Registration Document Veidekke ASAveidekke.com/incoming/article86202.ece/...Final.pdf · Project...

Prospectus

Veidekke ASA

Registration Document

Oslo, 16 August 2013

Joint Lead Managers:

Veidekke ASA, Prospectus of 16 August 2013 Registration Document

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Important information The Registration Document is based on sources such as annual reports and publicly available information and forward looking information based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for the Company's (including subsidiaries and affiliates) lines of business. A prospective investor should consider carefully the factors set forth in chapter 1 Risk factors, and elsewhere in the Prospectus, and should consult his or her own expert advisers as to the suitability of an investment in the bonds. This Registration Document is subject to the general business terms of the Joint Lead Managers, available at their websites. The Joint Lead managers and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this Registration Document, and may perform or seek to perform financial advisory or banking services related to such instruments. The Joint Lead Managers’ corporate finance department may act as manager or co-manager for this Company in private and/or public placement and/or resale not publicly available or commonly known. Copies of this presentation are not being mailed or otherwise distributed or sent in or into or made available in the United States. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States. Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The distribution of the Registration Document may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. Verification and approval of the Registration Document by the Norwegian FSA (“Finanstilsynet”) implies that the Registration Document may be used in any EEA country. No other measures have been taken to obtain authorisation to distribute the Registration Document in any jurisdiction where such action is required. The Norwegian FSA has controlled and approved the Registration Document pursuant to the Norwegian Securities Trading Act § 7-7. The Norwegian FSA has not controlled and approved the accuracy or completeness of the information given in the Registration Document. Financial supervision and approval relating solely to the Company has included descriptions according to a pre-defined list of content requirements. The Norwegian FSA has not undertaken any kind of control or approval of corporate matters described in or otherwise covered by the Registration Document. The Registration Document together with a Securities Note constitutes the Prospectus.


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TABLE OF CONTENTS: 1 Risk factors ........................................................................................................................ 4 2 Definitions .......................................................................................................................... 6 3 Persons responsible ............................................................................................................. 7 4 Statutory Auditors ............................................................................................................... 8 5 Information about the Issuer ................................................................................................. 9 6 Business overview ............................................................................................................. 10 7 Organizational structure ..................................................................................................... 23 8 Trend information .............................................................................................................. 25 9 Administrative, management and supervisory bodies .............................................................. 26 10 Major shareholders .......................................................................................................... 31 11 Financial information concerning the Issuer's assets and liabilities, financial position and profits and losses ................................................................................................................................. 32 12 Third party information and statement by experts and declarations of any interest .................... 34 13 Documents on display ...................................................................................................... 35 Cross Reference List ............................................................................................................. 36 Joint Lead Managers’ disclaimer ............................................................................................. 37 Articles of Association, Veidekke ASA ...................................................................................... 38


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1 Risk factors Investing in bonds issued by Veidekke ASA involves inherent risks. As the Company is the parent company of the Group and a holding company, the risk factors for Veidekke ASA and the Group are deemed to be equivalent for the purpose of this Registration Document. Prospective investors should consider, among other things, the risk factors set out in the Prospectus before making an investment decision. If any of the following risks actually occur, the Company’s business, financial position and operating results could be materially and adversely affected. The factors described below are risks of which the Company is aware and represent the principal risks inherent in investing in bonds issued by the Company. Occurrence of the risk factors described below may cause inability of Veidekke ASA to pay interest, principal or other amounts on or in connection with the bonds. Financial Risk Veidekke is primarily exposed to risks related to financial instruments such as accounts receivable, liquidity and interest-bearing liabilities. The risk is related to credit, market and liquidity matters. Credit Risk Credit risk is the risk of financial loss due to the inability of a customer or the counterparty of a financial instrument to fulfil their contractual obligations. The Group’s credit risk is mainly attached to the settlement of receivables, the largest risk of which is inherent in the Group’s accounts receivable. The credit risk attached to accounts receivable is related to the customer’s ability to pay, and not the customer’s willingness to pay (project risk). Further details regarding project risk are provided in a separate section. The Group has a substantial share of public-sector customers (35%), for whom the credit risk is considered very low. For private customers (65%), we seek to handle the credit risk within the Group’s various divisions through methods adapted to the individual nature of the different business areas. The Group’s largest single customer is the norwegian public Roads Administration (15%). For construction projects, importance is attached to thorough assessments in the tendering phase, settlement of work according to progress, contractual guarantees and active follow-up of outstanding claims. On signing contracts, the credit risk depends on the specific design of agreements with the client. The Group has no significant credit risk relating to any one party or to any parties that may be regarded as a group based on similarities in credit risk. The Group has not acted as guarantor for any third party’s debts with the exception of that discussed in note 27 in the Financial report 2012. Project risk There is always a risk that a customer be unwilling to settle its debts. This risk is regarded as an operating risk and not a financial risk, and is handled as part of the ordinary project valuation. For further details relating to the accounting, see note 19 Accounts receivable in the Financial Report 2012. Interest rate risk During the course of 2012, the Group's net interest-bearing debt has increased as a result of increased investments in property operations and the general increase in activity. The various business areas are exposed to interest rate risk, and in some partly-owned companies, interest derivatives are used to hedge against considerable long-term interest risk. Determination of fair value The fair value of the Group’s interest rate swaps is estimated using the forward rate on the balance sheet date, and is confirmed by the financial institution with which the agreement is signed. The current interest rate level is expected to have a significant effect on the demand for the Group’s products, particularly among private customers. Therefore, an indirect interest rate risk is inherent in the general market risk. Rising interest rates normally result in lower activity for the Group’s building and construction operations, and also reduce sales of residential units for the property development division. Liquidity risk Liquidity monitoring is an important prerequisite to profitability in Veidekke and the company's ability to invest and take risks in capital-intensive activities. Management, measurement and control of liquidity is carried out from the project level and up through all the levels of the organisation. At the project level, this means that all construction projects are measured continuously in relation to liquidity balance. In all strategy and planning processes, liquidity is included as an important management and performance parameter. At the end of 2012, unused committed borrowing facilities amounted to NOK 1,099 (NOKK 1,455 million in 2011). The borrowing facilities are based on a negative mortgage declaration and are conditional on Veidekke’s financial key


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figures (covenants), as well as sales of significant assets without consent and own-account risk in residential and non-residential projects. Veidekke meets all the conditions laid down in the loan agreement with a clear margin and has satisfactory freedom of action. Market risk Market risk is the risk that changes in market prices, e.g. currency exchange rates, interest rates and share prices, will influence the revenues or values of financial instruments. The purpose of market risk management is to ensure that the risk exposure is well within the defined limits while, at the same time, risk-adjusted yield is optimised. Currency risk Fluctuations in currency rates have little direct influence on Veidekke, as its operations are largely national in character and the project cash flows are normally in the same currency. Any substantial currency risks that arise are hedged through forward exchange contracts or similar arrangements. Equity in foreign subsidiaries is not hedged, and changes will affect consolidated equity. Net currency losses in 2012 were entered at NOK 0.9 million (NOK 0.6 million in 2011). At 31 December 2012, the Group had sold EUR 2.6 million on forward contracts to lock the expected future net cash flow of ongoing work on asphalt core dams abroad. Market price risk – shares The Group is exposed to price risk related to equity instruments through investments classified as available for sale. This applies primarily to shares. this type of investment is normally not a part of the Group’s investment strategy. Veidekke prioritises investments in companies and projects which allow the Group considerable influence on future operations and development. The Group has few financial investments that are classified as shares held for sale. The book value of this type of investment at 31 December 2012 was NOK 7.4 million. For information about the Company’s risk management, see note 29 Financial risk in the Financial report 2012.


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2 Definitions Articles of Association The articles of association of the Company, as amended and currently in

effect Board of Directors the board of directors of the Company Business Areas Report 2012: Veidekke ASA’ business areas report 2012 Companies Registry the Norwegian Registry of Business Enterprises (Foretaksregisteret) Company/Issuer/ Veidekke ASA Veidekke ASA, a Norwegian public limited company Consolidated Financial Statements The consolidated financial statements and notes included in the Company’s

annual report to shareholders. EBA Entreprenørforeningen – Bygg og Anlegg Management the management board of the Company Group the Company and its subsidiaries from time to time IFRS International Financial Reporting Standards ISIN International Securities Identification Number Financial Report of 2012 Veidekke ASA' financial report of 2012 Finaciall Report of 2011 Veidekke ASA' financial report of 2012 NOK Norwegian kroner Registration Document this document dated 16 August 2013 Securities Note document to be prepared for each new issue of bonds under the Prospectus VPS or VPS System The Norwegian Central Securities Depository, Verdipapirsentralen


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3 Persons responsible

3.1 Persons responsible for the information Persons responsible for the information given in the Registration Document are as follows: Veidekke ASA, P.O. Box 505 Skøyen, N-0214 Oslo, Norway

3.2 Declaration by persons responsible Responsibility statement: Veidekke ASA confirms that, taken all reasonable care to ensure that such is the case, the information contained in the Registration Document is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import.

Oslo, 16 August 2013

Veidekke ASA


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4 Statutory Auditors

4.1 Names and addresses The Company’s auditor for 2012 and 2011 has been Ernst & Young AS, independent State Authorised Public Accountants, Dronning Eufemias gate 6, N-0191 Oslo. State Authorised Public Accountant Erik Mamelund has been liable for the Auditor's report for 2012 and State Authorised Public Accountant Torstein Hokholt has been liable for the Auditor's report 2011. Ernst & Young AS / Eirik Mamelund / Torstein Hokholt are members of The Norwegian Institute of Public Accountants.


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5 Information about the Issuer

5.1 History and development of the Issuer

5.1.1 Legal and commercial name The legal name of the Issuer is Veidekke ASA, the commercial name is Veidekke.

5.1.2 Place of registration and registration number The Company is registered in the Norwegian Companies Registry with registration number 917 103 801.

5.1.3 Date of incorporation Veidekke ASA was incorporated on 6 February 1936.

5.1.4 Domicile and legal form The Company is a public limited liability company organized under the laws of Norway, including the Public Limited Companies Act. See also section 7.1 Description of Group that Issuer is part of. The Company's registered address is Skabos vei 4, 0278 Oslo, Norway. Postal address is P O Box 505 Skøyen, 0214 Oslo, Norway The Company’s telephone number is +47 21 05 50 00.


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6 Business overview Veidekke, headquartered in Oslo, with more than 6,300 employees and a 2012 turnover of 20.5 BNOK, is a large Scandinavian building contractor and property developer. Veidekke was established in 1936 and quoted on the Oslo Stock Exchange's main list in 1986. Veidekke’s three core activities include: • Construction: Building and construction operations in Norway, Sweden and Denmark • Property development: Development and sale of dwellings for its own account in Norway and Sweden • Industry: Operations in asphalt, road maintenance, and gravel and crushed stone in Norway and Sweden

6.1 Market overview Overall, the Scandinavian building and construction market has developed in line with expectations in 2012, with growth in all market segments in Norway, declining growth in the Swedish market, and a continued weak building and construction market in Denmark. The crisis in the euro zone persisted in 2012, but much of the political uncertainty in Europe seemed to have settled down in the autumn, and there was cautious optimism at the start of 2013. Most industrial nations reported zero economic growth at the end of 2012. The Norwegian economy has seen an upturn in 2012 with GDP growth of around 3.5 per cent as a result of high levels of investment in the oil industry and housing. Despite strong income growth in 2012, private consumption remained unchanged. Investments in building and construction in Norway were somewhat higher than expected, approx. 7 per cent, whereas our forecast was 4 per cent. Activity was good in all segments, particularly in the housing market where demand was very strong. There were some 30,000 housing starts, which is well above our estimate of 28,000 homes, and high activity in non-residential building too. The heavy construction market is seeing more large transport infrastructure projects with tough competition from foreign players and intense price pressure. For a long time, the Swedish economy was virtually untouched by the depression, but in autumn 2012 the Swedish economy took a rapid downturn, with declining industrial production and rising unemployment. GDP growth in 2012 was 1 per cent due to lower exports and investments. However, government finances are still very good, as is the financial situation of households, and this will most likely result in new growth at the end of 2013. Overall, however, the growth in the Swedish economy is expected to be weak in 2013. As a result of the economic downturn in Sweden, developments in the building and construction market were weaker than expected. There has been a negative development in housing investments in particular, with a decline of 8–9 per cent during the year. The housing market was slower than expected in 2012, and although prices of existing homes rose in the major cities, there was a sharp fall in the number of housing sales. Growth was also lower than expected in the non-residential segment, while growth in heavy construction was as expected at around 4 per cent. In Sweden too, there is fierce competition for heavy construction contracts and high price pressure. The Danish economy remained weak in 2012, with a fall in exports and rising unemployment. There were no significant changes in the building and construction market in 2012, with declining housing investments and a continued weak market for private non-residential buildings. Developments in public non-residential buildings and heavy construction helped buoy up activity somewhat. Outlook Economic growth in the euro zone will remain weak in 2013. After five consecutive quarters with declining activity, Europe entered 2013 with little impetus. Monetary policy will continue to focus on stimulating the economy, but there is uncertainty linked to the persistently restrictive fiscal policies. New growth is thus not expected until autumn 2013 at the earliest. The building and construction market in Norway will be strong in 2013 too, with good levels of activity in all segments. House prices are expected to rise by around 5 per cent. Housing starts will probably not be on the same level as in 2012. We expect housing starts to dip to under 30,000 this year, but this is still a historically high level. The building and construction market in Sweden is expected to continue to develop negatively in the first half of 2013, but with prospects for improvement in the autumn. Signs of improvements in the global economy coupled with continued strong public finances and household economies may lead to growing optimism towards the end of the year. Heavy construction activity will remain at a high level.


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The outlook for the Danish economy is still poor but with signs of improvement. The coming year looks set to be another year with low activity in the building and construction market. Improvements in the global economy will lead to a dawning recovery in the residential and non-residential building segment at the end of the year.

6.2 Business areas Veidekke’s core activities are linked with construction, property development and industrial operations (asphalt/aggregates and road maintenance).

6.2.1 Construction operations Veidekke has a comprehensive Scandinavian construction business and carries out all types of building and construction work. In Norway operations are organized in the company Veidekke Entreprenør AS. Hoffmann A/S carries out Veidekke's construction operations in Denmark, while Veidekke's Swedish construction operations are organized in the company Veidekke Entreprenad AB. Contracts include new homes, commercial property, schools and other public buildings, renovation and construction projects, including road, railway and industry. Construction operations achieved good margins and had a solid order backlog at the beginning of 2012. The Company´s ambition is to develop the business further, becoming one of the best contractors in Scandinavia with the most satisfied customers, the most competent and motivated employees and the highest profitability.

6.2.1.1 Construction operations in Norway Construction activities in Norway are organised under Veidekke Entreprenør AS and its subsidiaries. Veidekke Entreprenør conduct all types of building and construction work for their customers. On the building side, projects primarily encompass non-residential buildings, dwellings, schools and other public buildings. On the construction side, works include roads, railways, hydropower plants and wind farms, and industrial projects. Approx. 70% of activities are building-related and 30% civil engineering. Road services are mostly undertaken by Veidekke Industri, but some infrastructure contracts in northern Norway are undertaken as joint projects between Veidekke Industri and Veidekke Entreprenør. High turnover, slightly better profit margins Total turnover for the year was NOK 11,480 million (NOK 9,499 million in 2011), and ordinary profit before tax and the effect of the transition to a new pension scheme was NOK 262.1 million (NOK 190.2 million in 2011). Including the effects of the change of pension scheme, the profit for 2012 was NOK 356.7 million. The ordinary profit represents a profit margin of 2.3%, a moderate increase from 2011, when the profit margin was 2.0%.


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At the end of 2012, the Group had a total order backlog of NOK 11.2 billion, compared to NOK 10.3 billion in 2011. The order backlog is also considered to be of higher quality than one year ago.

Market with high level of activity After reaching a low in 2009, the market started to pick up again in 2010 in most segments within building and construction. In both 2011 and 2012, the overall activity level was high, but with major regional differences. The construction market continues to be dominated by public transport infrastructure projects, while private industry project activity remains at a very low level Operations in 2012 Nationwide and local operations in building and construction during the financial crisis and subsequent recession, Veidekke Entreprenør adopted and adhered to a strategy aimed at dealing with the crisis and creating profits short term, while enabling the company to emerge stronger in the longer term. Although there is now greater variation in the results, overall this strategy has been a success and the company is now in a strong position in most of their local markets. In 2012, 80% of the turnover was generated from new building projects, while the remaining 20% related to existing building or construction projects (additions, extensions or conversions). Veidekke Entreprenør is organised into four regions: Øst (east), Syd (south), Nord/Vest (north/west), and Road Services, where the regions Øst, Syd and Nord/Vest work primarily on the building side. Construction operations are largely local business, and the four regions consisted of a total of 23 districts at the end of 2012. These constitute the business units in Veidekke Entreprenør, with full responsibility for marketing, customers, projects, resources and financial results. The key to successful project execution is having the available capacity and expertise and the ability to combine knowledge of the local market and understanding of the individual customer's needs with the economies of scale that come with being a major corporation. Veidekke is able to achieve this by undertaking a number of projects as internal partnerships between the various districts. Veidekke Entreprenør operates mainly in Norway but in some cases also participates in civil engineering projects in Sweden, in partnership with Veidekke Entreprenad AB. Construction of housing for Veidekke’s own account is done in close cooperation with Veidekke Eiendom (Property), which handles land acquisition and property sales, etc., while Veidekke Entreprenør is responsible for planning and production. Contiunued high activity In 2013, Veidekke expects the market trends they saw in 2012 to continue. The heavy construction market will continue to be dominated by transport infrastructure projects. There is broad political consensus on increased investment in transport infrastructure, and they will probably have a large and growing volume of projects to be realised in years to come. Another discernible trend is that individual contracts are getting larger and more complex. Combined with the low level of activity in large parts of Europe, this will lead to a number of European construction companies turning their sights on the Norwegian market. More complex contracts will mean that capacity and expertise in foundation work, earthworks and tunnelling as well as concrete work will be decisive to be able to service the market properly. The level of activity in the private construction market as a whole is expected to remain low, although there are signs of some increase in activity in the energy sector. Together, this will make the construction market more demanding. Demographics, interest rates and household incomes are important factors in the development of the housing market. To date, the trend towards more energy-efficient new homes has largely been driven by increasing public authority requirements and to a lesser degree by the requirements and expectations of home buyers. Activity levels have increased significantly over the last couple of years, and Veidekke expects the current level to be


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maintained in 2013. Nevertheless, they must be prepared for a correction in the housing market at some point. The non-residential building market has developed positively over the past few years, and we expect this trend to continue in 2013. Veidekke is seeing a trend shift when it comes to the environmental and energy properties that owners and tenants expect. This is bolstered by new and stricter public authority requirements. They are also seeing signs that this may cause a shift in the competition between new and existing buildings in that providers of new buildings can more easily meet tenants' expectations of effective layout, good environmental solutions and low energy consumption. Veidekke is following the market developments closely and makes independent assessments. They have make these assessments available to their customers and partners through a periodic economic activity report for the Scandinavian countries. The high activity level in Norway means that Veidekke must expect major and increasing competition in attracting talented, new employees. There will be heightened competition both between industries and internally within the individual industries. Together our low turnover of personnel, focus on their production and conscious building of a strong corporate culture make Veidekke Entreprenør well equipped to meet this competition.

6.2.1.2 Construction operations in Sweden Veidekke Entreprenad’s operations are comprised primarily of building and construction activities and are concentrated in the major urban areas around Stockholm, Gothenburg and Malmö. Anläggning was established as a business area in 2012 and consists of the regions Anlägging Öst (construction east), Anläggning SydVäst (construction south-west), Tunnel & Bergrum (tunnels and rock caverns) and Industri (industry). The building operations segment consists of regions Bygg Stockholm (building Stockholm), Bygg Syd (building south), and Bygg Väst (building west). In April 2012 Veidekke acquired the company Brinkab. Brinkab has 140 employees and operates construction activities geared towards heavy industry in Norrland and is part of the region Tillväxt / Förvärv (growth and acquisitions). Profit increased sharply in 2012 to NOK 87.7 million. This is a 60 per cent increase compared with the previous year (NOK 54.8 million). Since turnover only rose by 5 per cent to NOK 3,556 million (NOK 3,384 million), profit margin increased to 2.5 per cent from 1.6 per cent in 2011. With the exception of Bygg Stockholm, the profit margins were improved in all the regions.

Major contracts won during the year include the Dovrebanen railway project in Norway, with a value of SEK 550 million, the road contract Väg 40 outside Borås (SEK 536 million) and the Nöten Quarter, a remodelling project for Fabege in Stockholm (SEK 500 million). Both Dovrebanen and Väg 40 are collaboration projects. The Dovrebanen railway project is being performed with Veidekke Entreprenør AS and Hochtief, while the Väg 40 road project is a joint undertaking between Anläggning SydVäst and Tunnel & Bergrum. Veidekke Entreprenad had a total order backlog of NOK 2,733 million at the end of 2012, compared with NOK 2,545 million at the beginning of the year. In 2013 there will continue to be a lot of activity on the infrastructure market, especially in Stockholm. In Gothenburg, inflow of infrastructure projects is expected to decrease in 2013 before the market picks up again in 2014. The housing market is affected by fluctuations in the economy, and start-up of housing projects takes a very long time. It


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is difficult to predict how the construction of housing cooperative flats ("bostadsrätter") will develop. A decline in the market will probably be only partially offset by the construction of flats for rent (hyresrätter). The market for commercial buildings is also affected by the financial unrest, but there are projects under way, mostly in Stockholm, but also in Gothenburg and Skåne. Construction projects for the government are helping to compensate for the drop in commercial buildings to a certain extent. The market There was generally good access to infrastructure projects in 2012, but the market was also marked by tougher competition and thus price pressure. Region Väst won several major road projects during the second half of 2012. Competition is harsher in Stockholm, where they have carried out some major construction projects over the past year. There are a number of foreign players in the market, especially for large projects with lots of concrete and underground operations. There was little inflow of projects in the underground market in 2012, and prices have been pressed. However, they have entered a new segment: the mining market, and have been awarded a contract for LKAB in Kiruna. There may be many interesting opportunities in this market in the future. The recent financial unrest has impacted the market for commercial buildings, and it now takes longer for an idea to be implemented as a project. The market is best in Stockholm, but there are also projects under way in Gothenburg and Skåne. One breakthrough in terms of size and complexity is the remodelling of the Perukmakaren Quarter in Gothenburg City for Vasakronan. With a contract value of SEK 125 million, this is a type of project we have previously only had in Stockholm. Bygg Syd has also taken a major step forwards through the Masthusen project, worth SEK 112 million. The client for the project, which is in the centre of Malmo, is Diligentia. There are also a number of new public school and hospital projects in all of our geographical markets. Operations in 2012 Bygg Syd Bygg Syd posted a profit of SEK 1 million, an improvement of SEK 8 million on the previous year. This region had one highly profitable unit in Helsingborg and weaker results in Lund / Malmö. To remedy this, the organisation has been restructured. The housing market is slow, partly because many Danes are moving back to Denmark. The market for commercial buildings is performing better, but Veidekke has yet to establish itself in this market. The Masthusen contract in Malmö for Diligentia is a good example that proves that it is possible. Housing accounted for 56 per cent of the turnover, of which 22 per cent was own-account projects. Public-sector contracts accounted for 32 per cent of the turnover. Bygg Väst Bygg Väst returned a loss for the year of SEK -9 million, however, this was still an improvement on 2011, when the result for the year was SEK -13 million. The main reasons for the disappointing result are impairments in a number of projects and projects that are being carried over to 2013. Throughout the year importance has been attached to efforts to stabilise the business by ensuring we select the right projects and implement them in a professional manner. In 2012 they won a contract for a commercial building in central Gothenburg in a project of a size and complexity that they have not previously undertaken. In addition, collaboration with Veidekke Bostad led to the start-up of new residential building projects towards the end of the year. Construction of housing for Veidekke’s own account accounted for 40 per cent of the turnover in 2012. Bygg Stockholm Bygg Stockholm achieved a good result of SEK 53 million and a margin of 4.7 per cent, but this was nevertheless a decrease compared with the previous year (SEK 77 million). The main reasons for the decline in profit are volume losses due to delays in housing projects and tighter margins. The market is plagued by delays, especially in the housing segment, and there is tougher competition in the market for commercial buildings. Despite fierce competition, they won the contract for the remodelling of the Nöten Quarter for Fabege, with a value of SEK 550 million. This resulted in a significant improvement in the second half of the year compared with the first half. Bygg Stockholm has a large proportion of negotiated contracts, yielding better results. Construction of commercial buildings accounted for 64 per cent of the turnover. Anläggning Öst Anläggning Öst returned a better result for the year in 2012 than in 2011, with a profit of SEK 48 million and a margin of 5.7 per cent (SEK 23 million in 2011). One of the reasons for the good result was settlement from the Swedish Transport Administration for the road project Väg 73, which boosted the final figures by some SEK 20 million. Production has been stable, and no major changes were made in the organisation during the year. Anläggning Öst operates in a market with good prospects for new orders in the long term, which has also attracted a number of overseas players. In 2012, however, there were few new contracts to bid for, leading to price pressure and low order intake. As a result they had to trim the workforce in the autumn in line with the decline in production. Some 23 per cent of the clients were private.


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Tunnel & Bergrum Tunnel & Bergrum also delivered a very good result in 2012, with a profit of SEK 25 million and a margin of 7.1 per cent. This is at the same level as last year, when the unit returned a profit of SEK 27 million and a margin of 6.5 per cent. Turnover fell 13 per cent to SEK 354 million. The reason for the positive result is the completion of the Norra Länken project. In autumn 2011, the region was in a difficult situation with no projects lined up for 2012; however it succeeded in winning several contracts that laid the foundations for the good result for 2012. Several of the year's new projects are internal joint ventures. These include Väg 40 together with Anläggning SydVäst and Dovrebanen with Veidekke Entreprenør AS. Together with Veidekke Entreprenør AS we are collaborating to achieve optimal development of the fleet of machinery. Anläggning SydVäst Performance in Anläggning SydVäst was divided, with Väst returning a profit of SEK 7 million, while Syd had to post a loss of SEK -19. The result for the region was thus SEK -12 million. The negative result in Syd was mainly due to poor profitability in a handful of projects. The business area is going to be restructured, entailing reductions in operations and the appointment of a new regional manager. During the autumn, the order backlog was boosted significantly by the road contracts Väg 40 (SEK 405 million) and Väg 42 (SEK 110 million). As previously mentioned Väg 40 is an internal joint venture with Tunnel & Bergrum. Industri The Swedish industry company achieved its best result ever with a profit of SEK 2 million (SEK 0 million) and a profit margin of 0.9 per cent. The improvement in profit compared with the previous year is attributable to the crushing and recycling operations. From 2012, Industri has been incorporated into the business area Anläggning. Uncertain market outlook At the start of 2013 there is widespread uncertainty about how the market will develop. One day it appears things are looking up and a resolution to the sovereign debt crisis in various countries in Europe is in sight; the next day you hear of further lay-offs in the Swedish export industry. In terms of house building, we expect the long sales time for flats to persist and thus a low level of production starts. In the second half of the year, they may see improvements, depending on market developments. The construction of flats for rent ("hyresrätter") will likely continue at the same pace as before. Veidekke expects the market for commercial buildings to remain at the same level in 2013 as in 2012. They predict a weaker first half followed by a stronger second half, driven by economic conditions in the global economy. The difficult access to capital for investors means that it takes longer to get projects started. Naturally, competition then increases for the projects that do exist, entailing price pressure. We assume that we have the strongest foothold in Stockholm, whereas they do not have the same market position in Skåne and Väst. Public building projects such as schools, hospitals etc. will be able to compensate for the difficulties in initiating projects in the private sector.

6.2.1.3 Construction operations in Denmark Veidekke is represented in Denmark through its subsidiary, Hoffmann A/S. The company operates nationwide building and construction activities from offices based in Glostrup and Næstved in Zealand and in Fredericia and Århus in Jutland. Increased profit margins, but lower turnover Hoffmann had a turnover of NOK 1,275 million (NOK 1,536 million) in 2012. The 17% decline in sales is due to the lower level of activity in the building and construction segment. The result for the year was a profit of NOK 52.3 million (NOK 56.2 million), yielding a profit margin of 4.1% (3.7%). The profit margin has increased by 11% from 2011 and is the highest since Hoffmann joined Veidekke. For some time now Hoffmann has been focusing on developing specialist expertise and ability to deliver with a view to becoming the preferred contractor for turnkey contracts, partnering contracts and "Phase 1" agreements. Here the architect, contractor and consulting engineer work together from the very outset to help customers realise the best product, on time and on budget. Through this kind of participative partnership from the earliest phase of a project we can offer customers products at competitive prices, and at the same time reduce the risk for Hoffmann


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The order backlog grew 10% compared with 2011 and amounted to NOK 1,057 million at the beginning of 2013. The contract for the construction and renovation of Frederiksberg Centret shopping centre, with a contract value of NOK 442 million, has had a major impact on the order backlog. This contract was won as a result of long-term collaboration with the customer on the project. Low activity has become the norm There is still low activity in the Danish market. The Danish economy has ground to an almost complete standstill, consumers are reticent to spend, and businesses are very cautious about investing. However, they are beginning to see the effects of the government's initiative to boost the Danish economy, and several construction projects are under way. While these measures will help to stabilise building activity, they will not compensate for the decline in private building investments. According to the Danish Construction Association (Dansk Byggeri), employment in the construction industry decreased by approx. 3,500 people in 2012, and another 3,000 jobs are expected to disappear in 2013. Next year, there will be 23,000 fewer employees in the industry than in 2004, the year before the recovery began. Hoffmann in 2012 In recent years Hoffmann built and renovated several shopping centres. In 2012, Hoffmann worked on the renovation of Fisketorvet and the extension and renovation of Rødovre Centrum. The most recent contract for the renovation and extension of the Frederiksberg Centret, with a value of NOK 442 million, cements Hoffmann's position as an attractive and competent contractor in this field. In 2012, Hoffmann built the new head office for the energy company Syd Energi for a contract value of DKK 210 million. Handover of the project was 13 June 2013. This building, which will be Denmark's largest passive house, i.e. commercial building that produces more energy than it consumes, has given Hoffmann considerable experience and increased our knowledge about the most modern systems for achieving energy savings. This knowledge is being collected and systematised in such a way that the specialist expertise they have gained in energy savings, sustainability and indoor climate can be used in future projects. In 2012 a number of Hoffmann's key personnel started training with a view to improving the organisation's understanding of its customer and business relations. Hoffmann wants to increase awareness throughout the entire organisation so that everyone observes the processes for participative collaboration and interaction with customers. The training is part of Hoffmann's 2015 strategy and is intended to contribute to the goal that 80% of the turnover shall be won on factors other than price alone. In collaboration with Byggeriets Efteruddannelser (a continuing education organisation for the building industry) Hoffmann conducted a pilot project on a major renovation project that included a professional development training programme for all administrative staff and skilled workers at the construction site. This resulted in a marked improvement in leadership skills, productivity management, HSE and development of Hoffmann's participative collaboration processes with the customer. Strategy for a continued weak market It is expected that activity in the market will remain at a low level in 2013. The projects will be primarily public-sector projects with very tough price competition. The ongoing work to improve the company's understanding of its customers and business relations will continue in 2013. All the employees at Hoffmann are going to take internal training to help create a more customer-oriented organisation. Hoffmann will continue to focus on turnkey contracts for public-sector clients and early collaboration with private developers to increase the proportion of projects that are won on factors other than price alone.


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6.2.2. Property Property – the purchase of sites and properties for the development of homes, offices, shops or buildings for public activities Veidekke Eiendom develops property, hereunder the purchase of sites and properties for the development of homes, offices, shops or buildings for public activities. The operations are based on expertise in purchasing, public approval, project development and sale. We work close to the market to ensure that what we build is attractive and provides added value to our customers. Buildings must have a good indoor environment and take the environment into account in order to ensure that those who work and live in the buildings are content. Planning and building is done in cooperation with the other units in the group. In this way we ensure high quality and safe execution. Veidekke Eiendom's operations are gathered in Veidekke Eiendom Skandinavia. In Norway the business unit is called Veidekke Eiendom AS. The development of commercial property is handled by Veidekke Eiendom, while the development of homes is concentrated in Veidekke Bolig AS. In Sweden both commercial property and homes are combined in the company Veidekke Bostad AB. In Danmark property development is handled by Hoffmann Ejendomme A/S.

6.2.2.1 Property Scandinavia Property Scandinavia is principally involved in the development of housing for Veidekke’s own account and, to some extent, non-residential buildings in Norway, Sweden and Denmark. The business consists of the companies Veidekke Eiendom AS (housing and commercial development in Norway) and Veidekke Bostad AB (housing development in Sweden). Hoffmann Ejendomme in Denmark has very limited activities. Property Scandinavia has 109 employees in total. Significant earnings improvement in Norway The results for Property operations in 2012 reflect the very different levels of activity in Norway and Sweden. While activity levels in Norway have continued to accelerate, activity in Sweden was impacted by the international turmoil with low sales throughout the year. The combined result for 2012 was a profit of NOK 172.9 million, compared to NOK 281.0 million in 2011. Most of the profit is from the Norwegian operations.

Since the end of 2009, when the number of units under construction was down to 311, the number of homes under construction has risen continuously and at the end of 2012 was at 1,277 (Veidekke's share). However, the gross figures indicate a level of activity in the Group's residential operations (property development and own-account building projects) on a par with 2007, which was the peak before activity started to decline as a result of the financial crisis.


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Split housing market in Scandinavia The years 2003 to 2007 saw a boom in the housing market, and Property generated very good results during this period. The economic downturn in the following two years created considerable uncertainty and, consequently, very few homes were sold. The financial crisis reinforced this trend, and banks became very reluctant to finance residential and commercial buildings. As a result, almost no new housing projects were initiated. Conversely, lower interest rates meant increased purchasing power for many households, and in 2009 and 2010 the housing market picked up steadily with a surge in sales. The improvement continued through the first half of 2011 in both Norway and Sweden, in and around most major cities. While the market recovery in Norway continued throughout the whole of 2012, Sweden has seen a slowdown in housing sales that has persisted since the third quarter of 2011. This has come as a result of uncertainty linked to the international recession, but has also been reinforced by absolute capital requirements for home loans and the introduction of capital gains tax on the sale of property for private individuals. Cautious optimism in uncertain times The market in Norway is still reasonably strong despite the great financial turbulence and economic downturn in several parts of the world. In Sweden, the market is stable, but relatively weak, and although there is interest at viewings, it takes a long time to close a housing sale. There is still a great need to increase profitability in Sweden, meaning we need to start more projects. Despite the uncertainty in the Swedish market, there are several projects that are close to start-up. This indicates that it is highly likely that the activity level in Sweden will pick up compared with 2012. In Norway, we expect a slight increase, but not at the same level as in 2012. Population growth and migration will create a huge demand for housing in the years ahead. With a firm foundation in our good portfolio of sites, motivated employees and, not least, productive collaboration with Construction operations, everything appears to be in place for good activity levels and profit margins in the coming years.

6.2.2.2 Property Norway Veidekke Eiendom strengthened its position as a major player in the Norwegian housing market in 2012. Veidekke Eiendom develops, builds and sells homes, primarily blocks of flats, but also detached and terraced houses. Geographically, activity is concentrated in and around the major cities. Activity in the property market has risen steadily since the end of 2009, and this is reflected in Veidekke Eiendom's results. However, there has also been a noticeable shift from predominantly wholly owned projects to a growing share of partly owned property projects. In 2012, 451 homes were sold (Veidekke's share), compared with 441 in 2011. If the market remains at its current level, more projects will be started up during the course of 2013, and activity is expected to pick up in the other major cities, in addition to Oslo. In 2012, 213 (293) homes were completed, and 528 (441) homes were initiated in 18 (12) projects. At the close of 2012, Property Norway had 906 (591) homes under construction in 25 (16) projects. Of the homes under construction, 184 (158) had not been sold. In addition, at year-end there were 10 (25) completed, unsold homes. In connection with the end-of-year accounting, a valuation of all the sites in the portfolio was undertaken, and no basis for impairment was found. The Veidekke Group owns a number of commercial properties. These are properties that have been used by Veidekke's construction and industrial operations. As the need for activity in these properties changes, these sites will be sold or we will consider selling them with a lease, if this appears to be the better alternative. In 2012, Veidekke Eiendom had gains from the sale of commercial properties totalling NOK 45 million. Property operations in Norway had a turnover of NOK 1,341 million (NOK 917 million) in 2012. The pre-tax result was a profit of NOK 173.8 million (NOK 122.6 million). In light of the improvement in the housing market, a number of projects were initiated, making a significant contribution to the profit. At the end of 2012, NOK 2,172 million (NOK 1,517 million) was tied up in property operations in Norway. The portfolio of sites was equivalent to 6,400 dwellings (Veidekke's share: 3,900).


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6.2.2.3 Property Sweden Veidekke Bostad is now a major player in the Swedish market and has operations in the Stockholm area, Skåne and Gothenburg. In 2012, Veidekke Bostad completed 236 (245) homes and initiated 94 (300) homes in 3 (5) projects. By the end of 2012 Property operations in Sweden had 371 (513) homes under construction (Veidekke's share), in 7 (10) projects. Of the homes under construction, 78 (135) had not been sold. The housing market was stable, but weak throughout the whole of 2012. In all, 201 dwellings were sold, compared with 248 in 2011. At year-end, the portfolio of sites comprised a total of 6,800 housing units (Veidekke's share: 6,500), of which some 70 per cent were options. High land prices in recent years have meant that we have concentrated on options to purchase (from municipal authorities and private owners) where the risk is low because the sites are paid for at a later stage in the process. Several municipalities in Sweden own large land areas and offer property developers options (called "markanvisninger") on an ongoing basis. The option agreements allow highly capital-efficient operation. In 2012 rights to build 193 homes were acquired, of which 143 are option-based, reducing the need for capital in the development period. In connection with the end-of-year accounting, a valuation of all the sites in the portfolio was undertaken and a few minor write-downs were made. Property operations in Sweden had a turnover of NOK 745 million (NOK 601 million) in 2012. The pre-tax result was a profit of NOK 4.7 million (NOK 166.0 million). Note, however, that the 2011 result was heavily impacted by appreciation as a result of the acquisition of Bouwfonds Veidekke. At the end of 2012, NOK 1,177 million (NOK 920 million) was tied up in property operations in Sweden.


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6.2.2.4 Property Denmark Hoffmann Ejendomme's result is currently primarily made up of interest and property taxes. The portfolio of sites consists exclusively of residential sites in Jutland and Zealand. There was a certain amount of movement in the housing market in 2012, and the company has sold two out of seven sites this year with a profit. Conditional sales agreements are in place for all the remaining sites. The pre-tax result was a loss of NOK -5.5 million (NOK -7.6 million). At the end of 2012, NOK 171 million (NOK 204 million) was tied up in Property Denmark.


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6.2.3. Industry Industrial operations comprise the business areas asphalt, ballast and gravel and road maintenance. Veidekke's industrial operations are concentrated in the Norwegian and Swedish markets under the name Veidekke Industry. In Norway Veidekke Industry is the leading asphalt contractor and a large player in the market for ballast, sand and gravel production and processing. In Sweden Veidekke Industry has a share of 25% in the asphalt company Sandahls Grus & Asfalt AB. Outside Scandinavia Veidekke Industry operates in the market segment asphaltic cores for embankment dams. The business area has special expertise in the consultant role and the development of equipment and operates mainly outside of Norway Industry operations were organised into three business areas at the end of 2012: Asphalt, Crushed Stone and Gravel, and Road Services, and are managed by Veidekke Industri AS. Veidekke Industri is the largest asphalt contractor in Norway with a market share of around 30% * (Veidekkes production in 2012 1 871’ tonnes share of total tonnes – estimated total production in 2012 6 288’ tonnes) and a large producer of crushed stone and gravel. Veidekke holds a 15% ** (number of operating contracts in percent of total number of operating contracts per 1 September 2012) market share in road services. Financial performance The total turnover for Veidekke Industri in 2012 amounted to NOK 3,193 million (NOK 3,042 million in 2011), and profit before tax was NOK 38.3 million (NOK 215.5 million in 2011), corresponding to a profit margin of 1.2%. However, the 2011 earnings were positively affected by the sale of the recycling operations (NOK 124 million). The total volume of asphalt was 5% higher than in 2011, but price pressure and increased operating expenses led to negative results for Asphalt in 2012. Road Services continued its strong performance with further improvements in profitability, and Crushed Stone and Gravel operations achieved good margins in 2012 too.

Positive market development The market for maintenance and investments in the construction market were relatively stable, but public transport infrastructure projects contributed positively to the level of activity. Total demand for asphalt was slightly lower than in 2011. There was growing activity in road maintenance through the year. In addition, public transport infrastructure projects boosted the demand for crushed stone and gravel. * Source: EBA - ** Source: Statens Vegvesen – see Section 12 Third party information and statement by experts and declarations of any interest and for reference to the sources.


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OPERATIONS IN 2012 Stable volume, but price pressure in Asphalt Asphalt operations accounted for roughly 65% of Veidekke Industri's total turnover in 2012 and consists of 27 asphalt plants throughout Norway. The total volume of asphalt for the year was 5% higher than in 2011. This is mainly due to better performance in the competitive tendering for the Norwegian Public Roads Administration. Overall, the proportion of public-sector customers rose slightly in 2012, while private-sector demand remained relatively stable. Veidekke Industri produced a total of about 1.9 million tonnes of asphalt, of which approximately 38% was for the Norwegian Public Roads Administration. Asphalt was dominated by price pressure in most parts of the country in 2012. Coupled with increased operating expenses, this led to major profitability challenges, and Asphalt operations posted a loss for 2012. New pay system for skilled workers in Asphalt As a result of the government's reining in of public expenditure, the Norwegian Labour and Welfare Administration (NAV) has changed the rules for entitlement to layoffs with unemployment benefit for businesses with foreseeable seasonal variations. During the pay negotiations in spring 2012, the industry introduced a trial scheme as a supplement to the Agreement for Asphalt and Road Services. This model makes use of the rules defined in the Norwegian Working Environment Act on calculating average normal working hours, allowing asphalt workers to have extended normal working hours in that part of the year when they lay asphalt. Veidekke Industri has developed a model based on the requirements laid down in the Agreement. Under this model, asphalt workers have a defined working period and non-working period during 12 months and are paid a regular monthly basic salary throughout the year. The introduction and testing of the new model have been challenging and have resulted in a substantial overall increase in payroll costs for Asphalt operations compared with 2011. High volume and good margins in Crushed Stone and Gravel Crushed Stone and Gravel operations accounted for about 12% of Veidekke Industri's total turnover in 2012. The total production volume was at the same level as in 2011, but profitability was further improved. Crushed Stone and Gravel maintains a constant focus on ways to cut costs and increase productivity, and this long-term initiative is resulting in new opportunities and better profitability. The business consists of 30 quarries spread across the whole of Norway. Total production volume was around 6.7 million tonnes in 2012. Of the total crushed stone and gravel volume in Norway, about two-thirds is produced by the ten largest companies, while the remaining volume is produced by a large number of smaller companies. Crushed stone and gravel products are used primarily in the development of infrastructure and general building and construction operations. The largest consumers are asphalt and concrete producers. Veidekke Industri has a clear strategy to ensure long-term access to resources and growth in the crushed stone and gravel business. In recent years, a number of smaller companies have been acquired, which has had positive effects on operations. Through extraction agreements and ownership, Veidekke Industri has access to total reserves of approximately 205 million tonnes. Higher volume and improved margins in Road Operation and Maintenance Road Services activities accounted for about 23% of Veidekke Industri's total turnover in 2012. Turnover is up 28% from 2011. The most recent contracts developed as expected and contributed to the area delivering positive results for the year as a whole. Profitability in this area improved significantly, and work on improvement in areas such as project costing, contract expertise, management and implementation of projects, as well as safety on the road, has yielded good results and will be continued. Positive market outlook The asphalt market is expected to remain relatively stable or increase slightly in the coming years. The market for road operation and maintenance is likely to increase slightly due to a large backlog in road maintenance. The major transport infrastructure projects will also lead to increased demand for crushed stone and gravel. Although the future market for Veidekke Industri as a whole looks promising, we are noticing increased competition from new players who in light of the situation in Europe regard the Norwegian market as attractive. Ambitions by 2015 Through its "Position 2015" process, Veidekke Industri has drawn up ambitious goals and an aggressive strategy for profitable growth and development in the years ahead. Profitability shall be improved, and Veidekke Industri aims to be the best in the industry in terms of customer solutions, to be the industry's safest workplace (HSE), and to be the knowledge leader in logistics, technology and the environment


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7 Organizational structure

7.1 Description of Group that Issuer is part of The parent company Veidekke ASA is a holding company with no operations. The primary task of the parent company, Veidekke ASA, is to exercise ownership over the operative entities in the Group. The new Group organization

Group structure per 31 December 2012


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Shares in subsidiaries per 31 December 2012

Shares in associated companies and joint ventures per 31 December 2012

7.2 Issuer dependent upon other entities Veidekke ASA’s performs a number of Group functions for its Group companies, including services such as financial management, operation and maintenance of it systems, handling of the Group’s insurance arrangements, HSE functions providing legal expertise, and communication and public relations. Veidekke ASA is depentend on its subsidiaries and Veidekke ASA´s activities consist of investments in subsidiaries and associated companies, and its income consists of dividends and Group contributions from these companies. In addition, Veidekke ASA invoices its subsidiaries for these services, and the payments are included in the Company’s operating revenues.


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8 Trend information

8.1 Outlook As per 1Q Report 2013 Economic growth in the euro zone will remain weak in 2013. After five consecutive quarters with declining activity, Europe entered 2013 with little impetus. Monetary policy will continue to focus on stimulating the economy, and uncertainty is primarily linked to restrictive fiscal policies. New growth is thus not expected until autumn 2013 at the earliest. The building and construction market in Norway will be strong in 2013 with high activity in all segments. House prices are expected to rise by around 6%. Housing starts will probably not be on the same level as in 2012. We expect housing starts to dip to under 30,000 this year, but this is still a high level. The building and construction market in Sweden is expected to continue to develop negatively in the first half of 2013, but with prospects for improvement in the autumn. Improvements in the global economy coupled with continued strong public finances and household economies may lead to growing optimism towards the end of the year. Construction activity will remain at a high level. The outlook for the Danish economy is still weak. This will result in another year with low activity in the building and construction market. Improvements in the global economy will lead to a dawning recovery in the residential and non-residential building segment towards the end of the year. The Norwegian economy performed well in the first quarter and in line with our expectations. The Swedish economy was affected by the situation in Europe in the first quarter. The weakening of the European economy has had only a minor impact on the Norwegian economy to date, which continues to be driven by high oil prices. In Norway there is good inflow of projects in all segments. However, the regional differences are relatively large and reflect the high level of investment in the oil industry, which is particularly noticeable in western Norway and the Agder counties. Despite the flattening of house prices in the first quarter, the demand for new homes is perceived as good. The market for commercial buildings is increasing steadily, in the private and public sectors alike. Activity within civil engineering is dominated by major transport infrastructure projects, although we are seeing a slight increase in inflow of industry-related contracts. There is still fierce competition for projects, and the proportion of foreign competitors is stable. The Swedish building and construction market was affected by the recession in Europe in the first quarter, particularly the market for residential and commercial buildings. We are now seeing signs of a recovery in the market, which we expect to continue through the remainder of the year. In Denmark, the market remains weak, especially within residential and private commercial buildings. The government is trying to stimulate activity by investing considerable funds in energy conservation and upgrading of housing. We do not expect to see a recovery in the private building industry in Denmark until 2014. In Norway, we expect a healthy building and construction market in 2013, whereas the market will remain challenging in Sweden and Denmark.

8.2 Statement of no material adverse change

There has been no material adverse change in the prospects of the Issuer since the date of its last published audited financial statements. See clause 11.6.


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9 Administrative, management and supervisory bodies

9.1 Information about persons Board of Directors The table below set out the names of the members of the Board of Directors of the Company:

Name Position Business address

Martin Mæland Chairman Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Per otto Dyb Deputy Chairman Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Annika Billström Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Gro Bakstad Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Hans von Uthmann Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Ann Christin Gjerdseth Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Odd Andre Olsen Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Inge Ramsdal Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway Lars Sevald Skaare Board member Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway

Martin Mæland Date of Birth 24 September 1949 Chairman of the Board since 2009. Board member since 2002 Vice-chairman NBBL (Norwegian Federation of Cooperative Housing Associations) and Board Chairman of Asplan Viak AS. Internal board appointments the OBOS Group. Has previously been Board Member/Charirman of Kredittkassen, VEAS (Vestfjorden Avløpsselskap), the AF Group, FONUS, Oslo Byhall, Oslo Byfornyelse, INBY, Dagsavisen and others. President and CEO of OBOS since 1983. Worked for OBOS since 1980. Previously municipal counsellor in City of Oslo and planner in Oslo Lysverker. Per Otto Dyb Deputy Chairman since 2012. He holds a graduate degree in Technical Cybernetics from NTNU. He has extensive experience in key leadership positions at Tandberg Data, ABB Flexible Automation and Siemens, both in Norway and internationally. Dyb is currently CEO of Siemens Norway. He is also Chairman of Nevion Europe AS. Annika Billström Date of Birth 1956 Board member since 2010 She has very long experience from politics and the public sector in Sweden. Billström has, among other things, served as Mayor of Stockholm as well as Commissioner in Opposition and Road Commissioner. She has been a board member of the Social Democratic Party, and held a number of heavy-weight public offices. She has been a long-time board member in Sabo, Swedish Association of Municipal Housing Companies, serving 7 years as chairman. Today she is CEO and owner of the recruitment company Inchefia AB.


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Gro Bakstad Date of Birth 1966 Board member since 2010 Gro Bakstad: Born in 1966. She holds an MBA from the Norwegian School of Economics and Business Administration with a Master’s in accounting and auditing from the same place. She has long experience from senior positions in finance in Ocean Rig, ProCorp and Norway Post. She is currently a member of corporate management in Norway Post, with staff responsibility in Finance, IT, Strategy, Purchasing, Legal, M & A and Real Estate. She was appointed "This year's Business Leader" in Norway in 2007. Bakstad is a Board member of Farstad Shipping AS. Number of shares in Veidekke: 13 000 Hans von Uthmann Date of Birth 1958 Board member since 2010 He holds an MBA from the Stockholm School of Economics. He has held many key leadership positions in Swedish industry including Vice-President of Vattenfall AB, CEO of Duni AB and AB Svenska Shell. In the period 1992 to 1994 he worked for Shell in Norway. He also holds a number of central board positions including in the Swedish Confederation of Enterprises, Fortum Oyj, Swedish Energy, and is currently a member of the board for Cleanergy AB and head of the Swedish Basketball Association. He is presently a senior partner in the consulting company Neuman & Nydahl and is associated with the private equity firm EQT as Industrial Advisor. Ann Christin Gjerdseth Board member since 2012. She holds a graduate degree in Offshore Electrical Engineering from Heriot-Watt in Edinburgh. She has extensive offshore industry experience with ABB, Kongsberg Simrad and FMC, where she has held key positions in project management, safety, quality, and management positions with international responsibility. Gjerdseth is currently director of FMC Subsea Kongsberg in charge of the company's projects in Europe, Africa, Russia, and Canada. Odd Andre Olsen Previously deputy board member and took over as employee representative to the Board in October 2011. Employed in Veidekke since 1985 as iron fixer. Senior shop steward and head safety delegate in Veidekke Entreprenør AS since 2007. Employee representative to the Board of Veidekke Entreprenør AS since 2007. Number of shares in Veidekke: 1,900 Inge Ramsdal Date of Birth 1 February 1962 Employees’ representative on the Board since 2008. Employed by Veidekke since 1986 as crane operator and concrete worker. Senior shop steward for Special projects and Heavy construction. Honorary positions in trade union movement. Number of shares in Veidekke: 5,800


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Lars Sevald Skaare Employee representative to the Board since December 2010. Represents salaried employees. Employed in Veidekke since 1985. Educated as engineer from OIH, 1984, civil engineer building and construction from NTH 1992, School of Management (evening) 1989. Department manager/project manager in Region Construction, District Construction Oslo, responsible for cooperation projects with Regions East and South. Number of shares in Veidekke: 65,575 Corporate Management The table below set out the names of the members of the Management of the Group:

Name Position Business address

Arne Giske President and CEO.

Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway

Per-Ingemar Persson Executive Vice President Sweden/Denmark and Managing Director Veidekke Entreprenad AB

Veidekke Bostad AS, Kalkstensvägen 2, 224 78 Lund, Sweden

Dag Andersen Executive Vice President and Managing Director of Veidekke Entreprenør AS


Jørgen Wiese Porsmyr Executive Vice PresidentIndustry/Property


Arne Giske

Arne Giske (b. 1957) was appointed Executive Vice President and CFO of Veidekke in May 2001. He was responsible for Veidekke's economy and financial function for six years before he was appointed Executive Vice President in 2007 with responsibility for the company's property development division in Scandinavia.

Giske has extensive experience as operative manager in large companies and from boards in industrial and property development companies.

Arne Giske takes up position as President and CEO of Veidekke ASA on 1 July 2013.

Shareholdings: 179 200

Experience:

2007 – 2012 Veidekke ASA, Executive Vice President Property Development Division 2001 – 2007 Veidekke ASA, Executive Vice President and CFO 1997 – 2001 Association for the Promotion of Skiing, General Secretary 1992 – 1997 ABB, Executive Vice President and CFO, deputy CEO 1987 – 1992 Elektrisk Bureau AS, CFO 1986 – 1987 Elektro Union AS, Finance Manager 1983 – 1986 National Elektro AS, Treasurer

Education:

1986 INSEAD (International Finance Programme) 1982 University of Wisconsin, Madison, Master of Business Administration 1981 Master in Business and Economics, Norwegian Business School (BI)

Directorships:

2011 Chairman of Anthon B Nilsen Eiendom AS 2007 Board member in Norsk Eiendom


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2004 Member of the Council of the Association for the Promotion of Skiing 1999 – 2011 Board member in Anthon B Nilsen AS 1992 - 1997 Chairman of ABB Asea Skandia AS, ABB Komponent AS, ABB Eiendom AS, ABB Financial Services AS, ABB Pensjonskasse, Project Risk Committee Per-Ingemar Persson Company: Veidekke ASA Date of Birth: 23 March 1956 Position: Executive Vice President, Country Manager Sweden. Chairman of Veidekke Industry Hoffmann A/S and Veidekke Entreprenad AB Engaged with company: 2005 Shareholdings: 145 300 Previous employment: NVS Installation AB 2002 – 2005: Managing Director Skanska AB 1998 – 2001: Managing Director Skanska Sverige AB 1993 – 1997: Managing Director Skanska Syd AB 1989 – 1992: Department Manager, Malmö 1982 – 1989: Head of construction operations Education: MSc. Civil Engineering, Technical University of Lund Dag Andresen ompany: Veidekke ASA Date of Birth: 18 January 1962 Position: Executive Vice President and Managing Director of Veidekke Entreprenør AS Engaged with company: 1986 Shareholdings: 220 725 Previous employment: Veidekke ASA 1999 - 2001: Senior Vice President, Industry Division 1994 - 1999: Senior Vice President, Finance 1992 - 1994: Controller1990 - 1992: Finance Director 1988 - 1990: Finance Manager for Heavy Construction Division 1986 - 1988: Financial Manager for Region Oslo Education: MSc/Business, Norwegian School of Management (BI) Jørgen Wiese Porsmyr Company: Veidekke ASA Date of Birth: 5 June 1972 Position: Executive Vice President and CFO, also responsible for purchasing, strategy, IT and legal department Engaged with company: 1995 Shareholdings: 94 945 Previous employment:


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2003-2007 Director, Corporate accounts 1997-2003 Chief accountant, Industry Division 1995-1997 Controller, Construction Operations, Norway Education: MSc (Econ. & Business Admin.) Norwegian School of Economics and Business Administration (NHH/Hochschule St. Gallen)

Company: Veidekke ASA

Date of Birth: 5 June 1972

Position: Executive Vice President and CFO, also responsible for purchasing, strategy, IT and legal department

Engaged with company: 1995

Shareholdings: 94 945

Previous employment:

2003-2007 Director, Corporate accounts

1997-2003 Chief accountant, Industry Division

1995-1997 Controller, Construction Operations, Norway

Education: MSc (Econ. & Business Admin.) Norwegian School of Economics and Business Administration (NHH/Hochschule St. Gallen)

9.2 Administrative, management and supervisory bodies conflicts of interest There are no conflicts of interest between any duties to the Issuer of the persons referred to in item 9.1 and their private interests and or other duties.


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10 Major shareholders

10.1 Ownership As of 31 December 2012, the share capital of Veidekke ASA was NOK 66,852,471 divided between 133,704,942 shares each with a nominal value of NOK 0.50. Veidekke has always had one share class, and each share carries one vote. Veidekke ASA’s 20 largest shareholders, per 10 June 2013: Investor Antall aksjer % av 20 største % av total Type Land

OBOS FORRETNINGSBYGG AS 37 469 440 43,98% 28,02% Sels. NOR

CITIBANK, N.A. 12 111 648 14,22% 9,06% Nom. SWE

FOLKETRYGDFONDET 10 110 297 11,87% 7,56% Sels. NOR

SKANDINAVISKA ENSKILDA BANKEN A/S 6 350 195 7,45% 4,75% Nom. SWE

MP PENSJON PK 3 100 000 3,64% 2,32% Sels. NOR

MUST INVEST AS 2 560 250 3,01% 1,91% Sels. NOR

JP MORGAN CHASE BANK, NA 2 150 000 2,52% 1,61% Nom. FIN

ODIN NORGE 1 413 268 1,66% 1,06% Sels. NOR

SKANDINAVISKA ENSKILDA BANKEN A/S 1 386 700 1,63% 1,04% Nom. FIN

FONDSFINANS SPAR 1 050 000 1,23% 0,79% Sels. NOR

DANSKE INVEST NORSKE INSTIT. II. 1 046 086 1,23% 0,78% Sels. NOR

NORDEA BANK DANMARK A/S 948 899 1,11% 0,71% Nom. DNK

STIFTELSEN VEIDEKKEANSATTEES 918 592 1,08% 0,69% Sels. NOR

KLP AKSJE NORGE INDEKS VPF 881 429 1,03% 0,66% Sels. NOR

NORDEA NORDIC SMALL CAP FUND 861 972 1,01% 0,64% Sels. FIN

DANSKE INVEST NORSKE AKSJER INST 704 471 0,83% 0,53% Sels. NOR

KLP AKSJE NORGE VPF 700 000 0,82% 0,52% Sels. NOR

SVENSKA HANDELSBANKEN AB 498 104 0,58% 0,37% Nom. SWE

J.P. MORGAN CHASE BANK N.A. LONDON 468 919 0,55% 0,35% Nom. GBR

THE BANK OF NEW YORK MELLON (LUXEM 458 741 0,54% 0,34% Nom. LUX

Antall aksjer hos de 20 største 85 189 011 100% 63,71%

Totalt antall aksjer 133 704 942 100%

10.2 Change in control of the Issuer There are no arrangements, known to the Issuer, the operation of which may at a subsequent date result in a change in control of the Issuer.


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11 Financial information concerning the Issuer's assets and liabilities, financial position and profits and losses

11.1 Historical Financial Information The financial statements for the Group have been prepared in accordance with EU approved International Financial Reporting Standards (IFRS) and Interpretations, together with the additional disclosure requirements of the Norwegian Accounting Act. Only standards that are effective for the year ended 31 December 2012 have been applied. The Group’s accounting policies is shown in Annual Report of 2012, page 19-29, note 1. According to the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council, information in a prospectus may be incorporated by reference. Because of the complexity in the historical financial information and financial statements this information is incorporated by reference to the Financial Report 2012 and the Financial Report 2011. Please see Cross Reference List for complete references. Annual Report 2012 2011 Veidekke ASA Consolidated Income statement 14 14 Statement of comprehensive income 14 14 Balance Sheet 15 15 Statement of cash flow

17

17

Notes

19 - 77

19 - 77

Veidekke ASA

Income statement 78 78 Balance Sheet 79 79 Cash flow statement

80

80

Notes

81 - 84

81 - 84

11.2 Financial statements See section 11.1 Historical Financial Information.

11.3 Auditing of historical annual financial information

11.3.1 Statement of audited historical financial information The historical financial information for 2012 and 2011 has been audited. A statement of audited historical financial information is given in Financial Report 2012 page 90-91 and Financial Report 2011 page 90-91.

11.4 Age of latest financial information

11.4.1 Last year of audited financial information The last year of audited financial information is 2012.


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11.5 Legal and arbitration proceedings Through its ongoing operations, Veidekke is occasionally involved in disputes regarding projects, and a number of these cases are settled by arbitration or in court. Disputes may involve Veidekke’s claims on customers (additional claims) and claims on Veidekke (repair of defects, compensation, etc.). Thorough assessments of uncertainty connected to the likelihood of an event occurring are undertaken to ensure the most appropriate reporting possible in the financial statements. Reference is made to the Group’s accounting policies: "Additional claims and disputed amounts are normally not taken to income until agreement has been reached or a legally binding court ruling has been given. In the case of relatively certain claims, a prudent part of the claim is taken to income. In the case of guarantee work, provision is made for confirmed and probable non-conformity. The anticipated final profit from the projects is updated continuously". At 31 December 2012, Veidekke was not involved in any major disputes that might have a significant effect on future profits. On the basis of a report from Veidekke in January 2010, the Competition Authority initiated investigations into suspected competition law breaches at Veidekke’s asphalt operations in central Norway. Veidekke cooperated fully with the Competition Authority throughout the Authority’s investigation. The Competition Authority therefore announced that the legal conditions for leniency were satisfied. Provided that Veidekke continued to cooperate fully with the Competition Authority and that no information became available indicating that Veidekke had given the Authority misleading or incorrect information, Veidekke would be exempt from a fine. The final decision was made on 5 March 2013. Veidekke was granted full leniency and therefore exempted from a fine of NOK 220 million. Other than the above conditions there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the Group’s financial position or profitability.

11.6 Significant change in the Group's financial or trading position There has been no significant change in the financial or trading position of the Group since the end of the last financial period for which interim financial information has been published.


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12 Third party information and statement by experts and declarations of any interest Part of the information given in this Registration Document has been sourced from a third party. It is hereby confirmed that the information has been accurately reproduced and that as far as Veidekke ASA is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. The following table lists such third parties:

Third party Source Section(s) in Registration Document

EBA http://www.ebanett.no/article.php?articleID=2050&categoryID=776

6.2.3. Industry

Statens vegvesen

http://www.vegvesen.no/_attachment/372686/binary/636618?fast_title=Kart%3A+Driftskontrakter‐Entrepren%C3%B8r‐pr‐01‐09‐2012.pdf

6.2.3. Industry


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13 Documents on display The following documents (or copies thereof) may be inspected for the life of the Registration Document at the headquarter of Veidekke ASA, Skabos vei 4, 0278 Oslo, Norway: (a) the memorandum and articles of association of Veidekke ASA; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at Veidekke ASA' request any part of which is included or referred to in the Registration Document; (c) the historical financial information of Veidekke ASA and its subsidiary undertakings for each of the two financial years preceding the publication of the Registration Document.


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Cross Reference List Reference in Registration Document

Refers to Details

11.1 Historical Financial Information

Financial Report 2012, available at http://hugin.info/172/R/1692989/556355.pdf

Income Statement, page 14 Statement of comprehensive income, page 14 Balance Sheet, page 15 Statement of cash flow, page 17 Notes, pages 19-77 Income Statement, page 78 Balance Sheet, pages 79 Cash flow statement, page 80 Notes, pages 81-84

Annual Report 2011, available at http://hugin.info/172/R/1610796/512479.pdf

Income Statement, page 14 Statement of comprehensive income, page 14 Balance Sheet, page 15 Statement of cash flow, page 17 Notes, pages 19-77 Income Statement, page 78 Balance Sheet, pages 79 Cash flow statement, page 80 Notes, pages 81-84

11.3.1 Statement of audited historical financial information


Auditor’s report, page 90-91


Auditor’s report, page 90-91


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Joint Lead Managers’ disclaimer DNB Bank ASA, DNB Markets and SEB Merchant Banking (together the "Joint Lead Managers") have assisted the Company in preparing this Registration Document. The Joint Lead Managers have not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Joint Lead Managers expressively disclaim any legal or financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with bonds issued by Veidekke ASA or their distribution. The statements made in this paragraph are without prejudice to the responsibility of the Company. Each person receiving this Registration Document acknowledges that such person has not relied on the Joint Lead Managers nor on any person affiliated with it in connection with its investigation of the accuracy of such information or its investment decision. Confidentiality rules and internal rules restricting the exchange of information between different parts of the Joint Lead Managers may prevent employees of the Joint Lead Managers who are preparing this presentation from utilizing or being aware of information available to the Joint Lead managers and/or affiliated companies and which may be relevant to the recipient’s decisions.

Oslo (Norway), 16 August 2013

DNB BANK ASA, DNB Markets SEB Merchant Banking


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Articles of Association, Veidekke ASA

Registration Document Veidekke ASAveidekke.com/incoming/article86202.ece/...Final.pdf · Project...

Documents

Transcript of Registration Document Veidekke ASAveidekke.com/incoming/article86202.ece/...Final.pdf · Project...