AI Terminal
Sweco
Earnings Release • May 12, 2023
2977_10-q_2023-05-12_38a045ee-95a0-4051-805a-c495b69473b1.pdf
Earnings Release
Open in ViewerOpens in native device viewer
12 May 2023
A strong first quarter
January–March 2023
- Net sales increased to SEK 7,140 million (6,077)
- EBITA increased to SEK 849 million (648), margin 11.9 per cent (10.7)
- EBITA increased 19 per cent year-on-year after adjustment for calendar effects
- EBIT increased to SEK 839 million (629), margin 11.7 per cent (10.4)
- Net debt amounted to SEK 2,916 million (997)
- Net debt/EBITDA amounted to 1.1x (0.4)
- Profit after tax increased to SEK 625 million (463), corresponding to SEK 1.75 per share (1.29)
Sweco plans and designs the sustainable communities and cities of the future. Together with our clients and the collective knowledge of our 20,000 architects, engineers and other specialists, we co-create solutions to address urbanisation, capture the power of digitalisation and make our societies more sustainable. Sweco is Europe's leading engineering and architecture consultancy, with sales of approximately SEK 25 billion (EUR 2.3 billion). The company is listed on Nasdaq Stockholm. This information is information that Sweco is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons, at around 07:20 CEST on 12 May 2023.
CEO comment
Strong start with captured market opportunities
2023 started with excellent momentum in various aspects, delivering strong organic growth, an all-time-high EBITA and a strengthened order book. The positive trend was driven by solid demand for Sweco's services fuelled by the green transition in society, higher average fees and good FTE growth. At the same time, we keep working with all our business areas to mitigate salary and other cost increases associated with the current inflation. A strong focus on fee increases, efficiency and cost control remains a priority going forward.
Solid growth in all business areas
Net sales increased to SEK 7,140 million (6,077), with an organic growth rate of 10 per cent, adjusted for calendar effects. EBITA increased 19 per cent to SEK 849 million (648), adjusted for calendar, resulting in an EBITA-margin of 11.9 per cent (10.7). The profit improvement is primarily driven by higher fees, FTE growth and lower absence. Higher operating expenses and personnel costs, as well as a slightly lower billing ratio, had a negative effect.
All business areas reported positive organic growth in the quarter, and six out of eight business areas reported EBITA improvements. In the quarter, Sweden, Norway, Denmark and Belgium all reported strong growth and margins. Finland had a solid quarter but a one-time payment as part of the industry salary agreement had a negative impact on the earnings. The Netherlands and the UK delivered strong growth and improved margins, whereas Germany & Central Europe also grew significantly, but noted a margin decline driven by the Central European countries.
New acquisitions and projects
We completed four new acquisitions in the first quarter, welcoming around 700 experts to Sweco.
The largest one, VK architects+engineers with 600 experts and net sales of around SEK 890 million was completed in late March after approval from the Belgian competition authorities. This acquisition is in line with our strategy to have a strong integrated engineering and architecture offering and strengthens our position in the Belgian market in sectors such as healthcare, industry and infrastructure.
We also announced acquisitions of two Dutch firms, the architecture and engineering company Van Aken and the architecture firm JHK Architecten, bringing around
70 experts in total. Van Aken brings extensive knowledge and experience in the private sector as well as from urban studies. JHK Architecten has a strong position within nonresidential building projects in the private sector.
In addition, we acquired Pro-Consult in Norway, adding 35 experts specialised in project management and constructional engineering.
We also won several exciting projects in the quarter. To mention a few: Sweco, together with Team Aker, will design Norway's largest hospital in Oslo – New Aker, currently the largest construction project in Norway. The project includes new construction and reuse of existing buildings. In Frankfurt am Main, Germany, Sweco is commissioned in an engineering consortium, with the planning of new tunnels as well as the new underground station for longdistance traffic below Frankfurt central station. The new Frankfurt long-distance railway tunnel will help to increase capacity at the Frankfurt transport hub.
Remaining focused and agile
Sweco's strategy and market position enables us to keep catering to the demand driven by the green transition in Europe. Our long-term strategy and diversified portfolio of solutions and clients will remain the foundation of Sweco, and it is evident, particularly in this market, that it is a strength.
We continue to note solid demand for Sweco's services with public as well as private clients. We are also maintaining good momentum in recruiting, and the Sweco Group is growing. However, the current market situation remains uncertain, which makes us place even further importance on managing fees, efficiency and costs. The key going forward is to stay focused and agile to deliver on our targets.
Åsa Bergman President and CEO
Europe's leading architecture and engineering consultancy
Sweco operates at the centre of the green transition. With the collective knowledge of our more than 20,000 architects, engineers and other experts, we co-create solutions with our clients that transform societies. Our work approach enables us to offer a combination of global expertise together with local presence and understanding, and by this we are adapting to our clients' business and reality.
Key figures
| #1 In the European market |
8 Business Areas |
19,000 Full-time employees |
|---|---|---|
| SEK 25.4 bn Net sales R12 |
SEK 2.4 bn EBITA R12 |
9.6% EBITA margin R12 |
Group performance
The first quarter resulted in good organic growth of 10 per cent, adjusted for calendar effects, and acquired growth of 3 per cent. EBITA increased approximately 19 per cent year-on-year after adjustment for calendar effects.
January–March
Net sales increased 17 per cent to SEK 7,140 million (6,077). Organic growth amounted to approximately 10 per cent, after adjustment for calendar effects, and acquired growth amounted to 3 per cent. Currency effects were 3 per cent in the quarter.
Higher average fees, a higher number of employees, higher revenue from subconsultants and lower sickness absence were the major drivers for organic growth.
EBITA increased to SEK 849 million (648) and the EBITA margin improved to 11.9 per cent (10.7). EBITA increased approximately 19 per cent or SEK 126
million year-on-year after adjustment for calendar effects.
The six business areas Belgium, Denmark, Sweden, Norway, the Netherlands and the United Kingdom all achieved increasing EBITA levels, adjusted for calendar effects. Overall for the Group, EBITA was positively affected by higher average fees, a higher number of employees and lower sickness absence, while higher personnel expenses, higher other operating expenses and a lower billing ratio had a negative impact. The significant negative impact from sickness absence in the first quarter last year was partly reversed.
The quarter had eight more working hours compared with the same period last year. This corresponded to a positive year-on-year impact of approximately SEK 75 million on net sales and EBITA.
The billing ratio decreased slightly to 73.2 per cent (73.6).
Total net financial items reduced to SEK -39 million (-21), primarily due to higher interest rates and increased debt.
Earnings per share increased to SEK 1.75 (1.29).
| KPIs | Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Net sales, SEK M | 7,140 | 6,077 | 25,360 | 24,296 |
| Organic growth, % | 12 | 5 | 6 | |
| Acquisition-related growth, % | 3 | 2 | 2 | |
| Currency, % | 3 | 3 | 3 | |
| Total growth, % | 17 | 10 | 11 | |
| Organic growth adj. for calendar, % | 10 | 3 | 6 | |
| EBITA, SEK M1 | 849 | 648 | 2,426 | 2,225 |
| Margin, % | 11.9 | 10.7 | 9.6 | 9.2 |
| Profit after tax, SEK M | 625 | 463 | 1,814 | 1,652 |
| Earnings per share, SEK | 1.75 | 1.29 | 5.06 | 4.61 |
| Number of full-time employees | 19,416 | 18,263 | 18,943 | 18,651 |
| Billing ratio, % | 73.2 | 73.6 | 73.7 | 73.9 |
| Normal working hours | 504 | 497 | 1,978 | 1,971 |
| Net debt/EBITDA, x2 | 1.1 | 0.4 | 0.4 |
1) EBITA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITA. For further information, see pages 18 and 20.
2) Net debt/EBITDA is an alternative performance measure (APM). Net debt is an alternative performance measure (APM) defined as financial debt (comprised almost exclusively of interest-bearing bank debt) less cash and cash equivalents and short-term investments. Lease liabilities are excluded from Net debt. EBITDA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes, Depreciation & amortisation and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITDA. For further information, see pages 18 and 27.
Employees
The number of full-time employees amounted to 19,416 (18,263) in the period.
Market
The underlying market for Sweco's services was good in the first quarter. Essentially all Business Areas experienced good demand for Sweco's services in the infrastructure, water, environment, energy and industry segments. However, demand for services in parts of the building and the real estate segments continued to weaken, with negative impact primarily in residential and commercial real estate.
Outlook
Russia's full-scale invasion of Ukraine and its macroeconomic impact continues to create significant uncertainty regarding future market development. The general economy and Sweco's markets are impacted by increased inflation, higher interest rates and energy supply risk. While there were negative impacts on some of Sweco's market segments, there was at the same time increased demand in other segments. Overall demand for Sweco's services normally follows the general macro-economic trend, with some time lag.
Sweco does not provide forecasts.
Events during the quarter
On 10 January, Sweco announced the acquisition of the Belgian group VK architects+engineers, specialised in architectural, technical and infrastructure design solutions. VK is primarily active in the Belgian market but also has a presence in the Netherlands, Luxembourg, the UK and Vietnam. The VK group has some 600 experts and annual net sales of around SEK 890 million. The acquisi-
Net sales by quarter and rolling 12 months
EBITA by quarter and rolling 12 months
SEK M
tion was completed on 21 March and was consolidated into Sweco as of 31 March 2023.
On 12 January, Sweco announced the acquisition of Dutch firm Van Aken Concepts, Architecture & Engineering B.V. with approximately 50 experts. Van Aken has extensive experience in the private sector as well as from urban studies. In 2022, the company had net sales of SEK 78 million. The acquisition was consolidated into Sweco Netherlands as of January 2023.
On 12 January, Sweco announced the acquisition of the Dutch architectural firm JHK Architecten with approximately 20 experts. JHK has a strong position within non-residential building projects in the private sector. In 2022, the company had net sales of SEK 26 million. The acquistion of JHK was completed on 21 December and was consolidated into Sweco Netherlands as of December 2022.
On 1 February, Sweco announced the acquisition of Pro-Consult in Norway. Pro-Consult has 35 experts specialising in project management and constructional engineering. In 2022, the company had net sales of SEK 66 million. Pro-Consult was consolidated into Sweco Norway as of February 2023.
Events after the quarter
On 17 April, Sweco announced the acquisition of Metria AB's planning and survey business in Sweden. Planning and Survey has 110 employees and annual net sales of SEK 130 million. The acquisition was completed on 2 May 2023.
On 3 May, Sweco acquired Neva Architects in Finland with around 30 experts. The acquisition contributes to Sweco now being one of Finland's largest architecture consultancies with over 150 architects. In 2022, Neva Architects had a turnover of SEK 33 million.
On 4 May, Sweco announced the acquisition of Approved Inspector Building Control firm Ball & Berry in the UK. Ball & Berry has around 40 experts. In 2022, the company had a turnover of SEK 44 million.
On 27 April, dividends totalling SEK 968 million (876) were distributed to Sweco AB shareholders.
Cash flow and financial position
Group cash flow from operating activities totalled SEK 136 million (235) for the first quarter. Net debt increased to SEK 2,916 million (997), primarily as a result of increased outflows for acquisitions.
The Net debt/EBITDA ratio was 1.1x (0.4).
Available cash and cash equivalents, including unutilised credit lines, totalled SEK 3,085 million (4,133) at the end of the quarter.
Purchase considerations paid to acquire companies and operations had an impact of SEK -1,217 million (-32) on the Group's cash and cash equivalents.
No repurchases of Sweco shares were made during the period or during the same period last year.
Net debt/EBITDA, x
Investments, January–March 2023
Investments in equipment totalled SEK 69 million (56) and were primarily attributable to IT investments. Depreciation of equipment amounted to SEK 55 million (54) and amortisation of intangible assets totalled SEK 36 million (34).
New projects
Energy and Industry
In Belgium, Sweco has been appointed as technical consultant in defining the climate roadmap for Bayer Agriculture, which is a global leader in crop protection products and seeds. The focus is to identify actions, technologies and exploratory scenarios for the transition to a low-carbon production process, as well as the framework conditions to make these scenarios technically and economically feasible. Sweco will provide energy consulting with options for renewable energy, electrification, biofuels, synthetic fuels, etc. The contract value is SEK 1 million.
Kraftringen has commissioned Sweco for pre-project planning and procurement of a new cogeneration plant (CHP plant) in Örtofta, Sweden. The new plant will replace older district heating production units to secure
the district heating supply and to relieve the region's electricity system. It will be designed to have the smallest possible climate footprint and equipped for carbon capture and storage (CCS). The contract sum initially amounts to SEK 10–15 million.
Heidelberg Materials, one of the world's largest building materials companies has commissioned Sweco to assist in the permit application process for the full-scale Carbon Capture and Storage (CCS) plant that Heidelberg Materials plans to construct in Slite, Gotland, in Sweden. The project, one of Sweden's most comprehensive climate adaptation initiatives, is now being planned in a feasibility study. Sweco's experts in application processing and environmental impact statements for CCS plants are involved in the project which runs to the end of 2023.
Transport and infrastrucure
The Frankfurt am Main railway junction is of great European importance and needs increased capacity. The German national railway company Deutsche Bahn AG has commissioned Sweco in an engineering consortium to plan a new tunnel and a new underground station for long-distance rail traffic below Frankfurt's central station. Sweco's assignment includes developing solutions from the feasibility study.
Buildings and Architecture
Sweco, together with Team Arker (Multiconsult, Ratio Arkitekter and Arkitema), will design Norway's largest hospital in Oslo – New Aker, which currently is the largest construction project in Norway. It will be an emergency hospital, a local hospital for Oslo's population and a university hospital. The project includes new construction and reuse of existing buildings. New Aker will be completed in 2030 and fully operational from 2031. The client is South-Eastern
Norway Regional Health Authority. The project has an investment framework of SEK 1.4 billion of which Sweco has an approximate 40 per cent share.
Sweco has been commissioned by biotech company Ecohelix to design a state-of-the-art production facility in Örnsköldsvik, Sweden, where renewable wood-based polymer products will be produced. The facility will be built entirely of wood, which still is an unusual choice of material for industrial buildings. Sweco has been able to demonstrate the differences in carbon emissions and costs between traditional concrete and timber framework, with wood the clear winner. Sweco will provide services within architecture, construction, land improvement, and water and sewage systems. The facility is expected to be completed by late 2025 or early 2026.
Together with Havnens Hænder, Sweco has been appointed by Ikano Bolig to identify solutions to reduce climate footprint by 75 per cent by 2030 with the residential construction project "4 to 1 Planet". The project is financially supported by the Danish philanthropic association Realdania and will be used as example buildings for the whole industry.
Circularity
For Volare, in Järvenpää Finland, Sweco is creating a pre-design for a production plant that uses side streams from the food industry in industrial symbiosis to feed black soldier fly larvae, thereby producing 5,000 tonnes protein for pet food and fish feed per year. Other end products include oils able to replace palm oil
and turf-like fertiliser for organic farming purposes. Sweco will provide process and warehouse design involving a wide range of Sweco's experts in building services, structures, land use, construction and architects.
Indaver Antwerp, a Belgian waste treatment company, will develop a circular recycling process, transforming post-consumer plastics to basic chemicals that meet the requirements for direct industrial use in petrochemical processes. The contract value is SEK 39 million.
Social sustainability
The City of Aalst in Belgium has engaged Sweco to transform its business parks from the 1960s to make them climate-robust, attractive, of higher quality and more accessible. Sweco's focus will be on economical use of space, accessibility for all modes of transport, giving space to biodiverse green and blue veins, and facilitating renewable energy and collectivity. The contract value is SEK 11 million.
The local authority Zwolle in the Dutch province Overijssel has commissioned Sweco to contribute to the transformation of the center of Zwolle. With the current housing shortage in the Netherlands, Zwolle has made accelerated agreements about housing construction. At the same time, the existing commercial and social facilities also need to be developed to achieve the intended transformation. Sweco's assignment is to conduct market research, a feasibility study and spatial design for the railway area.
The municipality of Høje Taastrup in Denmark has commissioned Sweco to develop the urban area Kulturstrøget. The project is multifunctional where climate protection, art and landscape architecture will create a new framework for urban life for everyday life and local celebrations. Sweco will assist with landscape architecture, traffic planning and multiple engineering disciplines including rainwater management, climate adaptation and mobility. The project is scheduled to finish in 2025.
Waste management
In the UK, the Infrastructure Housing and Environment Department of the Government of Jersey, has appointed Sweco to all six lots of the new Liquid Waste Professional Services Framework. Sweco's services range from small design projects and network modelling to strategic development in supporting the Department to secure funding for their five-year programme of work that will facilitate Island-wide development. The project will run from 2023 to 2027.
Sweco has been commissioned by biotech company Ecohelix to design a state-of-the-art production facility where renewable wood-based polymer products will be produced. The facility will be built entirely of wood, which still is an unusual choice of material for industrial buildings.
Sweco is involved in the design of Norway's largest hospital in Oslo – New Aker. This is currently the largest construction project in Norway and it includes new construction and reuse of existing buildings.
Business Area Overview
Sweco operates its business in and through eight geographical business areas: Sweden, Norway, Finland, Denmark, the Netherlands, Belgium, the UK and Germany and Central Europe.
2) Part of Business Area Germany and Central Europe 3) Part of Business Area Belgium 4) Part of Business Area UK
Sweco's markets
Sweco has presence in some 15 European markets and holds well-established positions in its business areas. It is primarily in these areas that the company will grow in the future. These markets are economically and politically stable, while also being close to each other geographically and culturally.
Sweco Sweden
Organic growth amounted to 9 per cent and EBITA increased 11 per cent, adjusted for calendar effects, both mainly driven by higher average fees and FTE growth. The market remained relatively good, albeit with continued weakness in the residential and commercial buildings segment.
Sales and profit, January–March
Net sales increased 11 per cent to SEK 2,178 million (1,968). Organic growth was approximately 9 per cent, adjusted for calendar effects, and was mainly driven by a higher number of employees and higher average fees. The year-on-year calendar effect of eight more hours had a positive impact of approximately SEK 26 million on net sales and EBITA.
EBITA increased approximately 11 per cent, corresponding to SEK 29 million, adjusted for calendar effects. The EBITA margin increased to 14.2 per cent (12.9). The EBITA increase was mainly driven by higher average fees, a higher number of employees and lower sickness absence, while higher personnel expenses and a lower billing ratio impacted negatively.
Market
The Swedish market remained relatively good during the quarter, albeit with large variations between the different segments. Demand for infrastructure services was good, backed by major public and industrial investments. The market for energy investments as well as for water and environmental services was also good.
The trend in the industry segment is somewhat uncertain, with the exception of northern Sweden, that continues to be a booming market driven by the green transition. In the real estate market, the weakness in the residential and commercial segments continued. The demand in the public building segments was good.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | |
|---|---|---|
| Net sales and profit | 2023 | 2022 |
| Net sales, SEK M | 2,178 | 1,968 |
| Organic growth, % | 10 | 3 |
| Acquisition-related growth, % | 1 | 1 |
| Currency, % | 0 | 0 |
| Total growth, % | 11 | 3 |
| Organic growth adj. for calendar, % | 9 | 1 |
| EBITA, SEK M | 309 | 255 |
| EBITA margin, % | 14.2 | 12.9 |
| Number of full-time employees | 6,219 | 5,853 |
Sweco Norway
Organic growth amounted to 12 per cent and EBITA increased 20 per cent, adjusted for calendar effects. Both were mainly driven by higher average fees and FTE growth. The market was stable, except for the residential and commercial buildings segments that remained weaker.
Sales and profit, January–March
Net sales increased 21 per cent to SEK 994 million (822). Organic growth was approximately 12 per cent, adjusted for calendar effects, and was driven mainly by higher average fees, a higher number of employees and higher revenue from subconsultants. Acquisitions contributed 11 per cent to growth. The year-on-year calendar effect of eight more hours had a positive impact of approximately SEK 11 million on net sales and EBITA.
EBITA increased approximately 20 per cent, corresponding to SEK 23 million, adjusted for calendar effects. The EBITA increase was mainly attributable to higher average fees, a higher number of employees and lower absence, while higher operating expenses impacted negatively. The EBITA margin increased to 15.1 per cent (14.1).
Market
The Norwegian market was stable during the quarter, however with variations between the different segments. The demand for services in the industry, energy, environment and water markets was good, partly driven by the shift towards electrification. The demand for infrastructure services was stable. In the real estate market, the weakness in the residential and commercial segments continued, while the public building segment remained good.
Net sales & EBITA margin, rolling 12 months
| Net sales and profit | Jan–Mar 2023 |
Jan–Mar 2022 |
|---|---|---|
| Net sales, SEK M | 994 | 822 |
| Organic growth, % | 14 | 15 |
| Acquisition-related growth, % | 11 | – |
| Currency, % | -3 | 7 |
| Total growth, % | 21 | 22 |
| Organic growth adj. for calendar, % | 12 | 9 |
| EBITA, SEK M | 150 | 116 |
| EBITA margin, % | 15.1 | 14.1 |
| Number of full-time employees | 2,077 | 1,791 |
Sweco Finland
Organic growth amounted to 6 per cent while EBITA decreased 13 per cent, adjusted for calendar effects. The decrease in EBITA was mainly driven by a one-time salary payment in the industry salary agreement. The market continued to be somewhat weak although some segments showed good demand.
Sales and profit, January–March
Net sales increased 15 per cent to SEK 904 million (788). Organic growth amounted to approximately 6 per cent, adjusted for calendar effects, and the largest drivers were higher average fees and a higher number of employees. The year-onyear calendar effect of eight more hours had a positive impact of approximately SEK 11 million on net sales and EBITA.
EBITA decreased approximately 13 per cent, corresponding to SEK 9 million, adjusted for calendar effects. The EBITA margin decreased to 8.5 per cent (9.5). The EBITA decrease was mainly attributable to higher personnel costs due to a one-time salary payment that is part of the salary agreement in the Finnish market. Higher average fees impacted positively.
Market
Overall, the Finnish market remained somewhat weaker, but with large differences between segments. The market for industrial services and energy was good, as was the market for infrastructure-related services. Demand for services within the residential and commercial building segments remained challenging, while the public building segment was stable.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | ||
|---|---|---|---|
| Net sales and profit | 2023 | 2022 | |
| Net sales, SEK M | 904 | 788 | |
| Organic growth, % | 8 | 1 | |
| Acquisition-related growth, % | – | 4 | |
| Currency, % | 7 | 4 | |
| Total growth, % | 15 | 9 | |
| Organic growth adj. for calendar, % | 6 | -1 | |
| EBITA, SEK M | 77 | 75 | |
| EBITA margin, % | 8.5 | 9.5 | |
| Number of full-time employees | 2,881 | 2,809 |
Sweco Denmark
Organic growth amounted to 16 per cent, adjusted for calendar effects. EBITA increased 54 per cent, adjusted for calendar effects, and was driven by higher average fees and FTE growth. The market was good, albeit with weakness in the private residential building segment.
Sales and profit, January–March
Net sales increased 27 per cent to SEK 674 million (531). Organic growth amounted to approximately 16 per cent, adjusted for calendar effects, and was impacted positively by a higher number of employees, higher revenue from subconsultants and higher average fees. Acquired growth amounted to 3 per cent. The year-onyear calendar effect of seven more hours had a positive impact of approximately SEK 7 million on net sales and EBITA.
EBITA increased approximately 54 per cent, corresponding to SEK 33 million, adjusted for calendar effects. The EBITA margin increased to 14.9 per cent (11.4). The EBITA increase was mainly driven by higher average fees and a higher number of employees.
Market
The Danish market was overall good during the first quarter. The activity within the public sector has increased moderately, while most of the private sector has remained stable during the period. The exception is private sector residential building, which has decreased significantly.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | |
|---|---|---|
| Net sales and profit | 2023 | 2022 |
| Net sales, SEK M | 674 | 531 |
| Organic growth, % | 17 | 7 |
| Acquisition-related growth, % | 3 | – |
| Currency, % | 7 | 4 |
| Total growth, % | 27 | 11 |
| Organic growth adj. for calendar, % | 16 | 6 |
| EBITA, SEK M | 100 | 61 |
| EBITA margin, % | 14.9 | 11.4 |
| Number of full-time employees | 1,476 | 1,358 |
Sweco Netherlands
Organic growth amounted to 10 per cent and EBITA increased 34 per cent, adjusted for calendar effects, both mainly driven by higher average fees. The market was relatively stable, still with differences between segments.
Sales and profit, January–March
Net sales increased 21 per cent to SEK 686 million (567). Organic growth amounted to approximately 10 per cent, adjusted for calendar effects, and was mainly driven by higher average fees, higher revenue from subconsultants and a higher number of employees. Acquired growth amounted to 3 per cent. The year-on-year calendar effect of eight more hours had a positive impact of approximately SEK 7 million on net sales and EBITA.
EBITA increased approximately 34 per cent, corresponding to SEK 17 million, adjusted for calendar effects. The EBITA margin increased to 10.7 per cent (8.7). The EBITA increase was mainly attributable to higher average fees, higher earnings from subconsultants and contributions from acquisitions, while higher operating expenses impacted negatively.
Market
The Dutch market was relatively stable in the quarter, albeit with differences between segments. The water & environment markets were stable. The energy market was good due to increased demand in energy transition.
Demand in the infrastructure and building segments remained subdued caused by the so called nitrogen issue, related to uncertainties around the impact from the EU regulation of nitrogen emissions in the Netherlands. Furthermore, the residential building segment remained weak.
Net sales & EBITA margin, rolling 12 months
| Net sales and profit | Jan–Mar 2023 |
Jan–Mar 2022 |
|---|---|---|
| Net sales, SEK M | 686 | 567 |
| Organic growth, % | 12 | 1 |
| Acquisition-related growth, % | 3 | 3 |
| Currency, % | 7 | 4 |
| Total growth, % | 21 | 8 |
| Organic growth adj. for calendar, % | 10 | 0 |
| EBITA, SEK M | 74 | 49 |
| EBITA margin, % | 10.7 | 8.7 |
| Number of full-time employees | 1,506 | 1,437 |
Sweco Belgium
Organic growth amounted to 17 per cent and EBITA increased 51 per cent, both mainly driven by higher average fees. The market remained good with continued investments in healthcare and pharma as well as infrastructure and energy transition.
Sales and profit, January–March
Net sales increased 32 per cent to SEK 788 million (597). Organic growth was 17 per cent and was mainly driven by higher average fees and a higher number of employees. Acquisitions contributed 8 per cent to growth. There was no year-on-year difference in the number of available working hours.
EBITA increased 51 per cent, corresponding to SEK 39 million. The EBITA margin increased to 14.8 per cent (13.0). The EBITA increase was mainly attributable to higher average fees and lower absence, while higher personnel and other operating expenses had a negative impact.
Market
The Belgian market remained good within most segments. The building markets were overall stable and new investments were planned in the healthcare and pharmaceutical industries. However, the slowdown in residential and office investments continued. The demand in the energy and enviroment segments were good driven by energy transition investments. Demand in the industry segment was stable. The infrastructure market was overall good.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | |
|---|---|---|
| Net sales and profit | 2023 | 2022 |
| Net sales, SEK M | 788 | 597 |
| Organic growth, % | 17 | 13 |
| Acquisition-related growth, % | 8 | 8 |
| Currency, % | 7 | 4 |
| Total growth, % | 32 | 25 |
| Organic growth adj. for calendar, % | 17 | 12 |
| EBITA, SEK M | 117 | 78 |
| EBITA margin, % | 14.8 | 13.0 |
| Number of full-time employees | 1,646 | 1,464 |
Sweco UK
Organic growth amounted to 10 per cent and EBITA increased by 51 per cent, adjusted for calendar effects, both mainly driven by higher average fees. The UK market remained challenging in the quarter.
Sales and profit, January–March
Net sales increased 12 per cent to SEK 386 million (344). Organic growth was approximately 10 per cent, adjusted for calendar effects, and was mainly driven by higher average fees and a higher number of employees. The year-on-year calendar effect of eight more hours had a positive impact of approximately SEK 4 million on net sales and EBITA.
EBITA increased approximately 51 per cent, corresponding to SEK 8 million, adjusted for calendar effects. The EBITA margin increased to 6.9 per cent (4.3). The EBITA increase was mainly attributable to higher average fees and lower other operating expenses, while higher personnel expenses had a negative impact.
Market
The UK market remained challenging in the first quarter albeit improving compared to the previous quarter. The demand for services in the energy market was very good, driven by energy storage and green energy generation investments. The water and environment markets were stable.
The infrastructure market weakened as the government announced delays to major transport infrastructure projects. In the real estate market, the weakness in the residential segment remained, while the commercial buildings segment saw a slight improvement. Other building segments such as data centres, life sciences and healthcare showed good demand.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | |
|---|---|---|
| Net sales and profit | 2023 | 2022 |
| Net sales, SEK M | 386 | 344 |
| Organic growth, % | 11 | 2 |
| Acquisition-related growth, % | – | – |
| Currency, % | 1 | 8 |
| Total growth, % | 12 | 10 |
| Organic growth adj. for calendar, % | 10 | 2 |
| EBITA, SEK M | 27 | 15 |
| EBITA margin, % | 6.9 | 4.3 |
| Number of full-time employees | 1,237 | 1,161 |
Sweco Germany and Central Europe
Net sales increased 6 per cent organically, while EBITA decreased, adjusted for calendar effects. The decrease in EBITA was mainly driven by lower profitability in Central Europe. The market remained somewhat weak, mainly in private real estate, whereas energy transition and infrastructure investments continued to drive demand.
Sales and profit, January–March
Net sales increased 13 per cent to SEK 577 million (509). Organic growth amounted to approximately 6 per cent, adjusted for calendar effects, and was mainly driven by higher average fees, while a lower billing ratio in Central Europe had a negative impact. The year-on-year calendar effect of ten more hours had a positive impact of approximately SEK 8 million on net sales and EBITA.
EBITA decreased approximately 39 per cent, corresponding to SEK 7 million, adjusted for calendar effects. The EBITA margin decreased to 3.2 per cent (3.4). The EBITA decrease was mainly driven by lower profitability in Central Europe and higher personnel costs, while higher average fees impacted positively.
Market
Overall, the German market remained somewhat weak in the first quarter. This effect was in particular driven by weaker demand in the commercial real estate sector and overall in the private sector due to market uncertainty and higher construction costs. The demand for services in the energy, environment and water markets was good, with energy transition and new regulation for waste treatment boosting demand. The demand for infrastructure services was good and stable.
Net sales & EBITA margin, rolling 12 months
| Jan–Mar | Jan–Mar | |
|---|---|---|
| Net sales and profit | 2023 | 2022 |
| Net sales, SEK M | 577 | 509 |
| Organic growth, % | 8 | 2 |
| Acquisition-related growth, % | -1 | – |
| Currency, % | 7 | 4 |
| Total growth, % | 13 | 5 |
| Organic growth adj. for calendar, % | 6 | 1 |
| EBITA, SEK M | 19 | 17 |
| EBITA margin, % | 3.2 | 3.4 |
| Number of full-time employees | 2,296 | 2,341 |
Other information
Parent Company, January–March 2023
Parent Company net sales totalled SEK 282 million (259) and were attributable to intra-group services. Profit after net financial items totalled SEK -76 million (-36). Investments in equipment totalled SEK 25 million (7). Cash and cash equivalents at the end of the period totalled SEK 0 million (50).
Accounting principles
Sweco complies with the International Financial Reporting Standards (IFRS) and interpretive statements from the International Financial Reporting Interpretations Committee (IFRIC), as adopted by the EU. This report was prepared in accordance with IAS 34, Interim Reporting; the Swedish Annual Accounts Act; and the Swedish Financial Reporting Board's RFR 2, Reporting for Legal Entities. The Group applies the same accounting and valuation principles as those described in Note 1 in the Annual Report for 2022.
In this report, amounts in brackets refer to the corresponding period of the previous year. Because table items are individually rounded off, table figures do not always tally. The interim report comprises pages 1–27; the interim financial information presented on pages 1–27 is therefore part of this financial report.
Key performance measures
Sweco follows the guidelines from ESMA (European Securities and Markets Authority) regarding APMs (Alternative Performance Measures). In brief, these are measures of historical or ongoing operating results and financial performance that are not specified or defined in IFRS. The presentation of non-IFRS financial measures is limited as an analytical tool and should not be used as a substitute for key ratios pursuant to IFRS. Sweco believes that the APMs will enhance investors' evaluation of our ongoing operating results, aid in forecasting future periods and facilitate meaningful comparison of results between periods. The non-IFRS financial measures presented in this report may differ from similarly titled measures used by other companies. A complete list of all Sweco's definitions can be found on our website: https://www.swecogroup.com/ investor-relations/financial-information/definitions/
Sweco's main key financial metrics, defined as Alternative Performance Measures (APMs) in accordance with IFRS, are EBITA and Net debt/EBITDA.
EBITA is the Group's key metric for operational performance at Group and Business Area level. Sweco's EBITA measure is defined as Earnings Before Interest, Taxes and Acquisitionrelated items. All leases are treated as operating leases and the total cost of the lease affects EBITA. Operating lease treatment follows IAS 17 (the standard for leases applicable through 31 December 2018).
Net debt/EBITDA is Sweco's key metric for financial strength. The definition remains essentially in line with the covenants defined in Sweco's bank financing agreements. Net debt is defined as financial debt (comprised almost exclusively of interest-bearing bank debt) less cash and cash equivalents and short-term investments. Lease liabilities are excluded from Net debt. As with the calculation of EBITA, when calculating EBITDA all leases are assumed to comprise operating leases pursuant to IAS 17.
Items affecting comparability (IAC): To assist in understanding its operations, Sweco believes that it is useful to consider certain measures and ratios exclusive of items affecting comparability. Items affecting comparability include items that are non-recurring, have a significant impact and are considered to be important for understanding the operating performance when comparing results between periods. Items affecting comparability relate to restructuring and integration costs, costs related to acquisitions and divestments, project write-downs and other one-off items when amounts are significant. The items affecting comparability are disclosed in this report. All measures and ratios in this report have been disclosed including items affecting comparability first and then excluding items affecting comparability as a second measure when deemed appropriate.
The reconciliation of Sweco's key financial metrics, described above, and IFRS measures are presented on pages 20 and 27. The organic growth calculation is presented on page 26.
The Sweco share
The Sweco share is listed on Nasdaq Stockholm. The share price of the Sweco Class B share was SEK 131.50 at the end of the period, representing an increase of 32 per cent during the quarter. Nasdaq Stockholm OMXSPI decreased 14 per cent over the same period.
The total number of shares at the end of the period was 363,251,457: 31,065,598 Class A shares and 332,185,859 Class B shares. The total number of shares outstanding was 358,654,441: 31,065,598 Class A shares and 327,588,843 Class B shares.
Resolutions at the 2023 AGM
Dividend: The Annual General Meeting resolved, in accordance with the proposal of the Board of Directors, to distribute a dividend of SEK 2.70 per share (2.45) to the shareholders.
2023 Share savings scheme: Pursuant to the Board's proposal, the 2023 AGM resolved to implement a long-term share savings scheme for up to 100 Sweco Group senior executives and other key employees.
2023 Share bonus scheme: Pursuant to the Board's proposal, the 2023 AGM resolved to implement a sharebased incentive scheme for employees in Sweden.
Pursuant to the Nomination Committee's proposal, the 2023 AGM resolved that the Board of Directors shall be comprised of seven members. Pursuant to the Nomination Committee's proposal, Åsa Bergman, Alf Göransson, Johan Hjertonsson, Johan Nordström, Susanne Pahlén Åklundh, Johan Wall and Christine Wolff were re-elected as directors. Johan Nordström was re-elected as Chairman of the Board of Directors.
Risks and uncertainties
Significant risks and uncertainties affecting the Sweco Group and the Parent Company include business risks associated with the general economic trend and investment level in various markets, the capacity to attract and retain skilled personnel, the effects of political decisions as well as risks and uncertainties related to the war in Ukraine. The Group is also exposed to various types of financial risk, such as foreign currency, interest rate and credit risk. The risks to which Sweco is exposed are detailed in Sweco's 2022 Annual Report (page 54–58, Risks and Risk Management).
Calendar effects
Year 2023
The number of normal working hours in 2023, based on the 12-month sales-weighted business mix as of September 2022, is broken down as follows:
| 2023 | 2022 | ||
|---|---|---|---|
| Quarter 1: | 504 | 497 | 8 |
| Quarter 2: | 462 | 468 | -6 |
| Quarter 3: | 508 | 516 | -7 |
| Quarter 4: | 487 | 490 | -2 |
| Total: | 1,962 | 1,971 | -8 |
Acquisition-related amortisation
Acquisition-related intangible assets and expensed costs for future services will be amortised pursuant to the following schedule, based on acquisitions to date excluding the acquisition of VK Group:
| 2023 Estimate | SEK -97 million |
|---|---|
| 2024 Estimate | SEK -52 million |
| 2025 Estimate | SEK -29 million |
| 2026 Estimate | SEK -19 million |
Forthcoming financial information
| Interim report January–June | 18 July 2023 |
|---|---|
| Interim report January–September | 27 October 2023 |
| Capital markets day | 14 November 2023 |
| Year-end report 2023 | 9 Februrary 2024 |
Stockholm, 12 May 2023
Åsa Bergman President and CEO, Member of the Board of Directors
For further information, please contact:
Olof Stålnacke, CFO Phone +46 70 306 46 21 [email protected]
Marcela Sylvander, CCO Phone +46 79 341 14 08 [email protected]
SWECO AB (publ) Org. nr. 556542-9841
Gjörwellsgatan 22, Box 34044, 100 26 Stockholm, Phone: +46 8 695 60 00 Email: [email protected] www.swecogroup.com
This report has not been subject to an audit or review.
KPIs
| KPIs1 | Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Profitability | ||||
| EBITA margin, % | 11.9 | 10.7 | 9.6 | 9.2 |
| Operating margin (EBIT), % | 11.7 | 10.4 | 9.7 | 9.2 |
| Revenue growth2 | ||||
| Organic growth, % | 12 | 5 | 6 | |
| Acquisition-related growth, % | 3 | 2 | 2 | |
| Currency, % | 3 | 3 | 3 | |
| Total growth, % | 17 | 10 | 11 | |
| Organic growth adj. for calendar, % | 10 | 3 | 6 | |
| Debt | ||||
| Net debt, SEK M | 2,916 | 997 | 1,075 | |
| Interest-bearing debt, SEK M | 3,530 | 1,528 | 1,926 | |
| Financial strength | ||||
| Net debt/Equity, % | 27.6 | 10.9 | 10.8 | |
| Net debt/EBITDA, x | 1.1 | 0.4 | 0.4 | |
| Equity/Assets ratio, % | 43.4 | 45.7 | 45.4 | |
| Available cash and cash equivalents, SEK M | 3,085 | 4,133 | 4,869 | |
| – of which unutilised credit, SEK M | 2,471 | 3,602 | 4,018 | |
| Return | ||||
| Return on equity, % | 18.4 | 18.2 | 17.8 | |
| Return on capital employed, % | 16.5 | 16.2 | 16.5 | |
| Share data | ||||
| Earnings per share, SEK | 1.75 | 1.29 | 5.06 | 4.61 |
| Diluted earnings per share, SEK | 1.74 | 1.29 | 5.05 | 4.60 |
| Equity per share, SEK3 | 29.49 | 25.54 | 27.71 | |
| Diluted equity per share, SEK3 | 29.38 | 25.41 | 27.60 | |
| Number of shares outstanding at reporting date | 358,654,441 | 357,598,804 | 358,619,404 | |
| Number of repurchased Class B shares | 4,597,016 | 5,652,653 | 4,632,053 |
1) The definitions of the Key Performance Indicators (KPIs) are available on Sweco's website.
2) See page 26 for details on Sweco's calculation of revenue growth.
3) Refers to portion attributable to Parent Company shareholders.
| Reconciliation of EBIT and the APMs EBITA and EBITDA, SEK M |
Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Operating profit (EBIT) | 839 | 629 | 2,454 | 2,245 |
| Acquisition-related items | 26 | 34 | 35 | 43 |
| Lease expenses1 | -226 | -206 | -849 | -829 |
| Depreciation and impairments, right-of-use assets | 210 | 191 | 786 | 767 |
| EBITA2 | 849 | 648 | 2,426 | 2,225 |
| Amortisation/depreciation and impairment, | ||||
| tangible and intangible fixed assets | 65 | 66 | 255 | 256 |
| EBITDA3 | 913 | 713 | 2,681 | 2,481 |
1) Lease expenses pertain to adjustments made in order to treat all leases as operating leases.
2) EBITA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITA.
3) EBITDA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes, Depreciation & amortisation and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITDA.
Consolidated income statement
| SEK M | Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Net sales | 7,140 | 6,077 | 25,360 | 24,296 |
| Other income | 4 | 5 | 31 | 31 |
| Other external expenses | -1,310 | -1,134 | -5,107 | -4,930 |
| Personnel expenses | -4,695 | -4,029 | -16,754 | -16,087 |
| Amortisation/depreciation and impairment, tangible and intangible fixed assets1 |
-65 | -66 | -255 | -256 |
| Depreciation and impairment, right-of-use assets | -210 | -191 | -786 | -767 |
| Acquisition-related items2 | -26 | -34 | -35 | -43 |
| Operating profit (EBIT) | 839 | 629 | 2,454 | 2,245 |
| Net financial items3 | -22 | -9 | -65 | -51 |
| Interest cost of leasing4 | -15 | -11 | -48 | -44 |
| Other financial items5 | -1 | -1 | 7 | 7 |
| Total net financial items | -39 | -21 | -106 | -89 |
| Profit before tax | 800 | 608 | 2,348 | 2,156 |
| Income tax | -175 | -146 | -534 | -505 |
| PROFIT FOR THE PERIOD | 625 | 463 | 1,814 | 1,652 |
| Attributable to: | ||||
| Parent Company shareholders | 625 | 463 | 1,813 | 1,651 |
| Non-controlling interests | 0 | 0 | 1 | 1 |
| Earnings per share attributable to Parent Company shareholders, SEK |
1.75 | 1.29 | 5.06 | 4.61 |
| Average number of shares outstanding | 358,264,651 | 357,560,893 | 358,445,666 | 358,269,726 |
| Dividend per share, SEK | 2.70 |
1) Includes tangible assets and intangible assets that are not acquisition-related.
2) Acquisition-related items consist of amortisation and impairment of goodwill and acquisition-related intangible assets, revaluation of purchase price, profit and losses on the divestment
of companies, operations, land and buildings, as well as costs for received future service. See page 24 for additional details. 3) Net financial items comprise interest expenses on credit facilities and costs related to credit facilities less interest income on cash and cash equivalents.
4) Interest cost of leasing comprises the interest cost of leasing pursuant to IFRS 16.
5) Other financial items: Result and distributions from participation in associated companies and other securities, result from sale of participations in associated companies and other securities, foreign exchange gains and losses on financial assets and liabilities, and other interest income and interest expenses.
Consolidated statement of comprehensive income
| Jan–Mar | Jan–Mar | Apr 2022– | Full-year | |
|---|---|---|---|---|
| SEK M | 2023 | 2022 | Mar 2023 | 2022 |
| Profit for the period | 625 | 463 | 1,814 | 1,652 |
| Items that will not be reversed in the income statement | ||||
| Revaluation of defined benefit pensions, net after tax1, 2 | – | – | 39 | 39 |
| Items that may subsequently be reversed in the income statement |
||||
| Translation differences, net after tax | 14 | 80 | 381 | 447 |
| COMPREHENSIVE INCOME FOR THE PERIOD | 640 | 543 | 2,235 | 2,138 |
| Attributable to: | ||||
| Parent Company shareholders | 640 | 543 | 2,233 | 2,136 |
| Non-controlling interests | 0 | 0 | 2 | 2 |
| 1) Tax on revaluation of defined benefit pensions | – | – | -14 | -14 |
2) Revalued annually. Reviewed quarterly in the event of material changes to actuarial assumptions.
Consolidated cash flow statement
| SEK M | Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Profit before tax | 800 | 608 | 2,348 | 2,156 |
| Amortisation/depreciation and impairment | 301 | 279 | 1,139 | 1,116 |
| Other non-cash items | 21 | 7 | 125 | 111 |
| Cash flow from operating activities before changes in working capital, tax paid, interest paid and received |
1,123 | 894 | 3,612 | 3,384 |
| Interest cost leasing | -15 | -11 | -48 | -44 |
| Net interest paid | -12 | -4 | -32 | -25 |
| Tax paid | -231 | -249 | -371 | -389 |
| Changes in working capital | -729 | -396 | -745 | -412 |
| Cash flow from operating activities | 136 | 235 | 2,416 | 2,515 |
| Acquisition and divestment of subsidiaries and operations | -1,217 | -32 | -1,795 | -610 |
| Purchase and disposal of intangible and tangible assets | -72 | -68 | -306 | -302 |
| Other investing activities | -1 | 3 | 1 | 5 |
| Cash flow from investing activities | -1,291 | -97 | -2,100 | -907 |
| Borrowings and repayment of borrowings | 1,110 | -283 | 1,371 | -22 |
| Principal elements of lease payments | -212 | -200 | -802 | -790 |
| Dividends paid | – | – | -876 | -876 |
| Cash flow from financing activities | 898 | -483 | -307 | -1,688 |
| CASH FLOW FOR THE PERIOD | -257 | -345 | 8 | -80 |
Consolidated balance sheet
| SEK M | 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 |
|---|---|---|---|
| Goodwill | 10,558 | 8,255 | 9,198 |
| Other intangible assets | 317 | 276 | 273 |
| Property, plant and equipment | 620 | 519 | 589 |
| Right-of-use assets | 2,608 | 2,470 | 2,438 |
| Financial assets | 327 | 332 | 319 |
| Current assets excl. cash and cash equivalents | 9,348 | 7,633 | 8,249 |
| Cash and cash equivalents incl. short-term investments | 614 | 531 | 850 |
| TOTAL ASSETS | 24,391 | 20,017 | 21,916 |
| Equity attributable to Parent Company shareholders | 10,576 | 9,134 | 9,939 |
| Non-controlling interests | 7 | 10 | 4 |
| Total equity | 10,582 | 9,144 | 9,943 |
| Non-current lease liabilities | 1,860 | 1,824 | 1,740 |
| Non-current interest-bearing debt | 2,811 | 1,318 | 1,410 |
| Other non-current liabilities | 798 | 875 | 779 |
| Current lease liabilities | 812 | 739 | 773 |
| Current interest-bearing debt | 719 | 211 | 516 |
| Other current liabilities | 6,809 | 5,906 | 6,756 |
| TOTAL EQUITY AND LIABILITIES | 24,391 | 20,017 | 21,916 |
| Contingent liabilities | 1,224 | 1,077 | 1,211 |
Consolidated statement of changes in equity
| Jan–Mar 2023 | Jan–Mar 2022 | ||||||
|---|---|---|---|---|---|---|---|
| SEK M | Equity attributable to Parent Company shareholders |
Non controlling interests |
Total equity |
Equity attributable to Parent Company shareholders |
Non controlling interests |
Total equity |
|
| Equity, opening balance | 9,939 | 4 | 9,943 | 8,594 | 10 | 8,604 | |
| Comprehensive income for the period | 640 | 0 | 640 | 543 | 0 | 543 | |
| Share bonus scheme | -3 | – | -3 | -5 | – | -5 | |
| Share savings schemes | 0 | – | 0 | 2 | – | 2 | |
| Non-controlling interests in acquired companies |
– | 4 | 4 | – | – | – | |
| Divestment of non-controlling interests | – | -1 | -1 | – | – | – | |
| EQUITY, CLOSING BALANCE | 10,576 | 7 | 10,582 | 9,134 | 10 | 9,144 |
Acquisitions
The following acquisitions of companies and operations were carried out during the period.
| Company | Included from |
Business area |
Acquired share, % |
Annual net sales in SEK M1 |
Number of employees (individuals) |
|---|---|---|---|---|---|
| VAN AKEN concepts, Architecture & Engineering B.V. | January | Netherlands | 100 | 78 | 48 |
| Pro-Consult | February | Norway | 100 | 66 | 35 |
| VK architects+engineers Group | March | Belgium | 100 | 888 | 5172 |
| TOTAL | 1,032 | 600 |
1) Estimated annual net sales.
2) Including self-employed, VK Group has some 600 experts.
During the period, the acquired companies contributed SEK 30 million in net sales, SEK 7 million in EBITA and SEK 5 million in operating profit (EBIT). If the companies had been owned as of 1 January 2023, they would have contributed approximately SEK 264 million in net sales, about SEK 41 million in EBITA and about SEK 40 million in operating profit (EBIT). The transaction costs for the acquisitions during this period and the previous period totalled SEK 17 million.
The purchase considerations of the acquisitions carried out in the period totalled SEK 1,321 million and had a negative impact on cash and cash equivalents of SEK 1,217 million. The acquisition analyses during the period are preliminary. The acquisitions impacted the consolidated balance sheet as detailed in the table below.
| Acquisitions, SEK M | |
|---|---|
| Intangible assets | 1,431 |
| Property, plant and equipment | 23 |
| Right-of-use assets | 2 |
| Financial assets | 14 |
| Current assets | 615 |
| Non-current lease liabilities | -1 |
| Other non-current liabilities | -476 |
| Deferred tax | -17 |
| Current lease liabilities | -1 |
| Other current liabilities | -266 |
| Non-controlling interest | -4 |
| Total purchase consideration | 1,321 |
| Purchase price outstanding | -3 |
| Payment of deferred purchase price | 2 |
| Cash and cash equivalents in acquired companies | -102 |
| DECREASE IN GROUP CASH AND CASH EQUIVALENTS | 1,217 |
Acquisition-related items
| SEK M | Jan–Mar 2023 |
Jan–Mar 2022 |
Apr 2022– Mar 2023 |
Full-year 2022 |
|---|---|---|---|---|
| Amortisation of acquisition-related intangible assets | -27 | -22 | -99 | -94 |
| Revaluation of additional purchase price | – | – | 11 | 11 |
| Profit/loss on divestment of companies and operations | 1 | 0 | 59 | 58 |
| Cost for received future service | – | -11 | -6 | -17 |
| ACQUISITION-RELATED ITEMS | -26 | -34 | -35 | -43 |
Fair value of financial instruments
The Group's financial instruments consist of shares, trade receivables, other receivables, cash and cash equivalents, trade payables, forward exchange contracts, interest bearing liabilities, other liabilities, and contingent considerations. Descriptions of each category and valuation techniques for the different levels are shown below and in the 2022 Annual Report, Note 33 Financial instrument per category. No transfers between any of the levels took place during the period.
Forward exchange contracts are measured at fair value based on Level 2 inputs. As per 31 March 2023, forward contracts with a positive market value amounted to SEK 0 million compared with SEK 0 million as per 31 December 2022 and forward contracts with a negative market value amounted to SEK 2 million compared with SEK 3 million as per 31 December 2022. Unlisted financial assets and contingent considerations are measured at fair value based on Level 3 inputs. The fair value of unlisted financial assets amounted to SEK 11 million as per 31 March 2023 compared with SEK 11 million as per 31 December 2022, and financial liabilities for contingent considerations amounted to SEK 0 million compared with SEK 0 million as per 31 December 2022. Other financial assets and liabilities are measured at accrued amortised cost. Accrued amortised cost is considered a good approximation of fair value since the fixed interest period for all loans is less than one year.
Quarterly review per business area
| 2023 Q1 |
2022 Q4 |
2022 Q3 |
2022 Q2 |
2022 Q1 |
2021 Q4 |
2021 Q3 |
2021 Q2 |
2021 Q1 |
|
|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK M | |||||||||
| Sweco Sweden | 2,178 | 2,201 | 1,549 | 2,067 | 1,968 | 2,035 | 1,446 | 2,012 | 1,905 |
| Sweco Norway | 994 | 933 | 712 | 778 | 822 | 719 | 533 | 696 | 675 |
| Sweco Finland | 904 | 930 | 680 | 812 | 788 | 802 | 646 | 776 | 723 |
| Sweco Denmark | 674 | 642 | 517 | 527 | 531 | 512 | 436 | 476 | 480 |
| Sweco Netherlands | 686 | 627 | 528 | 552 | 567 | 554 | 448 | 495 | 528 |
| Sweco Belgium | 788 | 577 | 549 | 587 | 597 | 504 | 450 | 474 | 478 |
| Sweco UK | 386 | 355 | 365 | 347 | 344 | 295 | 302 | 289 | 313 |
| Sweco Germany & Central Europe | 577 | 553 | 532 | 505 | 509 | 568 | 477 | 487 | 483 |
| Group-wide, Eliminations, etc.1 | -49 | -87 | -59 | -59 | -50 | -70 | -48 | -62 | -47 |
| TOTAL NET SALES | 7,140 | 6,732 | 5,372 | 6,116 | 6,077 | 5,920 | 4,691 | 5,643 | 5,538 |
| Items affecting comparability (IAC)2 | – | – | – | – | – | – | 16 | – | – |
| TOTAL NET SALES excl. IAC | 7,140 | 6,732 | 5,372 | 6,116 | 6,077 | 5,920 | 4,707 | 5,643 | 5,538 |
| EBITA, SEK M3 | |||||||||
| Sweco Sweden | 309 | 318 | 97 | 245 | 255 | 269 | 132 | 272 | 247 |
| Sweco Norway | 150 | 77 | 33 | 38 | 116 | 58 | 24 | 65 | 53 |
| Sweco Finland | 77 | 109 | 46 | 67 | 75 | 89 | 84 | 72 | 76 |
| Sweco Denmark | 100 | 101 | 68 | 33 | 61 | 55 | 50 | 37 | 41 |
| Sweco Netherlands | 74 | 60 | 40 | 34 | 49 | 54 | 34 | 40 | 73 |
| Sweco Belgium | 117 | 61 | 65 | 68 | 78 | 50 | 57 | 59 | 65 |
| Sweco UK | 27 | 11 | 33 | 12 | 15 | 7 | 28 | 4 | 16 |
| Sweco Germany & Central Europe | 19 | 21 | 12 | 14 | 17 | 30 | -48 | -9 | -3 |
| Group-wide, Eliminations, etc.1 | -23 | -48 | -12 | -25 | -17 | -26 | -1 | -12 | -27 |
| EBITA | 849 | 709 | 382 | 486 | 648 | 585 | 359 | 529 | 540 |
| Items affecting comparability (IAC)2 | – | – | – | – | – | – | 56 | – | – |
| EBITA excl. IAC | 849 | 709 | 382 | 486 | 648 | 585 | 415 | 529 | 540 |
| EBITA margin, %3 | |||||||||
| Sweco Sweden | 14.2 | 14.4 | 6.3 | 11.9 | 12.9 | 13.2 | 9.1 | 13.5 | 13.0 |
| Sweco Norway | 15.1 | 8.3 | 4.6 | 4.8 | 14.1 | 8.1 | 4.6 | 9.4 | 7.8 |
| Sweco Finland | 8.5 | 11.7 | 6.7 | 8.3 | 9.5 | 11.1 | 13.0 | 9.2 | 10.5 |
| Sweco Denmark | 14.9 | 15.7 | 13.2 | 6.3 | 11.4 | 10.7 | 11.4 | 7.7 | 8.6 |
| Sweco Netherlands | 10.7 | 9.6 | 7.5 | 6.1 | 8.7 | 9.8 | 7.5 | 8.1 | 13.8 |
| Sweco Belgium | 14.8 | 10.6 | 11.9 | 11.5 | 13.0 | 9.8 | 12.6 | 12.5 | 13.5 |
| Sweco UK | 6.9 | 3.1 | 9.0 | 3.5 | 4.3 | 2.3 | 9.3 | 1.5 | 5.1 |
| Sweco Germany & Central Europe | 3.2 | 3.7 | 2.3 | 2.8 | 3.4 | 5.3 | -10.1 | -1.8 | -0.5 |
| EBITA margin | 11.9 | 10.5 | 7.1 | 7.9 | 10.7 | 9.9 | 7.6 | 9.4 | 9.8 |
| Items affecting comparability (IAC)2 | – | – | – | – | – | – | 1.2 | – | – |
| EBITA margin excl. IAC | 11.9 | 10.5 | 7.1 | 7.9 | 10.7 | 9.9 | 8.8 | 9.4 | 9.8 |
| Billing ratio, % | 73.2 | 74.4 | 73.0 | 74.3 | 73.6 | 74.1 | 73.7 | 75.0 | 73.6 |
| Number of normal working hours | 504 | 490 | 516 | 468 | 497 | 496 | 517 | 473 | 487 |
| Number of full-time employees | 19,416 | 19,265 | 18,464 | 18,626 | 18,263 | 18,058 | 17,627 | 17,904 | 17,628 |
1) Group-wide, Eliminations, etc. includes Group functions, the Dutch real estate operations and Twinfinity AB.
2) Items affecting comparability encompass the provision related to the execution of the turn-around plan in Germany of SEK 56 million in Q3 2021, which is reported in Business Area Germany & Central Europe.
3) EBITA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITA.
Period review per business area
| January–March | Net sales, SEK M | EBITA, SEK M2 | EBITA margin, %2 | Number of full time employees |
|||||
|---|---|---|---|---|---|---|---|---|---|
| Business Area1 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Sweco Sweden | 2,178 | 1,968 | 309 | 255 | 14.2 | 12.9 | 6,219 | 5,853 | |
| Sweco Norway | 994 | 822 | 150 | 116 | 15.1 | 14.1 | 2,077 | 1,791 | |
| Sweco Finland | 904 | 788 | 77 | 75 | 8.5 | 9.5 | 2,881 | 2,809 | |
| Sweco Denmark | 674 | 531 | 100 | 61 | 14.9 | 11.4 | 1,476 | 1,358 | |
| Sweco Netherlands | 686 | 567 | 74 | 49 | 10.7 | 8.7 | 1,506 | 1,437 | |
| Sweco Belgium | 788 | 597 | 117 | 78 | 14.8 | 13.0 | 1,646 | 1,464 | |
| Sweco UK | 386 | 344 | 27 | 15 | 6.9 | 4.3 | 1,237 | 1,161 | |
| Sweco Germany & Central Europe | 577 | 509 | 19 | 17 | 3.2 | 3.4 | 2,296 | 2,341 | |
| Group-wide, Eliminations, etc.3 | -49 | -50 | -23 | -17 | – | – | 77 | 49 | |
| TOTAL GROUP | 7,140 | 6,077 | 849 | 648 | 11.9 | 10.7 | 19,416 | 18,263 |
1) Sweco is not applying IFRS 16 at the business area level.
2) EBITA is an alternative performance measure (APM) defined as Earnings before Interest, Taxes and Acquisition-related items, under which all leases are treated as operating leases and the total cost of the lease affects EBITA.
3) Group-wide, Eliminations, etc. includes Group functions, the Dutch real estate operations and Twinfinity AB.
Net sales growth
The table below shows the calculation of organic growth excluding calendar effects – i.e., net sales growth adjusted for the impact of acquisitions and divestments as well as the effect of foreign currency fluctuations and calendar effects.
| Jan–Mar 2023 |
Jan–Mar 2022 |
Growth, % Jan–Mar 2023 |
|
|---|---|---|---|
| Reported net sales | 7,140 | 6,077 | 17 |
| Adjustment for currency effects | 181 | 3 | |
| Net sales, currency-adjusted | 7,140 | 6,257 | 15 |
| Adjustment for acquisitions/divestments | -190 | -15 | 3 |
| Comparable net sales, currency-adjusted | 6,950 | 6,242 | 12 |
| Adjustment of calendar effect | -75 | 1 | |
| Comparable net sales, adjusted for currency and calendar effects | 6,875 | 6,242 | 10 |
| Jan–Mar 2022 |
Jan–Mar 2021 |
Growth, % Jan–Mar 2022 |
|
|---|---|---|---|
| Reported net sales | 6,077 | 5,538 | 10 |
| Adjustment for currency effects | 171 | 3 | |
| Net sales, currency-adjusted | 6,077 | 5,709 | 7 |
| Adjustment for acquisitions/divestments | -101 | -4 | 2 |
| Comparable net sales, currency-adjusted | 5,976 | 5,705 | 5 |
| Adjustment of calendar effect | -99 | 2 | |
| Comparable net sales, adjusted for currency and calendar effects | 5,877 | 5,705 | 3 |
Net debt
| SEK M | 31 Mar 2023 |
31 Mar 2022 |
|---|---|---|
| Non-current interest-bearing debt | 2,811 | 1,318 |
| Current interest-bearing debt | 719 | 211 |
| Cash and cash equivalents incl. short-term investments | -614 | -531 |
| NET DEBT1 | 2,916 | 997 |
1) Net debt is an alternative performance measure (APM) defined as financial debt (comprised almost exclusively of interest-bearing bank debt) less cash and cash equivalents and short-term investments. Lease liabilities are excluded from Net debt.
Parent Company income statement
| SEK M | Jan–Mar 2023 |
Jan–Mar 2022 |
Full-year 2022 |
|---|---|---|---|
| Net sales | 282 | 259 | 1,061 |
| Operating expenses | -299 | -277 | -1,145 |
| Operating loss | -17 | -18 | -84 |
| Net financial items | -59 | -18 | 1,135 |
| Profit/loss after net financial items | -76 | -36 | 1,051 |
| Appropriations | – | – | -189 |
| Profit/loss before tax | -76 | -36 | 862 |
| Tax | – | – | -115 |
| PROFIT/LOSS AFTER TAX | -76 | -36 | 748 |
Parent Company balance sheet
| 31 Mar | 31 Mar | |
|---|---|---|
| SEK M | 2023 | 2022 |
| Intangible assets | 14 | 18 |
| Property, plant and equipment | 76 | 69 |
| Financial assets | 6,575 | 6,545 |
| Current assets | 2,510 | 1,822 |
| TOTAL ASSETS | 9,176 | 8,454 |
| Equity | 4,560 | 4,644 |
| Untaxed reserves | 954 | 764 |
| Non-current liabilities | 1,170 | 1,205 |
| Current liabilities | 2,492 | 1,841 |
| TOTAL EQUITY AND LIABILITIES | 9,176 | 8,454 |