Veidekke

Earnings Release • May 9, 2019

Veidekke ASA: Increased profitability and improved capital utilisation to reinforce Scandinavian position by 2022

Veidekke ASA: Increased profitability and improved capital utilisation to reinforce Scandinavian position by 2022

Veidekke ASA (Oslo Stock Exchange: VEI) is conducting a capital markets update

today where concrete targets for profitability, capital efficiency and safety

will be presented. Veidekke's overarching objective is to restore a business

with strong profitability in the property development, building construction,

civil engineering and industrial operations. The implemented measures are

intended to bolster Veidekke's position in key markets, boost profitability and

enable Veidekke to continue to offer shareholders an attractive dividend in the

years ahead.

"Following a period of strong growth in most of our operations, Veidekke will

now give priority to improving results, rather than further expansion. Various

profit-enhancing measures have already been implemented. In combination with

other improvement projects, we expect these measures to impact positively on

profitability across the group. Our primary aim until 2020 is to increase

profitability, and thereafter to further lift performance in the period to

2022," says group CEO Arne Giske.

The specific financial targets presented in the capital markets update are:

·  Increase profit margin to above 4.5% by 2022

·  Annual revenue growth estimated at 3%-5% in the period to 2022

·  Halving the total investment level in 2019 to NOK 500-600 million

·  Reduce capital employed by NOK 2-3 billion compared to current level

"At the same time as improving margins, we will cut tied-up capital by reducing

fixed and current assets and accelerating the turnover rate of the property

development business. Together with improved results, this will help increase

returns and ensure that we can continue to offer shareholders an attractive

dividend in the years ahead," continues Arne Giske.

Several Veidekke units have solid results, but in recent years, profitability

has declined in parts of the operation. During the capital markets update,

Veidekke will present several business-level measures to boost results.

Following several years of strong residential sales growth and good results, the

property development operation has reported a weakening residential market, with

fewer sales and building starts, particularly in the Stockholm region.

·  In Sweden, Veidekke's short-term priority is to sell residential units

under construction while simultaneously developing selected projects for sale

and adjusting activity and cost levels on an ongoing basis.

·  Exploit the strong market in Norway by maintaining a high level of project

starts and transactions.

The building construction operation will adopt a stronger focus on major cities

and population centres:

·  Building construction Norway will change from being a generalist builder to

a product specialist in the residential, office buildings and schools segments.

·  Raise the margin level in general, and complete the special improvement

programme for residential construction projects in the Stockholm region

·  Strengthen Hoffmann's position as a leading developer and construction

company for commercial buildings in Denmark

The civil engineering operation in Norway has adopted new priorities to boost

profits and reduce risk:

·  Stricter project selection

·  Significant reduction in tied-up capital

·  Strengthened management team and staff expertise

The industrial operation aims to regain profitability by 2020, through special

measures targeting the asphalt and road maintenance operations.

·  The turnaround project concentrating on the road maintenance operation is

producing promising results

·  Improved capital utilisation and an improved pricing strategy will help

boost the profitability of the asphalt operation

"Veidekke has around 8,500 employees, half of whom are also shareholders in the

company. Together, we are custodians of a proud heritage going back to 1936.

With the measures presented today, the group's foundation for efficient

operation and increasing value creation in Scandinavia will be reinforced for

many years to come," concludes group CEO Arne Giske.

Presentation and webcast

The capital markets update and the Q1 2019 results will be presented at

Veidekke's head office at Skabos vei 4, Skøyen, Oslo, at 08:30 today. A live

webcast will be available on www.veidekke.com, and it will be possible to submit

questions online.

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

contact:

Group CEO Arne Giske, tel. +47 905 89 526

CFO Jørgen G. Michelet, tel. +47 917 43 856

Executive Vice President Communications and Public Affairs Lars Erik Lund, tel.

+47 413 31 369

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

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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 NOK 36 billion, and half of its 8,500

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.