Annual / Quarterly Financial Statement • Feb 11, 2021
Annual / Quarterly Financial Statement
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11 February 2021
Sweco plans and designs the sustainable communities and cities of the future. Together with our clients and the collective knowledge of our 17,500 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 21 billion (EUR 2 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 CET on 11 February 2021.
I am proud that we continued to grow our business and improve profitability in seven of our eight markets during such a challenging year. I am pleased that our two largest Business Areas, Sweden and Finland, outperformed the group profitability target and show EBITA margins well above 12 per cent. We end the year with a quarter impacted by the second wave of Covid-19 and a significant writedown in Germany. Demand and orders received remained stable and we see that the trends that drive our business – urbanisation, digitalisation and sustainability – will remain important drivers in society going forward.
Organic growth in the quarter was -5 per cent, adjusted for calendar effects and the write-down. Parts of the industry, and the private building and real estate segments continued to be impacted by Covid-19 during the fourth quarter, with an additional negative effect from lockdowns and other restrictions. The impact has been most visible in the UK.
We had strong, double-digit EBITA margins in Finland, Sweden and Belgium in the quarter and five of our eight Business Areas strengthened their operating margin compared with 2019. EBITA decreased 3 per cent to SEK 514 million (532), adjusted for the write-down in Germany. The negative impact from lower billing ratios and weak operating performances in Germany and the UK was only partly outweighed by cost reductions.
Net sales growth for the full year was -1 per cent (5), excluding the write-down in Germany and calendar effects. The full-year EBITA margin, excluding the write-down in Germany, improved to 9.7 per cent (9.1).
The order book remains stable. We have a strong financial position with stable cash flow and low net debt, giving us flexibility and allowing us to leverage opportunities.
As previously communicated, the extensive review of the German project portfolio was completed at the end of 2020 and a decision was made to conduct a write-down of SEK 290 million.
Sweco Germany now has full focus on implementing the Sweco model, including strict project governance and execution. With a new leadership, we have taken significant actions and I am positive about the long-term outlook for our German operations. This will be a change journey that will take time.
There was significant acquisition activity during 2020. In total, we completed ten acquisitions that strengthened our offerings and market positions. In January 2021, we announced two acquisitions, one of them strengthening our position in sustainable building design and architecture in Finland and the other in climate adaptation, urban planning and landscape architecture in the Belgian market.
We have a clear strategic focus on organic and acquired growth as well as on establishing market leading positions in all our Business Areas. By continuing to implement the Sweco model, we will achieve higher efficiency and continued profitable growth. We have a broad geographical footprint and a diversified offering, which creates stability. We will continue to work closely with our clients and to stay relevant, and maintain high efficiency in our projects. We will continue to monitor the development of Covid-19 closely to take advantage of opportunities, but also to be prepared to take necessary action.
With a strong financial position and a stable full-year result, the Board proposes a dividend of SEK 2.20 per share.
I would also like to take the opportunity to thank all clients, partners and employees for everything that we have achieved together during 2020.
Åsa Bergman President and CEO
Urbanisation, digitalisation and sustainability are transforming society. Together with our clients, we are committed to ensuring that we have clean water, clean air, clean energy and a physical environment where we all can live, work and prosper. With more than 17,500 experts in Europe, we have the knowledge to solve the most challenging projects, no matter size or location.
| #1 In the European market |
8 Business Areas |
17,500 Full-time employees |
|---|---|---|
| SEK 20.9 bn Net sales R12 |
SEK 1.8 bn EBITA R12 |
8.5% EBITA margin R12 |
EBITA in the quarter decreased approximately 14 per cent or SEK 73 million year-on-year after adjustment for calendar effects and the write-down in Germany. Organic growth amounted to approximately -5 per cent after the same adjustments. Acquired growth amounted to 3 per cent.
During the quarter, the review of the German project portfolio was concluded and, as announced on 21 December 2020, this review has resulted in a write-down of trade working capital of SEK 290 million. This write-down had a negative impact on net sales and EBITA of the same amount.
Net sales decreased 10 per cent to SEK 5,142 million (5,692). Organic growth amounted to approximately -10 per cent after adjustment for calendar effects. Excluding the effect of the German write-down, organic growth amounted to -5 per cent after adjustment for calendar effects. Acquired growth amounted to 3 per cent and currency effects impacted growth with -3 per cent.
Organic growth was heavily impacted by the write-down in Germany. Leaving the effects of the write-down aside, organic growth was impacted negatively mainly by lower average fees and lower subconsultant revenue.
EBITA decreased to SEK 224 million (532). The EBITA margin decreased to 4.4 per cent (9.4).
The write-down of working capital of SEK 290 million in the German operations is included in Items affecting comparability in the Business Area Sweco Germany & Central Europe.
EBITA excluding items affecting comparability (IAC) totalled SEK 514 million (532) and the EBITA margin excluding IAC amounted to 9.5 per cent (9.4).
EBITA excluding IAC declined by approximately 14 per cent or SEK 73 million
year-on-year after adjustment for calendar effects. EBITA was impacted by lower average fees and lower billing ratio. Lower operating expenses and the contribution from acquisitions contributed positively. Cost savings, mainly related to Covid-19, had a positive impact on EBITA of approximately SEK 90 million.
At the end of the period, around 70 employees remained on temporary lay-off. The majority of these were in the UK and in Finland.
The quarter had 6 more working hours compared with the same period last year. This corresponded to a positive year-on-year impact of approximately SEK 55 million on net sales and EBITA. The net positive calendar effect was entirely in December and only partly materialised, due to
| KPIs | Oct–Dec | Oct–Dec | Full-year | Full-year |
|---|---|---|---|---|
| Net sales, SEK M | 2020 5,142 |
2019 5,692 |
2020 20,858 |
2019 20,629 |
| Organic growth, % | -9 | 5 | -1 | 5 |
| Acquisition-related growth, % | 3 | 5 | 4 | 3 |
| Currency, % | -3 | 2 | -2 | 2 |
| Total growth, % | -10 | 11 | 1 | 10 |
| Organic growth adj. for calendar, % | -10 | 5 | -2 | 5 |
| Organic growth adj. for calendar & IAC, % | -5 | 5 | -1 | 5 |
| EBITA excl. IAC, SEK M1 | 514 | 532 | 2,056 | 1,869 |
| Margin,% | 9.5 | 9.4 | 9.7 | 9.1 |
| EBITA, SEK M1 | 224 | 532 | 1,766 | 1,869 |
| Margin, % | 4.4 | 9.4 | 8.5 | 9.1 |
| Profit after tax, SEK M | 235 | 472 | 1,293 | 1,393 |
| Earnings per share, SEK2 | 0.66 | 1.34 | 3.64 | 3.95 |
| Number of full-time employees | 17,470 | 17,084 | 17,328 | 16,412 |
| Billing ratio, % | 74.1 | 74.6 | 74.3 | 74.3 |
| Normal working hours | 491 | 485 | 1,974 | 1,962 |
| Net debt/EBITDA, x3 | 0.5 | 1.0 |
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. IAC stands for Items affecting comparability, see definition on page 18. The whole write-down of SEK 290 million is reported as IAC in the full year 2020 since a split of the amount over the current and previous years is not possible to make.
2) Due to the share split conducted during Q4 2020, historical data has been restated in accordance with IAS 33.
3) 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.
more vacation taken during the holiday period.
The billing ratio decreased to 74.1 per cent (74.6).
Total net financial items improved to SEK -21 million (-26) primarily due to a lower interest cost for leasing and capital gains from sales of associated companies. Income tax declined to SEK 9 million (-97) due to an increase in deferred tax assets related to the write-down in Germany.
Earnings per share decreased to SEK 0.66 (1.34). Last year, EPS were impacted positively by SEK 90 million due to divestments. EPS for the fourth quarter last year amounted to SEK 1.08 excluding the impact from divestments.
Organic growth amounted to approximately -2 per cent after adjustment for calendar effects. Acquired growth amounted to 4 per cent. Currency effects were -2 per cent. In total, net sales increased 1 per cent to SEK 20,858 million (20,629). Excluding the write-down in Germany, organic growth amounted to approximately -1 per cent after adjustment for calendar effects.
Apart from the write-down in Germany, organic growth was mainly driven by an increased number of employees, while lower revenue from subconsultants and lower average fees had a negative impact.
EBITA decreased to SEK 1,766 million (1,869) and the EBITA margin decreased to 8.5 per cent (9.1).
Items affecting comparability encompassed the write-down of working capital of SEK 290 million in the German operations and are reported in Business Area Sweco Germany & Central Europe.
EBITA excluding items affecting comparability increased to SEK 2,056 million (1,869) and the EBITA margin
SEK M
excluding items affecting comparability increased to 9.7 per cent (9.1).
EBITA excluding items affecting comparability improved approximately 5 per cent or SEK 85 million year-onyear after adjustment for calendar effects. The EBITA improvement was attributable to Finland, Sweden, Belgium, the Netherlands and the UK. Overall for the Group, lower operating expenses, contributions from acquisitions and an increased number of employees were the main improvement drivers, while lower average fees impacted negatively.
The calendar effect of 12 more hours corresponded to a positive year-onyear impact of approximately SEK 102 million on net sales and EBITA.
The billing ratio was stable at 74.3 per cent (74.3).
Total net financial items improved to SEK -98 million (-115) primarily due to a lower interest cost for leasing and capital gains from sales of associated companies.
Earnings per share decreased to SEK 3.64 (3.95). Last year, EPS were impacted positively by SEK 90 million due to divestments. EPS for 2019 amounted to SEK 3.70 excluding the impact from divestments.
The number of full-time employees amounted to 17,328 (16,412) in the period.
Overall, the underlying market for Sweco's services was somewhat weaker in the fourth quarter, due to the continued Covid-19 impact. Still, essentially all Business Areas experienced a relatively good market for Sweco's services in the infrastructure, water, environment and energy segments. Demand for services in the building and real estate segment and in parts of the industry market remained weaker.
The Covid-19 situation continues to create significant uncertainty regarding future market development. Demand for Sweco's services normally follows the general macro-economic trend in Sweco's markets, with some time lag. A negative medium -term impact on demand can therefore be expected from the economic effects of Covid-19. However, this impact will most likely be partly mitigated by increased public spending.
Sweco does not provide forecasts.
On 22 October, an extraordinary general meeting was held. The Extraordinary General Meeting resolved, in accordance with the proposal of the Board of Directors, to distribute an extraordinary dividend of SEK 3.10 per share to the shareholders and to authorise a split of the company's shares. One existing share of the company will be divided into 3 shares of the same class of shares (3:1 share split), and a connected amendment of the articles of association was decided upon. The share split was conducted in November 2020.
On 29 October, the extraordinary dividend of SEK 367 million was distributed to Sweco AB's shareholders.
On 30 October, Sweco completed the acquisition of the Norwegian architect
company TAG Arkitekter. TAG Arkitekter, with its 97 employees, is mainly active within the real estate and landscape architecture segments. The company has offices in Oslo, Bergen and Trondheim and net sales amounted to NOK 113 million in 2019.
On 1 November, there was a change of leadership in Sweco Germany and Karsten Gruber, Division Manager Civil Engineering Structures, took on the position as acting Business Area President Sweco Germany and Central Europe and joined the Executive Team for Sweco Group.
On 21 December, Sweco announced that the review of the German project portfolio, which was initiated during the third quarter, would result in a write-down of trade working capital of SEK 290 million. Sweco Germany has full focus on taking necessary actions to ensure strict project governance and project accounting standards going forward in order to ensure profitable growth. Accelerating the implementation of the Sweco Model is a key priority.
On 12 January, Sweco announced the acquisition of the Finnish engineering and architecture consultancy Optiplan with approximately 150 employees. The acquisition was completed on 29 December 2020. The acquisition strengthens Sweco's expertise in the
area of designing sustainable and energy efficient residential and nonresidential buildings. The revenue of Optiplan during 2019 was EUR 13 million.
On 19 January, Sweco announced the acquistion of BUUR in Belgium. BUUR has a strong reputation in the Belgian market with expertise focusing on urban planning, landscape architecture, infrastructure design and mobility studies. BUUR has over 60 employees and a full year revenue of approximately EUR 4.5 million.
Group cash flow from operating activities totalled SEK 3,249 million (2,299) for the full year. Net debt decreased significantly to SEK 943 million (2,114), primarily as a result of the increased operating cash flow.
The Net debt/EBITDA ratio was 0.5x (1.0).
Available cash and cash equivalents, including unutilised credit lines, totalled SEK 3,898 million (2,699) at the end of the quarter.
Purchase considerations paid to acquire companies and operations totalled SEK 588 million (713) and had an impact of SEK -535 million (-672) on the Group's cash and cash equivalents. No divestments were made during the period. Last year, divestments of companies and operations generated considerations of SEK 156 million and had an impact of SEK -97 million on the Group's cash and cash equivalents.
No repurchases of Sweco shares were made during the period. Last year, repurchases of Sweco shares totalled SEK 2 million and had the same effect on the Group's cash and cash equivalents.
Dividends totalling SEK 732 million (644) were distributed to Sweco AB's shareholders during the period.
Investments in equipment totalled SEK 187 million (226) and were primarily attributable to IT investments. Depreciation of equipment amounted to SEK 226 million (241) and amortisation of intangible assets totalled SEK 136 million (149).
Sweco Belgium is contracted to support Eval Europe (Kuraray Group) with detailed engineering for a new compounding installation. The project will increase the production capacity and flexibility of the existing production lines and will support reducing the use of materials as well as a reduction in emissions from traffic. The contract value is SEK 10 million.
Sweco Belgium has also won the assignment to redevelop a large industrial site with brownfield liability into a sustainable economic hub, with added economic and ecological value for the city of Charleroi and its inhabitants. The contract value is SEK 1 million.
Sweco Denmark has been selected for a four-year framework agreement for consultancy of Boliggården, including maintaining, renovating and building new public housing in and around Helsingør municipality. The project provides services within architecture, design and building, landscaping, sustainability and user involvement. The contract value is SEK 81 million.
Sweco Denmark has also been assigned to provide architectural services in a project covering nearly 30,000 m², which has been gold-precertified within the sustainability standard DGNB. The client is Greensquare Garden in Copenhagen.
Sweco is a design partner in all ongoing tramline project alliances in Finland. During the fourth quarter, Sweco was assigned to deliver design services for two larger tramway projects supporting cities in meeting their carbon neutrality 2030 goals. Sweco has been contracted to provide planning services connected to the western 9-kilometre section of Vantaa tramway from Tikkurila to Helsinki Airport as well as the second phase of Tampere Tramway with a total length of 24 kilometres.
In the Czech Republic, Sweco has been assigned by the Prague Water Company to provide services connected to the flood control measures of the sewage system to a total sum of SEK 7 million.
Sweco has been assigned by the Vilnius municipality, Lithuania, to select and design the most optimal infrastructure engineering solutions including clover-type openings, roundabouts, underground pedestrian crossings, pedestrian viaducts and public transport stops. A total contract value of SEK 3 million.
Another newly won contract includes supporting the Lithuanian Inland Waterways Authority (a state enterprise) to find solutions to reduce river channel sediment build-up and increase natural erosion of the navigation channel, as a means of reconstructing existing and building new spur-dikes. A total contract value of SEK 4 million.
In the Netherlands, Sweco has been assigned by chemical company Chemours to assist with the design of a new waste treatment plant and the tendering process for the realisation. The new treatment plant will reduce the proportion of potentially harmful substances released towards the sewage treatment plant of the Hollandsche Delta Water Board by more than 99 percent. A total contract value of SEK 10 million.
Sweco Sweden has won the contract to support Sustainable Development Capital LLP (SDCL) in identifying risks and opportunities associated with the asset, in order to arrive at a valuation with the aim of submitting a bid for the Stockholm gas grid.
Sweco Sweden has also been commissioned by the Swedish Transport Administration to produce a railway plan and system document, including permit management for the section between Uppsala Central and Söder Bergsbrunna.
In Gothenburg, Sweco Sweden won an assignment to create a green and vibrant urban environment in Västra Masthuggskajen. The project will weave together existing buildings with new homes and workplaces along the area by Södra Älvstranden. The client is Swedish Transport Administration and the contract value is SEK 20 million.
Sweco UK, as part of the Triskelion consortium, has been awarded Lot 2 of the framework to provide infrastructure consultancy services to Scotland's local authorities and other public sector bodies. Sweco's estimated fee for the duration of the framework is SEK 56 million.
Sweco UK has been assigned to help establish the UK as a global leader in digital creative media through the design and delivery of a one million square foot state-of-the-art creative media complex, which will house film and television studios, workshops and offices. Sweco is involved in the overall project planning, providing civil and structural engineering expertise and working alongside our partners. The client is Shinfield Studios.
Sweco creates a green and vibrant urban environment weaving together existing buildings with new homes and workplaces along the area by Södra Älvstranden, Sweden.
Sweco is assigned to work with renewal of waste-to-energy plant in Schwandorf, Germany.
Sweco's Business Areas are Sweden, Norway, Finland, Denmark, the Netherlands, Belgium, the UK and Germany and Central Europe.
Positive EBITA margin development in Sweden, despite negative organic growth in the quarter. The market remains relatively good, but there was negative impact from Covid-19 in some segments.
Net sales decreased to SEK 1,992 million (2,054). Organic growth was -4 per cent adjusted for calender effects. Organic growth was mainly impacted by lower average fees, a lower number of employees and a lower billing ratio. There were 8 more working hours in the quarter compared to last year, which contributed positively to net sales and EBITA with approximately SEK 26 million.
EBITA decreased approximately 5 per cent, corresponding to SEK 14 million after adjusting for calender effects. The EBITA margin increased to 14.2 per cent (13.2). The EBITA development was impacted positively by lower operating expenses, while lower billing ratio and lower average fees had a negative impact.
The Swedish market remained relatively good during the fourth quarter but there were variations between the different segments. Demand for infrastructure services was good, backed by major public investments. The markets for industrial investments, water and environmental services were also good. The real estate market was divided, with good demand within public buildings, whereas demand related to residential construction remained weak with the exception of larger cities where the situation was somewhat better. The market for power transmission services was strong while demand in energy generation remained challenging.
During the fourth quarter, the overall impact of the Covid-19 pandemic on the business was limited as ongoing projects continued. However, caution prevailed in the quarter with regard to starting new projects within the
private building and real estate market. The negative effect on projects for the automotive industry remained. During the quarter, the project export business was also negatively impacted by the pandemic.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 1,992 | 2,054 | 7,481 | 7,482 |
| Organic growth, % | -3 | 2 | 0 | 4 |
| Acquisition-related growth, % | 0 | 0 | 0 | 0 |
| Currency, % | 0 | 0 | 0 | 0 |
| Total growth, % | -3 | 3 | 0 | 3 |
| Organic growth adj. for calendar, % | -4 | 4 | -1 | 4 |
| EBITA, SEK M | 282 | 271 | 954 | 858 |
| EBITA margin, % | 14.2 | 13.2 | 12.8 | 11.5 |
| Number of full-time employees | 5,877 | 6,011 | 5,828 | 5,870 |
EBITA was impacted by project adjustments, outweighing the positive effects of FTE growth. Negative organic growth and a significant negative FX effect. The market weakened, due to heavy Covid-19 restrictions from November onwards impacting projects in the commercial building sector.
Net sales declined 10 per cent to SEK 620 million (692) mainly due to a weaker Norwegian krona. Organically, net sales decreased 4 per cent. The negative organic growth was mainly driven by lower revenue from subconsultants and higher negative project adjustments, while increased number of employees impacted positively. The acquisition of TAG Arkitekter contributed growth of 3 per cent. There was no year-on-year difference in the number of available working hours.
EBITA decreased SEK 21 million, corresponding to 33 per cent, to SEK 44 million (65) and the EBITA margin declined to 7.1 per cent (9.4). EBITA was impacted negatively by
higher negative project adjustments, lower billing ratio and a weaker Norwegian krona, whereas higher number of employees contributed positively.
Overall, the Norwegian market was weakening during the fourth quarter due to the heavy Covid-19 restrictions implemented in November 2020. The commercial building sector has been affected by postponement or cancellation of new projects. The infrastructure and energy markets were stable, but were not yet showing signs of compensating for the weaker building market.
On October 30, Sweco completed the acquisition of the Norwegian architect company TAG Arkitekter with 97 employees.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 620 | 692 | 2,414 | 2,606 |
| Organic growth, % | -4 | 6 | 1 | 8 |
| Acquisition-related growth, % | 3 | 0 | 1 | 0 |
| Currency, % | -10 | -1 | -9 | 1 |
| Total growth, % | -10 | 5 | -7 | 9 |
| Organic growth adj. for calendar, % | -4 | 6 | 0 | 8 |
| EBITA, SEK M | 44 | 65 | 209 | 216 |
| EBITA margin, % | 7.1 | 9.4 | 8.6 | 8.3 |
| Number of full-time employees | 1,723 | 1,605 | 1,660 | 1,563 |
Finland continues to increase EBITA, and returned to positive organic growth in the quarter. The main improvement drivers were lower operating expenses and the contribution from acquisitions, which also drove top-line growth. The market remains relatively good.
Net sales increased to SEK 729 million (663). Organic growth was approximately 5 per cent adjusted for calendar effects. Organic growth was impacted positively by an increased number of employees and higher revenue from subconsultants. The year-on-year calendar effect of 9 more hours had a positive impact of approximately SEK 10 million on net sales and EBITA. Acquired growth contributed 7 per cent and related to the acquisition of the design operations of NRC Group, which were consolidated into Sweco Finland as of November 2019, and to Saraco which was acquired in October 2020.
EBITA increased approximately 17 per cent, corresponding to SEK 11 million adjusted for calendar effects and the EBITA margin increased to 11.7 per cent (9.6). The increase in EBITA was mainly attributable to lower operating expenses, a higher number of employees and the contribution from acquisitions.
Overall, the Finnish market was relatively good during the fourth quarter, with slight differences between segments. Demand within the building and real estate segments was relatively good, but decline in residential construction continued. The renovation, maintenance and improvement market was stable. The market for industrial services was quite stable and the market for infrastructurerelated services was good.
During the fourth quarter, the impact of Covid-19 on the construction segment was limited, with only some projects postponed or cancelled. At the end of the quarter, around 30 employees were on temporary lay-off.
On 1 October, Sweco acquired Saraco DM Ltd, a consultancy specialising in project management and property development that employs 34 pro-
fessionals in Helsinki, Turku and Tampere, Finland.
At the end of the year, Sweco completed the acquistion of the engineering and architecture consultancy Optiplan, with approximately 150 employees.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 729 | 663 | 2,777 | 2,388 |
| Organic growth, % | 6 | 4 | 3 | 7 |
| Acquisition-related growth, % | 7 | 13 | 15 | 5 |
| Currency, % | -3 | 3 | -1 | 3 |
| Total growth, % | 10 | 19 | 16 | 15 |
| Organic growth adj. for calendar, % | 5 | 4 | 3 | 7 |
| EBITA, SEK M | 85 | 64 | 369 | 287 |
| EBITA margin, % | 11.7 | 9.6 | 13.3 | 12.0 |
| Number of full-time employees | 2,478 | 2,212 | 2,493 | 2,160 |
Net sales growth in Denmark was driven by the acquisition of KANT Arkitekter. EBITA improved with a higher billing ratio and higher average fees. The market was overall fairly stable, despite some negative impact from Covid-19.
Net sales increased to SEK 500 million (477). Acquired growth contributed 7 per cent and related to the acquisition of KANT Arkitekter. Organic growth was -1 per cent, adjusted for calender effects. Organic growth was impacted positively by higher average fees and a higher billing ratio, while lower revenue from subconsultants impacted negatively. The year-on-year calendar effect of 8 more hours had a positive impact of approxmately SEK 6 million on net sales and EBITA.
EBITA increased approximately 5 per cent, corresponding to SEK 2 million adjusted for calendar effects and the EBITA margin increased to 9.9 per
cent (8.6) The earnings increase was mainly impacted by higher average fees and a higher billing ratio.
During the fourth quarter, the market in Denmark was affected by the Covid-19 pandemic with delayed and cancelled projects, but there were still several segments with satisfactory development. Demand in the water and environmental sectors remained stable, driven by climate-related services in the larger cities. The energy market remained relatively weak. The infrastructure market was fairly stable in the municipal market, whereas state investments in road infrastructure in particular remained weak. The market for building services and the residential market were relatively stable.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 500 | 477 | 1,846 | 1,784 |
| Organic growth, % | 1 | 1 | -1 | -2 |
| Acquisition-related growth, % | 7 | 0 | 5 | 4 |
| Currency, % | -3 | 3 | -1 | 3 |
| Total growth, % | 5 | 4 | 3 | 4 |
| Organic growth adj. for calendar, % | -1 | 1 | -2 | -2 |
| EBITA, SEK M | 50 | 41 | 143 | 137 |
| EBITA margin, % | 9.9 | 8.6 | 7.8 | 7.7 |
| Number of full-time employees | 1,265 | 1,169 | 1,230 | 1,173 |
Significant EBITA margin improvement, but negative top-line and EBITA growth, driven by fewer FTEs. The market remained relatively good, even if Covid-19 had some impact on projects within infrastructure and buildings.
Net sales decreased to SEK 515 million (542). Organic growth adjusted for calender effects amounted to -3 per cent and was driven by lower revenue from subconsultants and a lower number of employees. A higher billing ratio contributed positively. There was 8 more working hours in the quarter compared to last year which contributed positively with approximately SEK 6 millon in net sales and EBITA.
EBITA decreased approximately 9 per cent, corresponding to SEK 4 million, after adjusting for calender effects. Earnings were negatively impacted by one-off costs for an onerous office lease and a lower number of employees, whereas higher average fees and a higher billing ratio contributed positively. The EBITA margin improved to 8.1 per cent (7.2).
At the end of the fourth quarter 2020, although the Netherlands went into a lockdown due to Covid-19, the Dutch market was relatively good during the fourth quarter, with slight differences between segments. Demand within the residential building remained high due to the continued shortage of residential homes. Both the buildings/ residential homes and the infrastructure market have delays in some projects coming to the market due to Covid-19. The market for industrial services is diversified, in the sense that the food sector is stable but the chemical sector remains under pressure. Within the energy market there is a substantial demand to increase the infrastructure to facilitate green energy like solar- and windfarms.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 515 | 542 | 2,066 | 2,055 |
| Organic growth, % | -1 | 1 | 1 | 4 |
| Acquisition-related growth, % | 0 | 0 | 0 | 0 |
| Currency, % | -3 | 3 | -1 | 3 |
| Total growth, % | -5 | 4 | 1 | 7 |
| Organic growth adj. for calendar, % | -3 | 1 | 1 | 3 |
| EBITA, SEK M | 42 | 39 | 172 | 143 |
| EBITA margin, % | 8.1 | 7.2 | 8.3 | 7.0 |
| Number of full-time employees | 1,378 | 1,403 | 1,390 | 1,403 |
Significant net sales growth from acquisitions, combined with EBITA growth. FTE growth slowed down in the quarter and acquisitions and higher average fees drove EBITA. Mixed picture in the market with some strong segments and others that are more impacted.
Net sales increased to SEK 414 million (381), and organic growth was approximately -1 per cent adjusted for calendar effects. Organic growth was impacted negatively mainly by lower revenue from subconsultants. Recent acquisitions contributed 14 per cent to growth. The year-on-year calendar effect of 8 less hours had a negative impact of approximately SEK 4 million on net sales and EBITA.
EBITA increased approximately 22 per cent, corresponding to SEK 9 million adjusted for calendar effects and the EBITA margin increased to 11.0 per cent (10.7). The improvement in earnings was mainly attributable to recent acquisitions and higher average fees.
The market was good within most segments during the fourth quarter and both the private and the public sector building market remained stable. The residential market and the office market weakened further. The public infrastructure market was stable. Belgium is in the middle of a complete energy transition with a new government clearly committed to the European Green Deal. The electrification in industry and the public domain increased. The pharma industry was running at full speed, while recovery in the more traditional industry markets was somewhat delayed due to the second Covid-19 wave.
At the end of the year, three employees were on temporary lay-off.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 414 | 381 | 1,655 | 1,394 |
| Organic growth, % | -2 | 15 | 6 | 19 |
| Acquisition-related growth, % | 14 | 0 | 13 | 2 |
| Currency, % | -3 | 3 | -1 | 3 |
| Total growth, % | 9 | 18 | 19 | 24 |
| Organic growth adj. for calendar, % | -1 | 15 | 6 | 19 |
| EBITA, SEK M | 46 | 41 | 189 | 158 |
| EBITA margin, % | 11.0 | 10.7 | 11.4 | 11.3 |
| Number of full-time employees | 1,124 | 943 | 1,071 | 870 |
The UK is the market most impacted by Covid-19 and organic growth remained significantly negative in the quarter. EBITA was negatively impacted by project adjustments and employees on furlough. The market remains uncertain, but with some positive signs in the quarter.
Net sales amounted to SEK 280 million (348). Organic growth was -13 per cent and the decline was mainly driven by negative project adjustments, a lower number of employees and lower revenue from subconsultants. There was no year-on-year difference in the number of available working hours.
EBITA decreased to SEK 6 million (24) and the EBITA margin declined to 2.2 per cent (7.0). Earnings were negatively impacted by negative project adjustments and employees on furlough.
The UK market remains challenging. The fourth quarter began with an improving picture in demand for services following easing of national restrictions in the third quarter. As the national government support scheme
for temporary lay-off ("furlough") came to a close at the end of October, a new national lockdown was imposed on the back of rising cases. The furlough scheme was then re-introduced.
Demand in the buildings market remained fairly stable in the fourth quarter, however, a number of larger projects that were anticipated to re-commence, did not. The energy and environment markets remained stable with moderate impact from Covid-19. The water market improved due to increased project call-offs by clients under framework contracts. The transportation infrastructure market remained fairly stable given the ongoing projects within the highways sector.
At the end of the year, 30 employees were on furlough.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 280 | 348 | 1,247 | 1,170 |
| Organic growth, % | -13 | 1 | -7 | -4 |
| Acquisition-related growth, % | 0 | 60 | 16 | 37 |
| Currency, % | -7 | 6 | -2 | 4 |
| Total growth, % | -20 | 68 | 7 | 36 |
| Organic growth adj. for calendar, % | -13 | 1 | -7 | -4 |
| EBITA, SEK M | 6 | 24 | 75 | 51 |
| EBITA margin, % | 2.2 | 7.0 | 6.0 | 4.4 |
| Number of full-time employees | 1,215 | 1,277 | 1,236 | 1,136 |
A quarter significantly impacted by the SEK 290 million working capital writedown and otherwise a weak quarter in Germany, with negative organic growth and a significant decline in EBITA. The market remained overall stable with Covid-19 impacting the private real estate market.
During the quarter, the review of the German project portfolio was concluded and, as announced on 21 December 2020, this review has resulted in a write-down of trade working capital of SEK 290 million. The write-down had a negative impact on net sales and EBITA of the same amount and was the main reason for the decline in net sales and EBITA of the Business Area.
Net sales decreased 71 per cent to SEK 175 million (605). Organic growth was around -21 per cent, adjusted for calender effects and the write-down in Germany, and was impacted by a lower billing ratio, lower average fees and fewer employees.
EBITA decreased to SEK -317 million (21). The decrease was driven by the project write-down of SEK 290 million and additional one-off costs and YTD corrections. The underlying EBITA in the Business Area was at break-even in the quarter.
Overall, the German market remained stable in the fourth quarter despite Covid-19 and no major construction sites had to be closed due to the crisis. However, private investors continued to slow down or stop projects and tenders in the real estate market. On the other hand, the German publicly funded sector remained good and energy transition projects have continued as planned.
At the end of the year, 9 employees remained on temporary lay-off.
On 1 November, the Business Area President in Germany, Ina Brandes left Sweco and was replaced by Karsten Gruber as acting Business Area President.
| Net sales and profit | Oct–Dec 2020 |
Oct–Dec 2019 |
Jan–Dec 2020 |
Jan–Dec 2019 |
|---|---|---|---|---|
| Net sales, SEK M | 175 | 605 | 1,657 | 1,941 |
| Organic growth, % | -67 | 18 | -20 | 11 |
| Acquisition-related growth, % | 0 | 17 | 7 | 9 |
| Currency, % | -4 | 3 | -2 | 3 |
| Total growth, % | -71 | 39 | -15 | 23 |
| Organic growth adj. for calendar, % | -69 | 18 | -21 | 11 |
| Organic growth adj. for calendar & IAC, % | -21 | 18 | -6 | 11 |
| EBITA excl. IAC, SEK M | -27 | 21 | -9 | 77 |
| EBITA margin excl. IAC, % | -5.7 | 3.5 | -0.5 | 3.9 |
| EBITA, SEK M | -317 | 21 | -299 | 77 |
| EBITA margin, % | -180.8 | 3.5 | -18.1 | 3.9 |
| Number of full-time employees | 2,367 | 2,410 | 2,375 | 2,171 |
Parent Company net sales totalled SEK 874 million (771) and were attributable to intra-group services. Profit after net financial items totalled SEK 1,036 million (743). Investments in equipment totalled SEK 32 million (33). Cash and cash equivalents at the end of the period totalled SEK 1,387 million (184).
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 2019.
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.
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.sweco.se/en/IR/financial-data/definitions/
The adoption of IFRS 16 had a significant impact on the presentation of financial statements. Sweco has chosen to maintain its key financial metrics close to previous definitions to facilitate comparability with previous periods.
Sweco's 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 BA level. Sweco's EBITA measure is defined as Earnings Before Interest, Taxes and Acquisition-related 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: 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 includes 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 is presented on page 20 and 27. Organic growth calculation is presented on page 26.
The Sweco share is listed on Nasdaq Stockholm. The share price of the Sweco Class B share was SEK 151.00 at the end of the period, representing a 9 per cent decrease during the quarter. Nasdaq Stockholm OMXSPI increased 5 per cent over the same period.
In November, the number of shares and votes increased as a result of the share split (ratio 3:1) that was resolved by Sweco AB's extraordinary General Meeting on 22 October, 2020, through which each existing share was split into three new shares of the same class.
The total number of shares at the end of the period was 363,251,457: 31,157,139 Class A shares and 332,094,318 Class B shares. The total number of shares outstanding was 355,197,471: 31,157,139 Class A shares and 324,040,332 Class B shares.
Dividend: The Board of Directors proposes the dividend be increased to SEK 2.20 per share (2.07), not to exceed a dividend amount of SEK 799 million (732).
2021 Share savings scheme: The Board of Directors proposes that the 2021 AGM resolves to implement a long-term share savings scheme for up to 100 Sweco Group senior executives and other key employees. The proposal principally corresponds to the terms in last year's proposal, with the exception of the performance targets, which for the Share Savings Scheme 2021 includes both absolute and relative total shareholder return, as well as earnings per share ("EPS").
2021 Share bonus scheme: The Board of Directors also proposes that the 2021 AGM resolves to implement a share-based incentive scheme for employees in Sweden. The proposal principally corresponds to the terms in last year's proposal.
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 and the effects of political decisions. 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 2019 Annual Report (page 100, Risks and Risk Management). No significant risks are deemed to have arisen since then apart from the Covid-19 pandemic.
The risks and uncertainties related to the Covid-19 pandemic are briefly described on page 89 and page 100 in the 2019 Annual Report. There is still significant uncertainty as to the extent of the Covid-19 impact on Sweco, the form this impact may take and the time horizon during which any impact may be felt.
The number of normal working hours in 2020, based on the 12-month sales-weighted business mix as of September 2019, is broken down as follows:
| 2020 | 2019 | ||
|---|---|---|---|
| Quarter 1: | 500 | 496 | +4 |
| Quarter 2: | 465 | 462 | +3 |
| Quarter 3: | 518 | 519 | -1 |
| Quarter 4: | 491 | 485 | +6 |
| Total: | 1,974 | 1,962 | +12 |
The number of normal working hours in 2021, based on the 12-month sales-weighted business mix as of September 2020, is broken down as follows:
| 2021 | 2020 | ||
|---|---|---|---|
| Quarter 1: | 487 | 500 | -13 |
| Quarter 2: | 473 | 465 | 8 |
| Quarter 3: | 517 | 518 | -1 |
| Quarter 4: | 496 | 491 | 5 |
| Total: | 1,973 | 1,974 | -1 |
Acquisition-related intangible assets and expensed costs for future services will be amortised pursuant to the following schedule, based on acquisitions to date:
| 2020 Actual | SEK -132 million |
|---|---|
| 2021 Estimate | SEK -130 million |
| 2022 Estimate | SEK -87 million |
| 2023 Estimate | SEK -46 million |
The 2021 Annual General Meeting will be held on Thursday, 22 April 2021 at 3:00 PM in Stockholm. Sweco's 2020 Annual Report will be available for shareholder perusal at Sweco's headquarters, Gjörwellsgatan 22, Stockholm, and on the company's website, www.swecogroup.com, approximately three weeks prior to the AGM.
| Interim report January–March | 11 May 2021 |
|---|---|
| Interim report January–June | 16 July 2021 |
| Interim report January–September | 29 October 2021 |
| Year-end report 2021 | 11 February 2022 |
Stockholm, 11 February 2021
Åsa Bergman President and CEO, Member of the Board of Directors
Åsa Bergman, President and CEO
[email protected] Olof Stålnacke, CFO Phone +46 70 306 46 21 [email protected]
Katarina Grönwall, CCO
Phone +46 73 258 93 33 [email protected]
Gjörwellsgatan 22, Box 34044, 100 26 Stockholm, Phone: +46 8 695 60 00 Email: [email protected] www.swecogroup.com
This report has not been audited.
| Oct–Dec | Oct–Dec | Full-year | Full-year | |
|---|---|---|---|---|
| KPIs1 | 2020 | 2019 | 2020 | 2019 |
| Profitability | ||||
| EBITA margin excl. IAC, % | 9.5 | 9.4 | 9.7 | 9.1 |
| EBITA margin, % | 4.4 | 9.4 | 8.5 | 9.1 |
| Operating margin (EBIT), % | 4.8 | 10.5 | 8.2 | 9.2 |
| Profit margin, % | 4.4 | 10.0 | 7.7 | 8.6 |
| Revenue growth2 | ||||
| Organic growth, % | -9 | 5 | -1 | 5 |
| Acquisition-related growth, % | 3 | 5 | 4 | 3 |
| Currency, % | -3 | 2 | -2 | 2 |
| Total growth, % | -10 | 11 | 1 | 10 |
| Organic growth adj. for calendar, % | -10 | 5 | -2 | 5 |
| Organic growth adj. for calendar & IAC, % | -5 | 5 | -1 | 5 |
| Debt | ||||
| Net debt, SEK M | 943 | 2,114 | ||
| Interest-bearing debt, SEK M | 3,031 | 2,774 | ||
| Financial strength | ||||
| Net debt/Equity, % | 12.5 | 29.5 | ||
| Net debt/EBITDA, x | 0.5 | 1.0 | ||
| Equity/Assets ratio, % | 37.9 | 37.1 | ||
| Available cash and cash equivalents, SEK M | 3,898 | 2,699 | ||
| – of which unutilised credit, SEK M | 1,811 | 2,039 | ||
| Return | ||||
| Return on equity, % | 17.6 | 20.9 | ||
| Return on capital employed, % | 12.9 | 15.3 | ||
| Share data3 | ||||
| Earnings per share, SEK | 0.66 | 1.34 | 3.64 | 3.95 |
| Diluted earnings per share, SEK | 0.66 | 1.30 | 3.58 | 3.84 |
| Equity per share, SEK4 | 21.25 | 20.24 | ||
| Diluted equity per share, SEK4 | 21.07 | 19.71 | ||
| Number of shares outstanding at reporting date | 355,197,471 | 353,395,377 | ||
| Number of repurchased Class B shares | 8,053,986 | 9,856,080 |
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) Due to the share split conducted during Q4 2020, all historical share data have been restated in accordance with IAS 33. 4) Refers to portion attributable to Parent Company shareholders.
| Reconciliation of EBIT and the APMs EBITA and EBITDA, SEK M |
Oct–Dec 2020 |
Oct–Dec 2019 |
Full-year 2020 |
Full-year 2019 |
|---|---|---|---|---|
| Operating profit (EBIT) | 248 | 596 | 1,706 | 1,892 |
| Acquisition-related items | -5 | -41 | 135 | 58 |
| Lease expenses1 | -207 | -196 | -782 | -736 |
| Depreciation and impairments, right-of-use assets | 188 | 173 | 708 | 656 |
| EBITA2 | 224 | 532 | 1,766 | 1,869 |
| Amortisation/depreciation and impairment, tangible and intangible fixed assets |
67 | 73 | 278 | 291 |
| EBITDA3 | 292 | 606 | 2,044 | 2,160 |
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.
| Reconciliation of the APMs EBITA and EBITA excl. IAC, SEK M |
Oct–Dec 2020 |
Oct–Dec 2019 |
Full-year 2020 |
Full-year 2019 |
|---|---|---|---|---|
| EBITA | 224 | 532 | 1,766 | 1,869 |
| Items affecting comparability (IAC)1 | 290 | – | 290 | – |
| EBITA excl. IAC | 514 | 532 | 2,056 | 1,869 |
1) Items affecting comparability encompassed the write-down of working capital of SEK 290 million in the German operations and are reported in Business Area Germany & Central Europe.
| Oct–Dec | Oct–Dec | Full-year | Full-year | |
|---|---|---|---|---|
| SEK M Net sales |
2020 5,142 |
2019 5,692 |
2020 20,858 |
2019 20,629 |
| Other income | 3 | 2 | 7 | 17 |
| Other external expenses | -1,089 | -1,231 | -4,180 | -4,373 |
| Personnel expenses | -3,558 | -3,661 | -13,859 | -13,377 |
| Amortisation/depreciation and impairment, tangible and intangible fixed assets1 |
-67 | -73 | -278 | -291 |
| Depreciation and impairment, right-of-use assets | -188 | -173 | -708 | -656 |
| Acquisition-related items2 | 5 | 41 | -135 | -58 |
| Operating profit (EBIT) | 248 | 596 | 1,706 | 1,892 |
| Net financial items3 | -11 | -11 | -46 | -46 |
| Interest cost of leasing4 | -13 | -16 | -54 | -65 |
| Other financial items5 | 3 | 1 | 2 | -4 |
| Total net financial items | -21 | -26 | -98 | -115 |
| Profit before tax | 226 | 570 | 1,608 | 1,777 |
| Income tax | 9 | -97 | -316 | -384 |
| PROFIT FOR THE PERIOD | 235 | 472 | 1,293 | 1,393 |
| Attributable to: | ||||
| Parent Company shareholders | 235 | 472 | 1,292 | 1,393 |
| Non-controlling interests | 0 | 0 | 1 | 0 |
| Earnings per share attributable to Parent Company shareholders, SEK6 |
0.66 | 1.34 | 3.64 | 3.95 |
| Average number of shares outstanding6 | 355,197,471 | 353,395,377 | 354,626,159 | 352,712,302 |
| Dividend per share, SEK6, 7 | 2.20 | 2.07 |
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. 6) Due to the share split conducted during Q4 2020, historical data has been restated in accordance with IAS 33.
7) Dividend 2020 is the proposed dividend.
| SEK M | Oct–Dec 2020 |
Oct–Dec 2019 |
Full-year 2020 |
Full-year 2019 |
|---|---|---|---|---|
| Profit for the period | 235 | 472 | 1,293 | 1,393 |
| Items that will not be reversed in the income statement | ||||
| Revaluation of defined benefit pensions, net after tax1, 2 | -12 | -44 | -34 | -42 |
| Items that may subsequently be reversed in the income statement |
||||
| Translation differences, net after tax | -187 | -59 | -314 | 165 |
| COMPREHENSIVE INCOME FOR THE PERIOD | 37 | 369 | 945 | 1,516 |
| Attributable to: | ||||
| Parent Company shareholders | 37 | 369 | 945 | 1,516 |
| Non-controlling interests | 0 | 0 | 0 | 1 |
| 1) Tax on revaluation of defined benefit pensions | 4 | 15 | 11 | 15 |
2) Revalued annually. Reviewed quarterly in the event of material changes to actuarial assumptions.
| SEK M | Oct–Dec 2020 |
Oct–Dec 2019 |
Full-year 2020 |
Full-year 2019 |
|---|---|---|---|---|
| Profit before tax | 226 | 570 | 1,608 | 1,777 |
| Amortisation/depreciation and impairment | 275 | 280 | 1,071 | 1,048 |
| Other non-cash items | 331 | -54 | 502 | 131 |
| Cash flow from operating activities before changes in working capital, tax paid, interest paid and received |
832 | 795 | 3,181 | 2,955 |
| Interest cost leasing | -13 | -16 | -54 | -65 |
| Net interest paid | -6 | -6 | -28 | -33 |
| Tax paid | -22 | -49 | -337 | -418 |
| Changes in working capital | 363 | 330 | 488 | -141 |
| Cash flow from operating activities | 1,155 | 1,054 | 3,249 | 2,299 |
| Acquisition and divestment of subsidiaries and operations | -207 | -328 | -535 | -769 |
| Purchase and disposal of intangible and tangible assets | -50 | -19 | -220 | -212 |
| Other investing activities | 4 | -4 | 9 | -4 |
| Cash flow from investing activities | -253 | -350 | -746 | -985 |
| Borrowings and repayment of borrowings | -6 | -431 | 376 | -112 |
| Principal elements of lease payments | -176 | -168 | -700 | -645 |
| Dividends paid | -367 | 0 | -733 | -645 |
| Repurchase of treasury shares | – | – | – | -2 |
| Cash flow from financing activities | -548 | -599 | -1,056 | -1,404 |
| CASH FLOW FOR THE PERIOD | 353 | 104 | 1,447 | -90 |
| SEK M | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Goodwill | 7,593 | 7,471 |
| Other intangible assets | 340 | 339 |
| Property, plant and equipment | 519 | 580 |
| Right-of-use assets | 2,705 | 3,043 |
| Financial assets | 391 | 389 |
| Current assets excl. cash and cash equivalents | 6,312 | 6,821 |
| Cash and cash equivalents incl. short-term investments | 2,088 | 660 |
| TOTAL ASSETS | 19,948 | 19,303 |
| Equity attributable to Parent Company shareholders | 7,548 | 7,154 |
| Non-controlling interests | 10 | 10 |
| Total equity | 7,557 | 7,164 |
| Non-current lease liabilities | 2,135 | 2,522 |
| Non-current interest-bearing debt | 2,996 | 1,665 |
| Other non-current liabilities | 832 | 877 |
| Current lease liabilities | 706 | 688 |
| Current interest-bearing debt | 34 | 1,109 |
| Other current liabilities | 5,688 | 5,279 |
| TOTAL EQUITY AND LIABILITIES | 19,948 | 19,303 |
| Pledged assets | – | 1 |
| Contingent liabilities | 942 | 1,010 |
| Jan–Dec 2020 | Jan–Dec 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| 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 | 7,154 | 10 | 7,164 | 6,158 | 10 | 6,168 | ||
| Comprehensive income for the period | 945 | 0 | 945 | 1,516 | 1 | 1,516 | ||
| Transfer to shareholders | -732 | 0 | -733 | -644 | 0 | -645 | ||
| Buy-back of treasury shares | – | – | – | -2 | – | -2 | ||
| Share bonus scheme | 177 | – | 177 | 122 | – | 122 | ||
| Share savings schemes | 5 | – | 5 | 4 | – | 4 | ||
| EQUITY, CLOSING BALANCE | 7,548 | 10 | 7,557 | 7,154 | 10 | 7,164 |
The following acquisitions of companies and operations were carried out during the period.
| Company or operations1 | Included from |
Business area |
Acquired share, %2 |
Annual net sales in SEK M3 |
Number of employees (individuals) |
|---|---|---|---|---|---|
| Talboom Group | January | Sweco Belgium | 100 | 133 | 69 |
| Morgenroth & Landwehr, asset deal |
February | Sweco Germany & CE | – | 8 | 6 |
| Temco, asset deal | March | Sweco Belgium | – | 37 | 31 |
| KANT Arkitekter A/S | March | Sweco Denmark | 100 | 136 | 81 |
| Automation unit of Eurocon, asset deal |
March | Sweco Sweden | – | 5 | 5 |
| SGI Ingénieurs SA/NV | June | Sweco Belgium | 100 | 58 | 31 |
| Aries Real Estate Solutions s.a. | September | Sweco Belgium | 100 | 12 | 124 |
| Saraco Oy Group | October | Sweco Finland | 100 | 45 | 34 |
| TAG Arkitekter AS Group | November | Sweco Norway | 100 | 97 | 97 |
| Optiplan Oy | December | Sweco Finland | 100 | 124 | 143 |
| TOTAL | 655 | 509 |
1) Acquired goodwill attributable to acquisition of assets is tax deductible in event of future write-downs.
2) No acquired ownership share reported for asset deals. 3) Estimated annual net sales.
4) Of which 11 self employed.
During the period, the acquired companies contributed SEK 313 million in net sales, SEK 26 million in EBITA and SEK 10 million in operating profit (EBIT). If the companies had been owned as of 1 January 2020 they would have contributed approximately SEK 643 million in net sales, about SEK 62 million in EBITA and about SEK 33 million in operating profit (EBIT). The transaction costs for the acquisitions during this period and the previous period totalled SEK 11 million.
The purchase considerations of the acquisitions carried out in the period totalled SEK 588 million and had a negative impact on cash and cash equivalents of SEK 535 million. The acquisition analyses regarding Morgenroth & Landwehr, KANT Arkitekter, Temco, Automation unit of Eurocon, SGI Ingénieurs, Aries Real Estate Solutions, Saraco, TAG Arkitekter and Optiplan are preliminary. The acquisitions impacted the consolidated balance sheet as detailed in the table below.
| Acquisitions, SEK M | |
|---|---|
| Intangible assets | 545 |
| Property, plant and equipment | 12 |
| Right-of-use assets | 21 |
| Financial assets | 5 |
| Current assets | 305 |
| Non-current liabilities | -7 |
| Lease liabilities | -20 |
| Deferred tax | -39 |
| Other current liabilities | -234 |
| Total purchase consideration | 588 |
| Purchase price outstanding | -44 |
| Payment and repayment of deferred purchase price | 58 |
| Cash and cash equivalents in acquired companies | -67 |
| DECREASE IN GROUP CASH AND CASH EQUIVALENTS | 535 |
| SEK M | Oct–Dec 2020 |
Oct–Dec 2019 |
Full-year 2020 |
Full-year 2019 |
|---|---|---|---|---|
| Amortisation of acquisition-related intangible assets | -20 | -33 | -85 | -101 |
| Revaluation of additional purchase price | 0 | -1 | -38 | -1 |
| Profit/loss on divestment of buildings and land | 6 | 19 | 6 | 20 |
| Profit/loss on divestment of companies and operations1 | 29 | 71 | 29 | 62 |
| Cost for received future service | -11 | -15 | -47 | -37 |
| ACQUISITION-RELATED ITEMS | 5 | 41 | -135 | -58 |
1) Provision for exposure in a previous divestment is released during the quarter and amounted to SEK 29 million.
The Group's financial instruments measured at fair value totalled SEK 10 million (10). The derivative instruments are forward currency contracts, the fair value of which is determined based on listed prices for forward currency contracts on the balance sheet date (Level 2). The fair value of unlisted financial assets is determined through market valuation techniques (observable market inputs) such as recent transactions, listed prices of similar instruments and discounted cash flows. In the event no reliable inputs are available for determining fair value, financial assets are reported at acquisition value (Level 3). There were no transfers between levels during the period.
In the table below, 2018 segment information has been restated to reflect the adjusted business area structure applicable from 1 January 2019.1
| 2020 Q4 |
2020 Q3 |
2020 Q2 |
2020 Q1 |
2019 Q4 |
2019 Q3 |
2019 Q2 |
2019 Q1 |
2018 Q4 |
|
|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK M | |||||||||
| Sweco Sweden | 1,992 | 1,489 | 2,015 | 1,985 | 2,054 | 1,519 | 1,952 | 1,958 | 2,003 |
| Sweco Norway | 620 | 489 | 598 | 708 | 692 | 550 | 658 | 706 | 661 |
| Sweco Finland | 729 | 584 | 726 | 738 | 663 | 536 | 611 | 579 | 556 |
| Sweco Denmark | 500 | 421 | 467 | 458 | 477 | 410 | 442 | 455 | 460 |
| Sweco Netherlands | 515 | 466 | 538 | 547 | 542 | 488 | 519 | 506 | 520 |
| Sweco Belgium | 414 | 392 | 418 | 431 | 381 | 326 | 352 | 335 | 323 |
| Sweco UK | 280 | 280 | 305 | 382 | 348 | 317 | 291 | 214 | 207 |
| Sweco Germany & Central Europe | 175 | 481 | 504 | 497 | 605 | 502 | 438 | 397 | 436 |
| Group-wide, Eliminations, etc. | -83 | -56 | -81 | -65 | -71 | -26 | -49 | -47 | -55 |
| TOTAL NET SALES | 5,142 | 4,547 | 5,489 | 5,680 | 5,692 | 4,623 | 5,214 | 5,101 | 5,112 |
| Items affecting comparability (IAC)4 | 290 | – | – | – | – | – | – | – | – |
| TOTAL NET SALES excl. IAC | 5,432 | 4,547 | 5,489 | 5,680 | 5,692 | 4,623 | 5,214 | 5,101 | 5,112 |
| EBITA, SEK M2 | |||||||||
| Sweco Sweden | 282 | 149 | 253 | 269 | 271 | 102 | 233 | 252 | 284 |
| Sweco Norway | 44 | 44 | 24 | 97 | 65 | 55 | 18 | 78 | 60 |
| Sweco Finland | 85 | 80 | 104 | 101 | 64 | 76 | 73 | 74 | 53 |
| Sweco Denmark | 50 | 41 | 22 | 30 | 41 | 44 | 16 | 36 | 17 |
| Sweco Netherlands | 42 | 44 | 35 | 51 | 39 | 24 | 37 | 43 | 31 |
| Sweco Belgium | 46 | 48 | 45 | 50 | 41 | 38 | 41 | 38 | 37 |
| Sweco UK | 6 | 9 | 21 | 40 | 24 | 15 | 4 | 8 | -6 |
| Sweco Germany & Central Europe | -317 | 0 | 8 | 9 | 21 | 26 | 18 | 11 | 27 |
| Group-wide, Eliminations, etc.3 | -13 | 2 | -18 | -17 | -34 | 3 | -18 | -9 | -8 |
| EBITA | 224 | 417 | 495 | 630 | 532 | 384 | 422 | 531 | 494 |
| Items affecting comparability (IAC)4 | 290 | – | – | – | – | – | – | – | – |
| EBITA excl. IAC | 514 | 417 | 495 | 630 | 532 | 384 | 422 | 531 | 494 |
| EBITA margin, %2 | |||||||||
| Sweco Sweden | 14.2 | 10.0 | 12.6 | 13.6 | 13.2 | 6.7 | 11.9 | 12.9 | 14.2 |
| Sweco Norway | 7.1 | 8.9 | 4.1 | 13.7 | 9.4 | 10.0 | 2.7 | 11.0 | 9.0 |
| Sweco Finland | 11.7 | 13.7 | 14.3 | 13.7 | 9.6 | 14.2 | 12.0 | 12.8 | 9.5 |
| Sweco Denmark | 9.9 | 9.7 | 4.8 | 6.7 | 8.6 | 10.7 | 3.6 | 8.0 | 3.7 |
| Sweco Netherlands | 8.1 | 9.4 | 6.6 | 9.4 | 7.2 | 5.0 | 7.1 | 8.6 | 5.9 |
| Sweco Belgium | 11.0 | 12.3 | 10.8 | 11.5 | 10.7 | 11.6 | 11.7 | 11.4 | 11.5 |
| Sweco UK | 2.2 | 3.1 | 6.8 | 10.4 | 7.0 | 4.8 | 1.4 | 3.7 | -3.0 |
| Sweco Germany & Central Europe | -180.8 | 0.0 | 1.7 | 1.8 | 3.5 | 5.2 | 4.1 | 2.9 | 6.3 |
| EBITA margin | 4.4 | 9.2 | 9.0 | 11.1 | 9.4 | 8.3 | 8.1 | 10.4 | 9.7 |
| Items affecting comparability (IAC)4 | 5.1 | – | – | – | – | – | – | – | – |
| EBITA margin excl. IAC | 9.5 | 9.2 | 9.0 | 11.1 | 9.4 | 8.3 | 8.1 | 10.4 | 9.7 |
| Billing ratio, % | 74.1 | 73.8 | 75.5 | 73.6 | 74.6 | 73.6 | 74.8 | 74.1 | 74.5 |
| Number of normal working hours | 491 | 518 | 465 | 500 | 485 | 519 | 462 | 496 | 489 |
| Number of full-time employees | 17,470 | 16,988 | 17,555 | 17,330 | 17,084 | 16,463 | 16,281 | 15,823 | 15,665 |
1) Sweco is not applying IFRS 16 at the business area level. In the table above, business area EBITA values for 2018 therefore remain unchanged from previous values.
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 EBITA for 2018 differs slightly from previously reported 2018 figures due to the change in treatment of leases previously reported as finance leases. This difference between reported and
restated Group EBITA is reported in Group-wide, Eliminations, etc.
| January–December | Net sales, SEK M | EBITA, SEK M2 | EBITA margin, %2 | Number of full time employees |
||||
|---|---|---|---|---|---|---|---|---|
| Business Area1 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Sweco Sweden | 7,481 | 7,482 | 954 | 858 | 12.8 | 11.5 | 5,828 | 5,870 |
| Sweco Norway | 2,414 | 2,606 | 209 | 216 | 8.6 | 8.3 | 1,660 | 1,563 |
| Sweco Finland | 2,777 | 2,388 | 369 | 287 | 13.3 | 12.0 | 2,493 | 2,160 |
| Sweco Denmark | 1,846 | 1,784 | 143 | 137 | 7.8 | 7.7 | 1,230 | 1,173 |
| Sweco Netherlands | 2,066 | 2,055 | 172 | 143 | 8.3 | 7.0 | 1,390 | 1,403 |
| Sweco Belgium | 1,655 | 1,394 | 189 | 158 | 11.4 | 11.3 | 1,071 | 870 |
| Sweco UK | 1,247 | 1,170 | 75 | 51 | 6.0 | 4.4 | 1,236 | 1,136 |
| Sweco Germany & Central Europe | 1,657 | 1,941 | -299 | 77 | -18.1 | 3.9 | 2,375 | 2,171 |
| Group-wide, Eliminations, etc.3 | -285 | -193 | -47 | -58 | – | – | 45 | 65 |
| TOTAL GROUP | 20,858 | 20,629 | 1,766 | 1,869 | 8.5 | 9.1 | 17,328 | 16,412 |
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 and the Dutch real estate operations.
The table below shows the calculation of organic growth excluding calendar effect and items affecting comparability – i.e., net sales growth adjusted for the impact of acquisitions and divestments as well as the effect of foreign currency fluctuations, calendar effect and items affecting comparability.
| Growth, % | Growth, % | |||||
|---|---|---|---|---|---|---|
| Oct–Dec | Oct–Dec | Oct–Dec | Jan–Dec | Jan–Dec | Jan–Dec | |
| 2020 | 2019 | 2020 | 2020 | 2019 | 2020 | |
| Reported net sales | 5,142 | 5,692 | -10 | 20,858 | 20,629 | 1 |
| Adjustment for currency effects | -186 | -3 | -372 | -2 | ||
| Net sales, currency-adjusted | 5,142 | 5,505 | -6 | 20,858 | 20,257 | 3 |
| Adjustment for acquisitions/divestments | -155 | -9 | 3 | -999 | -103 | 4 |
| Comparable net sales, currency-adjusted | 4,987 | 5,497 | -9 | 19,860 | 20,154 | -1 |
| Adjustment of calendar effect | -55 | 1 | -102 | 0 | ||
| Comparable net sales, adjusted for currency | ||||||
| and calendar effects | 4,932 | 5,497 | -10 | 19,758 | 20,154 | -2 |
| Adjustment of items affecting comparability | 290 | -5 | 290 | 1 | ||
| Comparable net sales, adjusted for currency, | ||||||
| calendar effects and items affecting comparability | 5,222 | 5,497 | -5 | 20,048 | 20,154 | -1 |
| Oct–Dec 2019 |
Oct–Dec 2018 |
Growth, % Oct–Dec 2019 |
Jan–Dec 2019 |
Jan–Dec 2018 |
Growth, % Jan–Dec 2019 |
|
|---|---|---|---|---|---|---|
| Reported net sales | 5,692 | 5,112 | 11 | 20,629 | 18,735 | 10 |
| Adjustment for currency effects | 78 | 2 | 317 | 2 | ||
| Net sales, currency-adjusted | 5,692 | 5,190 | 10 | 20,629 | 19,051 | 8 |
| Adjustment for acquisitions/divestments | -374 | -125 | 5 | -646 | -50 | 3 |
| Comparable net sales, currency-adjusted | 5,317 | 5,065 | 5 | 19,983 | 19,001 | 5 |
| Adjustment of calendar effect | 25 | 0 | 7 | 0 | ||
| Comparable net sales, adjusted for currency and calendar effects |
5,342 | 5,065 | 5 | 19,990 | 19,001 | 5 |
| SEK M | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Non-current interest-bearing debt | 2,996 | 1,665 |
| Current interest-bearing debt | 34 | 1,109 |
| Cash and cash equivalents incl. short-term investments | -2,088 | -660 |
| NET DEBT1 | 943 | 2,114 |
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.
| Full-year | Full-year | ||
|---|---|---|---|
| SEK M | 2020 | 2019 | |
| Net sales | 874 | 771 | |
| Operating expenses | -909 | -818 | |
| Operating loss | -35 | -48 | |
| Net financial items | 1,071 | 791 | |
| Profit/loss after net financial items | 1,036 | 743 | |
| Appropriations | -180 | -120 | |
| Profit/loss before tax | 856 | 623 | |
| Tax | -117 | -77 | |
| PROFIT/LOSS AFTER TAX | 739 | 546 |
| 31 Dec | 31 Dec | ||
|---|---|---|---|
| SEK M | 2020 | 2019 | |
| Intangible assets | 24 | 26 | |
| Property, plant and equipment | 60 | 59 | |
| Financial assets | 6,541 | 6,537 | |
| Current assets | 4,593 | 3,371 | |
| TOTAL ASSETS | 11,218 | 9,994 | |
| Equity | 4,673 | 4,480 | |
| Untaxed reserves | 654 | 474 | |
| Non-current liabilities | 2,906 | 1,569 | |
| Current liabilities | 2,985 | 3,471 | |
| TOTAL EQUITY AND LIABILITIES | 11,218 | 9,994 |
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