Veidekke Asa

Good morning, or good afternoon, as we say in our industry today, to the introduction of Veidekke's first quarter in 2024. It is good to see so many of you here at the auditorium in Sköjen, and welcome to you as well. I will, as usual, give a few comments on the results from a concern perspective and describe the order situation, before Jörgen takes the floor and goes through the details of where the business area is located. After that, I will make a few comments about the way forward for Veidekke and a summary before we open up to questions. As usual, questions can also be sent by e-mail to ir1veidekke.no. But first, a few words about HMS Veidekke. As we are equal with the financial performance, For the responsibility that everyone who works on our projects and facilities should come home safely every day, it lies deeply with everyone who works on the roadside. And a high level of safety at our workplaces must be re-established every day to avoid injuries. And that does not only include roadside employees, but everyone else who is with us at workplaces and performs the task together with us. This requires hard focus and discipline to succeed, and I am proud of the performance of Veidekke, where you see the reduction in the number of serious injuries over a several-year period in the graph to the left. The number of serious injuries over a 12-month period has remained stable low, and in 2021 we even managed to achieve zero vision. But then suddenly a serious injury occurs, where it affected Form 1 for life, and in Q1 it happened to us again. där en av våra anställda vid ett asfaltsverk blev allvarligt skadad i samband med ett servicearbete. En sån här händelse kickar igång omfattande processer i Veidekke, där vi följer noggranna protokoll för granskning av vad som skedde, och att vi kan lära oss vad liknande saker inte kan hända framöver. Det är vårt sätt att leva nollvisionen som vi redan har visat är möjlig. Sjukfrånvaron ni ser till höger, den är fortfarande högre än önskvärt, även om den är ned från årsskiftet. So over to the financial performance. There has been high activity during the first three months of the year. The turnover was 9.5 billion, which is on a level with 2023. And we see a clear improvement in results and margins, and we are satisfied with that on the way to goal-setting ambitions. But there are still weak results in parts of the business, and we are working on improving that. And even with the high activity in the quarter, we maintain a high order reserve and that gives good visibility for the quarter ahead. And on to the main numbers. A large part of Edeka's business is in normal low season in the first quarter and it is visible in the results. The turnover was 9.5 billion and is on the same level as the year before. The activity in construction goes down compared to the year before, mainly in Norway, but it is caused by an increase in infrastructure also there in the Norwegian unit. The rest of the businesses are in a rough draw on the level of the year before in activity. The result in the quarter was 25 million SEK, a clear improvement from last year when we resulted in a loss as a result of a comparison in an older Twister case. But also adjusted to that, lower winter costs contribute to infrastructure in Norway and increased project profitability in ByggNorge to increase the underlying result compared to last year. ByggSverige also contributes to the improvement as a consequence of that we in the first quarter last year had a significant drop after a decline in a housing project in Stockholm. The order entry in the first quarter was 10.2 billion, and the goal book-to-bill, which we see in the graph to the left, indicates the development in the activity level. The B-value is now at 0.98, and thus indicates a continued flattening of Veidekke's revenue in the future. The order reserve has increased by 2% since the change of year and decreased by 4% compared to the first quarter last year. And in today's market situation, we are satisfied with both the order entry and the level of the order reserve. But there are clear differences between different geographical markets. In the big cities, access to new projects is relatively good, even if the competition is high, while there is a significant decline in activity in the smaller cities around Norway. In the construction market, there are still many projects to work with, and here it is both about choosing the right project and being able to win the projects we have chosen at the right conditions. For us, it is completely fundamental to prioritize the projects we have the conditions to succeed with, which firstly means that we have the right team for the job, and secondly, to be able to understand and handle the risk that lies with us in the contract. The order entry in the quarter is dominated by private business buildings. This shows that even with high interest rates and high building prices, there is investment will and investment ability among customers in the segment. In several of the projects we have won, we have managed to find solutions together with customers that provide conditions for implementation even in today's market. In this quarter, Sweden has received the largest share of private apartment buildings, not least in B.R.A. in Gothenburg. And in Denmark, Hoffman has received a larger office project in central Copenhagen, which we have worked with for a long time. While the apartment buildings in the Norwegian businesses are divided into several small and medium-sized projects in different geographies. There has also been good access to new housing projects in Norway, where the largest projects have come in Oslo and Stavanger. And within infrastructure in Norway, we have, among other things, had foundation projects in the specialized construction business. And we have been assigned a new road maintenance contract in the quarter. In Sweden, we have had a new road project in southern Sweden, E20 Hindersberg-Muggebo. While the order entry, as you can see, within water and drainage, consists of increased scope in existing contracts. So all in all, a good start to the quarter with solid projects that will contribute to the income for Veidekke in the coming years. And that was it about the main projects in the quarter, so I give the floor to you, Jörgen, who will talk about the activities.

Thank you very much and a nice hello to everyone. The quarter is a turnover of 9.5 billion kroner, the same as in the first quarter last year. You see some decline in all three of our building units, and you see that our infrastructure units compensate for that. So we end up with 9.5 billion kroner versus 9.5 billion kroner. The result was 25 million kroner. It was minus 37 million kroner in the first quarter last year, if we remove the E39 effect. It is the first time in a very long time that Veidekke has had a positive result in the first quarter from operational operation. So it is a small milestone worth noting. As a result, the improvement from last year comes partly in ByggNorge, partly in InfraNorge and partly in ByggSverige. They are the main drivers. Each with its story, its setting and its details for that change, and I will come back to that in a moment. Our second segment is at minus 43 million kroner per quarter. It is somewhat lower, i.e. higher costs, than what we had in the previous quarters. And the reason for this lies in our central financial administration. Slightly increased interest rates in the first quarter, and thus a slightly lower discount on our obligation portfolio, our placement. than what is expected and normal. The construction business in Norway has a turnover in the quarter of 3.8 billion kroner. It was 4 in the first quarter last year. The decline is thus 5.5%. Despite a decline, the summary is that there is wide and high activity in the business. But what has happened now is what we said was going to happen. In 2023, we had a strong growth quarter by quarter throughout the year in this business. We said it would flatten out in 2024, and it has done so. The result was a clear progress, both in the amount of kroner and margin. 150 million kroner was the result, 4% margin. What lies behind this progress is solid project results and good capacity utilization in the company. Order entry. We have already received a teaser from Jimmy. 14.2 billion kroner is our order reserve. It was 14.8 billion kroner a quarter ago. You can see that in the last three quarters it has been quite stable. Order entry in all types of segments, both in commercial buildings and on the public side. And you can see from the graph down to the left that the turnover is still higher than the annual income, but you can also see that the gap between the two curves is getting closer. Throughout 2024, the guidance has been that our activity will stabilize and go down somewhat throughout the year. And we are working on setting up a nice order reserve for 2025. Infrastructure in Norway, a turnover of 1.8 billion NOK. It was 1.4 billion NOK in the same quarter as last year. It is a fairly strong increase in percentage, 25%. But it is also the case that there is low season in large parts of this business, so relatively small changes in individual units give large percentage results. But the summary from the inside is that the activity is something as we said it would be. The result is 169 million kroner in minus. Adjusted for the effect of E39 last year, it was a comparable result of minus 193. That is a clear result. You see that the design part of this, i.e. the large project design, operation and balance, and specialized design efficiency, gets a result of 43 against 51 last year. That is, seen with my glasses, about the same level. fine margins, both on large project facilities and in operation and maintenance. Then there is the asphalt side, which through the first quarter actually only has costs, waiting for the season to start. And there we managed 212 million kroner in minus this year, and it was 241 in minus last year. So we have gone through the winter period in the way we saw fit. The Easter came earlier this year. It was at the end of March. As a consequence, the asphalt season started earlier this year than it did when the Easter came later. So we are already one month behind. The basis for this year's production season selection is the offers for state and county roads, where the offer rounds are almost over. The volume this year is a little lower than last year. Our share is below 40, so it is a bit where it should be with our eyes. Apart from that, we have received some larger new building contracts on the way, which also affects the volume of the year. So now we are in the start block. Now it is time to take the next stage on the asphalt this year, which is the production season. The order reserve is 8.6 billion kroner. It was 8.9 for a quarter of a year ago. The order entrance in the quarter, first and foremost on the operating and maintenance side. On large project facilities, no new projects in the portfolio in Q1. But we are on our way into a very exciting period, with the declaration of several large projects, which we are in the final phase of, with different authors. We are also almost finished with phase 1, the collaboration phase, on Ring 1 here in Byen. And those who drive electric cars have found out that That's what the project looks like now, because we have started to adapt to the fact that it will start after the summer. So an exciting time ahead of us at Stort Prosjekt Andik. Byggvirksomheten i Sverige, en omsetning i kvartalet på 2,1 milliarder kroner, 2,2 var det i fjor. Det er jo litt same same, men i lokalvaluta er det ned 9%. En tydelig todeling fortsatt i den virksomheten. På aktivitetssiden er det viktig å påpegge at virksomheten vår i Gøteborg på næringsbygg, BRA, fortsatt høy aktivitet, men nedgang sammenhållt med i fjor. If we look at the other units, it is interesting to see that activity is increasing, for example in Malmø and Lund, in southern Sweden, in business buildings. The result is 47 million kroner. It was 10 million kroner in the first quarter last year. Still strong margins from Gothenburg. The result is stabilized in other units. Some differences, some units stronger than others. Nice to see that we can actually perform well on several projects there. Then there is the annual reserve, on the big side in Sweden in the end. Jimmy, you mentioned the annual income on commercial food, as it is called, and we see in the table here that the annual reserve is 6.8 billion, now it was 6.6 for a quarter of a year ago, so it has turned up a little. And then it is too early to see, after the development we have behind us, if it is a trend shift or what it is. But it is at least a little up in the quarter. If we look at the turnover through the year this year, we are still guiding that we will have some declines here. Infrastructure in Sweden, low season also here in the first quarter, both in industrial business, asphalt mass reception, and also in the business we have in northern Sweden, which is essential. 1.2 billion in top line, 1.2 billion was also there last year. The result as a result of the season. Minus 13 million this year. Minus 8 was last year. It is also the same level. On the business where there is more going on, where there is season, we can report stable and good income on the school project on the investment side. Order reserve up in the quarter. It is now 7.8 billion. zero, sky-blue, goods for the quarter side. And then you see that, if you go backwards, it has increased in yield and yield. You mentioned a value project, Jimmy, that has come to the portfolio in this quarter. Or are there increases in ongoing projects, especially on the water side in Stockholm, that pull the oil reserve up? So here the guiding is very clear, increased activity through year is to be expected. The Danish business at the end, about 800 million kroner in activity, 8% down in local currency from last year, but significantly greater activity through the first quarter than what we had seen for us, both as a result of great activity in ongoing projects, but also that we have a number of smaller, medium-sized projects in the order book. So we have started the year with a higher activity than we had actually seen for ourselves. The result is 53 million kroner, the same level as last year, and it is a 7% margin, and it is a solid project portfolio that is the basis for that high margin. Here is also a fun fact on the order entry curve, which looks like the one on the left. It is clear that the order entry has been high. Here we expect a stabilization and we expect an activity level for the year in line with what we had last year. At the end of the day, the financial side of our balance is at 18 billion. It was 17.6 at the same quarter last year. There are completely normal changes in it. If you look closely, you will see that our customer base has increased somewhat in connection with both the change of year and the level last year. We comment specifically that one of the reasons for this is the placement of Easter in the calendar. and costs from individual larger public customers on infrastructure in Norway, where the default was, if I remember correctly, the last bank day was March 28th or something like that. So what was after that came in April. And we have received a level of 300 million kroner in April, which would normally have come in March. The money is on the account. And that is also the explanation for the cash flow in the period. We started the year with 2.8 billion net positive interest rates. We ended the quarter at 2.1 and now. Some bigger negative work capital changes than we normally have. And the explanation also for public customers in infrastructure in Norway. Then there is a guideline for this internal quarter with our exchange rate of 7.90 euros in 14 days. So that will mark the cash flow in this quarter in a nice way for the shareholders. So, Jimmy, back to you.

Thank you very much, Jörgen. Veidekke delivers solid results this quarter and it is a joy to see traces of improvement over large parts of the business. We are stuck with our plan and with a clear focus on basic activities. Systematically and step-by-step, we will continue to lift profitability and rejection through prioritized approach. Our selection strategy stands firm. It is the right project, at the right conditions and at the right price, based on the skills that each single unit has. We are not guided by ambitions, but by the team and the resources that we have available. We see that our implementation and ability to choose the right project It has given and it will continue to contribute to margin improvement in Veidekke. And for many years we have now worked to improve our ability to security control, as we call it, in the selection and implementation of projects. And based on that experience and ability we have appreciated, we see the possibility of taking on something bigger and more complex projects within infrastructure, even if we will not see Veidekke Anlägg go for the largest projects on the market. Vi är också högst medvetna om att inflation och lönsuppgör har en effekt på kostnadsbasen och därmed på våra resultat. Därför är vi upptatt av att hela tiden säkra att den rigen vi har är anpassad till den aktivitet som vi ser framför oss. Sist men icke minst, vi har ett kontinuerligt fokus på att upprätthålla och förbättra prestationer i alla enheter i koncernen. Icke minst arbetet med att snu och förbättra enheter med svaga resultat. Det är kultur i Veidekke. To sum up this morning, we deliver a quarter with a stable turnover and improvement in results. The order is stable in the quarter and contributes to good visibility in the activity in the future. And last but not least, we still have great potential for continuous improvement in profitability in Vägdäcke. With discipline and hard work. And we value the ongoing opportunity for expansion where it can strengthen and complete existing operations. So thank you for listening to us this morning, and now we will open up for questions. Jörgen, welcome. Do we have anything from the web, Mattis? No questions on the web? And no one in the room, as it looks like. Yes, it is the first quarter then, and we were probably glass clear of what we said.

Still nothing, Mathis? Then we turn the corner and do a question time with the participants in the room.

Yes, then we say thank you again and see you again in at least a quarter. Thank you.