Veidekke

Earnings Release • Feb 8, 2018

Veidekke ASA: Continued growth and record-high order backlog for Veidekke

Veidekke ASA: Continued growth and record-high order backlog for Veidekke

Veidekke increased its revenue by 5% in 2017 to NOK 31.6 billion, while profit

before tax for the year came to NOK 1.4 billion, on par with 2016. Earnings per

share in accordance with the segment accounts was NOK 9.4. Order intake has been

high in all three countries, resulting in a historically high order backlog.

Based on the company's performance and outlook, the Board proposes an ordinary

dividend of NOK 5.0 per share for the 2017 financial year.

"Veidekke delivered both growth and good results in 2017 and is starting the new

year with a record-high order backlog. This growth is in spite of more varying

market conditions, proving that Veidekke's size, geographical spread and

professional breadth make us more robust when facing changes in the markets and

parameters," says President and CEO Arne Giske.

The Group as a whole had a slightly higher revenue and profit in 2017 than for

the previous year. Revenue in 2017 was NOK 31.6 billion, an increase of 5% from

2016. Profit before tax for 2017 was up 6%. Earnings per share was NOK 9.4

(9.3).

Veidekke's revenue in the fourth quarter of 2017 totalled NOK 8.8 (8.7) billion,

while profit before tax was NOK 437 (429) million. Earnings per share in

accordance with the segment accounts was NOK 3.2 (3.1).

The Group's total year-end order backlog increased by 33% from 2016 to 2017, to

NOK 32.6 (24.4) billion, of which around NOK 20 billion will generate revenue in

2018. Order intake in the fourth quarter of 2017 amounted to NOK 8.5 billion, an

increase of 37%, compared with NOK 6.2 billion in Q4 2016.

Veidekke's construction operations had revenue of NOK 7.4 (6.9) billion in the

fourth quarter of 2017. Sweden and Denmark provided the revenue growth of 7%

compared with the fourth quarter of 2016. In Norway, profits declined due to low

activity and weak profitability in southern and western Norway. Profit before

tax for construction operations is 37% higher, at NOK 254 (185) million.

"Construction achieved solid results in all three countries, with a rising

profit margin and increased order backlog after measures in both the building

construction and civil engineering operations. While Sweden and Denmark have had

good developments in revenue, the picture in Norway is more differentiated, with

good profitability for building construction operations in eastern and central

Norway, but challenges in southern and western regions. The civil engineering

segment is improving, but still has weak profitability," says Giske.

Property Development had revenue of NOK 863 million in the fourth quarter of

2017. This is considerably lower than in the corresponding period in 2016 (NOK

1.3 billion), which had extraordinarily high revenue. Profit before tax from

property development operations was NOK 114 million in the fourth quarter,

compared with NOK 226 million in Q4 2016, when development gains and a special

project contribution resulted in an unusually high profit.

Including jointly owned projects, 213 residential units were sold in the fourth

quarter of 2017, compared with 417 in Q4 2016. Veidekke had 2,620 (2,422)

residential units under construction at the close of the quarter. The total

sales ratio for projects under construction in the quarter was still high, at

83%, although it is slightly lower than for the same period last year (91%).

"As expected, the residential market declined in both Norway and Sweden last

year, after three years of upswing culminating in the record year 2016. The

number of residential units under construction is still higher than one year

ago, and the sales ratio remains high. Although market uncertainty makes home

buyers more hesitant, we are seeing positive signs in the better balance between

supply and demand," says Arne Giske.

Industrial had revenue of NOK 1.3 (1.1) billion in the fourth quarter of 2017.

The profit before tax of NOK 87 (34) million includes NOK 70 million from the

sale of a commercial site near Gardermoen. The increase in revenue is primarily

attributed to asphalt operations, where a combination of lower prices and higher

costs nevertheless resulted in a weaker profit.

"Asphalt's revenue growth was cancelled out by lower prices and higher costs of

raw materials, among others, but the profit for the quarter was boosted by the

sale of Hovinmoen. This is a good example of how Veidekke creates added value

and capitalises throughout the entire value chain of capacity and competencies,

from project development to construction and industrial activities," says Arne

Giske.

In line with Veidekke's ambitious occupational health and safety goals, the

number of serious injuries was reduced by 46% and the total number of injuries

by 23% in 2017. The Group's total lost-time injury (LTI) rate, indicating the

number of injuries per million hours worked, went down to 4.2, compared with

4.6 in the previous quarter and 4.5 in the fourth quarter of 2016. Sickness

absence rose slightly, to 4.0%, compared with 3.6% in the previous quarter and

3.7% in Q4 2016.

For press photos, see www.flickr.com/photos/veidekke, for more information,

contact:

President and CEO Arne Giske, +47 905 89 526, arne.giske@veidekke.no

SVP Finance Jørgen G. Michelet, +47 917 43 856, jorgen.michelet@veidekke.no

Communications Manager Helge Dieset, +47 47 905 53 322, helge.dieset@veidekke.no

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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 approx. NOK 32 billion, and around half

of its 7,700 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.

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.