Veidekke Asa

Välkommen till framläggelsen av Edekes resultat för tredje kvartalet i 2024. Det är hyggligt att se er alla här på Sköjen, för sista gången faktiskt. Därför att nästa gång blir på vårt nya huvudkontor på Ulven, dit vi flyttar vid årsskiftet. Varmt välkomna också till er som följer oss på webben. I will start by giving some overarching comments to the results from a concern perspective, as well as look at the order situation before Jörgen then takes us through the details in our business areas and the financial ones. Finally, I will tell you what we expect in the coming time before we finally open up for questions from the room as usual and from you who follow us on the web. It is good to send questions in writing to ir1veidekke.no during the presentation. But first of all, I would like to comment on the status and work with HMS in Veidekke. Vår bransch den är ju inneboende risikofylld och det gäller för alla de människor som har sitt dagliga värv på våra över 600 projekt och anläggningar runt om i Skandinavien. Det betyder att vi behöver skapa ett högt säkerhetstillstånd varje dag på dessa platser för att undgå olyckor och skador som gör att alla kan komma hela och friska hem från jobbet. Det här är ett arbete som kräver både fokus och systematik i det vi kallar för Veidekets HNS-kultur. We follow several KPIs and where the decisive factor is the number of serious injuries. And as you can see on the graph to the left, this is a work we have succeeded very well with during a period of several years. But one serious injury in the last 12 months is still one too much. And we are closely following the serious events that could have been an injury but did not become one. For the learning that we can draw from those events is what can make us avoid the next injury and can keep us at zero, which is our goal. Den kraftiga reduktionen av antalet allvarliga skador visar att när vi sätter mål och jobbar fokuserat och systematiskt, då når vi resultat. I grafen till höger ser ni sjukfrånvaron som över lång tid har varit och är för hög. This is a demand for us, for the industry and for the society. This theme is high on our agenda. Now we are working systematically in all the businesses together with our confidants to get these numbers down. And then our experience is that the results will also come. The third quarter has been a solid quarter in terms of results, but before we go into details, I want to highlight some elements. Omsättningen på 9,7 miljarder är en nedgång i jämförelse med ett väldigt starkt tredje kvartal i fjol. Den här nedgången är en varslad händelse i förhållande till orderingången i ByggNorge. Samtidigt har vi en solid margin i kvartalet och vi har klarat att förbättra resultatet. The order entry is robust and it is especially the private builders who pull up. And as many have probably brought with them, we have chosen to carry out a leadership shift in our Swedish construction business. The business has been through a demanding period and the need for new perspectives and new forces will be important in the coming time. The turnover in the quarter is, as I said, down compared to last year's third quarter and the decline comes in construction businesses in Norway and Sweden. In ByggNorge, which is of course our largest business, we expect that the turnover will continue to decrease in order to then stabilize during 2025. In Bygg Sverige we have had a steady decline in turnover over time, first and foremost in the units that have been most affected by a weak housing market. In that market, we see few signs of improvement in the short term. But we see that for B.R.A. in Gothenburg, which mainly builds industrial buildings, both order reserves and optimism increase, and that is a clear highlight. In our infrastructure businesses, the turnover increases somewhat in the quarter. The result in the quarter was 616 million. This is an increase compared to the year before and with a lower turnover it means that the margin increases to 6.4%. It is mainly infrastructure Norway that contributes to the increase in results driven by asphalt operations where the result increases despite a decline in tonnage. Resultatet i byggverksamheterna i Norge och Sverige är ju präglat av omsättningsnedgång och har följaktligen lägre resultat än året före. Detta växer med lite tid upp av resultatökning i övriga verksamheter. The order entry in the quarter was at 7.6 billion, which is an OK level in today's market. The 12-month turnover is now at the same level as the order entry with 1.1 billion. This KPI has been just under 1 billion in the past year. The order reserve is at 41 billion, a level that has fallen in the last five quarters. And even if access to new projects is seen as better in the infrastructure market, it is construction projects in Norway and Sweden that dominate the order entry in the third quarter. And that has contributed to increased order reserves in both of those businesses. Within infrastructure, the order reserve remains stable in Sweden, where a new tunnel in Gothenburg for the Trafikverket constitutes a large part of the order entry in the quarter. In Norway, no new contracts were introduced, but after the end of the quarter, we have been granted a contract for Fornebybanan, where we will build the new T-Bahn stations on Lysaker and Väckerö. We have since earlier two ongoing projects for Fornebybanan, and we are very happy that this contract has also landed as a continuation of the good cooperation with the customer. This picture shows how the order entry in the quarter is divided into the different segments in Norway, Denmark and Sweden. And as I mentioned, the order entry mainly comes from buildings where there are private customers for the majority. Housing projects are still a large part of the order entry and in line with previous quarters, these will come in Norway and in particular in Oslo. Trots ett lågt nybolig salg och få igångsättelse så har VDK klarat att upprätthålla orderreserven i nominella kronor inom detta segmentet. Det vittnar om den solida position vi har som boligbygger i Osloområdet och vår pipeline för ytterligare boligprojekt, den är god. Privata näringsbygg utgör som ni ser den största delen av orderingången i kvartalet och här har ingången varit störst i Sverige. Närmare bestämt i Göteborg där vårt dotter-sällskap BRA har bland annat ingått kontrakt på 690 miljoner för byggning av ett innovationscenter för Vektura och Next Step Group i samarbete med Volvo Cars och Göteborgs stad. On the north side, a business project has also come in. Among other things, we are going to build an office building in Bergen for only units, where Veidekke becomes one of the shareholders. This shows that even if the construction market is still challenging and has been for a long time, there are customers with investment capacity who also get their investment cases together, their business cases, and who choose to cooperate with Veidekke. And we are both happy and proud of that. In summary, this is another quarter with good order entry of projects that will contribute to strengthened customer relations and results for Veidekke. That was the main topic of the quarter, and then I hand over the floor to you, Jørgen. Welcome.

Thank you for that, and on behalf of all good colleagues who have been involved for quite a long time already, it is good form today. I will take you into the segments and details, starting with the overview picture. On the turnover side, Jimi has commented on a 7% lower turnover this quarter compared to Q3 last year, and you can see here in numbers that there is a decline of nearly 400 million in ByggNorge and ByggSverige, which gives that. On the results side, the details are the most important and most exciting. On this picture, I want to highlight two things. One is that we, with a lower turnover, manage to increase the margin- and end up at 6.4% in the quarter. So we are struggling to work with the margin, and we can also increase it this quarter. The second comment on the picture is the second segment. You see a result of minus 22 million. We normally guide that it should be minus 35 in the quarter. And when we are better or lower than that in cost, it is the effect of our central financial administration that gives that. The cost contribution at the company level is otherwise as planned. If we look at ByggNorge, a turnover in the quarter of 3.2 billion kroner is 13 percent lower than the corresponding quarter last year. This is a clear decline, and a decline that follows the the order reserve development we have had in the last few years, and which we have commented on in this trip. The rule of thumb is that it normally takes four to six quarters from the order reserve curve, up or down, until the turnover follows after the response. What is special about this quarter is that we have a decline that is quite wide across the company. As a result of the profile in the annual reserve, it is correct to point out, hopefully enough, that we naturally expect a decline in the top line, in conjunction with the corresponding quarter last year, also in Q4. That was when our activity was at its highest. The result in the quarter was 129 million kroner. It was 165 million kroner in the same quarter last year, so that is a clear decline. If we look at the result generation, there are two conditions worth commenting on, and which seem to be in almost every direction. One is our project portfolio. The magic in it, and it is good, and as we also comment, it is a higher magic in this quarter in what we generate results than we had in the corresponding quarter last year. On the other hand, when we have lower turnover and lower activity, we are challenged by capacity costs. Both in units that have a lot of fixed costs and on the joint cost side. So these are two forces that we see pulling the result each way or affecting each way. And when that is said, with a downturn in turnover in the quarter, we experience it as a good performance to be able to deliver 4% enough once in the three previous years, or as we have done this year. The order reserve, the nuances there, 14.9 billion was it at the beginning of Q3. It was 14.2 when we took the summer vacation, so you see a clear increase in this quarter, which we have already commented on. And then you see that we have been through, as the stacks show here, we started the year at 14.8, went down to 14.2, and is now up to 14.9, so there is at least a kind of curvature in that. and book-to-bill for the year ahead. Infrastructure in Norway, a turnover in the quarter of 2.8 billion kroner. It is the same as in the corresponding quarter last year. But this is also a business that we report on in two lines. Partly construction companies, large projects, operation and maintenance, and other construction companies, and partly Asfalt-POK. And when we separate that, there are two exciting trends on the revenue side. The retail business also increases its turnover this quarter, 10% up compared to Q3 last year. The asphalt business is the opposite. There are lower volumes in the market for us this year, and the turnover, accordingly, is down 12%. The result is clearly increasing, up to 310 million kroner per quarter. My comments here are linked to the distribution of facilities and asphalt geomaterials. The site side, 980 million kroner in results this year, Q3, 63 in last year. An increase that can be added broadly to the units in that part. Asphalt with 12% lower turnover, it is very nice to see that the result from that unit ends at 232 million kroner, and it was then 221 last year. So clearly lower activity, clearly, or some higher result. This is a consequence partly of good purchasing power in pricing and coverage contribution generation, but also in the product mix we have, where we have had a number of single-seater, slightly larger projects for the asphalting of airports, among other things, that contribute positively. And the reserves within Norway. It will be very digital, because there are large contracts that when they arrive, they clearly withdraw, and when they are not there, it will be the opposite. In this quarter, the exit, 9.1 billion kroner in the reserve, down from 10.2 in the previous quarter. And then we know, as we have already commented, last week, or on Monday maybe, we signed on Lysak in Vekkerø, which then became a large contract that affects the curve in this quarter. Buildings in Sweden, 1.6 billion kroner in revenue. In local currency, there is a decline of 25% in the same quarter as last year, and that is quite significant. This also follows the profile in the year's reserve, as it has been backwards. An important feature is that we have a decline in the earlier housing units, which are under the Veidekke blend. But we also have a decline in revenue at Næringsbygd in BrA in Gothenburg. On the results side, 36 million kroner was that, Magin, and it was a little higher last year, 41. Magin is 2.2 percent, and that is the rate we have been on this year. A clear division of two, good results in Gothenburg. Rightly so down as a result of the activity decline, but good Magin. And then we have an overall business where we are able to stabilize ourselves as it is. And then with this reduction in turnover, it is clear that we adjust capacity, make the necessary changes and try to define the way further. And the leadership shift that we had in that unit is an example of that. The order reserve, at the end. Unlike many quarters, we see an increase in the order reserve in the quarter. It ends at 6.2 billion, up from the previous quarter of 5.9 billion. It is good to see that in our well-performing unit in Gothenburg, we have a clear and significant order entry, which Jimmy also commented on. In summary, with this profile in the year reserve, we will naturally, and perhaps also willingly, go down in revenue next year for the segment as a whole. Inflation, a revenue of 1.5 billion kroner. In Norwegian kroner a little higher than last year, but in Swedish kroner it is flat. And a fairly stable, cool revenue is what we are looking at for that unit. The result was 76 million NOK, up from last year's 62 million NOK, and a margin of a little over 5%. Evenly balanced performance in the unit, in the portfolio in general, although we also see both positive and negative elements, which always are, but a good performance. And an oil reserve that ends up at 7.8 billion kroner per quarter. It is by far up to 9% this year. And that, together with the purchase of Euromining, which we closed, implemented, and which is now part of the value of the month shift, i.e. November 1st, will ensure good activity also next year. Denmark, at the end of the segments, a turnover of around 700 million kroner. It was the same as last year. Good results, as we usually do. Good project profitability, as we usually do. And a small increase in margin, 10.8%. That was what we ended up with, and we were at 9.6% margin in the same quarter as last year. And the reserve is down this quarter, but you can see that there have been quite large shifts throughout the year. So our assessment of it is that we are now at a natural level for the business, and it also provides a fairly stable activity in the future. So that was the segment of the details. either up in the helicopter or into the balance. It depends on how you angle it. Our balance normally has just smaller seasonal swings. 17.7 billion was what it ended at the end of the quarter, and a year ago it was slightly higher. We must be aware that we still manage to press the total size down, but these are only normal seasonal changes. The most important figure in the balance sheet is our positive net profit-bearing position. The quarter ended at 2.1 billion. It was 1 blank in the previous quarter. So we have an increase of 1.1 billion kroner this quarter. Normally, we always increase our liquidity after the summer. This has to do with the seasonal swings, especially in the industry. But it is worth commenting that the liquidity entry in Q3 this year is significantly better than it was in Q3 last year. The details are commented here. positive input of reduction in labor capital, as it is called precisely, which contributes to the cash flow, especially the industrial business, but also other Norwegian entities. And on a yearly basis, there is actually little to comment on. We are quite disciplined on the investment side, investing less than last year. We pay Our tax with joy is a little more than last year, and we also pay the exchange rate with joy. We do that every year in May. Last year it was 7,90 kroner, and that is a significant liquidity effect. We will also have positive seasonal content in Q4. Where it ends, we will see at Ulven in three months. But we have a very solid financial position. So with that, I'm done with what we have to say, and it's up to you to decide what to do next.

Thank you very much, Jørgen. Then we move on to the conclusion, and I was going to give some comments, as Jørgen said, about what we expect in the coming quarter. For several of our buildings, the market situation has been demanding for a while, but there are highlights. We expect a significantly lower turnover in ByggNorge in the fourth quarter compared to an all-time high turnover level in the fourth quarter last year. But despite a demanding market, we have had a relatively good order entry and it is good to see that it is a book to build up to just over one. It should mean that the turnover decline will slow down and then flatten out during 2025. In Sweden, the picture is more mixed. There is good order entry for private businesses, especially in our subsidiaries B&A Gothenburg and Arkona in Stockholm. But the housing market is waiting. All in all, we expect a slightly lower turnover in 2025. For Hoffman in Denmark, the picture is brighter. The order entry has been stronger than expected and there are several exciting offers out there. It is still uncertain how it will play out and possibly yield results at the activity level. The infrastructure markets have been strong in recent years and access to new projects has been good. In Norway, we would have liked to have seen a couple more projects in the order reserve during the year. The contract on the Fårnöbybanan, which came in after the end of the quarter, was postponed. In Sweden, the access to new projects is good, but the order entry in the last year came largely from an increase in existing contracts. But with a bulk bill of 1.26 and with the acquisition of Euromining in northern Sweden, the turnover will continue to increase into 2025. The Scandinavian markets have been quite demanding under 2024, but we see signs of an improvement in the market over the next one to two years. If you recognize the fax in the picture to the left, it is from our market report that we released in October. The entrepreneurial markets have been characterized by high inflation and interest rates in 2022 and 2023. But with the lightening of these macroeconomic indicators, in combination with the need for defense, energy and water waste, the market will follow. Even if it usually takes a year or two before it shows increased activity for us. But we believe in growth in 2026. That we have the ability to adapt to market development, how it will be, I mean that we have shown that only since Covid hit in 2020. Nu ser vi tendenser till bättring i marknaderna men oavsett hur det blir så är vårt fokus och våra uppgaver de samma. Vi ska vara selektiva så tillvida att bara ta på oss uppdrag där vi kan skapa värde både för kunden och för Veidekke. It means to see opportunities, offer good climate solutions and only take on risks that we can understand and handle, as well as not least be safe in that the people and the team, that we have the people and the team that can handle the implementation of often very complex projects. We call this insecurity control as a collective concept. Last but not least, we will continue to work with us now the units that have poor results, continue to improve the wide midfield in the track and maintain the high performing units. To summarize, there are three important points that I want to conclude with. 1. Even if we have a lower turnover in the quarter, as in the case of Varslat, we managed to get a better result than last year. The project portfolio is of good quality and we see a general margin improvement in large parts of Veidekke. 2. We have a good order reserve that has remained stable at 41 billion in a declining market and it is a pleasure to see that we have a strong order reserve in the Norwegian construction industry. Infrastrukturenheterna har en positiv utveckling och Fonebybanan som kommer efter kvartalsslut var viktig. 3. After a decline this year, we see signals for a more stable market in 2025 and potential growth in 2026. This is the basis for a careful but realistic optimism. With good cash flow and a strong financial position, and not least a competent and engaged organization, Weideck is strongly prepared for profitable growth in the coming years. Tack för att ni vill lyssna på oss denna morgon. Nu öppnar vi på vanligt sätt upp för spörsmål från salen och från webben.

We usually dare to talk a bit to get time to send emails to those who dare to do that. We can already sell the next quarter's presentation at Ulven. It's very stupid to meet up here. It's very funny to meet up there.

We have not planned this Jörgen, but maybe we can arrange a little tour in connection with that. It is a very nice building. It holds power on many levels over the normal one, so it is a nice example to come and see.

Simen Mortensen from DNB has two questions. The first you mention in the report on infrastructure Norway. The progress of the results is due to high activity and good profitability in portfolios of large construction projects, as well as improvement of both the results and margins in the specialized construction business. Does this mean that the margins in infrastructure Norway will remain at a good level due to portfolios of large construction projects, or was asphalt also part of the lifting margins?

Last but not least, definitely that asphalt contributes positively. When you go down in revenue and up in results, it is very pleasant. Moreover, if you take the helicopter perspective, the progress we have had in asphalt in the last few years is also very reasonable to be able to see. And it is a good effort by many that contributes to that. As for the portfolio and the generation from facilities, We are working for a good result generation, but we have a good portfolio.

There will be a good cash flow in the quarter. What does this mean for Q4, which is normally the best quarter in history?

That is completely correct. Both that it was good in the quarter and that Q4 historically is the best towards the year change. It is probably the case that A very good cash flow we had in Q3. I hope to say that the steel from what normally would have been in Q4 can be thought of. A little lower asphalt volume, for example, means a little less binding in labor capital than what has been the case before. When that is done, we will not undermine the expectations we have for good positive content in Q4.

That was it.

Då ser det ut som vi är färdiga med spörsmål. Och som sagt, då ser vi er alla väldigt gärna på Ulven om ett kvartal. Tack för den här morgonen.