Veidekke Asa

Good morning and a warm welcome to the presentation of Vedekes results for the fourth quarter and the whole year 2024. This is the first time from Vedekes new office here at Ulven. A split building that we have built ourselves and that I will tell you a little more about later in the presentation. I also want to say welcome to those of you who follow us on the web. I will give some overarching comments on the quarterly results for the Veidekke Group, before Jörgen usually takes us through the details of where the business area and the financial. Finally, I will comment on the end of the year and with a look at the coming year. It is good to send in questions online at ir1veidekke.nu, which we then gather up for a final Q&A. But first, the status of HMS in Vejdäcke. As most of you know, we are a business and a industry that is filled with risky manual labor operations. Therefore, planning and safe work analysis is an important requirement to be able to carry them out safely and eliminate the risk of injuries. For us, this is an absolute and eternal goal to be able to drive the business damage-free with zero serious injuries as the top HMS goal. The work to get there is almost over and it is exciting to see that our persistent focus for many years has made the number of injuries at a low level. A few years ago, we also showed that the zero vision is actually achievable. At the same time, we see a strong correlation between good planning and safety that leads to low damage rates and good flow in production. So far, there are only advantages to disciplined HNS work. In recent times, the graph to the right has also gained more focus. Over time, we have seen an increase in healthcare, and we are concerned about that development. Since this fall, we have put a spotlight on this issue and there is now a systematic work in cooperation with our trust and business health services and I hope and believe that it will soon have an effect. Because at Vejdecke we put people first and we are dependent on that all our colleagues are healthy and fast, regardless of whether you work at the office or out in the project. And Vejdecke, it will be a good place to work and we need all our skilled employees to succeed in realizing our ambitions. Briefly summarized, we see the main attraction of the quarter and I will come to the details in the coming slides. The most important thing is that we have good results in 2024, we have a solid order situation, a good liquidity situation and with that as the basis, the board suggests that we share out as well as the entire result per share with 9 kronor up from 7.90 last year. The development in the capital for the quarter we see here. The turnover is somewhat down compared to the high turnover we had in the fourth quarter of 2023. The decline of 600 million comes from ByggNorge and ByggSverige, while the turnover in Denmark increases. For our infrastructure businesses, the turnover is on a level with last year. The result in the quarter was 558 million. The volume decline affects the result in kronor, while the result margin remains on the level with the fourth quarter of 2023, which is due to higher profitability in the project portfolios than a year ago. On the order side, we can see that we have good speed. The order entry in the quarter was 10.5 billion, and in the last 12 months it is something more than the turnover, which gives an overview of just over one. That's what we're happy with in today's market, and that order reserve indicates stability for the total turnover level in 2025. At the same time, we see that the volume of projects in phase 1, that is, projects that are not yet in the order reserve, is higher now than it was six months ago. We are very pleased to have maintained the order reserve within the BOLI segment for a time with very few initiatives. This order reserve consists of Norwegian projects and is a sign of Veidekke's strong position as a BOLI builder in the Norwegian big cities and not least here in Oslo. In Sweden, there are as good as no BOLI projects in production at the moment. And then we thought we would go into what type of project is in the order intake in the quarter. And there we see that it has been broad, which means that it is not a single segment that is separated. Before construction, we see good entry of contracts for both private and public customers. And of housing projects, we can mention two larger projects in Oslo. It is Trin To of Grönvallet quarter at Helsfyr for Norder. And Pålsson quarter at Forneby for Fredensborg Boli. These have a total contract value of around 700 million. And within private and professional buildings, the annual income is largely Swedish, with several projects for multiple customers in Gothenburg. We will, among other things, build a multi-use house with both parking and sports hall at Masthuggskaien for Gothenburg city parking, HIGAB and the sports and association administration. And it's a contract of 580 million. In the quarter, we have also received two larger co-operation contracts. It is Lysaker station on Fornebebanan in Oslo, or for Fornebebanan in Oslo, to a value of 1.8 billion. And in Gothenburg, we will build Lundbyleden with railways or railway bridges and roads for the Trafikverket to a value of 1 billion. So summarized, it is another quarter with good order entry of projects that gives a good basis for the activity for the roadside also in 2025. In the strategy we laid out for the period until 2025, an important pillar is that we will take an active role in the green shift. We would not only adapt to the new requirements that will come, but above all work with our customers and suppliers to set the agenda and make this a commercial opportunity for us. We have succeeded in many ways. Hästnästunnel is a project that we have talked about earlier in a job we do for Banu Nord. The project was planned with the full expansion of the tunnel tube, which is very resource-intensive with a lot of concrete. But in cooperation with Sintef, NGI and Banu Noor, we developed an injection method in several steps and were therefore able to save essential amounts of concrete and exhaust. And with the use of digital solutions, we have also been able to plan and avoid interventions of 8,000 square meters of nature. In Kristiansund, we have rebuilt our asphalt factory and installed a multi-burner that can use hydrogen as fuel. This means that we are flexible about which energy carrier we can use and CO2 emissions by using hydrogen is only a fraction compared to using normal energy carriers. Here we have created the technological opportunity to use hydrogen without putting ourselves at risk for commercial availability of hydrogen. In southern Denmark, almost on the border with Germany, we are building a holiday destination, Nordborg Resort, with 440 holiday homes and adjacent facilities. In this project, nature is as important as the climate. Restoration of nature and diversity of species is central, and the project is the first in its kind to be DGNB certified, i.e. the German certification method used in Denmark. The last project I want to talk about is this building where we are today, the new headquarters of Wedeke. Here, the object has been to show what is practically possible in relation to climate gas reduction, both during construction and during the lifetime of the building. This is a four-tiered European industrial building and the reduction in climate gas is 65% in comparison with a reference building. All concrete is SEM 3B with old crushed concrete as an addition and the extensive reuse of interiors such as glass parts and furniture and interior. And the solar cell facility, which covers large parts of the facade and roof, has delivered 100% of the building electricity in the last building year and is then calculated for 90% of the electricity demand during operation. Here we have thought about everything. And was it expensive? Yes, a solar cell facility is of course an investment, but in general we mean that the difference is marginal. These projects have been good for the customer and they have been good for Veidekke. De har gjort att vi har blivit belönade med uppmärksamhet under 2024. Vi vann Norsk Näringslivs klimapris, Byggnäringens klimapris, vi är bästa industricelskap på PwC's klimaindex och vi är den endaste entreprenören på Times lista över de mest bärdekraftiga verksamheterna. Här har Mänskerna i Veidekkes organisation levererat på en hög nivå. Så därmed över till dig Jörgen, varsågod.

Thank you for that. And since both our projects and we here at Ulven, for that matter, have been going on for a long time, it is as usual in good form today. The quarter, a turnover of 11.5 billion kroner, a result of 558 and a margin of 4.9. There are many both exciting and important comments that come from each of our segments. On this picture, there are three things I would like to emphasize. One is the margin focus. We are pleased to deliver a margin of 4.9%. It was 5% in the same quarter last year. And if you look at the sum of our business areas, it is 5.1 to 5 last year. So that is a good performance. The second point that is important is that those who look at the other segment see that the result is 37 million kroner in minus in the quarter. It was 9 in the same quarter last year. The 37 is a sign of the guidance we have on the other side, which is independent of corporate costs and finance, the guidance we have on minus 35 per quarter. So it's spot on. And why is it a dip against Q4 2023? Well, it's because then the long interest rates went down, then the obligation rates in our financial portfolio went up, and accordingly we had a positive result. The last comment on this is related to what is called tax. It is not on the picture, but somewhere you can comment on it. It will be here. Our tax rate is slightly below 20% for the year. Why is that? It is because we have, especially in the Swedish construction segment, project development profits in the quarter, which is tax-free. Those who are wondering what to think about in terms of tax in the years to come, we are back at 22%. ByggNorge had a quarter in 2023, one year back, that was very strong. It was on activity and it was on magic. That is what we now compare ourselves to. The quarter ended at 4.2 billion in revenue. It is down 6% towards the same quarter in 2023. In the same way as the previous quarters this year, it has been down towards the quarters in 2023. And why are we down? Yes, it is the shift that we saw in our order book in the summer of 2023, which is now playing into activity. If you look at the details in the quarter, it is in the eastern region that the decline occurs. In the western countries and along the coast, it is in parity, or actually a little up in activity. And those who remember Q3, then we were down 13% in activity year-on-year. They see that we now have a little less decline. So the gap against last year, it is evened out. The result in the quarter was 178 million kroner. That was 245 in the year before. Half of the decline comes as a result of the volume decline. The other half of the decline comes as a result of increased capacity requirements in our business. When that is said, and as Jimmy said, our project profitability is higher now, that is, in the portfolio we have going, is higher than a year ago. The citizens get quality. This means that when we reach 4.2% this quarter, and over 4% on a yearly basis in this segment, in this market, it is a good performance. Our annual reserve ends the year at 14.3 billion kroner. That is 4% down in the quarter. The annual income I have commented on as housing projects, and also public projects, both in health and school. with some down in this quarter, then you see that in 2024, we have been in the interval from 14 to 15 billion in order reserve. So the expression has been quite stable. And that means that when we look into 2025 and think activity, then we say, as we have said before, that now the activity that will come in the coming year be in parity with what we have delivered this year. So the clear decline we have seen in 2024 is behind us. The infrastructure business in Norway, a turnover per quarter of 2.6 billion kroner. The construction part a little up, the asphalt part a little down, with a slightly lower volume at the end of the production season, but there are small nuances in total. The results were hundreds and 17 million kroner, and 132 in the spring, a decline. What is in the result generation? In the part that is investment units, which consists of large project facilities, operation of parallel roads, track and geofundamentation, i.e. pearl, as it is called in Østfold, the result was 72 million kroner. It was 99 last year. The project profitability is solid in all the units I just commented on. And we have implemented a capacity adjustment to the order reserve we have on the large project Anveg, and loaded the quarter with 30 million kroner, 32 million kroner as costs as a result of that. Naturally included in the stack of 72 for that part of the company for the quarter. The second part of INFRA is our asphalt and POK-business. It delivers 45 million kroner in this quarter. It delivered 34 million kroner in the same quarter last year. I said it was lower volume. When the result increases, it is because of good purchasing power and increased coverage on the tons we have delivered on the asphalt side in the quarter. With that, we conclude a good A much better asphalt year, 2024, than 2023. On a yearly basis, a result of 162 from that cold soil, against 56 last year, so that's more than 100 million kroner. And that's a big step forward. We clap once, and we smile once, and we congratulate our colleagues for that. And then we go on. And the reserve at the end, 9.9 milliard kroner is that. It spreads a little in the quarter, but it is natural when we have such large contracts as Lysaker-Vekkerøy in the portfolio. Our construction company in Sweden has a turnover in the quarter of 2.1 billion kroner. It is down by just under 20% compared to last year in local currency, and this is how the previous quarters this year. The result, 74 million, was against 18 last year. Here are several exciting things. Half of this segment, which is called business building in Gothenburg through the data company BRA, has, as previous quarters, solid and good profitability, and tops that with the result of sales of three medium-sized project development companies, where we have been part-owner and part-owner, three medium-sized projects. And that will of course be a large result with 70 million from there. At the top of a good margin. So, on the other hand, we have carried out a goodwill reduction related to a business we have on the production of concrete elements in Stockholm. Has been linked to housing production. has had low profitability in recent years. Therefore, we have chosen to remove the goodwill in its entirety. It came into the balance, for those who remember well, in 2014-2015. For the remaining part of the Swedish business, we continue to work with capacity adjustment and to find the right new projects in the portfolio. The annual reserve ends at 6 billion kroner at the end of the year. The business building company in Gothenburg also has this quarter a solid entry of new projects, as in Q3, and has increased its annual reserve significantly since the summer of 2024. The rest of the company has a small year in Q4. Those who have read our stock market report have seen that we have signed two contracts now in Q1 2025, both in Stockholm. And that is what lies in what we say to take new real contracts for the portfolio. Then there is infrastructure in Sweden. 1.9 billion in revenue, 3% over last year. The change from last year is that we have consolidated our purchase of Euromining in northern Sweden. in two months, i.e. from the 1st to the 11th. Otherwise, there is parity with Q4 2023. The result is 117 million kroner, up from 99 last year. Half of the increase is the consequence of the first two months with Euro Mining. The other half is improvement, partly on the project side, where we have, in total, a good portfolio, but also on the industry side, which ended the year in a good way. Order 7 here, 7.7 billion kroner, has been so stable throughout 2024. Then there are some of the What is it called? Specially interested in wondering. When you have taken in Euromining, have you not received an offer on the order reserve side? And then the answer is no, because with Euromining, in the same way as with Asphalt, it is running deliveries and we, we, we of course have a market share, we have contracts, but we do not take it in our order reserve. In the same way as Asphalt. Then there is the Danish company. 800 million kroner in turnover per quarter, 109 million in results and 13.7% in margin. With that, we end the second year in a row with margins in Denmark, on a yearly basis of over 10%. and it is solid project profitability, and a tight ship when it comes to capacity and joint costs, which makes it possible to deliver this result. We are very proud of that. The order reserve is 3.1 billion kroner. The same goes for the previous quarter. The most important event on the other side was for us in December. We renewed the contract with the Danish State Building Board for a four-year period. for development and production of your project portfolio in the coming years. A framework agreement. The specific projects that will come as a result of that will come in the order reserve as they are signed, but the collected volume that can be reached if both the projects are profitable and the People's Congress will be up to 9 billion Norwegian kroner in production over a six-year period. Will be able to give some growth in our Danish business from 2026, is our assessment. That was the segments. Then it is up in the financial helicopter, the balance, 18.8%. 8 billion kroner is on it. It was 18.2 for a year ago. Half of the increase is a consequence of the purchase of Euro Mining. The other is natural fluctuations in balance sheets. The most important figure is the interest rate position. We started this year at 2.8 billion. We end this year at 2.620. So a solid position on the way out of this year. What has happened at the end of the year? We have bought up Euromining. Netto Rentebærende got 360 million in Q4. And then we have, in a normal way, solid input of working capital in Q4. We have that year in and year out, and then also this year. We are very pleased to be able to say that we are financially very, very solid when we have both completed our year, paid quite a lot of tax, done what we were supposed to do in both normal investments and in this purchase. On the basis of that, And on the basis of our exchange policy, which is a minimum of 70% of the result over time to the shareholders in the form of exchange, and as the board has said, as long as we have the balance position we have, the entire result will be included as exchange. That is why we propose 9 kroner per share for the General Assembly in May as an expense. And that is exactly the percentage calculation, 97% in the statement rate, and in words, the whole result. With that, back to summarizing.

Thank you very much, Jörgen. Let me now give some reflections on the development that we have seen this year and draw some lines forward. We will start by looking at the numbers for the whole year 2024 and the development that we have had in the last five years. As you can see, we have had a relatively flat development of the turnover during the five-year period, but the goal and message has also been profitability ahead of growth. At the same time, the result for the tax has increased by 8% annually from a little over 1.1 billion in 2020 to a little less than 1.7 billion in 2024. The increase in results will therefore mainly come from the margin improvement we have achieved from 3% in 2020 to 4.1% in 2024. Behind this margin improvement we see this picture that reflects Veidekke's business areas. All businesses have a higher margin now than they had five years ago, even though not all have reached a level that we can say we are satisfied with. And that means that we mean that the potential is still great. Infrastructure businesses vary a bit from year to year, but overall it is a good margin improvement that we have seen in those businesses. And if you look at Hoffman in Denmark, the performance is at a very high level, as Jörgen commented. In ByggNorge, we have achieved a margin level of over 4% in the last two years, despite a lower capacity use in the last year. This business is solid and works well with its improvement work in the large portfolio. What we cannot be satisfied with is the accumulated margin in the Swedish construction business. But it is a mixed picture that Jörgen was on. The construction businesses in the Stockholm area have been weak for several years now. From my perspective, it is still the most important snow operation that we continue to work with and focus on. The part of the Swedish construction industry we are talking about is about 9% of our total turnover. In addition, we can note that more than 90% of Veidek's turnover is now at a level of over 4.1% in the result margin. This shows that we have come up on acceptable levels, margins for most of our businesses under the demanding circumstances that have been since 2020. and that there is still significant potential for further improvement. If we look at the development up towards the goals we presented on the Capital Market Day in 2021, we have approached the margin goal, even if we have lower revenue growth than we saw before. We have largely delivered the entire income during the period to the shareholders in the form of exchange. And the tools we use, we have talked about many times. It is about the selection of the right project for the right customer at the right price in relation to our cost-benefit calculation, followed by good implementation supported by our processes for road safety control. And this is useful both for our customers and for Veidekke. And that is the tool we work with and develop successively. And with a market that stabilizes and hopefully brightens, we work further towards the ambition of a margin of more than 5%. With us on the way, we also have a strong financial position that gives us the opportunity both for growth and for a high and attractive exchange rate. Hard and disciplined work, satisfied customers and good cost control. It is the form of success that we continue to use to create values also in the future. In summary, we showed a good result in a challenging market in the fourth quarter. It is high quality in the project portfolio that has given us the opportunity to maintain the margin despite a lower volume. We also have a good order reserve, and if we look at book-to-bill, it should give us the opportunity to stabilize the volume in ByggNorge in 2025 and be able to grow the infrastructure operations. Finally, with good cash flow and a strong financial position, we increase the proposal to exchange with 14% up to SEK 9. So, thank you very much for coming and listening to us this morning. And now we open up for questions, both from the hall and from the web. Welcome.

Bengt Jonasen, ABG. I can start and then maybe someone can take over. If you take ByggNorge first, maybe more explanation, the good performance in the fourth quarter of 2023, set the light on the fourth quarter this year, in the context that the project margin is better. It sounds like the fourth quarter last year was a bit extraordinarily strong, not 2024, but 2023. Just think about the effect of the year on margins, if we think about the future.

The change, if you take the bridge from last year to this year, in nominal kroner, half of the result change, as I said, was the effect of volume decline, and what had been contributed. The other half was the effects of capacity costs, both on joint costs, but also on units within the portfolio that have high fixed costs and have had significantly lower volumes this year. To draw a very clear picture, it is a concrete element factory on the Rolands side, which makes up the essential part of the result of the dam. And which now has activity under the normal.

Restructuring infrastructure, Norway sets the lights on a strong change, and all time high order backlog may sound like a regional adjustment.

We are working with the organization all the time to be competitive. No matter how the order looks, it is a constant theme and that is what has happened here.

The last question must be project development profits in Sweden. Are there several hidden reserves in the balance?

No, it is not a guilt reserve, but ambitions to recreate that type of profits on, as this is, between large warehouses and office projects. It is there so definitively, but it does not lie in the balance. On the other hand, we will get it to the reality of new projects. Is ambition.

The Danish framework agreement, my understanding has been that you have had a responsible one for a five-year period. If you take out, what has the production volume been on the old framework agreement?

It has been between 15 and 20 percent of the annual revenue yesterday. That is why we say it is a very large number. And we say that this could give us some growth, because it comes to the top of what we have already had. The nominal numbers get very violent if you just divide it. If you take us literally on that.

We have two questions on the web. Simen Martinsen, DNB. I wonder if you can comment on the goodwill reduction of 37 million in the Swedish prefab business, something more.

I can take some comments first, Jørgen, you can fill in. This is a factory located in Sala, north of Stockholm. And it is, as Jørgen said, a factory or a business that we bought in 2014. and has been specialized in making bathing cabins as the main product. Of course, the market in Sweden has been very, very low. So here it is a change to get the factory to be able to manufacture other products that have a position on the market.

And then there has been profitability between a few million and a few million in one year. And then when we go through the portfolio at the end of the year and evaluate our Gudvild post specifically, we saw that there was no point in keeping it in the balance for longer and took it away. And then Gudvild is taken in its entirety.

Ole Christian Voll is wondering if you have any thoughts about NCC looking at the possibility of selling its asphalt business. If this could be relevant for Veidekke.

We read the newspaper and concentrate on ourselves. That is the answer to that.

That was it.

Tack så mycket. Då ser det ut som att vi inte har några fler spörsmål från webben och inte heller från salen. Så då tackar vi igen för att ni ville vara med oss denna förmiddag och på återseende i vart fall om ett kvartal. Och för dem som vill så har vi nu ordnat med möjligheten för att få en omvisning här på vårt splitter nya bygg så de som är redo för det kan bara så samlas vi här utanför och tar en runda.