Veidekke Q1 2025 presentation: Revenue dips 5% amid seasonal lows, order book strengthens

Introduction & Market Context

Veidekke ASA (OB:VEI) presented its first quarter 2025 results on May 8, showing a revenue decline amid normal seasonal lows but highlighting a strengthened order book that provides improved visibility for future operations. The Scandinavian construction and civil engineering company, which operates across Norway, Sweden, and Denmark, reported mixed performance across its geographical segments while maintaining a solid financial position.

The company’s stock closed at NOK 160.80 on May 7, 2025, near its 52-week high of NOK 161.40, suggesting investor confidence despite the seasonal challenges reflected in the Q1 results.

Quarterly Performance Highlights

Veidekke reported revenue of NOK 9.0 billion in Q1 2025, representing a 5% decrease compared to the same period in 2024. The company attributed this decline to normal low season effects and a drop in construction activities. Profit before tax fell to NOK -21 million, down from NOK 25 million in Q1 2024, primarily due to reduced capacity utilization during the quarter.

As shown in the following chart of key financial figures, the company has experienced fluctuating performance over recent years:

Despite the quarterly profit decline, Veidekke highlighted a solid order intake that boosted its order book to NOK 44.4 billion, providing enhanced visibility for future operations. The company also reported strong cash flow, with operating cash flow amounting to NOK 313 million in Q1 2025, mainly due to reduced working capital among Norwegian business customers.

The order intake for Q1 2025 showed strength across multiple segments, with residential buildings leading at NOK 3.4 billion, followed by commercial buildings at NOK 2.4 billion:

Detailed Financial Analysis

Veidekke’s financial position remained solid, with an improved equity ratio of 18.3% as of March 31, 2025, up from 17.0% a year earlier. The company’s net interest-bearing position strengthened to NOK 2,720 million, compared to NOK 2,161 million in Q1 2024.

The balance sheet comparison between March 2025 and March 2024 reveals increases in fixed assets and cash equivalents, while current assets decreased:

The company’s positive cash flow in Q1 2025 was primarily attributed to reduced working capital among Norwegian business customers, as illustrated in this breakdown of the net interest-bearing position:

Segment Performance

Veidekke’s performance varied significantly across its geographical segments. The company provided a detailed breakdown of revenues, profits, and profit margins by business area:

Construction Norway, the company’s largest segment, saw a 4% revenue decrease compared to Q1 2024, with profit margins declining from 4.0% to 3.7%. Despite this decline, the company emphasized that the project portfolio remains robustly profitable, and the order book increased by 4% during the quarter.

Infrastructure Norway continued to face challenges, reporting a loss of NOK 189 million (compared to NOK 169 million in Q1 2024) with a negative profit margin of 10.8%. Revenue remained relatively stable year-over-year.

Construction Sweden experienced the most significant decline, with revenue dropping 24% in local currency compared to Q1 2024, accompanied by a profit decline. Meanwhile, Infrastructure Sweden was a bright spot, with revenue increasing 8% in local currency and profit improving compared to Q1 2024. The segment’s order book also grew by 19% during the quarter.

Denmark’s operations remained stable, with revenue and profits on par with Q1 2024 and the order book increasing by 2% during the quarter.

Strategic Initiatives

Veidekke emphasized its strategic approach to navigating market conditions through geographic diversification and selective project targeting. The company highlighted the benefits of its diverse presence across Scandinavian markets with unique drivers, providing some insulation from market-specific challenges.

The following chart illustrates the improved visibility from the robust order book across construction and infrastructure segments:

The company outlined its path to further improvement through systematic and incremental changes focusing on four key areas: selection, implementation, cost base, and continuous improvements. Veidekke stressed the importance of selectivity in projects and market adaptation, supported by a flexible cost structure.

Forward-Looking Statements

Looking ahead, Veidekke expressed confidence in its position, emphasizing that construction activities have stabilized and that its NOK 44.4 billion order book provides good visibility for future operations. The company highlighted robust markets in both Norway and Sweden for infrastructure projects.

The presentation concluded with this summary of key points:

Veidekke’s management indicated that while Q1 2025 faced normal seasonal challenges, the company’s strong financial position and growing order book provide a solid foundation for the remainder of the year. The company continues to focus on systematic improvements to enhance performance across all segments, with particular attention to addressing the ongoing challenges in Infrastructure Norway.

Full presentation:

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