Veidekke

Annual Report • Mar 27, 2023

Annual and

Contents

Operations 4

This is Veidekke	6
Key figures	7
Construction Norway	8
Infrastructure Norway	9
Construction Sweden	10
Infrastructure Sweden	11
Denmark/Hoffmann AS	12
Letter to shareholders	13
Board of directors of Veidekke ASA	16
Corporate management of Veidekke ASA	18

Directors' report	21
2022 highlights	21
Operations in 2022	21
Construction Norway	21
Infrastructure Norway	22
Construction Sweden	22
Infrastructure Sweden	23
Danmark/Hoffmann	23
Other operations/Other	23
Strategic objectives	23
Veidekke's group strategy for the period to
2025 – Performance with Meaning	23
Veidekke's objectives for the strategy period	24
Organisation	24
Occupational health and safety (OHS)	25
External environment and climate impact	26
Corporate governance	26
Remuneration of senior executives	26
Shareholder and stock exchange matters	26
Financial situation and capital structure	27
Risks and uncertainties	27
The market	28
Events after the balance sheet date	28
The parent company Veidekke ASA	28

Financial statements	31	Sustainability report	118
Annual financial statement Veidekke group	32	Sustainability at Veidekke	119
Income statement Veidekke group	32	Environmental impact	125
Consolidated statement of comprehensive income	33	Social impact	136
Statement of financial position Veidekke group	34	Governance impact	144
Statement of changes in equity Veidekke group	35	Sustainability fact book	147
Statement of cash flows Veidekke group	36	GRI index	171
Notes Veidekke group	37	Gender equality statement for Veidekke's
Annual financial statement Veidekke ASA	92	Norwegian operations	176
Income statement Veidekke ASA	92	The EU taxonomy for sustainable activities	178
Statement of financial position Veidekke ASA	93	Climate-related risk – TCFD	180
Statement of cash flows Veidekke ASA	94
Notes Veidekke ASA	95	Articles of association Veidekke ASA	185
Corporate governance	104	Veidekke's history	186
Auditor's report	111
Shareholder information	114

Targets

	STATUS 2022	TARGET 2022	TARGET 2025
PROFIT MARGIN	3.8%	4.0%	>5.0%
DIVIDEND	96%	>70%	>70%
SERIOUS INJURIES	2	0	0

Participating proactively in the green shift Putting people first Passionate about customer projects

Sustainability

Environmental impact: Page 125

Protect the environment by cutting greenhouse gas emissions, preserving biodiversity, reducing resource consumption and promoting a circular economy

Social impact: Page 136

Ensure that everyone working in and for Veidekke has decent terms of employment and a good working environment, where everyone is safe and respected

Governance impact: Page 144

Comply with competition regulations and fight corruption and other economic crime in all forms

Veidekke's greenhouse gas emissions and targets

Greenhouse gas emissions (scope 1–3) by emission category Based on 2021 emissions

Greenhouse gas emissions (scope 1-3) by business area

Based on 2021 emissions

Scope 1+2 | Greenhouse gas emissions and targets

Emissions from Veidekke's own operations

Scope 3 | Greenhouse gas emissions and targets

Emissions from Veidekke's value chain

9%

8% 5% 4%

This is Veidekke

Veidekke is one of Scandinavia's largest construction groups, with nearly 8 000 employees. The group is headquartered in Oslo and has operations in all major growth areas in Norway, Sweden and Denmark.

Veidekke provides services related to construction, civil engineering, road maintenance and asphalt and aggregates. An organisation into five business areas is intended to ensure proximity to the customer, good solutions and efficient project execution.

The group places emphasis on giving shareholders a competitive return and aims to pay out more than 70% of the annual profit in dividends. The Veidekke share is listed on the Oslo Stock Exchange.

Passion for clients' projects

Veidekke is a streamlined construction company with solid market shares in Scandinavia and a robust financial position. The group assists clients with their major construction and infrastructure projects, by developing, constructing, and maintaining buildings and infrastructure and producing asphalt and aggregates.

Veidekke seeks to get involved in the client's project from an early stage of planning, and to assist throughout the development until completion.

Through close collaboration throughout the project Veidekke is able to help clients arrive at the best, most forward-looking and sustainable solutions which add value for the client and the project's users.

An active contributor to the green shift

Veidekke strives to reduce greenhouse gas emissions from its own operations and from the entire construction value chain. Working towards this goal, Veidekke and customers share common interests, and the group sees new market opportunities in being able to help customers achieve their climate goals. Through innovation, collaboration and selective investments, Veidekke supports new, climate-friendly solutions and develops cutting-edge expertise which is put to use in practical solutions that help customers cut their emissions.

The group has set a target of reducing Veidekke's own greenhouse gas emissions in line with the Paris Agreement and to reach net zero emissions by 2045. Climate budgets have been set for each operational unit. In August 2022, as the first construction company in Scandinavia, Veidekke had its short-term and long-term climate targets validated by the highly reputed Science Based Target initiative (SBTi).

Risk assessment

When unforeseen events occur in construction projects, they often lead to delays and additional costs. It is in the interest of all parties to identify risk elements early, so that any uncertainty can be considered in the planning process. Risk management is therefore a key expertise at Veidekke.

Veidekke carries out many large projects that run over several years, and where a strong ability to calculate, manage and handle risk is a prerequisite to achieving commercial success. Risk management is a key factor in the process of deciding which projects best match Veidekke's expertise and resources, and for which the company wishes to initiate dialog with the customer in order to submit a tender.

A culture built on expertise, involvement and commitment

In Veidekke, the drivers of value creation are its people. Building schools, bridges and tunnels is teamwork, and the most effective teams are those that engage employees at all levels to take ownership of the planning and execution of their own tasks.

Construction and civil engineering projects are complex. A large variety of specialised expertise is involved in the planning and execution and must be secured the required resources, in order to ensure completion of an end product of optimum quality. Through dialog with the customer from an early planning stage, Veidekke can provide solutions that don't just take account of budgets, but also of users, surroundings, the environment, and the climate. By involving relevant specialist skills at any level at the right time, Veidekke ensures efficiency and good flow in the execution of the project.

Involvement and commitment are key to good commercial understanding – and this applies both to Veidekke as a company and to its employees, who must be able to see how they can best contribute to solid, efficient and profitable projects. This is one of the reasons why Veidekke invites all employees to take part in the company's value creation as shareholders. Nearly half of all Veidekke employees are shareholders, owning a combined share of 12% of the company.

Key figures

Figures in NOK million	2022	2021	2020
Revenue	38 658	37 592	38 140
Pre-tax profit	1 467	1 342	1 134
Construction Norway	530	507	532
Infrastructure Norway	496	462	244
Construction Sweden	140	166	175
Infrastructure Sweden	290	133	128
Denmark	213	200	200
Other	-203	-127	-145
Profit margin	3.8%	3.6%	3.0%
EBITDA	2 446	2 282	2 122
Operating profit (EBIT)	1 508	1 364	1 213
Operating margin	3.9%	3.6%	3.2%
Shareholders' profit share 1	1 092	1 029	2 189
Profit per share	8.1	7.1	5.8
Profit per share (IFRS) 1	8.1	7.1	15.6
Net interest-bearing assets 1	2 840	3 709	3 078
Cash flow from operations 1	1 409	2 194	2 270
Cash flow from investing activities 1	-701	-282	5 664
Return on equity past 12 months (IFRS) 1	43%	38%	53%
Total order book	41 334	38 084	37 460
LTI rate	3.0	4.6	4.4
Sickness absence	5.5%	4.6%	5.1%
CO2 emissions scopes 1 and 2 (tonnes)	68 332	81 290	97 367
CO2 emissions scope 3 (tonnes) 2		851 645	907 003

¹ Includes the property development operation before it was spun off in September 2020.

² Scope 3 CO2 emissions figures for 2022 will be available approx. mid-year 2023.

Construction Norway

Key figures

NOK million	2022	2021	2020
Revenue	13 370	13 514	14 638
Pre-tax profit	530	507	532
Profit margin	4.0%	3.8%	3.6%
Order book	16 584	13 537	13 358
CO2 emissions scopes 1 and 2 (tonnes)	9 082	10 234	11 777

Order book by market segment

Residential buildings 37% Commercial buildings 19% Public buildings 39% Civil engineering 6%

Veidekke's Norwegian construction operation is one of the country's largest contractors, with a 10% market share and an ambition to be the preferred contractor in the markets served by the company. Repeat customers account for a large part of the revenue.

The business unit has significant market positions in Oslo and central Eastern Norway as well as in the Agder, Rogaland, Bergen, Sunnmøre and Trøndelag regions. Expertise in the product categories residential, office, logistics, educational and healthcare buildings helps reduce risk in the projects and increase profitability.

By linking the group's standardised processes with the expertise required for the relevant building type, Construction Norway ensures project execution and solutions that add value for the client. During construction the company applies "involved planning", a LEAN approach that enables efficient and streamlined production. Customer surveys along the way contribute to continuous evaluation and adjustments to address customer needs.

Projects undertaken by Construction Norway should rely on sustainable production from start to finish and throughout its lifetime. The major greenhouse gas emissions in the value chain are related to materials, such as concrete, steel, windows and glass facades, and transport services. The construction operation is working to reduce its carbon footprint by using more massive wood and

low-carbon concrete in construction and through rehabilitation and reuse of materials. Buildings are constructed in accordance with environmental certification standards such as BREEAM and Nordic Ecolabel (Svanen).

In 2022, Veidekke established the company Veidekke Sirkulær AS, which is affiliated with the Oslo construction operation and will handle ongoing circular projects and initiate new climate solutions in the construction and civil engineering industry. The company is currently running a pilot project at Ulven, Oslo, where all virgin stone normally used to produce new concrete is replaced with crushed concrete from a demolition project. In late 2022, Veidekke's competitiveness in Bergen was bolstered through the acquisition of Constructa Entreprenør AS. With strong positions in the commercial, residential and public building segments in Bergen, Constructa complements the group's construction activities in the area.

Veidekke trains skilled workers in core construction industry trades and offers apprenticeships around the country. Veidekke's Norwegian construction and infrastructure operations share a joint newemployee programme and systems for role-based training, tailored to the various roles in the project organisation. The intention is to ensure that employees have relevant professional development and career opportunities, and that Veidekke has Norway's best project managers and project teams.

Infrastructure Norway

Key figures

NOK million	2022	2021	2020
Total revenue	9 583	9 147	8 847
Civil engineering	6 333	5 821	5 933
Asphalt, aggregates	3 251	3 327	2 914
Total pre-tax profit	496	462	244
Civil engineering	485	285	161
Asphalt, aggregates	11	177	83
Total profit margin	5.2%	5.1%	2.8%
Civil engineering	7.7%	4.9%	2.7%
Asphalt, aggregates	0.3%	5.3%	2.8%
Order book	8 242	7 477	7 206
CO2 emissions scopes 1 and 2 (tonnes)	50 492	61 817	72 496

Order book by market segment

Rail transport	31%
Industry and energy	1%
Other civil engineering	20%
Road maintenance contracts	47%

Employees Veidekke total: 7 933

Veidekke is a nationwide Norwegian civil engineering contractor with expertise in the construction of roads, railways, power plants, industrial facilities, and airports. The company is also Norway's largest asphalt producer and contractor, the second largest aggregates producer, and a major player in the maintenance of public roads in Norway. The business area also comprises companies that specialise in foundations, rock drilling and smaller construction assignments.

Infrastructure Norway was established in the spring of 2020, through a merger of Veidekke's civil engineering and industrial operations in Norway. Veidekke took the step of gathering technical expertise in one entity in order to approach the Norwegian civil engineering market in a more efficient and coordinated manner.

Civil engineering and asphalt operations entail significant greenhouse gas emissions as well as dust and noise, and Veidekke has set ambitious goals to reduce negative consequences for the climate, the environment and the surroundings. The largest greenhouse gas emissions in the value chain are related to direct purchases of diesel and gas, materials such as concrete, steel and bitumen as well as transport services. Infrastructure Norway is

striving to reduce the carbon footprint by changing energy carriers at the asphalt factories, developing more environmentally friendly asphalt with a plantbased binding agent, using slimmer constructions and making conscious choices of materials, such as low-carbon concrete. Infrastructure Norway delivers civil engineering projects in accordance with certification standards such as BREEAM Infrastructure.

In 2022, Veidekke organised its green growth initiatives as a new business area, Green Incubator, tasked with finding green business opportunities. Infrastructure Norway has established offshore wind as a new initiative, with ambitions to take part in the floating offshore wind value chain.

Veidekke trains skilled workers in core trades and recruits recent graduates and experienced engineers and other specialists. Veidekke's Norwegian construction and infrastructure operations share a joint new-employee programme and systems for role-based training, tailored to the various roles in the project organisation. The intention is to ensure that employees have relevant professional development and career opportunities, and that Veidekke has Norway's best project managers and project teams.

Construction Sweden

Key figures

NOK million	2022	2021	2020
Revenue	8 858	8 544	7 867
Pre-tax profit	140	166	175
Profit margin	1.6%	1.9%	2.2%
Order book	8 158	9 483	8 885
CO2 emissions scopes 1 and 2 (tonnes)	651	1 020	880

Order book by market segment

Residential buildings 18% Commercial buildings 65% Public buildings 14% Civil engineering 3% Employees Veidekke total: 7 933

Veidekke is one of Sweden's largest construction contractors, accounting for 4% of the total Swedish market. The business is concentrated on the growth regions around Stockholm, Gothenburg and Malmö.

Veidekke has a broad portfolio of construction projects in Sweden, with an emphasis on the market segments residential buildings, offices, hotels, healthcare buildings and schools. The company places great emphasis on product expertise and the ability to compose teams with the right competence and relevant experience for the specific assignment.

The subsidiary BRA has a strong position in the Gothenburg private commercial buildings market. BRA specialises in office and logistics buildings and the majority of the projects are with repeat customers.

Construction Sweden has developed Enkelt & Greit ("Simple & Straightforward"), a concept to ensure sustainable and safe execution, saving clients' time and money by cutting the time from idea to handover. This concept has met considerable

interest, and the business area has started building a portfolio of prospective projects, in close collaboration with clients.

Construction Sweden is working to achieve its environmental goals by cutting consumption of energy and materials and limiting waste. The largest greenhouse gas emissions in the value chain are related to materials such as concrete, steel, windows and glass facades, and transport services. Construction Sweden has a special focus on rehabilitation, reuse and massive wood construction and is currently building one of the world's largest massive wood projects, the residential high-rises Cederhusen in Stockholm. Construction Sweden builds in accordance with certification standards such as BREEAM, Nordic Ecolabel (Svanen) and Miljöbyggnad.

Construction Sweden offers apprenticeships and trains skilled workers in core trades. The unit also offers trainee programs for recent graduates with relevant university degrees, primarily in engineering subjects.

Infrastructure Sweden

Key figures

NOK million	2022	2021	2020
Revenue	5 247	4 345	4 426
Pre-tax profit	290	133	128
Profit margin	5.5%	3.1%	2.9%
Order book	5 277	4 774	5 495
CO2 emissions scopes 1 and 2 (tonnes)	6 516	6 242	9 503

Road transport	7%
Rail transport	6%
Industry and energy	9%
Other civil engineering	79%

Veidekke has solid positions in the Swedish markets for infrastructure, extraction, heavy industry, energy and recycling facilities/landfills and also produces and lays asphalt. Most of the business takes place in the metropolitan regions of Stockholm, Gothenburg and Malmö, and in addition, Veidekke is an established supplier to the mining industry further north in Sweden.

High professional expertise and a predilection for collaboration characterises Veidekke's Swedish infrastructure business. To arrive at the best and most sustainable solutions, Veidekke seeks collaboration with clients from an early stage of a project. Infrastructure Sweden often works in collaborative contracts, where cooperation with clients and suppliers is aimed at creating synergies that benefit the project and all parts of the project organisation.

In 2022, Infrastructure Sweden sold an industrial plot in Snebro, south of Stockholm, formerly used as a mass handling site. Mass handling in centrally located areas is a core activity in Veidekke's industrial operations, which strategy is to operate from locations that can later be applied for property development purposes.

The largest greenhouse gas emissions in the value chain of the infrastructure operation are related to direct purchases of diesel and gas, to materials such as concrete, steel and bitumen, and to transport services. To reduce the carbon footprint, Infrastructure Sweden is replacing energy carriers at the asphalt factories, using slimmer constructions, increasing reuse and making conscious choices of materials. Infrastructure Sweden delivers civil engineering projects in accordance with certification standards such as BREEAM Infrastructure.

Infrastructure Sweden trains its own skilled workers in the core trades and offers trainee programmes for recent graduates with relevant university degrees, primarily in engineering subjects.

Denmark/Hoffmann AS

Key figures

NOK million	2022	2021	2020
Revenue	2 420	2 362	2 652
Pre-tax profit	213	200	200
Profit margin	8.8%	8.5%	7.5%
Order book	3 074	2 813	2 516
CO2 emissions scopes 1 and 2 (tonnes)	1 537	1 889	2 513

Order book by market segment

Residential buildings	1%
Commercial buildings	69%
Public buildings	23%
Civil engineering	8%

Employees Veidekke total: 7 933

Representing Veidekke in the Danish market, Hoffmann AS is a construction company with a long and proud history. The company specialises in the development and construction of commercial building projects, primarily offices, hotels and shopping centres, in close collaboration with the client. Hoffmann places great emphasis on partnering to find optimum solutions, working with clients and consultants to improve the project and make it more profitable for the client. Projects in which Hoffmann collaborates closely with the client from an early stage, through planning and engineering, until the building is completed, make up 80% of the revenue.

In recent years, Hoffmann has expanded its portfolio of public sector projects, e.g. through a four-year strategic framework agreement entered into with the Danish Building and Property Agency. Hoffmann also operates separate business units specialising in technical installations and rehabilitation of commercial buildings and homes.

Hoffmann's vision is to contribute to sustainable societal development and to build a better future where people thrive and enjoy life, and the corporate culture is built around succeeding together.

Hoffmann offers apprenticeships and trains skilled workers in its core trades. The company also offers a programme in which project managers, who are hired while they are recent graduates, receive systematic training and development.

Letter to shareholders:

Determination, improvements, and great opportunities

2022 was yet another year of unforeseen global events that brought rising interest rates, energy prices at all-time highs, restricted commodity supplies and galloping inflation. Despite these circumstances, however, Veidekke's determined and painstaking pursuit of improvements throughout the group secured an annual profit in line with the expectations we communicated to the market in May 2021.

We believe that we can do even better and are maintaining our aim of achieving a 5% margin by 2025. The scope for improvement is particularly great in Construction Sweden and the Norwegian asphalt operation, which have both under-performed in recent years.

Veidekke is in a good position at the start of 2023. Our order book is large and of high quality, our balance sheet is strong, and our financial position is robust. On this basis, the board of directors is

proposing to distribute 96% of the annual profit for 2022 as a dividend to shareholders.

The robust order book, as well as our own forecasts and strong balance sheet also mean that we are starting 2023 well-equipped to navigate a highly uncertain market, and well-positioned to exploit market opportunities for further profitable growth.

Going forward, we will continue to select projects we can execute successfully and continue to manage risk proactively as we do so, in order to improve future project margins.

Two years ago, we finalised our strategy for the period to 2025. Today, Veidekke is a streamlined construction group with a clear strategy for selecting the right projects, managing risk, operating efficiently, and completing projects profitably. The group's organisational structure – with its focus on

operational execution and flat project management structures – reflects this strategy.

Our strategy, which we have called "Performance with Meaning", serves a clear purpose: to deliver good results where the customer's projects intersect with our staff and suppliers, and Veidekke's proactive approach to the green shift. We are delivering on many of our adopted parameters: the annual profit margin is close to target, we have an attractive dividend policy, our liquidity is robust, and our balance sheet is strong. Sustainability and social responsibility are also firmly embedded in the strategy.

As one of Scandinavia's largest construction groups, we have a particular responsibility to operate sustainably. Our staff throughout the group are working to improve sustainability, and we have adopted ambitious climate targets. We plan to halve our greenhouse gas emissions by 2030 and achieve net-zero direct and indirect emissions by 2045. We reached an important milestone in 2022, when Veidekke became the first construction company in Scandinavia to have both its short- and long-term targets validated by the Science Based Targets initiative. How we report our environmental impact is very important to us, and confirmation from independent evaluators is encouraging in this regard.

While strong reporting mechanisms provide valuable insights, being able to identify commercial opportunities for Veidekke related to the green shift, is even more important. Sustainability lies at the heart of our operations. Electrification of our machinery fleet and fossil-free construction sites are only the first steps towards reducing our greenhouse gas emissions from operations in the short term. In 2022, Construction Norway launched a new initiative, Veidekke Circular, which will seek out circular business opportunities in the construction industry. The first project is a solution for recycling concrete, for which the potential is very large. The infrastructure operation has established an incubator unit to pursue green shift-related business opportunities in construction and civil engineering. We are also considering how we can position the group in the offshore wind power sector, which will become a major market if current political ambitions are to be achieved.

This annual report contains a sustainability report based on the updated materiality analysis we completed at the end of 2021. The material topics relate to Veidekke's environmental, social, and governance impacts. The report also presents a climate-risk analysis prepared in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

The majority of Veidekke's direct greenhouse gas emissions stem from the asphalt operation, and we are working hard to reduce these. Veidekke has secured the support of the Norwegian Public

Roads Administration for laying our new and more environmentally-friendly asphalt on selected sections of road. Replacing crude-oil-based binding agents with a plant-based alternative allows us to reduce asphalt-related emissions by up to 80%. Although the road to full commercial breakthrough is long, the potential of this innovative product is correspondingly great.

We also recognise the growing importance of energy efficiency. Our Danish operation has a strong position in the Danish construction industry, and often wins competitive tenders due to its specialisation in technical disciplines.

Going forward, Veidekke will continue to prioritise customers and projects where the group's expertise can help reduce the climate footprint. We will also continue building our skills through innovation, cooperation, and selective investment to promote climate-friendly solutions.

It is people who execute Veidekke's projects and run its operations. We want to keep our team of committed, motivated and inspired employees, and in future we will need even more of them. Our industry is still male-dominated, and we have everything to gain from recruiting more women and becoming generally more diverse. Going forward, we will intensify our efforts, because the measures taken have so far proven not effective enough.

We expect our staff to contribute their expertise, drive, and determination. But we never want them to risk their life or health. This is why occupational health and safety is a key priority for Veidekke, and why all of the group's tools, systems, training, equipment, and attitudes have a safety focus. Last year, we were able to report achievement of our zero-seriousinjuries target for the first time. Unfortunately, we cannot do the same this year. Although two serious injuries represent a small number for a large group of companies, they are still two injuries too many. Safety always comes first on our project and construction sites, at our factories and at our landfill facilities, and our safety focus can never be relaxed.

Our strong performance in 2022 and momentum going into 2023 is result of our 8 000 employees' drive and determination, as well as the many improvements we have made to our products, organisational structure, and operations. Our staff, customers, partners, and shareholders give us the best possible basis for further improving profitability in 2023 and continuing on the course we have staked out for the period to 2025.

Jimmy Bengtsson Group CEO

The board

	Gro Bakstad	Daniel Kjørberg Siraj	Hanne Rønneberg	Per-Ingemar Persson	Klara-Lise Aasen
Position (year elected)	Board member since 2010, board chair since 2022 Board member since 2018 1		Board member since 2020	Board member since 2020	Board member since 2021
Committees	Remuneration committee (chair)	Audit committee Remuneration committee	Audit committee Project committee	Remuneration committee Project committee (chair)	Audit committee (chair)
Born	1966	1975	1959	1956	1974
Number of shares	15 500	OBOS BBL: 26 341 564	1 700	55 740	438
Other board assignments	− DNB Bank ASA	− Construction City Cluster (chair) − Solon Eiendom − Hovinbyen Sirkulære Oslo (chair)	− Multiconsult ASA − CICERO Center for Intl. Climate Research − Oslobygg KF	− Assemblin Group AB − Bonava AB	–
Education	− Graduate economist, NHH − State authorised public accountant, NHH	− Candidate of Law, University of Oslo (2001)	− Graduate engineer, NTH	− Graduate engineer, Lund University	− State authorised public accountant, NHH
Experience	− CEO of Vy (2020–) − EVP Norway Post (2012–2020) − EVP/CFO Norway Post (2006–2012) − Various positions in finance (Arthur Andersen, Ocean Rig, Procorp)	− CEO of OBOS (2015–) − EVP Strategy/Business Development and Housing Development OBOS (2010–2015) − Assistant lawyer, lawyer and business developer in OBOS (2004–2010) − Political adviser for city council and city councillor, City of Oslo (2000–2004) − Former board member of AF Gruppen ASA (2014–2018) and BWG Homes ASA (2012–2014)	− Extensive management experience from production of building materials, contracting and research. Currently works as a special adviser in SINTEF and a board member in the private and public sectors	− Self-employed − EVP Veidekke/CEO Veidekke Sweden AB − CEO Skanska Sweden AB − CEO NVS Installation AB	− Branch Manager at Bank Norwegian, branch of Nordax Bank (2022–) − CEO (2021–2022) and CFO, Bank Norwegian ASA (2020–2022) − Executive Vice President and Head of Group Financial Management, DNB (2017–2020) − Finance and risk management positions at Nordea (2006–2017)

Daniel Kjørberg Siraj resigned from Veidekke's board effective 20 February 2023.

Board of directors cont.

	Carola Lavén	Pål Eitrheim	Inge Ramsdal	Odd Andre Olsen	Arve Fludal
Position (year elected)	Board member since 2021	Board member since 2022		Board member, elected by employees, since 2008 Board member, elected by employees, since 2011	Board member, elected by employees, since 2015
Committees	Audit committee Remuneration committee	Project committee	Remuneration committee	Audit committee	Project committee
Born	1972	1971	1962	1961	1970
Number of shares	–	–	8 720	5 230	3 199 shares; 3 000 options
Other board assignments	− Confederation of Swedish Enterprise − Besqab − Ersta Diakoni − FAM förvaltning (incl. Grand Group AB)	− Confederation of Norwegian Enterprise (NHO)	− Norwegian Union of General Workers (board member)	–	– Veidekke fellestjenester AS – Block Berge Bygg AS
Education	− Graduate engineer, KTH Stockholm	− Master's degree Comparative Politics from the University of Bergen and University College Dublin	− Skilled worker	− Skilled worker	− Builder
Experience	− CEO Besquab ab (2020–) − Deputy CEO/Investment Director, Castellum ab (2019–2020) − Head of business area, NCC Property Development Nordic (2013–2019) − Experience from Atrium Ljungberg, Drott and Skanska	− EVP renewable energy at Equinor ASA	− Employee representative in Veidekke − Former crane operator and concrete worker in Veidekke Entreprenør AS	− Chief employee representative in Veidekke − Former formwork carpenter in Veidekke Entreprenør AS	− Employee representative in Veidekke − Site manager, Building Construction Norway and Head of The Veidekke Employee Share Trust

Corporate management

Corporate management cont.

The board of directors' report

With close to 8 000 employees, Veidekke is one of Scandinavia's largest contractors. In addition to undertaking all types of construction and civil engineering assignments, the group also maintains roads and produces asphalt and aggregates. In all of its business areas, Veidekke emphasises stakeholder involvement, local experience, and close cooperation with the client from an early project phase. Valuegenerating cooperation is a key component of the group's business philosophy and serves to ensure that construction and development projects benefit their users. Veidekke is headquartered in Oslo, Norway, and has operations in major growth centres in Norway, Sweden, and Denmark. Veidekke is listed on the Oslo Stock Exchange.

2022 highlights

Group revenue for 2022 totalled NOK 38.7 billion, up 5% from 2021 (adjusted for foreign exchange effects). Infrastructure Norway, Infrastructure Sweden, and Construction Sweden increased revenue compared to 2021, while the performances of Construction Norway and Denmark were on a par with last year.

The pre-tax profit amounted to NOK 1 467 million, compared to NOK 1 342 million in 2021. Overall, Veidekke improved its profit margin to 3.8% in 2022, from 3.6% in 2021. With the exception of

Construction Sweden, all of the business areas improved their profitability year-on-year. The greatest profit improvement was achieved by Infrastructure Sweden as a result of a NOK 130 million gain on the sale of a former landfill site. Several entities within Construction Norway improved their profitability, contributing to an increase in the overall margin compared to last year. The Danish operation maintained its high profitability and delivered results on a par with 2021. Overall, Infrastructure Norway delivered a stronger result than in 2021, although performances varied within the business area. While the civil engineering and road maintenance operations achieved strong profitability and significantly improved profits, the asphalt operation experienced a weak year and made a loss.

The 2022 order intake of NOK 39.0 billion brought the group's order book to NOK 41.3 billion at year-end, up 9% from the beginning of the year. During 2022, the order book grew in the segments commercial buildings, railway infrastructure and other civil engineering projects, while the segments road maintenance contracts, public buildings and other civil engineering projects were on a par with 2021. The order book shrank for the segments residential units and road infrastructure projects.

The group's net interest-bearing assets totalled NOK 2.8 billion at the end of 2022, compared to NOK 3.7 billion at the end of the previous year. The statement of financial position totalled NOK 17.6 billion at year-end, compared to NOK 17.3 billion in 2021.

In 2022, Veidekke launched two new focus projects, Veidekke Circular and Veidekke Green Incubator, as part of fulfilling its objective of playing a proactive role in the green shift. Veidekke is also participating in a large-scale feasibility study that aims to identify the best solutions for constructing floating offshore wind turbine foundations. Towards the end of the year, Veidekke reinforced its position in the Bergen region through the acquisition of Constructa Entreprenør.

The profit per share is NOK 8.1 for 2022. Based on the group's strong financial position and robust order book, the board of directors is proposing to pay an ordinary dividend of NOK 7.75 per share for the financial year 2022. This corresponds to a distribution ratio of 96%.

The group's LTI rate (the number of absences due to injury per million hours worked by own staff) was 3.0 in 2022, compared to 4.6 in 2021. Two serious injuries were recorded in 2022. The sick leave rate for the year was 5.5%, up from 4.6% the previous year.

Operations in 2022

Construction Norway

NOK million	2022	2021	2020
Revenue	13 370	13 514	14 638
Pre-tax profit	530	507	532
Profit margin%	4.0%	3.8%	3.6%
Order book	16 584	13 537	13 358

Construction Norway generated revenues of NOK 13.4 billion in 2022, on par with the previous year.

The pre-tax profit totalled NOK 530 million, compared to NOK 507 million in 2021. The 2022 profit margin was 4.0%, up from 3.8% in 2021. Systematic improvement efforts have boosted project profitability. While several operations – including that in Oslo – achieved strong profitability, revenues varied across the business area, and considerable potential remains for improving profitability, particularly in south-western Norway.

In December 2022, Veidekke completed the acquisition of Constructa Entreprenør AS in Bergen. The company has approx. 140 employees, of whom 85 are skilled workers, and annual revenues of around NOK 750 million. As a result of the merger, Veidekke's Bergen operation will have approx. 350 employees and revenues of around NOK 1.8 billion.

At year-end 2022, the construction order book stood at NOK 16.6 billion, up 23% over the course of the year. While the order book for residential, commercial, and public buildings grew, there was a drop in orders for other civil engineering projects. At year-end, the order book composition was 39% public buildings, 37% residential units, 19% commercial buildings, and 6% civil engineering-related projects.

Major contracts signed in 2022:

• Psychiatric facility, Drammen Hospital. Hospital building at new Drammen Hospital for South-Eastern Norway Regional Health Authority. Contract value NOK 777 million.
• New Trondheim central station. Train station in Trondheim for Bane NOR Eiendom AS. Contract value NOK 722 million.
• Cissi Klein Upper Secondary School. Upper secondary school in Trondheim for Trøndelag county municipality. Contract value NOK 660 million.
• Ulven D1A. Residential project at Ulven in Oslo for OBOS. Contract value NOK 523 million.
• Vollebekk B1 BT6. Apartments in Oslo for OBOS Nye hjem. Contract value NOK 505 million.

Infrastructure Norway

NOK million	2022	2021	2020
Total revenue	9 583	9 147	8 847
Civil engineering	6 333	5 821	5 933
Asphalt, aggregates	3 251	3 327	2 914
Total pre-tax profit	496	462	244
Civil engineering	485	285	161
Asphalt, aggregates	11	177	83
Total profit margin	5.2%	5.1%	2.8%
Civil engineering	7.7%	4.9%	2.7%
Asphalt, aggregates	0.3%	5.3%	2.8%
Order book	8 242	7 477	7 206

Infrastructure Norway generated revenue of NOK 9.6 billion in 2022, up 5% on 2021. The pre-tax profit was NOK 496 million, up from NOK 462 million in 2021. The profit margin for the year was 5.2%, compared to 5.1% the previous year. The civil engineering operation delivered a strong improvement on last year, while the asphalt operation experienced a weak year.

The civil engineering operation achieved revenues of NOK 6.3 billion, up 9% on 2021. The pre-tax profit was NOK 485 million, up significantly from NOK 285 million last year. The profit improvement is attributable to higher profitability in the road maintenance operation and the portfolio of major civil engineering projects. The annual profit margin was 7.7%, compared to 4.9% in 2021. Like last year, the operation was involved in one major ongoing dispute at year-end, concerning an older, concluded civil

engineering project. The case is considered to have potentially large financial consequences.

The asphalt and aggregates operations achieved combined revenues of NOK 3.3 billion in 2022, on a par with last year. The pre-tax profit was NOK 11 million, down from NOK 177 million in 2021, when the result included a gain of NOK 29 million on the sale of the group's operation in Rogaland. The remainder of the drop in profits is attributable to the asphalt operation, which made an annual loss, primarily due to reduced tonnages. The profit margin for the year fell to 0.3%, from 5.3% in 2021.

At year-end 2022, the infrastructure order book totalled NOK 8.2 billion, up 11% during the course of the year. The order book was composed of maintenance contracts (47%), transport infrastructure contracts (33%) and other civil engineering projects (20%).

Major contracts signed in 2022:

• Hestnes tunnel. Rock tunnel Kleverud–Espa in Innlandet for Bane NOR. Contract value NOK 1.3 billion.
• K2B Lysaker–Vækerø. Tunnel forming part of the Fornebu Line in Oslo for the City of Oslo. Contract value NOK 1.1 billion.
• Kattås water treatment facility for Asker og Bærum Vannverk IKS. Contract value NOK 601 million.
• D&V Vesterålen. Road maintenance contract for Nordland county municipality. Contract value NOK 460 million.
• D&V Mandal. Road maintenance contract. Contract value NOK 238 million.

	Construction Sweden
--	---------------------	--	--

NOK million	2022	2021	2020
Revenue	8 858	8 544	7 867
Pre-tax profit	140	166	175
Profit margin%	1.6%	1.9%	2.2%
Order book	8 158	9 483	8 885

Construction Sweden recorded revenues of NOK 8.9 billion in 2022, amounting to an increase of 9% on 2021 in the local currency. While the subsidiary BRA in Gothenburg boosted revenue substantially, earnings fell for many of the operation's other entities. The pre-tax profit was NOK 140 million, down from NOK 166 million in 2021. The decrease is linked to low profitability of operations in and around Stockholm. However, the subsidiary BRA in Gothenburg improved its profits year-on-year. The profit margin was 1.6%, compared to 1.9% the previous year.

Following several years of weak profitability for Construction Sweden, parts of the operation are now being restructured. Measures have been implemented to improve profitability over time, primarily in operations situated in and around Stockholm. The subsidiary BRA in Gothenburg was highly profitable in 2022.

At year-end 2022, Construction Sweden's order book totalled NOK 8.2 billion, compared to NOK 9.5 billion last year. Measured in the local currency, this equates to an 11% decrease. While the order book shrank

for many segments, it grew for BRA in Gothenburg, which accounted for half of the order book at yearend. The order book comprised commercial buildings (65%), residential units (18%), public buildings (14%) and civil engineering-related projects (3%).

Major contracts signed in 2022:

• Elgiganten Jönköping. Logistics building for Catena. Contract value NOK 652 million.
• MHC GoCo. Commercial building in Gothenburg for Majira Real Estate 3 AB. Contract value NOK 500 million.
• Geely building 46. Commercial building in Gothenburg for Geely Gothenburg Investment AB. Contract value NOK 431 million.
• Catena Menigo. Logistics building outside Gothenburg for Catena. Contract value NOK 383 million.
• Rausgård. Office premises in Malmö for Bastionen Skåne AB. Contract value NOK 301 million.

Infrastructure Sweden

NOK million	2022	2021	2020
Revenue	5 247	4 345	4 426
Pre-tax profit	290	133	128
Profit margin%	5.5%	3.1%	2.9%
Order book	5 277	4 774	5 495

Infrastructure Sweden achieved revenues of NOK 5.2 billion in 2022, up 15% on 2021 in the local currency. The pre-tax profit was NOK 290 million, compared to NOK 133 million in 2021. The result includes a gain of NOK 130 million on the sale of a former landfill site outside Stockholm. The industrial operation also made a positive profit contribution. The profit margin for the year was 5.5%, up from 3.1% the previous year. Net of the sale gain, the profit margin was on a par with 2021.

At year-end 2022, Infrastructure Sweden's order book totalled NOK 5.3 billion, compared to NOK 4.7 billion last year. Measured in the local currency, this equates to a 14% increase. The order book comprised transport infrastructure contracts (13%), industrial and energy contracts (9%) and other civil engineering projects (79%).

Major contracts signed in 2022:

• Sickla Betong. Water treatment facility in Stockholm for Stockholm Vatten och Avfall. Contract value NOK 1.4 billion.
• Östberga tunnel. Tunnel forming part of a new sewage treatment system in Stockholm for Stockholm Vatten och Avfall AB. Contract value NOK 577 million.

Danmark/Hoffmann

NOK million	2022	2021	2020
Revenue	2 420	2 362	2 652
Pre-tax profit	213	200	200
Profit margin%	8.8%	8.5%	7.5%
Order book	3 074	2 813	2 516

Veidekke's Danish operation generated revenues of NOK 2.4 billion in 2022, on a par with 2021. Measured in the local currency, revenues fell by 3%. The decrease is attributable to reduced activity in the Copenhagen region.

The pre-tax profit amounted to NOK 213 million, up from NOK 200 million last year. The profit margin improved from 8.5% in 2021 to 8.8% in 2022. The project portfolio was robustly profitable.

At year-end 2022, the order book totalled NOK 3.1 billion, up 4% from 2021 measured in the local currency. The order book comprised commercial buildings (69%), public buildings (23%), civil engineering projects (8%) and residential units (1%).

Major contracts signed in 2022:

• Fisketorvet. Commercial building in Copenhagen for Uniball Rodamco. Contract value NOK 306 million.
• BII. Office building in Copenhagen for BioInnovation Institute Foundation. Contract value NOK 155 million.
• Test facility Novo Nordisk. Commercial building in Copenhagen for Novo Nordisk. Contract value NOK 140 million.
• Amagerfælledvej. Offices in Copenhagen for the Danish Building and Property Agency. Contract value NOK 111 million.

Other operations/Other

The category "Other operations/Other" comprises

unallocated costs linked to administration of the group, the sale of administrative services to the group's Norwegian operations, the group's financial management activities, the group's ownership role in public-private partnerships (PPPs) and the elimination of intra-group profits. Other operations/ other recorded a loss of NOK 203 million in 2022, compared to a loss of NOK 127 million in 2021.

Strategic objectives

Veidekke operates in all growth areas in Scandinavia and aims to be a leader in its local markets in terms of profitability and size. In its capital markets update in May 2021, the group presented its strategy and objectives for the period to 2025.

Veidekke's group strategy for the period to 2025 – Performance with Meaning

Performance with Meaning represents Veidekke's strategy for delivering outstanding financial results, and is founded on three key principles:

• We are participating proactively in the green shift.
• We put people first.
• We are passionate about customer projects.

We are participating proactively in the green shift

Climate change affects everyone. Veidekke is participating proactively in society's transition to climate neutrality by contributing to the green shift. As a major stakeholder in an industry that accounts for a large proportion of global energy consumption and associated greenhouse gas emissions, Veidekke is working to reduce the climate footprint of its operations by selecting, developing, planning, and executing projects in a way that generates financial value for customers, employees and shareholders while also supporting positive climate and environmental development.

We put people first

Veidekke's ability to generate value rests on the collective expertise of its workforce. The company is a specialist enterprise in the labour-intensive construction industry, and as an expert on complex construction and infrastructure projects Veidekke's most important resource is its staff and their skills. Skills development and the recruitment of recent graduates and experienced workers therefore has high priority. Employee participation is part of Veidekke's DNA, and mandates the involvement of staff, colleagues and partners in all decisions and choices with consequences for others.

We are passionate about customer projects

Veidekke's customer pledge is fulfilled in the development, planning and execution of customer projects. Value-generating cooperation with staff, customers, and suppliers – based on trust and participation – lies at the heart of the group's business philosophy. The projects Veidekke develops and executes should be of value to users, satisfy their requirements, and have the least possible impact on climate and nature. Veidekke therefore provides wise climate options and welcomes the involvement of stakeholder groups. This approach has boosted value creation in the form of customer value, strong market positions and longterm, sustainable profitability.

Veidekke's objectives for the strategy period

Veidekke will prioritise selective growth in profitable positions until 2025 and is targeting a profit margin of more than 5% in 2025. Veidekke delivered close to its margin target of 4% in 2022 and improved both revenue and profit margins.

Veidekke seeks to provide a safe workplace. In 2014, the group adopted two specific targets: zero serious occupational injuries and a 20% annual reduction in the total number of injuries. Some 240 injuries were recorded in 2022 – 20% fewer than in 2021. Two of the injuries were classed as serious. See page 164 of the sustainability report.

Veidekke has adopted the targets of halving greenhouse gas emissions from its operations by 2030 and achieving net zero emissions by 2045. The targets, which apply to both the group's own operations (scope 1 and 2) and the rest of the value chain (scope 3), are in accordance with the Paris Agreement and the emissions pathway that limits global warming to 1.5°C. In 2022, Veidekke became the first construction company in Scandinavia to have both short- and long-term targets validated by the Science Based Target initiative. The group has adopted a climate plan for the transition to a zeroemission society that identifies priority measures for achieving its climate targets successively, year

by year. In 2022, Veidekke's scope 1 and 2 emissions amounted to 68 000 tonnes, down 16% on 2021 and down 40% compared to the base year (2018). Further details on Veidekke's greenhouse gas emissions can be found on pages 153–157 of the sustainability report.

Veidekke aims to pay its shareholders a high and attractive dividend, defined in the group's dividend policy as more than 70% of the profit per share. Over the past five years, the dividend ratio has been 95% (excluding the extraordinary dividend occasioned by the sale of Veidekke's property development operation). The board of directors is proposing a dividend of NOK 7.75 per share for the financial year 2022, corresponding to a distribution ratio of 96% of the profit per share.

Organisation

At the end of 2022, Veidekke had 7 933 permanent employees. Turnover (resignations only) amounted to 9.8%, compared to 8.8% in 2021. The overall turnover rate for the group was 12.5% in 2022, compared to 11.8% in 2021.

Number of employees

		Administrative
	Skilled workers	staff	Total
Norway	3 055 (2 933)	2 256 (2 213)	5 311 (5 146)
Sweden	830 (846)	1 354 (1 395)	2 184 (2 241)
Denmark	240 (219)	198 (190)	438 (409)
Total	4 125 (3 998)	3 808 (3 798)	7 933 (7 796)
	Last year's figures in brackets.

A significant share of the group's value creation takes place through sub-contractors with other expertise than Veidekke's own. In addition to the group's own employees, approximately 15 000 people work for Veidekke at any given time.

Skills-building and recruitment

Veidekke's projects are complex and demand strong expertise and skills. Employees working on projects are exposed to new tasks and challenges and can develop their abilities with the strong support of management and more experienced colleagues. This makes projects one of the most important learning arenas for company staff. Project management teams are composed of individuals with complementary skills, who must work together to secure an optimal project outcome. To ensure high performance, teams must exploit both individual capabilities and collective expertise, and work well together.

Veidekke arranges role-specific training and networking groups to supplement the knowledge acquired through project involvement and new responsibilities. HR competence centres in Norway and Sweden organise and facilitate learning and development adapted to individual roles and responsibilities. This covers the company's core subjects, project management, processes, systems, and leadership development. The networking groups engage in more specialised skills development in key areas, such as calculation, residential construction, and design work. To keep up with innovation and technology development, Veidekke

also collaborates with leading academic groups at universities, university colleges and technical colleges. The Horizon programme for senior executives is run in collaboration with BI Norwegian Business School, and 64 senior Veidekke executives have completed or are enrolled in the programme.

The group has a long-term strategy of educating and hiring its own skilled workers. In Norway, Veidekke is among the companies with the largest apprentice programmes, having 281 apprentices at the end of 2022. Passing the trade examination qualifies apprentices for a permanent position after completion of their apprenticeship. In 2022, the group continued its campaign to strengthen recruitment to vocational trades, including through traditional and social media advertising designed to inspire women to apply for vocational training.

Through its programme for recent graduates, Veidekke recruits primarily younger technical personnel. The programme combines practical project work with theoretical training. It is a strong recruitment base for future managers, and many of the participants subsequently take up management positions in the group. In 2022, the group recruited a total of 55 recent graduates from universities and university colleges.

In Sweden, Veidekke has over several years been improving its ranking among students and young engineers with work experience in Universum's annual "Sweden's best employer" survey. In 2022, Veidekke

climbed to 8th place – the highest ranking achieved by any employer in the construction industry. In the annual Universum surveys carried out in Norway, Veidekke achieved its best-ever ranking among young people with work experience (13th) and moved up one place from last year among engineering/natural sciences students (to 16th). While the group aims to top the rankings among construction companies, further work is needed to achieve this.

Working environment and diversity

All Veidekke employees must be met with respect and be given the opportunity to use their skills in cooperation with others. The group practises zero tolerance for harassment and conduct which may be perceived as threatening or degrading. This year's OHS week focused on the working environment and diversity to raise awareness of the importance of building an inclusive working environment in which all staff can be themselves. The group's ethical guidelines encourage staff to report actions which may be contrary to laws, regulations and internal routines, and procedures have been developed for the reporting and addressing of censurable conditions. Reports may be made internally or externally via an online whistleblowing portal. Veidekke received and processed three reports concerning the working environment in 2022. Of these, none concerned discrimination, and none was deemed very serious.

Maintaining and improving the group's corporate culture is an ongoing task. Veidekke conducts twoyearly employee surveys and regular occupational health surveys to identify important factors affecting the working environment. High reported levels of staff commitment and satisfaction indicate good framework conditions for productivity and personal development.

The fact that the proportion of women in the construction industry is low represents a major industry challenge which is also reflected in Veidekke. At year-end 2022, 13% of all Veidekke employees were women – the same figure as at the end of 2021. Women comprise just under 24% of administrative staff and close to 3% of skilled workers. The group is working to increase the diversity of its workforce, with a particular focus on improving the gender balance, and has adopted a strategy for achieving its target of increasing the proportion of women operational managers to more than 20%. In 2022, the proportion of female operational managers was 10.1%, which is on a par with the previous year. A further objective is that all management teams above project level should include at least one woman, although Veidekke is far from achieving this at present. Other targets include that women should account for 40% of new hires from universities and university colleges and 50% of students working summer jobs. The proportion of women trainees increased by some 14 percentage points in 2022, to 49%. The percentage of women among students in summer jobs was 26%. Among apprentices, the proportion of women increased somewhat, from 10.1% in 2021 to 11% in 2022.

See page 176–177 for the company's reporting on the activity duty and duty to issue a statement.

Management

In 2022, the group management team comprised the Group CEO, four EVPs for the operational areas (including one woman) and five EVPs for the staff functions (including two women). The group management team is presented on pages 18–19.

Occupational health and safety (OHS)

As at year-end, Veidekke's operations in Norway, Sweden and Denmark had recorded two serious occupational injuries, meaning that the zero-seriousinjuries target adopted in 2014 and achieved in 2021 was not achieved in 2022. Veidekke has not suffered a fatal workplace accident since 2018, and the frequency of injuries has fallen considerably in recent years. In total, the group registered 240 injuries in 2022. The improvement compared to 2021 (297 injuries) is in line with the target of a 20% annual reduction in injury numbers. The LTI rate fell from 5.5 in 2021 to 3 in 2022.

The group's sick leave rate was 5.5% in 2022, up from 4.6% in 2021. The increase is primarily attributable to higher short-term sick leave linked to a large number of employees contracting respiratory illnesses in the final quarter of 2022. The national sick leave rates were 3.4% (2021: 5.7%) in Norway, 5.1% (2021: 4.1%) in Sweden and 4.1% (2021: 2.8%) in Denmark.

Veidekke has been intensifying its injury-prevention efforts for a number of years, through a wideranging and ambitious programme to improve and standardise key group OHS processes. For further details of the group's OHS work, see page 136 of the sustainability report.

External environment and climate impact

Veidekke seeks to prevent and limit pollution, preserve natural diversity, reduce resource use, and help promote a circular economy. The group's management systems are designed to provide insight into Veidekke's climate and environmental impact and facilitate improvements to processes and products in all supply chains and throughout product lifecycles. Environmental considerations are integrated into all group operations, from planning to execution, as well as the purchasing of products and materials. Relevant measures include transitioning to renewable energy carriers and circular solutions in asphalt production, fossil-free and zero-emission construction sites, electrification of machinery and vehicles, increased use of solid wood products and low-carbon concrete, environmental certification of construction and civil engineering projects, various forms of reuse and circular solutions. Veidekke is also investing in innovation to develop new products that generate fewer greenhouse gas emissions and have a smaller environmental footprint.

The 2022 CDP Climate Change investor survey awarded Veidekke an 'A-' rating. The survey evaluates more than 15 000 companies all over the world in terms of their overall understanding, awareness and management of environmental risk, as well as best practice in the area of environmental leadership and reduction of greenhouse gas emissions. The criteria for the top 'A' rating are constantly becoming stricter.

Natural diversity is under heavy pressure and in need of protection, meaning that commodities, products and packaging must be harvested and produced sustainably. Veidekke has developed a zero-deforestation policy containing obligations for the entire supply chain. The group will report transparently and regularly on matters relevant to natural diversity, including through CDP Forest.

Veidekke imposes environmental requirements on its partners. The group's contribution extends beyond its own operations, encompassing activities in trade organisations, educational initiatives, research and development, and cooperation with authorities. Such cooperation facilitates mutual learning and quicker development and has positive effects with potential of reaching far beyond Veidekke's own operations and industry. Veidekke's work related to the external environment is discussed further on pages 125–135 of the sustainability report

Corporate governance

Good corporate governance is a board responsibility. Veidekke reports in accordance with the Norwegian Code of Practice for Corporate Governance dated 14 October 2021. A statement on the group's corporate governance work is provided on pages 104–110 of this report and will be considered at the ordinary general meeting on 10 May 2023.

Veidekke emphasises compliance with the requirements of the Transparency Act and gives high priority to workers' rights. The group's approach to these topics, and results achieved, are discussed on pages 139–141 and page 165 of the sustainability report. A formal statement is also published on the Veidekke website in accordance with official guidelines and deadlines.

Remuneration of senior executives

Veidekke's board issues a statement on executive remuneration and benefits in accordance with section 6-16a of the Public Limited Liability Companies Act. The statement was approved at the general meeting on 11 May 2022 and will also be presented to and considered at the ordinary general meeting on 10 May 2023.

The board of directors' remuneration committee prepares matters and proposals on all material aspects of the Group CEO's remuneration and benefits. The committee advises the Group CEO on the remuneration and benefit arrangements of other group executives.

Shareholder and stock exchange matters

In 2022, approximately 17.9 million Veidekke shares were traded on the Oslo Stock Exchange, equating to a turnover rate of 13.3%. Over the course of the year, the share price fluctuated between NOK 80.9 and NOK 136.40. The annual return including dividends was -22%. In contrast, the return achieved by the Oslo Stock Exchange Benchmark Index was -1%. All of Veidekke's shares are freely transferable; see section 5-8a of the Securities Trading Act.

At year-end, Veidekke had 12 474 shareholders, the largest of which were OBOS BBL (19.5%), Folketrygdfondet (10.2%) and IF Skadeförsäkring AB (3.7%). The proportion of foreign shareholders was 23.9%.

Veidekke encourages its employees to participate in the group's value creation through share ownership. The employee share programme gives all employees an annual opportunity to purchase Veidekke shares at a discount. At year-end 2022, approximately 12% of Veidekke was owned by employees.

The board of directors is proposing a dividend of NOK 7.75 per share in respect of the financial year 2022. The proposal is in line with Veidekke's dividend policy and the objective of giving shareholders a

competitive return on their investment. The proposed dividend equates to a distribution ratio of 96%.

Further information on the programmes, share price developments and other matters relating to the Veidekke share can be found on pages 114–116 of this report.

Financial situation and capital structure

Veidekke seeks to maintain a strong financial position. This is dependent on stable operations, low financial risk exposure and proper management of financial risk parameters. Financial developments are an important factor in the group's strategy process, and Veidekke issues guidance on financial risk management in its finance policy.

The group's net interest-bearing assets totalled NOK 2 840 million at the end of 2022, compared to NOK 3 709 million at the beginning of the year. Cash flow from operational activities amounted to NOK 1.4 billion for the year, compared to NOK 2.2 billion in 2021. Net investment activity amounted to NOK 701 million in 2022, compared to NOK 282 million the preceding year.

The group's total assets amounted to NOK 17.6 billion at year-end, compared to NOK 17.3 billion in 2021. Total equity stood at NOK 3.0 billion (2021: NOK 2.9 billion), corresponding to an equity ratio of 17% (2021: 17%).

Veidekke's borrowing facilities comprise a NOK 1.75 billion overdraft facility with a rolling 364-day

maturity period, provided by DNB, and a NOK 0.75 billion credit facility that matures at the end of 2025, provided by SEB.

At the beginning of 2022, Veidekke completed a voluntary buy-back of its VEI10 bond loan, which has a maturity date of 19 March 2025. As at 31 December 2022, the loan had an outstanding volume of NOK 193 million.

Risks and uncertainties

Risk management is a key aspect of Veidekke's business, which primarily involves the execution of individual projects. Veidekke seeks to identify risks early on, so that risk-reduction measures can be implemented. Relevant categories include operational risk, climate risk, reputational risk, and financial risk. The board of directors and senior executives are covered by Veidekke's board liability insurance. This insurance cover is provided by an insurer with a robust rating.

Operational risk

Veidekke's operations primarily involve the execution of individual projects. Constant growth in project size and complexity means an increasing need for effective and systematic risk management in all parts of the business and during all project phases. Veidekke gives high priority to risk management and has dedicated staff working on uncertainty management during both tender and execution phases. Projects where the earnings estimates have a large margin of error

are reviewed by group management and projects with a contract value exceeding NOK 800 million are reviewed by the board's project committee. Having the necessary expertise to ensure optimal assignment execution, and putting together a reliable team, is key when deciding which projects to tender for. At the tender preparation stage, risks are identified and assessed, and plans are made for managing risk during the execution phase.

Certain forms of contract permit differing interpretations of contractual performance, giving room for disagreement between the contractor and client regarding final payment. Although Veidekke seeks to reach agreement with clients through negotiations, some disputes do end up in the court system. At year-end, Veidekke was involved in one major dispute before the courts.

Climate risk

Climate change and climate policy are changing society and the economy in ways which may have a significant impact on the construction and civil engineering industry. Phenomena such as extreme weather, flooding and drought can cause physical damage to nature, infrastructure and buildings, and steps taken by society to counter climate change may impact market conditions, government policy, regulatory frameworks, technology and reputation.

Climate change entails strategic and financial risk for Veidekke, and climate change considerations

have therefore been integrated into the group's strategy work and risk management activities. Veidekke supports the Task Force on Climaterelated Financial Disclosures (TCFD) and seeks to address climate risk in accordance with TCFD recommendations. Veidekke has also conducted a climate risk analysis containing recommended measures to alleviate risk and exploit opportunities linked to physical risk and transition risk.

Reputational risk

Veidekke and its subsidiaries are well-known, wellestablished brands. Veidekke has a large customer base, works with numerous suppliers at any given time and hires many new employees every year. The group is therefore focused on long-term brand-building, professional customer service and reliable external communications as instruments for maintaining confidence in, and the attractiveness of, the group, its brands and its products. Key measures include adopting ethical guidelines, compliance with laws and the management of potential reputational risks. Ongoing quality assurance is also key to reducing reputational risk, and the group has therefore adopted procedures and routines designed to ensure a high level of quality in all parts of the group. Read more about corporate governance on pages 104–110.

Financial risk

Veidekke is primarily exposed to financial risks related to trade receivables, liquidity, and interestbearing debt.

Credit risk

Credit risk is the risk of financial loss because a customer or counterpart under a financial instrument is unable to meet its contractual obligations. The group's credit risk primarily arises with regard to the settlement of outstanding accounts – the principal risk linked to the group's trade debtors. Credit risk related to trade debtors is linked to clients' payment capacity, i.e. not their willingness to pay, which influences project risk. Veidekke's high percentage of public-sector clients helps reduce its credit risk. Further, credit risk is managed through contractual drafting and strong credit management procedures.

Liquidity risk

Liquidity risk is the risk that Veidekke may be unable to meet its payment obligations as they fall due. Strong liquidity is an important prerequisite for the group's profitability and its ability to invest and take on risk in capital-intensive business areas. Management of liquidity risk is an aspect of the group's financial flexibility objective and has high priority. The management, measurement and control of liquidity starts at the project level and is extended throughout all levels of the group.

Foreign exchange risk and commodity price risk Veidekke has some exposure to foreign exchange risk through its purchasing of construction materials and bitumen for use in asphalt production. The group does not engage in much hedging linked to input factors for use in future production and hedging only occurs

after an order has been placed. Hedging contracts are normally entered into in connection with major asphalt delivery agreements with a long-time horizon (exceeding one year). Under contracts with the Norwegian Public Roads Administration – the asphalt operation's largest customer – the majority of bitumen price risk is carried by the Public Roads Administration. When material foreign exchange risk arises, it is hedged through forward contracts and other measures.

Interest rate risk

Veidekke's interest rate risk arises in relation to the group's debt portfolio and is managed at group level. The different operations are exposed to interest rate risk, and some partly-owned subsidiaries use interest rate derivatives to reduce material long-term interest rate risk. Veidekke has issued a fixed-rate bond loan with an outstanding volume of NOK 193 million (reduced from NOK 600 million at the start of the year). The bond, which matures in 2025, carries a fixed coupon rate of 3.20%.

The group has substantial excess liquidity, with NOK 1.8 billion invested in short-term bond and money market funds. The return on the investment is sensitive to changes in market interest rates, and an increase in market rates normally reduces the value of these asset classes. Interest-rate duration measures the sensitivity of a fund to interest-rate changes: the longer the duration, the more sensitive the fund. Veidekke's investments in these asset classes comprise holdings in funds of investment-grade credit quality with short and medium durations. Accordingly, the portfolio has moderate price sensitivity to changes in market interest rates. For further information on the investments, see note 28.

For further information on the company's financial risks, see note 29.

The market

Production in the Scandinavian construction markets increased by approximately 5% in 2022 (measured in fixed prices), thanks to a high number of project starts throughout most of 2021 and in the first half of 2022. This development was driven particularly by fundamental factors like increased migration to major cities, very strong labour markets and low interest rates.

However, falling demand in 2022 – especially in the second half of the year – resulted in a declining number of construction project starts. Higher interest rates and concerns about an economic downturn in Scandinavia and internationally drove the decline in demand, as did increasing inflation triggered by high energy prices and sanctions resulting from the conflict in Ukraine.

Veidekke expects rising interest rates to reduce the number of building starts going forward. Current forecasts for the Scandinavian economy indicate that other fundamental drivers, like population growth and labour markets, will remain strong and will help dampen the downturn. The most severe downturn is expected in the residential sector, where activity has been especially high in recent years. Activity levels in the infrastructure market are expected to remain high, with accelerating growth in the water, sewerage, and energy segments.

The construction market is expected to be most resilient in Norway, where the economy is supported by high activity in the energy sector and expansive government spending. Construction-cost inflation is expected to diminish in 2023, although uncertainty remains high due to the conflicts which continue to impact European energy markets.

Events after the balance sheet date

No events with a material effect on the issued accounts have occurred after the balance sheet date.

The parent company Veidekke ASA

The primary task of Veidekke ASA is to exercise ownership of the operational entities in the group. The company has 50 (2021: 47) employees, including 20 (2021: 19) women. Veidekke ASA issues its accounts in accordance with the Norwegian Generally Accepted Accounting Principles (NGAAP).

Veidekke ASA performs group functions on behalf of its subsidiaries, in the form of services in areas such as financial management, IT infrastructure, insurance, HR, OHS, communications and information. These services are invoiced to the relevant subsidiaries in full or in part.

Veidekke ASA generated operating revenues of NOK 120 million (2021: NOK 93 million) in 2022 and made an operating loss of NOK 163 million (2021: NOK -143 million). Dividends and group contributions from subsidiaries amounted to NOK 1 357 million (2021: NOK 1 061 million). The company accounts show an annual pre-tax profit of NOK 1 120 million (2021: NOK 933 million).

The board of directors is proposing an ordinary dividend of NOK 7.75 per share in respect of the 2022 financial year. This equates to a distribution ratio of 96% of the profit per share, in line with the minimum distribution target of 70% under the dividend policy. The parent company, Veidekke ASA, achieved an annual profit of NOK 1 115 million (2021: NOK 924 million). At the company's annual general meeting on 10 May 2023, the board will propose the following allocation of the annual profit:

	NOK millioner
Allocated to dividend	1 046
Transferred to other equity	70
Profit for the year	1 115

A statement on corporate governance has been prepared in accordance with section 3-3b of the Norwegian Accounting Act and is included in this report. An account of Veidekke's social responsibility work has been prepared in

accordance with section 3-3c of the Norwegian Accounting Act and is also included in this report.

Going concern

Pursuant to section 3-3a of the Norwegian Accounting Act, the board of directors confirms that the company is a going concern and that the annual accounts for 2022 have been prepared on this basis.

Oslo, 23 March 2023 The board of directors of Veidekke ASA

Financial statements and notes

Annual financial statement Veidekke group

Income statement Veidekke group	32
Consolidated statement of comprehensive income	33
Statement of financial position Veidekke group	34
Statement of changes in equity Veidekke group	35
Statement of cash flows Veidekke group	36
Notes Veidekke group	37
Note 01. General information	37
Note 02. Accounting policies – Veidekke Group	37
Note 03. Segment information	45
Note 04.Revenue	48
Note 05. Payroll costs	49
Note 06.Share issues to employees	50
Note 07. Financial income and financial costs	51
Note 08. Construction projects in progress	52
Note 09.Earnings per share	52
Note 10. Goodwill	53
Note 11. Other intangible assets	55
Note 12. Plant, machinery, land and buildings	56
Note 13. Leases (IFRS 16)	58
Note 14. Acquisitions and divestments	61
Note 15. Investments in associates and joint ventures	62
Note 16. Public–private partnership (PPP) projects	63

Note 17. Financial assets	65
Note 18. Inventory	65
Note 19. Trade receivables and contract balances	66
Note 20. Cash and cash equivalents	68
Note 21. Number of shares, shareholders etc.	68
Note 22. Pensions	70
Note 23. Tax costs and deferred tax	73
Note 24. Non-current liabilities	76
Note 25. Trade creditors and other current liabilities	76
Note 26. Warranty allocations etc.	77
Note 27. Security, guarantee liabilities and joint and several liability	77
Note 28. Capital management	78
Note 29. Financial risk	79
Note 30. Financial instruments	81
Note 31. Executive remuneration	86
Note 32. Project-related disputes and claims	89
Note 33. Related-party transactions	89
Note 34. Events after the reporting date	90
Note 35. Alternative performance measures	90
Note 36. Corporate structure	90

Annual financial statement Veidekke ASA

Income statement Veidekke ASA	92
Statement of financial position Veidekke ASA	93
Statement of cash flows Veidekke ASA	94
Notes Veidekke ASA	95
Accounting policies	95
Note 01. Payroll costs	95
Note 02. Pensions	96
Note 03. Remuneration to auditors	96
Note 04.Operating assets	96
Note 05. Financial income and financial expenses	97
Note 06.Shares in subsidiaries	97
Note 07. Tax costs and deferred tax	98
Note 08. Shares in associates and joint ventures	99
Note 09. Financial investments and other non-current receivables	99
Note 10. Receivables and liabilities with group companies	100
Note 11. Bank deposits and short-term financial investments	100
Note 12. Reconciliation of equity	101
Note 13. Non-current liabilities	101
Note 14. Guarantees	101
Note 15. Other notes	101

Income statement Veidekke group

Figures in NOK million	Note	2022	2021
Revenue	3, 4, 5, 9, 33	38 658	37 592
Subcontractors		-18 618	-18 687
Cost of materials		-5 814	-5 582
Personnel expenses	5, 6, 22, 31	-7 312	-7 209
Other operating expenses		-4 506	-3 834
Depreciation	11, 12, 13	-938	-919
Operating expenses		-37 188	-36 231
Share of net income from joint ventures	16	37	2
Operating profit		1 508	1 364
Financial income	7, 30	45	70
Financial costs	7, 30	-87	-92
Profit before tax		1 467	1 342
Income tax expense	23	-308	-313
Profit for the year		1 159	1 029

Figures in NOK million	Note	2022	2021
Profit for the year
Equity holders of Veidekke ASA		1 092	958
Non-controlling interests		67	71
Total		1 159	1 029
Profit per share (NOK) (ordinary/diluted)	9	8,1	7,1

Consolidated statement of comprehensive income

Figures in NOK million	Note	2022	2021
Profit for the year		1 159	1 029
Value adjustment pension after tax	22, 23	33	- 39
Net items that will not be reclassified subsequently to profit or loss		33	- 39
Currency translation differences		4	- 82
Fair value adjustment of financial assets after tax	23, 30	91	46
Net items that will be reclassified subsequently to profit or loss		95	- 36
Total other income and expenses after tax		128	- 75
Comprehensive income		1 287	954
Comprehensive income attributable to
Equity holders of Veidekke ASA		1 218	886
Non-controlling interests		68	68
Total		1 287	954

Statement of financial position Veidekke group

Figures in NOK million	Note	31.12.2022	31.12.2021
ASSETS
Non-current assets
Goodwill	10, 14	2 016	1 758
Other intangible assets	11	137	150
Rights of use assets	13	857	896
Land and buildings	12	740	689
Plant and machinery	12	1 724	1 599
Asphalt and aggregates plants	12	626	600
Investments in joint ventures	15	278	150
Financial assets	17, 30	524	479
Total non-current assets		6 901	6 323
Current assets
Inventories	18	639	590
Trade receivables	19, 30	3 852	3 533
Contract assets	19, 30	2 729	2 056
Other receivables		286	460
Financial investments	20, 30	523	539
Cash and cash equivalents	20	2 714	3 814
Total current assets		10 743	10 992
Total assets		17 644	17 315

Figures in NOK million	Note	31.12.2022	31.12.2021
EQUITY AND LIABILITIES
Equity
Share capital	9, 21	67	67
Other equity		2 906	2 781
Non-controlling interests		22	17
Total equity		2 995	2 865
Non-current liabilities
Pension liabilities	22	565	596
Deferred tax liabilities	23	674	581
Bonds	24, 30	193	600
Debts to credit institutions	24, 30	194	162
Other non-current liabilities	24, 30	687	1 358
Total non-current liabilities		2 313	3 297
Current liabilities
Debts to credit institutions	30	14	13
Trade payables	25, 30	6 093	5 748
Contract liabilities	19, 30	1 984	1 936
Public duties		941	900
Warranty provisions	26	989	975
Taxes payable	23	161	206
Other current liabilites	25	2 153	1 374
Total current liabilities		12 336	11 153
Total equity and liabilities		17 644	17 315

Statement of changes in equity Veidekke group

					Equity holders of Veidekke ASA				Minority
Figures in NOK million	Note	Share capital	Other paid-in capital 1	Re-evaluation of pensions	Currency translation differences	Other retained earnings	Fair value adjustments2	Total	Non-controlling interests	Total
Equity at 1 January 2021		67	419	-46	54	2 514	-156	2 853	25	2 877
Profit for the year		-	-	-	-	958	-	958	71	1 029
Other comprehensive income		-	-	-39	-79	-	46	-72	-3	-75
Share-based transactions employees	6	-	-	-	-	-38	-	-38	-	-38
Transactions, non-controlling interests		-	-	-	-	-	-	-	22	22
Change, non-controlling interests, housing cooperatives in Sweden	24	-	-	-	-	-76	-	-76	-38	-114
Dividend	21	-	-	-	-	-776	-	-776	-60	-836
Equity at 31 December 2021		67	419	-85	-25	2 581	-110	2 848	17	2 865
Equity at 1 January 2022		67	419	-85	-25	2 581	-110	2 848	17	2 865
Profit for the year		-	-	-	-	1 092	-	1 092	67	1 159
Other comprehensive income		-	-	33	1	-	91	125	2	128
Share-based transactions employees	6	-	-	-	-	-31	-	-31	-	-31
Additions, acquisitions of operations, non-controlling interests		-	-	-	-	-	-	-	8	8
Transactions, non-controlling interests	24	-	-	-	-	-112	-	-112	-21	-133
Purchase of own shares	21	-	-	-	-	-5	-	-5	-	-5
Dividend	21	-	-	-	-	-945	-	-945	-50	-995
Equity at 31 December 2022		67	419	-52	-24	2 581	-19	2 973	22	2 995

¹ Paid-in capital over and above nominal value of shares.

² Financial assets and derivatives defined as hedging instruments, which are both measured at fair value in other comprehensive income. See note 30 details.

Statement of cash flows Veidekke group

Figures in NOK million	Note	2022	2021
Operating activities
Pre-tax profit		1 467	1 342
Net interest items	7	60	55
Tax paid	23	-290	-128
Depreciation and impairments operating assets	10, 11, 12	591	584
Depreciation rights of use assets	13	348	335
Net gains from sale of property, machinery etc.	12	-247	-118
Gains from sale of operations	7, 14	-1	-29
Share-based transactions directly over equity	6	-31	-38
Profit and loss items without cash effect		-57	43
Generated from this year's activities		1 839	2 046
Change in trade receivables	19	-790	868
Change in other current receivables		51	-91
Change in trade payables etc.	25	219	-348
Change in other current liabilities	25	90	-281
Net cash flow from operating activities (A)		1 409	2 194
Investing activities
Acquisition of tangible, non-current assets	11, 12	-785	-751
Disposal of tangible, non-current assets	12	356	278
Acquisition of subsidiaries	14	-299	-75
Sale of operations	14	3	135
Interest received	7	8	24
Net cash flow other investments	17	16	108
Net cash flow from investing activities (B)		-701	-282

Figures in NOK million	Note	2022	2021
Financing activities
New long-term debt	24	37	-
Repayment of non-current debt	24	-448	-53
New short term liablitities	25	1	-
Repayment of current liabilities	25	-	-16
Payment of principal IFRS16 leases	13	-343	-330
Payment of interest IFRS16 leases	13	-29	-27
Interest paid	7	-26	-52
Purchase of own shares	21	-5	-
Dividend paid to non-controlling interests		-50	-60
Dividend paid, group	21	-945	-776
Cash flow from financing activities (C)		-1 808	-1 314
Total net change in cash and cash equivalents (A+B+C)		-1 100	598
Cash and cash equivalents at 1 January	3 814	3 219
Exchange rate adjustments cash and cash equivalents		-	-3
Cash and cash equivalents at 31 December	2 714	3 814

Notes Veidekke group

Note 01. General information

Veidekke ASA is a one of Scandinavia's largest construction companies, headquartered in Oslo and listed on the Oslo Stock Exchange. The consolidated accounts include Veidekke ASA and its subsidiaries and the group's investments in associates and joint ventures. The group's operations are further described in note 3 Segment information. The main office's address is Veidekke ASA, Skabos vei 4, 0214 Oslo, Norway.

Note 02. Accounting policies – Veidekke Group

General

The most important accounting principles used in the preparation of the consolidated accounts are described below. These principles have been applied identically in all presented periods. The consolidated accounts are prepared on the basis of historical cost, with the exception of certain financial instruments and derivatives measured at fair value on the balance-sheet date. Transactions involving gradual acquisition are measured at fair value on the transaction date, provided that the transaction results in a change of control of the undertaking. Unless otherwise specified, all financial information in financial statements and notes is presented in millions of Norwegian kroner. All sums specified in notes are rounded to the nearest NOK 1 million.

Basis for preparation of the accounts

Veidekke's consolidated accounts have been prepared in accordance with EU-approved International Financial Reporting Standards (IFRS) and Interpretations, together with the disclosure requirements stipulated by the Norwegian Accounting Act. Only standards that are effective on 31 December 2022 have been applied.

Material accounting assessments, estimates and assumptions

Veidekke's operations primarily consist of construction work. For its projects, Veidekke recognises revenue using the percentage of completion method, based on the anticipated final profit (final outcome) and stage of completion. This means that income is recognised as work progresses.

The use of reasonable estimates and discretionary assessments is a key element in the preparation of the consolidated accounts. The percentage of completion method is based on estimates and assessments, entailing a degree of uncertainty in the accounting. For projects under construction, there is uncertainty associated with the progress of ongoing work, disputes, final outcome, etc. For completed projects, there is uncertainty about hidden deficiencies, including guarantee work, and the outcome of possible disputes with clients and suppliers.

Areas with significant estimation uncertainty

Accounting items with significant estimation		Discussed in the follow
uncertainty	Estimates / assumptions	ing notes	Carrying amount
Trade receivables/ Contract assets/ Trade payables (creditors)/ Warranty provisions	At 31 December 2022, project assessments had been carried out for all projects, focusing on the expected coverage contribution of the individual project on completion. The assessment is based on estimates, experience, professional judgement and interpretation of contracts. The revenue recognition method for additional claims against the client and disputed amounts with a high level of uncertainty is based on assessments of the most likely outcome and elements that can be measured reliably. Additional requirements are recognised only once it is considered highly probable that a substantial portion of this income will not be	9, 20, 26, 27, 33	Most of the group's current assets and current liabilities are related to projects.
	reversed at a later date. Calculation of the present value of future cash flow.
Goodwill	The main assumption in this calculation is expected future earnings.	11	NOK 2 016 million (2021: NOK 1 758 million)
Pension liabilities	A large proportion of the group's pension liabilities are calculated by an actuary, based on a number of actuarial assumptions.	23	NOK 565 million (2021: NOK 596 million)

1. Consolidation

Consolidated accounts

The consolidated accounts include Veidekke ASA (the parent company) and all of its subsidiaries. The consolidated accounts show the group's profit and financial position as if they are one legal entity and are a collective statement of all the companies in the group. The companies' accounts are consolidated line by line. The consolidated accounts are drawn up in accordance with uniform accounting standards.

Subsidiaries are defined as companies in which Veidekke has a controlling interest. Controlling interest is normally achieved, directly or indirectly, when the group owns more than 50% of the

shares in the company, or when the group is in a position to exercise actual control over the company. Control of a company can also be achieved through agreements or articles of association. In assessing control, currently exercisable voting rights are taken into account. Veidekke currently controls more than 50% of the voting rights in all subsidiaries. In terms of accounting, "control" is defined as when one company has influence over another company, is exposed or has rights to variable returns from the company, and has the ability to affect those returns to a significant degree by using its power to control activities in the company. Group formation can be achieved by establishing new companies, by purchasing companies or through mergers. Subsidiaries are consolidated in the accounts when

a controlling interest is achieved and continue to be consolidated until control ceases.

Partly owned subsidiaries are incorporated in the consolidated accounts in their entirety. The non-controlling share of the subsidiary's equity constitutes part of the group's equity. The share of the profit attributable to non-controlling interests is included in the consolidated profit for the year. The non-controlling interests' share of profit and equity are presented as separate items in the accounts. When purchasing a subsidiary with non-controlling interests, 100% of the identifiable assets and liabilities are entered in the consolidated statement of financial position, whereas in terms of goodwill a decision can be made for each individual acquisition as to whether only the parent's (Veidekke's) share of goodwill is entered, or whether the non-controlling party's share of goodwill will also be recognised.

When Veidekke acquires a non-controlling interest in a subsidiary, the purchase price beyond the non-controlling party's share of the book value is recorded as a reduction in the equity of the owners of the parent company. If an option agreement has been entered into with non-controlling interests regarding purchase of the remaining shares, an equity transaction between the non-controlling interest and Veidekke is recognised at each balance sheet date as if Veidekke had acquired the shares.

See also the section on options in non-controlling owner interests on page 39. In connection with the sale of shares in a subsidiary where the controlling interest is retained, this must be accounted for as an equity transaction. Such transactions, therefore, involve no change in goodwill or other assets or

liabilities and thus are not recognised in profit and loss. All intra-group transactions and balances are eliminated, as are intra-group profits and unrealised gains. The accounts of the subsidiaries have been restated to ensure consistency with the group's accounting principles.

Step acquisitions and disposals

In connection with the purchase and sale of companies, it will normally be assessed whether the transaction is an asset transaction or a business transaction. In Veidekke's construction and industrial operations, the purchase and sale of companies will normally be treated as a business transaction.

When a business is acquired in steps such that the status changes from having a non-controlling stake in the company to having a controlling stake (i.e. becoming a subsidiary), the previously held stake is valued at fair value and the gain or loss is recognised in the income statement. The fair value of the previous non-controlling ownership interest is included in the calculation of goodwill.

When part of a subsidiary is sold such that Veidekke retains more than 50% of the shares, no gain or loss is recognised in the income statement. If the sale results in a loss of control, normally when there is a stake of 50% or lower, the gain or loss is recognised in the income statement as if the entire company had been sold. This means that the remaining ownership interest is accounted for at fair value.

In connection with step acquisitions in a company that is regarded as an asset, such that Veidekke's status changes from having a non-controlling stake in a company to it becoming a subsidiary, the original cost price is allocated to the identifiable assets and liabilities based on their relative fair value on the acquisition date.

When shares in a subsidiary that is regarded an asset are sold and more than 50% of the shares are retained, no gain or loss is recognised in the income statement. If the sale results in loss of control, normally when there is a stake of 50% or lower, a gain or loss is recognised in the income statement corresponding to the realised asset.

Business combinations

Business combinations may be achieved through the acquisition of a company's operations, the acquisition of companies, or mergers. Business combinations are accounted for using the purchase method, where identifiable assets and liabilities are valued and recognised at fair value. Identifiable assets also include intangible assets, such as patents, licences, trademarks, logos, and customer portfolios.

That part of the price that exceeds the fair value of identifiable assets and liabilities constitutes goodwill. Only acquired goodwill is recorded in the income statement, and acquisition costs are expensed. Identifiable excess value in connection with acquisitions is included in the calculation of deferred tax, whereas no provision is made for deferred tax in the case of goodwill. The fair value of tangible assets is depreciated systematically, while goodwill and intangible assets with an undetermined lifespan are tested annually for impairment.

Conditional consideration is recognised in the statement of financial position at fair value on the acquisition date. Any subsequent changes in the

conditional consideration are recognised in the income statement.

Excess value and goodwill are determined at the time of group establishment. If there are subsequent changes in ownership, the changes will not affect goodwill or identified excess value, as these are locked from the acquisition date. However, the change in ownership will affect allocations between controlling and non-controlling interests.

Joint ventures

Veidekke is also engaged in operations with other enterprises, called joint ventures. These operations are managed through separate legal entities, which may be limited companies or general partnerships. Joint venture companies are used for investments in PPP (public–private partnership) companies and in some property development projects. Joint control is governed by an agreement and requires unanimity among the participants on important decisions. Veidekke uses the equity method to account for joint ventures, and the activities are included from the date that joint control of the company commences and until the joint control ceases. The accounts of joint ventures are adapted to IFRS, in keeping with Veidekke's accounting policies, before they are incorporated in the consolidated financial statements.

Under the equity method, investments are measured as the share of the equity in the company, and the share of the profit of the associated company is recognised in the income statement. Any share of other income and expenses is included in the financial statements. When a portion of a company is acquired, the investment is reported at original cost, i.e. the share of the equity measured at fair

value on the acquisition date, including goodwill. The share of the profit is recognised on a separate line under operating profit on the income statement. The investment is classified as non-current assets in the statement of financial position. Any subordinated loan is presented as part of the investment. Profit less distributions is added to the investment in the statement of financial position. When calculating the share of the profit, depreciation of the fair value of tangible and intangible assets on the acquisition date and internal gains are taken into account.

Negative equity in the company is recognised when the group is obligated to cover such loss, or when there are agreements making it likely that Veidekke will have to inject new equity into the company.

Joint operations

Veidekke also runs operations along with other enterprises through working partnerships. A working partnership is a collaboration between two or more participants who undertake a construction project together, and where they share the risk in the project (profit and loss) and the participants are jointly responsible for the working partnership's liabilities. Separate accounts are kept for working partnerships. Activities within a working partnership are often organised as a general partnership. A working partnership is a jointly controlled activity, and it is regarded as joint operations. This means that the participants control operations jointly, as laid down in an agreement, and requires unanimity on important decisions.

For working partnerships and jointly controlled operating arrangements, Veidekke recognises its share of assets, liabilities and revenues in line with the arrangements specified in the agreement (usually in line with its interest in the project). This means that Veidekke's share of the partnership's accounts is included, and each line in the income statement and statement of financial position is incorporated. Intra-group transactions are eliminated with a proportionate share.

Associates

Veidekke has investments in associates. Associates are companies in which the investing company has significant influence over financial and operating policies, but which are not subsidiaries or joint ventures. Significant influence will normally mean that the investing company holds between 20% and 50% of the shares in the company.

Associated companies are accounted for using the equity method from the date that significant influence commences until the significant influence ceases.

Put options non-controlling interests

The present value of the future purchase price related to non-controlling interests' put options is accounted for as liabilities (see note 24). The liabilities are recognised using estimated value, and the estimate may change in future periods since the amounts to be paid relate to future fair value and/or future profits. Any changes in the estimated purchase price of the shares (put option) are recognised as an equity transaction.

At each balance sheet date, a transaction between the non-controlling ownership interest and Veidekke is recognised as if Veidekke had taken over the non-controlling owner's shares at the estimated purchase price.

Translation of foreign operations

The group presents its financial statements in Norwegian kroner, which is the functional currency of the parent company and its Norwegian subsidiaries. The accounts of foreign companies with a different functional currency are converted as follows:

• ∙ Assets and liabilities are converted at the exchange rate on the balance sheet date.
• ∙ Income statement items are converted at the average exchange rate for the month.
• ∙ Currency translation differences are recognised in other income and expenses in total comprehensive income. Translation differences are recorded on an ongoing basis against other income and expenses in total comprehensive income. In the case of disposal of a foreign entity, the accumulated currency translation differences are recognised in the income statement. Sale and liquidation of a company, repayment of capital etc. count as disposal.

Goodwill on the purchase is considered part of the foreign entity and is treated as an item in foreign currency.

2. Revenue recognition

Construction projects

Veidekke's operations consist largely of the execution of all kinds of construction and civil engineering projects lasting anything from a few months to three or four years. For reporting of projects Veidekke primarily uses the stage of completion method, based on the estimated final profit. This means that income is reported in line with production, based on degree of completion.

The revenue recognition for additional claims

against the client and disputed amounts with a high level of uncertainty is based on assessments of the highly probable outcome of the dispute and elements that can be measured reliably. Additional claims are only recognised once it is considered highly probable that a substantial portion of this income will not be reversed at a later date.

Provision is made for guarantee work based on historical experience and identified risks. The guarantee period is normally from three to five years. For projects that are expected to make a loss, the whole loss is recognised in the income statement as soon as it is identified. A project is defined as loss-making if the cost-coverage contribution is negative. The costcoverage contribution only includes project-related costs, not other fixed costs. Costs related to tenders and other costs related to obtaining projects are recognised as expenses as they are incurred. The stage of completion is determined on the basis of the work completed and is normally calculated as the ratio of accrued expenses to date to estimated total expenses for the project. Accrued expenses to date are equal to book expenses adjusted for time lag in invoicing (Accrued but not recorded). Income to date is equal to total anticipated expenses plus project contributions multiplied by the stage of completion. Accrual accounting is used for both income and expenses.

Non-invoiced earned income is booked as Contract assets (Work done, but not invoiced). Unearned invoiced income (pre-agreed payment plans) is booked under trade receivables (Work invoiced in advance). Only one of these items may be applied per project. If the item Work invoiced in advance is a larger negative amount than invoiced trade receivables for the project, the surplus is recorded

as advance payment from customers (Contract liabilities). Each project thus shows either a net receivable from the customer or a net debt to the customer. While the right to issue an invoice normally arises once work has been completed, contracts often specify an invoicing schedule. Cost accruals (Accrued, not recorded) are entered under Trade payables, while provisions for guarantee work on completed projects are entered under Warranty provisions etc. Please refer to note 8 Projects in progress, note 19 Trade receivables and contract balances, note 25 Trade creditors and other current liabilities, note 26 Warranty allocations etc., and note 32 Project-related disputes and claims.

Long-term contracts for the operation and maintenance of public roads

Operation and maintenance contracts usually have a term of five years. For road operation and maintenance contracts, revenue is recognised on a percentage of completion basis in line with completed tasks and related costs. For each contract, a final-profit assessment/cost-coverage contribution assessment is prepared for the entire contract period at the end of the period. If a contract is expected to result in a net loss in the remaining contract period, the loss is recognised as soon as it is identified. The loss recognition shall cover the remaining ordinary term.

PPP projects

Veidekke has ownership shares in companies that have entered into PPP contracts (Public–Private Partnerships) for the construction of roads and schools with a subsequent operation and maintenance period. The PPP contracts are accounted for according to IFRIC 12 Service Concession

Arrangements (The Financial Asset Model), as a financial asset at cost amortised over the contract period. This is discussed in more detail in note 16.

Veidekke's owner function in the PPP companies is reported in the business area "Other operations". Profit is recognised in income over the entire lease period in line with the ownership interest. Services in the form of construction or operation are reported under the business areas Construction or Infrastructure. Construction services are accounted for as an ordinary building construction project. Deliveries related to maintenance are expensed as they are incurred.

Other operations

Income from sales of products (aggregates, asphalt, etc.) is recognised on delivery. For leasing operations the agreed rental fee is recognised on a straight-line basis. This also applies to services rendered, consultancy work, etc. Sales of noncurrent assets are recognised in the income statement on delivery.

3. Financial instruments

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. Veidekke recognises financial assets and financial liabilities in the statement of financial position when the enterprise becomes a party to the provisions of the contract.

Financial assets

The group classifies financial assets in the following five categories:

1. Financial assets measured at amortised cost The group measures financial assets at amortised cost if the following two conditions are met:

The financial asset is held in a business model the objective of which is to collect contractual cash flows, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of the principal and interest on the principal amount outstanding.

The subsequent measurement of financial assets measured at amortised cost is done using the effective interest rate method adjusted for any provisions for losses. Gains and losses are recognised in profit or loss when the asset is discounted, modified or written down.

On initial recognition of a financial asset measured at amortised cost, Veidekke measures it at fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset.

2. Financial assets measured at fair value with changes in fair value recognised through Other comprehensive income

The group measures debt instruments at fair value with value changes recognised through other comprehensive income if two conditions are met: the financial asset is held in a business model whose objective is both to collect contractual cash flows and sales, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of the principal and interest on the principal amount outstanding. The debt instrument is measured at fair value with value changes through other comprehensive income. In the event of

derecognition, the accumulated change in fair value that has been recognised in other comprehensive income is transferred to profit or loss.

Veidekke has no financial assets in this category.

3. Financial assets measured at fair value with value changes recognised through profit or loss Financial assets which are not equity instruments are measured at fair value with value changes through profit or loss.

4. Equity instruments measured at fair value with value changes through Other comprehensive income The group may choose to identify equity instruments at fair value with value changes through other income and costs as long as they meet the definition of equity in IAS 32 Financial instruments.

Veidekke has no financial assets in this category.

5. Derivatives measured at fair value defined as hedging instruments

Derivatives are recorded in the statement of financial position at fair value, adjusted for net changes in fair value recognised through Other comprehensive income. This only applies to derivatives whose hedging is documented and effective. This category contains forward foreign exchange contracts and interest rate swaps.

Impairment of financial assets

If there are indications of impairment relating to loans and receivables that are measured at amortised cost, the need to record an impairment loss shall be considered. The impairment amount is calculated as the difference between the

asset's recognised value and the present value of anticipated future cash flows. The impairment amount is charged to income.

Veidekke has two types of financial risks relating to the group's trade receivables: credit risk and project risk.

Credit risk relates to the customer's ability to pay. This risk has always been low at Veidekke in part because contracts normally require guarantees related to the underlying contract. Provision for such losses is made using a separate "Provision for bad debts" account. The group applies a simplified method for calculating provisions for bad debts, assessing each provision based on the anticipated credit loss over the reporting period, rather than on a 12-month anticipated loss. The group has developed a provision matrix based on historic credit losses, adjusted for forward-looking factors specific to each customer and the general economic situation.

Project risk relates to a customer's willingness to pay, and is managed as part of the project assessment. In the accounts, any drop in value is presented as a reduction in trade receivables. In the note, such risk is incorporated into the assessment of the item Work invoiced in advance.

For details, see notes 19 and 30.

If a financial asset measured at fair value with changes in value recognised through other comprehensive income with reclassification of accumulated gains and losses in profit or loss based on objective criteria has been the object of impairment, the loss is expensed in the income statement as impairment. A reversal of the

impairment of equity instruments classified in this category is not recognised in the income statement, but is recognised directly in the group's other comprehensive income.

Financial liabilities

On initial recognition, financial liabilities are classified as loans and liabilities, or derivatives defined as hedging instruments in an effective hedge. Derivatives are initially recognised at fair value. Loans and liabilities are recognised at fair value adjusted for directly attributable transaction costs. Derivatives are financial liabilities when the fair value is negative and are accounted for in a similar way as derivatives that are assets.

Financial liabilities – loans

Loans are reported in the accounts by recognising the amount received less directly related transaction costs. The loan is then measured at amortised cost using the effective rate of interest method. Effective interest rates are presented as financial costs in the income statement.

Derivatives and hedging transactions

On initial recognition, derivatives are recognised at fair value. Thereafter, the item is valued at each balance sheet date. On entering into a derivative agreement, the group defines whether this is a fair value hedge of an accounting item or hedging of an obligation it has entered into (a cash flow hedge). Changes in the fair value of derivatives that are both defined as hedging and satisfy the requirements for hedging are recognised in total comprehensive income. Such items are reversed and recognised as income or expenses during the period the hedged obligation or transaction affects the income statement. Changes

in the fair value of derivatives that do not qualify as hedging or where there are inefficiencies in the hedge are recognised as they occur.

Derecognition of financial assets and obligations

A financial asset is derecognised if the right to receive cash flows from the asset no longer exists. Similarly, a financial liability is derecognised if the liability has been fulfilled, cancelled or has expired as agreed.

Financial income and expenses

Financial income includes interest income on financial investments, dividends received and group contributions, currency gains, value increases and gains from financial assets. Financial expenses include interest charges on loans, currency losses, impairment and losses on the sale of financial assets. All loan expenses are recognised using the effective rate of interest method.

Interest expenses in connection with loans to key staff Financial Veidekke has provided loans to key staff in connection with the group's former share programme. These loans are recognised at amortised cost. Interest expenses are measured using the effective rate of interest method based on estimated market interest rates and are classified as payroll expenses. Interest on these is currently at 0.8%, and the difference between the nominal value of the loans and their fair value, based on discounting the future cash flow by the estimated market interest rate, represents a prepaid benefit to employees. These prepaid benefits are recognised in the income statement over the period from when a loan is granted until it is paid off.

4. Other princliples

Classification

Assets and liabilities relating to the supply of goods (projects) are classified as current assets and current liabilities.

Amounts due to credit institutions that are taken up to finance non-current assets (investments) and where there is an unconditional right to defer payment for more than 12 months from the balance sheet date are classified as non-current liabilities. Loans that are taken up to finance working capital (current assets) are classified as current liabilities. Other receivables and amounts due for payment after more than a year are classified as non-current assets and non-current liabilities.

Warranty allocations are closely related to the supply of goods and are therefore classified as current liabilities even if it is likely that large parts of the item will be due for payment after more than 12 months.

Pensions

Veidekke has both defined-contribution and definedbenefit plans. In defined-contribution plans the employer makes a contribution to the employee's pension savings. The future pension depends on the size of the contribution and the return on the pension assets. In defined-contribution pensions the cost to the company is equal to the contributions for the year, and the company's only commitment is to make an annual contribution. Thus, no liability is recorded in the statement of financial position. In the case of defined-benefit plans, the company commits itself to providing a pension of a specified size. An actuarial calculation is made each year of the pension costs and pension liabilities. Pension liabilities equal the present

value of the accrued pension rights. The employees' pension rights are recognised as costs as they are earned, and provision is made for pension liabilities in the statement of financial position. The pension calculation takes into account estimated wage growth, and pension costs are recognised on a straight-line basis over the employment period. Here, Veidekke bears the risk for the return on the pension assets.

Defined-benefit plans are measured at the present value of the future pension payments that for accounting purposes are regarded as accrued on the balance sheet date. The pension assets are recognised at fair value. The net of pension liabilities and pension assets is recognised as non-current debt. Pension assets consist of a premium fund and a share of the life assurance company's funds (premium reserves). Pension costs consist of the present value of the year's earning plus interest on the net pension liabilities. This means that the cost is calculated using the same discount rate for pension liabilities as is used to calculate expected return on pension assets. In defined-benefit plans, an annual difference arises between the estimated and actual return on pension assets and between estimated and actual pension liabilities, called actuarial gains and losses. Actuarial gains and losses may arise as a result of discrepancies and changes in the assumptions on which estimates were based. Actuarial gains and losses are recognised in total comprehensive income. In most of the Norwegian Veidekke companies, there are contractual early retirement schemes (AFP) for their employees. The AFP pension scheme is a defined-benefit multicompany scheme, and because the administrator is not in a position to procure reliable calculations concerning accrued rights, the accounting for the scheme will be conducted as for a definedcontribution scheme. This is discussed in more detail in note 22.

Tax

Income taxes are tax on the group's profit. Tax is treated as an expense in the accounts. Tax payable and deferred tax relating to items recorded as other income and expenses in total comprehensive income are recognised in total comprehensive income. The income tax expense for the year consists of payable tax, changes in deferred tax and adjustments from previous years. Payable tax is calculated based on the company's taxable profit for the year. Deferred tax is a provision (accrual) for future payable tax.

Deferred tax liabilities/assets are recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences arise because some items are accrued differently in the financial accounts and the tax accounts. Both tax-increasing and tax-reducing timing differences occur. Deferred tax is calculated on net temporary differences, i.e. by offsetting tax increasing against tax-reducing differences within the same tax jurisdictions. Deferred tax is measured on the basis of the current future tax rate in those companies in the group where temporary differences have arisen. Deferred tax is recognised at the nominal rate and is classified as a non-current asset or non-current liability.

Deferred tax assets relating to loss carry-forwards are recognised in the accounts when it is probable that the company will be able to make use of the advantage. Tax payable and deferred tax are

recognised in the income statement, unless the tax is related to a transaction or event that has already been recognised in total comprehensive income or directly in equity, or it is related to a merger.

Goodwill

Goodwill arises when the group acquires a business. Goodwill includes synergies, organisation, knowhow, market position, etc. Goodwill is calculated as the fair value of the purchase price at the time of the acquisition less the fair value of the acquired company's identified assets, liabilities and contingent liabilities. If the acquisition does not involve 100% ownership for the parent company, the entire fair value can be used as the basis for determining goodwill. This entails the non-controlling party's share of goodwill being recognised as goodwill as well. The principle used for measurement of non-controlling interests is determined separately for each business combination. Goodwill is not amortised, but is tested for impairment at least annually. See note 10 Goodwill.

Other intangible assets

Intangible assets with a determinable useful life are measured at original purchase price less accumulated amortisation and impairment losses. This applies, among other things, to extraction rights for aggregates, for which amortisation is determined based on actual extractions. Investments in IT systems are capitalised and recorded under Other intangible assets, and normally depreciated over a period of up to eight years.

Tangible non-current assets

Tangible non-current assets consist of plants, buildings, machinery and equipment, etc. Veidekke records tangible non-current assets in the statement of financial position using a historical cost model. This means that tangible non-current assets are measured at original cost less accumulated depreciation and impairments. Tangible non-current assets are recognised when it is probable that future economic benefits linked to the asset will accrue to the company and the original cost can be measured reliably. This applies both to first-time purchases of operating equipment and to subsequent changes, conversions, overhauls, etc. Other repairs and maintenance are recognised as expenses as they arise. Tangible non-current assets are depreciated on a straight-line basis over their estimated useful lives.

The estimated expected useful lives for the current
period and comparable periods are as follows:
- Vehicles: 5 years
- Machinery etc.:	5–8 years
- Asphalt plants and quarries: 15 years
- Buildings: 20–50 years

The depreciation period and residual value are assessed annually. Gains and losses on disposals of non-current assets are recognised in profit and loss and represent the difference between sales price and carrying value. Gains on sales of non-current assets are presented under operating revenues, while losses on sales of assets are presented under other operating expenses.

Impairment of non-current assets

If there is an indication of impairment in value of a tangible, non-current asset, the recoverable amount is calculated. An impairment loss is recognised if the recoverable amount of a non-current asset is less than its carrying amount. The recoverable amount is the

higher of net sales value and value in use. Value in use is the present value of the future cash flows that the asset is expected to generate. If there is an indication that the asset is impaired in value, the recoverable amount is used and the necessary impairment is recorded.

Intangible non-current assets with an indeterminable life and goodwill are tested for impairment each year, and any impairment is recorded. Impairment testing may also be performed on a quarterly basis if there are indications of impairment. The value in use is calculated for each cash-generating unit (CGU). If a CGU is impaired, goodwill is written down first, and other assets are then written down proportionately. If the value of impaired intangible non-current assets rises again later, the impairment may be reversed; however, impairment of goodwill is not reversed. The calculation of the value in use of a CGU is based on future estimated cash flows for the unit, discounted at a suitable rate in light of the group's required rate of return. The calculation is based on the CGU's budgets and forecasts, including terminal value. Maintenance costs and replacement investments are also taken into account, but not investments for expansion. Finance expenses and tax are not included in the calculation.

A cash-generating unit is determined as the smallest identifiable group of assets that generates incoming cash flows and that in all essence is independent of incoming cash flows from other assets or groups of assets. Units with significant synergies and that perform similar types of activities are considered as one cash-generating unit. Within construction operations a cashgenerating unit will normally be on the company level, whereas for industrial operations, they will

normally encompass business units, for example Asphalt or Aggregates.

The group as a lessee

When a contract is entered into, consideration is given to whether the contract constitutes or contains a lease agreement. A contract constitutes or contains a lease agreement if it transfers the right to control the use of an identified asset for a period of time in return for payment. Lease agreements are recognised in the accounts on the implementation date.

On the effective date of a lease, Veidekke calculates its obligation in its capacity as lessee as the present value of future lease payments. It also undertakes a corresponding asset calculation based on the right to use the underlying asset during the lease period (the usage right asset). The lease obligation is valued at the present value of the remaining lease payments, discounted using a marginal borrowing rate. Future lease payments are booked as repayments of the lease obligation and interest costs. The effective date of a lease is defined as the date when Veidekke takes control of the leased object.

Leased assets are depreciated on a linear basis over the lease period, while the lease obligation increases in accordance with the interest rate and is reduced by completed lease payments. Depreciation of leased assets and interest costs on lease obligations is incorporated into the income statement.

Lease periods include an extension option if it is reasonably certain that the option will be exercised and there are financial incentives for extending the lease agreement. The exercise of options

is associated with estimation uncertainty and discretionary assessment.

Veidekke has utilised an exception permitted by the standard and does not recognise short-term leases (less than 12 months' duration) or leases of low-value assets in the statement of financial position. Lease payments under lease agreements of this kind are expensed on a linear basis over the lease period. Lease obligations are not shown on separate lines in the statement of financial position, but are specified in a separate note. Lease obligations are not treated as interest-bearing debt because the majority of such obligations concern future rent payments, not the financing of operating assets. In notes and the cash flow statement, agreements of this type are referred to as IFRS 16 Lease agreements.

The group as a lessor

Lease agreements are classified as either operational or financial lease agreements. A lease agreement is classified as an operational lease agreement if it does not transfer all material risks and benefits associated with ownership of the underlying asset. Lease payments under operational lease agreements are recognised as income on a linear basis over the lease period.

Currency transactions

Transactions involving foreign currency are converted at the exchange rate at the time of the transaction. Monetary items in foreign currency are assessed at the exchange rate on the balance sheet date, and related currency gains or losses are recognised in the income statement. Monetary items are items that will be settled at a fixed nominal amount. This applies to liquid assets,

receivables, debts, etc. For non-monetary items, the exchange rate at the time of the transaction is taken as the basis for the original cost. This applies to tangible non-current assets, inventory, etc

Inventories

Inventories consist of project inventories in addition to raw materials/ inventory for the infrastructure operation. Project inventories are included in project valuations. The inventory for infrastructure operations is measured at the lower of total production costs and net sales price.

Warranty allocations etc.

An allocation is made in the accounts when the group has an obligation (legal or self-imposed) as a result of a previous event, and it is probable that a financial settlement will take place as a result of that obligation, and the amount can be measured reliably. Allocations are made for confirmed work under guarantee and for probable concealed deficiencies. See note 26.

Cash and cash equivalents

These consist of cash and bank deposits, including deposits subject to special conditions, and short-term liquid investments which can be converted into cash immediately. Investments in short-term money market funds are classified as cash and cash equivalents if the intention of the investment is to ensure liquidity for the payment of current liabilities. Only money market funds with very high security are classified as cash and cash equivalents. See note 20.

Share discounts

Veidekke purchases its own shares and then sells them to the employees at a discount with a lock-in period. These sales of shares are reported in

accordance with IFRS 2 on share-based payments. The discount is recognised in the income statement at fair value at the time of issue, taking into account the lock-in period. The discount is calculated according to an option-pricing model. The fair value of the discount is charged to personnel expenses. See note 6.

Proposed dividend

Proposed dividends are not recognised as liabilities in the accounts until they have been approved by the Annual General Meeting.

Disputes and claims related to projects

Veidekke's profits from projects are strongly influenced by estimates, entailing some uncertainty. See the discussion on page 37 under "Estimates". See also note 32 Project-related disputes and claims.

Borrowing costs

Borrowing costs that are directly attributable to the procurement, manufacturing or production of a qualified asset are recorded as part of the acquisition cost of the asset concerned.

In connection with the purchasing of operating equipment where it takes a long time before the operating equipment can be used for its intended purpose, interest is capitalised. This concerns, for example, construction of an asphalt plant. Other borrowing costs will be entered in the income statement as they incur.

Earnings per sharee

Earnings per share is calculated by dividing the profit for the period attributable to the owners of the parent company by the weighted average number of outstanding shares in the period.

Own shares

When the company buys back its own shares, the purchase price including directly attributable costs are deducted from equity. Own shares are recognised as a reduction in Share capital and Other equity. Any loss or gain on a transaction involving own shares is recorded directly against equity.

Statement of cash flows

The statement of cash flows is prepared using the indirect method.

Acquisitions and sales of companies are treated as investment activities. Acquired/sold companies' holdings of cash and cash equivalents are included/ deducted. This effect is therefore shown net, together with the cash payment made in the transaction. Lease agreements pursuant to IFRS 16 are classified as follows: depreciation is included in operational cash flow, and cash payments related to lease payments are divided into repayment of debt and paid interest and are treated as financing activity.

IFRS standards not yet effective

The International Accounting Standards Board (IASB) has adopted a number of interpretations and changes to existing standards and interpretations which had not yet entered into force at the time the accounts were closed on 31 December 2022. Veidekke has concluded that these interpretations and changes are unlikely to have a material effect on the group's financial position, profit/loss or note information going forward.

Note 03. Segment information

The segment structure mirrors the group's operational structure, which consists of five operational areas. This division reflects the type of delivery made and the market being served, and as reported to the Group CEO and corporate management accordingly.

Construction Norway is among the country's largest construction contractors. Its project portfolio includes apartment complexes and non-residential buildings such as schools, healthcare facilities, cultural buildings, office buildings, hotels and shopping centres. The operation is concentrated around Norway's major population centres.

Infrastructure Norway is a national civil engineering operation with projects in the road maintenance, railways, power production and airport segments. The operation is Norway's largest asphalt producer and contractor, the country's second-largest producer of aggregates and an important player in the operation and maintenance of the Norwegian public roads network.

Construction Sweden is a large, well-established construction operation with a broad portfolio of construction projects, including residential units, offices, schools and cultural buildings. The operation is concentrated in growth regions around Stockholm, Gothenburg and Malmö.

Infrastructure Sweden has a strong position in the market segments infrastructure, extractive industries, heavy industry, energy and recycling facilities/landfill, as well as asphalt-laying. Most activities are focused on the major metropolitan areas around Stockholm, Gothenburg and Malmö, although the operation is also a well-established supplier to the mining industry in northern Sweden.

Denmark consists of the wholly-owned subsidiary Hoffmann AS. The majority of Hoffman's projects involve commercial buildings. Hoffmann gives particular priority to close consultation with clients from an early stage, throughout the planning, design and execution phases.

"Other" comprises undistributed costs linked to administration and financial management of the group, the group's ownership role in public-private partnership (PPP) projects and shared services in the areas of HR, accounts and payroll. Revenue and internal profits between the segments are eliminated under "Elimination".

Business areas

		Construction Norway		Infrastructure Norway	Construction Sweden			Infrastructure Sweden		Denmark	Other operations		Eliminations		Group
Figures in NOK million									At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21
Income statement
Revenue	13 370	13 514	9 583	9 147	8 858	8 544	5 247	4 345	2 420	2 362	193	162	-1 012	-482	38 658	37 592
Operating expenses	-12 732	-12 845	-8 595	-8 190	-8 617	-8 285	-4 826	-4 076	-2 190	-2 138	-300	-253	1 009	474	-36 250	-35 312
Share of net income from joint ventures	-	-	10	2	1	-6	-	-16	-	-	27	22	-	-	37	2
Depreciation	-171	-180	-450	-458	-98	-92	-130	-117	-23	-24	-68	-51	2	2	-938	-919
Operating profit	467	489	548	502	144	160	291	137	208	200	-149	-119	-2	-6	1 508	1 364
Financial income	82	27	6	11	6	19	5	6	6	1	15	115	-75	-109	45	70
Financial costs	-19	-10	-58	-50	-10	-13	-6	-10	-1	-1	-68	-117	75	109	-87	-92
Profit before tax	530	507	496	462	140	166	290	133	213	200	-202	-121	-2	-6	1 467	1 342
Statement of financial position
Non-current assets	1 644	1 371	2 777	2 565	807	917	610	593	237	220	896	778	-70	-121	6 901	6 323
Current assets	2 702	2 198	2 010	2 119	1 705	1 356	662	588	357	270	2 008	1 727	-1 416	-1 080	8 028	7 178
Cash and cash equivalents	2 618	3 033	9	237	661	949	508	382	1 306	1 249	1 294	1 282	-3 682	-3 318	2 714	3 814
Total assets	6 963	6 602	4 796	4 921	3 174	3 222	1 781	1 563	1 900	1 739	4 197	3 787	-5 168	-4 519	17 644	17 315
Equity	762	1 121	973	914	306	390	270	259	454	416	15	-172	215	-63	2 995	2 865
Non-current liability	985	925	837	1 051	83	696	90	92	41	107	4 025	3 777	-3 748	-3 350	2 313	3 297
Current liabilities	5 216	4 556	2 985	2 955	2 785	2 136	1 421	1 212	1 405	1 216	157	183	-1 634	-1 105	12 336	11 153
Total equity and liabilities	6 963	6 602	4 796	4 921	3 174	3 222	1 781	1 563	1 900	1 739	4 197	3 787	-5 168	-4 519	17 644	17 315
Key figures
Operational cash flow	307	203	1 026	798	-19	451	130	197	217	85	-251	461	-	-	1 409	2 194
Cash flow from investments	-233	-57	-417	-168	-53	11	91	-15	-10	6	-79	-58	-	-	-701	-282
Number of employees	2 935	2 821	2 237	2 193	1 110	1 172	1 074	1 069	438	409	139	132	-	-	7 933	7 796
Order book	16 584	13 537	8 242	7 477	8 158	9 483	5 277	4 774	3 074	2 813	-	-	-	-	41 334	38 084
- due for completion within 12 months	11 794	9 148	3 527	3 523	5 337	6 082	2 714	2 641	2 327	1 644	-	-	-	-	25 699	23 039

Geographical segments

The geographical distribution of the group's activities corresponds to the geographical location of the resources used for the respective activities. This corresponds in the main to the location of the customers.

The statement has been prepared in accordance with the accounting policies used in the income statement (IFRS).

	Norway		Sweden		Denmark		Shared		Group
Figures in NOK million	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Income statement
Revenue	22 508	22 385	13 737	12 841	2 420	2 362	-7	3	38 658	37 592
Operating profit	1 015	991	435	297	208	200	-150	-125	1 508	1 364
Profit before tax	1 026	969	431	300	213	200	-203	-127	1 467	1 342
Statement of financial position
Total non-current assets	4 421	3 935	1 417	1 510	237	220	826	658	6 901	6 323
Number of employees	5 172	5 014	2 184	2 241	438	409	139	132	7 933	7 796
Order book	24 826	21 014	13 435	14 257	3 074	2 813	-	-	41 334	38 084
- due for completion within 12 months	15 321	12 671	8 051	8 723	2 327	1 644	-	-	25 699	23 039

Intra-group sales by segment

	Construction Norway		Infrastructure Norway		Construction Sweden		Infrastructure Sweden		Denmark		Other operations		Eliminations		Group
Figures in NOK million													At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21 At 31 Dec. 22 At 31 Dec. 21
External revenue	13 071	13 404	9 424	8 982	8 739	8 538	4 998	4 338	2 420	2 362	13	3	-7	-35	38 658	37 592
Internal revenue	298	110	159	166	119	5	249	7	-	-	180	159	-1 006	-447	-	-
Total revenue	13 370	13 514	9 583	9 147	8 858	8 544	5 247	4 345	2 420	2 362	193	162	-1 012	-482	38 658	37 592

All intra-group sales in continued operations are eliminated at the group level.

Note 04.Revenue

Ordinary revenue is solely from contracts with customers. For geographical distribution of revenue, see note 3 Segment information.

2021, figures in NOK million	Construction Norway	Infrastruct. Norway	Construction Sweden	Infrastruct.	Sweden Denmark	Other/ Eliminations	TOTAL	Order book	2020, figures in NOK million	Construction Norway	Infrastruct. Norway	Construction Sweden	Infrastruct.	Sweden Denmark	Other/ Eliminations	TOTAL	Order book
Service area									Service area
Appartments and small houses	4 935	-	2 136	-	41	-	7 111	7 593	Appartments and small houses	5 728	-	2 605	-	101		8 434	8 158
Commercial buildings	2 494	-	5 230	-	998	-	8 723	10 528	Commercial buildings	2 772	-	3 750		- 1 498		8 020	8 206
Public buildings	4 795	427	1 150		- 1 176	-	7 548	8 199	Public buildings	3 662	-	2 017	-	539		6 218	8 043
Transport – road	-	8	-	519	-	-	528	466	Transport – road	90	414	-	602	-	-	1 106	706
Transport – rail	-	2 335	4	612	-	-	2 951	2 871	Transport – rail	195	1 972	-	239	-	-	2 406	1 854
Asphalt and aggregates	-	3 396	-	762	-	-	4 158	-	Asphalt and aggregates	-	3 214	-	691	-		3 905	-
Other civil engineering	1 124	1 611	326	3 197	204	-	6 462	7 822	Other civil engineering	1 049	2 087	154	2 804	216		6 309	7 233
Maintainance contracts	-	1 691	-	-	-	-	1 691	3 854	Maintainance contracts	-	1 311	-	-	-		1 311	3 885
Eliminations/Other	-	-	-	-	-	-832	-832	-	Eliminations/Other	-	-	-	-	-	-320	-320	-
Total ordinary revenue	13 348	9 468	8 846		5 090 2 419		-832 38 339	-	Total ordinary revenue	13 495	8 998	8 526		4 337 2 355		-320 37 390	-
Other revenue	22	115	12	157	1	13	320	-	Other revenue	19	149	18	9	7	1	202	-
Total revenue	13 370	9 583	8 858		5 247 2 420		-819 38 658	-	Total revenue	13 514	9 147	8 544		4 345 2 362		-320 37 592	-
Total order book	16 584	8 242	8 158		5 277 3 074	-	-	41 334	Total order book	13 537	7 477	9 483		4 774 2 813	-		38 084

Specification of other revenue, figures in NOK million	2022	2021
Gains from sale of operating equipment1	254	111
Rental income	24	33
Other revenue	42	59
Other revenue	320	202

¹ Only gains are presented under other revenue. Any losses are presented under other operating expenses. In 2022, the sale of a site by Infrastructure Sweden generated a gain of NOK 130 million. For further information, see note 14.

Timing of revenue recognition, figures in NOK million	2022	2021
Goods transferred at a point in time1	1 019	850
Goods and services transferred over time	37 639	36 742
Total	38 658	37 592

¹ Consists primarily of aggregates related activities, as well as gains on the sale of equipment.

Remaining performance obligations, figures in NOK million	2022	2021
Within one year	26 000	23 104
More than 1 year	15 635	15 270
Total1	41 635	38 374

¹ The difference compared to the "total order book" is due to the exclusion of asphalt orders from the group's official order book.

Note 05. Payroll costs

Figures in NOK million	2022	2021
Payroll	5 591	5 564
Pension costs1	564	571
Employer's National Insurance contributions	1 014	993
Other payroll costs	144	81
Personnel expenses	7 312	7 209
Number of full time equivalents	7 733	7 772
Number of employees at 31 December	7 933	7 796

¹ See note 23.

Note 06.Share issues to employees

Veidekke sells shares to employees at a discount to the current market price every year. The shares are subject to a two-year lock-in period. Purchase of shares can be financed with cash payment or with an interest-free loan from Veidekke which is repaid over the year.

Two offers were made in 2022, in February for all employees and in November for key staff. In the November 2022 offer for key staff, the lock-in period was three years and an interest-free loan with a 15-year repayment profile was offered.

The share programmes are recognised in the accounts in accordance with IFRS 2 on share-based payment. The discount expensed in the income statement is calculated as the difference between the market price and the purchase price on the purchase date, reduced by the value of a sale option based on the lock-in period and historical share price fluctuations. The option is calculated using the Black-Scholes model.

Loans to key staff follow the conditions applicable at all times. The interest rate as of 31 december 2022 is 0.8% and the loans are repaid over 15 years. The loans are terminable after 10 years, and are secured by a charge over the shares. The loans linked to the share purchase scheme for all staff are interest-free and secured by a charge over the shares. The loan period was 10 months. The calculated interest cost linked to the long-term loans is classified as a payroll cost. Reference is made to notes 5 and 31.

Sale of shares to employees

Figures in NOK million	2022	2021
Number of shares sold to employees (acquired in the market)	1 918 314	1 836 174
Expensed discount after tax	9	5
Discount entered directly as a reduction in equity related to the group's share programme	23	33

Share loans to employees

Figures in NOK million, except number of executives and employees	2022	2021
Loans to key staff for purchases of shares in Veidekke ASA	122	97
Expensed change in the present value of share loans	3	2
Number of key staff with long-term loans	851	517

Employee share options

In May 2019, the annual general meeting approved a new three-year option programme for key staff. The number of options which may be allocated through the programme every year is capped at 1% of the number of shares in the company on the grant date. The option programme has now ended, but previous allocations are running as outlined below.

The options vest over 1–3 years (25% after the first year, 25% after the second year and 50% after the third year), and must be exercised within five years. The programme requires participants to be employed by the company during vesting, and to keep the shares for at least one year after exercising the options. A total of 1.6 million options remained unexercised as at 31 December 2022, adjusted for exercised options and employees who have left the group. The expensed option cost for 2022 is NOK 6 million and direct recognition against equity is NOK 7 million.

Issued options	2021 programme	2020 programme	2019 programme	Total
Number of options subscribed for			657 000	657 000
Correction for number of employees departed			-9 000	-9 000
Correction for number of options exercised				-
Number of issued options as at 31 December 2019			648 000	648 000
Exercise price at 31 December 2019 (NOK per share)			86.05
Number of options subscribed for		887 000		887 000
Correction for number of employees departed		-3 000	-78 750	-81 750
Correction for number of options exercised 1			-62 740	-62 740
Number of issued options as at 31 December 2020		884 000	506 510	1 390 510
Exercise price at 31 December 2020 (NOK per share)		6.86	63.55
Number of options subscribed for	981 900			981 900
Correction for number of employees departed	-2 000	-22 625	-25 250	-49 875
Correction for number of options exercised 2		-151 805	-148 840	-300 645
Number of issued options as at 31 December 2021	979 900	709 570	332 420	2 021 890
Exercise price at 31 December 2021 (NOK per share)	122.01	62.11	57.80
Correction for number of employees departed	-48 750	-38 000	-16 000	-102 750
Correction for number of options exercised 3		-134 250	-164 800	-299 050
Number of issued options as at 31 December 2022	931 150	537 320	151 620	1 620 090
Exercise price at 31 December 2022 (NOK per share)	115.01	55.11	50.80

¹ For share options exercised during 2020, the weighted average share price at the time of exercise was NOK 86.05 per share ² For share options exercised during 2021, the weighted average share price at the time of exercise was NOK 60.77 per share ³ For share options exercised during 2022, the weighted average share price at the time of exercise was NOK 53.29 per share. The Black-Scholes option pricing model is used to value the options. The following assumptions are applied:

	2021 programme	2020 programme	2019 programme
Number of options subscribed for	981 900	887 000	657 000
Share price	115.80	88.70	86.80
Risk-free interest rate	0.76%	-0.02%	1.34%
Historic volatility	29%	28%	24%
Expected option duration (years)	3.22	3.23	3.25
Expiration date	May 2026	May 2025	May 2024
Expected dividend yield	0%	0%	0%

Note 07. Financial income and financial costs

Figures in NOK million	2022	2021
Interest income	6	23
Other interest income from non-financial institutions	15	6
Foreign currency gains	14	13
Received share dividends	8	6
Value appreciation/gains on sales of financial instruments	1	16
Other financial income	2	6
Financial income	45	70
Interest costs	-35	-38
Interest charges from non-financial institutions	-4	-2
Interest costs leases – IFRS16 1	-29	-26
Foreign currency losses	-9	-14
Impairment/losses on sales of financial instruments	-6	-
Other financial costs	-4	-11
Financial costs	-87	-92
Financial income / financial costs	-42	-22

¹ See note 13 IFRS 16 Leases.

Note 08. Construction projects in progress

The note applies to all contruction projects, with the exception of road maintenance, asphalt and aggregates.

Figures in NOK million	2022	2021
Total income from construction projects	32 490	32 174
Details of projects in progress at 31 December
Accumulated income included in the financial statements	44 006	45 210
Accumulated costs included in the financial statements	-40 575	-41 895
Accumulated profit included in the financial statements	3 430	3 315
Loss-making projects in progress - remaining income1	1 128	1 433
Trade receivables in construction projects	3 348	3 105
Contract assets in construction projects2	2 577	1 995
Individual elements incl. in item Contract assets in the Statement of financial position
Due from customers3	1 213	1 015
Earned, not invoiced income	1 364	980
Contract liabilities (advance payments from customers)2	1 833	1 936

Note 09. Earnings per share

Figures in NOK million	2022	2021
Earnings per share (NOK)	8.1	7.1
Profit for the year	1 159	1 029
Equity holders of Veidekke ASA's share of the group's the profit for the year	1 092	958
Average number of shares (million)	135.0	135.0
Number of shares at 1 January (million)	135.0	135.0
Number of shares at 31 December (million) 1	134.9	135.0
Dilution effect of issued options	0.4	0.6
Time-weighted average number of shares owned after dilution	135.4	135.5
Diluted earnings per sharee (NOK)	8.1	7.1

¹ Veidekke owned 52 445 own shares as at 31 December 2022 (0 as at 31 December 2021).

In 2019, Veidekke introduced an option programme for employees. As at 31 December 2022, there are 1.6 million options outstanding options associated with this program. See note 6 for more information on the share and option programmes for staff.

¹ Anticipated losses on these projects have been charged to income.

² See note 19 for detailed information on contract assets and contract liabilities

³ The balance is money retained as security in favour of the contracting client. Included in the

item Accounts receivable in the Statement of financial position; see note 19.

Order book in construction projects

Figures in NOK million	2022	2021
Total order book	37 480	34 199
- of which due to be completed within the next 12 months	24 539	21 692

Note 10. Goodwill

Figures in NOK million	2022	2021
Carrying amount at 1 January	1 758	1 824
Original cost at 1 January	1 783	1 838
Additions, business acquisitions	289	15
Disposals, business divestments	-	-12
Currency translation differences accumulated original cost	-14	-58
Original cost at 31 December	2 058	1 783
Accumulated impairment at 1 January	-24	-13
Impairment for the year	-18	-11
Accumulated impairment at 31 December	-42	-24
Carrying amount at 31 December	2 016	1 758

The group has recognised goodwill from the acquisition of a total of 60 businesses. Each goodwill item is allocated to a cash-generating unit (CGU). A cash-generating unit is the lowest level at which independent cash flows can be measured. When an acquired business continues to be operated as an independent unit, this business is designated as a cash-generating unit. Units with significant synergy effects and which carry out similar activities, are together considered as a single cash-generating unit. This is the case when acquired operations are integrated with an existing Veidekke company or is operatively closely linked to an existing Veidekke company. In these cases, the combined business is considered the cash-generating unit for which goodwill is measured and followed-up. The group has recorded 37 cash-generating units associated with capitalised goodwill.

The group's largest goodwill items, plus the goodwill for each business area, are specified in the table below:

Goodwill per business area attributed to the cash generating units:

Figures in NOK million	2022	2021
Construction Norway
Constructa Entreprenør AS	259	-
Leif Grimsrud AS	177	177
Veidekke Entreprenør AS, Construction business area South (Agder og Block Berge Bygg)	108	108
Veidekke Entreprenør AS, Construction Norway (Reinertsen)	88	88
Grande Entreprenør AS	69	69
Other	145	145
Infrastructure Norway
Asphalt	119	119
Aggregates	72	72
Båsum Boring AS	49	49
Other	94	94
Construction Sweden
Billström Riemer Andersson AB (BRA)	295	301
Arcona AB	100	97
Construction business area West	62	64
Other	61	66
Infrastructure Sweden
Berggren og Bergman	44	45
Brinkab	41	42
Other	92	95
Denmark
Hoffmann A/S	138	126
Total goodwill	2 016	1 758

Testing goodwill for impairment

Goodwill is not amortised, but is tested for impairment in the fourth quarter each year. In the event of a particular indication of possible impairment, testing is carried out on a quarterly basis. Testing is carried out by comparing the estimated recoverable amount with capital invested for the unit in question. The recoverable amount is calculated on the basis of the unit's expected future discounted cash flows. The cash flows are calculated on the basis of the business unit's expected earnings for the next three years, adjusted for any capital injection needs. Expected cash flow is also calculated for years four and five, based on nominal growth in earnings and the unit's terminal value after five years. The sum total is the unit's recoverable amount. Capital invested is the unit's total assets less interest-free liabilities. When the recoverable amount exceeds capital invested, the carrying value of the goodwill is upheld. When the recoverable amount is lower than capital invested, the carrying value is impaired to the estimated recoverable amount.

Assumptions used in impairment testing

1. Revenue and profit margin in the next three years

Impairment tests are based on the management's approved budget and strategy for the next three years. These are estimated on the basis of current revenue and margins, and expected market development.

2. Revenue and profit margin in the subsequent periods

Assumed annual growth used in the cash flows for years four and five is marginally higher than the growth expected in the Scandinavian economy, as growth in the construction and civil engineering market is expected to be higher than GDP growth. The calculations are based on nominal growth of 2.5% per year from year four onwards. This calculation assumes a terminal value after five years based on the Gordon model.

3. Discount rate

The discount rate is based on the weighted average cost of capital (WACC) method. The nominal discount rate before tax is based on the group's estimated cost of capital calculated as a weighted average of the cost for the group's equity and the cost of its debt. The discount rate takes into account the debt interest rate, risk-free rate, debt ratio, risk premium and a liquidity premium. The discount rates applied to cash flow and terminal value are presented in the following table:

	Norway	Sweden	Denmark
Discount rate (WACC) before tax used on cash flows	9.4%	9.2%	7.9%
Before-tax discount rate for calculation of the terminal value	10.4%	10.2%	8.9%

4. Investment needs / reinvestment

The unit's anticipated future investment needs in order to maintain current levels are reflected in the calculations. These are based on management's approved budget and strategy for the next three years. For the period beyond the next three years, reinvestment needs are assumed to correspond to expected depreciation. Changes in working capital needs have been assessed and in all essence set at NOK 0. Building construction operations are generally not very capital-intensive, while more capital is required in civil engineering and industrial operations.

Assessment of the assumptions forming the basis for last year's estimates

The assumptions used in the calculations at the end of 2021 were largely achieved. An impairment totalling NOK 18 million was made due to failure to achieve targets in two smaller units in Construction Sweden

Details of goodwill items with a carrying amount exceeding NOK 100 million1

Figures in NOK million	CGU revenue for 20222	CGU margin achieved in 2022	Revenue growth after 20223	Impairment indicator: Profit margin over time4
Construction Norway – Leif Grimsrud AS	947	2.3%	2.5%	2.3%
Construction Norway – Veidekke Entreprenør AS, business area South	1 796	2.6%	2.5%	1.5%
Infrastructure Norway – Veidekke Industri AS, business area Asphalt	2 803	-2.1%	2.5%	1.3%
Veidekke Denmark – Hoffmann A/S	2 420	8.8%	2.5%	1.2%
Construction Sverige – Arcona AB	1 705	-0.3%	2.5%	1.2%
Construction Sweden – BRA AB	3 954	6.3%	2.5%	1.9%

¹ Constructa Entreprenør AS is not included in the table, as this business was purchased in December 2022.

² Revenue in the cash-generating unit (CGU) which the goodwill will be measured against.

³ Expected growth in revenue used in tests at 31 December 2022.

⁴ "Break-even" level. If the future expected profit margin (over time) is lower than the stated profit margin in the table, this indicates that goodwill impairment is necessary.

Sensitivity analysis for goodwill items with a value of over NOK 50 million

The group has carried out sensitivity analyses to assess the calculated present values for each cash-generating unit with goodwill in excess of NOK 50 million. This does not indicate the need for impairment in the event of a negative change in the assumptions. The sensitivity analysis is based on the financial assumptions described above. Calculations are made on the basis that one of the estimated financial assumptions changes and that the remaining assumptions remain the same. The sensitivity calculations are based on a reasonable outcome range. A reduction in revenue of over 20% is considered unlikely. However, if this were to occur, such a reduction could have a significant impact on the units' performance and would most likely result in impairment.

The following table shows impairment for changes in the assumptions used in the sensitivity analysis

	Discount rate		Revenue1		Profit margin
Change in assumption	+100 bp	+200 bp	-10%	-20%	-20%	-40%
Impairment need	-	-	-	-	-	-

¹ Margins maintained.

Note 11. Other intangible assets

Other intangible assets include extraction rights in the business area Aggregates, customer portfolios and investments in IT systems. Depreciation of the right to extract aggregates is determined on the basis of extraction of gravel. Customer relations are depreciated on a straight-line basis over four to five years, while IT systems are depreciated on a straight-line basis over five to eight years.

Figures in NOK million	2022	2021
Carrying amount at 1 January	150	130
Original cost at 1 January	285	267
Additions, acquisitions of companies/ongoing operations	10	42
Original cost sold operations, disposal	-3	-31
Reclassification/other changes	1	16
Translation differences original cost	-4	-9
Original cost at 31 December	291	285
Accumulated depreciation/impairment at 1 January	-135	-137
Accumulated depreciation sold operations	1	9
Depreciation for the year	-22	-14
Reclassification/other changes	-1	-
Translation differences depreciation	3	7
Accumulated depreciation / impairment at 31 December	-154	-135
Carrying amount at 31 December	137	150

Distribution of other intangible assets:

Figures in NOK million	2022	2021
IT systems	80	82
Rights to extract aggregates	51	58
Other intangible assets	6	10
Carrying amount at 31 December	137	150

Note 12. Plant, machinery, land and buildings

		2022				2021
Figures in NOK million	Plant and machinery	Asphalt and aggre gates plants	Land and buildings	Total	Plant and machinery	Asphalt and aggre gates plants	Land and buildings	Total
Carrying amount at 1 January	1 599	600	689	2 889	1 640	582	739	2 961
Original cost at 1 January	4 762	1 543	1 028	7 333	4 747	1 499	1 064	7 311
Additions, running operations	633	111	31	774	511	143	57	711
Additions, acquisition of companies	33	-	39	72	61	-	21	82
Disposals original cost	-796	-6	-8	-811	-405	-20	-90	-515
Disposals original cost, disposed operations	-	-	-	-	-43	-73	-6	-121
Reclassification/other changes	-16	-	7	-9	-45	-	-1	-47
Translation differences original cost	-22	-3	2	-23	-65	-6	-17	-87
Original cost at 31 december	4 593	1 645	1 097	7 336	4 762	1 543	1 028	7 333
Accumulated depreciation/impairments at 1 January	-3 163	-944	-338	-4 444	-3 107	-917	-326	-4 350
Accumulated depreciation, disposed operating equipment	721	6	5	732	321	21	14	355
Accumulated depreciation, disposed operations	-	-	-	-	24	30	3	57
Depreciation for the year	-446	-83	-20	-550	-451	-79	-28	-558
Impairment for the year	-	-	-1	-1	-1	-	-	-1
Reclassifications/other changes	4	-	-	3	11	-	-5	5
Translation differences, depreciation	15	1	-3	13	40	2	5	47
Accumulated depreciation at 31 December	-2 869	-1 020	-358	-4 247	-3 163	-944	-338	-4 444
Carrying amount at 31 December	1 724	626	740	3 089	1 599	600	689	2 889
Depreciation method Depreciation rate	Straight line 15–25%	Straight line 7%	Straight line 2–5%		Straight line 15–25%	Straight line 7%	Straight line 2–5%

As at 31 December 2022, the group has entered into contracts worth NOK 205 million on delivery of operating equipment, which are due for delivery in 2023.

Additions and disposals (sales price)

	2022		2021
Figures in NOK million	Additions	Disposals	Additions	Disposals
Plant and machinery	633	188	511	162
Asphalt and aggregates plants	111	3	143	11
Land and buildings	31	165	57	105
Additions and disposals (sales price)	774	356	711	278

Net gain (loss) on sale of operating equipment 1

Figures in NOK million	2022	2021
Plant and machinery	112	78
Asphalt and aggregates plants	3	12
Land and buildings 2)	132	28
Total net gain on sales	247	118

¹ Gains on sale of operating equipment are included in revenues. Losses on sale of operating equipment are included in operating expenses. ² In 2022, the sale of a site by Infrastructure Sweden generated a gain of NOK 130 million. For further information, see note 14.

Note 13. Leases (IFRS 16)

The group as a lessee

The group leases various assets, mainly office premises and other land and buildings. Other leased assets include machinery, equipment and vehicles.

Leased assets

		2022		2021
Figures in NOK million	Machinery etc.	Properties	Total	Machinery etc.	Properties	Total
Carrying value of leased assets at 1 January	205	692	896	189	579	768
Acquisition cost at 1 January	412	1 099	1 511	357	866	1 224
Addition of leased assets	223	90	312	202	282	484
Termination of leases	-127	-18	-145	-137	-37	-174
Translation differences	-2	-6	-8	-11	-12	-23
Acquisition cost at 31 December	505	1 166	1 671	412	1 099	1 511
Accumulated depreciation and impairments at 1 January	-207	-407	-614	-169	-287	-456
Depreciation	-168	-179	-348	-172	-163	-335
Termination of leases	127	18	145	128	37	165
Translation differences	-	3	4	6	6	11
Accumulated depreciation and impairments at 31 December	-248	-566	-814	-207	-407	-614
Carrying value of leased assets at 31 December	257	600	857	205	692	896
Lower of remaining lease period and economic life	1–5 years	1–10 years		1–5 years	1–10 years
Depreciation method	Straight line	Straight line		Straight line	Straight line

Lease obligations

Figures in NOK million	2022	2021
Total lease obligations at 1 January	907	776
New/amended lease obligations recognised during the period	312	484
Payment of principal	-343	-330
Payment of interest	-29	-27
Interest cost linked to lease obligations	29	27
Terminations of leases	-	-9
Translation differences	-4	-14
Total lease obligations at 31 December	872	907
- of which long-term lease obligations (note 24)	554	634
- of which short-term lease obligations (note 25)	318	274
Undiscounted lease obligations and payment dates
Less than 1 year	325	280
1–2 years	210	208
2–3 years	108	182
More than 3 years	302	326
Total undiscounted lease obligations, 31 December	946	996
Net cash flow from lease obligations	-372	-357
Average discount rate	3.3%	3.2%

The lease agreements do not contain restrictions on the group's dividend policy or financing options. The group has no material residual-value guarantee liability linked to its lease agreements.

Other lease costs recognised in the income statemetn

Figures in NOK million	2022	2021
Operating expenses during the period linked to short-term lease agreements (including short-term lease agreements of low value)	506	580
Operating expenses during the period linked to low-value assets (excluding short-term lease agreements above)	128	80
Variable lease payments expensed during the period	-	10
Total lease costs included in other operating expenses	634	659

Applied practical solutions

Veidekke leases various machinery and equipment in connection with construction and civil engineering projects. Which type of equipment is required in a project varies greatly, because of different needs at different stages of the construction process. A large proportion of this equipment has a lease period of less than 12 months. The group has decided not to recognise leases with a period of less than one year and therefore does not recognise lease obligations and leased assets for any of these lease agreements. The lease payments are instead expensed as they arise. The group also does not recognise lease obligations and leased assets where the underlying asset is of low value – see the overview in the table above.

Options to extend lease agreements

The group's lease agreements related to buildings have lease periods of between one and ten years. Several agreements include an option to extend the lease which may be exercised in the last period of the agreement. When entering into an agreement, the group assesses whether it is reasonably certain that the option to extend will be exercised.

Purchase options

The group leases machinery, equipment and vehicles for lease periods of between three and five years. Some of these lease agreements include an option to purchase the assets at the end of the lease period. When entering into an agreement, the group assesses whether it is reasonably certain that the purchase option will be exercised.

The group as a lessor

Veidekke has lease agreements related to the the leasing out of properties, current assets, etc. The table below shows revenues from the lease activities.

Veidekke's revenues from lease activities

Figures in NOK million	2022	2021
Lease income this year	24	16
Lease income next year	15	10
Total lease income after two year	48	10

The group has classified all these leases as operating leases, because they essentially do not transfer the risks and benefits associated with ownership of the properties or machines to the lessees.

Note 14. Acquisitions and divestments

Acquisitions in 2022

In 2022, Construction Norway took over all the shares in Constructa Entreprenør AS. The company operates a construction business centred on Bergen, Norway, focusing primarily on commercial buildings and public buildings. The purchase price of the shares was NOK 383 million, of which approximately 40% was settled in the form of shares in Veidekke ASA. The company's accounts for 2022 showed revenue of NOK 785 million and a pre-tax profit of NOK 41 million. On the takeover date, the company had bank deposits of NOK 130 million. Goodwill of NOK 259 million was recognised for the company in connection with the purchase. In addition, NOK 17 million was allocated to excess value in the form of property and machinery. Constructa Entreprenør AS was consolidated into Veidekke's group accounts as of 1 December 2022, and is included in the group accounts for 2022 with sales of NOK 44 million and a pre-tax profit of NOK 4 million.

Accounting effects of the acquisition of Constructa Entreprenør AS

Figures in NOK million	2022
Consideration for the shares	383
Net value recognised in the statement of financial position on the acquisition date	107
Net identified excess value	17
Goodwill recognised in the statement of financial position	259
Total value recognised in the group accounts	383
Figures in NOK million
Purchase price paid for the shares	-383
Taken over liquid assets in the company	130
Net cash flow from the purchase	-253

In addition to the acquisition of Constructa Entreprenør AS, two smaller acquisitions were also made in 2022, involving total consideration of NOK 11 million.

Divestments in 2022

Infrastructure Sweden sold an industrial site in Snebro at Nykvarn – south of Stockholm – in 2022, to the logistics company NREP Logicenters. The transaction generated an accounting gain of NOK 130 million, which has been included in Infrastructure Sweden's profit. The income is shown on the operating income line in the accounts. The sale has been treated as a sale of an operating asset.

Acquisitions in 2021

There were no material acquisitions in 2021.

Divestments in 2021

Infrastructure Norway sold its asphalt and aggregates operation in Rogaland in 2021. The background was an assessment of the group's asphalt and aggregates positions in Norway, and the fact that Veidekke had not achieved satisfactory profitability for the Rogaland asphalt operation. The divested business had revenues of NOK 125 million in 2020, with a slightly negative result. The business was sold for NOK 135 million and generated an accounting pre-tax profit of NOK 29 million. The sale was treated as sale of business.

Cash-flow effects of acquisitions and divestments

Figures in NOK million	2022	2021
Payments for acquisitions current year	-264	-10
Deferred payments for previous acquisitions, paid	-35	-65
Divestments	3	135
Net cash flow, acquisitions and divestments	-296	60

Note 15. Investments in associates and joint ventures

This balance sheet item mainly comprises investments in PPP companies. The movements for the year for investments in associates and joint ventures are presented in the table below:

	Joint ventures			Associates		Total
Figures in NOK million	2022	2021	2022	2021	2022	2021
Carrying value of investment at 1 January	135	172	15	24	150	197
Share of the profit for the year	31	2	6	1	37	2
Reclassification to current liabilities	-	16	-	-	-	16
Dividends received	-22	-24	-	-2	-22	-26
Acquisition of companies/capital increases	52	3	3	-	54	4
Disposal of companies	-4	-77	-3	-8	-7	-85
Change in value recognised in total comprehensive income	68	49	-	-	68	49
Currency translation differences	-1	-6	-1	-1	-2	-7
Carrying value of investment at 31 December	258	135	21	15	278	150

See note 16 Public-private partnership (PPP) projects for more information about the joint ventures reported under the business area Other.

Note 16. Public–private partnership (PPP) projects

Veidekke has interests in five PPP projects: four school projects and one road project.

PPP (Public–Private Partnership) projects are a collaboration between a public and a private operator on a construction project, where a municipality or government agency orders a service, which in Veidekke's case relates to the lease of a road or school for an agreed lease period. Veidekke establishes a limited liability ("AS") company, which then acts as contracting client, performs the project planning and design, and is responsible for the construction, financing, operation and maintenance during a given lease period. In connection with the school projects, Veidekke Entreprenør AS (Construction Norway) is responsible for both the construction and the operation and maintenance of the buildings during the lease period, while for the road project, the construction work is carried out by Veidekke Entreprenør AS (Construction Norway), while Veidekke Industri AS (Infrastructure) undertakes the operation and maintenance work. The actual construction and operation are accounted for in the same way as for ordinary projects and are included in the respective business area's income statement. Figures for the performance of the owner role for the five projects are reported under the segment Other operations. The PPP contracts are accounted for as financial assets according to IFRIC 12 Service Concession Arrangements (The Financial Asset Model), based on amortised cost. Income from the operation and maintenance contract is recognised over the operation period, as the work is done.

		Construction
Overview of PPP contracts	Lease period	contract	Ownership share	Status	Legal owner
Rykkinn school	2016–2041	0.2 billion	50%	Lease period	Skuleveg AS
Jessheim secondary school	2017–2042	0.8 billion	50%	Lease period	Skulebygg AS
Gystadmarka school	2018–2043	0.2 billion	50%	Lease period	Skuleplass AS
Justvik school	2018–2043	0.1 billion	50%	Lease period	Skulegard AS
E39 Lyngdal-Flekkefjord	2006–2031	1.2 billion	50% 1	Lease period	Allfarveg AS

¹ Veidekke's share of profit is 68%.

The value of investments in the statement of financial position includes the negative value of hedging reserves. In the financial statements, the PPP companies are included on the following lines in the accounts:

Figures in NOK million	2022	2021
Income statement
Share of net income from joint ventures	27	22
Profit before tax	27	22
Statement of financial position
Investments in joint ventures	164	88
Non-current assets	164	88
Current assets	-	-
Total assets	164	88
Equity	164	88
Non-current liabilities	-	-
Current liabilities	-	-
Total equity and liabilities	164	88

Financial Instruments – financing of PPP projects

Dedicated funding has been obtained for all the projects in the construction and lease period. To ensure predictability in the lease period, interest rate agreements have been entered into. These agreements run over the lifetime of the projects. The rental income from the state or municipality is largely determined at the signing of the contract, making it expedient to hedge the project's interest expense over the same period in order to reduce the overall financial risk. Hedging ensures that any subsequent changes in interest rates will not have a significant impact on the profitability of the projects. The interest hedges are designed to satisfy the requirements for hedge accounting. Key figures for loans and interest rate swaps are shown in the tables below.

PPP school projects

Veidekke's share of interest rate derivatives entered into to cover obligations related to the construction and leasing of schools.

Figures in NOK million	Nominal value	Due date		Fair value1 Recognised value 2
Financing – fixed rate loans	74	July 2041	0	0
Financing – fixed rate loans	320	August 2042	5	0
Financing – fixed rate loans	97	December 2042	8	0
Financing – fixed rate loans	41	December 2042	3	0

¹ Fair value is Veidekke's share of the market value of the financial instrument on 31 December 2021. A positive figure means that the applicable interest rate is higher than it was at the time the contract was signed and indicates, theoretically, what will be refunded by the counterpart beyond the principal amount in the event of termination of contract.

2 According to the loan agreement, Veidekke cannot receive any refund in case of early repayment, and the financial instruments are therefore valued at NOK 0.

PPP project National highway E39 Lyngdal–Flekkefjord

The ownership role in the PPP project E39 is exercised through Veidekke's 50% stake in the company Allfarveg AS. The table below shows Veidekke's share of the interest rate derivative.

Figures in NOK million	Nominal value	Due date	Fair value	Recognised value
Hedging – interest rate swaps	403	August 2030	-34	-27

Specification of the item in the statement of financial position Investment in the joint venture Allfarveg AS:

Figures in NOK million	2022	2021
Carrying value at 1 January	55	21
Recognised profit	17	13
Dividends	-11	-8
Adjustments for fair value of long-term interest rate swaps	29	29
Carrying value at 31 December	90	55

Total hedging reserve on the PPP projects:

Figures in NOK million	2022	2021
Hedging reserve at 1 January	-97	-155
This year's changes in the hedging reserve	70	58
Hedging reserve at 31 December	-27	-97
Adjustment of hedging reserve by not including negative equity	-	3
Hegding reserve at 31 December included in the financial statements	-27	-94

The table shows Veidekke's share of interest rate derivatives related to PPP projects. The fair value of all the interest rate derivatives has been reduced by NOK 27 million after tax at 31 December 2022.

A sensitivity analysis has been conducted of the effect of a possible change in interest rates by 100 basis points up or down. A change of this magnitude would have an effect on equity in the order of +NOK 11 million/-NOK 26 million.

Note 17. Financial assets

Financial assets	524	479
Other shares	19	17
Shareloans to employees	122	97
Other non-current receivables	70	62
Financial investments	313	303
Figures in NOK million	2022	2021

Financial investments totalling NOK 313 million relate to the coverage of pension liabilities, and are subject to security pledge. Just over 80% of the portfolio is invested in a high-yield bond fund, while the rest is invested in a stock mutual fund. These investments are classified as financial assets measured at fair value with value changes recognised through net profit and loss. One-third of the portfolio enjoys some protection because a change in the value of the investment is compensated for by a corresponding change in the pension liabilities.

Share loans to employees can be subdivided into the following categories:

Figures in NOK million	2022	2021
Loans to employees at fair value	100	86
Long-term advance to employees	22	11
Carrying value of share loans to employees	122	97

Loans to employees are recognised at fair value in accordance with the principles of IAS 39. The interest rate as of 31 december 2022 is 0.8%. Carrying value is estimated by discounting the expected future repayments by an estimated market interest rate. The difference between the carrying value and the nominal value of the loans is treated as advance payments to employees. Satisfactory security has been furnished for the loans. See note 6.

Note 18. Inventory

Inventory includes project inventories in construction and infrastructure projects, such as materials, raw materials (aggregates and bitumen), spare parts and small equipment.

Figures in NOK million	2022	2021
Infrastructure Norway, Asphalt and Aggregates	144	200
Infrastructure Norway, Civil engineering	214	178
Construction Norway	169	106
Infrastructure Sweden	14	55
Construction Sweden	41	16
Other	57	35
Total inventory	639	590

Note 19. Trade receivables and contract balances

Trade receivables are invoiced receivables in which Veidekke has an unconditional right to payment, while contract assets represent a conditional right to payment. These terms are explained in more detail in the section on contract balances.

Trade receivables and contract assets in the statement of financial position at 31 December consist of the following elements:

Figures in NOK million	2022	2021
Invoiced trade receivables	6 942	6 661
Provisions for bad debts	-16	-26
Work invoiced in advance	-3 074	-3 103
Trade receivables	3 852	3 533
Work done, but not invoiced	1 516	1 042
Due from customers	1 213	1 015
Contract assets	2 729	2 056
Trade receivables and contract assets	6 581	5 589

Maturity structure of invoiced trade receivables at 31 December:

Figures in NOK million	2022	2021
Receivables not due for payment	4 042	4 082
Less than 30 days since due date	620	622
30–60 days since due date	173	49
60–90 days since due date	60	50
90–80 days since due date	326	86
More than 180 days since due date1	1 722	1 773
Invoiced trade receivables	6 942	6 661

¹ Receivables that are overdue by more than 180 days comprise significant sums. These are generally related to disputes, which take time to resolve and which, in some cases, have to be resolved in a court of law. Any impairment of a receivable based on project risk is included in the evaluation of the project's likely outcome (estimated final result) and is listed as "Work invoiced in advance" in the table above. The amount listed therefore does not express the real risk of loss. See note 32 Project-related disputes and claims.

Changes in the provision for impairment related to credit risk from trade receivables:

Figures in NOK million	2022	2021
Provisions at 1 January	26	36
Currency translation differences	-	-1
Provisions made during the year	3	7
Provisions used during the year	-7	-8
Provisions reversed during the year	-6	-7
Provisions at 31 December	16	26

Provisions are mainly made on a group basis.

Credit risk exposure

Credit risk is the risk that Veidekke will incur a loss as a result of a customer's inability to fulfil their obligations (bankruptcy risk).

Figures in NOK million	2022	2021
Trade receivables and contract assets	6 581	5 589
Of which:
Received bank guarantees to trade receivables and contract assets	447	447
Other guarantees	200	53
Receivables from public authorities (state and municipal level)1	2 845	2 390
Total trade receivables and contract assets with minimal risk	3 493	2 889
Maximum unhedged credit risk in the trade receivables and contract assets	3 088	2 700

1 It has been assumed that the credit risk linked to receivables from public authorities (state and municipal level) in Scandinavia is minimal.

Contract balances

Revenue recognition, invoicing and payments from customers are generally done at different times, resulting in trade receivables, uninvoiced receivables (contract assets) and prepayments from customers (contract liabilities) in Veidekke's statement of financial position.

In the infrastructure operations and in some parts of the building construction operations, invoicing normally occurs after the work has been done, either at fixed intervals or as milestones are reached. This entails a time lag in invoicing for work that has been done, which in turn results in recognition of a contract asset.

The construction operations generally use fixed payment plans, and if the payment exceeds the work that has been done, the difference is classified as a contract liability in the statement of financial position.

On the balance sheet day, all projects are reviewed, and for each project either a net asset or a net liability to the customer is recognised. The table below provides information on receivables, contract assets and contract liabilities from contracts with customers at year-end.

Figures in NOK million	2022	2021
Trade receivables	3 852	3 533
Contract assets	2 729	2 056
Contract liabilities	-1 984	-1 936

Contract assets consist of fulfilment of performance obligations, mainly from construction projects and other projects in which progress is measured over time. Contract assets are reclassified as trade receivables when Veidekke has the right to invoice based on work done.

Due from customers is also classified as contract assets. This is money that is withheld as security for the client and that is settled when the project is finished.

Contract assets

Figures in NOK million	2022	2021
Statement of financial position at 1 January	2 056	2 961
Invoiced receivables throughout the year	-1 858	-3 203
Work done this year, not invoiced	2 530	2 298
Statement of financial position at 31 December	2 729	2 056

Contract liabilities primarily consist of prepayments from construction contract customers, where income is earned over time. The contract liabilities as at 31 December 2021 have largely been recognised as income in 2022.

Contract liabilities

Figures in NOK million	2022	2021
Statement of finanacial position at 1 January	-1 936	-1 912
Recognised as income during the year	1 936	1 912
Acquisition of companies	-61	-
Advances received	-1 923	-1 936
Statement of financial position at 31 December	-1 984	-1 936

Note 20. Cash and cash equivalents

The group's cash and cash equivalents comprise bank deposits and money market funds.

Figures in NOK million	2022	2021
Investments in money market funds	1 294	1 872
Bank deposits1	1 421	1 942
Total cash and cash equivalents	2 714	3 814

¹ Of which NOK 74 million (31) in restricted cash.

Veidekke has developed a strategy and a plan for managing and investing its excess liquidity to secure a higher return for the company than could currently be achieved on bank deposits, taking into account the need for necessary liquidity/accessibility and low risk. The investments in various money market funds are highly secure and can be liquidated on short notice. The funds are therefore classified as cash equivalents.

In addition to a NOK 1 294 million investment in money market funds, Veidekke has invested NOK 523 million in bond funds, classified as short-term financial investments in the statement of financial position. The bond funds have a well-diversified portfolio, and are considered to have high liquidity, but to be less accessible than money market funds and bank deposits.

Note 21. Number of shares, shareholders etc.

The following table lists Veidekke ASA's largest shareholders at 31 December 2022:

	Number of shares	Ownership share
OBOS BBL	26 341 564	19.5%
Folketrygdfondet	13 784 550	10.2%
If Skadeförsäkring AB	5 041 200	3.7%
Verdipapirfond ODIN Norge	4 622 958	3.4%
Vanguard	3 712 435	2.8%
Pareto Aksje Norge Verdipapirfond	3 050 288	2.3%
Must Invest AS	3 000 000	2.2%
Danske Invest	2 924 390	2.2%
MK Pensjon PK	2 748 284	2.0%
DNB Asset Management	2 014 639	1.5%
Swedbank Robur Fonder	1 700 000	1.3%
Constructa AS	1 647 954	1.2%
BlackRock	1 639 782	1.2%
Storebrand Asset Management	1 609 634	1.2%
RBC Global Asset Management	1 491 106	1.1%
Dimensional Fund Advisors	1 490 687	1.1%
Arctic Fund Management	1 452 713	1.1%
Holberg funds	1 270 000	0.9%
KLP Kapitalforvaltning AS	1 047 753	0.8%
Forsvarets Personellservice	973 250	0.7%
Sum 20 largest shareholders	81 563 187	55.8%
Own shares	52 455	0.0%
Others	53 340 625	39.5%
Total	134 956 267	100.0%
Change in number of shares
Number of shares at 1 January 2022	134 956 267
Number of shares at 31 December 2022	134 956 267

Each share has a nominal value of NOK 0.50.

Shares owned by board members and members of the corporate management at 31 December 2022:

THE BOARD OF DIRECTORS	Number of shares
Gro Bakstad, board chair	15 500
Daniel Kjørberg Siraj 1	-
Hanne Rønneberg	1 700
Per Ingemar Persson	55 740
Klara-Lise Aasen	438
Carola Lavén	-
Pål Eitrheim	-
Inge Ramsdal	8 720
Odd Andre Olsen	5 230
Arve Fludal 2	3 199
Shares owned by board members	90 527

Own shares

Veidekke owned 52 455 own shares as at 31 December 2022 (0 as at 31 December 2021).

Dividend

The dividend for the financial year 2021, which was paid in 2022, amounted to NOK 945 million (NOK 7.00 per share). The proposed dividend for the financial year 2022 amounts to NOK 1 046 million (NOK 7.75 per share).

Payment of dividends to Veidekke ASA's shareholders does not affect the company's tax payable or deferred tax.

¹ Daniel Kjørberg Siraj has no private shareholding, but represents the shareholding of OBOS BBL: 26 341 564 aksjer

² Arve Fludal also owns 3 000 options

MEMBERS OF THE CORPORATE MANAGEMENT	Number of options	Number of shares
Jimmy Bengtsson	3 000	62 087
Jørgen Wiese Porsmyr	3 000	119 657
Terje Larsen	3 000	115 273
Lars Erik Lund	500	16 157
Anne Thorbjørnsen	3 250	38 252
Kristina Andreasson	2 000	11 677
Hans Olav Sørlie	4 000	84 937
Øivind Larsen	2 000	21 947
Charlotta Nilsen	-	5 100
Marcus C Nilsson	1 000	26 093
Total shares owned by corporate management	21 750	501 180
Total shares owned by board members and corporate management	24 750	591 707

As at 31 December 2022, Veidekke employees own approximately 12% of the shares (11.5% as at 31 December 2021).

Note 22. Pensions

Veidekke now mostly has defined-contribution pension schemes. However, defined-benefit pension plans still exist for a few employees. For the defined-contribution plans, the cost is equal to the contribution in the period for employees plus taxes. Here, each individual's future pension depends on the annual contribution and the return on the pension assets. In the remaining defined-benefit plans, Veidekke is responsible for paying an agreed pension to an employee on the basis of expected final salary. The cost in the period under this scheme shows the employees' pension earnings in the financial year plus taxes.

Norway

In Norway, Veidekke has the following pension schemes:

• ∙ General pension scheme
• ∙ Contractual early retirement scheme (AFP)
• ∙ Early retirement scheme for some executives
• ∙ Additional pension for employees with salaries exceeding 12G

General pension schemes

Veidekke has a defined-contribution scheme, whereby Veidekke pays a monthly contribution into the individual employee's pension account. The size of the contribution depends on the employee's salary. The contribution is 5.5% of pay for salaries up to 7.1G and 11% for salaries between 7.1G and 12G. As of 1 July 2022, the arrangement was adjusted so that salary below 1G also qualifies for pension contributions. The employees can choose the risk

profile for the management of their pension funds. In the event of death, the pension account accrues to the employee's survivors.

Employees born in 1957 or earlier and who were working for Veidekke on 31 December 2012 are members of a defined-benefit pension scheme. Veidekke's pension plan is a supplemental pension which, together with the national insurance pension, provides a retirement pension totalling approximately 60% of an employee's salary on retirement, assuming a full service period. The scheme has previously been financed by funds accumulated in a life insurance company.

In 2021, the scheme was revised through the issue of paid-up policies to retired staff in respect of accrued pension rights. In total, paid-up policies with a value of NOK 639 million were issued. In the statement of financial position, pension assets and pension liabilities are presented net, meaning that the change has had little effect on the accounts. For the affected retired staff, discontinuation of the scheme means that Veidekke no longer guarantees the scheme. Their accrued pension rights are unchanged.

The part relating to the pension scheme for salaries exceeding 12G is financed through operations. Veidekke has investments in mortgaged bond and equity funds related to this scheme. See note 17 and 27.

Prior to 1 January 2013 Veidekke had a definedbenefit pension scheme for all its employees. In connection with the transition to a definedcontribution pension, a compensation scheme was introduced for employees who would lose out as a result of the switch to the new pension plan. Provisions are made for this.

Contractual early retirement scheme (AFP)

The private-sector AFP early retirement scheme is a life-long supplement to the public retirement pension scheme and is paid no earlier than age 62. The Norwegian group companies have AFP early retirement pensions for their employees. Employees must satisfy a number of conditions to be eligible for early retirement under the AFP scheme.

The AFP scheme is a defined-benefit, multiemployer pension plan and is financed through premiums, which are determined as a percentage of the salary. There is currently no reliable measurement and allocation of liabilities and assets in the scheme. For accounting purposes, the scheme is treated as a defined-contribution plan for which premium payments are expensed as incurred, and no provisions are made in the accounts. If the scheme had been capitalised, its implementation would have had significant impact on the accounts. The premium for 2022 was 2.6% of reported salaries between 1G and 7.1G.

Early retirement scheme for executives Veidekke has an early retirement scheme for some of its senior executives in Norway covering retirement between the ages of 64 and 67. It is a defined-benefit plan and has seven members. These individuals have the right to retire at the age of 64, with an early retirement pension that is 60% of their final salary (including national insurance benefits and contractual early retirement pension payments), financed through operations. The scheme is closed. Veidekke's Group CEO has a separate agreement. For further details, see note 31.

Pensions on salaries above 12G

Veidekke has a pension savings scheme for employees in Norway with salaries exceeding 12G where 20% of the salary above 12G is saved. The pension is paid from 62 years at the earliest and for a maximum of 15 years from when it is first drawn.

Denmark and Sweden

Veidekke has defined-contribution pension schemes for its employees in Denmark and Sweden whereby the company makes a monthly contribution to the scheme, while the employees bear the risk for the return on the pension funds. The pension funds are placed in life insurance companies, which manage the funds and administer the schemes. The pension schemes cover retirement and disability pension.

In Denmark Veidekke pays two-thirds of the contributions, while the employee pays the remaining third. The employer's contribution constitutes between 8% and 10% of the salary. The retirement age in Denmark is between 65 and 69 years, depending on year of birth. Going forward, the retirement age will be adjusted based on the average life expectancy of the population. The payment of the retirement pension is very flexible, and, in the event of death before retirement, the pension is payable to surviving dependants. There is a corresponding defined-contribution scheme for the management of the Danish company, but in this scheme the employer's contribution is 10% of the salary.

In Sweden, Veidekke has a collective pension scheme, where the majority of employees have a defined-contribution pension plan. The pension plan comprises retirement pension, sickness pension, family pension and debt insurance. The administrative staff have two different schemes: ITP1 for people born after 1979 and ITP2 for people born before 1979. The skilled workers have a SAF-LO scheme. All the pension schemes are premiums-based, with savings varying between the schemes. The premiums also vary depending on income and age.

On average Veidekke pays 15% of the salary towards pensions. The employees do not pay into the schemes. The schemes are recognised in the accounts as defined-contribution schemes. The employees have great flexibility in their pension and can choose where the pension funds are invested and with which insurance company. Employees may decide themselves when they wish to begin drawing their pension, based on their year of birth. The retirement age is from 65 to 69 years.

Overview of pension costs and pension liabilities

Figures in NOK million	2022	2021
Pension costs
Current service cost	10	17
Interest cost on net pension liabilities	6	6
Gain on liquidation of pension scheme	4	-6
Total cost defined-benefit schemes	20	17
Cost of defined-contribution and deposit schemes	544	554
Pension costs	564	571
Composition of net pension liabilities
Pension liability – defined-benefit schemes	-477	-604
Pension assets	111	201
Unrecognised pension assets	-2	-7
Net pension liability defined-benefit schemes	-367	-410
Pension liability – other schemes	-195	-182
Pension liability at 31 December	-565	-596
Pension assets at 31 December	3	3

Figures in NOK million	2022	2021
DETAILS LIABILITIES DEFINED-BENEFIT SCHEMES Change in gross pension liability during the year
Gross pension liability at 1 January	-604	-1 210
Acquisition of new companies	-	-14
Accruals during the year (present value)	-11	-16
Interest cost	-10	-12
Gains on liquidation of pension scheme	-4	6
Issuance of paid-up policies upon liquidation of pension scheme	22	639
Actuarial gains and losses recognised in comprehensive income	106	-48
Payroll tax of employer's contribution	1	3
Benefits paid during the year	23	40
Other changes	-	8
Gross pension liability at 31 December	-477	-604

Change in pension assets during the year

Pension assets at 1 January	201	839
Expected return	3	6
Issuance of paid-up policies – liquidation of pension scheme	-22	-639
Grants	9	24
Repayment, pension premium	-2	-
Year's actuarial gains and losses recognised in total comprehensive income	-69	2
Payroll tax of employer's contribution	-1	-3
Benefits paid during the year	-7	-28
Premium assets at 31 December	111	201

Change in unrecognised asset ceiling during the year

Unrecognised asset due to asset ceiling at 31 December	-2	-7
Year's actuarial gains and losses recognised in total comprehensive income	5	-4
Unrecognised asset due to asset ceiling at 1 January	-7	-3

Overview of net pension liabilities and actuarial gains and losses

Figures in NOK million	2022	2020
Gross pension liabilities	-477	-604
Pension assets	111	201
Impact of unrecognised asset ceiling	-2	-7
Net pension liability defined-benefit schemes	-367	-410
Overview of actuarial gains and losses - defined-benefit schemes
Liabilities:
Changes in economic assumptions	40	29
Changes in population and demographic assumptions	8	-88
Pension assets:
Actual return v. actuarial assumption	-6	9
Year's actuarial gains and losses recognised in total comprehensive income before tax	42	-50
Year's actuarial gains and losses recognised in total comprehensive income after tax	33	-39
Financial assumptions
Discount rate/return on pension investments	3.2%	1.5%
Annual wage growth	3.8%	2.5%
Annual adjustment of G (National Insurance Scheme basic amount)	3.5%	2.3%
Annual adjustment of pensions under payment	1.8%	1.5%
Mortality table	K2013F	K2013F
Pension assets
Investment Property	14%	13%
Bonds	47%	47%
Short-term investments	35%	28%
Shares	4%	12%
Total investments	100%	100%
Return
Book return	0.5%	4.6%
Adjusted return	-3.1%	3.7%

Pensions 2023

The estimated premium for defined-benefit plans for 2023 is NOK 17 million, wheras the cost is expected to be NOK 20 million.

Sensitivity analysis

Any changes made in the economic assumptions that are categorised as probable will not have a significant impact on the ordinary income statement. The effect on the statement of financial position may be larger, as pension liabilities are recognised at fair value. Changes in actuarial assumptions may entail differences in the group's equity of up to NOK 40 million.

Note 23. Tax costs and deferred tax

Figures in NOK million	2022	2021
Income tax expense
Tax payable	222	335
Change in deferred tax	85	-21
Total tax expense	308	313
Reconciliation of the group's tax rate
Pre-tax profit	1 467	1 342
Calculated income tax expense based on Norway's current tax rate (22%)	323	295
Actual income tax expense	308	313
Difference	15	-18
Explanation difference income tax expense
Tax from activity in joint ventures	7	6
Tax-exempted sales of companies	32	12
Other permanent differences:
Non-deductible expenses	-13	-11
Effect of lower tax rate in Sweden	6	4
Addition to the purchase price for business acquisitions, non-deductible cost	-22	-24
Other items	4	-6
Total	15	-18
Group tax rate	21%	23%

Deferred tax liabilities

Figures in NOK million	2022	2021
Deferred tax
Current items1	937	780
Total current items	937	780
Operating equipment – additional depreciation	221	206
Other non-current items	21	14
Provisions for liabilities	-229	-280
Pension liabilities	-117	-122
Total non-current items	-104	-182
Losses carried forward	-160	-18
Net deferred tax liabilities	674	581

¹ In Norway and Denmark construction projects in progress are not taxed until completion and handover. Given stable order levels, this will provide a permanent tax credit of approx. NOK 900 million.

Presentation of deferred tax in the statement of financial position

Figures in NOK million	2022	2021
Deferred tax liabilities	674	581
Recognised deffered tax liabilities	674	581

Change in deferred tax liabilities

Figures in NOK million	2022	2021
Current items	157	-110
Operating equipment - additional depreciation	15	31
Other non-current items	7	-45
Provisions for liabilities	51	14
Pension liabilities	5	-13
Losses carried forward	-142	103
Change in deferred tax	93	-20
Currency translation differences	-3	8
Deferred tax in connection with acquisition/sale of companies	-19	2
Change in deferred tax recognised in total comprehensive income	14	-11
Change in deferred tax liabilities in the income statement	85	-21

Presentation of payable tax in the statement of financial position

Figures in NOK million	2022	2021
Tax payable	161	206
Recognised tax payable	161	206

Taxes incorporated into total comprehensive income

		2022		2021
Figures in NOK million	Pre-tax profit	Income tax expense	Post-tax profit	Pre-tax profit	Income tax expense	Post-tax profit
Statement of comprehensive income From the income statement, continued operations	1 467	308	1 159	1 342	313	1 029
Other income and expenses recognised in comprehensive income:
Value adjustment pensions	42	9	33	-50	-11	-39
Currency translation differences	4	-	4	-82	-	-82
Fair value adjustments of financial assets	96	5	91	46	-	46
Total comprehensive income	1 608	322	1 287	1 257	303	954

Note 24. Non-current liabilities

Non-current liabilities to bondholders and credit institutions, etc.

Figures in NOK million	2022	2021
Bonds1	193	600
Non-current loans from credit institutions	194	162
Total non-current interest bearing liabilities	387	762

¹ At 31 December 2022 Veidekke had one bond loan: a seven-year loan of NOK 193 million, expires in 2025. The loan is listed on the Oslo Stock Exchange under the ticker VEI10.

Other non-current liabilities

Figures in NOK million	2022	2021
Non-current liabilities, leases IFRS 161	554	634
Deferred payment business acquisitions2	-	301
Option agreements3	111	392
Other non-current liabilities	22	31
Total other non-current liabilities	687	1 358

¹ See note 13 Leases (IFRS 16).

2 See note 14 Acquisitions and divestments and note 25 Trade creditors and other current liabilities.

³ For certain partly owned subsidiaries, there are option agreements with the non-controlling interests whereby Veidekke has a right to buy remaining shares and the non-controlling interests have a right to sell the same shares. The subsidiaries to which this applies are Båsum Boring AS (70%), Seby AS (70%), Tore Løkke AS (80%), Grande Entreprenør AS (80%), Geo Fundamentering & Bergborig AS (87.5%), Leif Grimsrud AS (80%), Hande AS (68%), BRA AB (90.1%) og Veitech AB (90.1%). Veidekke's ownership share in brackets. Certain liabilities have been classified as current liabilities; see note 25.

Instalment profile details can be found in note 30.

Note 25. Trade creditors and other current liabilities

Figures in NOK million	2022	2021
Trade payables
Trade payables	3 001	2 872
Provision for accrued costs	3 092	2 875
Total trade payables	6 093	5 748
Contract liabilites (see note 19)
Total contract liabilites	1 984	1 936

Contract liabilities include both forward payment plans in construction projects and advance payments from customers.

Figures in NOK million	2022	2021
Current lease obligations IFRS 16 1	318	274
Accrued holiday pay including employer's contribution	597	583
Deferred payment, business acquisitions and option agreements 2	753	-
Other current items	484	518
Total current liabilites	2 153	1 374

¹ See note 13 IFRS 16 leases

² See note 24 Non-current liabilities.

Note 26. Warranty allocations etc.

Provision is made for guarantee work under the item Warranty provisions etc., for example to remedy any defects or omissions on completed projects. Warranty provisions etc. also covers other liabilities, such as claims from subcontractors, claims from third parties, etc. Provisions are made to cover both accrued warranty liabilities and contingent liabilities. Among other things the provisions must cover future expenses for the remedy of hidden defects, i.e. defects and omissions that have not been detected. In addition, they must also cover issues that are detected, but where there is uncertainty regarding the scope, responsibility, costs, etc. (disputes).

Figures in NOK million	2022	2021
Warranty provisions etc. at 1 January	975	1 037
Currency translation differences	4	-27
+ new warranty provisions (additions)	455	429
- reversed warranty provisions (disposals)	-142	-219
- actual claims expenses (consumption)	-304	-244
Warranty provisions etc. at 31 December	989	975

Liability for material defects

All projects shall be handed over to the customer in accordance with the contract. If defects or omissions are detected in projects that have been handed over, the contractor may be liable to remedy them at no extra charge. The projects have different warranty periods, but the norm is three to five years.

Note 27. Security, guarantee liabilities and joint and several liability

Figures in NOK million	2022	2021
Mortgages1
Recorded liabilities secured by mortgages etc.	477	407
Book value of mortgaged assets	494	381
Guarantees
Guarantees to joint ventures and associates	50	-
Guarantees to other companies	6	-

¹ Excludes usage right assets, non-current liabilities and current liabilities pursuant to IFRS 16. See note 13 Leases

The group has given a negative pledge for loans and guarantees. As a result of its participation in partnerships and joint ventures, Veidekke could become liable for other participants' inability to fulfil their obligations. However, Veidekke is not liable until the company in question is unable to meet its obligations.

Veidekke has pledged financial assets with a carrying amount of NOK 313 million at 31 December 2022 to cover pension liabilities incurred. See note 17 Financial assets.

Note 28. Capital management

The purpose of effective capital management is to secure financial leeway to implement measures in support of Veidekke's operations and strategy. Veidekke seeks to maintain a robust financial position that supports profitability and value creation throughout the group and thus generates a return for shareholders. Important elements in a robust capital structure include equity, the level and development of net interest-bearing assets, ongoing cash flow and financial limits. The liquidity of the Veidekke group is characterised by seasonal fluctuations, and capital management is designed with these fluctuations in mind.

Net interest-bearing assets amounted to NOK 2.8 billion at year-end 2022. Veidekke's construction projects largely involve client financing in the form of front-loaded payment plans. Accordingly, large parts of the group operate with negative working capital. The combination of constructionproject working capital, group profits and available borrowing facilities allows Veidekke to finance capital-intensive activities such as the industrial operation and project development.

The group has substantial excess liquidity. At year-end, cash and cash equivalents and financial investments amounted to NOK 3.2 billion, including NOK 1.8 billion in short-term investments in bond and money market funds. These funds are expected to generate a somewhat better return than bank deposits with very low anticipated risk. Although the investments are considered to be low-risk, rising market interest rates and stock-market turbulence resulted in a weak return in 2022. The return for 2022 totalled NOK 6 million, corresponding to a return of 0.3%. The investments are highly liquid.

The group's total available credit amounted to NOK 2.5 billion. Veidekke also had a NOK 193 million unsecured bond loan. The group had no outstanding certificate loans as at 31 December 2022. Veidekke has no official credit rating but monitors quantitative and qualitative factors with an effect on its creditworthiness. For further information on Veidekke's financial borrowing limits and the bond loan, see note 29.

Veidekke can optimise its capital structure by paying dividends to shareholders and repurchasing shares. Veidekke's dividend policy is to provide shareholders with a regular return proportionate to the group's financial performance, and for paid dividends to total at least 70% of post-tax profits. In its capital markets update in May 2021, Veidekke stated that it envisaged distributing more than 70% in the short term, based on its strong financial position following the sale of the property development operation in 2020. The average distribution ratio over the past five years is 95% (excluding the extraordinary dividend paid out in connection with the sale of the property development operation). For the financial year 2022, the board of directors has proposed a dividend of NOK 7.75 per share, equating to a distribution ratio of 96%. The group's equity ratio is a potential

limiting factor with regard to dividend distributions, as some public-sector clients demand a certain level of equity ratio in connection with competitive tenders.

In periods when the group's financial position is strong, Veidekke may supplement its dividend policy with share repurchasing. The general meeting has authorised the board of directors to repurchase up to 10% of the company's share capital, although share repurchases are only considered when the share price is deemed to be below actual fundamental value. Although Veidekke has prioritised dividends and operational investment over share repurchases in recent years, the company bought back 2.5 million shares at a fixed price towards the end of 2022. The purposes of the repurchase were to secure shares for settlement of the employee share purchase programme and to part-finance the acquisition of Constructa Entreprenør AS.

Note 29. Financial risk

Veidekke seeks to maintain a robust financial position, necessitating effective operation, low financial risk exposure and appropriate management of parameters with an impact on financial risk. The group's financial policy includes guidelines on financial risk management.

Veidekke has a centralised finance function mandated to ensure short- and long-term financial capacity and to manage financial risk in cooperation with the group's individual operations.

The finance function is responsible for making financing arrangements and managing interest rate risk and foreign exchange risk, while the operations undertake ongoing risk management, including management of credit risk and trade debtors. Veidekke's primary categories of financial risk are trade debtors, liquidity and interest-bearing debt.

1. Credit risk

Credit risk is the risk of financial losses due to non-performance of contractual obligations by a customer or financial asset counterparty. The group's credit risk relates primarily to the payment of receivables, with trade debtors presenting the greatest risk. Credit risk linked to trade debtors concerns the payment capacity of customers, rather than their willingness to pay (project risk). The group has a significant proportion of publicsector clients (approximately 35%), who are deemed to present very low credit risk. Veidekke seeks to manage credit risk linked to private-sector clients

(approximately 65%) through proactive drafting of client contracts and by ensuring that the operations apply robust credit monitoring procedures.

Veidekke's management systems include contract drafting procedures which also function as risk management measures and require agreed payment schedules to match planned progress. In addition, works contracts are largely based on national standards, such as Norwegian Standards, which include provisions requiring the client to provide security for the contract sum. (Norwegian Standards require the provision of security for up to 17.5% of the contract sum during the construction period.) Together, these two measures help reduce credit risk in ordinary construction projects. Sweden does not have a national standard provision on bank guarantees, and risk is therefore somewhat higher there. The asphalt and aggregates operations, which serve a large number of customers, prioritise credit assessment procedures, timely invoicing, guarantee provision and active follow-up of unpaid receivables.

The group has no material credit risk linked to any individual counterparty. The group has issued few guarantees relating to third-party debt, except as discussed in note 27 Provision of security. There will always be a risk that a customer may be unwilling to pay owed sums, but this is regarded as an operational risk and is managed in the context of ordinary project assessment. For further information, see note 19 Trade debtors and note 32 Project-related disputes and claims.

2. Liquidity risk

Liquidity risk is the risk that Veidekke may be unable to meet its payment obligations as they fall due. Robust liquidity is a key prerequisite for Veidekke's profitability and ability to invest and take on risk in capital-intensive business areas. Managing liquidity risk serves the objective of financial flexibility, and has high priority. Liquidity is managed, measured and controlled at project level and throughout the organisation. At year-end, cash and cash equivalents and financial investments amounted to NOK 3.2 billion, including NOK 1.8 billion in short-term investments in bond and money market funds. These funds are expected to generate a somewhat better return than bank deposits with very low anticipated risk. For more information on the investments, see note 28. The group also has substantial capacity to fulfil ongoing performance guarantees issued in connection with construction projects. Veidekke's substantial available liquidity and financial borrowing capacity mean that the company is well-equipped to handle financial uncertainty. Veidekke's borrowing facilities comprise a NOK 1.75 billion overdraft facility with a rolling 364-day maturity period, provided by DNB, and a NOK 0.75 billion credit facility that matures at the end of 2025, provided by SEB. Both agreements are based on a negative pledge and require Veidekke's key financial figures (covenants) to fulfil the following condition:

Net interest-bearing debt divided by EBITDA over the preceding four quarters shall not exceed 3.0.

As of 31 December 2022, this ratio totalled -1.16. Net interest-bearing debt is defined as the group's short-term and long-term interest-bearing debt minus liquid assets and interest-bearing receivables, while EBITDA is defined as the group's operating profit/loss plus depreciation and amortisation. See note 20 for information on liquid assets, note 24 on long-term interest-bearing debt, note 27 on provision of security and guarantee liability and note 30 on sensitivity analysis and maturity structure.

3. Market price risk

Shares and bonds

The group is exposed to price risk on investments in equity instruments. This investment category, which includes shares, is not normally part of the group's investment strategy. Instead, Veidekke gives priority to investments in companies and projects where the group can exert significant influence on future operations and developments.

The carrying value of financial assets at fair value was NOK 524 million as of 31 December 2022. This item primarily comprises a bond fund investment made to cover pension liabilities. Financial investments totalling NOK 313 million relate to the coverage of pension liabilities, and are subject to security interests. Four-fifths of the portfolio is invested in a high-yield bond fund, while the rest is invested in a stock mutual fund. These investments are classified as financial assets measured at fair value with value changes

recognised through other comprehensive income. One-third of the portfolio enjoys some protection because a change in the value of the investment is compensated for by a corresponding change in the pension liabilities. The value of the financial investments may be affected by financial turbulence and market fluctuations.

The carrying value of financial investments at fair value was NOK 523 million as of 31 December 2022, comprising a short-term investment in a bond fund. The investments are linked to excess liquidity.

Hedging of raw material costs

Veidekke undertakes little hedging of input factors used in production, and any hedging is only done once an order has been received.

The petroleum product bitumen is a key input factor for the asphalt operation (part of Infrastructure Norway), and the price of bitumen is closely linked with oil prices. Bitumen costs are rarely hedged, and only in the case of orders with long delivery deadlines. Contracts with the group's largest customers, the Norwegian Public Roads Administration and county municipalities, assign most of the risk associated with changes in the price of bitumen to the customer. As regards deliveries to other customers, the period of time between receipt of an order and delivery is normally short, thus reducing the risk of price changes. Nevertheless, Veidekke may has some exposure in the event of rapid, substantial price changes. As of 31 December 2022, the group had entered into a total of two hedging contracts, both related to major asphalt contracts scheduled for delivery in 2023.

4. Interest rate and currency risk

Veidekke's interest rate risk relates to the group's debt portfolio and is managed at group level. The different operations are exposed to interest rate risk, and some partly-owned companies use interest-rate swaps to reduce material long-term interest rate risk. Veidekke has issued a fixed-rate bond loan with an outstanding volume of NOK 193 million. The bond, which matures in 2025, carries a fixed coupon rate of 3.20%. The fixed-rate bond loan was reduced from NOK 600 million at the start of 2022. The early redemption resulted in a premium-related charge of NOK 13 million in the income statement for 2022.

The value of the group's interest-rate swaps is determined using the forward rate on the balancesheet date, and is confirmed by the financial institution acting as the counterparty.

Veidekke has ownership interests in five PPP companies: the school projects Skuleveg AS (50%), Skulebygg AS (50%), Skulegard AS (50%) and Skuleplass AS (50%) and the road project Allfarveg AS (50%). For all these projects, agreements have been signed which secure long-term financing at a fixed rate of interest. Interest rate risk has been eliminated by ensuring that agreed financing is in accordance with signed leases. Reference is made to separate discussion of the PPP projects in note 16.

The interest rate level is believed to have a significant impact on the demand for Veidekke's products, particularly from private customers. The general market risk therefore also comprises indirect interest rate risk. Rising interest rates will usually mean lower activity for the group's construction activities.

The investments in the money and bond markets are sensitive to changes in market interest rates, and an increase in market rates normally reduces the value of these asset classes. Interest-rate duration measures the sensitivity of a fund to interest-rate changes: the longer the duration, the more sensitive the fund. Veidekke's investments in these asset classes comprise holdings in funds of investment-grade credit quality with short and medium durations. Accordingly, the portfolio has moderate price sensitivity to changes in market interest rates.

Veidekke's operations are largely national, and project cash flow is usually denominated in the national currency. Foreign exchange risk arises in connection with purchases of input factors denominated in foreign currencies. When material foreign exchange risk arises, it is hedged through forward contracts or similar instruments. Equity in foreign subsidiaries is not hedged, and any exchange rate fluctuations therefore affect the group's overall profit/loss. Total net agio recognised in the income statement for 2022 was NOK 5 million (NOK -1 million).

Note 30. Financial instruments

The carrying value of assets and liabilities can be broken down into the following categories:

2022

2022							Fair value
Figures in NOK million	Statement of financial position at 31 December 2022	Financial assets and liabilities measured at fair value through profit and loss	Financial assets and liabilities measured at amortised cost	Financial assets and liabilities measured at fair value through OCI	Other financial liabilities	Level 1	Level 2	Level 3	Total	Cost of assets measured at fair value
Non-current financial assets	524	313	211	-	-	-	313	-	313	286
Trade receivables and contract assets	6 581	-	6 581	-	-	-	-	-	-	-
Financial investment, bond fund	523	523	-	-	-	-	523	-	523	565
Other receivables	286	-	286	-	-	-	-	-	-	-
Cash and cash equivalents1	2 714	1 294	1 421	-	-	-	1 294	-	1 294	1 298
Total financial assets	10 628	2 130	8 498	-	-	-	2 130	-	2 130	2 148
Bond debts and debt to credit institutions	387	-	-	-	387	-	196	-	196	-
Other non-current liabilities	687	-	-	-	687	-	-	-	-	-
Debt to credit institutions (current)	14	-	-	-	14	-	-	-	-	-
Tax payable	161	-	-	-	161	-	-	-	-	-
Other financial current liabilities2	11 172	-	-	-	11 172	-	-	-	-	-
Total financial liabilities	12 421	-	-	-	12 421	-	196	-	196	-

¹ Cash and cash equivalents comprise of bank deposits and deposits in money market funds. See note 20.

² Other financial current liabilities comprise the items trade payables, contract liabilities, public duties and other current liabilities in the statement of financial position.

2021						Fair value
Figures in NOK million	Statement of financial position at 31 December 2021	Financial assets and liabilities measured at fair value through profit and loss	Financial assets and liabilities measured at amortised cost	Financial assets and liabilities measured at fair value through OCI	Other financial liabilities	Level 1	Level 2	Level 3	Total	Cost of assets measured at fair value
Non-current financial assets	479	303	176	-	-	-	303	-	303	275
Trade receivables and contract assets	5 589	-	5 589	-	-	-	-	-	-	-
Financial investment, bond fund	539	539	-	-	-	-	539	-	539	555
Other receivables	460	-	460	-	-	-	-	-	-	-
Cash and cash equivalents1	3 814	1 872	1 942	-	-	-	1 872	-	1 872	1 873
Total financial assets	10 882	2 714	8 168	-	-	-	2 714	-	2 714	2 704
Bond debts and debt to credit institutions	762	-	-	-	762	-	635	-	635	-
Other non-current liabilities	1 358	-	-	-	1 358	-	-	-	-	-
Debt to credit institutions (current)	13	-	-	-	13	-	-	-	-	-
Tax payable	206	-	-	-	206	-	-	-	-	-
Other financial current liabilities2	9 958	-	-	-	9 958	-	-	-	-	-
Total financial liabilities	12 298	-	-	-	12 298	-	635	-	635	-

¹ Cash and cash equivalents comprise bank deposits and deposits in money market funds. See note 20.

² Other financial current liabilities comprise the items trade payables, contract liabilities, public duties and other current liabilities in the statement of financial position.

The section on the right in the table above shows financial instruments recorded at fair value according to valuation method.

The different levels are defined as follows:

Level 1: Fair value is measured using market prices from active markets for identical financial instruments. No adjustment is made for these prices.

Level 2: Fair value is measured using other observable input than that used in level 1, either directly (prices) or indirectly (derived from the prices).

Level 3: Fair value is measured using input that is not based on observable market data.

The carrying value of bank deposits and liabilities to credit institutions is virtually the same as their fair value, since these instruments have a short maturity term. Correspondingly, the carrying value of trade receivables, contract assets, contract liabilities and trade payables are virtually the same as the fair value, as they are agreed upon under market terms. Unpaid government charges, tax payable and current liabilities have a short maturity, and capitalised liabilities are virtually the same as the fair value. The fair value of the group's interest rate hedging is estimated using the forward rate on the balance sheet date and is confirmed by the financial institution with which the agreement is signed.

For details concerning maturity structure and credit risk for trade receivables and contract assets, see note 19 Trade receivables and contract balances.

Financial instruments at fair value1

Veidekke's financial instruments recorded at fair value are reconciled in the following table:

	2022						2021
Figures in NOK million	Non-current financial assets	Financial investment, bond fund	Cash and cash equivalents, money market funds	Total financial instruments measured at fair value	Non-current financial assets	Financial investment, bond fund	Cash and cash equivalents, money market funds	Total financial instruments measured at fair value
Financial instruments at 1 January	303	539	1 872	2 714	320	540	1 262	2 123
Additions	7	-	-	7	2	-	600	602
Sales/disposal	-	-	-601	-601	-37	-	-	-37
Reinvested return	3	9	26	38	1	11	11	24
Pre-tax gains (losses) recogn. in the income statement	-1	-25	-3	-29	16	-13	-1	2
Financial instruments at 31 December	313	523	1 294	2 129	303	539	1 872	2 714

¹ Veidekke's share of financial instruments in joint ventures is not included.

The group's long-term financing

Maturity structure and contractual cash flows for the group's non-current liabilities are presented in the following table:

2022	Maturity structure
Figures in NOK million	Carrying value at 31 December 2022	2023	2024	2025	2026	After 2026	Total contractual cash flows
Bond loans1	193	6	6	199	-	-	212
Debt to credit institutions2	194	74	47	46	22	14	203
Other non-current liabilities3	687	39	231	143	329	-	743
Total	1 074	120	284	388	351	14	1 157

2021				Maturity structure
Figures in NOK million	Carrying value at 31 December 2021	2022	2023	2024	2025	After 2025	Total contractual cash flows
Bond loans1	600	19	19	19	619	-	677
Debt to credit institutions2	162	44	64	27	20	13	168
Other non-current liabilities3	1 358	39	228	601	228	344	1 440
Total	2 120	102	311	648	867	356	2 285

¹ In first quarter 2022, Veidekke implemented a voluntary buy-back of its VEI10 bond loan, which has a maturity date of 19 March 2025. As at 31 December 2021, the loan had an outstanding volume of NOK 600 million, of which a total of NOK 407 million was bought back at a price of NOK 103.20. As at 31 December 2022, the bond loan stands at NOK 193 million. As a result of the premature redemption the income statement in 2022 was charged with NOK 13 million related to share premiums.

² The group has a long-term credit facility with DNB with a credit limit of NOK 1.75 billion and one with SEB of NOK 0.75 million, none of which had been utilised on 31 December 2022. The two parts of the facilities have different maturities, which for the larger facility, of NOK 1 750 million, is one year, and for the other, of NOK 750 million, is until December 2025.

³ Includes non-current liabilities related to leases in accordance with IFRS 16, ref. note 13.

Effective interest rates for selected financial instruments:

Figures in NOK million	2022 1	2021 1
Liquidity	0.3%	0.0%
Current interest-bearing liabilities	4.6%	2.3%
Non-current interest-bearing liabilities 2	3.7%	3.0%

¹ Average effective interest rate is calculated as the average of the rates applicable through the year.

² Effective interest rate on long-term interest-bearing debt excluding the premium by redemption of its bond loan is 6.9%.

Interest rate derivatives

The group uses interest rate derivatives to hedge against fluctuations in profit as a result of changes in interest rates, i.e. interest rate swaps as cash flow hedging of loans. At 31 December 2022 the group had no such interest rate derivatives that are consolidated in the financial statements.

The group's net interest-bearing position

Figures in NOK million	2022	2021
Cash and cash equivalents	2 714	3 814
Interest-bearing financial assets	5	130
Interest-bearing bonds	523	539
Interest-bearing other receivables	-	1
Total interest-bearing assets	3 242	4 485
Bonds, non-current	193	600
Debt to credit institutions, non-current	194	162
Debt to credit institutions, current	14	13
Total interest-bearing debt	402	776
Net interest bearing position	2 840	3 709

The group's short-term financing

Maturity structure and expected cash flow for the group's current liabilities are presented in the following table:

2022		Maturity structure
Figures in NOK millionr	Carrying value at 31 Decem ber 2022	Payable on demand/due	date not set 0–3 months	3–12 months	Over 12 months	Anticipated cash flow
Current liabilities to credit institutions	14	-	8	6	-	14
Trade payables1	6 093	3 324	2 704	50	16	6 093
Unpaid government charges	941	-	793	87	62	941
Tax payable	161	-	79	81	-	161
Contract liabilities and other current liabilities2	4 137	1 310	1 102	1 633	99	4 144
Total current financial liabilities	11 347	4 633	4 686	1 857	176	11 354

2021		Maturity structure
Figures in NOK millionr	Carrying value at 31 Decem ber 2021	Payable on demand/due	date not set 0–3 months	3–12 months	Over 12 months	Anticipated cash flow
Current liabilities to credit institutions	13	-	5	8	-	13
Trade payables1	5 748	2 997	2 720	32	-	5 748
Unpaid government charges	900	-	778	83	40	900
Tax payable	206	1	29	176	-	206
Contract liabilities and other current liabilities2	3 310	1 176	1 186	935	19	3 316
Total current financial liabilities	10 177	4 175	4 717	1 234	58	10 184

¹ When the due date is not set for trade payables, this is largely related to project accrual due to invoices not having been received. ² Includes current liabilities related to IFRS 16, ref. note 13.

Specification of "Fair value adjustment" in the statements of changes in equity

Figures in NOK million	2022	2021
Hedge reserves, joint ventures1	-25	-93
Interest rate swap agreements, wholly-owned companies	2	-16
Foreign exchange forward contracts	5	-1
Total	-19	-110

¹ NOK -27 (-84) million is related to PPP E39 Lyngdal Flekkefjord. See note 16.

Specification of the accounting item in other comprehensive income

Revaluation of financial assets at fair value

Figures in NOK million	2022	2021
Fair value adjustments hedge reserves, joint ventures	68	49
Interest rate swap agreements, wholly-owned companies	17	-1
Fair value adjustments of financial assets available for sale	6	-2
Total	91	46

Sensitivity analysis of cash flow, financial instruments

Veidekke's financial position is generally strongest at year-end. Some parts of the business experience seasonal fluctuations which also affect the group's financial instruments. The group's contract types and payment terms may vary considerably. Overall, this means that the calculation of sensitivity to interest-rate changes is associated with a number of risk factors. The group's interest-bearing debt is limited to an outstanding fixed-rate bond loan, some financial leasing and smaller local borrowings. The group is expected to have substantial excess liquidity going forward. Minor changes in interest-rate levels – whether positive or negative – are not expected to have a material impact on profits, and therefore no detailed calculations have been prepared. Veidekke also has investments in joint ventures which have entered into fixed-rate agreements. See note 16 for a sensitivity analysis focused on altered interest rate.

Note 31. Executive remuneration

In accordance with amendments to the Public Limited Liability Companies Act, where a new section 6-16 (b) with associated new regulations has been added, Veidekke will publish a separate report on the group's website.Allocation and payment of remuneration to members of the corporate management team has been carried out in accordance with Veidekke's guidelines for executive remuneration, as adopted by the 2021 Annual General meeting. The complete guidelines are available at veidekke.com.

Compensation to the group chief executive and corporate management

	2022			2021
Figures in NOK thousand	Salary	Paid bonus	Car, phone, interest rate advantage etc.	Total compensation	Total compensation
Group CEO
Jimmy Bengtsson	4 492	1 306	553	6 351	5 768
Corporate management
Jørgen Wiese Porsmyr	3 264	749	234	4 247	4 023
Terje Larsen	2 886	666	190	3 743	3 527
Lars Erik Lund	2 589	595	202	3 386	3 148
Anne Thorbjørnsen	2 337	519	243	3 098	2 795
Kristina Andreasson	2 194	519	88	2 800	2 113
Hans Olav Sørlie	3 071	702	230	4 004	3 817
Øivind Larsen	3 071	1 002	279	4 352	3 817
Charlotta Nilsén 1	3 030	315	62	3 407	1 360
Marcus C. Nilsson 1	2 759	315	234	3 307	1 653
Mats Nyström 2	-	-	-	-	2 412
Total Group CEO/corporate management	29 692	6 687	2 316	38 696	34 434

¹ Member of corporate management as of 1 July 2021.

² Member of corporate management until 30 June 2021. Salary stated in the table is for the period up to departure. In addition, NOK 7.3 million was paid in various benefits in the period after departure.

Salaries and remuneration are only stated for the period serving in the group management.

2022	Defined benefit	Present value	Premium	Pension
Figures in NOK thousand	scheme - year's cost	of pension liabilities	pension plans 1	balance 31 Dec. 2		Share loans Earned bonus
Group CEO
Jimmy Bengtsson	260	704	1 442	5 548	232	1 278
Corporate management
Jørgen Wiese Porsmyr	1 709	26 030			235	812
Terje Larsen	2 938	24 213			263	716
Lars Erik Lund			329	1 815	838	644
Anne Thorbjørnsen			361	2 050	469	563
Kristina Andreasson			523	1 097	-	563
Hans Olav Sørlie			522	4 710	785	769
Øivind Larsen			423	1 917	469	955
Charlotta Nilsén			1 098	1 295	440	322
Marcus C. Nilsson			1 123	1 484	440	901
Total Group CEO/corporate management	4 907	50 947	5 821	19 916	4 171	7 523

¹ This year's cost for provision arrangements

² Relates to provision arrangements for salary exceeding 12G

2021	Defined benefit scheme -	Present value of pension	Premium pension	Pension balance
Figures in NOK thousand	year's cost	liabilities	plans 1	31 Dec.2		Share loans Earned bonus
Group CEO
Jimmy Bengtsson	333	578	1 974	4 106	255	1 306
Corporate management
Jørgen Wiese Porsmyr	1 450	27 439			251	749
Terje Larsen	2 308	25 650			335	666
Lars Erik Lund			566	1 584	893	595
Anne Thorbjørnsen			576	1 786	503	519
Kristina Andreasson			574	574	-	519
Hans Olav Sørlie			1 148	4 285	897	702
Øivind Larsen			655	1 592	503	1 002
Charlotta Nilsén3			405		471	331
Marcus C. Nilsson3			396		471	331
Total Group CEO/corporate management	4 092	53 666	6 293	13 927	4 581	6 719

¹ This year's cost for provision arrangements

² Relates to provision arrangements for salary exceeding 12G

³ Member of corporate management as of 1 July 2021

Compensation to the board of directors

	2022		2021
		Loan for share		Loan for share
Figures in NOK thousand	Fees	purchases	Fees	purchases
Gro Bakstad 1	421	-	389	-
Daniel Kjørberg Siraj	405	-	341	-
Hanne Rønneberg	445	-	368	-
Per Ingemar Persson	458	-	368	-
Klara-Lise Aasen 2	390	-	-	-
Carola Lavén 2	370	-	-	-
Inge Ramsdal (elected by employees)	370	-	304	-
Odd Andre Olsen (elected by employees)	390	-	358	-
Arve Fludal (elected by employees)	370	70	314	75
Pål Eitrheim 3	-	-	-	-
Svein Richard Brandzæg 4	689	-	667	-
Ingolv Høyland 5	370	-	358	-
Ingalill Berglund 6	-	-	358	-
Total board of directors	4 675	70	3 825	75

1 Board chair from 11 May 2022 2 Board member from 5 May 2021 3 Board member from 11 May 2022 4 Board chair until 11 May 2022 5 Board member until 11 May 2022 6 Board member until 5 May 2021

Veidekke has established audit, compensation and project committees. Compensation for participation in committees is included in the board members' fees. One of the reasons for increased compensation is that the board has been expanded from 10 to 11 members during the period. For an overview of corporate management and board shareholdings, see note 21.

Remuneration to auditors

Total remuneration to auditor	13 324	13 584
Other services in addition to auditing	712	797
Tax-related assistance	318	259
Statutory audit	12 294	12 528
Figures in NOK thousand	2022	2021

Remuneration excludes VAT.

Note 32. Project-related disputes and claims

Through its ongoing operations, Veidekke is involved in disputes with clients regarding the interpretation and understanding of signed contracts. This applies particularly to complex projects where the contract terms are demanding and large sums of money are involved. Veidekke strives to resolve these kinds of disputes outside the courts whenever possible, but some cases must nevertheless be decided by arbitration or in court. Disputes may be Veidekke's claims on customers (additional claims) and customers' claims on Veidekke (remedy of defects, compensation, etc.). Thorough assessments are conducted in connection with disputed claims to ensure the most correct reporting in the accounts.

Reference is made to the Group's accounting policies: "The revenue recognition for additional claims against the client and disputed amounts with a high level of uncertainty is based on assessments of the likely outcome of the dispute. The degree of uncertainty in the estimates will affect the proportion of the claim that is recognised in the income statement."

At year-end, Veidekke was involved in five (2021: six) ongoing court cases valued at more than NOK 25 million. One of the disputes is considered to have potentially large financial consequences, as Veidekke has a significant final settlement claim and the developer can demand daily fines in the project. The final settlement claim is scheduled for legal processing in 2023. In a Supreme Court judgment handed down in 2022, Veidekke was unsuccessful in a claim for extended construction time. Veidekke's assessment of the dispute has been taken into account in the preparation of the accounts for 2022. Three cases valued at more than NOK 25 million were resolved during the year through either a court judgment or negotiations with the client.

Note 33. Related-party transactions

Veidekke's related parties include associates and joint ventures (see note 16), Veidekke's shareholders, members of the board and key staff in Veidekke (see note 31). Veidekke has stakes in associates and joint ventures, and these are reported in Veidekke's accounts using the equity method.

Transactions with associates and joint ventures

Figures in NOK million	2022	2021
Revenue	123	101
Statement of financial position at 31 December
Receivables	32	49
Liabilities	-	6

OBOS BBL has a 19.5% stake in Veidekke and is also a major business partner. The collaboration with OBOS comprises deliveries from Veidekke's construction operation to companies in the OBOS Group. In addition, in 2022 Veidekke and OBOS entered into a joint ownership arrangement relating to the company Ulven B1 Næringstomt AS, which will own Veidekke's new headquarters at Ulven in Oslo. Veidekke has signed an eightyear lease starting on the completion date. Construction work started in 2022 and is expected to conclude in the autumn of 2024.

In 2022, Veidekke and OBOS also entered into an agreement to jointly develop the residential area Wendelstrand outside Gothenburg. The project includes approx. 200 homes, and Veidekke has a 20% stake in the project.

Transactions with selected parties

	Revenue		Receivables
Figures in NOK million	2022	2022	31.12.2022	31.12.2021
OBOS	1 821	2 141	161	263

Note 34. Events after the reporting date

No events have occurred after the balance sheet date which have had a material effect on the issued accounts.

Note 35. Alternative performance measures

Veidekke generally reports its financial results in line with International Financial Reporting Standards (IFRS). In addition, the following alternative performance measures are also reported:

Net interest-bearing position

The key figure expresses the group's financial position and has been prepared based on the total liquid assets and interest-bearing receivables at the time of assessment, less interest-bearing debt (both current and non-current). The key figure is included in the covenants calculation in the loan agreement.

Order book

The order book provides an indication of future activity in the group's construction operations. The order book is defined as contracted and signed contracts on the measurement date. This key figure also includes road maintenance contracts in Infrastructure in Norway's Road Maintenance unit.

Invested capital

The return on invested capital is calculated by dividing the pre-tax profit/loss plus interest costs over the previous 12 months by the average invested capital over the same period.

The average invested capital is calculated by averaging invested capital over the four preceding quarters.

Invested capital comprises equity and interestbearing debt. Interest-bearing receivables and cash are excluded from the definition of interest-bearing debt.

Return on equity

This key figure indicates the return on equity during the period. It is calculated by dividing the post-tax profit by average equity.

Post-tax profit last 12 months Average equity last 12 months

Average equity over the last 12 months is calculated by averaging equity over the preceding four quarters|.

Note 36. Corporate structure

This is an alphabetical overview of all subsidiaries in the Veidekke group, excluding pure holding companies and inactive companies. Specified ownership shares represent the proportion owned by Veidekke ASA or by a directly or indirectly owned subsidiary.

				Ownership share1
Company name	Business area	Head office	Country	2022	2021
AB Berggren & Bergman	Infrastructure Sweden	Luleå	Sweden	100%	100%
Amrock AS	Infrastructure Norway	Oslo	Norway	100%	100%
Arcona AB	Construction Sweden	Solna	Sweden	100%	100%
Arcona X AB	Construction Sweden	Solna	Sweden	100%	100%
Bergmesteren Raudsand AS	Infrastructure Norway	Raudsand	Norway	100%	100%
Billström Riemer Andersson AB	Construction Sweden	Mölndal	Sweden	90%	90%
BRA Bygg AB	Construction Sweden	Mölndal	Sweden	95%	95%
BRA Förvaltning AB	Construction Sweden	Mölndal	Sweden	100%	100%
BRA Knarrholmen AB	Construction Sweden	Mölndal	Sweden	67%	67%
BRA Knarrholmen Drift AB	Construction Sweden	Mölndal	Sweden	100%	100%
BRA Laholm	Construction Sweden	Mölndal	Sweden	100%	100%
BRA Mark AB	Construction Sweden	Mölndal	Sweden	0%	83%
BRA Teknik AB	Construction Sweden	Mölndal	Sweden	0%	100%
Brinkab AB	Infrastructure Sweden	Hudiksvall	Sweden	0%	100%
BSK Arkitekter AB	Construction Sweden	Stockholm	Sweden	100%	100%
BSK Holding AB	Construction Sweden	Solna	Sweden	76%	51%
Båsum Boring AS	Construction Norway	Krøderen	Norway	70%	70%
Constructa Entreprenør AS	Construction Norway	Bergen	Norway	100%	0%
Fastighets AB GTR	Construction Sweden	Stockholm	Sweden	100%	100%
GEO Fundamentering & Bergboring AS	Construction Norway	Rolvsøy	Norway	88%	88%
Grande Entreprenør AS	Construction Norway	Verdal	Norway	80%	80%
Hande AS	Construction Norway	Oslo	Norway	68%	68%
Hoffmann AS	Denmark	Glostrup	Denmark	100%	100%
Hoffmann Ejendomme AS	Other	Glostrup	Denmark	100%	100%
Industrivegen 2 Jessheim AS	Infrastructure Norway	Jessheim	Norway	100%	100%
Knarrholmen Utveckling AB	Construction Sweden	Mölndal	Sweden	100%	100%
Kongsberg Pukkverk og Grus AS	Infrastructure Norway	Kongsberg	Norway	0%	67%
Kynningsrud Grundläggning AB	Construction Norway	Uddevalla	Sweden	100%	100%
Kystmiljø AS	Construction Norway	Halden	Norway	100%	100%

				Ownership share1
Company name	Business area	Head office	Country	2022	2021
Leif Grimsrud AS	Construction Norway	Halden	Norway	80%	80%
Lillhagen Byggnads AB	Construction Sweden	Mölndal	Sweden	90%	100%
Nordre Fokserød Utvikling AS	Infrastructure Norway	Sandefjord	Norway	100%	100%
Rauma Bygg AS	Construction Norway	Åndalsnes	Norway	100%	100%
Rudsflata 11 AS	Construction Norway	Grålum	Norway	100%	100%
Seby AS	Construction Norway	Skedsmokorset	Norway	70%	70%
Skuledrift AS	Construction Norway	Oslo	Norway	100%	100%
Veidekke Asfalt AB	Infrastructure Sweden	Klippan	Sweden	75%	75%
Team Veidekke DA	Construction Norway	Oslo	Norway	80%	80%
Tore Løkke AS	Construction Norway	Revsnes	Norway	85%	85%
Valdresbygg AS	Construction Norway	Fagernes	Norway	100%	100%
Veidekke Entreprenad AB	Construction Sweden/ Infrastructure Sweden	Solna	Sweden	100%	100%
Veidekke Entreprenør AS	Construction Norway	Oslo	Norway	100%	100%
Veidekke Fellestjenester AS	Other	Oslo	Norway	100%	100%
Veidekke Framtid AB	Construction Sweden	Solna	Sweden	100%	100%
Veidekke Grundläggning AB	Infrastructure Sweden	Gothenburg	Sweden	100%	100%
Veidekke Industri AB	Infrastructure Sweden	Solna	Sweden	100%	100%
Veidekke Industri AS	Infrastructure Norway	Oslo	Norway	100%	100%
Veidekke Logistikkbygg AS	Construction Norway	Sandefjord	Norway	100%	100%
Veidekke Prefab AB	Construction Sweden	Sala	Sweden	100%	100%
Veidekke Prefab AS	Construction Norway	Klepp	Norway	100%	100%
Veidekke Raudsand AS	Infrastructure Norway	Raudsand	Norway	100%	100%
Veidekke Sverige AB	Construction Sweden/ Infrastructure Sweden	Lund	Sweden	100%	100%
Veitech AB	Infrastructure Sweden	Solna	Sweden	90%	90%
Vestgårdveien 17 AS	Construction Norway	Halden	Norway	100%	100%
Øst AS	Construction Norway	Halden	Norway	100%	100%
Øst Boligprosjekt AS	Construction Norway	Halden	Norway	100%	100%

¹ For subsidiaries which parent company is not directly or indirectly wholly-owned by Veidekke ASA, the real or financial ownership share is less.

Income statement Veidekke ASA

Figures in NOK million	Note	2022	2021
Revenue		120	93
Personnel expenses	1, 2	-125	-126
Other operating expenses	3	-138	-99
Depreciation	4	-20	-12
Total operating expenses		-284	-236
Operating profit		-163	-143
Dividends and group contributions from subsidiaries	5	1 343	1 061
Other financial income	5	30	63
Reversal of write-down of shares in subsidiaries	6	-	-
Financial costs	5, 6	-90	-48
Profit before tax		1 120	933
Income tax expense	7	-5	-10
Profit for the year		1 115	924
Allocation of profit
Dividends payable		1 046	945
Other equity		70	-21
Total		1 115	924

Statement of financial position Veidekke ASA

Figures in NOK million	Note	2022	2021
ASSETS
Non-current assets
Deferred tax assets	7	59	64
Operating assets	4	97	108
Investments in subsidiaries	6	2 529	2 502
Investments in associates and joint ventures	8	144	105
Financial investments	9	286	275
Other non-current receivables	9	121	97
Total non-current assets		3 237	3 151
Current assets
Receivables from group companies	10	720	471
Financial investments	11	523	539
Other receivables		47	98
Cash and cash equivalents	11	1 294	1 525
Total current assets		2 584	2 632
Total assets		5 821	5 783

67
1 123
1 191
291
600
-
891
72
1
945
2 656
27
3 701
5 783

Statement of cash flows Veidekke ASA

Figures in NOK million	Note	2022	2021
Operating activities		1 120	933
Recognised dividends and group contributions from subsidiaries, not yet paid	5	-1 343	-1 061
Received dividends and group contributions from subsidiaries		1 079	398
Tax paid	7	-7	-
Depreciation	4	35	12
Gains on sale of shares		-7	-
Pensions, difference expensed/paid		4	8
Generated from this year's activities		881	290
Change in other current assets		-14	4
Change in other items		-118	-63
Net cash flow from operating activities (A)		749	231
Investing activities
Acquisition of tangible non-current assets	4	-10	-39
Paid-in after divestment of property development operations		-	1
Payment, other investments		-49	-2
Received dividends from joint ventures		14	15
Net cash flow from investing activities (B)		-45	-25

Figures in NOK million	Note	2022	2021
Financing activities
Downpayment of non-current bond loan		-407	-
Repayment of non-current debt		32	-
Change in intra-group balances group cash account		384	249
Dividends paid		-945	-776
Net cash flow from financing activities (C)		-936	-527
Total net change in cash and cash equivalents (A+B+C)		-231	-321
Cash and cash equivalents at 1 January		1 525	1 846
Cash and cash equivalents at 31 December		1 294	1 525
Supplementary information
Borrowing facility		2 500	2 500
Used committed borrowing facilities at 31 December		-	-

Notes Veidekke ASA

Accounting policies

Veidekke ASA prepares its financial statements in accordance with Norwegian accounting standards.

The parent company Veidekke ASA is a holding company with no operational activity. Its activities consist of investments in subsidiaries and joint ventures, and its income consists of dividends and group contributions from these companies. In addition, Veidekke ASA invoices its subsidiaries for their share of costs related to administration of the group.

Investments in subsidiaries and joint ventures are accounted for using the cost method. This means that investments are booked at cost price, and only distributions from the companies are recognised in income. Investments are written down if the carrying value exceeds fair value.

Group contributions are recognised in the income statement in the same year as they are accrued by the subsidiary. Dividends from subsidiaries are recognised in the income statement in the same year as they are allocated in the subsidiary (the year before distribution). The dividend proposed in Veidekke ASA was recognised as a liability at 31 December 2022.

With the exception of the date of accounting recognition of dividends and group contributions and the accounting treatment of financial instruments such as share investments, the parent company applies the same accounting principles as the group.

Unless otherwise specified, all amounts are in NOK million.

Note 01. Payroll costs

Figures in NOK million	2022	2021
Payroll	86	87
Pension costs	18	21
National Insurance contributions	16	11
Other payroll costs (social benefits etc.)	4	6
Total	125	126
Number of fulltime equivalents	50	47
Number of employees at 31 December	50	47

Note 02. Pensions

Figures in NOK million	2022	2021
Pension costs
Current service cost	5	5
Interest cost on net pension liabilities	4	4
Cost of defined-benefit plan	9	9
Cost of defined-contribution and deposit schemes	9	14
Pension costs	18	23
Pension liabilities	265	297
Pension assets	-	-5
Net pension liability	265	291
Change in value (actuarial gains and losses)	30	-29
Change in value after tax recognised directly in equity	23	-22

The company is required by law to have occupational pension arrangements under the Norwegian Mandatory Occupational Pension Act. The company's pension plans comply with the statutory requirements laid down in this Act. See the accounting policies and the presentation of the schemes in note 22 to the consolidated accounts.

Note 03. Remuneration to auditors

Remuneration to the auditors in 2022 amounted to NOK 1.1 million for auditing, and NOK 0.1 for tax services. Equivalent for 2021 NOK 1.0 million for auditing, and NOK 0.1 for auditing-related services. All amounts are stated excluding VAT.

Note 04.Operating assets

		Machinery/	IT systems under
Figures in NOK million	Properties	IT systems	development	Total 2022	Total 2021
Carrying amount at 1 January	8	29	71	108	80
Original cost at 1 January	11	117	71	198	159
Additions	-	-	10	10	39
Completion	-	-11	11	-	-
Disposal original cost	-	-	-	-	-
Original cost at 31 December	11	106	92	209	198
Accumulated depreciations / impairments at 1 January	-3	-88	-	-91	-79
Depreciation for the year	-	-8	-12	-20	-12
Impairment for the year	-	-	-	-	-
Akkumulerte avskrivninger avhendede driftsmidler	-	-	-	-	-
Accumulated depreciation/ impairments at 31 December	-3	-96	-12	-111	-91
Carrying amount at 31 December	8	10	80	97	108
Depreciation method	Straight line	Straight line	Straight line
Depreciation rate	2–5%	10–25%	12.5–25%

Note 05. Financial income and financial expenses

Figures in NOK million	2022	2021
Dividend and group contributions from subsidiaries	1 343	1 061
Interest income	9	43
Dividends from joint ventures	14	15
Other financial income	7	5
Total other financial income	30	63
Interest costs	-70	-44
Foreign currency loss	-4	-4
Impairment of shares	-15	-
Total financial costs	-90	-48
Net financial items	1 284	1 076

Note 06.Shares in subsidiaries

Company	Location	Ownership share (%)	Value in the statement of financial position 1
Veidekke Entreprenør AS	Oslo	100	1 438
Hoffmann A/S	Copenhagen	100	366
Veidekke Industri AS	Oslo	100	415
Veidekke Sverige AB	Lund	100	296
Veidekke Fellestjenester AS	Oslo	100	14
Total			2 529

¹ Carrying value in Veidekke ASA's accounts at 31 December 2022 (cost method).

Note 07. Tax costs and deferred tax

Figures in NOK million	2021	2020
Income tax expense
Tax payable in the statement of financial position	-	1
Tax payable on group contributions	7	-
Change in deferred tax	-2	9
Total income tax expense	5	10
Reconciliation of the group's tax rate
22% of profit before tax	247	205
Actual income tax expense	5	10
Difference	241	196
Difference in income tax expense
Tax-exempted dividends from subsidiaries	244	197
Tax-exempted capital gain on share sale	-	-2
Other permanent differences	-3	1
Total	241	196

Figures in NOK million	2021	2020
Deferred tax
Temporary differences
Current items	-10	-8
Gains and loss account	9	11
Operating equipment	-3	-4
Pensions	-265	-291
Basis for deferred tax (- deferred tax asset)	-269	-291
Deferred tax assets 22%	-59	-64
Recognised deferred tax assets	-59	-64

Note 08. Shares in associates and joint ventures

Note 09.	Financial investments and other non-current receivables
----------	---------------------------------------------------------

Company	Location	Ownership share (%)	Carrying amount in NOK million 1
Allfarveg AS	Oslo	50	66
Skulebygg AS	Oslo	50	21
Skuleplass AS	Oslo	50	11
Ulven B1 Næringstomt AS	Oslo	50	39
Other companies	Oslo	50	8
Total			144

¹ Carrying amount in Veidekke ASA's accounts at 31 December 2022 (cost method).

Figures in NOK million	2022	2021
Share loans to employees	122	97
Financial assets	286	275
Total	407	372

See note 6 to the group statements for further information on share loans to group employees. The company has invested NOK 286 million in a combination fund consisting of both bonds and shares. The investment is intended to cover incurred pension liabilities and has been pledged. Unrealised gain per 31 December 2022 is NOK 27 million.

Note 10. Receivables and liabilities with group companies

Figures in NOK million	2022	2021
Trade receivables from group companies	37	32
Outstanding dividends and group contributions	1 340	1 061
Dividends payable offset against current group liabilities	-818	-623
Other liabilities to group companies	161	-
Total receivables from group companies	720	471
Trade payables to group companies	1	7
Skyldig konsernbidrag	45	-
Current liabilities to group companies related to the group account	3 652	3 268
Dividends payable offset against current group liabilities	-816	-623
Other liabilities to group companies	60	4
Total liabilities to group companies	2 942	2 656

Note 11. Bank deposits and short-term financial investments

Figures in NOK million	2022	2021
Short-term investment in bond fund 1	523	539
Short-term financial investments	523	539
Short-term money market investments 1	1 294	1 272
Bank deposits and cash equivalents	-	253
Total bank deposits and cash equivalents	1 294	1 525

¹ Veidekke has made a short-term investment of NOK 1.8 billion in a fixed-income fund and a money market fund. In the statement of financial position, the money market fund is classified as a cash equivalent, while the fixed-income fund is treated as a short-term interest-bearing receivable. For further information on this investment, see notes 17 and 20 to the group accounts.

Note 12. Reconciliation of equity

Figures in NOK million	2022	2021
Equity at 1 January	1 191	1 234
Profit for the year	1 115	924
Paid dividends	-1 046	-945
Dividends payable	-5	-
Change in value of net pension assets	23	-22
Equity at 31 December	1 279	1 191

Figures in NOK million	Share capital	Share premium	Other equity	Total equity
Equity at 1 January	67	419	705	1 191
Profit for the year			1 115	1 115
Dividends payable			-1 046	-1 046
Purchase of own shares			-5	-5
Change in value of net pension assets			23	23
Equity at 31 December	67	419	792	1 279

Note 13. Non-current liabilities

Veidekke has an overdraft facility with DNB of NOK 1 750 million (rolling 364-day maturity) and a NOK 0.75 billion credit facility with SEB (three-year maturity and two one-year extension options). These facilities remained unused at year-end 2022. Veidekke ASA is responsible for the group's total withdrawals from the group account. For further details, see notes 28 and 29 to the consolidated accounts.

At 31 December 2022 the recorded non-current liability consists of bond loan of NOK 193 million maturing in March 2025.

Note 14. Guarantees

At 31 December 2022 Veidekke ASA has provided guarantees for its subsidiaries totalling approx. NOK 4 900 million in connection with specific construction projects for group companies. The company has a current bank guarantee to cover payroll tax obligations.

Note 15. Other notes

The following requirements are covered in notes to the consolidated accounts:

• Note 21: Number of shares, shareholders etc..
• Note 29: Financial risk
• Note 30: Financial instruments
• Note 31: Executive remuneration
• Note 34: Events after the reporting date

Declaration in accordance with article 5-5 of the securities trading act

We hereby confirm that, to the best of our knowledge and belief, the group and company financial statements for 2022 have been prepared in compliance with current accounting standards, and that the information in the accounts gives a true and fair view of the group and company assets, liabilities and financial position, as well as the results of their operations in their entirety.

The board of director's annual report gives a true and fair view of the group and company development, result and position, as well as of the main risk and uncertainty factors the group is faced with.

Oslo, 23 March 2023 The board of directors of Veidekke ASA

Corporate governance

The corporate governance and management principles specify how Veidekke must be led, organised and administered to facilitate the greatest possible value creation over time, for the benefit of shareholders, employees and society at large.

1. Statement on corporate governance

Together with Veidekke's risk management principles, core values and ethical guidelines, the corporate governance principles are the group's most important management parameters. The board of directors is responsible for Veidekke's corporate governance and management and conducts an annual evaluation of principles and practice in this area.

Veidekke is subject to the governance reporting requirements in section 3-3b of the Accounting Act. The company is also subject to Oslo Stock Exchange's corporate governance requirements, and therefore reports in accordance with the current version of the Norwegian Code of Practice for Corporate Governance. This chapter covers the 15 main topics in the Code of Practice and explains any deviations. The company's auditor has reviewed the information in the statement issued pursuant to section 3-3b of the Accounting Act and has concluded that it is consistent with the information provided in the annual accounts.

The corporate governance statement will be considered at the annual general meeting on 10 May 2023.

Deviations from the Code of Practice: None

2. Operations

Veidekke's purpose is defined in its articles of association as "construction and property development activities, and other economic activities related thereto. Activities may be engaged in by the company itself, by subsidiaries in Norway or abroad, through participation in other companies or in cooperation with others." See page 185.

Veidekke ASA is a public limited liability company, listed at the Oslo Stock Exchange (NACE code: Construction), headquartered in Oslo and with operations in Norway, Sweden and Denmark. The operations are managed by the private limited liability companies Veidekke Entreprenør AS, Veidekke Industri AS, Veidekke Sverige AB and

Hoffmann A/S, but financial figures are reported in accordance with the following segment structure:

• Construction Norway is one of the country's largest construction contractors.
• Infrastructure Norway executes civil engineering projects all over the country and is a substantial producer of asphalt and aggregates, as well as an important operator in the Norwegian public roads maintenance market.
• Construction Sweden builds residential and commercial buildings and executes renovation projects, primarily in and around Stockholm, Malmö and Gothenburg.
• Infrastructure Sweden executes civil engineering, recycling and asphalting projects all over Sweden.
• Hoffmann A/S in Denmark primarily constructs commercial buildings.

Veidekke's strategy defines three strategic pillars to ensure competitiveness and increased value creation going forward; that Veidekke take an active role in the green shift, put people first and has passion for the customer's project.

Veidekke wishes to promote sustainable social development through responsible business conduct and systematic improvements related to, for example, greenhouse gas emissions, resource consumption, protection of the external environment, occupational health and safety, diversity, skills development, etc. Veidekke supports the UN Sustainable Development Goals and is a member of the UN Global Compact.

The group's efforts in these areas are detailed in its sustainability report, which complies with the GRI 2021 standard from the Global Reporting Initiative and is incorporated into the annual report (pages 118–175).

Veidekke prioritises solid profitability and high dividend payments to shareholders and focuses on continued profitable growth in selected markets towards 2025. Concrete targets have been adopted for the group's profit margins and dividends, as well as strategic goals for the various operations to ensure strong profitability and value creation in all parts of the business.

Deviations from the Code of Practice: None

3. Equity and dividends

Veidekke aims to provide its shareholders with a com petitive return on their investment through a combination of dividends and share price appreciation. To achieve this, strategic targets have been set at unit level. The group must have a strong financial position.

As at 31 December 2022, the group's equity ratio was 17% and its net interest-bearing assets totalled NOK 2.8 billion.

Veidekke aims to distribute at least 70% of the group's annual profit to shareholders. A dividend of NOK 7.0 per share was distributed in May 2022, corresponding to a dividend pay-out ratio of 99% for 2021. The board is proposing a dividend of NOK 7.75 per share for the financial year 2022, amounting to 96% of the profit

per share. The proposal is based on the company's dividend target and its robust financial position. The proposal will be presented for approval at the annual general meeting on 10 May 2023.

At the annual general meeting on 11 May 2022, the board was authorised to:

• Increase the company's share capital in connection with business acquisitions. The share capital may be increased by up to NOK 6.5 million, i.e., approximately 10% of the company's share capital, divided into 13 million new shares with a nominal value of NOK 0.50 each.
• Increase the company's share capital in connection with share and option programmes for employees. The share capital may be increased by up to NOK 1 137 000, i.e., approximately 2% of the company's share capital, divided into 2 274 000 new shares with a nominal value of NOK 0.50 each.
• Purchase the company's own shares to optimise the group's capital structure, and as a means of payment in connection with the acquisition of other undertakings. This authorisation is capped at NOK 6.5 million, i.e. approximately 10% of the company's share capital, divided into 13 million new shares with a nominal value of NOK 0.50 each, where, for one share with a NOK 0.50 denomination, a minimum of NOK 10 and a maximum of NOK 300 should be paid.
• Purchase the company's own shares in connection with share and option programmes for employees. This authorisation is capped at a nominal value

of NOK 1 137 000, i.e., approximately 2% of the company's share capital, and the payment per share with a nominal value of NOK 0.50 may not be lower than NOK 10 or higher than NOK 300.

Deviations from the Code of Practice: None

4. Equal treatment of shareholders and transactions with close associates

Veidekke treats all shareholders equally as a matter of principle. Each share carries one vote at the annual general meeting. Any variation of shareholders' preemptive rights in connection with capital increases will be explained.

Impartiality rules ensure that resolutions do not favour the main shareholder, namely OBOS (19.5% ownership interest). OBOS is a major property developer and an important client for Veidekke's construction operation, in respect of both residential and office projects. Veidekke and OBOS have jointly owned projects at Ulven in Oslo and Wendelstrand outside Gothenburg. See note 33.

Where Veidekke has engaged in material transactions with major shareholders other than ordinary commercial agreements, independent advisers are engaged to ensure correct valuation.

Board members have a duty to inform the board of potential conflicts of interest. Guidance on this topic is also included in the board's rules of procedure.

Veidekke's management gives high priority to employee co-ownership and seeks to enable as many staff as possible to buy shares in the company. The employee share purchase programme gives staff an annual opportunity to buy discounted Veidekke shares. At the end of 2022, employees owned more than 12% of the company.

Veidekke had an option programme for key staff until 2021, with full accrual being achieved after three years. The exercise period for the former option programme will run until 2026, and as of 31 December 2022 there were 1.6 million outstanding options in the program. In 2021, the option programme was replaced with an annual share purchase programme for senior executives which offers discounted shares with the option of loan financing by Veidekke.

The group complies with Oslo Stock Exchange's insider trading rules and trading restrictions. See page 116 for further details of the insider trading rules applicable to employees.

Deviations from the Code of Practice: None

5. Freely negotiable shares

Veidekke's shares are listed on Oslo Stock Exchange and are freely transferable. The company's articles of association do not contain any trading restrictions.

Deviations from the Code of Practice: None

6. Annual general meeting

Veidekke facilitates shareholder participation in the annual general meeting and gives priority to ensuring that it is an effective meeting place for shareholders and the board. The 2021 ordinary general meeting took the form of a hybrid meeting, where shareholders could meet in person or participate digitally.

The company's next ordinary general meeting will be held on 10 May 2023, and as in the preceding year, shareholders can participate digitally or in person. Notice of the meeting and supporting documents are published on Veidekke's and the Oslo Stock Exchange's websites no later than 21 days before the annual general meeting. Pursuant to section 5-11 of the Public Limited Liability Companies Act, shareholders have the right to submit matters for consideration by the annual general meeting. Such matters must be notified to the board of directors in writing no later than seven days before the deadline for giving notice of the annual general meeting, together with a proposed decision or statement of reasons for the inclusion of the matter on the agenda. Shareholders can participate in the annual general meeting either in person or through an authorised representative (proxy). Proxy forms are distributed with the notice of meeting. Shareholders who are unable to attend the annual general meeting in person or by proxy may vote in advance on the individual agenda items. The board of directors, the chair of the nomination committee and Veidekke's auditor attend the annual general meeting, in addition to company management. The minutes of the annual general meeting are published the first working day after the meeting.

Deviations from the Code of Practice: None

7. Nomination committee

Use of a nomination committee is stipulated in Veidekke's articles of association. The nomination committee submits recommendations to the annual general meeting on the election of members to the board of directors and the nomination committee and proposes board and nomination committee fees.

When proposing board candidates, the nomination committee must take into account the board's overall competence and ensure that the board fulfills legal requirements for gender balance and independence. The committee held three meetings in 2022.

The nomination committee consults the CEO, board members and relevant shareholders when preparing recommendations. Shareholders may propose board candidates to the nomination committee. The Veidekke website includes a function for this, and there is no deadline for submitting such proposals.

The nomination committee's chair and other members are elected by the annual general meeting, which also sets the committee members' remuneration.

Under the articles of association, the nomination committee must have at least three members. Nomination committee members should be shareholders or representatives of shareholders, and the majority must be independent of the board of directors and company management. The CEO and other senior executives are barred from membership.

Up until the annual general meeting on 11 May 2022, the nomination committee comprised Harald Norvik (chair), Erik Must, Anne Elisabet Thurmann-Nielsen and Tine Fossland. Following the annual general meeting, the nomination committee comprised Arne Austreid (chair), Erik Must and Tine Fossland, representing, respectively, OBOS, Must Invest AS and Folketrygdfondet, which are all among Veidekke's largest shareholders.

Deviations from the Code of Practice: None

8. The board of directors, composition and independence

The board of directors is Veidekke's highest administrative body and is directly accountable to the annual general meeting. The board consists of seven members elected by the shareholders and three members elected by and from among the employees. In 2003, Veidekke entered into an agreement with its employees that it would not have a corporate assembly. In return, employees were granted increased representation on the board of directors. The shareholder-elected board members are elected for

one year at the annual general meeting. Since the group does not have a corporate assembly, the board elects its own chair in accordance with the provisions of the Public Limited Liability Companies Act.

In deciding the composition of the board, emphasis is given to safeguarding shareholder interests and ensuring diversity and breadth of expertise. Relevant aspects are financial, sustainability and other professional expertise that is of particular relevance to Veidekke's business.

Of the shareholder-elected board members, four are women and three are men. Veidekke thus complies with the provisions of the Public Limited Liability Companies Act on gender balance on the boards of listed companies. Efforts are made to have board members from all Scandinavian countries. Five of the shareholder-elected board members are resident in Norway and two in Sweden.

The board's composition ensures that it can act independently of shareholders' special interests. Moreover, the board's rules of procedure include impartiality rules dealing with situations where a board member has a vested interest. Board independence is also ensured through the use of the nomination committee as stipulated in the articles of association.

The shareholder-elected board members are independent of the company's senior executives and significant business associates, with the

exception of board member Daniel Kjørberg Siraj, who is Group CEO of OBOS, Veidekke's largest shareholder and an important business partner.

In keeping with the Code of Practice from the Norwegian Corporate Governance Board, board members are encouraged to own shares in Veidekke. See the overview of shareholdings in note 21.

Deviations from the Code of Practice: None

9. The work of the board of directors

The board's main task is to ensure value creation. The board of directors is also responsible for the overall management of the company, including the appointment of the Group CEO, and is tasked with ensuring productive, appropriate organisation of the company's business. The board plays an independent role and is mandated to ensure equal and proper treatment of all shareholders. The board held 13 board meetings in 2022.

The board's work is based on its rules of procedure, which describe its responsibilities and tasks, including agreements with associated parties. The board of directors adopts targets, strategies and budgets, reviews and approves financial and sustainability reports and contributes expertise and experience. All matters of an unusual nature or of great significance to the group must be presented to the board.

The topics to be discussed at different board meetings are specified in an annual plan, which also includes annual board review of all business areas and such topics as compliance, sustainability, OHS, HR and succession planning.

Ongoing evaluation of the board's work is included in each board meeting. The board also annually carries out a more formal evaluation of its work and competence. In the fourth quarter, members answer an evalu ation survey, and the results are reviewed at the board's January meeting, which decides on any follow-up.

Veidekke's board had three sub-committees as at the end of 2022: the audit committee, the remuneration committee and the project committee. Committee members are selected from among the board members. Minutes of subcommittee meetings are sent to the board, and the committee chairs regularly brief the board on the work of their committees.

The audit committee

The audit committee is tasked with facilitating productive cooperation between the board of directors and the administration, as well as between the board and the external auditor, on accounting, financial

The board of directors – roles and participation in board and committee meetings in 2022:

Name	Role	Board member since	Board meetings	Committee involvement/meetings
Gro Bakstad	Chair	2010	13 of 13	Remuneration (chair): 3 av 3 Audit (chair): 4 of 4
Daniel Kjørberg Siraj	Board member	2018	12 of 13	Audit: 9 of 9 Remuneration: 5 of 7
Hanne Rønneberg	Board member	2020	12 of 13	Audit: 9 of 9 Project: 11 of 12
Per-Ingemar Persson	Board member	2020	13 of 13	Remuneration: 7 of 7 Project (chair): 12 of 12
Klara-Lise Aasen	Board member	2021	12 of 13	Audit (chair): 8 of 9
Carola Lavén	Board member	2021	13 of 13	Remuneration: 5 of 7 Audit: 4 of 5
Pål Eitrheim 1	Board member	2022	8 of 9	Project: 7 of 8
Inge Ramsdal  2	Board member	2008	13 of 13	Remuneration: 5 of 7
Odd Andre Olsen 2	Board member	2011	13 of 13	Audit: 9 of 9
Arve Fludal  2	Board member	2015	13 of 13	Project: 12 of 12
Ingolv Høyland 3	Board member	2017	4 of 4	Project: 4 of 4
Svein Richard Brandtzæg 3 Chair		2019	4 of 4	Remuneration (chair): 4 of 4

¹ Elected to the board of directors at the annual general meeting on 11 May 2022.

² Employee-elected.

³ Resigned at the annual general meeting on 11 May 2022.

affairs, sustainability, controls and risk management. The committee reviews periodical financial reports and annual and sustainability reports in advance of board consideration. The committee reports to the board, and its work is governed by board-issued mandates and instructions. The committee holds nine ordinary meetings per year, four of which are related to the group's quarterly reports.

The audit committee is composed of four shareholderelected and one employee-elected board member. In 2022, the shareholder-elected members comprised Klara-Lise Aasen (chair as of May 2022), Daniel Kjørberg Siraj, Hanne Rønneberg, and Carola Lavén (as of May 2022), and the employee-elected member was Odd Andre Olsen. Gro Bakstad chaired the committee until her nomination as board chair in May 2022.

The remuneration committee

The remuneration committee submits proposals to the board on the salary and other compensation of the Group CEO and advises the Group CEO on salary and compensation arrangements for members of group management. The committee reports to the board, and its work is governed by board-issued mandates and instructions. The committee held seven ordinary meetings in 2022.

The remuneration committee is composed of four shareholder-elected and one employee-elected board member. In 2022, the shareholder-elected members comprised Gro Bakstad (chair as of May 2022), Daniel Kjørberg Siraj, Per-Ingemar Persson, Carola Lavén, and the employee-elected member was Inge Ramsdal. Svein Richard Brandtzæg chaired the committee until his resignation from the board in May 2022.

The project committee

The project committee helps deepen the board's insight into major new projects and assists the Group CEO with decisions on bids for projects valued in excess of NOK 800 million, as well as projects with an unusual content or risk level. The project committee held 12 meetings in 2022.

The project committee is composed of three shareholder-elected members and one employeeelected member. In 2022, the shareholder-elected members comprised Per-Ingemar Persson (chair), Hanne Rønneberg and Pål Eitrheim (as of May 2022) and the employee-elected member was Arve Fludal. Ingolv Høyland was a member of the committee until his resignation from the board in May 2022.

Deviations from the Code of Practice: None

10. Risk management and internal control

The ability to plan, execute and evaluate construction projects lies at the heart of Veidekke's business. Effective structuring and management are critical success factors for the group. The large number of ongoing projects at any given time necessitates systematic reporting by each project to each business area, and then on to management and the board.

Reports are submitted ten times a year, and cover matters such as profitability, liquidity, risk, injuries, employee absence and environmental impact, as well as other financial and non-financial parameters.

Veidekke's framework for the management and monitoring of project uncertainties covers the tender and execution phases and concentrates on uncertainty analysis and management. Uncertainty management is incorporated into financial reports for individual projects, and also includes a quarterly review by management of the project portfolio's development and the individual projects presenting the greatest uncertainties.

Management monitors the project portfolio on an ongoing basis to ensure an acceptable level of risk exposure and a robust basis for profitability. The principles underpinning the uncertainty management framework are reflected in the management systems used by the different operations, in the form of clear guidelines on and procedures for risk management at the tendering phase as well as project execution regarding quality, progress, profitability, health, safety and the environment.

These systems and procedures help ensure the quality of the order book and a consistent high standard of project execution. The development and profitability of the order book is a fixed agenda item for the management teams of the individual companies, group management and the board of directors.

Veidekke's financial policy provides guidelines for the different entities' financial management and activities. The objective is to avoid, limit, control and measure financial risk, promote capital rationalisation and optimise the group's financial resources.

Climate risk is included in the company's risk management activities. Climate change may entail severe damage to nature and infrastructure such as buildings and roads. In addition, stricter climate standards and new technologies may bring about major changes in demand for various products and services, as well as in applicable framework conditions for production. Climate risk may therefore impact the group's operational, financial and market risks. Veidekke reports on climate risk in accordance with the TCFD framework. See page 180.

Planning

Veidekke's financial and strategic planning follows a fixed annual schedule which specifies deadlines for the preparation of framework documents, strategy plans and budgets. The schedule also prescribes ongoing monitoring of the group's operations.

Financial management

The group is managed in accordance with clear financial targets related to profit margin, capital yield and capital structure. These targets are broken down and translated into sub-targets for the individual operations, in the form of profitability and cash flow requirements. Projects are subject to profit margin targets, including targets for financial items.

Financial reporting

Veidekke's group accounts are prepared in accordance with the applicable IFRS regulations. The group adopts accounting policies in line with the regulations, which are communicated to the operations together with other applicable rules, with particular emphasis on changes in new and significant standards. Accounting information is reported through the group's joint reporting system. The reporting system features an overarching chart of accounts and integrated control systems, both intended to promote information consistency. Quarterly and year-end financial reports are expanded to provide mandatory additional information.

In accordance with Veidekke's governance model, accounting information is consolidated and controlled at several levels within the organisation. Each entity has a responsibility to comply with applicable laws and regulations on financial reporting, and to seek assistance from central staff functions when significant assessments or transactions going beyond the ordinary course of business are required. The group has adopted a special procedure which must be followed in connection with the purchase and sale of businesses. Veidekke's external auditor performs expanded checks at project level. Moreover, the audit committee is mandated to engage in-depth with accounting and financial matters, control

measures and risk management on behalf of the board. Assessment of project status and risk constitutes the greatest financial reporting-related risk for project-based organisations. Veidekke therefore arranges courses on relevant financial and management systems to ensure that it has the necessary project-reporting expertise.

Sustainability goals

Veidekke has set fixed targets in key sustainability areas, e.g. for reducing occupational injuries and greenhouse gas emissions and increasing the percentage of women in management and in other operations. See the Sustainability Report for more information.

Sustainability reporting

Veidekke prepares a sustainability report in accordance with the GRI 2021 standard from the Global Reporting Initiative. The report is included in the annual report on pages 118–175.

The group supports the TCFD initiative and seeks to address climate risk in line with TCFD's recommendations. The group also reports to CDP Climate (2022: A-) and CDP Forest (2022: B).

Ethical guidelines

Veidekke's ethical guidelines draw up a framework for proper conduct on behalf of the group, detailing both business practice standards and requirements linked to Veidekke's relations with partners, suppliers and other parties.

All persons who work for or represent Veidekke have a duty to act in accordance with the ethical guidelines and the group's core values; professional, honest, enthusiastic, and ground-breaking. To help ensure that ethical dilemmas are handled well, the individual employee's personal values must align with the group's core values. Other prerequisites to making wise choices is familiarity with laws and regulations and a good understanding of what these entail.

Reporting of censurable conduct

Veidekke has rules in place for the reporting of censurable conduct within the company (whistleblowing) and on the handling of such reports. A whistleblowing mechanism has been established through which reports can be submitted anonymously. The mechanism can be accessed on Veidekke's website, thus also allowing external parties to submit reports.

Compliance risk

Veidekke has adopted measures to help employees handle issues in accordance with applicable laws and regulations. The measures include guidance documents and training.

Deviations from the Code of Practice: None

11.Remuneration of board members

Board and committee remuneration is set by the annual general meeting based on recommendations received from the nomination committee. The remuneration reflects the board's responsibility,

expertise and time spent, and is independent of the company's financial results. No board members have share option agreements.

None of the shareholder-elected board members perform special tasks for Veidekke beyond those inherent in their membership of the board and any board committees. See also note 31.

Board members are encouraged to hold shares in Veidekke (see section 8).

Deviations from the Code of Practice: None

12. Remuneration of senior executives

The board of directors is tasked with setting the salary and other compensation of the Group CEO, while the remuneration of other members of group management is determined by the Group CEO in consultation with the board chair. Guidelines for the remuneration of senior executives is presented to the annual general meeting each year. The statement and annual report on executive pay are published on Veidekke's website.

Veidekke seeks to offer competitive pay conditions but does not wish to be a wage-driver, and the salaries of senior executives are therefore set based on a comparison with industry statistics and other relevant businesses. A bonus programme has been established in addition to ordinary salary, under which the maximum individual payout is 50% of annual

salary. The bonus is linked to target achievement in accordance with pre-defined criteria. Veidekke's managers also participate in the group's general employee share purchase programme, under which employees receive an annual invitation to buy Veidekke shares at a discount and with financial assistance.

See also Shareholder information on page 114 for further details, as well as notes 31 and 6.

Deviations from the Code of Practice: None

13. Information and communication

All shareholders and other stakeholders in the financial markets are treated equally in terms of access to financial information from Veidekke. Strong emphasis is given to ensuring that all provided financial information is correct, clear and relevant, so that the share price reflects the value of the company.

The company website provides all interested parties with equal and simultaneous access to relevant shareholder information, in Norwegian and English. Access is also provided to the group's financial calendar, which contains dates for the publication of financial information and information about Veidekke's annual general meeting.

Veidekke publishes quarterly reports containing supplementary financial information on the websites of the company and the Oslo Stock Exchange. The presentation of the quarterly results is open to the

public and can also be viewed via webcast. The group's Investor Relations team (IR) maintains regular contact with shareholders, potential investors, analysts and the financial markets in general. Extra care is taken in the periods immediately prior to the publication of quarterly figures. The board of directors is updated on IR work on an ongoing basis. See also Shareholder information.

Deviations from the Code of Practice: None

14. Corporate takeover

Any offer to take over the company will be handled in accordance with the principle of equal treatment of shareholders. The board of directors recognises its responsibility to provide shareholders with sufficient information and time to form an opinion on any bid for the company. If a bid for a large, controlling shareholding is received, the board will evaluate the bid and make a recommendation to shareholders to accept or reject it. Once any bid becomes public, the board will not use authorisations or pass other resolutions that obstruct the bid unless this has been approved by the general meeting.

Deviation from the Code of Practice: The board of directors does not have specific guidelines on its conduct in connection with a bid for the company. The board agrees with the wording of the NUES recommendation, but has not found it necessary to adopt such guidelines.

15. Auditor

Veidekke's external auditor is EY. The external auditor is elected by the annual general meeting, which also approves the audit fee each year. The external auditor is independent of Veidekke ASA and issues an annual written confirmation to the board of directors that stipulated independence requirements are met. Veidekke has guidelines in place on the scope and types of additional services provided by the auditor. The external auditor's remuneration is specified in note 31.

The external auditor normally attends at least two board meetings a year, including the meeting at which the board considers the annual accounts and audit summary. Arrangements are made to ensure that the board has an opportunity to ask the auditor questions without management being present.

The external auditor also attends all meetings of the audit committee, to which the auditor presents the audit plan, interim audit report and report on the

annual report and accounts. In these reports, the auditor issues an opinion on the quality of internal controls throughout the group and discusses any accounting problems revealed by the audit.

The external auditor also attends the ordinary general meeting.

Deviations from the Code of Practice: None

Auditor's report

Statsautoriserte revisorer Ernst & Young AS Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00

www.ey.no

Medlemmer av Den norske Revisorforening

Dronning Eufemias gate 6a, 0191 Oslo Postboks 1156 Sentrum, 0107 Oslo

VEDLAGT. INDEPENDENT AUDITOR'S REPORT

To the Annual Shareholders' Meeting of Veidekke ASA

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Veidekke ASA (the Company) which comprise the financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries (the Group). The financial statements of the Company comprise of the statement of financial position as at 31 December 2022 and the income statement and statement of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies. The consolidated financial statements of the Group comprise of the statement of financial position as at 31 December 2022, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion

• the financial statements comply with applicable legal requirements,
• the financial statements give a true and fair view of the financial position of the Company as at 31 December 2022 and its financial performance and cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway,
• the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022 and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Our opinion is consistent with our additional report to the audit committee.

A member firm of Ernst & Young Global Limited

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company and the Group in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided.

We have been Veidekke ASA's elected auditor for a continuous period starting prior to 2022.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2022. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the

Accounting of projects

Basis for the key audit matter

Revenues and costs from projects in the construction operations are recognised over time in accordance with the progress of the projects. Estimates for the projects' total costs, the outcome of disputes and any other contractual obligations are applied for revenues recognised over time. Progress is estimated on the basis of accrued costs compared with estimated total costs in the project. Project revenue comprises the agreed compensation and variable compensation from additional and change orders. Variable revenue is fully or partly recognised if it is considered to be highly unlikely that any significant reversal of revenue will be made in subsequent periods. The projects can be complex and continue for several years. The accounting for projects has been a key audit matter due to the estimation uncertainty, the projects' complexity and the significance of the amounts involved.

risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements.

2

Our audit response

We assessed the application of the accounting principles for revenue recognition over time in addition to completeness and accuracy of the disclosures concerning revenues. We have also considered routines for project monitoring and tested controls related to project evaluations and accounting. We discussed the status on selected projects with project management and the Company's management by region and business unit.

• We also visited selected projects. For selected contracts, we tested
• project revenue against agreements and assessed the treatment of variable revenue from additional and change orders in addition to disputes and claims.
• estimated variable compensation against the Company's documentation and management's assessment of the probability that no significant reversals will take place when the uncertainty related to the variable compensation ceases.

We also controlled costs charged to the projects against invoices and timesheets, assessed the determination of estimated total project costs, the estimated final profit against comparable projects and analysed the development in profitability for selected projects and for the total project portfolio. In addition, we have performed analyses of actual revenues and costs on selected finalised projects against project prognoses in order to evaluate management's historical accuracy.

We refer to note 8 on construction projects in progress, note 32 on information regarding disputes and claims related to projects and note 25 on trade payables and other current liabilities.

Independent auditor's report - Veidekke ASA 2022

A member firm of Ernst & Young Global Limited

Disputes and claims in large infrastructure projects

Basis for the key audit matter

The Group is through its ongoing business involved in disputes with clients regarding the interpretation and understanding of contracts. This particularly applies to infrastructure projects where the contractual amounts are significant, and the projects and contracts are complex. The disputes and claims concern both claims from Veidekke against the customers (due to variable volumes and the settlement of volumes, etc.) as well as claims from customers against Veidekke (remedy of defects, compensations etc.). Management uses a significant degree of judgment in the consideration of such dispute issues, and disputed amounts are only recognized if it is considered to be highly probable that no significant reversals will take place in subsequent periods. Disputes and claims have been a key audit matter due to estimation uncertainty, the disputes' complexity and the significance of the amounts.

Our audit response

We assessed the Company's controls and routines related to the identification, evaluation and follow-up of disputes. We evaluated the Company's assessment of estimates and discussed ongoing disputes with management on various levels in the Group. We reviewed relevant internal and external correspondence, had meetings with the in-house legal department and obtained statements from external and internal lawyers. We assessed management's accuracy in historical disputes against the outcome of these disputes as part of our control of management's judgment in ongoing disputes.

3

We refer to note 2 for information on areas involving significant estimation uncertainty and note 32 for information regarding disputes and claims related to projects.

Other information

Other information consists of the information included in the annual report other than the financial statements and our auditor's report thereon. Management (the board of directors and CEO) is responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the board

Independent auditor's report - Veidekke ASA 2022

A member firm of Ernst & Young Global Limited

of directors' report, the statement on corporate governance and the statement on corporate social responsibility contain the information required by applicable legal requirements and whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that the other information is materially inconsistent with the financial statements, there is a material misstatement in this other information or that the information required by applicable legal requirements is not included in the board of

directors' report, the statement on corporate governance or the statement on corporate social responsibility, we are required to report that fact.

We have nothing to report in this regard, and in our opinion, the board of directors' report, the statement on corporate governance and the statement on corporate social responsibility are consistent with the financial statements and contain the information required by applicable legal requirements.

Responsibilities of management for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway and of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or the Group, or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.

Independent auditor's report - Veidekke ASA 2022

A member firm of Ernst & Young Global Limited

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

4

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may

5 cause the Company and the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the board of directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other legal and regulatory requirement Report on compliance with regulation on European Single Electronic Format (ESEF) Opinion As part of our audit of the financial statements of Veidekke ASA we have performed an assurance engagement to obtain reasonable assurance whether the financial statements included in the annual report, with the file name VEI-2022-12-31-en, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF Regulation. Management's responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor's responsibilities 6 engagements other than audits or reviews of historical financial information". The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. As part of our work, we perform procedures to obtain an understanding of the company's processes for preparing the financial statements in accordance with the ESEF Regulation. We test whether the financial statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL tagging of the consolidated financial statements and assess management's use of judgement. Our procedures include reconciliation of the iXBRL tagged data with the audited financial statements in human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, 23 March 2023 ERNST & YOUNG AS Anders Gøbel State Authorised Public Accountant (Norway) (This translation from Norwegian has been prepared for information purposes only.)

Independent auditor's report - Veidekke ASA 2022

A member firm of Ernst & Young Global Limited

Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. We conduct our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – "Assurance

Independent auditor's report - Veidekke ASA 2022

A member firm of Ernst & Young Global Limited

Shareholder information

Veidekke aims to generate value for shareholders in the form of a strong, stable return. This return reflects the group's financial robustness, itself the result of stable, profitable operations.

History

Veidekke was founded in 1936, and has been listed on the Oslo Stock Exchange since 23 June 1986. The Veidekke share is traded on the main exchange under the ticker symbol VEI. All Veidekke shares carry equal rights and are freely transferrable. Veidekke has always had a single share class, with one share carrying one vote.

There is a long-term link between value creation by the company and the return on the share as measured by share price growth and dividends. Veidekke has generated a strong return for shareholders over time. Including dividends, the total return over the past five years is 88%. This equates to an average annual return of 13.5%. In contrast, the Oslo Stock Exchange all-share index

Share price development, indexed 1

¹ The share prices in this chart have been adjusted for dividends. The scale is logarithmic. Source: Oslo Stock Exchange and Veidekke.

grew by 46% over the same period, equating to an average annual return of 7.9%.

Veidekke aims to generate value for shareholders in the form of a competitive return compared to investment alternatives. The return comprises a combination of dividends and share price growth.

Turnover and return

2022 saw a total of 17.9 million Veidekke shares traded on the Oslo Stock Exchange, equating to a turnover rate of 13.3%. In comparison, 27.4 million shares were traded in 2021, corresponding to a turnover rate of 20.3%. There were 89 165 trades involving Veidekke shares during the year, compared to 92 409 the previous year. At the close of 2022, the share price was NOK 96.80, corresponding to a market value of NOK 13 billion. The total return for shareholders in 2022 was -22%, including dividends paid for the financial year 2021. In contrast, the return on the Oslo Stock Exchange all-share index was -1%.

Dividends

Veidekke's dividend policy calls for a pay-out ratio of at least 70% of the profit for the year. Over the past five years, the company has delivered an average pay-out ratio of 95% (excluding the

extraordinary dividend paid in connection with the sale of Veidekke's property development operation).

At the general meeting in May 2022, a dividend of NOK 7.0 per share was approved for the financial year 2021.

The board is proposing a dividend of NOK 7.75 per share in respect of the financial year 2022, corresponding to a pay-out ratio of 96% of the profit per share.

Share capital and ownership structure

Veidekke's share capital as at 31 December 2022 amounted to NOK 67 478 133.50, divided into 134 956 267 shares with a nominal value of NOK 0.50 each. There were no changes in share capital in 2022.

At the close of the year, Veidekke had 12 474 shareholders, compared to 11 377 at the beginning of the year. The largest shareholders in the company were OBOS BBL (19.5%), Folketrygdfondet (10.2%) and IF Skadeforsäkring AB (3.7%). There were some adjustments to the shareholdings of Veidekke's ten largest shareholders in 2022. ODIN Fonder's decision to increase its stake by 0.7% – from 2.7% to 3.4% – represented the largest increase, while Lannebo Fonder's decision to sell its 1.9%

Share price

stake represented the largest decrease. At yearend 2022, employees owned a combined stake of approximately 12% in the company, compared to 11.5% in 2021. Veidekke owned 5 000 treasury shares at the end of 2022. Foreign ownership totalled 23.9% at year-end.

Employee co-ownership

Employee ownership has been a priority for Veidekke since the company's initial listing in 1986. Management encourages broad employee coownership through its employee share programme, which gives all employees an annual opportunity to purchase Veidekke shares at a discount. While the share programme was originally reserved for key executives, it was opened up to all employees in 1990. Management firmly believes that employee

co-ownership promotes increased commitment, motivation and understanding of the business, and that actively benefiting from the company's value creation gives employees a long-term perspective on the company's development. Co-ownership is also considered an important recruitment tool and an incentive which supports retention of skilled workers.

Veidekke's trainees receive NOK 10 000 in shares when they join the company, as do apprentices who stay with Veidekke after achieving trade certification.

Two share programmes were run in 2022 – one for all employees and one for senior executives. Both programmes allow staff to purchase a limited number of Veidekke shares at a 20% discount. For

Largest shareholders as at 31 December 2022

	Ownership share in %
OBOS BBL	19.5
Folketrygdfondet	10.2
If Skadeförsäkring AB	3.7
ODIN Funds	3.4
Vanguard	2.8
Pareto Asset Management	2.3
Erik Must	2.2
Danske Invest	2.2
MP Pensjon PK	2.0
DNB Asset Management AS	1.5
Total 10 largest	49.8
Employees	12.0
Others	38.2
Total	100.0

A list of the 20 largest shareholders is published on Veidekke's website and updated weekly. The company's share registrar is DNB.

Share distribution as at 31 December 2022

Shareholding	From	Until	No. of shareholders	No. of shares	%
	1	100	3 634	140 739	0.10
	101	1 000	4 544	2 044 508	1.51
	1 001	10 000	3 286	11 467 649	8.50
	10 001	100 000	902	23 326 808	17.28
	100 001		108	97 976 563	72.60
Total			12 474	134 956 267	100.00

Swedish participants, the offer has been increased to 25% to compensate for tax rules. Share purchases can be financed in two ways: payment in cash or through an interest-free loan from Veidekke which is repaid through salary deductions over the following 10 months. Some 6 907 employees received a sharepurchase offer under the all-employees programme in February 2022, and ultimately 2 149 employees bought a total of 1 161 103 shares. The subscription price per share was calculated based on the volumeweighted average share price on Oslo Stock Exchange during the subscription period, less a discount. The 25% discount for Swedish participants resulted in a price of NOK 100.14, while the 20% discount for Norwegian and Danish participants resulted in a price of NOK 106.81. The shares are subject to a two-year lock-in period. In total, 1 129 persons received a share-purchase offer under the senior-executive programme in November 2022, and ultimately 604 employees bought a total of 766 611 shares. The subscription price was calculated based on the volume-weighted average share price on Oslo Stock Exchange during the subscription period less a discount. The 25% discount for Swedish participants resulted in a price of NOK 67.64, while the 20% discount for Norwegian and Danish participants resulted in a price of NOK 72.14. Shares purchased through the senior-executive programme can be financed by a loan with a 15-year repayment period, and are subject to a three-year lock-in period. The interest rate on such loans was 0.8% at year-end.

Veidekke operated an option programme for key staff from 2019 to 2021. Options accrued over a period of three years from the allocation date: 25% at the end of the first year, 25% at the end of the second year and 50% at the end of the third year. Options expire if they are not exercised within five years of the allocation date. Shares purchased through the option programme may not be sold within the first year after exercise of the option. As at year-end, approximately 1.6 million options remained unexercised. Options purchased during the final programme period (2021) will lapse in May 2026.

Inside information

The company's internal insider trading rules are stricter than required by the Norwegian Securities Trading Act. In addition to an expanded statutory duty to investigate, the company observes the duty to obtain clearance for primary insiders, in order to ensure more thorough compliance with the duty to investigate. This is in keeping with Oslo Stock Exchange recommendations. Veidekke has also drawn up internal rules which have been made known to all employees in key positions and senior employee representatives. Among other things, these rules provide that trading in Veidekke shares is prohibited during the four weeks prior to publication of interim results, and that employees must always exercise great caution when buying and selling Veidekke shares.

The investor market

Veidekke's main aim for its investor market work is to build trust by ensuring that all parties are treated equally in terms of equal access to identical financial information. Open dialogue with investors, analysts and other stakeholders in the financial markets helps ensure that the group's values are reflected in the pricing of the Veidekke share.

Interim results are reported in accordance with the financial calendar. Veidekke holds presentations for shareholders, potential investors, brokers, analysts,

Key figures for the Veidekke share

the press and employees in connection with the publication of annual and interim results. These presentations can be followed via webcast. The company publishes information in Norwegian and English. Veidekke's financial calendar, quarterly reports, analyst presentations, economic activity reports and other important press releases and presentations, information on the Veidekke share, share price developments and shareholder information, as well as up-to-date lists of shareholders and analysts who follow the Veidekke share can be found on veidekke.com.

	2022	2020	2020	2019 restated	2018
Market price as at 31 December	96.8	131.8	110.8	119.5	96.9
- high	136.4	132.4	133.6	121	99
- low	80.9	103.4	72.95	79.1	75.8
Earnings per share	8.1	7.1	15.6	6.8	4
Market price/earnings (P/E)	12.0	18.6	7.1	17.6	24.2
Market price/book value per share (P/B)	4.4	5.3	5.2	4	3.1
Dividend per share	7.75	7.0	28.25	0	5
Pay-out ratio (%)	96%	99%	181%	0%	125%
Turnover rate (%)	13.26%	19.30%	28.70%	23.70%	33.50%
Earnings yield (%)	7.23%	5.30%	11.60%	4.20%	5.20%
Outstanding shares (average million)	134.9	134.9	134.9	133.7	133.7
Market price as at 31 December (NOK million)	13 307	17 787	14 953	16 127	12 956
No. of shareholders as at 31 December	12 474	11 377	12 140	11 173	11 559

2022

Sustainability report

Veidekke supports the UN's 17 sustainable development goals and has pledged to operate in line with the UN Global Compact's 10 principles for responsible business conduct. Veidekke reports in line with GRI Universal Standards 2021 from the Global Reporting Initiative.

Veidekke's sustainability reporting shows how the company impacts and is impacted by changes in the environment, nature, climate conditions, and society, and how the group is responding to the financial risks and commercial opportunities arising from these changes.

Sustainability at Veidekke

Basis for sustainability

Development is sustainable when it meets current needs without compromising the ability of future generations to meet their needs.

Human activity is currently exceeding the earth's tolerance limits in many areas. Veidekke takes responsibility for safeguarding and rehabilitating natural resources and ensuring that people throughout the value chain are treated fairly. Veidekke also helps customers, suppliers and society achieve their sustainability goals by systematically integrating sustainability into company operations, customer projects and all parts of the value chain.

Sustainability is a key element in the group's strategy and processes. While Veidekke's business has always centred on people and customer projects, the group strategy also identifies a further priority area: greenhouse gas emissions and the green shift. Addressing climate change is also crucial to safeguard nature. Active participation in the green shift is vital for Veidekke's future success.

Veidekke believes that relevant regulations and legislation, including the new Transparency Act, the EU Taxonomy, and the upcoming Corporate Sustainability Reporting Directive, will contribute to the achievement of shared goals and foster greater transparency about the work being done.

Objectives

Veidekke has adopted quantitative targets in several areas, with a particular focus on:

• reducing greenhouse gas emissions in line with the Paris Agreement by halving total greenhouse gas emissions in the value chain in the short term (by 2030) and achieving netzero emissions in the long term (by 2045)
• avoiding serious injuries and reducing the number of injuries by 20% annually
• increasing diversity in the group; women should hold 20% of operational management roles by 2025.

The group's short-term and net-zero climate targets have been verified by the Science Based Target initiative (SBTi).

Organisation of sustainability work

Sustainability is incorporated into Veidekke's strategy and management systems. The board of directors bears ultimate responsibility for sustainability, while day-to-day sustainability work is managed by the corporate management team.

Responsibility for implementing and monitoring measures lies with the five business areas, which develop action plans and identify material key performance indicators (KPIs).

Sustainability and innovation are included in the decision-making basis when the project committee evaluates major projects. There is considerable local scope for action within the framework provided by Veidekke's core values – professional, honest, enthusiastic, and ground-breaking – policies and group requirements.

Veidekke has established a sustainability council that supports corporate management with technical advice and promotes an integrated approach to sustainability and social responsibility within the group. The sustainability council draws its members from operational units and relevant support functions.

Publicly available governing documents are published on the company's website.

Reporting

Veidekke's sustainability reports describe the company's impact on the environment, climate, and society, how climate change and the transition to a zero-emission society affect group operations, and how the group is responding to resulting financial risks and commercial opportunities.

With few exceptions, the sustainability report covers the same companies as the financial reports (see GRI 2-2 on page 147 and note 36).

Veidekke's sustainability report has been prepared in accordance with the GRI 2021 standard issued by the Global Reporting Initiative. The report starts with a description of overall principles and organisation, followed by a review of the group's work on each material environmental, social and governance topic. Relevant indicators are discussed on pages 147–170, and the GRI index for the report can be found on pages 171–175.

In addition to preparing a dedicated sustainability report, Veidekke submits data to the investor surveys CDP Climate, CDP Forest, Sustainalytics and S&P Global.

Restatements of information

in connection with SBTi validation of the company's climate targets, greenhouse gas (GHG) emissions data was adjusted and emissions figures for previous years have been restated accordingly in the sustainability report. See GRI 2-4 on page 147.

External assurance

Group management and the board of directors have agreed to seek third-party verification of the sustainability report in accordance with GRI 2021 as of the 2023 financial year. See GRI 2-5 on page 147.

Membership and endorsement of sustainability initiatives

Veidekke participates in industry and environmental organisations and initiatives that promote industry interests and sustainable development goals. See GRI 2-28 on page 152.

Key topics from 2022 onwards

Veidekke's sustainability work is based on a materiality analysis conducted between December 2021 and February 2022 in accordance with the GRI 2021 standard from the Global Reporting Initiative (GRI).

GRI has not yet issued a construction sector standard. The analysis therefore concentrated on likely impacts in the environmental, governance and social categories, based on descriptions of risks and opportunities linked to Veidekke's operations, value chain, geographical presence, business model and strategic priorities.

Supporting data were collected by means of a written questionnaire sent to Veidekke employees, the board of directors and selected external stakeholders, including customers, trade associations, owners, financial partners, and sustainability organisations. The questionnaire asked respondents to rank likely impacts in order of importance. In addition, a smaller number of external stakeholders were interviewed about the same topic. The results were then summarised for consideration by Veidekke's group management team and board. The project identified the following topics as material to Veidekke's future sustainability work:

• Environment: greenhouse gas emissions, biodiversity and habitats, materials consumption and the circular economy
• Social conditions: work-related injuries, workers' rights, diversity and equality
• Governance: corruption and financial crime

Reducing greenhouse gas emissions and workrelated injuries and maintaining efforts to combat corruption and financial crime are still considered material. Two new topics have been added since the previous materiality analysis in 2018: biodiversity and habitats, and materials consumption and the circular economy. In addition, the previous topics 'expertise' and 'compliance' were redefined to focus attention on diversity and gender equality, and workers' rights, respectively. Two topics from the previous period – productivity and customer satisfaction – are no longer defined as separate topics but are considered to be addressed in the group's annual report as a whole.

The company's materiality analysis identifies which of the 17 UN Sustainable Development Goals the company can impact the most. See page 122.

Double materiality

Double materiality involves assessing the company's impact on society and stakeholders, but also how material sustainability factors affect the company's ability to create value over time.

This involves Veidekke assessing not only the company's climate and social impact, but also how climate change will affect the company's long-term financial performance, in line with the Task Force on Climate Related Financial Disclosures (TCFD).

Similarly, Veidekke has investigated its impact and dependence on nature in typical projects and assessed nature as a financial opportunity and risk. See page 131. Conclusions in this area remain provisional, however, pending issuance of a final framework by the Taskforce on Nature-related Financial Disclosures (TNFD), which is expected in 2023.

DOUBLE MATERIALITY

UN Sustainable Development Goals

The UN's 17 Sustainable Development Goals (SDGs) constitute an action plan for eradicating poverty, combating inequality and stopping climate change by 2030. Veidekke supports the SDGs and is cooperating with a range of stakeholders to achieve the goals within and outside its own supply chains. Based on the material topics for Veidekke's sustainability work, the following SDGs have been identified as particularly relevant:

Material topic	Diversity and equality	Workers' rights Work-related injuries	Materials consumption and circular economy	Climate impact	Biodiversity and habitats	Corruption and financial crime
Veidekke's goal	20% share of women in operative management positions by 2025	Annual risk assessment of suppliers and subcontractors 0 serious injuries and 20% annual reduction of total injuries	Reduce resource consumption and work to promote a circular economy	50% reduction of greenhouse gas emissions from operations by 2030; achieve net zero emissions by 2045	Protect natural diversity. Stop deforestation and conversion of natural ecosystems related to the purchase of goods and services	Counter corruption Counter breaches of competition law
What we do	Awareness of bias in recruitment and development processes Mapping of pay and working conditions Proportion men/women among recent graduates >40% Proportion men/women in summer jobs at 50/50%	Workers' rights: Due diligence assessments relating to human rights violations; measures related to prequalification, compliance checks, etc. Work-related injuries: Learning from undesirable incidents. Risk management. Applying "Safety talks" as a carrier of company culture Reducing obstacles	Optimise mass balance and utilisation of resources. Seek opportunities for reuse of, e.g., crushed clean concrete	Streamlining, changing energy carriers and new technology. E.g., replacement of energy carriers at asphalt plants, fossil-free/emission-free construction sites, sustainable materials options	Set strict requirements when purchasing wood products: 100% third-party certified by 2025, 100% traceability by 2025, and 100% sustainable palm oil-free biofuels	Risk assessments, and measures such as group policies and group requirements; training The internal audit undertakes audits of anti corruption work
Sustainability goal
Target	5.5: Ensure women's full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life	8.8: Protect labour rights and promote safe and secure working environments for all workers	12.2: Achieve the sustainable management and efficient use of natural resources 12.5: Substantially reduce waste generation through prevention, reduction, recycling and reuse	Main goal 13: Take urgent action to combat climate change and its impacts	15.2: Promote sustainable manage ment of all types of forests 15.5: Take action to reduce the degradation of natural habitats and halt the loss of biodiversity 15.8: Prevent the introduction and reduce the impact of alien species; control or eradicate the priority species	16.5: Substantially reduce corruption and bribery in all their forms

Stakeholder dialogue

The table below summarises key stakeholders, the topics that concern them, and how Veidekke has engaged with stakeholders and followed up on the topics.

Stakeholders	Topics of interest to stakeholders	Arena for dialogue	Regularly	Annually	As required	Veidekke's follow-up
		Quarterly presentations
Owners	Corporate governance	Meetings with investors and analysts				Reporting in the sustainability report
	Veidekke's goals and policies	Annual general meeting				Online news items
		Dialogue with managers
		Staff appraisals				Involved through employees' daily dialogue with managers Involved through internal communication channels
Employees	Involvement and dialogue	Staff meetings				Implementation of a joint induction programme for new staff
		Involvement of employee representatives through the board and various forums				Establishment of management tools to increase sustainability knowledge and facilitate action
Customers	Challenges and opportunities in cooperation with Veidekke	Customer meetings, seminars, and events				Customer satisfaction measurements Customer conversations/interviews with key customers regarding sustainability, environmental and climate issues Engagement in customer dialogue in projects and focus groups Participation in professional and industry forums
	Cooperation on OHS and compliance	Dialogue meetings				Involvement of suppliers at an early stage, with an emphasis on cooperation, safety, and the environment Pre-qualification of suppliers
	Securing good and reputable suppliers	Industry forums				Auditing and follow-up of suppliers through company visits and direct dialogue
Suppliers	Information about Veidekke's goals and expectations regarding the climate, the environment and compliance	Supplier meetings Contracts				Environmental Product Declarations (EPDs) required for all categories with significant emissions Suppliers are recommended to have their own climate targets validated by the Science Based Target initiative Raising the expectation that suppliers will contribute to the green shift Concrete contract requirements
	Climate risk assessment	Quarterly reporting				Annual risk assessment and selection of mitigating measures
Financial institutions (lenders)	Loan conditions linked to sustainability	When refinancing and concluding new loan agreements				Evaluation of performance in line with the agreement and corresponding adjustment of loan conditions
Ministry of Finance	Taxonomy	Input on the taxonomy regulation to NHO's expert group				Contribution of expertise, consultation feedback and questions to the ministry

					As
Stakeholders	Topics of interest to stakeholders	Arena for dialogue	Regularly	Annually	required	Veidekke's follow-up
		Industry forums
	Compliance	Political events
Local and central government	Good working conditions	Contact with politicians and authorities through trade associations				Placing issues on the agenda Initiatiation of dialogue and participation in public debates on topics related to environmental and climate targets,
	Efficient construction and	Dialogue meetings in municipal and regional forums				compliance, and permanent employment
	regulatory processes	Municipal and regional forums for urban development
		Communication with local authorities on individual projects
	Industry cooperation to improve	Dialogue meetings
Industry	safety, compliance, and the environment	Participation in industry forums				Promotion of cooperation on topics such as achieving zero injuries, measures to meet environmental and climate targets, and achieving greater diversity
		Participation in industry associations and boards
		Member organisations				Participation in initiatives such as Skift – Business Climate Leaders, Färdplan: Bygg- och anläggningssektorn,
	Impact of Veidekke's activity, such as	Participation in industry forums				Norwegian Green Building Council, Sweden Green Building Council, and others in collaboration with business and public entities
	jobs, noise, or environmental impacts	Open meetings				Formalised cooperation with the Zero Emission Resource Organisation (ZERO) on issues such as fossil-free
Society	Alignment of Veidekke's strategy with	Public meetings				construction sites, renewable materials, and hydrogen as an energy carrier
	government targets	Consultations				Participation in/contribution to Skift – Business Climate Leaders and signatory of the Anti-Greenwashing Charter Member of the UN Global Compact; has pledged to comply with the initiative's 10 principles for responsible business conduct. Veidekke is engaged in issues related to social conditions in the global supply chain
Knowledge hubs for climate and nature	Facts about the earth's tolerance limits Nature	Events devoted to specific topics				Stockholm Resilience Centre, WWF Norway, WWF Sweden, and the Zero Emission Resource Organisation (ZERO) were invited to Veidekke's Scandinavian Environment Day
	UN Biodiversity Agreement					Participation in pilot project on nature with Sabima
General public	Transparency	Internet				For transparency reasons, Veidekke makes information available to the public

Environmental impact

To live on earth, people need a balanced climate, air, water, and a sustainable ecosystem that provides us with the natural resources we need to build our lives, welfare, and wellbeing. Climate change, biodiversity loss, land use change and resource scarcity show that the earth's tolerance limits are being exceeded. Construction consumes large amounts of energy, materials, and natural resources, generates substantial waste and is responsible for significant greenhouse gas emissions. The industry has a social responsibility to help resolve the problems it is involved in creating, and Veidekke intends to play an active role in this green shift.

Greenhouse gas emissions

Why is the topic material?

Climate change is having serious impacts on both humans and nature, and the UN Intergovernmental Panel on Climate Change (IPCC) is stressing the urgency of stepping up efforts to mitigate it. According to the IPCC's Sixth Assessment Report, human activity has increased the earth's temperature by about 1.1°C compared to pre-industrial times, and the panel identifies the main cause as anthropogenic emissions of greenhouse gases.

The Paris Agreement, adopted in 2015, is the first global climate agreement that is legally and effectively binding on all countries. The agreement contains the targets of keeping global warming well below 2°C compared to pre-industrial times and seeking to limit the temperature increase to 1.5°C.

The Nordic countries have a long tradition of political cooperation and wish to be seen as role models in the area of environmental and climate efforts. In 2022, these countries reaffirmed their goal of leading the transition to a zero-emission society and limiting global warming in line with the 1.5°C target. Many of the solutions for achieving the ambitious targets already exist but need to be

scaled up. The Nordic countries have highlighted their intention to:

• maintain and reinforce a high carbon price
• stimulate green and competitive industry and business activities
• promote carbon storage in forests, soil, and geological formations, while also working towards a bio-based economy

Indikatorer

GRI 201: Economic Performance 201-2 Financial implications and other risks and opportunities due to climate change GRI 302: Energy 302-1 Energy consumption within the organisation 302-2 Energy consumption outside of the organisation 302-3 Energy intensity GRI 305: Emissions 305-1 Direct (scope 1) GHG emissions 305-2 Energy indirect (scope 2) GHG emissions 305-3 Other indirect (scope 3) GHG emissions 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions GRI 308: Supplier Environmental Assessment 308-1 New suppliers that were screened using environmental criteria

• accelerate the transition to a more circular economy that supports achievement of climate and biodiversity goals

The EU is seeking to become a competitive, resource-efficient, zero-emission continent by 2050. The European Green Deal strategy was put forward by the European Commission in 2019 to address climate and environmental challenges, and the EU Taxonomy classification system is designed to channel green investments into activities that are necessary to achieve the objectives of the European Green Deal. As two of the EU Taxonomy's six environmental objectives are climate-related, all businesses that aim to be sustainable have to address climate change and climate adaptation.

Impact of Veidekke's operations

Veidekke's operations generate significant greenhouse gas emissions, particularly related to the group's asphalt factories, aggregate plants and machinery used in projects. Use of fossil energy carriers at the asphalt factories in Norway accounts for 47% of Veidekke's direct greenhouse gas emissions.

90% of other greenhouse gas emissions in Veidekke's value chain are produced upstream and downstream. The majority of these are linked to

purchases of goods and services, such as concrete, steel, bitumen, and transport services.

A further major emissions source is the energy consumption of buildings over their operating life. In Norway, electricity is the primary energy source used for heating, although district heating is also used. At present, there is limited self-production of and self-sufficiency based on other energy sources such as solar energy and geothermal energy. See also pages 154–156.

Guidelines and obligations

The group has adopted the target of reducing its greenhouse gas emissions in line with the Paris Agreement and achieving net-zero emissions throughout its value chain by 2045. As a milestone along the way, Veidekke has set the short-term emission reduction target of halving its emissions by 2030. In July 2022, Veidekke became the first construction company in Scandinavia to have both a net-zero target and a short-term science-based emission reduction target validated by the Science Based Target initiative. As early as November 2015, the company was one of the first companies on the Oslo Stock Exchange to commit to operate in accordance with the Paris Agreement.

The group's climate and environmental policy, which has been approved by group management, states that Veidekke shall be an industry leader in the green shift in terms of reducing greenhouse gas emissions and protecting the environment. This includes adopting a precautionary approach to environmental challenges, taking on greater environmental responsibility and encouraging the development and use of environmentally friendly technology. The policy is consistent with the UN Global Compact's 10 principles for responsible business conduct, which Veidekke has signed.

The group's ethical guidelines emphasise making the right choices for the environment and the climate. The guidelines apply to Veidekke employees, contracted personnel, and suppliers, and emphasise personal responsibility for staying technically updated, complying with requirements and procedures, and reporting any breaches of environmental principles.

Veidekke's efforts to reduce greenhouse gas emissions

Climate is integrated into Veidekke's strategy and management systems. The group strategy identifies climate as one of three key factors in achieving profitability and competitiveness. As of 2021, Veidekke introduced a climate budget for the group, broken down by operational level. The budget is described later in this chapter.

The board of directors bears overall responsibility for the group's climate work. Responsibility for ongoing follow-up lies with group management, while the business areas are responsible for implementing and following up on measures designed to ensure the achievement of sustainability and social responsibility objectives.

Veidekke will be a driving force in the transition to a zero-emission society and will actively promote good climate solutions in its contact with customers. Although societal changes will require clear priorities and bold choices in the years ahead, they will also provide Veidekke with opportunities to leverage its innovative and participatory culture and engineering expertise. The group is working to ensure that its business model will be every bit as relevant in a net-zero economy as it is today.

To achieve net-zero emissions by 2045, Veidekke will cut its greenhouse gas emissions linearly each year, halving them by 2030. To achieve this, the group will switch to fossil-free/emission-free energy carriers by

2025 and examine its materials selection and resource consumption, product development and innovation, as well as its project portfolio. Towards 2030 and 2045, the measures from the preceding period will be refined and accelerated, and Veidekke will adopt new technologies and evaluate new business models. Residual emissions will be neutralised through carbon capture and other methods that remove CO2 equivalents from the atmosphere.

To ensure that Veidekke and its value chain reduce greenhouse gas emissions in line with its emissions targets, the group has developed an action-oriented climate plan that is updated at least annually, preferably in the first quarter of the year. More and more of Veidekke's projects are calculating the climate impact of projects from a life-cycle perspective and developing plans to reduce emissions throughout the value chain, and an increasing number of projects are securing environmental certification.

Veidekke has already identified many new business opportunities that can crystallise the group's role in the green shift. To date, this has resulted in the establishment of new business areas such as Veidekke Circular, Veidekke Green Incubator

and Veidekke Offshore Wind. The group has clear ambitions to become an important link in the value chain for floating offshore wind facilities and is already involved in a major feasibility study examining floating foundations for wind turbines.

To prepare the organisation for the changes to come, sustainability topics are being integrated into courses and training initiatives. The mandatory "Choose Right" training course teaches employees how to encourage customers to make climatefriendly choices, and courses run by the Veidekke School – such as the Horizon management training programme and the Perspectives course for project owners – provide training on the topics of sustainability and the circular economy.

If the group is to achieve its ambitious climate goals, emissions must be cut throughout the value chain. Veidekke is a major player in the industry and recognises that it has both a responsibility and opportunities to make a positive difference. The group is intensifying its dialogue with suppliers and partners regarding the climate impact of products. At the same time, Veidekke itself must utilise resources and expertise in a way that secures robust, lasting

solutions, not least by encouraging customers and giving advice that creates added value.

Veidekke also engages in activities that help limit society's greenhouse gas emissions in areas such as construction for renewable energy, road and rail transport, rehabilitation of buildings and infrastructure, and the construction of highquality new-builds. The company strives to build sustainably by consulting the Taxonomy and certification schemes.

Impact of the measures

The Veidekke group's greenhouse gas budget is broken down by operation unit. Compliance with emissions budgets is monitored in the same way as financial and OHS targets, and both sustainability-linked loans (company level) and financial management incentives are linked to the greenhouse gas budget.

Veidekke measures progress by reference to the climate budget and the adopted KPIs on a quarterly basis (scopes 1 and 2) and annually (scope 3). Responsibility for analysing the figures and implementing necessary measures lies with the business areas.

Veidekke's climate targets are:

• 2045 (long-term): net-zero greenhouse gas emissions throughout the value chain (scopes 1, 2 and 3)
• 2030 (short-term): halve greenhouse gas emis– sions in scopes 1 and 2 compared to base year 2018, and in scope 3 compared to base year 2020

Veidekke's own greenhouse gas emissions have been declining since 2018, having been reduced by an average of 10 percent per year. One important driver of these developments is the switch to fossil-free energy carriers at asphalt factories, the transition from diesel to renewable diesel (HVO) as fuel for machines and vehicles, and changes in project portfolios. Veidekke's emissions are well within its own climate budget for scopes 1 and 2. The figures for scope 3 (supplier and customer emissions) for 2022 will not be available until mid-2023. In previous years (change from 2020 to 2021), scope 3 was within Veidekke's climate budget. The development in greenhouse gas emissions over the last three years is discussed on pages 154–157. See also page 5.

Annual revision of Veidekke's climate plans to 2030 and 2045 is expected to provide input on new measures and build recognition that early action is crucial. Sufficient and sufficiently rapid emissions reductions are conditional on boosting knowledge throughout the value chain. While many suppliers and material groups include robust data in their EPDs, others are in the very early stages, and Veidekke will therefore increase its engagement with the supplier segment.

Early involvement and interaction with the customer and other partners during the design phase is vital for achieving good solutions. Although an increasing number of customers express high climate expectations, Veidekke believes that there is a need for more ambitious customers that better facilitate innovation. The introduction of the EU Taxonomy and more ambitious environmental certification schemes will reinforce this development. Competition to achieve the lowest greenhouse gas emissions could also accelerate the green shift.

While cutting emissions is a top priority for reaching net-zero, innovative solutions are needed to secure a climate impact throughout the lifetime of a building or infrastructure. Thus, dilemmas may arise in situations where accepting higher emissions during construction may help reduce total emissions over the lifetime of a building.

Although more customers and suppliers are seeking to set science-based targets, the total number remains low. Veidekke believes that science-based targets will focus efforts on the most impactful measures and will support its partners in setting targets in line with SBTi criteria.

Cooperation with stakeholders

Veidekke seeks solutions to environmental challenges through innovation and collaboration. The group will reduce its own emissions where possible but will also help customers and suppliers adapt to a net-zero society by actively leveraging its skills and expertise to reduce the climate footprint of its partners.

90% of the greenhouse gas emissions associated with Veidekke's operations occur upstream and downstream in the value chain. To meet its own targets, the group must therefore work more closely with the partners that have the greatest impact on emissions. Veidekke will initiate "green conversations" with these suppliers to encourage the development of more sustainable products and services in cooperation with Veidekke.

Sustainability, climate plans, and climate risks and opportunities are recurring topics in dialogues

with the group's investors. Investor initiatives such as CDP and direct investor dialogue help shape Veidekke's efforts to reduce greenhouse gas emissions, for example through targets, commitments, and surveys.

Veidekke is a strategic partner of the Zero Emission Resource Organisation (ZERO) and Skift – Business Climate Leaders.

The group participates in organisations and collaborative projects with the aim of reducing greenhouse gas emissions in the construction sector. Veidekke chairs the climate, energy, and environment committee of the Norwegian Contractors Association – Building and Construction (EBA) and has signed the commitment on 10 immediate measures for contractors, an initiative from EBA and the Norwegian Green Building Council intended to promote more climate and environmentally friendly construction and civil engineering projects. Through dialogue with trade associations, authorities, and NGOs, Veidekke wishes to influence framework conditions so that the industry can utilise known solutions that minimise climate footprint and mechanisms that ensure innovation.

Biodiversity and habitats

Why is the topic material?

Life on earth is only viable for humans thanks to the earth's resilient and richly biodiverse ecosystems, which cover our basic needs for air, water, and food. Examples of such ecosystem services include oxygen production by trees and plants, carbon capture in natural ecosystems, water purification and the provision of drinkable fresh water, and plant pollination by bees and insects.

Now, however, the earth's tolerance limits are being exceeded, as exemplified by climate change and loss of biodiversity. There is growing awareness of such issues as deforestation, land use change and biodiversity loss, which together with climate change represent the greatest environmental challenges facing the world today. As the Intergovernmental Panel on Climate Change (IPCC) has issued reports and research papers

Indicators

GRI 304: Biodiversity 304-2 Significant impacts of activities, products and services on biodiversity

warning about the state of the global climate for many years, the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) is collating primary scientific evidence on biodiversity and has warned of large and rapid biodiversity loss in its first main report, issued in 2019. At the UN Biodiversity Conference in Montreal, Canada, in December 2022, a new agreement on the use and management of biodiversity was adopted by representatives of 196 countries. The agreement aims to halt and reverse nature losses by 2030.

Conserving natural forests, and tropical rainforests in particular, is essential for limiting global warming, preserving natural biodiversity, and safeguarding the rights of indigenous peoples. In addition, unmanaged and seemingly unproductive ecosystems in the Nordic region, including alpine habitats and wetlands, have a significant capacity to capture and store carbon.

In addition to impacting the intrinsic value of nature, biodiversity loss entails risks related to resource availability, ecosystem services and price increases. Veidekke affects nature through its activities, and is dependent on nature for materials, among other things. Veidekke's intention to develop a circular

business model is founded on both a desire to protect nature and the need to reduce business risk.

Impact of Veidekke's operations

The construction industry consumes large amounts of energy, materials, and other natural resources, and generates substantial waste. It affects biodiversity directly through land use change and site preparation, and indirectly through the environmental impact of extracting resources for construction use. For example, forests – a particularly important resource for the construction industry – are impacted by the procurement of timber products and land use for operational and infrastructure development purposes. Industry players like Veidekke have a responsibility to manage nature sustainably and to help limit and – where possible – reverse nature loss.

Protecting biodiversity is a prerequisite for sustainable future development. The main drivers of nature loss include land use change and overharvesting. Undeveloped land can hold large carbon stocks and removing or relocating soil and plants during construction can release significant amounts of carbon into the atmosphere. The most carbonrich areas are moors, forests, and agricultural land.

In the Nordic countries, degradation, fragmentation, and overgrowth of natural areas are the main reasons why many habitats and species are at risk of disappearing. In Norway, 75% of the land area being degraded is forest, 14% is cultivated land and 7% is infield pasture. Degradation is linked to buildings (such as houses and cabins) (43%), road construction (26%), powerlines, sports arenas, gravel pits and quarries, landfill, storage sites, etc.

Veidekke owns various plots of land connected to its industrial operations, including its asphalt factories and the production of aggregates. In addition, the group uses customers' land during the execution of construction projects. Veidekke's industrial and infrastructure operations have the greatest direct negative impact on land. The company uses and impacts land throughout its production value chain, and through the continued use of buildings and facilities after delivery to customers. The products Veidekke buys for use in its projects are also associated with land use.

The handling of material infested with invasive alien species carries the risk of spreading and negatively impacting local nature. The Scandinavian countries, where Veidekke operates, have strict legislation

on alien species. The Norwegian Nature Diversity Act and regulations on alien organisms contain due diligence requirements designed to prevent dissemination and biodiversity damage.

Guidelines and obligations

Veidekke's group management team has adopted a climate and environmental policy for the group. In line with the principles of the UN Global Compact, the policy emphasises a precautionary approach to environmental challenges, active promotion of environmental responsibility and support for the development and use of environmentally friendly technology.

Veidekke's strategy is to be an industry leader in the green shift in terms of reducing greenhouse gas emissions and protecting the environment. In its production and purchasing activities, Veidekke will help to stop deforestation and the conversion of natural ecosystems. This involves setting strict requirements when purchasing timber products and working to raise awareness of the consequences of deforestation among Veidekke's stakeholders. The company's commitment in this regard, which also includes safeguarding the rights of indigenous peoples, applies throughout the value chain and is enshrined in the group policy against deforestation. When purchasing timber products, Veidekke will seek to:

• use solutions and working methods that secure efficient resource use
• prioritise reuse and recycling rather than products entailing virgin resource use
• buy third-party certified products
• prioritise locally produced materials, i.e., from the Nordic region rather than Europe, and from Europe rather than other parts of the world.

All business areas must take steps to achieve the targets set out on page 132 when purchasing timber and fuel.

Veidekke already has a zero-deforestation policy in place and plans to expand this to include biodiversity.

Veidekke's biodiversity efforts

Compliance with the zero-deforestation policy is a management task, with the Group CEO bearing ultimate responsibility. In view of the aim of improving environmental performance, it is vital that the group's management system provides an overview of the environmental impact of Veidekke's operations throughout product value chains and lifecycles. Environmental considerations are integrated into the business areas' management systems. The entire Norwegian operation and parts of the Swedish operation are ISO 14001 certified. Environmental concerns are taken into account throughout the chain of production, during project planning and execution, and in the procurement of products and materials.

The number of environmentally certified construction projects is increasing, and Veidekke expects certified projects to account for an even larger share of its revenue in future. Biodiversity impact is among the factors considered in the certification of construction projects. Certification entails, among other things, mapping the ecological value of an area in terms of priority natural areas and red list species and drawing up plans to preserve existing values and compensate for or increase biodiversity. Veidekke is helping to build knowledge about invasive species, i.a. through an R&D preliminary study on invasive species in the materials handling industry. The study, which was completed in 2022, was carried out in collaboration with VIAQ and various Swedish industry stakeholders and received support from the Development Fund of the Swedish Construction Industry. The aim is to spread knowledge about selected species, applicable legislation, and problems and opportunities that arise during contract execution.

More and more of Veidekke's projects are mapping ecological value and developing plans to maintain or increase that value. Veidekke does not permit the introduction of alien species through its projects, and there is a high level of awareness of this issue

in connection with materials handling and planting. Many key materials used by the company, such as timber and kitchen and flooring materials, stem from forests. The harvesting of raw materials and the production of products and packaging must be carried out sustainably.

Veidekke executes its construction projects in accordance with certifications and adopted environmental monitoring plans.

BREEAM Nor encourages the use of previously developed spaces and the avoidance of areas with ecological qualities. Moreover, construction projects that affect untouched nature are not consistent with the taxonomy.

Nature risk will be higher up on the company's agenda going forward, as both a financial risk and an opportunity. Veidekke is currently analysing its dependence and impact on nature in accordance with recognised frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), the International Union for Conservation of Nature (IUCN) and the Science Based Targets Network (SBTN). The company will consider the possibility of defining science-based targets, for example using the SBTN framework. See further the overview of natural risks on page 131.

Natural risk

Veidekke has started identifying how its operations impact and depend on nature. The overview below provides examples of impacts, dependencies, risks, and opportunities in some of Veidekke's business areas. Although the list is non-exhaustive and does not cover all of Veidekke's operations, it can serve as a starting point for further investigation.

Transition risk

Legal requirements and regulations

• The EU Taxonomy will result in stricter requirements also related to the certification of buildings and other projects.
• As a result of the new UN agreement on the use and management of biodiversity, the Nordic region is expanding its protected areas. This may reduce access to raw materials used in the production of e.g. asphalt and concrete. Veidekke must consider land use and increased demands for project certification, which may inflate costs.
• Stricter legal requirements intended to protect nature could lead to higher costs, such as taxes on raw materials.

Technology (materials, product and process development)

• The transition to zero-emission solutions is progressing too slowly. Renewable energy sources are often more expensive, and biofuel supplies are limited and only represent a transitional solution.
• A stronger focus on materials recycling to reduce the use of virgin resources may increase costs and cause resource scarcity.
• Excessive belief that everything can be solved with technology.

Market

• Customers and investors expect solutions that protect the climate and nature, and Veidekke therefore has to participate actively in the green shift.
• A lack of ambitious customers will reduce Veidekke's scope for protecting and restoring nature.

Reputation

• The construction of, for example, multi-cabin zones, motorways and wind farms in untouched natural areas entails land use change and may have a negative impact on Veidekke's reputation.
• Measures to reduce greenhouse gas emissions, such as wind farms, can have negative impacts on nature and may thus also damage the group's reputation.

Physical risk

• Physical risks in Veidekke's operations vary from project to project. Examples of potential risks include the spread of alien species during infrastructure construction, pollution of watercourses and land use change.

Opportunities

The Veidekke group has great potential for implementing a circular operational model, and the establishment of the subsidiary Veidekke Circular is intended to support progress in this area. The development of expertise on solutions that preserve and restore nature also promises great opportunities. Where projects are located on previously developed sites, Veidekke can help increase existing biodiversity. Veidekke sees opportunities in the green shift and is boosting its competitiveness in order to be an industry leader in the field of nature conservation.

In individual projects, Veidekke is already implementing measures that contribute positively to biodiversity, such as wildlife crossings in infrastructure projects, green and ecological solutions in the urban environment, and nature restoration (for example on Langøya in the Oslo fjord). In addition, the circular economy helps protect biodiversity by recovering resources and feeding them into a cycle that minimises waste.

Impact of the measures

Veidekke is working to establish procedures to identify the impact of its operations on nature and will report openly and regularly on matters affecting biodiversity, including through CDP Climate and CDP Forest. The group's monitoring parameters include red list species and alien species. Group requirements related to deforestation are reported on annually and are incorporated into contracts with relevant suppliers. Environmental project certifications like BREEAM are monitored separately through third-party audits.

Veidekke's biodiversity targets are:

• net-zero greenhouse gas emissions (see page 127)
• halting deforestation (dedicated policy)

• − 100% third-party certified timber by 2025 (FSC certificate prioritised over PEFC, SFI with CoC, CSA)

• − 100% traceability by 2025

• − 100% sustainable biofuels without palm oil

In 2020, the share of FSC- and PEFC-certified timber was 75% but increased to 84% in 2021. Figures for 2022 will be available in June 2023. The group requires that sustainable biofuels do not contain any palm oil, and this requirement was met in 2022. Work on satisfying deforestation requirements is a continuous process.

Going forward, biodiversity targets and indicators will be further developed.

Veidekke will use recognised frameworks such as TNFD, IUCN and SBTN to map its impact and dependence on nature throughout its value chain. In 2022, work began on analysing the company's activities by means of selected pilot projects. Veidekke's aim is to incorporate biodiversity considerations into contracts and agreements, and otherwise to use the experience gained so far to raise the level of knowledge within the group.

Nature and biodiversity knowledge is incorporated into Veidekke's management training, for example the Horizon and Perspective programmes and the Sustainability Topic of the Month.

Climate and nature were headline topics at Veidekke's annual Scandinavian Environment Day in 2022. The target group for the event is line managers and other employees who want to learn about the environment and competitiveness. Investors, customers, and NGOs such as the WWF and ZERO contribute to the event programme in the form of presentations and knowledge-sharing.

Cooperation with stakeholders

Veidekke maintains productive dialogue with suppliers and relevant interest groups. Among other things, the group has liaised with the WWF on the development of an anti-deforestation policy. Together with customers and other companies, Veidekke is also participating in a project focusing on natural risk, run by Sabima and PWC.

Supplier dialogue allows Veidekke to identify and communicate how suppliers can contribute proactively to safeguarding biodiversity, even before a project has started. Suppliers can be pre-qualified with regard to biodiversity, and developments can be continuously evaluated and monitored by discussing the topic at regular supplier meetings.

Through the Norwegian Contractors Association – Building and Construction (EBA), Veidekke has

signed the commitment on 10 immediate measures for contractors, which include safeguarding and enhancing biodiversity. Both national and municipal land use planning must facilitate the avoidance or minimisation of biodiversity loss, for example in connection with road construction, which fragments wildlife and plant habitats. While many mitigation measures have to be implemented during the planning phase, much can also be done during execution, preferably in consultation with the construction client.

Veidekke is a strategic partner of Skift – Business Climate Leaders and the environmental foundation Zero Emission Resource Organisation (ZERO). Sustainability, including natural risks and opportunities, is a recurring theme in the company's dialogue with investors. Investor initiatives such as CDP and direct dialogue with investors influence Veidekke's work on the topic, for example in the form of targets, commitments, and surveys.

Materials consumpution and circular economy

Why is the topic material?

Ever since the industrial revolution, economic development has been based on abundant access to natural resources and the trading of such resources in linear value chains encompassing extraction, production, use and disposal. Globally, more than 100 billion tonnes of minerals, metals, fossil fuels and biomass are used each year, and only a small proportion of these resources are recycled. Today, only 2.4% of the Norwegian economy and 3.4% of the Swedish economy is circular (compared to 7.2% globally). In other words,

Indicators

GRI 301: Materials 301-1 Materials used by weight or volume 301-2 Recycled input materials used GRI 306: Waste 306-1 Waste generation and significant waste-related impacts 306-2 Management of significant waste-related impacts 306-4 Waste diverted from disposal 306-5 Waste directed to disposal

97% of resources used to meet Norwegian and Swedish societal needs are not recycled. Operation within the planet's tolerance limits is only achievable with an accelerated transition to a circular economy in all economic sectors.

Veidekke operates in an industry with a particularly high consumption of materials and other resources. According to Circular Report Norway, construction accounts for 18.3% of the entire Norwegian materials footprint, and the industry generates 20% of all waste, of which only 40% is subjected to materials recycling. However, there are clear trends towards a more circular construction industry in Norway, Sweden, and Denmark. The goal for the industry must be to construct high-quality buildings and infrastructure with a long lifespan and the capacity to be maintained, refurbished, and reused.

The transition to a circular economy is a key EU policy measure and one of the six environmental objectives of the EU Taxonomy. It requires all businesses that are pursuing sustainability to implement a circular operational model.

Awareness of the circular economy is growing in Veidekke's operational environment. For example, in its roadmap for a circular economy, the EU has identified the construction and real estate sectors as one of seven priority areas for circular transformation. This is reflected in Sweden's national strategy for transitioning to a circular economy, which was issued in 2022. The Norwegian Government has also adopted a circular economy action plan. BREEAM Nor, the most common certification scheme for construction projects in Norway, has updated its requirements in line with the EU Taxonomy and now rewards projects that not only sort, but also recycle, reuse and minimise waste.

Impact of Veidekke's operations

The Veidekke group currently uses large quantities of raw materials and other supplies. This includes high volumes of non-renewable virgin resources which Veidekke extracts through its aggregates operation. The construction business uses large amounts of concrete and structural steel, while the asphalt business has a heavy consumption of input factors like bitumen.

Although materials reuse is increasing in new projects, the proportion of reuse is small when old buildings and structures are demolished. For example, although it is technically possible to recycle all asphalt, transport and other considerations mean that this is not always easy to achieve in practice. A further consideration is the risk of spreading or increasing the concentration of environmental pollutants when materials are reused. For example, soil and dredged material and construction and demolition waste together account for 90% of waste created in the Swedish construction sector. New construction projects also generate large amounts of waste, with materials, concrete, timber and gypsum accounting for the largest percentages. The majority of waste is separated at source (i.e., on the project site) for – in priority order – further reuse, materials recycling, energy recovery or, if relevant, landfill.

Guidelines and obligations

The company seeks to make efficient use of renewable and sustainable materials, energy, water, land, and other resources, and to limit or eliminate emissions, pollution, and waste.

Veidekke intends to be an industry leader in the green shift in terms of reducing greenhouse gas emissions and protecting the environment. The group supports the UN Global Compact, which requires it to take a precautionary approach to

environmental challenges, promote increased environmental responsibility, and encourage the development and use of environmentally friendly technology. Ethical guidelines and policies on climate-related, environmental and deforestation issues require the company to prevent and control pollution, protect biodiversity, reduce resource consumption (including of water) and take an active role in promoting the circular economy. These documents guide both Veidekke and its suppliers.

The company anticipates an increased focus on reuse going forward, both in certification schemes and as a consequence of the EU Taxonomy and individual national legal requirements.

Veidekke's efforts related to the circular economy

The circular economy is about reworking the linear economy into a system that eliminates waste, keeps resources in use and regenerates natural ecosystems. Today, recycling rates are low and the potential for improvement is correspondingly high. Slimming, slowing, closing, and regenerating resource flows will enable Veidekke to consume fewer minerals, metals, fossil fuels and biomass, and to reduce emissions to soil, water and air.

As a manufacturer of products such as asphalt and precast concrete components, Veidekke has a strong influence on materials consumption and the circular economy. In the construction context, certain agreement types – such as collaboration contracts, design and build contracts and publicprivate partnerships (PPPs) – offer greater scope than others. Veidekke can query the recycling rate in connection with all purchases.

According to its group policy on climate and the environment, Veidekke must generate added value for customers by utilising its environmental expertise and challenging and advising customers to reduce their impact on the external environment. Veidekke's mandatory internal course "Right choices" teaches employees how to challenge customers to make good climate choices. Moreover, the topics of sustainability and the circular economy are also included in other courses run by the Veidekke School, as well as in the Perspective and Horizon management training courses.

Choices made when designing construction projects will impact the entire lifecycle of the end product, and Veidekke therefore seeks to integrate circularity into process and product designs by extending durability and simplifying maintenance, repair, upgrading and recycling. Further, Veidekke gives priority to using renewable resources and nontoxic, bio-based and recyclable materials. Examples of measures implemented by Veidekke include:

• making extensive use of recycled steel
• lobbying for changes to the Norwegian concrete regulations to minimise concrete use
• reuse of soils
• monitoring and requesting reuse rates in procurement processes
• developing a method for using only recycled aggregates in concrete needed to build Veidekke's new headquarters at Ulven in Oslo
• Veidekke's new headquarters will include recycled office furniture from the current head office at Skøyen in Oslo. A review is currently being carried out to see what can be reused with little investment. Each piece of furniture is QR-tagged so that information on its origin and whether it has been recycled can be retrieved through a portal. The plan is to roll out this methodology for most of the types of materials purchased by the group.

With support from Enova and the Research Council of Norway, among others, Veidekke is working on several R&D projects aimed at reducing the negative impact of the group's asphalt operation. These include the development of more environmentally friendly asphalt in which fossil bitumen is replaced by biogenic materials to reduce greenhouse gas emissions.

Timber products can be reused or recycled and are increasingly sourced more locally. Solid wood binds carbon, requires little fossil energy during production and can largely be produced using climate-neutral bioenergy. Among the solid wood buildings Veidekke had under construction in 2022 were the Oksenøya Centre at Fornebu near Oslo and the Cederhusen and Sigtuna residential buildings in and around Stockholm.

Deforestation is a major cause of greenhouse gas emissions. Working to protect preservable natural forests and avoiding the use or manufacture of products that lead to deforestation can therefore contribute significantly to the achievement of climate goals. Veidekke does not allow the use of tropical timber in its own projects, and advises customers against such use. FSC, PEFC or equivalent certificates are requested for all timber and timber products.

Veidekke has measures in place to reduce waste, as well as robust systems for waste management and at-source separation. All projects draw up and monitor waste management plans. Veidekke generally has a high at-source separation rate, which exceeds the EU Taxonomy requirement.

Veidekke's strategy is to invest selectively in innovation and solutions that support the green shift. In 2022, the group established the subsidiary Veidekke Circular, which focuses on reuse, repurposing, recycling and other complex issues related to circularity. By developing more resource-efficient and circular business models that make it easier for customers to choose sustainably, such initiatives will bolster the group's competitiveness and help define the Veidekke of the future.

The transition from a linear to a circular economy is still in its early stages. Veidekke is working on recycling or reusing materials including asphalt, concrete, bricks, soil, and plastics. For example, old asphalt can be reused in new asphalt, contingent on sufficient supply. To facilitate future modification, upscaling and reuse of buildings and facilities, Veidekke emphasises the tracking of properties and dismantling optionality.

Impact of the measures

The impact of measures to strengthen the circular economy is measured annually using the following indicators:

• recycling rate in asphalt production (Norway, Sweden)
• percentage of renewable energy (scope 1 and 2, location-based methodology)
• number of asphalt factories powered by renewable energy (Norway, Sweden)
• proportion of roads paved with environmental asphalt (Norway, Sweden)
• number of fossil-free/emission-free construction sites
• waste volume, although an overall target has yet to be set.

Responsibility for analysing the figures and taking necessary steps lies with the individual operations. Resource scarcity can affect the opportunities and future of a business that uses finite, non-renewable resources. Veidekke recognises that circular business models can have great upside and is working to understand and exploit the opportunities offered by key circular principles.

Although the group has robust waste management processes and procedures in place for its projects and facilities, a better overview is still needed, and work is continuing to increase reporting frequency.

Cooperation with stakeholders

Veidekke has signed cooperation agreements with Skift – Business Climate Leaders and the Zero Emission Resource Organisation (ZERO). These collaborations relate not only to framework conditions laid down by authorities and customers, but also to the circular economy. Going forward, Veidekke will

intensify its recycling cooperation with suppliers, including on the use of recycled aggregates in concrete, which has enormous potential.

Through its collaboration with the furniture brand company Flokk, Veidekke is supporting the recycling of broken snow depth markers, which are melted down and repurposed into the Capisco office chair.

Collaboration with Sisters in Business, a social enterprise that creates jobs for immigrant women through local textile production, has thus far resulted in the transformation of used workwear, rollups, and tarpaulins from Veidekke into some 6 000 computer satchels, handbags, and toiletry cases.

Social impact

Veidekke promotes compliance and reputability in the construction industry. All Veidekke staff and contractors should enjoy proper and decent working conditions and a positive working environment in which individuals feel safe and respected.

Work-related injuries

Why is the topic material?

Robust, systematic occupational health and safety (OHS) efforts reduce injuries and sickness absence, ensure safety, boost productivity, and strengthen trust and reputation. Moreover, OHS documentation and results form part of the basis on which contracts are won. The construction industry has known risks linked to specific work operations, and Veidekke also has to manage risks associated with sub-contractors working on the group's projects and work sites. Regulation and monitoring are laid down as legal requirements in the Working Environment Act, the Internal Control Regulations and the Public Procurement Act.

Veidekke's position as a major player in the Scandinavian construction industry entails

responsibilities. It must be safe to work for Veidekke, and customers must be confident that Veidekke complies with its obligations. The group works systematically to monitor the health, safety and working environment of both its own employees and sub-contractors.

Impact of Veidekke's operations

Injuries and serious accidents are reported to the relevant supervisory authorities in the affected countries and may result in fines or other legal penalties if a supervisory authority concludes that Veidekke has breached its obligations. Since any penalties may be recorded in the police certificate Veidekke submits along with its tenders, injuries and serious accidents can ultimately result in Veidekke failing tender pre-qualification. Failure to follow up on such incidents can also have negative consequences for the group's reputation.

Guidelines and obligations

Veidekke's OHS work is governed by principles defined in the group OHS policy and in safety plans based on the OHS strategy. The business areas are

Indicators

GRI 403: Occupational Health and Safety 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment, and incident investigation 403-3 Occupational health services 403-4 Worker participation, consultation, and communication on occupational health and safety 403-5 Worker training on occupational health and safety 403-6 Promotion of worker health 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 403-8 Workers covered by an occupational

health and safety management system 403-9 Work-related injuries

responsible for achieving targets. The group OHS policy reflects Veidekke's values and ambitions and is in line with regulatory requirements.

Managers and employees working for Veidekke must comply with the following principles in their daily work:

• We care about and for each other.
• We speak up when we discover situations that could endanger life and health.
• We work proactively to prevent injuries and health problems.
• We stop work when life and health are at risk.
• We actively gather experience and plan our work to minimise the risk of injuries and health problems.
• We know and comply with laws and regulations.
• We are role models for others in the area of OHS.

Veidekke's efforts related to work-related injuries

All projects and contracts must ensure that all employees, including sub-contractors, can work safely and efficiently. The OHS strategy adopted in 2021 describes the measures to be implemented in the period to 2025 in order to achieve the goal of zero serious injuries and a 20% annual reduction in injuries. The strategy applies throughout the group.

In 2021, Veidekke reached its goal of zero serious injuries, but not a 20% reduction in total injuries. In 2022, the company achieved a near 20% reduction in total injuries but recorded two serious injuries. Veidekke believes that the combination of current measures and new measures to be implemented in 2023 will provide additional protection against serious injuries. In 2023, Veidekke will continue to implement its OHS strategy and continue to target the three programme areas with dedicated measures adopted in 2020:

• • Learning. This includes processes and tools to ensure learning throughout the organisation after undesirable incidents. In 2022, Veidekke initiated a process to ensure more effective learning from the most serious incidents.
• • Risk management. This aims to ensure that all activities are planned with the lowest possible risk, through better processes, new tools, and clearer requirements.
• • Culture. Veidekke should build a safety culture in which all employees take responsibility for each other, are committed to each other's safety, and thus help each other to make good choices. The aim is to prevent human error, which causes dangerous situations and very often contributes to accidents.

The LTI (lost time injury) rate is calculated for group employees and shows the frequency of workplace accidents resulting in injury. Injury frequency is

defined as the number of workplace accidents resulting in injury per million hours worked. The LTI-1 value is calculated based on the number of injuries resulting in absence from work. The LTI-2 value is calculated based on the number of injuries resulting in absence + the number of injuries requiring medical treatment but not resulting in absence + the number of injuries resulting in a need to assign alternative work.

Veidekke reduced its LTI-1 value by 43% and its LTI-2 value by 28% from 2021 to 2022, confirming that the measures implemented to reduce the number of injuries are having an effect. The group will continue to implement the strategy in the years ahead.

The most common injury types recorded by Veidekke's operations are crushing and cut injuries, falls from lower heights, and foreign objects in the eye. The group has established measures to prevent unwanted incidents resulting in injuries. However, to be effective these measures must be respected and complied with, and ensuring this requires continuous effort.

In 2019, Veidekke decided to digitalise its risk management process. This hazard management tool will function as a platform for continuous experience-sharing and improvement, and will form part of a comprehensive OHS risk management process. Veidekke plans to implement the platform gradually in the period to 2025, in line with the group's risk management strategy for the period 2020–2025. As the tool is implemented, all manual risk management tools will be phased out.

All staff, whether employed by Veidekke or subcontractors, can report undesirable incidents, and Veidekke has introduced tools and activities to ensure easy access to reporting mechanisms for undesirable incidents. Incidents are reported through a digital platform via the Veidekke entity by which a staff member is employed or engaged. All reports are followed up on by the relevant entities, and measures are implemented based on severity (as defined in the procedure "Standard for investigation and follow-up of OHS non-conformances"). It is clearly communicated that undesirable incidents must be reported for learning and improvement purposes, and that making a report will not have negative consequences for the reporting person. Internal and external audits are carried out to ensure that established systems and activities work and are complied with. An annual internal audit is also conducted.

Common safety requirements are described in the group's governing documents. Each business area has its own management systems designed to

ensure that group requirements are implemented and complied with in projects.

The fact that construction is a higher-risk industry is clearly documented in the annual reports of supervisory authorities, and Veidekke takes the results of both internal and industry investigations seriously. Most undesirable incidents are attributable to behaviour. In safety training, emphasis is therefore given to preventing injuries by building a robust safety culture in which people take personal responsibility for their own and their colleagues' safety. At Veidekke, this is specified in the Conversation about safety tool and the OHS agreement. Safety culture has been a priority topic during the group's annual OHS week. See further discussion in the section on GRI 403-5 Worker training on OHS.

Several scientific studies show that systematically implementing the right knowledge-based working environment measures into a company secures a positive working environment and boosts productivity and profitability. Doing so also serves Veidekke's vision of a longer and healthier working life for all staff.

Impact of the measures

Veidekke uses the following targets and indicators to evaluate progress:

Target: 0 (zero) serious injuries and 20% reduction in total number of injuries per year

Indicators:

• undesirable incident reports
• pre-job discussion/morning meetings/ conversations about safety/barracks meetings
• OHS is the first topic at all meetings
• follow-up of OHS non-conformances.

Veidekke is satisfied with the effect of the measures in view of the positive injury reduction trend, including for serious injuries. However, this area requires continuous attention and improvement.

Since 2019, Veidekke has been developing a Power BI experience database containing data from the non-conformance reporting systems of all business areas. The database provides a comprehensive overview of progress made in the area of OHS and permits searches all the way down to project level. The overview helps determine which activities need further central or local follow-up, and highlights scope for adjustments in response to trends in registered data categories.

The experience database provides a comprehensive overview of trends and developments related to injuries and serious accidents, and thus enables

Veidekke to identify relevant entities and support them in their response. By building commitment to data collection among local OHS managers, the experience database is helping to improve the quality of reported data.

Processes and tools for promoting groupwide learning from undesirable incidents are gathered in the Learning programme area. The following measures have been implemented as at the end of 2021:

• shared digital tools for effective experiencesharing
• common standard for accident investigation
• joint comprehensive learning process
• safety messages
• responsibility matrix for management follow-up and clear decision-making structure for the response to OHS non-conformances.

A process has been introduced to boost learning after serious accidents. In 2023, process results will be implemented and actioned, with the involvement of all business areas.

Cooperation with stakeholders

Construction is one of the most injury-prone industries. Safety is a perishable commodity that has to be built and rebuilt every day. This is why the Norwegian construction industry has

established the collaborative safety organisation, SfS BA, through which construction industry stakeholders promote the common goal of an injury-free construction industry. The participants – construction clients, advisers, contractors, trade unions, trade associations, the Norwegian Labour Inspection Authority, etc. – are organised into broad-based working groups that focus on specific issues important for individual companies and society more generally. Examples of such issues include common basic safety training, falling accidents, safe lifting, and safe element assembly.

Veidekke was an active participant in the establishment of SfS BA and is represented on several working groups. In 2019, the industry jointly developed a

mandatory safety course covering the six major hazard areas in construction. The course makes it easier for sub-contractors to complete safety training, as they no longer have to take many different courses depending on who they are working for.

A particular priority in the Risk Management programme area is requirements for lifting operations, as these are associated with known risks and have high injury potential. Veidekke has developed a skills test for all roles in lifting operations. This is a joint initiative with SfS BA, and the skills test is in the process of becoming an industry-wide requirement. An industry-wide lifting guide has also been developed, which will be published in the first quarter of 2023.

Workers' rights

Why is the topic material?

Employment-related crimes involves violations of human rights, such as the exploitation of workers and breaches of laws regulating pay, working conditions and taxes. Further examples include undeclared work, child labour, forced labour, restriction of the free movement of labour and social dumping.

Veidekke is helping to perform important – and often societally critical – tasks in the private and public sectors. Anyone who builds for society is reliant on society's trust. Promoting workers' rights is a prerequisite for earning such trust.

Indicators

GRI 409: Forced or Compulsory Labour 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour GRI 414: Supplier Social Assessment 414-1 New suppliers that were screened using social criteria 414-2 Negative social impacts in the supply chain and actions taken

Impact of Veidekke's operations

As a major construction industry stakeholder, Veidekke is in a position to set requirements and lead the industry in a positive direction, for example by challenging and advising suppliers and partners. Veidekke has identified the following areas in which the company has particular influence on its own operations, sub-contractors, and suppliers:

• promoting fair and good terms of employment, including safe and healthy working conditions (such as the right to rest, leisure time and holidays)
• preventing discrimination in working conditions and during recruitment
• promoting freedom of association, freedom to organise and the right to strike
• OHS at the workplace
• preventing child labour, forced labour and slavery.

Going forward, risk assessment will be updated and Veidekke will consider additional measures.

Guidelines and obligations

As a responsible company, Veidekke respects human rights in its own operations and throughout its supply chain. Operations must be run in compliance with the UN Guiding Principles on Business and Human Rights and the 10 principles of the UN Global Compact. Veidekke supports the ILO Declaration on Fundamental Principles and Rights at

Work, which include freedom of association, the right to collective bargaining and measures to combat discrimination, forced labour and child labour.

Board and group management support for Veidekke's human rights work is ensured through governing documents such as ethical guidelines, a policy on respect for human rights, and a sustainability and social responsibility policy. Veidekke strives to be a driving force for compliance with human rights and works continuously to build support for this objective within the group.

Veidekke's efforts related to workers' rights

The group has established a process for assessing the risk of human rights violations and breaches of decent working conditions among all categories of suppliers, based on the OECD Due Diligence Guidance for Responsible Business Conduct. As the risk of employment crime is considered to be high in the construction industry, the group prioritises measures directed at and follow-up of sub-contractors.

Veidekke's business relationships are founded on trust and transparency. While suppliers and partners are crucial to Veidekke's business, they may also entail a risk of human rights violations. This risk is managed by developing thorough knowledge of partners and markets. The group expects suppliers

and partners to share Veidekke's approach to ethics and compliance, and to comply with applicable legislation, respect human rights and fulfil ethical requirements. The group has implemented the following requirements:

• All sub-contractors and suppliers must accept and sign Veidekke's supplier code of conduct. The code requires compliance with human rights in areas such as working conditions, pay, prohibition of forced labour and freedom of association. Veidekke also imposes requirements on its suppliers through contractual reputability provisions.
• All of Veidekke's sub-contractors and suppliers are pre-qualified before they are engaged. The pre-qualification process assesses various criteria, including OHS, quality, taxes, etc.
• Materials suppliers that present a particular risk are regularly screened by reference to social criteria. On-site visits are also carried out when assessing certain new suppliers.
• Veidekke checks sub-contractors based on annual risk assessments. The risk areas are defined by organisations such as the Norwegian Tax Administration, the Norwegian Labour Inspection Authority, Fair Play, the Federation of Norwegian Construction Industries (BNL), the Norwegian Contractors Association – Building and Construction (EBA) and the Norwegian Association

of Heavy Equipment Contractors (MEF). The basis for the risk assessments also includes an analysis of on-site audits of sub-contractors.

• Sub-contractors and suppliers are required to rectify any deficiencies or breaches of laws, regulations or Veidekke's ethical standards. Companies that are unwilling or unable to do so are not allowed to continue as a sub-contractor or supplier.

Veidekke has established a whistleblowing mechanism for employees and others to report censurable conditions of any kind. See pages 146 and 149.

Veidekke aims to engage only reputable subcontractors and suppliers that respect human rights. In accordance with board-approved ethical guidelines and policies, requirements regarding the monitoring of sub-contractors and suppliers are documented in various processes at different levels of Veidekke's management systems. Training is conducted at business-area level. All Veidekke employees must complete mandatory e-learning on topics including the handling of sub-contractors.

Veidekke uses services provided by Dow Jones to screen suppliers for negative media coverage concerning breaches of workers' rights. Major new suppliers undergo due diligence that includes an assessment of workers' rights.

Impact of the measures

The group uses the following metrics to evaluate its progress on compliance: the number of pre-qualified sub-contractors and suppliers, implemented training measures, the number of whistleblowing cases and the number of court cases. Internal audits are also incorporated into the progress assessment.

In 2022, 63 audits of sub-contractors were carried out, and 51 sub-contractors were compliant. Of the remaining sub-contractors, one was reported to the authorities for employment crime, eight were blocked in StartBANK, five showed serious non-compliance and six showed less serious non-compliance. When an audit reveals that a sub-contractor is not complying with Veidekke's requirements, the subcontractor is either helped to improve their processes or excluded from future projects.

In November 2022, Veidekke conducted an internal audit focused on the company's processes linked to human rights. The audit revealed some minor improvement needs which will be addressed in 2023. In addition, some workers' rights violations were notified in 2022, mainly concerning breaches of the Working Environment Act.

The compliance function has identified potential improvements to employee training, and the group

Diversity and equality

has developed an e-learning course on workers' rights. The course aims to raise awareness of applicable rules and regulations, and to prevent breaches. Moreover, the internal audit function has reviewed governing documents in the area. Recommended actions have been implemented.

Cooperation with stakeholders

Veidekke engages in productive dialogues with customers and suppliers regarding workers' rights. Construction client demands are incorporated into Veidekke's operations and communicated to suppliers through agreements and the supplier code of conduct. Veidekke's whistleblowing mechanism is open to all parties and allows all stakeholders to report suspected rule breaches.

Why is the topic material?

Veidekke is one of the largest construction groups in Scandinavia and is working to improve both gender balance and general diversity in a very maledominated industry. This is a high priority for the group, which believes that systematic, thorough promotion of diversity and gender equality are a prerequisite for attracting vital human resources to the company, both now and in the future, and helps build a positive and inclusive working environment.

Equal treatment is enshrined in legislation through the Working Environment Act and the Equality and

Indicators

GRI-401 Employment 401-1 New employee hires and employee turnover 401-3 Parental leave GRI 405: Diversity and Equal Opportunity 405-1 Diversity of governance bodies and employees 405-2 Ratio of basic salary and remuneration of women to men GRI 406: Non-discrimination 406-1 Incidents of discrimination and corrective actions taken

Anti-Discrimination Act, and breaches of relevant principles may result in criminal penalties and damage to Veidekke's reputation as an employer. Both employees and shareholders expect Veidekke to be diverse and to treat staff equally. Also, customers are increasingly raising these topics in project pre-qualification processes.

Discrimination and harassment have negative consequences for victims, damage the working environment and can make the workplace less attractive, and less productive.

Impact of Veidekke's operations

Veidekke's civil engineering and industrial operations face the greatest challenges in recruiting female employees. The likely causes include the fact that these operations have both the highest proportion of men and more shift work. Although the proportion of women is somewhat higher in the construction operations, the same challenges arise. Veidekke recognises that the group's effort to date have not had sufficient effect. In cooperation with employee representatives and others, the company will therefore analyse the implemented measures and consider possible new initiatives to encourage more women to apply to Veidekke and remain with the company.

Guidelines and obligations

Veidekke's ethical guidelines state that everyone should be treated with courtesy and respect, and that there is zero tolerance for discrimination, harassment, bullying and threats. Actions that could reasonably be perceived as offensive or intimidating, including any form of sexual attention, are unacceptable.

For Veidekke, equality and diversity are about fairness, equality and sound values, and the fact that diversity brings different perspectives to teams and supports better decision-making and better solutions for customers, Veidekke and society. These attitudes are rooted in the conviction that different skills and characteristics contribute to growth, development, innovation, and value creation, that inclusive and participatory leadership fosters a working environment characterised by respect, security and trust, and that diversity helps secure good performance.

Veidekke's leadership compass, which has been adopted by group management, clearly expresses that managers are expected to engage staff and demonstrate trust, build security and value people's differences, and develop staff and other managers around them. The leadership compass has been reformulated as a policy and will be incorporated into all processes related to the recruitment and development of staff and managers.

Veidekke's board of directors has adopted a policy on diversity and gender equality, and the diversity perspective is also incorporated into the group's recruitment policy. The diversity policy emphasises that all people should have equal opportunities. Veidekke is working on strengthening diversity in the group as a whole and building an equal and inclusive culture in which all staff are respected and safe. Since the industry is male-dominated, particular emphasis is being given to increasing the proportion of women. The group's recruitment policy states that Veidekke will use competencebased recruitment processes, work to encourage more women to apply to the company and strive for gender balance in final interviews.

Veidekke's efforts related to diversity and gender equality

All Veidekke staff are expected to comply with the group's ethical guidelines in internal and external contexts. Training occurs through e-learning, in physical arenas and in individual conversations. Senior executives have completed courses in unconscious bias awareness, and this work will be rolled out to the broader organisation in physical or online learning arenas. Governing documents and associated processes have been developed for recruitment, leader development and remuneration. The measures implemented to increase diversity and strengthen gender equality include:

• setting targets to increase the share of women operative managers
• ensuring that staff recruitment and development processes are competence-based and deliberate
• raising awareness of the importance of recruiting women into the industry
• illustrating greater diversity in texts and images used in advertising and marketing
• preventing unconscious discrimination by using deliberate, objective selection methods in the early stages of the recruitment process and in the evaluation and selection of managers
• monitoring remuneration systems with a view to ensuring equal treatment and avoiding discrimination.

The group's ethical guidelines encourage the reporting of actions that may be in violation of laws, regulations, and internal procedures. In addition, procedures have been drawn up for reporting, processing, and following up on censurable conditions. Reports can be submitted internally or via an established external, online whistleblowing portal. In 2022, three reports concerning the working environment were reported and processed. None of these related to discrimination, and none were deemed very serious.

The measures Veidekke has implemented to combat discrimination include:

• ensuring that staff recruitment and development processes are competence-based and deliberate
• providing training to raise managers' awareness of prejudice and unconscious discrimination
• introducing automated processes to ensure that employees are interviewed before, during and after parental leave
• replacing the job title "foreman" with "supervisor"
• ensuring that all projects have separate changing facilities for men and women
• introducing a women's line of workwear.

In 2022, Veidekke's annual OHS week focused on building an inclusive and diverse working environment in which all staff feel safe and can be themselves.

If undesirable incidents related to diversity and gender equality in the working environment occur, they are handled in accordance with internal guidelines. For example, Veidekke has procedures for conflict management that state that measures should be implemented at the lowest possible level. Some non-conformances can also be resolved through training. The Diversitas network is a key arena for experience-sharing in the industry.

Qualification of skilled manual workers is important for realising Veidekke's self-production strategy, and the recruitment of young people also has a positive impact on society. Veidekke primarily recruits skilled manual workers through the group's apprenticeship schemes, which encompassed 281 apprentices in a wide range of construction trades as at the end of 2022. More than 25 years ago, Veidekke inintiated a still ongoing collaboration with the school system which offers young people who have dropped out of school the opportunity to complete vocational upper secondary education, and the possibility of an apprenticeship.

Veidekke also contributes to the development of future leaders through its internal training programme for new engineering graduates. The programme had 55 participants as at the end of 2022.

Impact of the measures

Veidekke conducts regular surveys of its working environment in the form of questionnaires sent to all employees. The surveys show that the psychosocial working environment is generally good. However, there are indications that women feel they have somewhat fewer opportunities than men. This is being addressed at both a general and a specific level by the individual operations.

The development of adopted key performance indicators is measured quarterly. Responsibility for analysing the figures and taking necessary action lies with the individual operations.

Group management has adopted gender balance targets for operational managers, summer students and recent graduates, as shown in the table below:

Target figures – proportion of women	2022	2021	2020
Students in summer jobs: 50%	26%	35%	38%
Graduates: 40%	49%	39%	31%
Operational managers: 20%	10.1%	9.8%	8.9%

The implemented measures have not yet had a significant effect. Veidekke is dissatisfied with the development of the proportion of women in operational positions, which indicates that the target of a ratio above 20% by 2025 may be difficult to achieve. New measures therefore have to be considered. However, the proportion of women new graduates has developed positively over the past two years and is in line with the target figure. This group is very important to the company's future, and Veidekke is highly focused on ensuring that these employees want to continue working for Veidekke. Veidekke also expects to recruit a large proportion of its operational managers from this group in the years ahead.

For the past two years, Veidekke's OHS week has concentrated on mental health and diversity, and

this choice of topic has received very positive feedback from within the organisation.

Veidekke believes that the structural measures imple mented to strengthen diversity and gender equality are important and correct but recognises that cultural aspects need more work. The group is also considering what needs to be done internally to deve lop women for operational management roles, and to retain the women who have been hired. External recruitment opportunities also have to be considered.

The challenges identified above are common to most companies in the construction industry and need to be addressed through both long-term efforts within individual companies and joint, industry-wide efforts.

Cooperation with stakeholders

Veidekke participates in trade associations and cooperation projects to promote diversity and gender equality in the construction industry. In Norway, the group has helped to establish the Diversitas industry network, which is working for greater diversity and better gender balance in the construction sector.

The group has worked to change attitudes towards vocational trades for many years. Veidekke conducts targeted campaigns to increase recruitment to vocational fields of study and has made gender balance a priority topic in these recruitment campaigns in recent years.

Governance impact

Combating corruption and other financial crimes such as breaches of competition law is a priority for Veidekke. Corruption and financial crime undermine competition on purely commercial terms, are harmful to society and are in direct conflict with healthy economic development. Compliance with competition rules is an important prerequisite for the functioning of society and the construction industry. Violating such rules means violating Veidekke's core values.

Corruption and financial crime

As a major construction industry stakeholder, Veidekke seeks to support the fight against financial crime both by preventing corruption and breaches of competition rules within Veidekke and by imposing requirements and giving guidance to suppliers, sub-contractors, and other partners.

Why is the topic important?

Corruption is a serious criminal offence that could have far-reaching consequences for Veidekke in the form of penalties ranging from heavy fines to imprisonment for individuals. Corruption could also cause significant harm to Veidekke's reputation. The group's annual risk assessments show that corruption risk is greatest in dealings between

suppliers and sub-contractors, and in Veidekke's interactions with current and potential customers. Corruption risk is considered to be relatively similar in the three countries in which the group operates, and Veidekke therefore concentrates its anticorruption efforts on improving internal processes and training.

With regard to financial crime, it is particularly violations of competition law that pose a risk in the construction industry. Veidekke's core values of professionalism and honesty dictate that the company, its employees, and others acting on its behalf must always act in accordance with applicable competition rules.

The construction industry is particularly vulnerable to competition law infringements, as projects employ various project collaboration and joint venture models. Veidekke's risk assessments also show that risk is greatest where the group engages in lawful interactions with competitors, for example in the asphalt operation. In this context, it is particularly important to be clear about what type of information is exchanged. The highest risk level arises in tenders where price is the decisive criterion. The inclusion of sustainability parameters in tender evaluation metrics in recent years has resulted in differentiation and reduced the risk of competition law breaches.

Indicators

GRI 205: Anti-corruption 205-1 Operations assessed for risks related to corruption 205-2 Communication and training about anti-corruption policies and procedures 205-3 Confirmed incidents of corruption and actions taken GRI 206: Anti-competitive behaviour 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices In Norway, Veidekke is a major industry player and needs to be aware of issues relating to market dominance. These considerations do not apply to the operations in Sweden and Denmark. Participation in trade associations may entail a particular risk of regulatory breaches, and Veidekke's representatives in such bodies therefore have a particular responsibility to familiarise themselves with the group's compliance requirements.

Impact of Veidekke's operations

As a significant industry player, Veidekke is in a position to make demands and lead the industry in a positive direction, for example by challenging and advising suppliers and partners.

Guidelines and obligations

Veidekke's board of directors has adopted group policies on anti-corruption and competition law. These are supported by corporate documents in the form of, for example, groupwide anti-corruption requirements to ensure compliance with competition rules. The topics of corruption and competition law are addressed in Veidekke's ethical guidelines, and the requirements in the code are passed on to suppliers through the supplier code of conduct.

All Veidekke staff are expected to comply with the anti-corruption provisions of the Penal Code in

dealings with clients, sub-contractors, and suppliers. Accordingly, all staff are prohibited from offering or accepting benefits that are or could be suspected of being improper. The supporting corporate documents contain further descriptions of various forms of corruption. All of Veidekke's business transactions must comply with international standards and be clearly specified in the group's accounts.

Similarly, any kind of cooperation that restricts or may restrict competition is prohibited. The prohibition applies to both cooperation between entities within the group and cooperation with one or more competitors, including other nationwide contractors and – in some cases – sub-contractors. Potential competition issues must be evaluated before the start of all project cooperation and market-related work, including marketing and sales, strategic decisions, production decisions, acquisitions/mergers and informationexchange and cooperation with third parties.

Veidekke's compliance work

All compliance work within the group is governed by board-approved policies on compliance, internal audits, competition law and anti-corruption. The policies serve the purpose of minimising Veidekke's compliance risk. The group has zero tolerance for corruption and breaches of competition law, and any breaches that do occur are reported to the police.

The internal audit function conducts audits to verify compliance with requirements and guidelines. All Veidekke suppliers and partners must sign the group's supplier code of conduct, which includes measures to prevent corruption and breaches of competition rules. An internal audit conducted in June 2022 focused on anti-corruption and identified some minor improvement needs which were addressed during the course of the year. No breaches of anti-corruption legislation or competition law were reported in 2022.

Veidekke uses services provided by Dow Jones to screen suppliers for negative media coverage concerning corruption or breaches of competition rules. Major new suppliers undergo due diligence that includes an assessment of corruption risk.

The group uses the number of completed training measures, the number of whistleblowing reports, and the number of court cases to measure the progress of its compliance work. The work of the internal audit function is also used to assess progress.

In line with group policy, Veidekke has established a comprehensive compliance programme which encompasses anti-corruption and competitionrelated efforts. As part of monitoring compliance with the rules, all managers and supervisors are required to ensure that all employees are familiar

with the content of Veidekke's ethical guidelines and associated documents, and that they comply with the rules. Similarly, all employees have a duty to familiarise themselves with governing documents and to report any breaches of the rules.

Veidekke has established a whistleblowing mechanism through which employees and others can report censurable conditions of any kind, including breaches of statutory rules, internal rules or ethical standards, circumstances that threaten the life or health of individuals, dangerous products, embezzlement, corruption, breaches of competition rules, theft, fraud, and breach of financial trust,

etc. The whistleblowing mechanism is open to both Veidekke employees and external parties.

All new employees undergo mandatory training on anti-corruption and competition law, and courses and other training are provided to selected groups. In 2022, 227 staff members completed such training.

Impact of the measures

Compliance reviews conducted after the implementation of measures have not identified risk exceeding the board's risk appetite. No instances of corruption or breaches of competition rules were identified in 2022, and consequently no action was

taken against any employees or partners. There were no legal cases involving corruption or breaches of competition rules in 2022, and Veidekke did not receive any reports on such matters.

The compliance function has identified potential for improvement in the training of Veidekke's employees, and the group has developed e-learning courses on anti-corruption and competition rules. The courses, which are intended to raise awareness of applicable rules and regulations and prevent breaches, will become mandatory for all employees. In addition, the internal audit function has reviewed

relevant governing documents, and recommended measures have been implemented.

Cooperation with stakeholders

Veidekke is engaged in positive dialogues with customers and suppliers regarding anti-corruption work and competition rules. The group incorporates construction client requirements into its operations and communicates them to suppliers through agreements and the supplier code of conduct. Veidekke's whistleblowing mechanism is open to all parties and allows all stakeholders to report suspected violations.

Sustainability fact book

In the following, Veidekke reports on sustainability impacts from its operations in accordance with GRI 2021 from the Global Reporting Initiative. The report starts with GRI 2, followed by indicators per material topic, in the order Environmental, Social and Governance impacts.

General information

2-1 Organisational details

Veidekke ASA is a public limited company headquartered in Oslo, with operations in Norway, Sweden and Denmark. See page 185.

2-2 Entities included in the organisation's sustainability reporting

The sustainability reporting covers, with few exceptions, the same companies as the financial reporting (see note 36), and acquired businesses are normally included in Veidekke's reporting from the takeover date. A major exception in the 2022 reporting was BRA in Sweden (acquired by Veidekke in 2018). Other exceptions, listed by indicator:

401-3 The reporting covers fully integrated subsidiaries in Norway and Sweden only. 405-2 The reporting covers fully integrated subsidiaries in Norway and Sweden only.

Activities not covered by the report are of the same type as those covered by the report. In future, the company plans to report according to the same principles for consolidation as in the financial accounts and to incorporate all businesses owned by the group in the sustainability reporting.

2-3 Reporting period, frequency and contact point

Veidekke reports annually about sustainability and financial affairs. This report was published 28 March

2023 and covers the period 1 January to 31 December 2022. Questions about the report may be directed at firmapost@veidekke.no or lars.lund@veidekke.no.

2-4 Restatements of information

Greenhouse gas (GHG) emissions data was adjusted in connection with SBTi validation of the company's climate targets, and emissions figures for previous years have been restated accordingly in the sustainability report.

2-5 External assurance

Veidekke's GHG accounts for 2022 and the report's chapter on climate impact have been verified by DNV in accordance with GRI 2021, to "limited assurance" level.

Group management and the board of directors have agreed to seek third-party verification of the sustainability report in accordance with GRI 2021 as of the 2023 financial year. In preparation for external verification, Veidekke had an external pre-assessment of the report carried out in late 2022.

2-6 Activities, value chain and other business relationships

See pages 6–12 in the annual report.

2-7 Employees

	Norway			Sweden			Denmark			Group
Category	Men	Women	Total	Men	Women	Total	Men	Women	Total	Men	Women	Total
Full time	4 624	573	5 197	1 802	340	2 142	399	34	433	6 825	947	7 772
Part time	66	48	114	23	19	42	1	4	5	90	71	161
Total number of permanent employees	4 690	621	5 311	1 825	359	2 184	400	38	438	6 915	1 018	7 933
Temporary employees	212	46	258	19	2	21	14	3	17	245	51	296
Total number of employees	4 902	667	5 569	1 844	361	2 205	414	41	455	7 160	1 069	8 229

Veidekke has temporary employees, but does not use contracts with non-guaranteed hours. The group bases its operations on permanent employees and considers the share of temporary employees to be acceptable.

Method

Veidekke reports the number of employees at year end.

Context

The group operates contracting activities with a high degree of in-house production in the core skills, which include carpentry, concrete works, and asphalting. A moderate number of employees are hired on a temporary basis during periods of unusually high revenue. Services are also acquired from subcontractors and other partners. The total number of employees has remained relatively unchanged in recent years, corresponding to a stable turnover.

The fluctuations in the number of employees throughout the year are small, with the exception of the asphalt operation, which employs seasonal workers during the months when asphalt laying is possible.

2-8 Workers who are not employees

Estimated number	885
Denmark	10
Sweden	75
Norway	800
Number of workers hired

During periods of higher-than-normal revenue, temporary hiring occurs in Veidekke's core skills, especially carpentry and concrete works. Temporary staff are hired from other contracting companies or from pre-qualified staffing agencies. They carry out ordinary work tasks as part of Veidekke's ordinary teams of skilled workers. Temporary staff work under Veidekke management and are looked after accordingly.

The number of employees is estimated based on average hours worked during the period. The length of hire varies from one day to longer periods.

Considerable fluctuations may occur during the year, as the number of projects and the revenue of the various geographical areas vary. The share of production by permanent employees is higher in the infrastructure operations than in the construction operations.

2-9 Governance structure and composition

See Annual report, chapter Corporate governance, item 9 on page 106.

2-10 Nomination and selection of the highest governance body

See Annual report, chapter Corporate governance, items 7 and 8 on page 106.

2-11 Chair of the highest governance body

See Annual report, chapter Corporate governance, items 8 and 9 on page 106.

2-12 Role of the highest governance body in overseeing the management of impacts

See Annual report, chapter Corporate governance, item 9 on page 106.

2-13 Delegation of responsibility for managing impacts

See Sustainability report, page 120.

2-14 Role of the highest governance body in sustainability reporting

See Annual report, chapter Corporate governance, item 9 on page 106 and description of materiality analysis on page 121.

2-15 Conflicts of interest

See Annual report, chapter Corporate governance, items 7 and 8 on page 106.

2-16 Communication of critical concerns

Veidekke has established a compliance function that reports annually to the group's board of directors. The compliance report states the number of critical concerns which have been handled and what they pertain to. During 2022, the compliance function handled 7 critical concerns, which dealt with issues related to the working environment, fraud, and the environment. None of the concerns reported were considered as critical.

2-17 Collective knowledge of the highest governance body

See Annual report, chapter Corporate governance, item 9 on page 106.

2-18 Evaluation of the performance of the highest governance body

See Annual report, chapter Corporate governance, item 9 on page 106.

2-19 Remuneration policies

The current "Guidelines on the setting of remuneration for the CEO and other senior executives at Veidekke ASA" is published on the company's website.

2-20 Process to determine remuneration

The process of designing and deciding salaries and other compensation to be paid to the CEO and group management is as follows:

The board's remuneration committee handles all matters concerning salaries and compensation to the group management and submits proposals for board decisions based on the following mandate:

• ∙ Make recommendations to the board regarding the CEO's remuneration
• ∙ Advice the CEO on remuneration of the company's managers, primarily the group management
• ∙ Know the conditions and principles for remuneration of the company's management group

The shareholders submit their input regarding salaries and compensation to board members or at the Annual general meeting.

On recommendation from the board, the general meeting adopts "Guidelines on the setting of remuneration for the CEO and other senior executives at Veidekke ASA" and the annual "Report on remuneration to senior executives". The latter report is approved by the auditors before it is presented to the Annual general meeting.

Veidekke does not hire consultants to help determine salaries and remunerations, but may use consultancy services in the benchmark surveys, which are undertaken on a regular basis.

"Guidelines on the setting of remuneration for the CEO and other senior executives at Veidekke ASA" and "Report on remuneration to senior executives" were unanimously approved by the Annual general meeting.

2-21 Annual total compensation ratio

The latest "Report on remuneration to senior executives" is available from the company's website.

Veidekke's calculations of the ratio and percentage increase of total compensation are based on averages, rather than medians. See "Report on remuneration to senior executives" for further context.

2-22 Statement on sustainable development strategy

See Annual report, pages 13–14 and page 23.

2-23 Policy commitments

Anyone employed by Veidekke is responsible for behaving ethically. The group's ethical guidelines specify rules and set frameworks to help employees make good judgments and ethically wise choices in their daily work. The board and group management are responsible for Veidekke's human rights efforts through ownership of the group's governing documents, which require that Veidekke respects and promotes compliance with human rights. The governing documents include, i.a., Veidekke's ethical guidelines, policy for respect for human rights and policy for sustainability and social responsibility. Continuous efforts are ongoing to ensure compliance with the governing documents throughout the organisation.

Governing policies are published on Veidekke's website.

Human rights as expressed in workers' rights is among the topics Veidekke has identified as of material importance to the business. The topic is outlined in more detail in the chapter "Workers' rights" in this report.

2-24 Embedding policy commitments

Veidekke has a decentralised form of management, where the various business areas draft their own strategies and have their own management systems. At the same time, a decision can affect all business areas. Veidekke ASA has a board-approved group strategy, and all business areas have procedures to implement and operationalise the parts of the group strategy that are of relevance to their business.

Veidekke ASA has its own set of governing documents which are handled in the group's management system. These documents apply to all business areas and consist of e.g., ethical guidelines, group policies, group requirements and process requirements. The documents must be implemented in the business areas' own management systems, further operationalised where necessary, and complied with. Complying with the requirements and guidelines in the group's governing documents is a management responsibility, and a process for management confirmation has been established, whereby operational managers must confirm compliance status to the CEO.

Training is an important part of the implementation process and should ensure that all employees are aware of and comply with the group's governing documents. While the training mainly takes place in the business areas, business areas are provided guidance and training from Veidekke's compliance function. For example, e-learning has been prepared to ensure that all Veidekke employees are aware of the group's ethical guidelines and how to comply with them.

Several types of audits are carried out in the group, e.g., ISO audits, compliance checks etc. Additionally, an internal group level audit function has been established which reports twice a year to the audit committee. The internal audit function undertakes audits in areas that pose particular risk for the group and provides a compilation of audits carried out in the various business areas.

2-25 Processes to remediate negative impacts

Through the materiality analysis process (see page 121), Veidekke received good feedback from stakeholders regarding material issues. The analysis and the corresponding stakeholder dialogue have, e.g., identified which topics Veidekke has the greatest negative impact on, and which measures are required to reduce the negative impact. The results of this work are described in more detail in the chapters concerning the respective material topics.

Veidekke has set up an online portal for reporting of critical concerns and complaints. The portal can be accessed from the company's website, veidekke.no. There, any person can inform or complain about negative impacts. Complaints are processed, followed up on and measured by the business areas concerned.

2-26 Mechanisms for seeking advice and raising concerns

Veidekke has a group-wide compliance policy, and compliance and process requirements for internal reporting of critical concerns. These documents describe how Veidekke employees can in various ways obtain advice and guidance on questions related to the ethical guidelines, the underlying policies, and other governing documents. The governing principle is that employees should seek advice from their immediate manager. But Veidekke's compliance function has an independent position, and all employees who have questions, may approach the function for advice.

A channel for reporting critical concerns has also been established, in line with the requirements of the Working Environment Act.

2-27 Compliance with laws and regulations

Veidekke has not identified or been involved in significant cases of non-compliance with laws and regulations during 2022.

2-28 Membership associations

Veidekke participates in industry and environmental organisations and initiatives that promote industry interests and sustainable development goals, including:

• ∙ The Norwegian Contractors Association Building and Construction (EBA), which is affiliated with the Federation of Norwegian Construction Industries (BNL) and the Confederation of Norwegian Enterprise (NHO). Veidekke's group CEO chairs the EBA board and is a BNL board member. Veidekke's sustainability director chairs the EBA's climate, energy, and environment committee.
• ∙ The Swedish Construction Federation, which is affiliated with the Confederation of Swedish Enterprise.
• ∙ DI Construction, which is affiliated with the Confederation of Danish Industry.
• ∙ UN Global Compact Veidekke is a member and complies with the UN Global Compact's 10 principles for responsible business conduct. Veidekke's EVP for strategy and sustainability is a board member.
• ∙ Skift Business Climate Leaders Veidekke is a member, has signed the Anti-Greenwashing Charter and participates in other initiatives that promote sustainable development goals.
• ∙ Färdplan 2045 Veidekke has adopted and committed to the Swedish roadmap.
• ∙ Zero Emission Resource Organisation (ZERO) Veidekke is a strategic partner of this environmental foundation.
• ∙ Diversitas Veidekke is a contributor to the leading network promoting diversity and gender balance in the construction industry.

To ensure that stakeholder dialogue is meaningful, Veidekke practices transparency about agendas, objectives, and participation.

2-29 Approach to stakeholder engagement

See Sustainabililty report, pages 123–124.

2-30 Collective bargaining agreements

Approximately 95% of employees in Veidekke and subsidiaries are covered by collective bargaining agreements. Employees who are not subject to collective bargaining agreements are treated according to the same regulations and principles as other employees.

Material topics

3-1 Process to determine material topics

See Sustainability report, page 121.

3-2 List of material topics

See Sustainability report, page 121.

ENVIRONMENTAL IMPACTS

Climate impact

3-3 Management of material topics

See pages 125–128 in the Sustainability report.

201-2 Financial implications and other risks and opportunities due to climate change

See chapter Climate-related risk – TCFD on pages 180–184.

302-1 Energy consumption within the organisation

The energy reporting comprises all business operations as well as subsidiaries and jointly controlled companies with >50% ownership. Period 1 January–31 December 2021 (12 months). Base year is 2018.

The renewable share of electricity, district heating and district cooling is according to the location-based method.

The source of energy factors is DEFRA. The source of the renewable share of electricity is the International Energy Agency. The source of the renewable share of district heating is Swedenergy (Sweden), Fjernkontrollen (Norway) and Danish District Heating Association (Denmark). The source of remote cooling is manufacturer specific.

Veidekke does not sell energy.

Energy consumption has been reduced year by year since 2020, while the renewable share increased from 31% in 2020 to 37% in 2021 and 39% in 2022. HVO and biofuel oil have replaced fossil energy sources in several projects and asphalt factories. Energy consumption from non-renewable sources was 984 444 GJ, corresponding to 61% of the total energy consumption of 1 624 879 GJ (451 356 MWh), while energy consumption from renewable sources was 640 435 GJ (177 899 MWh), which corresponds to 39%.

		Renewable		Renewable		Renewable
Energy consumption in MWh	2022	share 2022	2021	share 2021	2020	share 2020
Dyed diesel (100% fossil)	106 005	0%	137 838	0%	166 302	0%
Petrol	1 236	5%	856	5%	585	5%
Diesel (DK)	3 281	8%	3 413	8%	3 263	8%
Diesel (NO)	46 173	25%	40 122	25%	52 536	20%
Diesel (SE)	22 164	36%	22 036	25%	24 149	21%
Fuel oil	12	0%	1 736	0%	4 383	0%
Light fuel oil	45	0%	0	0%	1 790	0%
LNG (liquid natural gas)	2 480	0%	9 388	0%	0	0%
LPG (propane, liquid petroleum gas)	97 105	0%	103 973	0%	106 659	0%
Natural gas	657	0%	3 989	0%	19 879	0%
Electricity	107 193	91%	132 955	93%	123 932	92%
District cooling Stockholm	0	0%	59	100%	100	100%
District heating	7 699	41%	13 645	34%	10 763	39%
Biodiesel HVO	32 770	100%	26 569	100%	38 918	100%
Biofuel oil	23 388	100%	20 576	100%	43	100%
Wood pellets	1 148	100%	641	100%	0	0%
Total	451 356	39%	517 796	37%	553 303	31%

302-2 Energy consumption outside of the organisation

Veidekke adheres to the GHG Protocol Corporate Standard (March 2004) and Technical Guidance for Calculating Scope 3 Emissions (2013). See GRI 305 on the next pages for a further explanation of categories.

Indirect energy consumption is based on a control approach, including operational control.

Reporting period is 1 January–31 December (12 months). Base year is 2020. Source of energy factors is DEFRA.

Energy consumption from business travel in 2022 corresponded to 23 107 GJ (6 419 MWh) and from commuting to 53 474 GJ (14 854 MWh).

Energy consumption (MWh) outside Veidekke; in upstream and downstream value chains 1	2022 2	2021	2020
3. Fuel- and energy-related activities
4. Upstream transportation and distribution		184 986	172 732
6. Business travel 3	6 419	9 711	6 515
7. Employee commuting	14 854	10 116	18 400
8. Upstream leased assets		23 366	18 130
9. Downstream transportation and distribution		14 101	10 691
11. Use of sold products: Energy consumption in use phase of delivered construction projects, MWh 4		1 990 133	3 964 629
13. Downstream leased assets		3 003	2 938

¹ Categories according to Greenhouse Gas Protocol scope 3.

² Completion of other categories for 2022 expected in June 2023.

³ Kilometres driven by car only. Flights are not included. The result must be considered in the context of changes in the reporting structure for business travel and commuting in the years 2021 and 2022

⁴ From 2021, a new and more precise method for calculating category 11 Use of sold products, has been adopted. The results are also affected by annual variations in the type of projects and the number of completed square metres.

302-3 Energy intensity

The energy consumption associated with asphalt production, corresponding to scope 1 and 2, was 750 094 GJ (208 359 MWh) in 2022. The energy consumption per produced tonne of asphalt was 320 GJ (89 MWh).

Energy intensity, MWh per tonne of asphalt produced	2022	2021	2020	Comment on development
Energy consumption MWh per tonne of asphalt produced	89	84	89	Energy consumption in MWh
- Tonnes of asphalt in Veidekke Infrastructure Norway and Sweden	2 343	2 573	2 511	per produced tonne of asphalt in Veidekke Norway and Sweden has
- Energy consumption in MWh corresponds to scope 1 and 2 (bioenergy, fossil fuels and electricity)	208 359	216 786	222 266	changed little over the past three years.

305-1 Direct (scope 1) GHG emissions 305-2 Energy indirect (scope 2) GHG emissions 305-3 Other indirect (scope 3) GHG emissions

Veidekke adheres to the GHG Protocol Corporate Standard (March 2004) and Technical Guidance for Calculating Scope 3 Emissions (2013). Climate reporting is based on a control approach, including operational control. The source of emission factors is DEFRA for scope 1 and IEA for scope 2 and includes CO2, CH4, N2O. GWP: IPCC Fourth Assessment Report (100-year GWPs). The climate reporting comprises all business areas as well as subsidiaries and jointly controlled companies with >50% ownership share. Period 1 January–31 December 2021 (12 months). The base year is 2018 for scope 1 and 2. The base year for scope 3 is 2020.

GHG accounting, tCO2e (location-based method)	Emission source	2022 1	2021	2020 2	2018 3
Scope 1	Direct GHG emissions, fuel consumption	66 927	78 730	94 034	111 707
Scope 2	Indirect GHG emissions; electricity, district heating and district cooling	1 406	2 560	3 333	1 653
Scope 3 4	Other indirect GHG emissions; upstream and downstream in the value chain		851 753	907 106
	1. Purchased goods and services		564 095	586 759
	2. Capital goods		15 853	16 464
	3. Fuel- and energy-related activities	16 338	17 867	20 806
	4. Upstream transportation and distribution		110 709	137 855
	5. Waste generated in operations		5 891	5 850
	6. Business travel	3 670	4 436	3 458
	7. Employee commuting	4 633	2 508	4 666
	8. Upstream leased assets		1 215	942
	9. Downstream transportation and distribution		5 067	3 842
	10. Processing of sold products		N/A
	11. Use of sold products		74 151	79 433
	12. End-of-life treatment of sold products		49 923	47 003
	13. Downstream leased assets		39	28
	14. Franchises		N/A
	15. Investments		0	0

Scope 1 and 2: In 2022, CO2 emissions from Veidekke's own operations amounted to 68 332 tonnes of CO2e. This means that absolute emissions were reduced by 16% from 2021, and that Veidekke's climate budget was met. The reduction is i.a. attributable to fewer diesel-intensive projects, such as wind power and road projects in the Norwegian civil engineering business.

In 2021, Veidekke obtained emissions figures for the fourth time for scope 3, which includes emissions in the entire value chain and amounts to approx. 90% of all emissions related to the group's operations. Veidekke has decided to use 2020 as the base year from which to measure further developments in scope 3 emissions.

GHG accounting, tCO2e (market-based method)	Emission source	2022	2021	2020
Scope 2	Electricity, district heating and district cooling	34 161	50 222	52 119
GHG accounting, tCO2e	Emission source	2022	2021	2020
Biogenic emissions1	Fuel consumption	19 817	15 781	14 071

¹ Biogenic emissions comprise carbon dioxide from bioenergy combustion (HVO, bio-oil etc.), as part of the biological carbon cycle. Veidekke requires that suppliers use palm-free bioenergy, and the emissions are considered sustainable, resulting in net zero emissions.

¹ Completion of other categories for 2022 in June 2023.

² The base year for scope 3 is 2020.

³ The base year for scope 1 and 2 is 2018.

⁴ Scope 3 emissions for 2020 have been restated with a significant increase from the number stated in the 2021 annual report. The main reason for the increase is that the data used for calculating emission factors for certain products and categories have been improved. In addition, several subsidiaries have been added. The base year for scope 3 is 2020 and the climate budget for 2021–2030 has been updated.

The table shows Veidekke's scope 3 categories and lists calculation methods and emission sources

1. Acquired goods and services	Acquisitions of goods and services are calculated based on Veidekke's acquisitions volume in NOK and emissions data reported by the largest suppliers in the materials and services categories included in this category. Category 1 includes materials and services related to concrete, steel, bitumen, building materials, facades and windows, cement, aggregates, and salt. The greenhouse gas emissions reporting is based on environmental product declarations (EPD) phases A1–A3. Emissions were estimated by multiplying the total acquired volume of a given material or service category by an emission factor that represents weighted emissions per NOK across the suppliers who reported emissions data in the materials or services category. The suppliers who reported data represent approx. 30% of the total purchase volume on which the estimate is based. The acquisitions volume used in the estimate represents approx. 90% of Veidekke's overall operations, and emissions for the remaining 10% of operations are extrapolated from this volume.
2. Capital goods	Based on numbers and specifications per capital item. The emission factor is greenhouse gas emissions corresponding to product stages A1–A3 in an EPD per capital item. If a specific emission factor is not available, a generic emission factor from the manufacturer is used.
3. Fuel- and energy related activities	The data base is the same as that recorded for scope 1 and 2. The emission factor includes the production and combustion of the energy sources used in the production of fuel, electricity, district heating and district cooling. Greenhouse gases from transmission and distribution are also included in the emission factor and make up a small proportion. Factor source: DEFRA.
4. Upstream transportation and distribution	The data collection follows the same process as category 1, Acquired goods and services, and includes transport services paid for by Veidekke. The emission factor includes the production and combustion of fuel (well-to-wheel). Factor source: Greenhouse gas emissions corresponding to A4 in an EPD per product and specific reporting from selected suppliers. If a specific emission factor is not available, generic sources are used.
5. Waste generated in operations	The data collection follows the same process as for category 1, Acquired goods and services. The emission factor is specific, depending on the type of waste and waste treatment method. Factor source: DEFRA. Landfill: Emission factor includes transport and emissions from landfill "gate to grave". Energy and material recovery: Emission factor includes transport to waste treatment facilities only.
6. Business travel	The source of the number of passenger kilometres and length of journey etc. by plane is Veidekke's travel agency. The specific emission factor depends on length of journey. The emission factor includes a factor for climate forcing (radiative forcing). The source of the number of kilometres for which mileage allowance has been paid is Veidekke's salary system. Factor source: DEFRA.
7. Employee commuting	Transport of employees between home and workplace in the reporting year, in vehicles not owned or operated by Veidekke. Compensation for driving by private car categorised as commuting. Factor source is DEFRA. The emission factor includes the production and combustion of fuel (well-to-wheel).

The table shows Veidekke's scope 3 categories and lists calculation methods and emission sources

8. Upstream leased assets	Includes pellet furnaces in the asphalt operations. kWh/kg/litre per energy source * kgCO2e per energy source (pellets, fuel, country-specific electricity, district heating or district cooling). The emission factor includes the production and combustion of the energy sources used in the production of fuel, electricity, district heating and district cooling. Greenhouse gases from transmission and distribution are also included in the emission factor and make up a small proportion. Factor source: DEFRA.
9. Downstream transportation and distribution	Transport paid for by the customer (applies if products sold by the business operation are collected by the customer). Examples of products are landfill materials and aggregates. Factor source: A4 in EPD Rudshøgda Pukkverk AS.
10. Processing of sold products	Not applicable
11. Use of sold products: Energy consumption in use phase of delivered construction projects, MWh	The data collection comprises: Building handed over to client > NOK/SEK/DKK 25 million, Heated area, kWh/m2, percentage distribution per energy source. Emissions factor and calculations are based on kWh per energy source * kgCO2e per energy source (electricity country-specific, district heating, district cooling), 60-year lifetime. The emission factor includes the production and combustion of the energy sources used in the production of electricity, district heating and district cooling. Greenhouse gases from transmission and distribution are also included in the emission factor and make up a small proportion. Factor source: IEA and DEFRA; location-based country-specific emission factor.
12. End-of-life treatment of sold products	The data collection and the data base are the same as for category 1 Acquired goods and services. Greenhouse gas emissions correspond to C1–C4 in an EPD per product. If a specific emission factor does not exist, a generic emission factor is used.
13. Downstream leased assets	Energy consumption in assets owned by Veidekke (landlord) and rented to others in the reporting year, not included in scope 1 and scope 2. For Veidekke, this comprises public-private partnerships (PPP). kWh per energy source * kgCO2e per energy source (e.g., fuel, electricity country-specific, district heating, district cooling). The emission factor includes production and combustion of the energy sources used in the production of fuel, electricity, district heating and district cooling. Greenhouse gases from transmission and distribution are also included in the emission factor and make up a small proportion. Factor source: IEA and DEFRA; location-based country-specific emission factor.
14. Franchises	Not applicable
15. Investments	Veidekke's share of energy consumption (corresponding to scope 1 and 2) in joint ventures. Veidekke's share in the joint venture kWh per energy source * kgCO2e per energy source (e.g., fuel, country-specific electricity, district heating, district cooling). The emission factor includes the production and combustion of the energy sources used in the production of fuel, electricity, district heating and district cooling. Greenhouse gases from transmission and distribution are also included in the emission factor and make up a small proportion. Factor source: DEFRA and IEA; location-based country-specific emission factor for electricity.

305-4 GHG emissions intensity

GHG emissions intensity	2022	2021		2020 Comment on development
Change in carbon productivity (ΔCAPRO)	21%	21%	21%	Veidekke trended positive in carbon
CAPRO 1: Value creation/greenhouse gas emissions	0.14	0.12	0.10	productivity over the past three years,
- Emissions: tCO2e corresponding to scope 1 and 2	68 332	81 290	97 367	thus contributing to green growth according to the definition of CAPRO.
- Value creation: EBITDA + labour costs (MNOK)	9 758	9 491	9 385	Carbon Productivity (CAPRO) shows changes in the relationship between value creation (NOK) and GHG emissions (tonnes of CO2 equivalents). The purpose is to decouple GHG emissions from economic growth, and CAPRO is a good indicator for this. A rise over time is desirable, to indicate that more value is created per emitted CO2 equivalent. ΔCAPRO >7% indicates green growth.
tCO2e per tonne of asphalt produced	15	15	16	Asphalt operations in Norway accounted
- Amount of asphalt produced (tonnes)	2 343	2 573	2 511	for 53% of emissions from Veidekke's
- Emissions related to asphalt production: tCO2e corresponding to scope 1 and 2 (bioenergy, fossil fuels and electricity)	36 093	38 488	40 738	own operations in 2022. The reduction in emissions per tonne of asphalt produced from 2020 to 2021 was e.g. due to production being moved to more efficient asphalt factories. From 2021 to 2022 there was a marginal change in emissions per tonne of asphalt produced.
tCO2e per MNOK of revenue	1.8	2.2	2.6
- Emissions: tCO2e corresponding to scope 1 and 2 (bioenergy, fossil fuels and electricity)	68 332	81 290	97 367	18% reduction in emissions per MNOK of revenue – from 2.2 tCO2e in 2021 to 1.8 tCO2e in 2022.
-Total revenue in MNOK	38 568	37 592	38 140

¹ Value creation is defined as the operating result (EBITDA) plus all salary and personnel costs (Haller, 2016; Haller, van Staden, & Landis, 2018), i.e., the difference between the company's sales revenue and external costs related to purchases, etc., and denotes the value the company creates for employees and shareholders before financial costs, depreciation, write-downs, taxes etc.

305-5 Reduction of GHG emissions

Measures to reduce GHG emissions in scope 1 and 2 1	Change in tCO2e 2022–2021	Reduction in scope
More fossil-free projects, more use of biofuels in Norwegian and Swedish operations	1 515	Scope 1
Other measures	22	Scope 1

¹ Reduction calculated in relation to the previous year. Veidekke's base year for scope 1 and 2 is 2018.

The number of fossil-free construction sites increased from 28 in 2021 to 45 in 2022. This number is expected to increase in future, as Veidekke has several hundred active construction and civil engineering sites at any given time.

The share of certified and renewable projects in % of the company's revenue was approx. 25% in 2022, compared to approx. 28% in 2021. The projects include buildings and structures that qualify for environmental certification standards as well as engineering services or projects related to renewable energy such as wind and hydro. The proportion is expected to increase in the years ahead. The number of certified projects increased from 2021 to 2022, while the number of renewable projects decreased.

308-1 New suppliers that were screened using environmental criteria

Most of the subcontractors used by Veidekke in Norway are listed in the supplier register StartBANK, which includes assessment against environmental criteria. StartBANK-registered companies represent 92.1% of Veidekke's revenue related to subcontractors in Norway.

At present, Veidekke has no corresponding basis for reporting on subcontractors in Sweden, nor for the acquisition of materials in any of the countries of operation. Going forward, the group will consider applying other tools that provide such data.

Biodiversity and habitats

3-3 Management of material topics

See Sustainability report, pages 129–132.

304-2 Significant impacts of activities, products and services on biodiversity

The bulk of Veidekke's land properties is associated with the group's industrial operation in Norway. The tables below show the number of red-listed and invasive alien species linked to plots wholly-owned by Veidekke in the reporting year.

The Construction and Infrastructure business areas handle red-listed species and invasive species at project level, and as of today this work has not been aggregated at company level.

IUCN's 1 Red List categorises the threat to the species' survival 2		Number of registered red-listed species 3
RE	Regionally extinct	0
CR	Critically endangered	1
EN	Endangered	1
VU	Vulnerable	5
NT	Near threatened	3
DD	Data deficient	0
Total		10

¹ International Union for Conservation of Nature

² Source: Artsdatabanken (2021). Method: Norwegian red-listed species 2021, downloaded January 2023.

³ Number of unique registered red-listed species, of which some species, such as the willow tit, may occur on several locations.

Red list species are taken into consideration and are shielded from production activities during their most vulnerable periods. The species have been mapped, and plans for their protection have been drawn up.

Risk assessment of invasive alien species; categories 1		Number of registered invasive species
SE	Very high risk	5
HI	High risk	0
PH	Potentially high risk	0
LO	Low risk	0
NK	No known risk	0
Total		5

¹ Source: Artsdatabanken (2018). Risk categories and criteria. Alien species in Norway – with ecological risk 2018. From artsdatabanken.no, downloaded January 2023

To prevent invasive species from spreading and flourishing, a control strategy is chosen, and an execution plan is drawn up.

Materials consumption and circular economy

3-3 Management of material topics

See Sustainability report, pages 133–135.

301-1 Materials used by weight or volume

301-2 Recycled input materials used

The table shows how much of the most significant materials were used in respective years.

Calculations are made on the basis of supplier-specific reporting from selected suppliers and are extrapolated from total costs to include the entire company.

The proportion of materials from renewable sources and reclaimed materials is expected to increase as a result of Veidekke's circular economy activities.

Consumption of materials by weight or volume - and proportion of recycled input materials	Unit	2022 1	Percentage of recycled materials	2021	Percentage of recycled materials	2020	Percentage of recycled materials
Non-renewable materials used
Reinforcement steel	tonne			54 239	99%	59 333	99%
Precast concrete components	tonne			225 505	0–8%	243 191	0–8%
Bitumen	tonne			135 768	0%	123 952	0%
Ready-mixed concrete	m3			372 611	0–3%	377 603	0–3%
Fillers	tonne			26 358	0%	20 430	0%
Facade glazing	m2			29 317	7%	31 850	7%
Structural steel	tonne			3 467	57%	4 547	57%
Mortar and screed	tonne			6 979	0%	8 401	0%
Piles/sheet piling	tonne			93 416	65%	24 952	65%
Aggregates	tonne			5 199 892	0%	5 266 943	0%
Salt	tonne			38 541	0%	42 645	0%
Cement	tonne			29 071	0%	16 200	0%
Windows	m2			61 713	12%	95 458	12%
Renewable materials used
Bitumen (biogenic)2	tonne			NA		NA
Wood 3	MNOK			660	NA	577	NA

¹ Calculation of material consumption in 2022 to be completed in June 2023.

² The number of tonnes of biogenic bitumen is confidential.

³ Wood is a broad category of materials, which at Veidekke comprises anything from timber, massive wood and formwork materials to floors, kitchens, and other building furnishings. Data is collected from the companies annually, to get an overview of the total volume and proportion of certified wood and follow up on the use of certified wood in accordance with the company's targets related to deforestation. Due to limitations in Veidekke's and the suppliers' systems, this volume can to date only be stated in NOK, rather than in volume units.

Limitations, assumptions, and comments

The consumption of materials was calculated using the expenditure-based method and was based on data collected through Veidekke's GHG reporting. Consumption of materials was limited to Veidekke's direct purchases of materials. Due to a lack of data, consumption of materials included in Veidekke's subcontracts were mostly omitted.

The percentage of reclaimed materials was based on data from EPDs related to products bought by Veidekke, which were largely identical in 2020 and 2021. The percentage of reclaimed materials per materials category for said years was therefore assessed to be at the same level. Where reclaimed materials are stated as an interval, the percentage of reclaimed materials will have varied across the product category, and the data will not have permitted a one-to-one link between volume and the associated EPD.

Aggregates are a combination of materials produced in-house and externally.

Bitumen volume is from Veidekke's asphalt operations' production statistics.

Veidekke will continue to work with suppliers to improve data.

306-1 Waste generation and significant waste-related impacts

See description of impacts from Veidekke's operations in the Sustainability report, chapter Materials consumption and circular economy on page 133.

306-2 Management of significant waste-related impacts

All projects are required to have a waste plan. A checklist included in the waste plan ensures that the amount of waste is reduced and goes, in order of priority, to reuse, reclaimed materials, energy recovery and landfill. Veidekke's procurement processes ensure that all suppliers comply with legal requirements and the requirement to regularly report waste data to projects. Projects are encouraged to use central procurement agreements with waste contractors. Below is an extract from the checklist:

• ∙ Project planning; use precast components.
• ∙ Project planning; specify and order finished sizes and pre-cut components, e.g. plasterboard, steel studs.
• ∙ Project planning; choose long-lasting materials.
• ∙ Project planning; choose materials that are easy to replace.
• ∙ Project planning; facilitate easy replacement of materials and components.
• ∙ Consider whether the packaging can be reduced or eliminated entirely.
• ∙ Consider weight and volume when choosing packaging.
• ∙ Plan production; improve quality of work performed (do it right the first time).

• ∙ Return waste materials for reuse/reclaiming of materials, e.g., as insulation, packaging, paint pails etc.

• ∙ Have materials delivered at the right time to reduce time in storage and the risk of goods being damaged during handling/moving, wastage, and moisture/weather damage.

• ∙ Establish a waste plan; the most common fractions that are sorted out are concrete/brick, timber planks, treated wood planks, metals, plaster, various types of hazardous waste, cardboard/paper and plastics.
• ∙ Cooperate closely with approved carriers.
• ∙ All hazardous waste as well as electrical and electronic waste must be sorted at the construction site.
• ∙ Prioritise source sorting of fractions that are heavy, have a low fraction price and are easy to sort.
• ∙ Include source sorting in contract with subcontractors.

Central to achieving the project's waste targets, is facilitation in the design phase, rigging and production planning, contracts with partners, information to everyone, follow-up, and control, as well as communication of achievement of preliminary target.

306-4 Waste diverted from disposal 306-5 Waste directed to disposal

Disposal and treatment of waste generated in the reporting company's operations Waste in tonnes, broken down by final treatment method	2022 1	2021	2020
Waste diverted from disposal, tonnes		10 801	11 250
Waste directed to energy recovery, tonnes		10 241	12 344
Waste directed to landfill, tonnes (excl. masses)		30 104	6 573
Soil masses directed to landfill, tonnes		75 929	68 332
Total		127 075	98 500

¹ Waste accounting to be completed in June 2023.

Waste quantity and final treatment method as reported from waste companies correspond to 27% of total waste category costs in 2021 and 29% in 2020. The generation of waste is influenced, e.g., by the type of project, project phase and the number of projects. Veidekke will continue to work with suppliers to improve the data base. Omitting soil masses, the degree of material recovery is 21% for waste reported by waste companies. Veidekke is working to increase the proportion of material recycled in the coming years.

2021 1 Waste categories, tonnes	Materials recovery	Energy recovery	Landfill	Total
Soil	48	531	75 929	76 508
Concrete	6 178	193	23 953	30 324
Mixed waste	740	4 071	2 168	6 979
Wood	712	4 475	5	5 192
Plaster	1 146	0	1 137	2 284
Aggregates	0	0	1 510	1 510
Metal	1 275	1	0	1 276
Asphalt	85	0	848	933
Plastic	18	638	0	656
Insulation	1	116	390	507
Cardboard and paper mixed	404	37	0	441
Organic waste	61	83	0	143
Glass	50	22	31	103
Brick	0	35	55	90
WEEE (waste electrical/electronic equip.)	68	4	2	73
Mineral oil	13	12	0	25
Asbestos	0	12	5	17
Clothes	0	14	0	14
Batteries	1	0	0	1
Tyres	1	0	0	1
Total	10 801	10 241	106 033	127 075

¹ Waste accounting for 2022 to be completed in June 2023.

SOCIAL IMPACTS

Work-related injuries

3-3 Management of material topics

See Sustainability report, pages 136–139.

403-1 Occupational health and safety management system

Veidekke's ISO certifications are linked to the individual business areas rather than the group. The business areas are certified in accordance with: NS-EN ISO 9001:2015 NS-EN ISO 14001:2015 NS-EN ISO 3834-2:2021 NS-ISO 45001:2018

The certificate for Veidekke Entreprenør covers production/delivery of the following products and services:

Development and execution of all types of building and construction projects through execution and design and build contracts. The projects comprise design, construction, operation and maintenance of commercial and residential buildings, schools, and other public buildings, building renewal, and civil engineering projects, including road, rail, water and wind power as well as infrastructure for the oil, gas and energy sectors.

The certificate for Veidekke Industri covers production/delivery of the following products and services:

Development, planning, production and sale of asphalt and aggregates. Execution of asphalting, preparation, and road maintenance as well as administration, management and implementation of road and airport maintenance contracts.

Veidekke's Norwegian operations has an overarching audit programme that includes the units that are ISO certified and are linked to the group's business system. The audit programme includes both internal and external audits. Veidekke's quality function is responsible for establishing and ensuring implementation of the audit programme. The programme selects units and topics for audit on a risk-based approach.

Subsidiaries that are not linked to Veidekke's management system have their own systems and monitor occupational health and safety in accordance with laws and regulations.

Veidekke sets requirements for subcontractors and suppliers through the established contract templates, which include requirements regarding compliance, management system, quality assurance and risk management. ISO certification is not required, but the subcontractor must use a management system that ensures compliance with the requirements that apply, including statutory requirements, relevant requirements in Veidekke's contract with the client and Veidekke's own requirements.

In Norway, approx. 90% of the employees are covered by ISO certification. In Sweden, approx. 18% of employees are covered by ISO certification. The operations of the Danish subsidiary Hoffmann are not ISO certified.

403-2 Hazard identification, risk assessment, and incident investigation

To avoid injuries, everyone working at or for Veidekke must be aware of – and able to assess and manage – risks in their work operations.

Before starting a project, everyone, regardless of role and place of work, must undergo joint training, where they address the construction industry's six major hazards and how the related risks should be handled.

In addition, everyone must undergo training related to project-specific risks and requirements. The training includes reporting and follow-up of undesirable incidents. Veidekke clearly emphasises that reporting such incidents does not have negative consequences for the person making the report. Nevertheless, different cultural backgrounds and other aspects can affect whether an individual feels it is safe to report. Veidekke and the industry at large are aware that the threshold for reporting can occasionally be higher among subcontractors with foreign employees. In some projects where personnel have long experience from working in Norway, positive developments can nevertheless be noted.

All employees have access to the information that is reported. Barracks meetings are held locally at regular intervals, where reported incidents, investigation reports and other learning are reviewed and discussed.

The reporting rate in Veidekke is overall good, but there is room for improvement in the scope of what is reported, for example regarding factors that affect the working environment and work-related health issues.

A tool used to prioritise and identify the right measures and time of implementation is "the measures ladder", which can be used to make overall assessment of risks and measures in a project, or in specific work operations. Construction industry incidents often have known risks and causes, and Veidekke's management system describes which requirements apply to as far as possible reduce risk in such work operations. But if conditions change after the first risk assessment has been made, for example related to weather conditions or conflicting work operations, situations may arise where those performing the task must assess risk. They are then required to make a new risk assessment, and everyone is personally responsible for both their own safety and that of their colleagues.

403-3 Occupational health services

See GRI 403-6 on page 163.

403-4 Worker participation, consultation, and communication on occupational health and safety

Preparation and revision of procedures is based, firstly, on statutory audit requirements to ensure that the group's procedures are in line with internal and external requirements, and, secondly, on experience from incidents in Veidekke's production or in the industry. For such requirements or changes to be as effective as possible, professional personnel must contribute to the preparation.

For example, in 2022, Veidekke decided to focus on the most serious accidents. Over a period of many years, the group has implemented measures to reduce the number of accidents, without achieving satisfactory results. A project group was therefore established to look at the topic through 2022. The work has involved people in different roles from different parts of the organisation. Skilled workers and other operating project personnel were e.g., interviewed about which learning initiatives have good results locally and in production. This gave many new perspectives on what needs to be changed to achieve a greater learning effect. The outcome of the measures recommended will first be assessed and then prioritised for further implementation, with the aim of reducing the number of serious work accidents.

403-5 Worker training on occupational health and safety

Any personnel employed by or assigned to Veidekke must complete the following mandatory courses:

The e-learning course Hazard-blind

Hazard-blind is an industry-wide safety course that provides risk training related to the construction and civil engineering industry's six major types of hazards, i.e., falling from heights, being crushed/trapped, large machines and vehicles, falling objects, electrical voltage, blasts/explosions. Course duration: 2 years.

The OHS agreement

Veidekke wants to clearly communicate expectations and forge a personal commitment to occupational health and safety in every employee. This course outlines Veidekke's expectations and what they entail in day-to-day work. The OHS agreement is a personal commitment to compliance when working in production in Veidekke. For the group's own employees, the course is available in the employee portal. All other personnel complete the course on an external learning platform. Course duration: 2 years.

Module 2

Module 2 reviews project-specific requirements and reminds of the other requirements and expectations in the courses Hazard-blind and the OHS agreement. The course is offered at each project, contract, or facility. Course duration: Dependent on the project's duration, but no more than 2 years.

Veidekke also uses several well-integrated tools to promote health and safety in the workplace:

Conversation about safety is a tool for an informal discussion about safety, intended to encourage reflection and awareness of risk in the workplace. The conversation is based on these basic principles:

• ∙ To get a good result, address behaviour
• ∙ To trigger the desired behaviour, hold accountable and clarify
• ∙ To achieve maximum accountability, make it personal

The OHS agreement (see top of the page)

The OHS week has been organised annually since 2011 and is a well-integrated concept, with a common program of exercises and learning for all employees. Over the past few years, the aim has been to further build a culture where people care about each other and speak up when situations come up that could jeopardise health and life. In making safety a collective responsibility, the group is saying that anyone working for Veidekke has a responsibility to not only look after themselves, but also everyone else. Everyone makes mistakes, risk is interpreted and experienced differently, and what is deemed acceptable is highly individual. Creating a culture where people look out for each other, helps reduce the likelihood of health and life ultimately being jeopardised by one individual's decisions. The 2022 OHS week was about improving insight into measures that improve the working environment and factors that affect mental and physical health at work.

403-6 Promotion of worker health

Veidekke's occupational health service serves the group's Norwegian operations. The service is approved by the Norwegian Labour Inspection Authority, in accordance with Regulations on administrative arrangements, chapter 2, of 1 January 2013. In line with statutory stipulations, the occupational health service has a free and independent position in matters related to the working environment.

As stipulated by the Norwegian Labour Inspection Authority, the occupational health service only handles issues related to occupational health and the working environment. In Norway, public health-related diseases are handled by general practitioners and are outside the realm of the occupational health service.

Veidekke's Norwegian operations have an agreement with Moment Organisasjon og Ledelse AS which ensures employees quick access to mental health services. The purpose is to prevent work absence or employees dropping out of working life because a mental illness develops into more serious conditions. Veidekke has no other agreements with private health institutions and does not provide health insurance or treatment insurance.

The aim of the occupational health service is to ensure more good working years for everyone working for Veidekke. The service works with, i.a., the prevention of work-related illness, improving health through a good working environment and preventing exclusion from working life. The service is involved in:

• ∙ surveying the working environment and making risk assessments
• ∙ preventing musculoskeletal disorders caused by the working environment
• ∙ carrying out targeted occupational health examinations
• ∙ providing advice and conducting training and metrics related to the physical, chemical, and biological working environment (noise, vibrations, dust, gas, indoor climate)
• ∙ following up on absences
• ∙ providing advice and follow-up for substance abuse issues and gambling addictions
• ∙ preparedness exercises
• ∙ care and debriefing in the event of accidents, serious incidents, and deaths
• ∙ assistance in the event of conflicts, bullying, and harassment
• ∙ consultations on work-related matter

The occupational health service also provides training in health and safety-related topics, such as:

• ∙ Basic first aid training
• ∙ 40-hour OHS course and OHS management course
• ∙ Absence follow-up for managers

• ∙ From stress to coping and job satisfaction

• ∙ Courses related to mental health

• ∙ Prevention and handling of conflicts, bullying, and harassment
• ∙ Prevention of substance abuse and addiction
• ∙ Ergonomics
• ∙ Physical, chemical, and biological working environment

Veidekke's Swedish employees have access to preventive health services through Avonova and other suppliers. The services include a health check every three years for all employees and every year for skilled workers over the age of 50, as well as statutory health checks, assessment of work capability, 24/7 crisis support, medical advice in connection with sickness absence, training, and access to physical therapist, psychologist, behavioural researcher, organisational consultant, and occupational therapist.

Substance abuse is a major social problem that also affects the workplace, through illness, accidents, and unnecessary expenses. Veidekke's Swedish employees have access to free counselling relating to alcohol, drug and gambling issues from the substance abuse specialist Ljung & Sjöberg, who also conducts training for HR, local health and safety representatives and regional management groups on alcohol and drug-related issues.

To prevent injuries and stimulate physical activity, Swedish employees have access to app-based training via Wellify, and Veidekke also offers Swedish employees an annual SEK 3 500 stipend for wellness activities.

The Danish subsidiary Hoffmann has a health services agreement with Danica Pension that applies to all employees. The agreement focuses on the prevention of physical and mental illness in order to abate health problems faster and to avoid or reduce sickness absence. The agreement enables simpler and faster assessment and help when needed, by providing access to various medical and psychological expert advice. The service is provided as online consultations and various medical treatment options, and does not require referral from the employee's personal physician.

403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships

Veidekke was an active force behind the establishment of the industry initiative Cooperation for safety in construction (SfSBA) in Norway. This is a collaboration between builders, advisers, contractors, trade unions, organisations, the Norwegian Labour Inspection Authority and other industry players with the common goal of an injury-free construction industry.

Veidekke has taken on an active role in several of SfSBA's broadly composed working groups, which are tasked with solving specific issues of importance to individual companies and the community, such as:

• ∙ common basic safety training
• ∙ fall accidents
• ∙ safe lifting
• ∙ safe assembly of components.

In 2019, the industry joined forces to develop a common, mandatory safety course to address the industry's six major injury hazards. An industry-wide safety course is more convenient for subcontractors, whose employees no longer have to take a variety of different courses, depending on which company they are assigned to.

Requirements for safe lifting operations comprise one of three focus areas in Veidekke's OHS programme Risk management. Lifting operations have known risks and great potential for injuries, should barriers fail. Veidekke has therefore developed a competence test for every role involved in lifting operations. The work has been shared with SfSBA, and Veidekke's competence test will become a joint industry requirement. A lifting guide for the industry has also been developed, and is scheduled for publication in the first quarter 2023.

To Veidekke, safety is a collective responsibility. This means that employees are not just responsible for their own safety but should also look out for the people around them. Experience, interpretation, and acceptance of risk varies from person to person. With a culture where everyone looks out for each other, it is less likely that one person's choice will place life and health at risk .

It is well established that when measures to improve the working environment are knowledge-based and systematically incorporated, not only will they bolster the working environment, but also improve productivity and profitability. This also underpins Veidekke's vision of more good working years for everyone. Over several years, Veidekke has implemented measures, such as the annual OHS week, that focus on health, the working environment and safety (see also GRI 403-5 on page 162).

403-8 Workers covered by an occupational health and safety management system

See GRI 403-1 on page 161.

403-9 Work-related injuries

The various Veidekke units and subsidiaries use several systems to report undesirable incidents. Since 2018, the data from all systems has been sourced into a joint database. This experience database provides an overall overview of occupational health and safety in Veidekke, and it is also possible to sort data to local level, such as a project, contract, or district.

The group has joint systems for the categorisation and classification of deviations, with descriptions of the type of follow-up required, and corresponding governing documents are available in the group's management system. The group administration has the overall responsibility for following up on what is reported in the experience database. Any injury or serious incident must be verified by the person responsible for follow-up. Based on severity, step-by-step follow-up has been stipulated and outlined in a group-level governing document.

Veidekke has assessed the establishment of an LTI (lost time injury) rate that includes subcontractors. In April 2022, it was decided not to proceed with this at group level. At a later stage, Veidekke will consider taking into use an average factor, which is a somewhat less resource-intensive process than obtaining full hourly statistics from all subcontractors.

In 2022, incidents occurred that caused two serious injuries, of which one was a crush injury that resulted in the loss of one joint of a finger, and the other was an eye injury resulting from splash of concrete that caused reduced vision.

Main target: Zero serious injuries and 20% reduction per year in the total number of injuries

				Results
Key figures	Goal 2023	Goal 2022	2022	2021	2020
Number of serious injuries	0	0	2	0	3
Number of injuries/reduction	Minimum 20% reduction	Minimum 20% reduction	245 (-19%)	297 (-13%)	315 (-10%)
LTI rate	-	-	3.0	5.5	4.6
Number of hours worked 1	-	-	12.86	12.17	13.1
Sick leave rate	-	-	5.5%	4.6%	4.5%

¹ Own employees, million hours. The number of hours worked for subcontractors is not available.

Workers' rights

3-3 Management of material topics

See Sustainability report, pages 139–140.

409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour

A risk assessment of direct suppliers has identified increased risk among Veidekke's subcontractors, primarily those with parent companies in Eastern Europe. Veidekke sets requirements for subcontractors in the contract terms and carries out checks at project sites. Where a breach of contract and/or laws and regulations has been identified, the subcontractor must rectify the situation. Some subcontractors have been banned from working on Veidekke projects.

414-1 New suppliers that were screened using social criteria

Veidekke has operations in Norway, Sweden, and Denmark, all of which are countries where the risk of human rights violations is generally low. At the same time, Veidekke is part of an industry with a somewhat elevated risk – primarily linked to subcontractors and suppliers of materials. A risk assessment has identified increased risk among suppliers located or with a parent company outside Scandinavia.

• ∙ In the period 2018 to February 2022, Veidekke traded with 40 424 suppliers.
• ∙ For 32 683 of these suppliers, Veidekke has identified a global parent company.
• ∙ 1 413 suppliers have a global parent company outside Scandinavia that is monitored by Dow Jones.
• ∙ In addition to the suppliers who are continuously monitored, Veidekke screened approx. 50 suppliers through Dow Jones in 2022.

414-2 Negative social impacts in the supply chain and actions taken

63 audits of subcontractors were carried out in 2022. 51 subcontractors were approved without deviations. 1 subcontractor was reported to the authorities through A-krim (cooperation scheme between the Labour Inspection Authority, Norwegian Labour and Welfare Administration, the police, and The Norwegian Tax Administration), 8 were blocked in StartBANK, 5 had serious deviations and 6 had less serious deviations.

Diversity and equality

3-3 Management of material topics

See Sustainability report, pages 141–143.

401-1 New employee hires and employee turnover

New hires			Norway			Sweden			Denmark			Group
Category	Age	Men	Women	Total	Men	Women	Total	Men	Women	Total	Men	Women	Total
New hires	Under 30	235	40	275	78	14	92	50	6	56	363	60	423
New hires	30–50	194	32	226	154	39	193	50	5	55	398	76	474
New hires	Over 50	47	10	57	46	9	55	21	0	21	114	19	133
Number of new hires	All	476	82	558	278	62	340	121	11	132	875	155	1 030
New hire ratio	Under 30	7%	5%	7%	12%	7%	11%	20%	17%	20%	10%	7%	9%
New hire ratio	30–50	6%	0%	5%	8%	3%	7%	16%	20%	16%	8%	3%	7%
New hire ratio	Over 50	4%	0%	4%	11%	11%	11%	29%	N/A	29%	11%	5%	11%

Turnover

			Norway			Sweden			Denmark			Group
Category	Age	Men	Women	Total	Men	Women	Total	Men	Women	Total	Men	Women	Total
Share of resignations
Turnover – voluntary resignation	Under 30	14.5%	11.9%	14.1%	15.5%	22.2%	16.7%	0.0%	50.0%	11.1%	14.5%	15.8%	14.7%
Turnover – voluntary resignation	30–50	8.1%	8.7%	8.2%	14.8%	15.6%	14.9%	18.4%	7.1%	17.0%	10.6%	11.8%	10.8%
Turnover – voluntary resignation	Over 50	3.7%	3.9%	3.7%	10.7%	16.2%	11.4%	0.0%	0.0%	0.0%	5.3%	7.1%	5.5%
Turnover – total	Under 30	17.8%	14.8%	17.4%	17.5%	23.8%	18.6%	28.6%	75.0%	38.9%	17.8%	18.8%	18.0%
Turnover – total	30–50	9.1%	9.7%	9.2%	16.7%	22.1%	17.7%	22.4%	21.4%	22.3%	12.0%	15.7%	12.6%
Turnover – total	Over 50	9.0%	9.5%	9.0%	16.4%	20.3%	16.9%	0.0%	0.0%	0.0%	10.5%	12.0%	10.7%
Number of resignations
Turnover – voluntary resignation	Under 30	127	16	143	45	14	59	0	2	2	172	32	204
Turnover – voluntary resignation	30–50	164	24	188	156	38	194	18	1	19	338	63	401
Turnover – voluntary resignation	Over 50	61	7	68	55	12	67	0	0	0	116	19	135
Turnover – total	Under 30	156	20	176	51	15	66	4	3	7	211	38	249
Turnover – total	30–50	185	27	212	176	54	230	22	3	25	383	84	467
Turnover – total	Over 50	148	17	165	84	15	99	0	0	0	232	32	264

Comments:

Veidekke is able to attract staff with the right skills to cover employee turnover and retain the organisation's ability to execute. Generally, few new hires leave the company within one year of employment, but there are geographical differences. The higher percentage in Denmark is linked to the form of employment for skilled manual workers.

The youngest age groups have the highest turnover, and the focus is on discovering why and implementing local measures. The processes related to employee follow-up have been boosted, i.e., by setting stricter requirements for clarification of expectations and feedback.

Turnover is generally higher in Denmark and Sweden than in Norway, and there are also geographical differences within each country. Due to the geographical differences, analysis and follow-up is performed locally.

401-3 Parental leave

	Number of employees entitled to parental leave	Number of employees who took parental leave	Number of employees who returned to work after parental leave
Veidekke Norway, of whom:	4 694	178	168
Women	568	44	43
Men	4 126	134	125
Veidekke Sweden, of whom	1 501	266	258
Women	264	62	56
Men	1 237	204	202

Comments:

The countries in which Veidekke operates have different rules for parental leave, with Norway providing the most comprehensive schemes, both in terms of the length of the leave and the proportion of paid leave.

Veidekke encourages both women and men to take parental leave and Veidekke's rules extend beyond statutory requirements regarding remuneration. There are procedures in place for dialogue with both women and men before and during parental leave to ensure an optimum return to work. Veidekke is satisfied with the percentage currently returning to work after the end of leave but aims for 100%.

Note:

The figures include fully integrated subsidiaries in Norway and Sweden only. Fully integrated subsidiaries comprise 80% of Veidekke's employees. In future, the group will seek to supplement the figures.

Veidekke implemented a new HR system in the period 2020–2021. Historical parental leave data are unavailable, limiting reporting in 2022. From 2023, the group will return to reporting historical data.

405-1 Diversity of governance bodies and employees

Group management and board of directors by gender and age – percentages

		Group management		Board of directors
Age	Men	Women	Men	Women
Under 30
30–50		10%	10%	20%
Over 50	70%	20%	50%	20%

The group management comprises both men and women. The composition of the board is in accordance with legal requirements. The chair of the board of directors a woman.

Employees by gender and age – %

	Norway			Sweden			Denmark		Group
Age	Men	Women	Total	Men	Women	Total	Men	Women	Total	Men	Women	Total
Total	88.2%	11.8%	100%	83.6%	16.4%	100%	91.3%	8.7%	100%	87.1%	12.9%	100%
Under 30	85.7%	14.3%	100%	82.6%	17.4%	100%	91.7%	8.3%	100%	85.4%	14.6%	100%
30–50	87.9%	12.1%	100%	82.1%	17.9%	100%	92.5%	7.5%	100%	86.2%	13.8%	100%
Over 50	89.9%	10.1%	100%	87.4%	12.6%	100%	89.1%	10.9%	100%	89.3%	10.7%	100%

Gender is the only diversity indicator Veidekke is able to report on.

Employees by the categories gender and age

			Norway			Sweden			Denmark			Group
Category	Age	Men	Women	Total	Men	Women	Total	Men	Women	Total	Men	Women	Total
Administrative staff %	All	77.1%	22.9%	100%	74.9%	25.1%	100%	82.3%	17.7%	100%	76.6%	23.4%	100%
Skilled manual workers %	All	96.5%	3.5%	100%	97.7%	2.3%	100%	98.8%	1.3%	100%	96.9%	3.1%	100%
Administrative staff	Under 30	175	99	274	89	45	134	15	5	20	279	149	428
Administrative staff	30–50	825	241	1 066	650	222	872	93	16	109	1 568	479	2 047
Administrative staff	Over 50	699	165	864	275	73	348	55	14	69	1 029	252	1 281
Skilled manual workers	Under 30	687	45	732	168	9	177	73	3	76	928	57	985
Skilled manual workers	30–50	1 225	40	1 265	412	10	422	105	0	105	1 742	50	1 792
Skilled manual workers	Over 50	950	20	970	231	0	231	59	0	59	1 240	20	1 260

Comments:

Veidekke has a good age distribution for both administrative staff and manual workers. The group management and the board of directors have no members in the age group under thirty.

In the male-dominated construction industry, the proportion of women is very low, and diversity efforts are therefore directed at increasing the share of women. Various measures have been implemented to date. See page 141–143. It is particularly challenging to recruit female skilled manual workers, as the total market is extremely limited. Veidekke notes with satisfaction, however, that the proportion of female apprentices has passed 10%. There is a sharp focus on developing and retaining the women already working at Veidekke, and on providing equal opportunities.

405-2 Ratio of basic salary and remuneration of women to men

	Administrative staff	Women		Men		Women, % of men
	Age	Average basic salary	Average basic salary and remuneration	Average basic salary	Average basic salary and remuneration	Average basic salary	Average basic salary and remuneration
Norway	Under 30	506 772	531 796	535 534	585 467	95%	91%
	30–50	769 184	784 764	809 839	848 146	95%	93%
	Over 50	787 456	800 617	909 204	947 596	87%	84%
Sweden	Under 30	426 276	469 476	443 352	521 592	96%	90%
	30–50	521 124	594 888	699 600	761 916	74%	78%
	Over 50	585 180	627 180	737 100	788 760	79%	80%
	Skilled manual workers	Women		Men		Women, % of men
	Age	Average basic salary	Average basic salary and remuneration	Average basic salary	Average basic salary and remuneration	Average basic salary	Average basic salary and remuneration
Norway	Under 30	256 600	308 500	430 800	490 200	60%	63%
	30–50	418 000	468 100	561 000	637 600	75%	73%
	Over 50	486 600	550 100	563 800	638 000	86%	86%
Sweden	Under 30	443 292	485 028	402 684	438 684	110%	111%
	30–50	458 160	499 896	452 088	489 828	101%	102%
	Over 50	-	-	460 404	512 520	N/A	N/A

The table above shows only fully integrated Norwegian and Swedish subsidiaries, which represent 80% of Veidekke's employees. Efforts are being made to complete the data so that, in future, the figures will include all employees.

Comment:

In some groups, there is substantial difference between women's and men's wages.

Administrative staff:

The differences are the least in the lowest age groups and increase with age. This is because the majority of managers are men, including at the top management levels. Also, more women work in staff functions, which on average are paid less than production and line management.

On average, women take longer parental leaves. Taking parental leave does not result in bonus reduction, and this contributes to gender equality.

In the monitoring and analysis of remuneration differences, an examination is warranted into whether pay differences could in certain cases be deemed discriminatory.

Skilled manual workers:

The proportion of women among skilled manual workers is very small, and the data therefore provides little basis for comparison between genders. In the Swedish operations, women are being paid equal to or slightly more than men. In the Norwegian operations, the differences are substantial in all age groups, which calls for a more detailed analysis.

406-1 Incidents of discrimination and corrective actions taken

In 2022, three critical concerns via Veidekke's external notification channel were reported and processed. None dealt with discrimination and none were considered very serious. This number does not include deviations and concerns reported directly to the business areas and processed there. Veidekke is considering a process that can provide a better overview of concerns reported to and handled by line management.

GOVERNANCE IMPACTS

Corruption and financial crime

3-3 Management of material topics

See Sustainability report, pages 144–146.

205-1 Operations assessed for risks related to corruption

The entire Veidekke group has been assessed.

Risk assessments have revealed that the risk of corruption is greatest in the interface between suppliers and subcontractors and in interaction between Veidekke and current and potential customers. The Scandinavian countries, where Veidekke has its operations, is considered to have about the same risk of corruption, and the group is therefore concentrating efforts on improving its internal processes.

205-2 Communication and training about anti-corruption policies and procedures

A total of 212 new employees completed the e-learning course Wise Choices in 2022. In addition, 30 top managers completed ethics training as part of the group's top management programme. As Veidekke has a decentralised form of management, data regarding training completed in the business areas is not available.

Any Veidekke supplier or subcontractor is contractually obliged to adhere to Veidekke's ethical guidelines for suppliers, which are attached to all agreements.

205-3 Confirmed incidents of corruption and actions taken

No incidents

206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices

None

GRI index

Veidekke ASA has reported in accordance with the GRI Standards for the period 1 January–31 December 2022.

GRI 1: Foundation 2021

At the time of publishing, GRI has not published a sector standard for the construction and civil engineering industry.

		Omission
Disclosure	Location	Requirement(s) omitted	Reason	Explanation
GRI 2: General Disclosures 2021
2-1 Organisational details	page 147
2-2 Entities included in the organisation's sustainability reporting	page 147
2-3 Reporting period, frequency and contact point	page 147
2-4 Restatements of information	page 147
2-5 External assurance	page 147
2-6 Activities, value chain and other business relationships	page 147
2-7 Employees	page 148
2-8 Workers who are not employees	page 148
2-9 Governance structure and composition	page 149
2-10 Nomination and selection of the highest governance body	page 149
2-11 Chair of the highest governance body	page 149
2-12 Role of the highest governance body in overseeing the management of impacts	page 149
2-13 Delegation of responsibility for managing impacts	page 149
2-14 Role of the highest governance body in sustainability reporting	page 149
2-15 Conflicts of interest	page 149
2-16 Communication of critical concerns	page 149
2-17 Collective knowledge of the highest governance body	page 149
2-18 Evaluation of the performance of the highest governance body	page 149
2-19 Remuneration policies	page 149
2-20 Process to determine remuneration	page 150
2-21 Annual total compensation ratio	page 150	Basis for calculation of annual compensation ratio	Information unavailable/incomplete	Veidekke bases calculations of annual compensation ratio on averages rather than medians.
2-22 Statement on sustainable development strategy	page 150
2-23 Policy commitments	page 150
2-24 Embedding policy commitments	page 151
2-25 Processes to remediate negative impacts	page 151
2-26 Mechanisms for seeking advice and raising concerns	page 151
2-27 Compliance with laws and regulations	page 151
2-28 Membership associations	page 152
2-29 Approach to stakeholder engagement	page 152
2-30 Collective bargaining agreements	page 152

				Omission
GRI-standard	Disclosure	Location	Requirement(s) omitted	Reason	Explanation	UN Sustainable Development Goals	UN Global Compact
GRI 3: Material Topics 2021	3-1 Process to determine material topics	page 153
	3-2 List of material topics	page 153
Climate impact
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 125–128
GRI 201: Economic Performance 2016	201-2 Financial implications and other risks and opportunities due to climate change	page 153
GRI 302: Energy 2016	302-1 Energy consumption within the organisation	page 153
	302-2 Energy consumption outside of the organisation	page 154	2022 data unavailable at time of publication	Information unavailable/ incomplete	Calculation of energy (MWh) used outside the organisation in 2022 to be completed in June 2023		Environment Principle 7: Support a
	302-3 Energy intensity	page 154					precautionary approach to
GRI 305: Emissions 2016	305-1 Direct (Scope 1) GHG emissions	page 154	2022 data	Information unavailable/ incomplete	The subsidiaries BRA and Constructa are not included		environmental challenges Principle 8: Undertake
	305-2 Energy indirect (Scope 2) GHG emissions	page 154	2022 data	Information unavailable/ incomplete	The subsidiaries BRA and Constructa are not included	Goal 13: Climate action	initiatives to promote greater environmental responsibility
	305-3 Other indirect (Scope 3) GHG emissions	page 154	2022 data	Information unavailable/ incomplete	2022 data for other relevant scope 3 categories to be finalised and verified in June 2023	Take urgent action to combat climate change and its impacts	Principle 9: Encourage the development and
	305-4 GHG emissions intensity	page 157				See page 122	diffusion of environmentally friendly technologies
	305-5 Reduction of GHG emissions	page 157	2021, 2022 data	Confidentiality constraints	Bio-bitumen (tonnes) used in 2021 and 2022
GRI 308: Supplier Environmental Assessment 2016	308-1 New suppliers that were screened using environmental criteria	page 157	Reporting is limited to Norwegian operations and covers only subcontractors	Information unavailable/ incomplete	Incomplete data due to incomplete systems; Veidekke will consider replacing with other data sources for future reporting
Biodiversity and habitats
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 129–132
GRI 304: Biodiversity 2016	304-2 Significant impacts of activities, products and services on biodiversity	page 158	2022 data	Information unavailable/ incomplete	To date, data is not aggregated at group level. Red-listed species and invasive alien species are addressed at project level in the Construction and Infrastructure business areas. Infrastructure Sweden's land bank is not included in this year's reporting	Goal 15. Life on land Targets 15.2, 15.5, 15.8 See page 122	Environment Principle 7: Support a precautionary approach to environmental challenges Principle 8: Undertake initiatives to promote greater environmental responsibility Principle 9: Encourage the development and diffusion of environmentally friendly technologies

				Omission
GRI-standard	Disclosure	Location	Requirement(s) omitted	Reason	Explanation	UN Sustainable Development Goals	UN Global Compact
Materials consumption and circular economy
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 133–135
GRI 301: Materials 2016	301-1 Materials used by weight or volume 301-2 Recycled input materials used	page 158 page 158	2021, 2022 data 2022 data	(1) Confidentiality constraints (2) Information unavailable/ incomplete Information unavailable/	(1) Bio-bitumen (tonnes) used in 2021 and 2022. (2) Calculations of materials used in 2022 to be completed in June 2023. Due to limited access to data from suppliers, Veidekke for now limits its scope 3 reporting to the most emission intensive materials and services, which account for 19.4% of total spend. 2021 data not available from the following subsidiaries/business areas; BRA, Arcona, GEO Fundamentering & Bergboring og Veidekke Asfalt AB; as spend data are unavailable or insufficient. Calculations of materials used in 2022 to	Goal 12. Responsible consumption and production	Environment Principle 7: Support a precautionary approach to environmental challenges Principle 8: Undertake initiatives to promote greater environmental responsibility
				incomplete	be completed in June 2023.		Principle 9: Encourage
	306-1 Waste generation and significant waste-related impacts	page 159				Targets 12.2, 12.5	the development and diffusion of environmentally
	306-2 Management of significant waste-related impacts	page 159				See page 122	friendly technologies
GRI 306: Waste 2020	306-4 Waste diverted from disposal	page 160	2022 data	Information unavailable/ incomplete	Included in the report is waste corresponding to 27% of total spend (2021 data).
	306-5 Waste directed to disposal	page 160	2022 data	Information unavailable/ incomplete	Data for hazardous waste is not available. Included in the report is waste corresponding to 27% of total spend (2021 data).

				Omission
GRI-standard	Disclosure	Location	Requirement(s) omitted	Reason	Explanation	UN Sustainable Development Goals	UN Global Compact
Work-related injuries
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 136–139
	403-1 Occupational health and safety management system	page 161
	403-2 Hazard identification, risk assessment, and incident investigation	page 161
	403-3 Occupational health services	page 162
	403-4 Worker participation, consultation, and communication on occupational health and safety	page 162
GRI 403: Occupational Health and Safety 2018	403-5 Worker training on occupational health and safety	page 162
	403-6 Promotion of worker health	page 163				Goal 8. Decent work and economic growth
	403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships	page 163				Target 8.8 See page 122
	403-8 Workers covered by an occupational health and safety management system	page 164
	403-9 Work-related injuries	page 164
Workers' rights
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 139–141					Human Rights
GRI 409: Forced or Compulsory Labor 2016	409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor	page 165					Principle 1: Support and respect the protection of
	414-1 New suppliers that were screened using social criteria	page 165					internationally proclaimed human rights
							Principle 2: Make sure that they are not complicit in human rights abuses
							Labour
GRI 414: Supplier Social Assessment 2016	414-2 Negative social impacts in the supply chain and actions taken	page 165				Goal 16. Peace, justice and strong institutions Target 16.5	Principle 3: Uphold the freedom of association and the effective recognition of the right to collective bargaining
						See page 122	Principle 4: Elimination of all forms of forced and compulsory labour
							Principle 5: Effective abolition of child labour

				Omission
GRI-standard	Disclosure	Location	Requirement(s) omitted	Reason	Explanation	UN Sustainable Development Goals	UN Global Compact
Diversity and equality
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 141–143
	401-1 New employee hires and employee turnover	page 166
GRI 401: Employment 2016	401-3 Parental leave	page 167	Employees entitled to parental leave	Information unavailable/ incomplete	Data currently limited to fully integrated subsidiaries in Norway and Sweden, which account for 80% of the group's employees.		Work
	405-1 Diversity of governance bodies and employees	page 167					Principle 6: Elimination of discrimination in respect
GRI 405: Diversity and Equal Opportunity 2016	405-2 Ratio of basic salary and remuneration of women to men	page 169	Ratio of the basic salary and remuneration of women to men	Information unavailable/ incomplete	Data currently limited to fully integrated subsidiaries in Norway and Sweden, which account for 80% of the group's employees.	Goal 5. Gender equality Target 5.5	of employment and occupation
GRI 406: Non-discrimination 2016	406-1 Incidents of discrimination and corrective actions taken	page 169				See page 122
Corruption and financial crime
GRI 3: Material Topics 2021	3-3 Management of material topics	pages 144–146
	205-1 Operations assessed for risks related to corruption	page 170
GRI 205: Anti-corruption 2016	205-2 Communication and training about anti-corruption policies and procedures	page 170					Anti-corruption
	205-3 Confirmed incidents of corruption and actions taken	page 170					Principle 10: Work against corruption in all its forms, including extortion and
GRI 206: Anti-competitive Behaviour	206-1 Legal actions for anti-competitive behaviour,	page 170				Goal 16. Peace, justice and strong institutions	bribery
2016	anti-trust, and monopoly practices					Target 16.5
						See page 122

Gender equality statement for Veidekke's Norwegian operations

Activity duty

In the context of surveying the risk of discrimination and other barriers to gender equality, Veidekke has collaborated with employee representatives to identify problem areas. Measures were implemented to reduce risk in specific areas. In 2022, implementation of these measures continued, and some new initiatives were added. In Veidekke's experience, it is significantly easier to implement structural measures than cultural aspects related to attitudes and behaviour. The group recognises that this requires longterm, targeted effort, including analysis and improvements of the measures at regular intervals.

Significant work remains to be done on surveying discrimination risk and identifying barriers to gender equality. Veidekke is prioritising a better gender balance but is also conscious of other causes of discrimination. Working with employee representatives, the group is continuing to identify challenges and take effective steps to reduce the risk of discrimination for all groups.

Mapped risk areas	Measures initiated to reduce risk	Result assessment and expectations
Processes related to recruitment, development and remuneration processes and their interpretation and application	1. Develop guidance documents and processes for recruitment and management development. 2. Ensure that recruitment and staff development processes are skills-based and intentional. 3. Continue to direct attractiveness efforts at generating interest in working in the industry among women. 4. Ensure greater diversity of texts and images in advertising and marketing materials. 5. Employ deliberate and objective selection methods at an early stage of recruitment processes, in management evaluations and in manager appointments to prevent unconscious discrimination. 6. Monitor remuneration systems to ensure gender equality and avoid discrimination.	1. Implemented. 2, 3, 4. The proportion of women increased in 2022. 5. Given strong attention through skills-building measures relating to unconscious discrimination. 6. No systematic pay differences were discovered between women and men. Persons on parental leave receive pay adjustments and their bonuses are not reduced
A male-dominated culture in which harassment, discrimination and violence against women and other minorities occur (e.g. on the basis of sexual orientation, gender identity and gender expression)	1. Zero tolerance for offensive behaviour of all kinds is enshrined in Veidekke's ethical guidelines and its diversity and gender equality policy. 2. The whistleblowing procedure describes the process for reporting on matters relating to the physical and psychosocial working environment.	1. Ongoing project which will be reinforced through further skills-building measures. 2. Three critical concerns relating to the working environment were reported and dealt with in 2022, none of which were linked to discrimination or considered as very grave.
The construction and civil engineering industry is male-dominated, and media coverage of discrimination can make the industry a less attractive workplace for women	1. To reduce unconscious discrimination, measures have been implemented to build skills and encourage reflection on the topic. 2. Diversity was the topic of the OHS week. 3. Preparation of the "Veidekke compass" 4. A survey was conducted to uncover women's ambitions and perception of opportunities.	1. Skills-enhancing dialogues have been carried out in all top management groups in 2022. 2. The OHS week in 2022 focused on the working environment and how employer and individuals can contribute to a healthy and inclusive working environment for everyone. A special spotlight was placed on diversity, to raise awareness of/conditions for everyone to be able to be entirely who they are at work. 3. The Veidekke compass, which is to be integrated into the company's employee processes, provides guidelines for what behaviour is expected of all employees and focuses, i.a., on feeling psychologically secure and valuing people's differences. 4. More women want more responsibility, and some feel that they do not have the same opportunities as men. Possible measures have been assessed, for which a more detailed conclusion is pending.
Men and women taking parental leave may experience poor accommodation before, during and after their leave period	To ensure effective dialogue in the transition into, during and after parental leave, automated processes have been developed to ensure that meetings are held with staff before and during their leave period.	Managers receive automatic reminders to hold such meetings, followed up on by HR. The measures are expected to promote better accommodation, and to encourage men and women to take parental leave and to return to the company after the leave period has ended. 94% of employees who were on parental leave last year have remained with the company. 98% of women and 93% of men continued after the end of leave. Veidekke aims for everyone to return to work when their parental leave is over but is satisfied that the vast majority wishes to continue.
Other factors, such as gender-specific job titles and the need for physical accommodation in the form of changing rooms for women and others with a need for separate facilities	1. A decision was made to replace the job title "foreman" with "supervisor" or "production manager". 2. All projects must offer separate changing facilities for men and women. 3. A separate range of work clothing for women is available	1. The job title "foreman" has been eliminated. 2. Separate changing facilities have been installed for most projects, although exceptions may occur on smaller project sites. 3. Implemented.
It is more difficult for persons with disabilities to enter an industry where the majority of staff work on construction and civil eng. sites	Wherever possible, accommodation measures are implemented for staff with disabilities	To be assessed in each individual case
Little emphasis has been given to recruiting staff with a multicultural background. The resulting low proportion of such staff makes the industry even less attractive to this group	Not prioritised to date

Duty to issue a statement

The low proportion of women is a major construction industry challenge, which is also reflected at Veidekke. The group works to achieve greater diversity among its employees, with particular attention directed at improving the gender balance, and has laid plans to achieve the goal of increasing the share of female operational managers to over 20%. At the end of 2022, women accounted for nearly 12% of operative managers in Veidekke's Norwegian operations. As at 31 December 2022, women accounted for 12% of Veidekke employees, which is on a par with 2021. Women made up 24% of administrative staff and almost 4% of skilled manual workers. Among the group's apprentices, the proportion of women increased to 12.6%, from 12.3% in 2021.

The group has adopted the target that women should make up half of students working summer jobs and 40% of recently graduated employees by the end of 2025. In 2022, women accounted for 33% of employees in summer jobs, compared to 35% the year before, and 44% of recently graduated employees, up from 36% in 2021.

Recruitment of women to most functions within the group – and particularly to operational management roles – has received considerable attention over several years. Nevertheless, the proportion of women working for Veidekke has remained stable. The upward trend in the number of woman apprentices is attributed to an increased focus on recruiting women to vocational trades.

	Gender balance		Temporary employees throughout the year		Parental leave		Actual part-time work
	Number		Number		Average number of weeks		Number
	Women	Men	Women	Men	Women	Men	Women	Men
Veidekke ASA only	20	30	9	10	28	13	0	0
Veidekke in Norway	610	4561	46	212	35	18	48	66

NB: Temporary employees primarily comprise seasonal workers in the asphalt operation and persons working summer jobs

Veidekke has a very low proportion of part-time employees, but there are gender differences. A staff survey conducted among Norwegian administrative staff in 2021 revealed no involuntary part-time work. A procedure has been established to systematically investigate involuntary part-time work among all employees every second year, and the next investigation will take place in 2023.

Mapping of pay differences is carried out every two years, with the next mapping coming up in 2023. Mapping in 2022 showed that there are pay differences between women and men, and more so for some groups than others. Even though the survey does show pay differences between the genders, this is, as far as the analysis has revealed, linked to roles and not to systematic differences as a result of gender discrimination. The issue will be further followed up in 2023.

Veidekke's subsidiaries account for the Activity duty and the Duty to issue a statement in their respective annual reports.

The EU taxonomy for sustainable activities

The EU is introducing the taxonomy, a classification system with criteria to determine whether an activity can be considered sustainable. The initiative is part of the European Green Deal, a growth strategy to make Europe the first net zero-emissions world region by 2050 – and the most resource efficient. The taxonomy came into effect in the EU on 1 January 2022 and in Norway on 1 January 2023. Veidekke will report on the EU taxonomy from 2023.

For an activity to be classified as "green", or "aligned" according to the EU taxonomy, it must contribute significantly to at least one of the EU's

The EU's environmental objectives

• 1. Climate change mitigation
• 1. Climate change adaptation
• 1. The sustainable use and protection of water and marine resources
• 1. The transition to a circular economy
• 1. Pollution prevention and control
• 1. The protection and restoration of biodiversity and ecosystems

six defined environmental objectives and not cause significant damage to either of the other five. It must also meet minimum social rights requirements by adhering to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Veidekke's activities meet the social rights requirements.

The EU taxonomy requirements are expected to lead to significant changes in the construction industry. Getting familiar with the requirements of the taxonomy, Veidekke has assessed its operations in relation to the sustainable activity requirements. Several requirements are designed to request that projects consider certain criteria from the planning stage on and cooperate with the customer to meet the requirements. A large part of Veidekke's ongoing projects are not taxonomy aligned. The guidelines are still somewhat unclear, and different actors are likely to interpret the criteria differently. Veidekke is working with the industry organisations to prepare a joint interpretation of the EU criteria.

Revenue per activity	MNOK	Share of total revenue
Construction of new buildings	24 656	64%
Renovation of buildings	882	2%
Construction and modernisation of motorways, roads, streets etc.	6 997	18%
Construction and maintenance of rail transport infrastructure	3 147	8%
Construction and maintenance of personal transport infrastructure	293	1%
Construction of wind power plants	76	0%
Construction and rehabilitation of hydroelectric power plants	51	0%
Construction, expansion and renewal of water supply systems	849	2%
Construction and expansion of centralised sewage systems	22	0%
Construction and modernisation of ports	142	0%
Construction work related to adaptation to climate change	150	0%
Demolition and recycling of buildings and other structures	285	1%
Total taxonomy eligible activities	37 550	97%
Total taxonomy non-eligible activities	1 108	3%
Total	38 658	100%

Operating income that is taxonomy eligible

Preliminary assessment shows that of Veidekke's total revenue of NOK 38.7 billion in 2022, 97% was taxonomy eligible. Most non-eligible activities are related to the production of aggregates. In Veidekke, five taxonomy eligible activities make up the bulk of the total operating income:

• Construction of new buildings
• Renovation of buildings
• Construction and modernisation of motorways, roads and streets
• Infrastructure for rail transport
• Construction, expansion and renewal of water supply systems

These activities together account for 94% of Veidekke's total revenue and 97% of the taxonomy-eligible operating income.

Operating costs that are taxonomy eligible

The purpose of the key figures operating costs and capital expenditure is to map investments that contribute to green activity and restructuring. The key figure operating costs in the taxonomy does not denote the same as operating costs according to IFRS. Taxonomy-related operating costs may be linked to the maintenance and repair of property, facilities and equipment that are essential for carrying out activities

covered by the taxonomy. This constitutes only a small part of Veidekke's total operating costs and is mainly associated with the capital-intensive businesses Infrastructure Norway and Infrastructure Sweden.

Capital expenditure that is covered by the taxonomy The taxonomy's key figure capital expenditure includes the acquisition of assets, products or services which are recognised in the financial position, and which are essential for carrying out activities for which the taxonomy has a set of criteria. For Veidekke, this mostly includes investments in own and leased machines and operating assets. Goodwill is not defined as an intangible asset in accordance with IAS 38 and is not included in capital expenditure. In 2022, Veidekke had a total capital expenditure of NOK 846 million, the majority of which is considered linked to taxonomy-eligible activities. Capital expenditure in Veidekke mostly relates to machinery, equipment, property, and asphalt and aggregates plants. Of total capital expenditure, NOK 666 million concerned investments in machinery and equipment. Veidekke's machinery is used in several projects throughout its lifetime – and hence in different economic activities. This makes it more challenging to attribute capital expenditure to specific activities and to assess whether these are taxonomy aligned.

Climate-related risk – TCFD

Governance

The group strategy expresses a clear ambition of taking on an active role in the green shift, and Veidekke has laid out strategies and business systems that underpin this ambition. Veidekke has adopted the goals of the Paris Agreement and has had its own climate targets validated by the Science Based Targets initiative (SBTi). The group's climate targets have been distributed among the five business areas, with an annual greenhouse gas emissions budget.

The board of directors

The board of Veidekke is updated quarterly on the group's direct (scope 1 and 2) GHG emissions and annually on indirect (scope 3) emissions. Achievements versus strategic ambitions are discussed at the board's annual strategy seminar. Developments in GHG emissions and climate risk are also discussed in the annual sustainability brief to the board.

Climate risk in the board committees:

• The project committee, which meets regularly to review projects in excess of NOK 800 million, includes assessment of climate impact, risk and environmental concerns.
• Together with the board, the audit committee oversees Veidekke's risk appetite. Climate risk

and potential impact on the company's balance sheet is assessed annually.

• The remuneration committee oversees incentive models which include the achievement of climate targets.

Climate concerns and climate risk are also addressed in connection with investments and with divestments and acquisitions of companies, in accordance with the company's ordinary decision-making matrix.

The ultimate responsibility for assessing climate risk rests with the board and is managed in cooperation with the group management.

Management

Veidekke's group management manages the company's business systems and decides, together with the board, the risk parameter framework.

Veidekke's CEO has overall responsibility for implementing and following up Veidekke's strategy. The responsibility for meeting climate targets rests with the business areas and their management.

The EVP for strategy and sustainability, together with the CFO, has the highest professional responsibility for climate concerns and climate risk. A sustainability council functions as an advisory body for the group management.

Climate risk and opportunities are assessed annually and presented in a separate table in the annual report; see pages 183–184. Veidekke's management monitors risk continuously and considers mitigating measures where deemed necessary.

	Annual Report 2022, Corporate governance
The board's	Veidekke's decision matrix
supervision	Board committees
	The board's annual wheel
	Group governing documents
	Group strategy
	Organisational structure
	Decision matrix
Role of management	Climate plan
	Greenhouse gas accounting
	Greenhouse gas budget
	Climate-related risks and opportunities

Strategy

Veidekke has started a process to identify and account for significant climate risks and opportunities the company faces in the short, medium, and long term. In this process, Veidekke has assessed risk based on three different scenarios relevant to the business.

The significance of climate-related threats and opportunities

Veidekke is a streamlined contractor, which main activity is to select, win and execute construction and civil engineering projects in Scandinavia.

Project-based contracting activities

Veidekke carries out a wide array of construction projects, of different sizes and duration. Consequently, the company can quickly change the composition of the portfolio. This helps mitigate climate changerelated risks and it also presents opportunities.

Projects account for nearly 80% of Veidekke's purchases. Decisions about solutions and materials are made by the project, in cooperation with the client and the client's advisers. As any influence on process, materials and risk must be exerted before construction start, priority is given to clients who invite Veidekke into the project at an early stage.

Time-limited contracting activities

In Norway, Veidekke is a contractor for the operation and maintenance of public roads. The contracts in this segment are time-limited, with a typical duration of five to eight years.

Frequent weather changes can entail risk. Increased risk of water, landslides and extreme weather along the roads can also provide opportunities for assign ments that the company has the expertise to handle.

Stationary operations

Asphalt and aggregates operations currently account for more than 10% of the group's revenue. Veidekke operates 28 asphalt factories and 25 aggregates plants in Norway and Sweden. The installations have a lifetime of up to 30 years, and represent total invested capital which amounted to approximately NOK 1.7 billion at year-end.

Veidekke has two factories in Norway that produce precast concrete components.

All such fixed locations are monitored for extreme weather. Veidekke has carried out a climate risk analysis for all physical installations in Scandinavia.

Climate management in Veidekke's strategies

Climate is at the core of Veidekke's strategy, with regard to both the responsibilities, the commercial role the company can play in reducing emissions, and the risk that climate change can pose to the business.

Against this backdrop, the group strategy defines "an active role in the green shift" as one of three

key principles in the period to 2025, alongside putting people first, and being passionate about the customer's project. The three principles underpin each other.

The strategy involves making choices on an ongoing basis regarding projects, materials, suppliers, energy carriers, investments, ventures, business models and customers, in line with Veidekke's ambitions.

In the companies' strategies

The business operations incorporate the group strategy guidelines and adapt the strategy to their markets and segments.

With the aim of taking on an active, commercial role in the green shift, Veidekke is deliberating various initiatives;

• Veidekke Green Incubator was established by the Norwegian infrastructure business to explore business opportunities in the green shift
• Veidekke Circular was established by the Norwegian construction business to explore circular economy opportunities in the construction and civil engineering industry. The first focus area is production of concrete using aggregates from demolished structures
• Veidekke is assessing opportunities in the Norwegian offshore wind market. With expertise and extensive experience from large concrete constructions, the group is ideally positioned to take part in this market

• BRA Energi is an initiative from the Swedish subsidiary BRA which works with energy optimisation in buildings.

Climate-related threats and opportunities	Sustainability report, Climate-related risks and opportunities
Significance for business, strategy, and financial planning	The description of operations in the annual report Climate-related risks and opportunities
Implications of different scenarios	In the group's response to CDP Climate Change for 2021, Veidekke explains the two scenarios used

Risk management

Climate risk is included in Veidekke's overall risk management.

The significance of climate-related threats and opportunities

The company has prepared a climate risk analysis with recommended measures to mitigate risks and exploit opportunities related to physical risk and transition risk. Assessment of climate risk is included in the group management's annual plans and the board's annual sustainability review.

In its analysis, Veidekke has assessed climate risk in the form of physical risk and transition risks

and opportunities linked to products and services, resource efficiency, energy sources, market, and robustness.

The company must identify, manage and, as far as is practically possible, reduce risks related to the business, which Veidekke does by;

• identifying risk
• understanding how risk arises
• assessing severity and probability
• estimating the effectiveness of existing and available measures.

By assessing comparable construction companies, and companies linked to the industry, Veidekke can uncover the sector's most significant climate change-related risks.

Risks are registered, logged, and assessed based on probability and consequence. The analysis is shared and discussed with the audit committee – and significant risks are communicated to the company's board of directors.

The group management assesses and decides on measures to reduce risk.

The processes for identifying, assessing, and managing climate-related risk are incorporated into the company's overall risk management – from projects to business areas.

Processes for identifying and assessing climate-related risk	Sustainability report, Climate-related risks and opportunities
Processes for the management of climate related risk	Sustainability report, Climate-related risks and opportunities
Integration into the company's overall risk management	Sustainability report, Climate-related risks and opportunities

Targets and methods

Veidekke adheres to the requirements of the GHG protocol, which is the most widely used and highly recognised standard for reporting greenhouse gas emissions through organisations' climate accounts. Climate data is included in the climate accounting based on operational control. Having operational control means having day-to-day control over the building, installation, or equipment.

Veidekke's sustainability reporting is in line with GRI 2021 and is based on a materiality analysis carried out in 2022. The analysis identified climate impact, biodiversity, and circularity as material topics for the company going forward, in addition to social and governance impacts.

Veidekke reports to CDP Climate and CDP Forest annually.

Greenhouse gas emissions reporting

The business areas report direct emissions (scope 1 and 2) quarterly, and indirect emissions (scope 3) annually. Development is followed up in quarterly presentations, and all employees have access to the data through the company's digital scoreboard.

Climate reporting comprises all business areas as well as subsidiaries and jointly controlled companies with more than 50% ownership share.

The climate accounts and the climate chapter in the sustainability report have been verified by DNV. In 2022, Veidekke, as the first contractor in Scandinavia, had both short-term climate targets (2030) and the ambition to reach net zero by 2045 validated by the Science Based Target initiative (SBTi).

Veidekke will reduce emissions in the entire value chain, through successive year-by-year reduction of absolute emissions:

• Direct greenhouse gas emissions from own operations (scope 1 and 2) to be reduced by 50% by 2030, from the base year 2018.
• Indirect emissions upstream and downstream in the value chain (scope 3 – selected categories), to be reduced by 50% by 2030, from the base year 2020.
• Veidekke's ambition is to reach net zero emissions by 2045.

Methods used to assess climate-related threats and opportunities

GHG emissions reporting

Targets for management of climaterelated risks and opportunities

Sustainability report 2022, Environmental impact

Sustainability report 2022, Environmental impact Veidekke's website, Approved SBT – 2030 Approved SBT – 2045 Climate plans Sustainability report 2022, GHG emissions

Sustainability report 2022, Climate-related risk and opportunities

Risk

	Type	Cause and risk category	Potential consequence	Financial effect
Main category				0–2 years	2–10 years	10+ years	Mitigating factors
Physical risk	Chronic	Rising temperatures, sea levels, flood risk and changed rainfall patterns	Extended construction time Impaired security Unsuitable geographies Shifts in demand	None	None	Low	Contract terms Segment and market flexibility Production planning Alternative deliveries
	Urgent	More frequent/violent extreme weather	Injuries Supply chain delays	Low	Medium	High	Flexible business model; geography, segment and cost structure
Transition risk	Policy and regulations	Carbon pricing	Shifts in demand Price hikes for materials Requirements for reduction of direct emissions	Low	Medium	High	Stay up to date on regulatory changes Expertise in energy-efficient constructions Low-emission solutions Reduced use of machines
		Reporting requirements	Internal time consumption Sharper spotlight from stakeholders	Medium	Low	None	Transparent reporting Efficient reporting routines Participate in the development of reporting requirements
		Products and materials requirements	Availability of materials Increased costs	Low	Medium	Medium	Stay up to date on materials requirements and new production methods Have an overview of alternative deliveries
	Technology	New materials and construction methods	New materials and technologies Reuse and adaptability	Low	Medium	High	Cooperation with suppliers Low-emission materials innovation Cooperation regarding circular economy
		Cost of transition to new technologies	Temporarily increased costs at introduction of new technologies	Low	Medium	High	New green technologies innovation Training in new production methods and technologies
	Market	Increased energy and raw materials costs	More expensive materials and increased energy costs Shifts in demand	Medium	Medium	Low	Energy efficiency and new energy carriers Staying close to customers and their needs
	Reputation	Loss of reputation for the sector	Loss of reputation may result in lower demand	Low	Low	Low	An active role in the green shift
		Attractiveness	Access to expertise if attractiveness declines	Low	Low	Medium	Transparent reporting Communication Reduction in line with climate targets
	Responsibility	Compensation claims and lawsuits	Lawsuits as a result of damage to nature and the climate Claims for compensation after failure to achieve targets	Low	Low	Medium	Existing risk management processes Building expertise

Opportunities

		Opportunities	Description	Financial effects
Main category	Type			0–2 years	2–10 years	10+ years	Mitigating factors
		Wind power	Concrete foundations for offshore wind Onshore wind power	Low	Medium	High	Offshore wind has been established as a new investment segment for Veidekke
		Waterpower	Dam renewal	Low	Medium	Medium	Assessment of potential Veidekke has built a number of currently operating hydropower plants
Energy sources	Renewable energy	Geothermal power	Deep geothermal wells	Low	Low	Medium	Veidekke owns Båsum Boring, one of the Norway's leading well drillers Expertise and equipment for deep wells
		Solar power	Roof-mounted solar energy systems Facade-mounted solar energy systems Other locations	Low	Low	Medium	Veidekke Green Incubator is assessing possibilities related to solar energy
		Infrastructure and nature	Ability of infrastructure and nature to handle large quantities of water	Low	Low	Medium
	Climate-robust infrastructure	Flood and landslide protection	Adaptation of infrastructure with flood and landslide exposure	Low	Low	Medium	Veidekke can quickly adapt to new market segments
		Operation and maintenance	Services and expertise to prevent, operate and maintain infrastructure	Low	Low	High
Products and services	New construction	Reduction of climate footprint	Climate footprint-reducing services Low emission materials and elements	Medium	High	High	Veidekke has expertise to help clients reduce greenhouse gas emissions Veidekke Prefab and Grande have developed precast concrete with a low climate footprint Veidekke Sirkulær is developing circular concrete Development of environment-friendly asphalt
		Energy efficiency improvements	Services to help reduce energy consumption in new buildings Local energy production	Medium	High	High	Technical expertise in all three countries can help customers reduce energy consumption in new and existing buildings Expertise related to energy production; solar and geothermal heating
		Climate adaptations	Reinforcement of existing buildings against torrential rain	Low	Low	Medium	Expertise related to adapting to climate change
	Rehabilitation	Energy efficiency improvements	Measures and expertise to improve energy efficiency in existing buildings	Medium	Medium	High	Technical expertise in all three countries can help customers reduce energy consumption in new and existing buildings Expertise related to energy production; solar and geothermal heating
		Rehabilitation	Rehabilitate existing buildings, instead of building new buildings	Low	Low	Medium	Rehabilitation expertise
Resource efficiency	Reduce fossil fuels in own production	Electric vehicles	Development and investment in electric machines and vehicles	Low	Low	Medium	Fossil-free and emission-free building sites have long been a Veidekke priority Remains a focus for larger infrastructure projects
		Alternative energy carriers	Development of machines and vehicles operating on alternative energy sources New energy carriers at asphalt factories	Medium	Medium	High	Alternative energy carriers are key to reducing emissions
	Circular economy	Circular materials	Development of circular products and materials	Medium	Medium	High	Establishment of Veidekke Circular
		Recycling services	Handling of waste for new products Reuse of materials and equipment	Medium	Medium	High	Establishment of Veidekke Green Incubator Increase recycling of asphalt and invest in equipment that can receive used asphalt
		Landfill services	Handling and cleaning of construction landfill masses Handling of hazardous waste	Medium	Medium	High	Development of Veidekke's aggregates services in Norway and Sweden Acquisition of potential landfill sites

Articles of association Veidekke ASA

(Effective 11 May 2022)

Article 1 The name of the Company is Veidekke ASA. The Company is a public limited company.

The Company's purpose is construction and property development activities, and other economic activities related with the afore-mentioned. Activities may be conducted by the Company itself, by subsidiaries at home and abroad, or through participation in other companies or in cooperation with others.

Article 2 The Company's registered office is in Oslo.

Article 3 The Company's share capital is NOK 67 478 133.50 divided into 134 956 267 shares, each with a nominal value of NOK 0.50 fully paid and registered by name. The Company's shares shall be registered in the Norwegian Central Securities Depository.

Article 4 Each share carries one vote at the Annual General Meeting of the Company.

Article 5 The Company's Board of Directors shall have from eight to eleven members. A maximum of eight members and alternates shall be elected by the Annual General Meeting. A maximum of three members and alternates for those members shall be elected by and from among the Company's employees in accordance with regulations issued in pursuance of provisions in the Public Limited Companies Act (Norway) relating to employee representation on the board of directors of public limited companies. The period of office is one year. The Board of Directors elects its chairperson.

Article 6 The Company shall have a nomination committee. The committee shall have at least three members. The Annual General Meeting shall elect the nomination committee's chairperson and other members and determine the remuneration of the committee's members. The term of office is one year. The nomination committee shall submit a recommendation to the Annual General Meeting on the election of and fees to be paid to members of the nomination committee. Nominated candidates should be shareholders or representatives of shareholders. The proposal for a new nomination committee shall be such that the majority of the new nomination committee is independent of the Board of Directors and senior executives of the Company. The nomination committee may not propose the Company's chief executive officer or other senior executives as members of the nomination committee. The nomination committee shall submit a recommendation to the Annual General Meeting on the election of and fees to be paid to members of the Board of Directors. The nomination committee shall justify its recommendations.

Article 7 Two members of the Board jointly or one member of the Board and the Group CEO jointly shall have the right to sign on behalf of the Company.

Article 8 The Annual General Meeting is held every year before the end of May, at the time and place determined by the Board of Directors. The meeting is convened with at least 21 days' written notice. The agenda for the meeting shall be sent out with the notice of the meeting. The Board of Directors may decide that documents pertaining to matters to be dealt with at the Annual General Meeting that have been made available to the shareholders on the company's website will not be sent to shareholders. This also applies to documents that by law must be included in or attached to the notice of the Annual General Meeting. Shareholders may nevertheless request to be sent documents pertaining to matters to be dealt with at the Annual General Meeting. Shareholders or their authorised representatives who wish to attend and vote at the Annual General Meeting must notify the company of this within the deadline specified in the notice of the meeting. This deadline must not expire earlier than five days before the Annual General Meeting. The board can provide shareholders access to cast their vote in advance of the Annual General Meeting. Advance votes must be submitted electronically and no later than five days before the Annual General Meeting. Advance votes will be added to votes cast at the Annual General Meeting. A vote cast at the Annual General Meeting will replace the advance vote.

The Annual General Meeting shall:

• Adopt the annual accounts and annual report, including employment of profit or covering of loss, and approve the distribution of a dividend.
• Elect members of the nomination committee.
• Determine the number of Board members, elect the Board members who by law shall not be elected by the employees and any alternates for the Board members elected by the shareholders.
• Consider the Board of Directors' guidelines for remuneration of senior executives.
• Deal with other business that is by law to be addressed by the General Meeting.

Article 9 Unless otherwise provided for in these Articles of Association, the provisions in the Public Limited Companies Act (Norway) shall apply.

Veidekke's history

Veidekke was founded in 1936 as a cobblestone cutting and laying company in Østfold county. The business gradually expanded and took on road improvement projects in several municipalities and counties in eastern Norway. The real breakthrough came in 1948, when the small company was awarded the major civil engineering contract for the construction of Sola Airport in Stavanger. With time Veidekke became a central player in airport construction in Norway, and in the late 1950s it undertook its first overseas assignment: construction of an airport in Ethiopia.

Large civil engineering projects accounted for the bulk of the business in the '60s and '70s, and in the following decades the company became a sizeable road builder. Other major civil engineering projects, such as construction of power stations and large industrial facilities for the oil sector, were added as new market areas.

The 1980s were marked by structural changes in the construction industry, and several of the larger construction companies merged. Veidekke's strategy was to continue to develop as an independent company, marking the beginning of an era of acquisitions. A total of ten companies were merged into the group in the 1980s, and an additional 80 companies have since joined Veidekke.

In the 1980s Veidekke expanded into a new market: construction of residential and non-residential buildings. The company's public listing on the Oslo Stock Exchange in 1986 marked another milestone.

The acquisition of Aker Entreprenør in 1991 resulted in a doubling of the company's revenue, marking the advent of a decade of strong growth. In addition, Veidekke decided to focus on property development as a new business area.

The group was also looking for expansion opportunities in Sweden and Denmark. In 2000, Veidekke acquired Hoffmann A/S, Denmark's oldest and fourth largest contractor, and at about the same time, the group started operations in Gothenburg, Stockholm and Scania.

After the divestment of the property development business in 2020, Veidekke is a streamlined contractor. Towards 2025, Veidekke's focus will be on generating profitable growth and providing an attractive dividend to shareholders. Veidekke plans to achieve this by applying its passion for the client's project, creating value through collaboration and involvement, taking an active role in the green shift, and monitoring risk at all levels.

Veidekke is one of Scandinavia's largest contractors. In addition to undertaking all types of construction and civil engineering assignments, the group also maintains roads and produces asphalt and aggregates. Veidekke emphasises stakeholder involvement and local experience. The annual turnover is NOK 39 billion, and half of its 8 000 employees own shares in the company. Veidekke is listed on the Oslo Stock Exchange and has posted a profit every year since its inception in 1936.

veidekke.com