Slide 1: 4th Quarter 2015 Investor presentation
4TH QUARTER 2015 Investor presentation 11 Februar 2016 1
Slide 2: Contents
CONTENTS Highlights Results – segments and Group Status and focus areas Road Maintenance at Nordkapp 2
Slide 3: Increased activity and a good development
INCREASED ACTIVITY AND A GOOD DEVELOPMENT + A good quarter and a good year + Improved results + Historically high level of activity + Proposed dividend of NOK 4.0 per share The Winery Hotel in Solna opened in January 2016 3
Slide 4: 2015 – A good year (1/2)
2015 —A GOOD YEAR (1/2) 4 200 1000 25 _, 800 20 = 5 ye 600 ye 15 2 2 = 400 10 200 5 0 oO 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Strengthened positions through acquisitions Strong residential sales and improved land bank 2000 TORE LOKKE AS. REINERTSEN 1800 SS ENTREPRENAD AB = 1000 2 Martin
Slide 5: 2015 – A good year (2/2)
2015 -A GOOD YEAR (2/2) Progress in Sweden Solid financial position 500 s | ae 3 =5 8 | | . 2 -800 AVAILABLE CREDIT ey 5 FACILITY: 5 g 7 5 i] oy aD NOK 3.4 BILL. é # 2 -2.500 2011 2012 2013 2014 2015 2013 2014-2015 Decrease in number of injuries 450 5 300 = £ 150 Zz 2012 2013 2014 2015
Slide 6: Revenue and earnings
REVENUE AND EARNINGS REVENUE PROFIT BEFORE TAX 25 1 200 1 000 20 800 NOK mill. NOK bill. 15 125 24,5 600 113 23,9 10 20,5 21,2 967 1 043 17,9 400 776 626 567 5 200 0 0 2011 2012 2013 2014 2015 2011* 2012** 2013 2014 2015 * NOK 125 mill. is related to sales gain from Veidekke Gjenvinning in 2011 ** N
Slide 7: Profit before tax per business area
PROFIT BEFORE TAX PER BUSINESS AREA CONSTRUCTION PROPERTY DEVELOPMENT INDUSTRIAL 700 700 700 600 600 600 500 500 500 94 NOK mill. NOK mill. NOK mill. 400 400 400 300 644 300 300 549 446 200 403 200 200 301 281 280 306 125 100 100 221 100 210 190 173 158 91 18 0 0 0 20 2011 2012* 2013 2014 2015 2011
Slide 8: Changes in profit before tax
CHANGES IN PROFIT BEFORE TAX PROFIT BEFORE TAX 1 100 1 043 1 000 967 NOK mill. 900 Construction Property Development 800 2014 Norway Sweden Denmark Norway Sweden Industrial Other 2015 8
Slide 9: Historically good order intake in 2015
HISTORICALLY GOOD ORDER INTAKE IN 2015 Health-care building at Södersjukhuset, Stockholm E39 Os-Bergen Danish Centre for Particle Therapy, Aarhus Chalmers technical college, Gothenburg SEB’s offices in Solna, Stockholm Oppsal Centre, Oslo Brf Hovås Park, Gothenburg Ladebekken 1, Trondheim E134 at Ko
Slide 10: Strong order backlog
STRONG ORDER BACKLOG ORDER BACKLOG CONSTRUCTION AND INDUSTRIAL ORDERS IN REVENUE NEXT 12 MONTHS 28 28 Road Maintenance Denmark Sweden Norway 24 24 20 20 16,7 NOK bill. NOK bill. 16 16 12,3 12 12 8 8 4 4 0 0 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Per Q4 2014 Per Q4 2015 Order backlog for Industrial is present
Slide 11: We sold 1,800 residential units in 2015
WE SOLD 1 800 RESIDENTIAL UNITS IN 2015 Brf Greenroof, Gothenburg Gartnerløkka, Oslo Branddörren, Högdalen Kvartal 33, Lillestrøm Sørengstranda, Oslo Lomma Läge, Skåne Brf Äppelblom, Gothenburg Landskrona Strandbyn Konsul Lorcks Hage, Trondheim Östra Sala Backe, Uppsala Kjøita Secret Garden, Kristia
Slide 12: Considerable increase in residential sales
CONSIDERABLE INCREASE IN RESIDENTIAL SALES NO. OF UNITS SOLD* – NORWAY AND SWEDEN NO. OF UNITS UNDER CONSTRUCTION – NORWAY AND SWEDEN 2 500 2 500 2 381 2 000 1 804 2 000 1 500 1 500 1 000 1 000 500 500 0 0 Veidekke’s share Joint venture *12-month rolling 12
Slide 13: An active year within Industrial
AN ACTIVE YEAR WITHIN INDUSTRIAL Road Maintenance of the road network in the Drammen region Martin Haraldstad’s five quarries wholly owned by Veidekke New asphalt plant in We added 2.3 million tonnes of asphalt in 2015 Snow clearing at Nordkapp Asphalt added on the runway at Gardermoen Aurdal, Valdr
Slide 14: High level of activity in Industrial
HIGH LEVEL OF ACTIVITY IN INDUSTRIAL QUARTERLY REVENUE, INDUSTRIAL (NOK MILL.) ACCUMULATED ASPHALT PRODUCTION (MILLION TONNES) 1 600 2012 2013 2014 2015 3,0 2012 2013 2014 2015 1 400 2,5 1 200 2,0 1 000 800 1,5 600 1,0 400 0,5 200 0 0,0 Q1 Q2 Q3 Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 14
Slide 15: Good financial position
GOOD FINANCIAL POSITION NET INTEREST-BEARING POSITION AT YEAR-END (NOK MILL.) Capital spending 2015 274 • Acquisitions NOK 0.4 bill. • “PPP” projects NOK 0.4 bill. -274 -396 -606 Solid long-term financing • Bank facility NOK 3.6 bill. • Bond loan NOK 0.75 bill. -1 506 2011 2012 2013 2014 2015 15
Slide 16: Dividend 2015
DIVIDEND 2015 DIVIDEND AND SHARE REPURCHASE 5,0 Earnings per share*: NOK 5.7 (6.3) 4,0 NOK per share Proposed dividend: NOK 4.0 (3.5) 3,0 2,0 Dividend pay-out ratio: 70% (55%) 1,0 0,0 Ordinary dividend Share repurchase * From the Consolidated Financial Statement (IFRS). Earnings per share in the seg
Slide 17: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY INJURIES* LTI RATE** SICKNESS ABSENCE** 120 All injuries Lost-time injuries 10 6% 100 5% 8 80 4% 6 60 3% 4 40 2% 20 2 1% - 0 0% * Veidekke employees, hired staff and sub-contractors **12-month rolling (LTI = Number of lost-time injuries per million hours worked for Vei
Slide 18: Results segments and Group
Sjøparken, Stavern RESULTS SEGMENTS AND GROUP
Slide 19: Revenue and profit for 4th quarter
REVENUE AND PROFIT FOR 4TH QUARTER REVENUE PROFIT BEFORE TAX 8 400 6 300 NOK bill. NOK mill. 113 4 200 7,3 368 376 6,6 336 5,6 6,1 5,1 2 100 206 179 0 0 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 * NOK 113 mill. is related to changes in the pension scheme in Norway in 2012 19
Slide 20: Profit before tax for 4th quarter
PROFIT BEFORE TAX FOR 4TH QUARTER 4TH QUARTER: CONSTRUCTION 4TH QUARTER: PROPERTY DEVELOPMENT 4TH QUARTER: INDUSTRIAL 250 250 250 200 200 200 94 NOK mill. NOK mill. 150 150 NOK mill. 150 219 100 199 100 100 185 132 117 117 50 110 50 50 79 85 76 60 18 64 28 49 0 0 0 2 2011 2012* 2013 2014 2015 2011 2
Slide 21: Business areas, 4th quarter
BUSINESS AREAS, 4TH QUARTER 4th quarter 2015 4th quarter 2014 Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway 3 624 180 5.0% 3 196 145 4.5% Construction Sweden 2 089 7 0.3% 1 353 8 0.6% Construction Denmark 422 33 7.8% 485 46 9.5% Total Construction 6 135 219 3
Slide 22: Construction Norway
CONSTRUCTION NORWAY Increased revenue 4th quarter Full year • Increase in Building Construction with regional variations Amounts in NOK million 2015 2014 2015 2014 • Stable in Civil Engineering Revenue 3 624 3 196 12 031 11 878 Operating profit (EBIT) 176 127 454 356 Good result Net financial items
Slide 23: Construction Sweden
CONSTRUCTION SWEDEN Significant increase in revenue 4th quarter Full year • Increase in Building Construction, stable in Civil Amounts in NOK million 2015 2014 2015 2014 Engineering Revenue 2 089 1 353 6 156 4 804 Low profitability Operating profit (EBIT) 17 18 66 35 • Stable profitability in Civil
Slide 24: Construction Denmark
CONSTRUCTION DENMARK Fewer large projects led to reduced revenue 4th quarter Full year Solid result Amounts in NOK million 2015 2014 2015 2014 • Strong profitability in the project portfolio Revenue 422 485 1 608 1 820 Operating profit (EBIT) 32 43 91 98 Increased order backlog in 2015 Net financial
Slide 25: Property Development in Norway
PROPERTY DEVELOPMENT IN NORWAY High level of activity 4th quarter Full year • Good sales in Oslo and Trondheim Amounts in NOK million 2015 2014 2015 2014 • Substantial increase in number of residential units under Revenue 87 198 413 747 construction Operating profit (EBIT) 58 92 150 185 A solid quar
Slide 26: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN Strong result improvement 4th quarter Full year • Property development gain of NOK 25 mill. in the quarter Amounts in NOK million 2015 2014 2015 2014 Historically high residential sales Revenue 488 569 1 712 1 529 • Both in Stockholm and Gothenburg Operating profit (EBIT)
Slide 27: Industrial
INDUSTRIAL Stable revenue and a good result 4th quarter Full year Solid result and increased margins in Asphalt Amounts in NOK million 2015 2014 2015 2014 • Lower volumes due to fewer deliveries to new Revenue 1 109 1 114 4 033 4 127 road projects this year Operating profit (EBIT) 71 78 211 239 • Go
Slide 28: Financial statements
Reconstruction of Plushuset, office premises in Malmø FINANCIAL STATEMENTS IFRS
Slide 29: Income statement
INCOME STATEMENT 4th quarter Full year Amounts in NOK million 2015 2014 2015 2014 Revenue 7 371 6 719 24 225 24 027 Operating expenses -6 920 -6 290 -23 039 -22 861 Share of net income from associates and JVs 45 83 130 217 Depreciation/impairment -107 -91 -372 -338 Operating profit 389 421 944 1 045
Slide 30: Balance sheet – Assets
BALANCE SHEET – ASSETS Amounts in NOK million 31.12.2015 31.12.2014 Goodwill and other intangible assets 1 255 914 Deferred tax assets 65 54 Land and buildings 556 501 Plant and machinery 1 689 1 389 Investments in associates and joint ventures 1 134 1 151 Financial assets 852 408 Total non-current
Slide 31: Balance sheet – Equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 31.12.2015 31.12.2014 Equity 3 218 2 744 Pensions and deferred tax liabilities 940 744 Bonds 750 750 Amounts due to credit institutions 517 73 Other non-current liabilities 103 104 Total non-current liabilities 2 310 1 671 Debt to credit
Slide 32: Statement of cash flows
STATEMENT OF CASH FLOWS 2015 2014 Construction Property Amounts in NOK million Industrial Group Group and Other Development Profit before tax 454 306 190 950 1 055 Depreciation/impairment 217 1 154 372 338 Other working capital -567 82 -66 -551 360 1 753 Cash flow from operating activities 105 389 2
Slide 33: Status and focus areas
Veidekke to build Bragernes Kvartal in the centre of Drammen with 125 apartments and retail premises at street level STATUS AND FOCUS AREAS
Slide 34: Shanghai Composite Index, copper and oil
160 140 120 100 Shanghai Composite 80 Index Copper 60 Oil 40 Feb-15 Feb-16 34
Slide 35: Construction market forecasts
CONSTRUCTION MARKET FORECASTS 2015 2016 2017 2015 2016 2017 2015 2016 2017 NOK bill. growth growth NOK bill. growth growth NOK bill. growth growth Residential 120 0% -1% 132 10% 3% 60 5% 10% Private comm. 51 -2% -2% 86 7% 7% 19 3% 7% buildings Public comm. 33 3% 3% 36 3% 2% 18 0% 5% buildings Civil
Slide 36: Our markets - Norway
OUR MARKETS - NORWAY 100 % Residential building Residential building Eastern Norway other regions Public non-residential Public infrastructure Private non-residential buildings buildings Veidekkes aktivitetsnivå 2015 36
Slide 37: Our markets – Sweden
OUR MARKETS – SWEDEN 100 % Public non-residential buildings Residential building Gothenburg area Residential building Skåne Residential building Private non-residential buildings Stockholm area Public infrastructure Veidekke’s activity level 2015 37
Slide 38: Our markets – Denmark
OUR MARKETS– DENMARK 100 % Private non-residential buildings Public non-residential buildings Veidekke’s activity level 2015 38
Slide 39: High level of activity in transport infrastructure
HIGH LEVEL OF ACTIVITY IN Rv 83 Harstadtunnelen E6 Sjømanskirka - Ornes TRANSPORT INFRASTRUCTURE E6 Mørsvikbotn - Ballangen E10 Evenes - Gullesfjord Several large projects are due for tendering in 2016/17 Fv 17 Steinkjer - Namsos Trønder- og Meråkerbanen E6 Vindåsliene The projects amount to more th
Slide 40: Construction
CONSTRUCTION REVENUE AND MARGIN* ORDER BACKLOG (NOK BILL.) Revenue (NOK bill.) Margin % Civil Engineering Building Construction 25 5% 25 30 % 20 4% 20 15 3% 15 10 2% 10 70 % 5 1% 5 0 0% 0 2011 2012 2013 2014 2015 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 *2012 is adjusted for changes in the pension scheme 40
Slide 41: Order intake and revenue - Construction
ORDER INTAKE AND REVENUE - CONSTRUCTION 12-MONTH ROLLING REVENUE AND ORDER INTAKE (“BOOK-TO-BILL” 1.40) ORDER INTAKE PER QUARTER 30 000 12 000 10 000 25 000 8 000 NOK mill. 20 000 6 000 4 000 15 000 2 000 10 000 - Q2 11 Q4 11 Q2 12 Q4 12 Q2 13 Q4 13 Q2 14 Q4 14 Q2 15 Q4 15 Revenue Order intake 41
Slide 42: Construction Norway
CONSTRUCTION NORWAY REVENUE* (NOK MILL.) PROFIT (NOK MILL.) AND MARGIN* ORDER BACKLOG (NOK MILL.) 16 000 500 5% 16 000 Focus areas: 400 4% Project execution 12 000 12 000 300 3% Integration of 8 000 8 000 acquisitions 200 2% Regional differences in 4 000 100 1% 4 000 level of activity 0 0 0% 0 Civil
Slide 43: Construction Sweden
CONSTRUCTION SWEDEN REVENUE* (NOK MILL.) PROFIT (NOK MILL.) AND MARGIN* ORDER BACKLOG (NOK MILL.) 8 000 100 5% 8 000 Focus areas: 7 000 7 000 80 4% Project execution 6 000 6 000 5 000 5 000 60 3% Increase profitability 4 000 4 000 3 000 40 2% 3 000 2 000 2 000 20 1% 1 000 1 000 0 0 0 0% Civil Engine
Slide 44: Construction Denmark
CONSTRUCTION DENMARK REVENUE* (NOK MILL.) PROFIT (NOK MILL.) AND MARGIN* ORDER BACKLOG (NOK MILL.) 2 500 125 10% 2 500 Focus areas: 2 000 100 8% 2 000 Project execution 1 500 75 6% 1 500 Secure new larger projects 1 000 50 4% 1 000 500 25 2% 500 0 0 0% 0 Building Construction Profit Margin Building
Slide 45: Property Development
PROPERTY DEVELOPMENT PROFIT AND RETURN STRONG RESIDENTIAL SALES IN 2015 (NUMBER OF UNITS) 2 000 350 14% 300 12% 1 500 +85% 250 10% 200 8% 1 000 150 6% 100 4% 500 50 2% 0 0% 0 2011 2012 2013 2014 2015 2012 2013 2014 2015 Profit (NOK mill.) Return (%) Veidekke's share Joint venture *2012 is adjusted f
Slide 46: Property Development Norway
PROPERTY DEVELOPMENT NORWAY PROFIT AND RETURN NORWAY: NO. OF UNITS SOLD AND UNDER PRODUCTION, END OF QUARTER 200 NOK mill. 20% 1500 Sold* 1 500 Under production Focus areas: 1200 1 200 New projects 150 15% 900 900 Right products in the 100 10% market 600 600 50 5% 300 300 0 0% 0 0 Profit Return Veid
Slide 47: Residential projects in the Oslo area
RESIDENTIAL PROJECTS IN THE OSLO AREA Total 2016-2019: 2 350 150 270 360 360 310 230 450 110 130 47
Slide 48: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN PROFIT AND RETURN SWEDEN: NO. UNITS SOLD AND UNDER PRODUCTION, END OF QUARTER 200 NOK mill. 20% 1500 1 500 Focus areas: Sold* Under production 1200 1 200 Take advantage of the 150 15% good market 900 900 100 10% Collaboration with 600 600 Construction 50 5% 300 300 0 0% 0
Slide 49: Residential projects in the Stockholm area
RESIDENTIAL PROJECTS IN THE STOCKHOLM AREA 80 80 37 Total 2016-2019: 5 200 120 140 900 75 155 112 210 107 250 60 100 46 290 390 12 51 550 450 450 170 70 40 65 84 58 35 49
Slide 50: Industrial
INDUSTRIAL REVENUE AND MARGIN* REVENUE DISTRIBUTION 2015 5 6% 5% 4 29 % 4% Asphalt 3 NOK 3% 4.0 Aggregates 2 bill. 2% 59 % Maintenance 1 12 % 1% 0 0% 2011 2012 2013 2014 2015 Revenue (NOK bill.) Margin % *Adjusted for sales gain in 2011 and for changes in the pension scheme in 2012 50
Slide 51: Business areas Industrial
BUSINESS AREAS INDUSTRIAL ASPHALT AGGREGATES ROAD MAINTENANCE Focus areas: Revenue Margin Revenue Margin Revenue Margin 3 000 16% 3 000 16% 3 000 16% Asphalt 14% 14% 14% 2 500 2 500 2 500 • Price- and market strategies 12% 12% 12% • Cost efficiency 2 000 10% 2 000 10% 2 000 10% 8% 8% 8% Aggregates 1
Slide 52: Strong position in Sweden
STRONG POSITION IN SWEDEN Present in growth areas REVENUE AND PROFIT NUMBER OF UNITS SOLD (12M) THE LARGEST CONTRACTS 1 600 employees 8 300 1 200 NOK million 0 600 1 200 1 800 Large within construction and 250 1 000 2015 6 residential development 200 • Broad customer- and project 4 150 800 portfolio
Slide 53: Financial goals and results
FINANCIAL GOALS AND RESULTS BUSINESS AREA LONG TERM GOAL AVG 2012-14 2015 Construction Margin (EBT) 5,0 % 2.9 % 3.3 % Norway 3.2 % 4.1 % Sweden 1.0 % 0.9 % Denmark 5.3 % 6.0 % Industrial Margin (EBT) 6.5 % 3.8 % 4.7 % Return on Property Development 15.0 % 9.5 % 13.1 % invested capital Norway 11.9 %
Slide 54: Summing up
SUMMING UP GLOBAL AND REGIONAL IMPACTS MAIN FOCUS STEADY PROGRESS FOR VEIDEKKE Increased economic uncertainty Project execution Solid results In total, good outlook for New housing projects Financial flexibility construction and civil engineering in Scandinavia Improvements Good momentum into 2016 C
Slide 55: Veidekke's upcoming reports
VEIDEKKE’S UPCOMING REPORTS Economic outlook: 7 March 2016 1st quarter: 11 May 2016 55
Slide 56: Appendix
APPENDIX
Slide 57: Business areas
BUSINESS AREAS 2015 2014 Amounts in NOK mill. Revenues Profit Margin Revenues Profit Margin Construction Norway 12 031 493 4.1% 11 878 423 3.6% Construction Sweden 6 156 56 0.9% 4 804 19 0.4% Construction Denmark 1 608 96 6.0% 1 820 108 5.9% Total Construction 19 795 644 3.3% 18 502 549 3.0% Propert
Slide 58: Housing portfolio
HOUSING PORTFOLIO Property Under construction Completed Start-up Under construction Completed Start-up Under construction Housing portfolio - Veidekke's share at 31 Dec. 2013 2014 2014 at 31 Dec. 2014 2015 2015 at 30 Sept 2015 Construction - number of units Norway 749 -508 158 399 -248 390 541 Swede
Slide 59: Solid land bank
200 SOLID LAND BANK A total of 14 850 units 1 650 • Veidekke’s share 11 800 200 In Norway • 7 650 units 950 3 500 • Veidekke’s share 5 050 950 In Sweden • 7 200 units 3 900 • Veidekke’s share 6 750 200 2 200 • 70% options 1 100 59