investors Somewhat higher risk associated
Slide 6: Old economies rebounding?
Old economies rebounding? ■ Q2: better figures from the US, growth rebounding in the Eurozone GDP growth in % 2012 2013 2014 ■ Weaker GDP growth in Eurozone -0.6 -0.4 0.9 emerging economies Germany 0.7 0.5 1.7 More uncertainty in respect of China Great Britain 0.2 1.3 2.1 ■ For Scandinavia: USA 2.
Slide 7: Nearby building and construction markets
Nearby building and construction markets Production volume in building and ■ Positive signals in Q2 after long- construction at Q2 2013 term negative trend Decline stopped in the Nivå i % av Trend siste Fra 1. til 2. Eurozone 2007/2008 4 kv. i % kv. i % s.j. Eurosonen 78 -4 0 Tyskland 105 -1 4 ■ G
Slide 8: The situation in Norway
The situation in Norway
Slide 9: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth slowing down Continued high capacity utilisation ■ Households stand strong Somewhat slower growth in household demand ■ New impetus Growth among trading partners Weaker currency strengthens competitiveness
Slide 10: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth slowing down Continued high capacity utilisation ■ Households stand strong Somewhat slower growth in household demand ■ New impetus Growth among trading partners Weaker currency strengthens (Red line shows our prognoses) competitiveness
Slide 11: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth slowing down Continued high capacity utilisation ■ Households stand strong Somewhat slower growth in household demand ■ New impetus Growth among trading partners Weaker currency strengthens competitiveness (Red line shows our prognoses)
Slide 12: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth diminishing Continued high capacity utilisation ■ Households stand strong Somewhat slower growth in households' demand ■ New impetus Growth among trading partners Weaker currency strengthens competitiveness
Slide 13: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth slowing down Continued high capacity utilisation ■ Households stand strong Somewhat slower growth in household demand ■ New impetus Growth among trading partners Weaker currency strengthens competitiveness (Red line shows our prognoses)
Slide 14: Norway – normalisation of the market
Norway – normalisation of the market ■ GDP growth slowing down Some prognoses from August/September: Continued high capacity GDP Mainland in % 2012 2013 2014 utilisation Nordea 3.4 2.0 2.3 ■ Households stand strong Somewhat slower growth in Swedbank 1.8 2.0 household demand DNB 2.0 2.0 ■ New imp
Slide 15: Building and construction market in Norway
E18 Sky-Langangen Building and construction market in Norway
Slide 16: Expectations of the building and construction market 2014
Expectations of the building and construction market 2014 ■ More normal economic growth ■ Roughly 2% GDP growth in 2013 and 2014 ■ Continued high level of activity in the oil sector, but growth slowing down ■ Slight rise in unemployment ■ Households still optimistic
Slide 17: Housing market: Number of units sold
Housing market: Number of units sold ■ Three years of high housing sales ■ Trend pointing downwards thus far in 2013 ■ However, levels remain high
Slide 18: Housing market: Selling prices of housing units
Housing market: Selling prices of housing units ■ Flatter trends in housing prices thus far this year About 1% for flats 3.6% Aug./Aug. ■ 2014: More normal growth rate: Slower economic growth, continued low unemployment rate Somewhat less immigration Price growth of 4% in 2014 for high-ris
Slide 19: Housing market: Regional differences
Housing market: Regional differences Table: Housing price trend for flats in certain selected cities (source: ■ Regional differences more NEF) distinct than before August/August January/ August ■ Slower price growth in Oslo 3.9 0.7 Stavanger and Kristiansand Bergen 4.2 1.8 Trondheim 5.7 2.1 Rapid
Slide 20: Housing starts down so far this year
Housing market: Housing starts down so far this year (Red line shows our prognoses)
Slide 21: Housing starts down from a high level
Housing starts down from a high level ■ Capacity/access to land and projects ■ The ”catch-up effect” is over Not as many projects ready for start-up ■ High building costs result in lower profitability in the projects ■ The prognosis for 28 000 housing starts in 2013 stands firm ■ Fewer starts, nea
Slide 22: New growth in commercial buildings
New growth in commercial buildings
Slide 23: Commercial buildings, vigorous growth in H1?
Commercial buildings, vigorous growth in H1? ■ 20% growth in starts thus far this year All sectors are contributing to the growth, but… Garages and holiday homes are lagging behind ■ Projected lower no. of starts in H2 (Red line shows our prognoses)
Slide 24: High level of activity for Construction
High level of activity for Construction ■ Overall growth of 7% in 2013, 6% in 2014 Good growth in all segments ■ Major projects dominate the market ■ Also large local markets in eastern and western Norway ■ Railway facilities on the rise ■ Energy investments up Green certificates contribute ■ El
Slide 25: The aggregate building and construction market
The aggregate building and construction market Norge: Bygg og anleggsmarkedet ■ Normalisation of the economy of Faste 2010 kr, MNOK Norway over the next two years 140 000 120 000 Bolig ■ 7% growth in building and construction investments this 100 000 year 80 000 Some 2% in 2014 Anlegg 60 000 Nærin
Slide 26: The situation in Sweden
Skälderviken, Stockholm The situation in Sweden
Slide 27: Sweden – will get worse before it gets better
Sweden – will get worse before it gets better ■ Weak growth figures in H1 But the worst is behind us ■ More demand from trading partners Germany + Great Britain + ■ Labour market surprisingly positive Promising for the consumer and housing markets
Slide 28: Sweden – will get worse before it gets better
Sweden – will get worse before it gets better ■ Weak growth figures in H1 But the worst is behind us ■ Labour market surprisingly strong Promising for the consumer and housing markets ■ More demand from trading partners Germany + (Red line shows our prognoses) Great Britain +
Slide 29: Sweden – will get worse before it gets better
Sweden – will get worse before it gets better ■ Weak growth figures in H1 But the worst is behind us ■ Labour market surprisingly strong Promising for the consumer and housing markets ■ More demand from trading partners Germany + Great Britain + (Red line shows our prognoses)
Slide 30: Sweden – will get worse before it gets better
Sweden – will get worse before it gets better ■ Weak growth figures in H1 But the worst is behind us ■ Labour market surprisingly strong Promising for the consumer and housing markets ■ More demand from trading partners Germany + (Red line shows our prognoses) Great Britain +
Slide 31: Sweden – will get worse before it gets better
Sweden – will get worse before it gets better ■ Weak growth figures in H1 Some prognoses from August/September: But the worst is behind us GDP growth in 2012 2013 2014 % ■ Labour market surprisingly calendar adjusted strong Nat. Inst. of 1.1 1.1 2.6 Promising for the consumer and Econ. Research
Slide 32: The building and construction market in Sweden
The building and construction market in Sweden
Slide 33: Prerequisites for housing market
Prerequisites for housing market ■ Swedish economy recovering GDP growth of 2.5 – 3% in 2014 ■ Labour market recovering slowly ■ Real disposable income of 2.7% in 2014 ■ Continued low interest level in 2014 ■ Households' economic situation Housing Index = 100, households have 15% before tax to ser
Slide 34: Housing market
Housing market ■ 2013: Strong growth in housing prices in Stockholm 13% July/July and 2.6% thus far this year In Gothenburg and Malmö, prices have developed in line with our prognoses ■ 2014: Continued good growth in housing prices in Stockholm (Red line shows our prognoses)
Slide 35: Housing market
Housing market Sweden: Construction Started, Residential Buildings 37500 - - 37500 35000 - - 35000 32500 - - 32500 30000 ~ 30000 * aw 4 - 27500 25000 - - 25000 22500 - - 22500 20000 -_ i i i i i i - 20000 2007 2008 2009 2010 2011 2012 2013
Slide 36: Housing construction picking up again gradually
Housing construction picking up again gradually ■ Better economic prospects Sverige: Antall igangsatte boliger 50 will contribute to new 45 growth in autumn 2013 40 Småhus 22 000 housing starts 35 Climbing to 27 000 in Blokker 30 2015 100 boliger 25 20 ■ Strongest growth in 15 Stockholm and Goth
Slide 37: Commercial buildings
Commercial buildings ■ The weak cyclical development in 2013 impacts the private sector ■ Lower investments in private- sector commercial buildings contributed to a 6% decline in overall investments in commercial buildings Investments in the renovation of commercial buildings are down significantl
Slide 38: Construction market – high level of activity
Construction market – high level of activity Sverige: Anleggsinvesteringer ■ Slight decline in the 25 000 construction market: -1% in Veier,gater 2013 20 000 Jernbane, flyplasser mm ■ 2014 growth of roughly 4% Privat infrastruktur Private construction investments 15 000 in telecom and mining contr
Slide 39: "Förbifart Stockholm"
"Förbifart Stockholm" ■ A 21-km stretch of road that will run west of Stockholm 18 km of the stretch will be in a tunnel ■ The project carries an estimated price tag of NOK 28 billion 2009 SEK 10-year construction period 80% toll-financed and 20% government-financed ■ Construction to begin in
Slide 40: "Slussen" "a world-class meeting place"
"Slussen" "a world-class meeting place" ■ Cost about SEK 8 billion ■ Scheduled for completion in 2020 ■ Demolition of the old lock in progress New bus terminal Upgrading of roads and railway tracks Parks Cultural facilities
Slide 41: The overall Building and Construction market
The overall Building and Construction market Entreprenørmarkededet i Sverige ■ Building and Construction faste 2011- kroner investments down 2% in 120 2013 100 ■ Housing investments down Boliger 2% in 2013 80 Anlegg ■ Investments in commercial Priv yrkesbygg buildings down 6%, public- Mrd SEK 60 sec
Slide 42: The situation in Denmark
Glostrup Centre The situation in Denmark
Slide 43: Denmark – on the road to recovery
Denmark – on the road to recovery ■ GDP upturn in Q2 The beginning of a recovery? ■ Households regaining confidence Stimulating growth? ■ Normalisation of the investment level = robust investment growth
Slide 44: Denmark – on the road to recovery
Denmark – on the road to recovery ■ GDP upturn in Q2 The beginning of a recovery? ■ Households regaining confidence Stimulating growth ■ Normalisation of the investment level = powerful investment growth (Red line shows our prognoses)
Slide 45: Denmark – on the road to recovery
Denmark – on the road to recovery ■ GDP upturn in Q2 The beginning of a recovery? ■ Households regaining confidence Stimulating growth ■ Normalisation of the investment level = powerful investment growth
Slide 46: Denmark – on the road to recovery
Denmark – on the road to recovery ■ GDP upturn in Q2 The beginning of a recovery? ■ Households regaining confidence Stimulating growth ■ Normalisation of the investment level = powerful investment growth (Red line shows our prognoses)
Slide 47: Denmark – on the road to recovery
Denmark – on the road to recovery Some prognoses from August/September: ■ GDP upturn in Q2 The beginning of a recovery? GDP growth in 2012 2013 2014 % ■ Households regaining Min. of Ec. -0.4 0.2 1.6 confidence Affairs Stimulating growth Danske Bank 0.1 1.4 ■ Normalisation of the investment DNB 0
Slide 48: The building and construction market in Denmark
Rabalder Park, Roskilde The building and construction market in Denmark
Slide 49: Contribution from the Danish economy
Contribution from the Danish economy ■ Growth is returning to the Danish economy ■ Labour market stable ■ Household demand on the rise ■ Enterprises' investments are expected to rise ■ Still considerable available capacity after several years of slump
Slide 50: Housing prices on the way up
Housing prices on the way up ■ Housing prices moving up Inflation of 13% in Copenhagen Q2/Q2 ■ Low building level over several years leads to little availability ■ Housing still at a low level, about 10 000 housing starts Continued low level of (Red line shows our prognoses) housing prices hampe
Slide 51: Housing construction is lagging behind!
Housing construction is lagging behind! (Red line shows our prognoses)
Slide 52: The overall building and construction market
The overall building and construction market ■ Slightly brighter prospects for Danish building and construction Level of activity still low ■ Aggregate building and construction investments up 2% in 2013 Public funding contributing to growth Private sector will take over in 2014 and 2015 ■ Hou
Slide 53: Summary
Summary ■ Better outlook at the international level ■ The building and construction market, normalisation in Norway and improvement in Sweden and Denmark ■ Brighter prospects for the building and construction market in Scandinavia in 2014 and 2015
Slide 54: Economic cycle wheel - macro overview for the next months
Economic cycle wheel - macro overview for the next 6 months. Norge Sverige Danmark
Slide 55: The next Economic Activity Report will be published on 10 March 2014
The next Economic Activity Report will be published on 10 March 2014
Slide 56: Attachment: New market figures for building and construction
Attachment: New market figures for building and construction ■ Background: Statistics Norway’s breakdown of building and construction figures is more limited than before That makes it difficult to estimate the available construction market ■ New market figures show the building and construction ma