Third quarter Q32022
9 November 2022 Jimmy Bengtsson, Group CEO | Jørgen Wiese Porsmyr, Group CFO
Questions? Email [email protected]
Occupational health and safety
Our primary priority
Number of serious injuries
12-month rolling, Veidekke employees, hired staff and sub-contractors
Sickness absence
Veidekke employees
Highlights Q3 2022
- Revenues and profits on a par with a year ago
- Majority of the group produces solid results
- Large order book with good profitability
Key financial figures
Historical figures (2019–2020) have been restated to reflect the spin-off of the property development operation.
Q3 revenues Q3 pre-tax profit
NOK billion NOK million
The group's large order book maintained Commercial buildings' share of the portfolio has increased
Road maintenance contracts
Large addition of contracts with commercial clients
...in Gothenburg, Copenhagen, Trondheim og central eastern Norway
Elgiganten Jönköping (NOK 652 mill.) Geely B46 (NOK 431 mill.)
Construction Sweden, BRA (Gothenburg)
Construction Sweden, BRA (Gothenburg)
Kvarteret, block 2 (NOK 248 mill.)
Construction Norway, Oslo
Hoffmann, Copenhagen
Fisketorvet (NOK 306 mill.) Sintef Horizon (NOK 261 mill.)
Construction Norway, Trondheim
Construction Norway, Oslo
Results Group and segments Q3
Jørgen Wiese Porsmyr, Group CFO
Revenues, profits and profit margins
Group and business areas
|
|
Q3 2022 |
|
|
Q3 2021 |
|
| Amounts in NOK million |
Revenues |
Profit before tax |
Profit margin |
Revenues |
Profit before tax |
Profit margin |
| Construction Norway |
3 097 |
123 |
4,0% |
3 005 |
117 |
3,9% |
| Infrastructure Norway |
2 815 |
301 |
10,7% |
2 777 |
325 |
11,7% |
| Construction Sweden |
1 824 |
49 |
2,7% |
1 874 |
11 |
0,6% |
| Infrastructure Sweden |
1 209 |
59 |
4,9% |
1 086 |
54 |
5,0% |
| Denmark/Hoffmann |
663 |
53 |
8,0% |
622 |
50 |
8,0% |
| Total business areas |
9 609 |
585 |
6,1% |
9 364 |
557 |
5,9% |
| Other |
-59 |
-41 |
|
-70 |
-27 |
|
| Group |
9 550 |
545 |
5,7% |
9 295 |
530 |
5,7% |
Construction Norway
Stable level of activity
• Revenue up 3% over Q3 2021
Profitability marginally improved over previous year
- Broad effort to increase and maintain profit margins
- Robust profitability in central eastern Norway and in Trøndelag
- Weak profitability in southwestern Norway
Order book increased over previous quarter
- Intake of new orders in commercial and residential segments
- Revenue expected to increase next year
Completion of the acquisition of Constructa Entreprenør AS in Bergen is expected in Q4
Revenues and profit margin
Profit before tax
Infrastructure Norway
Revenues on a par with preceding year
- Solid level of activity in civil engineering
- Asphalt tonnage dropped 18% compared to Q3 2021
Civil engineering strong; Asphalt weak
- Total profits NOK 301 (325) million
- Civil engineering; strong profitability from the large projects portfolio and Road maintenance
- Asphalt; profits weak due to tonnage drop
Order book shrank somewhat from the preceding quarter
• No major contracts signed in the quarter
Revenues and profit margin
Profit before tax Q3
51
Construction Sweden
Revenues up 4% from Q3 2021 in local currency
- Increase related to BRA in Gothenburg
- Revenues dropped in Stockholm and Malmö
Profits improved, but profitability remains low
- Robust profitability in BRA's projects in Gothenburg
- Loss in Stockholm continues the project portfolio has returned to break-even, but is unable to cover fixed costs
Order book down 18% from Q3 2021 in local currency
- Residential segment in Stockholm and Malmö has suffered strong decline
- BRA signed two major new contracts
Revenues and profit margin Profit before tax
Infrastructure Sweden
Revenues boosted 19% from Q3 2021 in local currency
- Stable profits and margin
- Profit improvement in industrial operations
Order book increased by 27% in local currency from Q3 2021
• No major contracts signed in the quarter
Sale of industrial plot to be completed in Q4 2022
• The transaction will yield a gain and liquidity effect of NOK 130 million
Order intake and order book Revenues and order intake
Order book (NOK billion) Order intake (NOK billion)
Denmark/Hoffmann
Revenue up 9% from Q3 2021 in local currency
Margin remains high
• Consistently solid project profitability
Order book increased since the preceding quarter
• 10% increase in local currency
Financial position
Balance sheet
| Amounts in NOK million |
30 September 2022 |
30 September 2021 |
| Fixed assets |
6 399 |
6 272 |
| Current assets (excluding cash, cash equivalents and financial investments) |
8 797 |
7 428 |
| Cash, cash equivalents and financial investments |
2 685 |
3 880 |
| Assets |
17 881 |
17 579 |
| Equity |
2 600 |
2 706 |
| Long-term debt |
2 484 |
3 141 |
| Short-term debt |
12 797 |
11 732 |
| Equity and debt |
17 881 |
17 579 |
|
|
|
| Equity ratio |
15% |
15% |
| Return on equity (12mos) |
36% |
31% |
| Net interest-bearing position |
2 324 |
3 195 |
Financial position
- Payment of dividends of NOK 945 million
- Normal seasonal fluctuations in asphalt and aggregates operations
- Operational cash flow remains relatively weak in the Swedish operations
- A good cash flow can normally be expected in the fourth quarter
Highlights year to date Change in net interest-bearing assets NOK million
Closing comments Q3
Jimmy Bengtsson, Group CEO
Veidekke is well positioned
Streamlined contractor
- Continuous focus on improvement
- Flexible and capital-light business model
Improvements implemented
- Selectivity in line with strategy and uncertainty management
- Project profitability improved and risk reduced
Strong financial position
- Rock-solid balance sheet and good financial capacity
- Opportunity for expansion in a challenging market situation
1
2
3
Operational flexibility in an uncertain world
Selectivity, capacity and cost structure
- Demand varies between geographies
- Able to adapt capacity to demand
Geographical spread Serves various markets Flexible cost structure
• The public and private markets have different drivers
- Project deliveries account for large share of costs
- Flexibility to adapt cost structure
Closing comments
- Majority of the group produced solid results
- Demanding situation, in an uncertain market with volatile commodity prices
- Veidekke is in a strong position, with a large order book, a flexible business model and considerable financial latitude