Veidekke

Earnings Release • Mar 25, 2021

Veidekke ASA: Improved forecasts for contracting markets in 2021/2022

Veidekke ASA: Improved forecasts for contracting markets in 2021/2022

Based on the market stability seen in 2020, Veidekke expects activity levels to

remain very high in contracting markets, with growth in all three Scandinavian

countries in 2022.

"Construction markets have weathered the Covid-19 pandemic well thus far. Order

intakes, revenues and profitability remained stable throughout 2020, giving the

industry a strong foundation for future activity. Stable activity often also

means improved access to expertise and greater predictability than during

periods of substantial market fluctuation," says Jimmy Bengtsson, group CEO of

Veidekke ASA.

The forecast for the Scandinavian markets is generally flat to weakly positive

growth from an existing high activity level. In the Norwegian construction

market, Veidekke expects growth of 1% this year and 2% next year. In the Swedish

market, zero growth this year is expected to turn into 2% growth in 2022. The

Danish market is predicted to grow 3% in 2022 following an estimated 5% decline

in 2021.

Although the market as a whole is stable, there is considerable movement below

the surface, creating opportunities for construction companies.

The expectation that the Covid-19 pandemic would weaken demand for residential

units was thoroughly disproven in 2020. On the contrary, the residential market

recorded very strong growth, and prognoses for 2021 have been raised

substantially, particularly in Norway and Sweden. Forecasts indicate a strong

new-project pipeline and 5% production growth in 2022.

The civil engineering market is expected to grow by 6% this year and 3% next

year. Strong growth in the transport infrastructure sector looks set to

continue, driven by several major rail developments in both Sweden and Norway

and a strong road construction market. The outlook for the asphalt sub-market is

also positive, with anticipated growth of 9% in Norway this year following a

very weak 2020.

The biggest future challenges are likely to arise in the commercial buildings

segment, where production is expected to fall until the end of 2022. Travel

restrictions and widespread working from home in the Scandinavian countries are

reducing demand for both hotels and offices, and it is likely to take time for

these market segments to recover.

In Norway, the municipal sector also reduced its investment levels substantially

in 2020, effectively stopping the pipeline of new building starts. The municipal

sector is responsible for the development of schools and care facilities, and is

therefore a large and very important customer for the construction industry.

Veidekke's market report will be published at 08:30 on Thurday 25 March. The

presentation can be viewed via webcast on www.veidekke.com.

For more information, please contact:

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

Kristoffer.Eide.Hoen@veidekke.no

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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.