Veidekke

Earnings Release • Nov 8, 2023

Third quarter Q3²⁰²³

8 November 2023 Jimmy Bengtsson, Group CEO | Jørgen Wiese Porsmyr, CFO

Questions? Email ir@veidekke.no

Occupational health and safety

Our primary priority

Number of serious injuries

12-month rolling, Veidekke employees, hired staff and sub-contractors

Sickness absence

Veidekke employees

Highlights Q3 2023

• Revenue NOK 10.4 billion up 9% on Q3 2022
• Profit before tax up 10% profit margin remains stable
• Order book down 10% from the previous quarter, to NOK 40.7 billion • In a challenging market, Veidekke has a good overview of activity for the upcoming year

Key financial figures

Q3 revenues Q3 profit before tax

NOK billion NOK million

Historical figures (2020) have been restated to reflect the spin-off of the property development operation

Solid order book in a more challenging market

Order book

Order book per segment Percent

Broad intake of orders in the quarter

Share of orders from private clients remains high

Results and financial status

Jørgen Wiese Porsmyr, CFO

Revenues, profits and profit margins

Group and business areas

		Q3 2023			Q3 2022
Amounts in NOK million	Revenues	Profit before tax	Profit margin	Revenues	Profit before tax	Profit margin
Construction Norway
Infrastructure Norway
Construction Sweden
Infrastructure Sweden
Denmark/Hoffmann
Total business areas
Other
Group

Construction Norway

High activity

• Revenues up 19% on Q3 2022 (of which acquisition accounts for 5% )
• Effect of high order intake in 2022

Improved performance

• Profit increase due to higher revenue
• The bulk of the business delivered solid profitability

Order book down 8% over the quarter

• Clear differences between different segments and regions
• Revenues are expected to flatten out around spring 2024

Revenues and profit margin

Profit before tax

Infrastructure Norway

Revenues on a par with Q3 2022

• Drop in civil engineering activities. Road maintenance activities remain stable
• Increase in asphalt revenues; stable volume and somewhat higher prices

Total profit NOK 283 (301) mill.

• Civil engineering had robust project margins, but profit declined due to volume drop
• Road maintenance margins remain very high, albeit below the previous year's
• Clear improvement of Asphalt results this production season

Order book decline compared to previous quarter

• No major contracts signed in the quarter
• Several opportunities for large infrastructure projects

Revenues and profit margin Profit before tax Q3

96

Construction Sweden

Revenues up 9% in local currency from Q3 2022

• Activity boost in BRA, Gothenburg
• Significant decline in the residential segments

Overall profitability remains low

• While robust in BRA (Gothenburg), profitability remains unsatisfactory in the remainder of the business
• To adapt the organisation to a lower activity level, the workforce will be reduced by 60 persons

Order book down 12% in local currency in the quarter

• BRA has a strong order book, but the remainder of the business needs more assignments
• Residential order book reduced by more than half over the past year
• 11 • Order book comprises approx. 70% private commercial, 20% public commercial, and 10% residential buildings

Revenues and profit margin

Profit before tax

Infrastructure Sweden

Revenue up 9% in local currency from Q3 2022

• Increase linked to high production and expansion of ongoing projects

Stable profit; slight drop in profit margin

• The North and West Sweden project portfolios show robust profitability
• Results are somewhat weaker in parts of industrial operations

Order book down 4% in local currency from previous quarter

Denmark

Revenues dropped 10% in local currency from Q3 2022

High profit margin

• Consistently strong project profitability

Order book down 12% in local currency in the quarter

• Challenging market difficult to deliver on the customer's business case while maintaining satisfactory profitability
• Order book and order intake indicate lower revenues going forward

Revenues and profit margin Profit before tax 0.7 0.8 0.8 0.8 0.7 8.0% 10.7% 7.0% 7.7% 9.6% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23

Financial position

Balance sheet

Amounts in NOK million	30 Sept. 2023	30 Sept. 2022
Fixed assets	7 173
Current assets (excluding cash, cash equivalents and financial investments)	9 345
Cash, cash equivalents and financial investments	1 735
Assets	18 253
Equity	2 591
Long-term debt	2 274
Short-term debt	13 387
Equity and debt	18 253
Equity ratio	14%
Return on equity (12mos)	43%
Net interest-bearing position	1 446

Financial position

Highlights Q3 2023

• Normal seasonal development in operational cash flow, with somewhat higher working capital in Asphalt
• Otherwise only minor changes from Q2

Highlights YTD 2023

• Strong project liquidity in the Norwegian construction operation
• Approx. NOK 640 mill. shares settlement in BRA, Gothenburg. Veidekke retains 70% ownership share (Q1)
• Buyout of a minority in the Norwegian construction business (Q2)
• In Q4, positive inflow of working capital is expected from the asphalt business, in the amount of up to NOK 500 million

Change in net interest-bearing assets

NOK million

Closing comments

Jimmy Bengtsson, Group CEO

Challenging market

But a good overview over the next year

Order book

NOK billion

• Low general demand for residential and private commercial buildings
• Interest rates and inflation are decisive factors
• Solid demand for large infrastructure projects
• We will continue selective approach

Focus on the things we can influence

Diversified and distributed

• Handle various geographies and markets with unique drivers
• Adjust capacity to demand

Flexible cost structure

• Large share of costs are related to project deliveries

• Flexibility to adapt cost structure to order book

• Selectivity and market adaptation

• Manage risk in calculations and implementation

Summary

2

3

Growth and stable profitability in Q3

• Strong revenue boost in several segments
• Profit increase, measured in NOK

Solid order book

• Lower order intake in a challenging market
• Good overview over the next year

Focus on improvement

• Selectivity in line with strategy
• Lift units with weak profitability

Revenues, profits and profit margins Per 30 Sept. 2023

	30 Sept. 2023			30 Sept. 2022
Amounts in NOK million	Revenue	Profit before tax	Profit margin	Revenue	Profit before tax	Profit margin
Construction Norway	11 762	465	4.0 %	9 507	358	3.8 %
Infrastructure Norway	6 641	90	1.3 %	7 053	307	4.4 %
Construction Sweden	6 546	88	1.3 %	6 211	122	2.0 %
Infrastructure Sweden	4 135	114	2.7 %	3 569	105	2.9 %
Denmark	2 280	182	8.0 %	1 637	129	7.9 %
Total business areas	31 363	938	3.0 %	27 976	1 022	3.7 %
Other	-351	-97		-155	-177
Group	31 012	841	2.7 %	27 821	845	3.0 %