21-May-13

Credit Research For disclaimer and information regarding distribution; see the last page. Please note that DNB Markets is acting as joint lead manager for a potential bond issue for the company.

Bloomberg: DNBM

Veidekke ASA Sector: Industrials Equity market capitalization: NOK 6.3 bn Issuer rating: DNB Markets: BBBS&P: Not rated Moody’s: Not rated Issue rating: BBBCompany management: CEO: Terje R. Venold CFO: Jørgen Wiese Porsmyr Largest owners: OBOS Foretningsbygg: IF Sskadeförsäkring AB: Folketrygdfondet: Employees (3,100):

28.0 % 9.1 % 7.9 % 18.5 %

Rating rationale The BBB- credit rating on Veidekke ASA (“the Company” or “Veidekke”) reflects the Company’s fair business risk profile and its modest financial risk profile in rating agency terminology. The business risk profile is strengthened by Veidekke’s position as the leading constructor and property developer in Norway. We also view the outlook for the business in Norway as positive with continued growth. However, the construction business is highly cyclical with low margins. Veidekke is experiencing competition from international companies and weak markets for the business areas in Sweden and especially Denmark. The financial risk profile is strengthened by the Company’s low financial gearing and strong liquidity which is necessary to be rated investment grade within the construction business. We have rated the senior unsecured bonds the same as the corporate credit rating (BBB-) as we expect a recovery of 30-70 per cent to bondholders in the event of default. Please note that upon the occurrence of a Change of Control Event and/or De-listing Event, each bondholder shall have the right to require that the issuer redeems its bonds (put option) at a price of 101 per cent of par plus accrued interest. Credit strengths  Low financial gearing and strong liquidity  Strong market position in the Company’s core business segment, the Norwegian construction market  Relatively large share of low risk public clients  Substantial contract backlog in percent of revenues Credit risks  Large exposure towards the cyclical construction business with relatively low margins  Highly working capital intensive property development business  Weak results outside of Norway  Aggressive dividend payout ratio (minimum 50 per cent of net result) Financial figures Key financial figures - Veidekke ASA ( in NOK m illion) 2008 19,395 1,078 1,088 616 8,966 9,128 885 1,047 2,114 277 (794) (555)

Total revenues EBITDA EBITDA (lease adj.) Net income Total assets Total assets (lease adj.) Total interest bearing debt Total interest-bearing debt (lease adj.) Total equity Funds from operations (FFO) CAPEX Dividends paid DNB Markets Credit Research (updated 15-5-2013) Credit Research – Corporates Analyst: Kristina Solbakken Knut Olav Rønningen High Yield Corporates  +47 24169045 [email protected]

2009 15,558 831 842 411 7,779 7,974 307 501 2,054 (278) (466) (342)

2010 15,745 784 798 354 8,071 8,297 564 789 2,035 669 (401) (344)

2011 17,727 728 741 645 9,925 10,155 805 1,035 2,294 1,050 (454) (337)

2012 19,839 803 820 458 11,185 11,457 2,073 2,345 2,334 575 (551) (375)

Commercial papers outstanding Issuer Veidekke ASA Veidekke ASA Veidekke ASA

Amount (M) 200 200 300

Curr. NOK NOK NOK

Maturity Coupon (%) 15/01/2014 2.70 05/11/2013 2.79 12/02/2014 2.80

Description Fixed Fixed Fixed

Source: Stamdata.no

New bond issue Kristina Solbakken Investment Grade Corporates  +47 24169051 [email protected]

New issue: Issuer Veidekke ASA *DNB Shadow rating

tbd = to be discussed Source: Stamdata.no

Amount (M) (tbd)

Curr. NOK

Maturity (tbd)

Coupon (%) Description Rating* (tbd) (tbd) BBB-

Q1-12 4,036 (52)

Q1-13 4,234 (13)

(74) 9,853

(59) 11,010

1,376

1,815

1,795 (110) (31)

2,163 149 (35)

DNB Markets Credit Research

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Brief company description

Veidekke ASA 100 %

100 %

Veidekke Industri AS

100 %

Veidekke Eiendom AS

Veidekke Entreprenør AS

100 %

100 %

Veidekke Sverige AB

Hoffmann A/S

*The figure shows only the significant subsidiaries that are directly owned by Veidekke ASA. In total the Group consists of approximately 46 operational subsidiaries directly and indirectly owned by Veidekke ASA.

The Norwegian company Veidekke was established in 1936 and has a current market cap of NOK 6.3 bn. It is one of Scandinavia’s leading construction and property development companies and leading in its field in Norway. The Company has a total of 6,300 employees in Scandinavia and had an annual turnover of NOK 20 bn at 31 December 2012. Activities include construction projects, property developments and industrial operations. Veidekke's operations are predominantly in Norway (74 per cent), in addition to a presence in Sweden (20 per cent) and Denmark (6 per cent) since the late 1990s. The Company is listed on the Oslo Stock Exchange and has never declared an annual loss since it was founded in 1936. Veidekke is divided into three different divisions and operates in three different countries as illustrated below: Norway 74%

Sweden 20%

Denmark 6%

Construction 75%

Industry 15%

Property Development 10%

Construction The construction operations constitute approximately 74 per cent of the Group’s turnover. The construction operations include construction of new homes, commercial property, public buildings, renovation, road and railway. The division has shown a growth in revenues of 12 per cent in 2011 and 2012. The Norwegian division is the largest and most profitable. The revenue growth was 21 per cent, but profit margins only rose slightly from 2 per cent to 2.3 per cent in 2012. Industry Veidekke’s industrial projects constitute approximately 15 per cent of the Group’s turnover. The operations include asphalt plants, gravel and aggregates and road maintenance. In Norway, Veidekke Industry is the largest asphalt contractor in Norway with a market share of around 30 percent and the second largest producer of crushed stone and gravel. Veidekke Industry holds a 15 per cent market share in road services. Strong pressure on prices coupled with increased operating expenses led to weak profitability for asphalt operations in 2012. In total, revenue growth was 5 per cent but profit margins decreased from 7.1 per cent to 1.2 per cent in 2012. Property development Veidekke’s property development operations constitute approximately 10 per cent of the Group’s turnover. The division develops mainly homes, offices and shops or buildings for public activities. Veidekke Eiendom strengthened its position as a major player in the Norwegian housing market in 2012. Revenue growth was 46 per cent in 2012, but profit margins decreased slightly from 13.4 per cent to 13.0 per cent in 2012. Revenues by division 20000 15000

16311

14419

12749

Revenues by geography 2012 (MNOK)

4,301

10000

Norway

1,299 5000

3076

1065

3042

1526

3193

2110

0 2010

2011

Revenue Construction Revenue Property development

2012

Revenue Veidekke Industri

Source: Veidekke ASA annual report 2012

Denmark

16,014

Sweden

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BUSINESS RISK PROFILE Veidekke’s business risk profile can be described as fair in rating agency terminology. The business is characterized by the cyclical nature of all divisions and the high working capital intensity of the property development division. The competition is fierce in all business divisions and the EBITDA margins are relatively low. However, Veidekke has a strong market position in Norway where the macro outlook for Veidekke’s core business areas is positive going forward. Industry challenges Veidekke’s business risk profile is characterized as fair in rating agency terms which means that the risk is slightly higher than average. This is mainly due to the nature of the construction industry. The construction industry is generally characterized as cyclical and seasonal, with low margins and large projects. It is also highly competitive with low barriers to entry. Veidekkes low financial gearing and strong liquidity is crucial for maintaining the investment grade rating within this industry. Cyclical industry Veidekke has the majority of its risk exposure towards the building and construction business which is highly cyclical in line with the macro economy. The operations in Sweden and especially Denmark are significantly affected by the financial turmoil in Europe. The Norwegian economy has seen an upturn in 2012 with a GDP growth of around 3.5 per cent and an increase in investments in the building and construction business of 5-6 per cent. However, the cyclicality of the business increases the credit risk of Veidekke. Counterparty risk One of the most important risks to assess with respects to Veidekke is the risk associated with each counterparty’s ability to fulfill the contractual obligations. Veidekke has a considerable share of public sector customers (35 per cent) for whom the risk of default is considered very low. The Group’s largest single customer is the Norwegian Public Roads Administration (15 per cent). Veidekke’s costs related to bad debts have historically been very low. Execution risk Another important risk to assess with respects to Veidekke is the risk of higher than expected costs on individual projects. Since Veidekke normally receives a fixed price for each project, calculating the cost of each project is of great importance to avoid large losses if projects should default. Fierce competition The competition in all of Veidekke’s business areas is fierce and characterized by many market players and pressure on prices. Veidekke has a strong market position in Norway. However, the competition from foreign and international companies is increasing and the EBITDA-margins are on historically low levels (4.1 in 2012). With the high cost level and labor costs in Norway, it may become increasingly difficult for Veidekke to stay competitive going forward with a purely Norwegian cost base. Pressure on margins Subcontractor prices are increasing because of risks associated with the market developments in the construction business. The risk is partly handled by entering into long-term collaboration agreements with strategic suppliers. Raw material prices are creating a negative pressure on margins and Veidekke only hedges input factors for use in production to a very limited extent. The petroleum product bitumen is an important input factor for the asphalt operations. Price fluctuations are closely linked to changes in the oil price. However, bitumen costs are rarely hedged. A mitigating factor is that Veidekke’s largest customer, the Norwegian Public Roads Administration, contractually bears the risk related to the price development for bitumen. Profitability Veidekke has had an average growth rate of 12.5 per cent a year since its IPO in 1986. In 2012, the growth rate was 12 per cent (13 per cent). The EBITDA-margins for the group has decreased since 2008 and were historically low in 2012 at 4.1 per cent (lease adjusted). The profit margin for the Group increased in 2011 to 4 per cent due to large contribution from associates. In 2012 it fell to 3.0 per cent.

DNB Markets Credit Research

MNOK 30,000

Page 4 of 11

Revenues and margins

% 6.0

20,000

4.0

10,000

2.0

-

2008 2009 2010 Total revenues Profit margin

2011 2012 EBITDA margin

EBITDA development

MNOK 1,200

1,000 800

600 400

200 2008

2009

2010

2011

2012

EBITDA

Source: DNB MarketsCredit Research and Veidekke ASA

Market outlook Economic growth in the euro zone will remain weak in 2013. 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. Heavy construction activity will remain at a high level. The outlook for the Danish economy is still poor. We believe that 2013 will be another year with low activity in the building and construction market in Denmark. The building and construction market in Norway will continue to be strong in 2013, with good levels of activity in all segments. In total, we believe that the strong market and activity in Norway will increase the EBITDA margins of the Group going forward. FINANCIAL RISK PROFILE Veidekke’s financial risk profile is characterized as moderate in rating agency terminology. This means that the financial risk is low. Veidekke has a solid financial risk profile due to the low interest-bearing debt compared to cash flow. It is credit positive that nearly half of the Group’s operating costs is payments to subcontractors which give flexibility to scale down operations in weak economic conditions. The Company has, however, increased the level of interest-bearing debt due to increased investments in residential projects during 2012. In Q1-13 the interest-bearing debt was slightly reduced, but is still on a relatively high level compared to 2011. A cyclical company like Veidekke, with large working capital liabilities is dependent on low interest-bearing debt to maintain an investment grade rating. Key credit m etrics - Adjusted num bers - Veidekke ASA (In MNOK) 2008 2009 Grow th in total revenues (%) 0.3 (19.8) EBITDA margin (%) 5.6 5.4 EBIT margin (%) 4.1 3.3 Profit margin (%) 4.2 3.4 EBITDA interest coverage (x) 19 77 EBIT interest coverage (x) 12 22 FFO / TIBD (%) 26 (55) FFO/NIBD (%) 37 (70) FOCF/TIBD (%) 63 140 TIBD / EBITDA (x) 1.0 0.6 NIBD / EBITDA (x) 0.7 0.5 TIBD / Total capital (%) 33 20 TIBD/Total assets (%) 11 6 DNB Markets Credit Research (updated 16-5-2013) Please note that all credit metrics are lease adjusted FFO= Funds from operations FOCF= Free operating cash flow TIBD = Total interest-bearing debt NIBD= Net interest-bearing debt Total capital = TIBD + Equity

2010 1.2 5.1 2.9 3.1 36 13 85 97 10 1.0 0.9 28 10

2011 12.6 4.2 2.4 4.2 22 9 101 126 14 1.4 1.1 31 10

2012 11.9 4.1 2.6 3.0 15 7 25 27 (0) 2.9 2.6 50 20

Liquidity Veidekke has a solid liquidity buffer with cash and cash liquidity of MNOK 139 at Q1-13 (MNOK 206 at year end 2012). Unused committed borrowing facilities amounted to MNOK 1,258 (MNOK 1,099 at yearend 2012). The solid liquidity buffer must be seen in conjunction with the Company’s need for flexible financing solutions because of the seasonal fluctuations and volatile working capital. Working capital liabilities were MNOK 6,403 at year-end 2012 (MNOK 6,042).

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MNOK 30,000

Seasonal liquidity

MNOK 3,000

Working capital

% 10

2,500 2,000

5

20,000

1,500

-

1,000

10,000

500 0

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

Interest bearing debt

3Q 10

1Q 11

3Q 11

1Q 12

3Q 12

(5)

-

Q1 13

(10) 2008

2009

2010

2011

2012

Total revenues

Cash and cash equivalents

Increase in working capital/revenues (%)

Unused borrowing facilities

Source: DNB Credit Research and Veidekke ASA

Capital tied up in property development has risen substantially during 2012 and amounted to MNOK 3,520 (MNOK 2,641) at year-end 2012. Funds from operations in Q1-13 were higher than normal at MNOK 149 compared to MNOK -110 in Q1-12. The reason is the higher than normal property investments in the first half of 2012 with sales effects in 2013. In order to handle liquidity risks in projects for own account within property operations, the Group has set a requirement stating that projects shall not be started until the sales rate exceeds 50 per cent. Financial leverage and capital structure Veidekke’s net interest-bearing debt was MNOK 1,882 (MNOK 2,154 lease adjusted) at year-end 2012 and has increased significantly since 2009. At Q1-13 net interest-bearing debt was reduced to MNOK 1,677 (Unadjusted). The graphs below illustrate the increase in financial gearing (TIBD/Total capital) and leverage (TIBD/EBITDA and NIBD/EBITDA). The leverage is still conservative and the EBITDA interest coverage is very good at 15x in 2012 (22x) The Company has also signaled that the debt will be further reduced in 2013 and that net interest-bearing will stabilize around MNOK 1,000 going forward. Property values, including inventory residential projects, amount to 4,325 (4,052 unadjusted). Net interestbearing debt makes up only 49.8 per cent of property values. The fact that net interest-bearing debt make up less than 50 per cent of property values is one of the reasons why we are comfortable giving the Company an investment grade rating.

Capital structure

MNOK

%

2,500

60 50 40 30 20 10 -

2,000

1,500 1,000 500

2008

2009

2010

2011

2012

Total interest-bearing debt (lease adj.) Total equity Goodwill TIBD / Total capital (%)

Financial leverage

x 3.5 3 2.5 2 1.5 1 0.5 0 2008

2009

TIBD / EBITDA (x)

2010

2011

2012

NIBD / EBITDA (x)

Source: DNB Credit Research and Veidekke ASA *Total capital= Total interest-bearing debt + book equity TIBD= Total interest-bearing debt NIBD= Net interest-bearing debt

Covenants On 31 January 2012 Veidekke signed a new loan agreement with DNB Bank ASA which includes a credit facility of NOK 3.1 bn, due 2 November 2015. The borrowing facility is based on a negative mortgage declaration and is subject to certain covenants: (i) Net interest-bearing debt should not exceed EBITDA for the previous four quarters multiplied by 3, except for the 2nd and 3rd quarters of each year when the ratio should not exceed 3.5x. At 31 December 2012 this figure was 2.3x (2.6x lease adjusted). The Company’s own calculation of net interest-bearing debt is 1.9x. The difference is due to our more conservative definition of net interest-bearing debt. We do not subtract interest-bearing assets when calculating net interest-bearing debt as they consist mainly of loans to employees.

DNB Markets Credit Research

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(ii) The Group’s own account exposure shall not at any time exceed 60 per cent of the Group's book equity. At 31 December 2012, own account exposure was 22 per cent. If Veidekke approaches the limits of the key financial figures net interest-bearing debt will be reduced through the sale of assets in the two capital-intensive business areas industry and property. Own-account exposure will be reduced by stopping or delaying the start-up of new projects which have not achieved 100 per cent sales. Equity ratio Veidekke’s equity ratio was exceptionally low at Q1-13 at 19.6 per cent (20.9 per cent at year-end 2012). The company has earlier signaled that the equity ratio should be minimum 25 per cent. However, when we adjust the equity based on a market cap of MNOK 6.3 bn the value adjusted equity ratio is 41.7 per cent at Q1-13 (39.9 per cent at year-end 2012). This is a level we are comfortable with. In our view it is more relevant to look at leverage, gearing and liquidity ratios, rather than the equity ratio, when we are assessing Veidekke's financial risk profile from a credit perspective. Peer analysis In the peer analysis we have compared some of Veidekke’s key credit metrics to international players with official ratings from S&P and Moody’s. Please note that Veidekke is listed in NOK and the international peers are listed in EUR. The peer analysis shows average credit metrics from 2010-2012. Average 2010-2012 S&P rating Mody's rating DNB shadow rating Revenues EBITDA Funds from operations (FFO) Capital expenditures Free operating cash flow Debt Equity Ratios EBITDA margin (%) EBITDA interest coverage (x) EBIT interest coverage (x) Return on capital (%) Equity ratio FFO/debt (%) Free operating cash flow/debt (%) Debt/EBITDA (x) Total debt/debt plus equity (%)

Veidekke ASA (MNOK) n.a n.a BBB17,770 786 685 -469 -359 1,390 2,221

Strabag SE (MEUR) BBBn.a n.a 12,882 700 626 600 187 112.5 3,160

Leighton Holdings Ltd. (MEUR) BBBBaa2 n.a 10,711 1,011 1,211 1,042 -2 1,765 1,760

4.5 24.4 9.6 8.7 23 63.9 1.7 1.7 36.4

5.4 7.5 3.7 11 29 556 166 0.2 3.4

9.9 5.8 2.8 14.8 26 69 3.4 1.7 50.5

*Lease adjusted numbers

Source: DNB Credit Research

Veidekke’s EBITDA-margins and return on capital are lower than the international peers’. Veidekke’s interest ratio coverage is very strong and debt/EBITDA is in line with peers. The equity ratio is slightly lower than for the international peers. Financial policy The Company signals that growth going forward will be primarily organic, but also through the acquisition of new businesses. Acquisition of businesses will mainly take place in the Norwegian and Swedish construction operations. Veidekke has relatively low long term interest-bearing debt and little interest rate risk. The Company’s policy is to hedge up to 50 per cent of long term interest-bearing debt. MNOK 250 is currently hedged. The average dividend pay-out ratio has been 63 per cent of earnings per share since 2002. If extraordinary dividends and share buy-backs are included, the average pay-out ratio has been 78 per cent of earnings per share. Since 2002, Veidekke has paid out NOK 4.0 bn in dividends to shareholders. Veidekke’s signaled dividend policy is a pay-out ratio of at least 50 per cent of the profit after tax. Veidekke uses share buy-backs as an instrument to optimise the capital structure of the Group. In the years 2006–2008, Veidekke repurchased 6.7 per cent of the outstanding shares. In recent years, Veidekke has prioritised dividend payments and operational investments rather than buy-backs. Pension liabilities With effect from 1 January 2013, the EU has adopted new accounting rules for pensions (IAS 19 Employee Benefits.) This change means that Veidekke’s equity at 1 January 2013 has been reduced by NOK 138 million. The write down was previously estimated at approximately MNOK 150. It is a

DNB Markets Credit Research

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requirement that previous years' financial statements are restated. This results in an increase in the profit for 2012 of MNOK 111. Recovery analysis The parent Company, Veidekke ASA, is the issuing entity of the bond. The group has given a negative pledge for loans and guarantees with a small carve-out. Pledged assets were MNOK 127.8 at 31 December 2012. The Group had MNOK 1,704 in structural subordinated debt at 31. December 2012. The bond term sheet states that the bonds rank at least pari passu with all other unsecured obligations of the issuer. S&P’s credit methodology states that more than 20 per cent priority interest-bearing debt in a Company indicates a one notch downgrade of the bond rating. Priority interest-bearing debt, both contractual and structural, is less than 20 per cent for Veidekke Group. We estimate that holders of senior unsecured bonds will achieve an average recovery of 30-70 per cent in an event of a default. According to S&P’s notching criteria, the rating on the bonds should therefore be equal to the corporate credit rating. Hence, we have rated the senior unsecured bonds BBB-. Key credit m etrics - Adjusted num bers - Veidekke ASA (In MNOK) 2008 2009 2010 Interest coverage EBITDA interest coverage (x) 19 77 36 EBIT interest coverage (x) 12 22 13 (EBITDA-CAPEX)/interest coverage (x) 4 17 11 FFO interest coverage (x) 4 (12) 19 Financial gearing Net debt/EBITDA (x) 0.7 0.5 0.9 Total debt/EBITDA (x) 1.0 0.6 1.0 FFO/net debt (%) 37 (70) 97 FFO/total debt (%) 26 (55) 85 Free operating cash flow /net debt (%) 89 177 12 Free operating cash flow /total debt (%) 63 140 10 Solidity Total debt/(total debt+book value equity) (%) 33 20 28 Equity/total assets (%) 23 26 25 (Equity-goodw ill)/(total assets-goodw ill) (%) 18 20 19 Perform ance Grow th in revenues 0 (20) 1 EBITDA margin (%) 6 5 5 EBIT margin (%) 4 3 3 Profit margin (%) 4 3 3 Increase in w orking capital/revenues (%) 4 9 (2) DNB Markets Credit Research (updated 16-5-2013)

2011

2012

22 9 6 22

15 7 4 8

1.1 1.4 126 101 17 14

2.6 2.9 27 25 (50) (0)

31 23 18

50 20 15

13 4 2 4 (4)

12 4 3 3 (5)

DNB Markets Credit Research

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Major ongoing projects at year-end 2012 Projects Norway 3 projects at Økern*, Oslo Ufp 05 Skillingsmyr Hamar Stadion Sørlandssenteret Nordre Kvartal - Vulkan E16 Slomarka - Fulu Sartor Senter Joint venture E6-Dovrebanen Ørnen Hotell Helleren Sweden Joint venture E6-Dovrebanen Väg 40 Dållebo - Hester phase 2 Nöten E210 E120 Agnesb-Marieholm E13 E 45 N Göta Edet Rasta Elektronen Denmark Frederiksberg Centre SE-Syd Energi Rødovre Centrum Kagshusene Fisketorvet phase 2

Type

Customer

Turnover

Road/Infrastructure Road/Infrastructure Shopping centre Shopping centre Housing and commercial building Highway Shopping centre Road/Infrastructure Hotel School / indoor swimming pool

Norwegian Public Roads Adm. Jernbaneverket Centrumsgården AS Sørlandssenteret AS Vulkan Utvikling AS Statens vegvesen Sartor Senter AS/Thon Sartor AS Statens vegvesen/Jernbaneverket OBOS Forretningsbygg AS Hordaland Fylkeskommune

MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK

1,538 943 900 735 488 486 483 470 435 423

Infrastructure Road/Infrastructure Refurbishing Highway Highway Railway Highway Housing project

Norwegian Public Roads Adm/Jernbaneverket Trafikverket Fabege Trafikverket Trafikverket Banverket Trafikverket Panorama

MSEK MSEK MSEK MSEK MSEK MSEK MSEK MSEK

550 537 529 403 397 292 262 260

Shopping centre Power plant Shopping centre Housing project Shopping centre

Danica Syd Energi A/S Rødovre Centrum PAK Fisketorvet Shopping Center

MDKK MDKK MDKK MDKK MDKK

397 224 211 138 79

*NOK 340 million is included from the project Økern Metro Station w hich is completed

Source: Veidekke annual report 2012

Order backlog

MNOK 20,000 15,000 10,000 5,000 0 1. kv. 08

3. kv. 08

1. kv. 09 Norge

3. kv. 09

1. kv. 10 Sverige

3. kv. 10

1. kv. 11

3. kv. 11

Danmark

Source: Veidekke investor presentation 2013

1. kv. 12

3. kv. 12

1. kv. 13

DNB Markets Credit Research

Key financial figures - Veidekke ASA ( in NOK m illion) Profit & loss Total revenues Cost of materials Other operating expenses General & administrative costs (G&A) EBITDA EBITDA (lease adj.) Depreciation & amortization EBIT EBIT (lease adj.) Contribution from associated Interest expense (net) Interest expense (lease adj.) Other financial costs (net) Profit before tax Tax Net incom e from continuing operations Gains/profit/loss from discontinued operations Net incom e Balance sheet

Page 9 of 11

2008 19,395 4,486 9,693 4,139 1,078 1,088 296 782 792 123 (17) (7) 106 816 200 616 616 2008

2009 15,558 3,197 7,703 3,827 831 842 336 495 507 26 (18) (6) 16 523 112 411 411 2009 1,717 550 1,041 2,605 40 105 1,723 7,779 7,974 307 501 470 4,822 127 2,054 7,779 7,974

2010 15,745 3,368 7,712 3,881 784 798 349 436 449 22 (15) (2) (23) 482 128 354 354 2010 1,691 596 937 2,722 50 102 1,974 8,071 8,297 564 789 317 5,061 95 2,035 8,071 8,297

2011 17,727 3,863 8,975 4,162 728 741 322 405 419 229 (2) 12 (117) 748 103 645 645 2011 1,625 581 863 3,320 76 200 3,262 9,925 10,155 805 1,035 767 6,042 17 2,294 9,925 10,155

2012 19,839 3,785 10,998 4,253 803 820 303 501 517 35 (23) (7) (30) 587 129 458 458 2012

Property, plant & equipment Intangible assets Other non-current assets Tot. w orking capital assets Restricted cash (short term) Cash and cash equivalents Assets available for sale Other current assets Total assets Total assets (lease adj.) Total interest bearing debt Total interest-bearing debt (lease adj.) Other non-current liabilities Obligations under capital leases (ST) Tot. w orking capital liabilities Other current liabilities Current liabilities in operations held for sale Total equity Total equity and liabilities Total equity and liabilities (lease adj.)

1,776 583 1,012 3,489 48 307 1,751 8,966 9,128 885 1,047 455 5,222 290 2,114 8,966 9,128

1,747 677 1,212 3,720 15 192 3,624 11,185 11,457 2,073 2,345 361 6,403 14 2,334 11,185 11,457

Cash flow EBITDA

2008 1,078

2009 831

2010 784

2011 728

2012 803

EBITDA (lease adj.) Other cash flow Tax paid Net interest paid

1,088 (566) (177) (59)

842 (812) (285) (11)

798 22 (115) (22)

741 458 (101) (34)

820 (138) (37) (54)

Net interest paid (lease adj.) Funds from operations (FFO) Changes in w orking capital Operating cash flow (OCF) Investments Other cash flow from investments Free operating cash flow (FOCF) Debt installments Debt principal Dividends paid Funding surplus (shortfall) New debt New equity Other funding Other cashflow from financing activities Change in cash DNB Markets Credit Research (updated 16-5-2013)

(68) 277 864 1,140 (794) 262 656 (585) (555) (484) 848 (234) 130

(23) (278) 1,353 1,076 (466) 101 702 (634) (342) (274) 56 (218)

(36) 669 (278) 391 (401) 79 80 (6) (344) (270) 288 19

(48) 1,050 (740) 310 (454) 258 141 (23) (337) (219) 370 150

(70) 575 (1,025) (449) (551) (20) (1,083) (6) (375) (1,464) 1,332 (132)

DNB Markets Credit Research

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Key financial figures - Veidekke ASA ( in NOK m illion) Profit & loss Total revenues Operating costs EBITDA Depreciation & amortization EBIT Contribution from associated Financial expence (net) Profit before tax Tax Net incom e

Q1-12 4,036 4,088 (52) 71 (123) 2 (26) (95) (22) (74)

Q1-13 4,234 4,248 (13) 73 (87) 2 (8) (76) (17) (59)

Balance sheet Property, plant & equipment Intangible assets Other non-current assets Tot. w orking capital assets Cash and cash equivalents Assets available for sale Total assets Total interest bearing debt Tot. w orking capital liabilities Other non-current liabilities Total equity Total equity and liabilities

Q1-12 1,581 577 1,061 2,994 177 3,464 9,853 1,376 5,808 874 1,795 9,853

Q1-13 1,723 687 1,225 3,771 139 3,465 11,010 1,815 6,555 477 2,163 11,010

Cash flow EBITDA Other cash flow Tax paid Funds from operations (FFO) Changes in w orking capital Operating cash flow (OCF) Investments Other cash flow from investments Free operating cash flow (FOCF) Debt installments Debt principal Dividends paid Funding surplus (shortfall) New debt New equity Other funding Other cashflow from financing activities Change in cash DNB Markets Credit Research (updated 15-5-2013) *Please note that Q1 numbers are not lease adjusted

Q1-12 (52) (59) 1 (110) (131) (241) (31) (47) (318) (290) (608) 571 (35) (72)

Q1-13 (13) 169 (7) 149 30 179 (35) 27 171 (258) (87) (12) (99)

DNB Markets Credit Research

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