Veidekke

Earnings Release • May 7, 2020

Veidekke ASA: Q1 2020 results

Veidekke ASA: Q1 2020 results

Veidekke generated revenues of NOK 9.0 billion and a pre-tax loss of NOK 16

million in the first quarter. The construction operation order book stood at NOK

35.0 billion at quarter-end. The group's loss per share in the quarter totalled

NOK 0.70 (IFRS).

"Since the COVID-19 outbreak reached Scandinavia, Veidekke has focused on

limiting the spread of the virus and maintaining production. The steps we have

taken have protected staff health and jobs, ensured that customer deliveries

could be made as agreed and safeguarded the group's assets," says group CEO

Jimmy Bengtsson.

"The pandemic had a limited impact on production in construction and civil

engineering projects and residential sales in the first quarter. However, the

longer term outlook has become far less clear. While our long-term objectives

remain unchanged, our 2020 profit forecast is highly uncertain," says Bengtsson.

"The construction and civil engineering sector is at a later stage of the

economic cycle than many other industries which were hit hard earlier on. We are

working hard to find solutions for our own operations, and are also cooperating

with other stakeholders and the authorities on initiatives to keep our industry

moving forward," says Bengtsson.

Work is continuing on the establishment of a new ownership structure for the

property development operation, and the choice of ownership structure will as

stated be decided before the end of the second quarter. As announced, the

industrial and civil engineering operations in Norway will be more closely

amalgamated as part of the group's improvement project.

Veidekke achieved revenues of NOK 9.0 billion in the first quarter, compared to

NOK 8.5 billion in the same period last year. Both the construction and property

development operations improved revenues, while the industrial operation

recorded a revenue drop of 8% compared to Q1 2019.

The group's Q1 pre-tax loss of NOK 16 million compares to a loss of NOK 21

million in Q1 last year. The loss calculation includes an unrealised loss of NOK

65 million linked to changes in the value of financial items, an unrealised

foreign exchange loss linked to the industrial operation and NOK 20 million in

costs related to the process of selling the property development operation. The

construction operation achieved a profit of NOK 194 million in the quarter,

compared to NOK 148 million in Q1 2019. The property development operation

generated a profit of NOK 101 million, up from NOK 57 million last year. The

industrial operation's loss of NOK 222 million was normal for this part of the

year - the low season for asphalting activity - and was additionally impacted

negatively by an unrealised foreign exchange loss.

The first-quarter order intake of NOK 7.2 billion brought the construction order

book to NOK 35.0 billion as at quarter-end, on a par with the same time last

year. Approximately two-thirds of the order book is due to be converted into

revenue over the next 12 months.

Net interest-bearing debt amounted to NOK 2.6 billion at quarter-end. Veidekke

has sufficient financial capacity to manage a challenging market situation,

having refinanced its borrowing facilities towards the end of 2019, with

increased credit limits. First-quarter cash flow was unusually strong thanks to

very high project liquidity in Denmark and Sweden, and foreign exchange effects.

Liquidity has also benefited from the decision not to distribute a dividend for

2019 in response to uncertainty about the further impact of the COVID-19

pandemic.

The number of injuries reported in the first quarter was historically low, and

Q1 2020 represents the group's first ever quarter without any serious injuries.

The group LTI (lost time injury) rate, which measures the number of injuries per

million hours worked, was 4.0 in the first quarter, on a par with the preceding

quarter and down from 5.0 in Q1 2019. Veidekke's sick leave rate was 4.1%,

compared to 4.0% in Q4 2019 and 4.6% in Q1 2019.

For more information, please contact:

· Group CEO Jimmy Bengtsson, tel. +47 984 70 000, jimmy.bengtsson@veidekke.no

· Finance Director Jørgen G. Michelet, tel. +47 917 43 856,

jorgen.michelet@veidekke.no

· EVP Communications and Public Affairs Lars Erik Lund, tel. +47 413 31 369,

lars.lund@veidekke.no

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This information is subject to a disclosure duty pursuant to section 5-12 of the

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Veidekke is one of Scandinavia's largest construction and property development

companies. The company undertakes all types of building construction and civil

engineering contracts, develops residential projects, maintains roads, and

produces asphalt and aggregates. The company is known for its involvement and

local knowledge. Its annual turnover is approximately NOK 39 billion, and half

of its 8,600 employees own shares in the company. Veidekke is listed on the Oslo

Stock Exchange and has always posted a profit since it was founded in 1936.