Veidekke : Report Q1 2024

Q1 2024 results

Veidekke achieved revenues of NOK 9.5 billion in the first quarter of the year, and a pre-tax profit of NOK 25 million. The group's order book totalled NOK 41.2 billion at quarter-end.

Veidekke achieved revenues of NOK 9.5 billion in Q1 2024, on par with the first quarter of 2023. The infrastructure operations improved their revenues, while the construction operations reported a slight drop in earnings.

The quarterly profit before tax amounted to NOK 25 million. In Q1 2023, the group made a loss of NOK -37 million, including an adjustment (totalling NOK -110 million) linked to a payment made in settlement

billion, compared to NOK 43.1 billion at the same time last year and NOK 40.4 billion at the beginning of the year. Some 62% of the order book will be converted into revenue in the next 12 months.

Net interest-bearing assets totalled NOK 2.2 billion at the end of Q1 2024, compared to NOK 2.5 billion one year ago and NOK 2.8 billion at the beginning of the year. Quarterly cash flow from operational activities amounted to NOK -339 million, compared

"Veidekke maintained its momentum in the first quarter. Although market conditions remain challenging and the construction and infrastructure operations are showing quite different trends, we managed to keep activity levels up and the order book strong," says Group CEO Jimmy Bengtsson.

"As usual, the first quarter was marked by a seasonal downturn for certain parts of the group. Despite achieving a year-on-year improvement in profitability, we see good opportunities to improve profitability further, and are continuing our efforts to realise this potential in all parts of the business," says Bengtsson.

"The infrastructure market remains robust, and there are grounds for optimism despite difficult market conditions in the construction industry generally and the residential segment specifically. Our strong first- quarter order intake gives us a strong foundation going forward," says Jimmy Bengtsson.

"In March, one of our asphalt factory employees suffered a serious work injury. People and their safety at work are Veidekke's top priorities. As always, the accident is being investigated, so that we can learn from the incident and avoid that similar accidents happen again," says Group CEO Jimmy Bengtsson.

of an older dispute involving Infrastructure Norway. With the exception of Infrastructure Sweden and Denmark, whose performances were on a par with Q1 2023, most of the group's operations delivered improved results. Overall, the profit margin was 0.3%, compared to -0.4% in the first quarter of 2023 (adjusted for the settlement).

The group's quarterly order intake was NOK 10.2 billion, with more than 40% of received orders relating to commercial buildings. In contrast, the order intake in Q1 2023 was NOK 10.3 billion. At quarter-end, the order book amounted to NOK 41.2

to NOK 320 million in the first quarter of last year. The statement of financial position totalled NOK 18.0 billion at quarter-end, compared to NOK 18.2 billion at the start of the year and NOK 17.6 billion in the corresponding quarter of last year.

The first-quarter LTI (lost time injury) rate was 4.6, compared to 6.6 in the preceding quarter and 3.9 in Q1 2023. One serious injury occurred during the quarter. The sick leave rate was 6.4%, compared to 6.0% in the preceding quarter and 6.2% in the first quarter of last year.

4 Veidekke - First quarter 2024

KEY FIGURES QUARTERLY REVIEW FINANCIAL STATEMENTS AND NOTES

Construction Norway

Construction Norway generated revenues of NOK 3.8 billion in the first quarter of 2024, compared to NOK 4.0 billion in Q1 2023. Revenue was up in major cities, but other operations saw a drop in earnings.

The Q1 profit before tax totalled NOK 150 million, compared to NOK 136 million in the first quarter of last year. The quarterly profit margin was 4.0%, up from 3.4% in Q1 2023. The profit and profit margin improvement is primarily attributable to generally strong project profitability and high capacity utilisation.

The first-quarter order intake was NOK 3.3 billion, compared to NOK 2.4 billion in Q1 2023.

New contracts signed in the quarter:

• Smedasundet 77, office building in Haugesund for Smedasunder Sytti7 AS. Contract value NOK 300 million.
• Kanaltunet, residential project in Stavanger for Lervig Brygge AS. Contract value NOK 276 million.
• Skårerbyen - Mathildetunet, residential project in Lørenskog for Selvaag. Contract value NOK 259 million.
• Alvim treatment plant, expansion and upgrade of treatment plant for Sarpsborg municipality. Contract value NOK 253 million.
• Fenderen, commercial building in Bergen for Solheimsgaten­ AS. Contract value NOK 241 million.

At quarter-end, the order book totalled NOK 14.2 billion, compared to NOK 14.9 billion at the same time last year. Of this total, NOK 10.5 billion will be executed in the next 12 months, compared to NOK 12.6 billion as at the end of Q1 2023.

Infrastructure Norway

1 The profit before tax in 2023 includes the settlement with a profit effect in Q2 of NOK -110 million linked to an older dispute involving the civil engineering operation

2023 (adjusted for the settlement). Overall, the profit margin of the civil engineering operation was 2.7%, compared to 3.6% in the first quarter of 2023 (adjusted for the settlement). The portfolio of major civil engineering projects and the road maintenance operation were robustly profitable, while specialist engineering operations recorded weaker profitability.

The asphalt and aggregates operations achieved total revenues of NOK 154 million in the first quarter, compared to NOK 117 million last year. The quarterly loss was NOK -212 million, compared to NOK -245 million in Q1 2023. The first quarter of the year was characterised by the operation's usual seasonal downturn, and the quarterly result primarily reflects winter costs.

Demand for asphalt from central government and

to just over 700 000 tonnes. The volumes linked to national and local roads normally account for one- third of Veidekke's total asphalt volume.

Infrastructure Norway secured new orders valued at NOK 1.3 billion in Q1, compared to NOK 3.0 billion in the same period last year.

New contracts signed in the quarter:

• Åmli, maintenance of local roads for Agder County Municipality. Contract value NOK 235 million.
• Fel-22Kl, renewal of railway network between Etterstad and Lillestrøm for Bane Nor. Contract value NOK 231 million.

At quarter-end, the order book totalled NOK 8.6 billion, compared to NOK 9.8 billion last year. Final decisions on the tenders for several large civil

Infrastructure Norway achieved revenues of NOK 1.8 billion in the first quarter, up from NOK 1.4 billion

in the same quarter of last year. The majority of the revenue increase is attributable to the civil engineering operation. The pre-tax loss totalled NOK -169 million, compared to NOK -193 million in Q1 2023 (including an adjustment totalling NOK -110 million linked to settlement of an older dispute involving Infrastructure Norway). The total profit

margin was -9.6%, compared to -12.7% in Q1 2023 (adjusted for the settlement).

The civil engineering operation generated revenues of NOK 1.6 billion in Q1, up from NOK 1.3 billion

in the corresponding quarter of last year. High production in several projects contributed to the revenue increase. The profit before tax totalled NOK 43 million, compared to NOK 51 million in Q1

counties was down approximately 14% on 2023 (and down 33% on 2022) in this year's tendering round for the asphalting of national and local roads. Approximately 70% of anticipated central government and county volumes had been allocated by quarter-end, and Veidekke has thus far secured approximately 400 000 tonnes, equating to 40% market share in the segment. In contrast, in 2023 Veidekke had a market share of 49%, corresponding

engineering projects are expected in Q2 and Q3 2024. Road maintenance contracts amounted to NOK 4.2 billion, compared to NOK 4.9 billion in the corresponding quarter of 2023. Orders due to be executed in the next 12 months amounted to NOK 4.3 billion, compared to NOK 4.1 billion in the same period last year.

6 Veidekke - First quarter 2024

KEY FIGURES QUARTERLY REVIEW FINANCIAL STATEMENTS AND NOTES

Construction Sweden

Construction Sweden recorded revenues of NOK 2.1 billion in the first quarter, compared to NOK 2.2 billion in the same quarter of last year. Measured in local currency, revenue fell by 9%. The first-quarter profit was NOK 47 million, up from NOK 10 million in Q1 of last year, when the Stockholm operation delivered a weak result. The first-quarter profit margin was 2.2%, up from 0.5% in Q1 2023. While the Gothenburg-based subsidiary BRA delivered strong profitability, the profitability of other operations within Construction Sweden was weak.

The first-quarter order intake totalled NOK 2.3 billion, compared to NOK 2.6 billion last year.

New contracts signed in the quarter:

• GoCo Lab/Active, construction of commercial building i Gothenburg for Gothenburg CoValley AB. Contract value NOK 467 million.
• SÖS By 17 & 18, refurbishment of hospital building

in Stockholm for Locum AB. Contract value NOK 305 MNOK.

• Posthornet, construction of commercial building in Lund for Bastionen Malmö AB. Contract value NOK 213 million.
• Orminge Porsche for Tranviks Udde AB. Contract value NOK 162 million.
• Gibraltar for BRAX Projektutveckling AB. Contract value NOK 142 million.

At the end of the first quarter, the order book stood at NOK 6.8 billion, compared to NOK 9.1 billion in the same quarter last year. Measured in local currency, the order book shrank by 23%. The decline is primarily attributable to the residential portfolio. Orders due to be executed in the next 12 months amounted to NOK 4.8 billion as at 31 March 2024, compared to NOK 6.3 billion on the same date in 2023.

7 Veidekke - First quarter 2024

KEY FIGURES QUARTERLY REVIEW FINANCIAL STATEMENTS AND NOTES

Infrastructure Sweden

Infrastructure Sweden generated revenues of NOK 1.2 billion in the first quarter of 2024, on a par with the same period last year.

The quarterly result, which was impacted by the seasonal downturn in the industrial operation, was a loss of NOK -13 million, compared to NOK -8 million last year. The profitability of the project portfolio has increased since last year. The quarterly profit margin was -1.1%, compared to -0.7% one year ago.

The first-quarter order intake was on a par with Q1 2023, and totalled NOK 2.0 billion. The majority of

the quarterly order intake comprised increases in the scope of existing contracts.

New contracts signed in the quarter:

• E20 Hindsberg-Muggebo, alteration works for the Swedish Transport Administration. Contract value NOK 564 million.

At the end of the first quarter, the order book stood at NOK 7.8 billion, up from NOK 6.4 billion last year. Orders due to be executed in the next 12 months amounted to NOK 3.3 billion.

8 Veidekke - First quarter 2024

KEY FIGURES QUARTERLY REVIEW FINANCIAL STATEMENTS AND NOTES

Denmark

The Danish operation Hoffmann achieved revenues of NOK 756 million in the first quarter, compared to NOK 796 million in the corresponding quarter of last year. Measured in local currency, this corresponds to an 8% year-on-year decrease. Activity during the quarter was higher than anticipated due to high activity levels and the execution of several smaller contracts.

The profit before tax was NOK 53 million, compared to NOK 55 million in Q1 2023. The profitability of the project portfolio is very strong, and the profit margin was 7.0%, the same as in the first quarter of 2023.

The first-quarter order intake totalled NOK 1.3 billion, up from NOK 333 million in Q1 2023.

New contracts signed in the quarter:

• Helmerhus, refurbishment of and alteration works on historical building in central Copenhagen
  for Square Copenhagen ApS. Contract value NOK 894 million.
• KLP - refurbishment of rental premises for KLP Ørestad 3A A/S. Contract value NOK 105 million.

The order book stood at NOK 3.8 billion at the end of the first quarter, up from NOK 2.8 billion last year. Measured in local currency, the order book grew by 32%. Orders due to be executed in the next 12 months amounted to NOK 2.5 billion, up 14.8% from NOK 2.2 billion as at 31 March 2023.

Other operations

Other operations consist of unallocated costs associated with the group's corporate administration, the sale of administrative services to the group's Norwegian operations, financial management and the group's ownership role in Public-Private Partnerships (PPP), and the elimination of intra-group profits. The result for the first quarter was NOK -43 million, compared to NOK -38 million in Q1 2023. The increased loss is attributable to lower returns on financial investments.

Financial situation

Net interest-bearing assets amounted to NOK 2.2 billion at quarter- end, compared to NOK 2.5 billion last year and NOK 2.8 billion at the beginning of the year. A large proportion of the decline since the beginning of the year relates to increased trade receivables, which are expected to be paid in Q2. Operational cash flow totalled NOK -339 million in Q1, down from NOK 320 million in Q1 2023. Cash flow from investment activities amounted to NOK -189 million, compared to NOK -786 million in the first quarter of last year.

The statement of financial position totalled NOK 18.0 billion at quarter- end, compared to NOK 18.2 billion at the beginning of the year and NOK 17.6 billion at the same time last year. As at the end of Q1 2024, Veidekke had not drawn on any of its available credit totalling NOK 2.5 billion.

Shareholder information

A total of 12.8 million Veidekke shares were traded in the first quarter of 2024. The share price ranged from NOK 95 to NOK 118, and was NOK 118 as at 31 March. The foreign shareholding was 20.9%. Approximately 12% of the shares in the company are owned by Veidekke employees.

Related-party transactions

Veidekke is regularly involved in transactions with related parties in the course of its ordinary operations, including contracts for the development of specific projects. There were no other significant related-party transactions in the first quarter of 2024. For a more

detailed description of related-party transactions, see Veidekke's Annual and Sustainability Report 2023.

Risks

Veidekke's business primarily involves the execution of construction and infrastructure projects for private and public-sector clients in Norway, Sweden and Denmark. The past two years have been characterised

by rising energy and commodity prices, higher interest-rate levels and high inflation. Although inflation slowed in 2023, commodity prices remain high. These developments are impacting financial capacity and investment decisions in both the private and public sectors, and are resulting in deferment or redesign of planned projects and weak sales of new residential units. Although Veidekke's order book was strong at the end of Q1 2024, the market outlook remains uncertain, and the company expects conditions in the construction market to remain challenging going forward. The company is engaged in an ongoing dialogue with clients and suppliers, and has an organisational and cost structure that allows rapid adaptation to altered framework conditions. The order book's development in recent months indicates that the market is functioning, but there are large variations between different geographical regions and market segments. Veidekke presents its outlook for the Scandinavian contracting markets twice a year. The market update is published on the Veidekke website.

Veidekke's project portfolio varies greatly in terms of complexity, size, duration and risk, and systematic risk management in all parts of the business and during all project phases is therefore of crucial importance.

This encompasses matters such as project selection, processes, tender quality, project follow-up and project execution. Having the necessary expertise to ensure optimal assignment execution is key when deciding which projects to tender for. At the tender-preparation stage, risks are identified and assessed, and plans are made for managing risk during the execution phase. Veidekke's projects are increasing in size and complexity, making risk management a high priority. Certain forms of contract permit differing interpretations of contractual performance, giving room for disagreement between contractor and client regarding final payment. Although Veidekke seeks to reach agreement with clients through negotiations, some disputes do end up in the court system. There were no major ongoing court cases as at the end of Q1 2024.

For further discussion of the company's financial risk, climate risk and other risk factors, see Note 29 and Note 30 in Veidekke's Annual and Sustainability Report 2023.

Oslo, 8 May 2024

The board of directors of Veidekke ASA