Veidekke

Earnings Release • Oct 20, 2021

Veidekke ASA: Expects stable Scandinavian contracting markets for the next two years

Veidekke ASA: Expects stable Scandinavian contracting markets for the next two years

Veidekke expects activity in the Scandinavian contracting markets to remain at

current levels until the end of 2023, with generally similar headline

developments all three countries.

"The markets are returning to normal, pre-pandemic conditions. Our forecast in

the spring that activity levels would remain high and stable has been confirmed

thus far, and we expect strong momentum in the construction and civil

engineering sector going forward," says Veidekke ASA Chief Analyst Kristoffer

Eide Hoen.

The big topic in the construction and civil engineering industry in 2021 - both

in Scandinavia and globally - has been sharp price increases driven by

restricted supplies of building materials and other input factors. Prices of

materials like rebar and lumber remain far higher than normal. In addition,

increased taxes and CO\2\ emissions quota prices are increasing the cost of

energy-intensive products like metals and cement. Various additional factors

also require clarification, including the situation of the cement producer

Cementa. However, most identified delivery challenges appear to be temporary and

are expected to be resolved, provided that society continues to reopen following

the pandemic.

Demand in the contracting markets has remained strong despite rising prices, and

Veidekke expects stable markets for the next two years. The estimated order

intake has exceeded expectations in most segments of the commercial buildings

sector. The residential segment has also reported strong demand, and indicators

of overheating are on the decline in all three countries.

Investment levels were very high in the civil engineering market at the

beginning of the year. In Sweden, previously strong growth is expected to slow

somewhat going forward, while further growth is anticipated in Norway following

a temporary slowdown in 2020.

Continued growth is expected in the transport infrastructure sector. Road

investment will slow somewhat in Sweden, while railways investment growth is

predicted to remain strong throughout the forecast period. While the recent

change of government in Norway may result in some revision of adopted plans,

transport infrastructure looks set to remain a priority.

Veidekke's market report will be presented at 08:30 on Thursday 20 October. The

presentation will be streamed as a webcast on

www.veidekke.com (https://365veidekke.sharepoint.com/sites/KO

-Konjunkturrapport/Shared%20Documents/General/Marked%20og%20analyse/01%20Markedso

ppdatering%20(Veidekke.com)/07%20Markedsoppdatering%201.%20kvartal%202021/04%20Pr

essemelding/www.veidekke.com).

For more information, please contact:

Kristoffer Eide Hoen, Chief Analyst, Veidekke ASA, +47 976 75 434,

Kristoffer.Eide.Hoen@veidekke.no

Veidekke press photos  (https://veidekke.fotoware.cloud/fotoweb/archives/5028

-Pressebilder-Veidekke/)

Subscribe to notices from Veidekke (http://veidekke.com/no/borsmeldinger/abonner

-pa-meldinger/)

Veidekke is one of Scandinavia's largest contractors. In addition to undertaking

all types of building and civil engineering assignments, the group also

maintains roads and produces asphalt and aggregates. Veidekke emphasises

stakeholder involvement and local experience. Its annual turnover is

approximately NOK 38 billion, and half of its 8,100 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.