Veidekke Asa · OSL:VEI
Veidekke Asa — Q3 2017 Earnings Presentation
37 slides from Veidekke Asa's earnings presentation, Nov 9, 2017
Slide 1: 3rd Quarter 2017 Investor presentation
3RD QUARTER 2017 Investor presentation 9 November 2017
Slide 2: Contents
CONTENTS Highlights Results – segments and Group Status and outlook Veidekke to build Lysgården in Trondheim 2
Slide 3: High level of activity
HIGH LEVEL OF ACTIVITY + Revenue and earnings growth + High level of activity in residential construction and asphalt + Strong order intake + Lower residential sales Veidekke has added 10% more asphalt year-to-date than the best-ever 2016 3
Slide 4: Revenue and earnings – 3rd quarter
REVENUE AND EARNINGS – 3RD QUARTER REVENUE PROFIT BEFORE TAX 8,0 600 90 500 6,0 400 NOK bill. NOK mill. 4,0 7.9 300 7.4 507 523 5.6 6.0 5.9 200 358 370 390 2,0 100 - 0 Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Q3 13 Q3 14 Q3 15 Q3 16* Q3 17 * Positive one-off effect from changes to the disability pension scheme
Slide 5: Profit before tax – 3rd quarter
PROFIT BEFORE TAX – 3RD QUARTER 3RD QUARTER: CONSTRUCTION 3RD QUARTER: PROPERTY DEVELOPMENT 3RD QUARTER: INDUSTRIAL 300 300 300 250 250 250 32 4 200 11 200 200 -2 -1 -37 12 150 150 4 150 100 213 100 100 218 185 183 125 141 50 50 50 0 0 0 Q3 2016 Norway Sweden Denmark Q3 2017 Q3 2016 Norway Sweden Q3
Slide 6: Result and profit margin - Construction
RESULT AND PROFIT MARGIN - CONSTRUCTION NORWAY* SWEDEN* DENMARK (HOFFMANN)* 600 7% 600 7% 600 7% 500 6% 500 6% 500 6% 5% 5% 5% 400 400 400 NOK mill. NOK mill. NOK mill. 4% 4% 4% 300 300 300 3% 3% 3% 200 200 200 2% 2% 2% 100 1% 100 1% 100 1% 0 0% 0 0% 0 0% Profit before tax Margin (%) * 12-month roll
Slide 7: Solid order intake
SOLID ORDER INTAKE REVENUE AND ORDER INTAKE (“BOOK-TO-BILL” 1.26) ORDER INTAKE PER QUARTER, CONSTRUCTION 12 35 30 10 25 8 8.8 NOK bill. NOK bill. 20 6 15 4 10 2 5 12m Revenue 12m Order intake 0 0 Q3 14 Q3 15 Q3 16 Q3 17 Q3 14 Q3 15 Q3 16 Q3 17 7
Slide 8: Residential sales and production
RESIDENTIAL SALES AND PRODUCTION NO. OF UNITS SOLD* NO. OF UNITS UNDER CONSTRUCTION 1 600 3 000 1 400 2 500 1 200 2 000 1 000 800 1 500 600 1 000 400 500 200 - - Sweden Norway * 12-month rolling, Veidekke’s share 8
Slide 9: Results Property Development
RESULTS PROPERTY DEVELOPMENT OMSETNING PROFIT BEFORE OG MARGIN* TAX* RETURN ON CAPITAL INVESTED Norway Sweden 25% 700 600 20% 500 NOK mill. 400 15% 300 10% 200 100 5% 0 0% 2012 2013 2014 2015 2016 12m * 12-month rolling. Adjusted for positive one-off effects from changes in the pension scheme in Nor
Slide 10: High level of activity in Industrial
HIGH LEVEL OF ACTIVITY IN INDUSTRIAL PROFIT BEFORE TAX AND MARGIN* 10% HIGHER ASPHALT PRODUCTION THAN A YEAR AGO 250 6% 3,0 5% 2,5 200 4% NOK mill. 2,0 Million tonnes 150 3% 1,5 100 2% 1,0 50 1% 0,5 0 0% 2012 2013 2014 2015 2016 12m 0,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Profit before t
Slide 11: Occupational health and safety
OCCUPATIONAL HEALTH AND SAFETY SERIOUS INJURIES* # LTI RATE* SICKNESS ABSENCE 40 10 6% 5% 8 30 4% 6 20 3% 4 2% 10 2 1% 0 0 0% # Veidekke employees, hired staff and sub-contractors *12-month rolling (LTI = Number of lost-time injuries per million hours worked for Veidekke employees) 11
Slide 12: Business areas
Bjørvika, Oslo BUSINESS AREAS TERJE LARSEN, CFO
Slide 13: Business areas, 3rd quarter
BUSINESS AREAS, 3RD QUARTER 3rd quarter 2017 3rd quarter 2016 Amounts in NOK million Revenue Profit Margin Revenue Profit* Margin* Construction Norway* 3 475 109 3.1% 3 685 146 4.0% Construction Sweden 2 024 46 2.3% 1 714 35 2.0% Construction Denmark 552 31 5.6% 459 32 7.0% Total Construction* 6 052
Slide 14: Construction Norway
CONSTRUCTION NORWAY 3rd quarter YTD Revenue decrease Amounts in NOK million 2017 2016* 2017 2016* • Decrease in Civil Engineering and building construction in the Southern and Western regions of Norway Revenue 3 475 3 685 10 727 10 903 Operating profit (EBIT) 103 144 284 390 Variation in results • B
Slide 15: Construction Sweden
CONSTRUCTION SWEDEN 3rd quarter YTD Increased revenue Amounts in NOK million 2017 2016 2017 2016 • Growth in Civil Engineering Revenue 2 024 1 714 6 118 5 577 The profitability improvement continues Operating profit (EBIT) 44 35 109 73 • Result and margin improvements mainly in Civil Engineering Net
Slide 16: Construction Denmark
CONSTRUCTION DENMARK 3rd quarter YTD High revenue growth Amounts in NOK million 2017 2016 2017 2016 • Increased activity in the Copenhagen area and within technical installations Revenue 552 459 1 539 1 199 Operating profit (EBIT) 30 31 83 66 A good result • High profitability in the project portfol
Slide 17: Property Development in Norway
PROPERTY DEVELOPMENT IN NORWAY 3rd quarter YTD A good result Amounts in NOK million 2017 2016* 2017 2016* • Tax-adjusted EBT at NOK 49 mill. (NOK 48 mill.) Revenue 112 54 471 190 Lower residential sales Operating profit (EBIT) 47 32 144 112 • One new project with 39 units was released for sale Net f
Slide 18: Property Development Sweden
PROPERTY DEVELOPMENT SWEDEN 3rd quarter YTD A strong result Amounts in NOK million 2017 2016 2017 2016 Lower residential sales Revenue 572 400 2 121 1 678 • One new project with 90 units was released for sale Operating profit (EBIT) 104 92 312 233 High number of units under construction Net financia
Slide 19: Industrial
INDUSTRIAL 3rd quarter YTD Good result Amounts in NOK million 2017 2016* 2017 2016* Asphalt Revenue 1 694 1 434 3 417 3 095 • Very high level of activity Operating profit (EBIT) 225 183 138 98 • Strong result Net financial items -7 0 -19 -10 Road Maintenance Profit before tax (EBT) 218 183 119 88 •
Slide 20: Financial statements
High level of activity during the asphalt season FINANCIAL STATEMENTS IFRS
Slide 21: Income statement
INCOME STATEMENT 3rd quarter YTD Amounts in NOK million 2017 2016* 2017 2016* Revenue 7 461 7 045 21 663 20 489 Operating expenses -6 980 -6 467 -20 706 -19 515 Share of net income from associates and JVs 71 39 162 135 Depreciation/impairment -131 -119 -380 -337 Operating profit 421 500 739 771 Net
Slide 22: Balance sheet – Assets
BALANCE SHEET – ASSETS Amounts in NOK million 30.09.2017 30.09.2016 31.12.2016 Goodwill and other intangible assets 1 460 1 372 1 385 Deferred tax assets 65 65 65 Land and buildings 591 550 560 Plant and machinery 2 159 1 903 1 954 Investments in associates and joint ventures 1 278 1 260 1 363 Finan
Slide 23: Balance sheet – Equity and liabilities
BALANCE SHEET – EQUITY AND LIABILITIES Amounts in NOK million 30.09.2017 30.09.2016 31.12.2016 Equity 3 419 3 180 3 465 Pensions and deferred tax liabilities 861 825 877 Bonds - 750 750 Amounts due to credit institutions 870 994 212 Other non-current liabilities 152 138 136 Total non-current liabili
Slide 24: Statement of cash flows
STATEMENT OF CASH FLOWS YTD 2017 YTD 2016 Property Amounts in NOK million Construction Industrial Other1) Group Group Development Profit before tax 504 435 119 -321 738 801 Depreciation/impairment 233 1 137 9 380 337 Other working capital -229 -1 170 -380 241 -1 538 -580 Cash flow from operating act
Slide 25: Status and outlook
Flatås Park in Göteborg is under construction STATUS AND OUTLOOK
Slide 26: A strong Scandinavian market
A STRONG SCANDINAVIAN MARKET CONSTRUCTION AND CIVIL ENGINEERING INVESTMENTS 950 billion 500 450 +6 % -3 % 400 350 NOK bill. 300 +7 % 250 +5 % +8 % +3 % 200 150 +4 % +7 % 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Residential Commercial buildings Public buildings Civil engineering Sou
Slide 27: Residential sales in the quarter
RESIDENTIAL SALES IN THE QUARTER NO. OF UNITS SOLD* 700 High sales ratio in ongoing projects 600 500 400 Few new projects released for sale 300 200 100 Weaker markets in Oslo and - Stockholm Sweden Norway * Veidekke’s share + partner share 27
Slide 28: Sales starts since June
SALES STARTS SINCE JUNE Lilleby (x2), Trondheim Nærbyen, Trondheim Grenselunden, Ås, stage 1 June 28/54 52% June 63/112 56% June 25/27 93% Grenselunden; Ås, stage 2 Teaterkvarteret, Högdalen, stage 3 Nyegaardskvartalet, Oslo, stage 1 September 24/39 62% September 15/90 17% October 31/63 49% 28
Slide 29: Expecting fewer sales starts
EXPECTING FEWER SALES STARTS 1 600 1 500 No. of residential units, Veidekke’s share 1 370 1 400 1 220 1 150 Sales start postponed to 2018 for 1 200 some projects 1 000 800 Expecting longer sales periods 630 600 Minimum 50% pre-sale ahead of 400 construction start 200 Robust project portfolio 0 2014
Slide 30: Order backlog doubled in three years
ORDER BACKLOG DOUBLED IN THREE YEARS CONSTRUCTION ORDERS IN REVENUE NEXT ORDER BACKLOG CONSTRUCTION AND INDUSTRIAL 12 MONTHS* 32 32 Road Maintenance Denmark Sweden Norway 28 28 24 24 20 20 18.8 NOK bill. NOK bill. 17.1 16 16 12 12 8 8 4 4 - 0 Q3 14 Q3 15 Q3 16 Q3 17 Per Q3 2016 Per Q3 2017 Order bac
Slide 31: Balanced order backlog on sectors…
BALANCED ORDER BACKLOG ON SECTORS… Other Other Other infrastructure Commercial infrastructure Commercial Commercial infrastructure 12% buildings 18% 14% buildings 20% buildings 21% 17% Public infrastructure Public Public 12% infrastructure NOK Public buildings infrastructure NOK Public buildings NOK
Slide 32: … and on project size
… AND ON PROJECT SIZE 1 250 Examples of ongoing projects: Sergelshuset Horten upper secondary school Hotel at Carlsberg Byen 1 000 750 NOK mill. 500 250 Avg size NOK 95 mill. 0 1 50 100 150 200 250 300 350 400 No. of new projects last 24 months above NOK 10 million 32
Slide 33: Strengthening of our positions
STRENGHTENING OF OUR POSITIONS CONSTRUCTION PROPERTY DEVELOPMENT INDUSTRIAL Strong order backlog Good project execution Further development of good positions Take advantage of good Selective sales starts with customer- and market focus on the right project Consolidation to lift profitability positio
Slide 34: Summing up
SUMMING UP + Revenue and result growth in the quarter + Strong order intake + Strong total market, but weaker residential market E6 between Arnkvern-Moelv shall be finalised in December 2020 34
Slide 35: Appendix
APPENDIX
Slide 36: Business areas, year to date
BUSINESS AREAS, YEAR TO DATE First 9 months 2017 First 9 months 2016* Amounts in NOK million Revenue Profit Margin Revenue Profit Margin Construction Norway* 10 727 309 2.9 % 10 903 409 3.7 % Construction Sweden 6 118 109 1.8 % 5 577 70 1.3 % Construction Denmark 1 539 87 5.6 % 1 199 69 5.8 % Total
Slide 37: Housing portfolio
HOUSING PORTFOLIO Under Under Under Property Development construction Completed Start-up construction Completed Start-up construction Housing portfolio - Veidekke's share 31.12.2015 2016 2016 31.12.2016 2017 2017 30.09.2017 Construction - number of units Norway 541 -293 352 600 -135 175 640 Sweden 1