Earnings Release • Jul 18, 2013
Earnings Release
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18 July 2013
The Sweco Group's net sales rose by 2 per cent to SEK 3,942.1 million (3,852.7). Organic growth was 2 per cent and acquisition-driven growth was 2 per cent, while foreign exchange effects resulting from a stronger Swedish krona had a negative impact on growth of 2 per cent.
| Profit summary, SEK M |
Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Sweco Sweden | 121.9 | 94.7 | 226.4 | 233.2 |
| Sweco Norway | 61.1 | 20.8 | 86.6 | 89.9 |
| Sweco Finland | 17.3 | 29.5 | 31.7 | 45.3 |
| Sweco Central & Eastern Europe |
1.0 | 1.7 | -0.3 | 4.3 |
| Sweco Russia | -0.5 | -3.0 | -7.1 | -5.8 |
| Sweco Industry | 5,0 | 12.1 | 8.9 | 33.3 |
| Group-wide, etc. | -14.9 | -5.6 | -20.0 | -18.0 |
| Operating profit | 190.9 | 150.2 | 326.2 | 382.2 |
| Consolidated net financial items |
-9.4 | 2.7 | -10.4 | -3.5 |
| Profit before tax | 181.5 | 152.9 | 315.8 | 378.7 |
Operating profit was SEK 326.2 million (382.2). The decrease is mainly explained by lower earnings in Sweco Finland and the Finnish part of Sweco Industry, which had a negative impact on operating profit of around SEK 40 million, and by negative calendar effects of approximately SEK 30 million. Operating margin for the Group was 8.3 (9.9).
Sweco Sweden reported net sales of SEK 2,141.4 million (2,044.7). Operating profit was SEK 226.4 million (233.2) and operating margin was 10.6 per cent (11.4).
Net sales for Sweco Norway totalled SEK 931.8 million (910.7) and operating profit reached SEK 86.6 million (89.9). Operating margin was 9.3 per cent (9.9).
Sweco Finland achieved an operating profit of SEK 31.7 million (45,3) and an operating margin of 6.9 per cent (10.9). The decrease in earnings is due to slowing in the Finnish construction market.
The negative earnings in Russia are explained by a persistently very weak market in the infrastructure segment and restructuring charges to adapt the organisation to structurally lower demand.
The drop in earnings for Sweco Industry is attributable to a clear downturn in the industrial market in Finland.
Measures are being carried out to adapt the organisation to current demand levels.
Consolidated profit was burdened with acquisitionrelated costs of SEK 5.5 million (12.5) and amortisation of acquisition-related intangible assets of SEK 20.4 million (23.0).
Operating profit before amortisation of acquisitionrelated intangible assets (EBITA) was SEK 346.6 million (405.2) and the margin was 8.8 per cent (10.5).
The billing ratio, including all administrative personnel, was 73.8 per cent (74.5).
The number of normal working hours during the period was 957 (966).
Profit before tax was SEK 315.8 million (378.7). The Group's net financial items amounted to SEK –10.4 million (–3.5), and included foreign exchange effects of SEK –1.0 million (10.9).
Profit after tax was SEK 238.4 million (287.0).
Return on equity was 28.9 per cent (34.1) and return on capital employed was 26.8 per cent (34.9).
No significant transactions with related parties have taken place.
Earnings per share amounted to SEK 2.59 (3.12) before dilution and SEK 2.59 (3.12) after dilution.
Investments in equipment totalled SEK 45.6 million (58.6) and referred mainly to computers and other IT investments. Depreciation of equipment amounted to SEK 49.7 million (43.1) and amortisation of intangible assets to SEK 24.2 million (27.5).
Purchase consideration paid for the acquisition of companies amounted to SEK 19.7 million (781.3) and had an effect of SEK –11.9 million (–528.3) on the Group's cash and cash equivalents.
The Group's cash flow from operating activities was SEK 143.8 million (228.3).
Cash and cash equivalents amounted to SEK 184.6 million (335.9). Disposable cash and cash equivalents including unutilised bank overdraft facilities at the end of the reporting period totalled SEK 677.3 million (813.8). Interest-bearing debt is reported at SEK 830.7 million (844.9). The net interest-bearing liability was SEK 646.1 million (509.0). The net debt/equity ratio was 40.9 per cent (37.1). The equity/assets ratio was 32.4 per cent (27.9).
During the year, dividends have been paid to Sweco AB's shareholders in a total amount of SEK 296.2 million (274.0).
The number of employees at 30 June 2013 was 7,845 (7,694). The average number of employees in the Group was 7,559 (7,200). The Sweco Group gained 34 employees through acquisitions during the period.
Net sales increased by 4 per cent to SEK 2,010.5 million (1,943.1). Organic growth was 5 per cent and acquisition-driven growth was 1 per cent, while foreign exchange effects resulting from a stronger Swedish krona had a negative impact on growth of 2 per cent.
Operating profit was 190.9 million (150.2) and operating margin was 9.5 per cent (7.7). Operating profit was positively affected by calendar effects of around SEK 60 million.
Consolidated profit was burdened with acquisitionrelated costs of SEK 5.4 million (0.3) and amortisation of acquisition-related intangible assets of SEK 10.3 million (12.7).
Operating profit before amortisation of acquisitionrelated intangible assets (EBITA) was SEK 201.2 million (162.9) and the margin was 10.0 per cent (8.4).
The billing ratio was 75.0 per cent (75.1).
The number of normal working hours during the period was 476 (461).
Profit before tax was SEK 181.5 million (152.9). Profit after tax amounted to SEK 136.2 million (122.0).
Cash flow from operating activities was SEK 80.3 million (148.7).
On 1 July 2013 Sweco carried out an organisational change in which the Sweco Industry business area was split up and transferred to the Sweco Finland, Sweco Sweden and Sweco Norway business areas. The main motive is to clarify the organisation and strengthen the total offering to industrial clients in the Nordic market. The business areas' net sales, operating profit and operating margin according to the new organisation are presented in a table at the end of the report.
The Parent Company recorded net sales of SEK 136.0 million (113.8), all of which refers to intra-group services. Profit after net financial items was SEK 200.5 million (8.9). Investments in equipment amounted to SEK 11.4 million (3.2) and cash and cash equivalents at the end of the period totalled SEK 3.3 million (0.2).
Sweco is listed on NASDAQ OMX Stockholm. The closing bid price for the Sweco B share at 30 June 2013 was SEK 76.25, an increase of 4 per cent during the year. The OMX Stockholm General Index rose by 5 per cent over the same period.
The total number of shares at the end of the period was 91,516,847, of which 9,378,364 were of class A and 82,138,483 were of class B. After deduction of treasury shares, the number of shares outstanding at 30 June 2013 was 91,135,382, of which 9,378,364 were of class A and 81,757,018 were of class B.
Sweco held 381,465 class B shares in treasury at 30 June 2013. The treasury shares correspond to 0.4 per cent of the total number of shares and 0.2 per cent of the votes.
Sweco has signed an agreement with the Swedish Government to acquire 100 per cent of the shares in Vectura, with 1,200 employees. The acquisition will create the largest engineering consultancy in the Nordic market, with annual sales of approximately SEK 8,800 million and around 9,000 employees. The transaction is conditional on approval from the competition authorities in Sweden and Norway, and the goal is for the change of ownership to take place in August 2013.
Vectura is the Nordic region's leading provider of consulting services for transport infrastructure and has an especially strong position in the Swedish railway sector. The company has a presence in some 40 locations in Sweden, Norway and Denmark.
The acquisition is in line with Sweco's strategy to consolidate its leading positions in the Nordic region and expand in the infrastructure segment. Combining Vectura's comprehensive expertise in transport infrastructure with Sweco's forefront position in sustainable engineering and design will boost Sweco's growth in the Nordic region, above all in Sweden and in the fastgrowing Norwegian market.
Value-creating growth:
The total purchase consideration of SEK 927 million will be paid in cash (equity value). The enterprise value is expected to amount to approximately SEK 900 million on the transaction date. Vectura will be integrated into the Sweco Sweden business area under the Sweco brand. The integration is scheduled for completion around year-end 2013.
In 2012 Vectura reported annual sales of SEK 1,327 million and an operating profit of SEK 31 million (EBIT). The acquisition is expected to increase Sweco's operating profit (EBITA) by SEK 100 million starting in 2015. Based on the estimated synergies, a standardised assessment of acquisition-related intangible assets and the current financing cost, Sweco's earnings per share will increase by SEK 0.47, or by 9 per cent from the 2012 level. The combined figures are hypothetical and should not be seen as a pro forma accounts, since only rough adjustments have been made for the acquisition. The long-term business is expected to perform with the same level of profitability as Sweco's current infrastructure activities.
The improvement in earnings will be achieved primarily through the realisation of cost synergies, e.g., reduction of external corporate costs, coordination of administrative functions and co-location of operations. The combination of Vectura's operations in Norway and the Traffic & Urban planning businesses with Sweco's operations will enhance their profitability. The identified synergies exceed SEK 70 million.
The integration costs are estimated at SEK 100 million and will be recognised mainly in the second half of 2013 and first half of 2014. Transaction costs amount to approximately SEK 5 million, affecting the second quarter of 2013.
The acquisition will be financed through a combination of existing loans and a new three-year credit facility. The financing cost is around 3 per cent.
The engineers, architects and environmental experts at Sweco are working together to contribute to the development of a sustainable society. With more than 7,800 employees in 12 countries, the Sweco Group is one of the largest players in Europe. Every year, Sweco carries out projects in some 80 countries worldwide.
Operations are conducted in six business areas: Sweco Sweden, Sweco Norway, Sweco Finland, Sweco Central & Eastern Europe, Sweco Russia and Sweco Industry. After 1 July 2013, operations are conducted in five geographically organised business areas (see previous page).
Sweco is well positioned for profitable growth. The Group has market-leading positions in Sweden, Norway and Finland and solid niche positions in several countries in Central and Eastern Europe. Sweco's home markets have generally higher GDP growth and healthier public finances than the European average. With a level of profitability at the top of the industry, Sweco has capacity to grow faster than the market average, both organically and through acquisitions.
The first half of the year was characterised by relatively stable demand in most service segments. However, Sweco's markets as a whole have been impacted by generally slow growth in the Nordic region and Europe, with major variations. In Norway, demand for Sweco's services remains very strong, while Sweden has been affected by generally weak growth. An improved market situation was noted in the latter half of the second quarter. The market for industrial services in Finland has continued to worsen and measures have been taken to adapt these operations to the current market conditions. 35 employees in the Finnish industrial operations have been placed on temporary layoff. The markets in Russia and Poland also remain persistently weak.
The need for investment in urban and regional development is stimulating long-term demand for Sweco's services. These include a growing need for transport infrastructure, industrial production, energy production and construction. Among other things, the Swedish Government is expected to increase its total investments in the road and railway network from SEK 27 billion to SEK 39 billion over the next five years. In Norway, the corresponding investments are expected to increase by 75 per cent, from NOK 17 billion to NOK 29 billion.
At the same time, there are increasingly stringent requirements for sustainable development of society and adaptation to climate change. This is creating demand for services in areas like energy efficiency improvements, environmental impact assessments, renewable energy solutions, effective traffic planning, water supply systems, wastewater treatment and soil/site remediation.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 1,081.1 | 1,013.8 | 2,141.4 | 2,044.7 |
| Operating profit, SEK M | 121.9 | 94.7 | 226.4 | 233.2 |
| Operating margin, % | 11.3 | 9.3 | 10.6 | 11.4 |
| No. of employees at end of period |
3,491 | 3,329 |
Sweco Sweden is the country's leading provider of consulting engineering services and the Group's largest business area, with around 3,500 employees in some 50 locations. Services are offered in the areas of
Architecture, Structural Engineering, Building Service Systems, Infrastructure, Water & Environment, Project Management, Energy Systems, Geographical IT and Institutional Services.
Sweco Sweden also has project exports to countries in Eastern Europe, Africa, Asia, the Middle East and Latin America.
Demand for Sweco's services in Sweden was relatively stable, although the market has been impacted by generally weak growth in the Nordic region. Signs of an improved market situation were noted towards the end of the period. Interest in Sweco's comprehensive offering of services in sustainable engineering and design has continued to grow and strong long-term demand is anticipated, above all in the transport infrastructure segment.
In the second quarter, Sweco's architects were selected to design the renovation and expansion of Kungälv Hospital, with 220 beds. Sweco has also been commissioned by Svenska Kraftnät (the Swedish national grid operator) to plan a 150 km power line that will reinforce transmission of electricity from the Oskarshamn nuclear power plant. During the quarter, Sweco's Swedish consultants were chosen to study and plan a new peat-fired power plant in Rwanda with a capacity of 90 megawatts.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 482.9 | 438.2 | 931.8 | 910.7 |
| Operating profit, SEK M | 61.1 | 20.8 | 86.6 | 89.9 |
| Operating margin, % | 12.7 | 4.8 | 9.3 | 9.9 |
| No. of employees at end of period |
1,169 | 1,100 |
Sweco is one of Norway's leading engineering consultancies, with around 1,170 employees. The Norwegian business area is organised in five divisions: Energy, Building & Construction, Building Service Systems, Vest and Water, Planning & Transportation.
Demand in the Norwegian market remains strong. Extensive investments in the road and railway network are creating a favourable long-term market for Sweco. The energy area is also showing healthy demand for Sweco's services, above all with regard to electric power production. Investments in commercial properties are rising and demand in the housing sector remains robust. However, a slowing trend has been noted in the industrial and mining sectors.
In the second quarter Sweco was chosen to plan a new section of the E 134 motorway between Gvammen and Århus in the Telemark region. Sweco was also awarded additional road contracts in connection with upgrading of county road 78 in northern Norway. The assignment includes road planning, geotechnical engineering and structural design of bridges. In addition, Sweco's Norwegian consultants have been appointed by the World Bank to carry out a comprehensive sustainability study in Tanzania regarding the country's existing and planned hydropower plants.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 241.0 | 259.3 | 460.7 | 415.3 |
| Operating profit, SEK M | 17.3 | 29.5 | 31.7 | 45.3 |
| Operating margin, % | 7.2 | 11.4 | 6.9 | 10.9 |
| No. of employees at end of period |
1,325 | 1,336 |
Sweco Finland includes FMC Group, with around 1,200 employees, which provides services with a focus on structural engineering, building service systems, energy and environment. The business area also includes Sweco PM, which primarily offers project management services to clients in the infrastructure, construction and industrial sectors.
Demand for Sweco's building-related services in Finland weakened during the period. However, a good demand is awaited for public facilities such as schools and hospitals. Development is also positive in the renovation, rebuilding and expansion sector.
New assignments in the second quarter include two large-scale contracts in the healthcare sector. The first involves structural engineering of a new hospital in Espoo with 255 beds and a total area of approximately 70,000 square meters. The second is a new children's hospital in Helsinki where Sweco has been given responsibility for construction and project management. Another notable contract was awarded for structural engineering of Finland's largest residential building made of wood. The structure will have five floors and will be built in central Helsinki.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 56.3 | 68.1 | 112.5 | 134.5 |
| Operating profit, SEK M | 1.0 | 1.7 | -0.3 | 4.3 |
| Operating margin, % | 1.6 | 2.4 | -0.3 | 3.2 |
| No. of employees at end of period |
809 | 884 |
Sweco Central & Eastern Europe has more than 800 employees and is active in Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia and Bulgaria.
Demand in the water and environmental segments is relatively stable throughout the business area. The Polish market remains very weak with regard to infrastructure and architecture. The Czech Republic is noting continued healthy demand in the water supply segment and Bulgaria is showing stable demand for Sweco's services.
Ongoing use of the EU structural funds 2014-2020 to support less developed regions in the European Union is expected to stimulate long-term demand for Sweco's services.
New assignments include project management for a new hotel in Tallinn, Estonia, and the design of a new CHP plant in Latvia. In Lithuania, Sweco is responsible for project and construction management for expansion of the Port of Sventoji. In Poland, Sweco was awarded a contract for planning of a flood protection system along the Watok River, and in Bulgaria Sweco will plan phase two of Struma Highway, a new motorway between Sofia and the border to Greece.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 11.8 | 27.2 | 26.0 | 59.7 |
| Operating profit, SEK M | -0.5 | -3.0 | -7.1 | -5.8 |
| Operating margin, % | -3.8 | -11.1 | -27.3 | -9.7 |
| No. of employees at end of period |
199 | 323 |
Sweco Russia has around 200 employees and offers services in Infrastructure and Water & Environment. Sweco Russia also coordinates project exports from the other business areas to Russia.
The Russian economy is being affected by the general global business climate. Investment spending among both public and private sector clients has decreased, most visibly in the infrastructure and industrial segments, where many projects have been postponed. Measures have been taken successively to adapt these operations to the current market conditions.
In spite of the market situation, the order intake has improved. Among other things, Sweco's Russian consultants were commissioned to plan a wastewater treatment plant for the chemical producer Metahim, to study optimisation of a route network for passenger transport in Yaroslavl and to investigate the market conditions for an express train between Moscow and Ekaterinburg.
| Net sales and profit | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
|---|---|---|---|---|
| Net sales, SEK M | 192.0 | 191.9 | 382.1 | 384.7 |
| Operating profit, SEK M | 5.0 | 12.1 | 8.9 | 33.3 |
| Operating margin, % | 2.6 | 6.3 | 2.3 | 8.7 |
| No. of employees at end of period |
837 | 707 |
Sweco Industry is the Group's resource for qualified industrial consulting services. The business area's capabilities include studies, planning, engineering and project management services for expansion and development of industrial facilities. With some 590 employees in Finland, 220 in Sweden and 30 in Norway, Sweco Industry is one of the Nordic region's largest industrial engineering consultancies. Sweco Industry also has operations in Russia, Eastern Europe and South America. The business area works with a focus on the energy, chemical and petro-chemical, pulp and paper, mining and mineral industries, as well as offshore projects.
As of 1 July 2013, the Sweco Industry business area has been split up and transferred to the Sweco Finland, Sweco Sweden and Sweco Norway business areas. The motive is to strengthen the total offering to industrial clients in the Nordic region.
The market situation for industrial consultants in Finland worsened further during the latter half of the period with a growing number of postponed projects, primarily in the energy production area. 35 people have been placed on temporary layoff and another total of around 100 employees have been given notice of temporary layoff in order to adapt these operations to the current market conditions. In Sweden, the market for industry-related services remains stable with healthy demand primarily in the mining industry and upgrading of pulp and paper mills.
Notable contracts during the period include planning and design in connection with the installation of a new biomass boiler for Alvesta Energi, a framework agreement with Talvivaara Mining and several new assignments for clients such as Metso, Neste Jacobs, Outotec, Kemira and Andritz.
Sweco complies with the International Financial Accounting Standards (IFRS) and interpretations of these (IFRIC) that have been endorsed by the European Commission for application in the EU. This interim report is presented in accordance with IAS 34, Interim Financial Reporting, the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Accounting for Legal Entities. With effect from 1 January 2013, Sweco ap-
plies IAS 1, Presentation of Financial Statements (Presentation of Items of Other Comprehensive Income), the amended IAS 19, Employee Benefits, and IFRS 13, Fair Value Measurement.
One change is that the Group no longer applies the "corridor approach" and instead recognises all actuarial gains and losses in other comprehensive income. The expected return on plan assets is based on the discount rate that is used for calculating the pension liability. The difference between the actual and expected return on plan assets is recognised in other comprehensive income. The comparison periods have therefore been adjusted accordingly. The Group's comprehensive income for the full year 2012 has been adjusted by SEK +127.7 million. Operating profit has been adjusted by SEK +22.3 million, deferred tax by SEK –6.2 million, currency translation differences by SEK –2.0 million and remeasurement of defined benefit pension plans by SEK +113.6 million, of which SEK –44.2 million refers to tax. The balance sheet at 31 December 2012 has also been adjusted. Financial assets have been reduced by SEK 42.3 million, noncurrent liabilities have been reduced by SEK 1.8 million and equity has been reduced by SEK 40.5 million. The Group's comprehensive income for the period January-June 2012 has been adjusted by SEK –0.8 million. Operating profit has been adjusted by SEK +1.3 million, deferred tax by SEK –0.3 million and currency translation differences by SEK –1.8 million. The balance sheet at 30 June 2012 has also been adjusted. Financial assets have been increased by SEK 53.4 million, non-current liabilities have been increased by SEK 222.4 million and equity has been reduced by SEK 169.0 million. The Group's comprehensive income for the period April-June 2012 has therefore been adjusted by SEK +0.1 million. Operating profit has been adjusted by SEK +0.6 million, deferred tax by SEK –0.1 and currency translation differences by SEK –0.4 million. However, the change has had no effect on net cash flow.
In other respects, the accounting and valuation standards applied by the Group are the same as those described in Note 1 of the annual report for 2012. In this report, the amounts in brackets refer to the same period of the previous year.
The significant risks and uncertainties affecting the Sweco Group and the Parent Company include business risks tied to the general economic trend and investment spending in different markets, the ability to attract and retain competent personnel and the effects of political decisions. The Group is also exposed to different types of financial risk, such as foreign exchange risk, interest rate risk and credit risk. No significant risks are assessed to have arisen aside from
those presented on page 82, "Risks and risk management", of Sweco's annual report for 2012.
The number of normal working hours in 2013, based on the year's volume-weighted operating mix, is broken down as follows:
Quarter 1: 481 (505), –24 Quarter 2: 476 (461), +15 Quarter 3: 522 (515), +7 Quarter 4: 484 (487), –3 Total 2013: 1,963 (1,968), –5
Interim report January-September: 5 November 2013 Year-end report 2013: 14 February 2014
The market for consulting engineering services is relatively stable, but is being impacted by generally slow growth in the Nordic region and Europe. Demand for Sweco's services is following the general economic trend at a certain delay. Sweco's ambition is to achieve sustained profitable growth by strengthening its market positions in the Nordic region and in Central and Eastern Europe. Sweco's leading market positions and the industry's strongest offering of services in sustainable engineering and design provide a solid platform for stable long-term development.
For additional information please contact:
Tomas Carlsson, President & CEO Telephone +46 8 695 66 60 / +46 70 552 92 75 [email protected]
Jonas Dahlberg, CFO Telephone +46 8 695 63 32 / +46 70 347 23 83 [email protected]
Bo Jansson, Senior Vice President, Head of IR Telephone +46 8 695 66 06 / +46 73 412 66 06 [email protected]
SWECO AB (publ) Corp. ID no. 556542-9841 Gjörwellsgatan 22, Box 34044, SE-100 26 Stockholm, Sweden Telephone +46 8 695 60 00, Fax +46 8 695 66 10 E-mail: [email protected] www.swecogroup.com
Sweco discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on 18 July 2013, 11:10 CET.
The Board of Directors and the President give their assurance that the semi-annual report gives a true and fair view of the business activities, financial position and results of operations of the Group and the Parent Company, and describes the significant risks and uncertainties to which the Parent Company and the Group companies are exposed.
Stockholm, 18 July 2013
Board Chairman Board member
Olle Nordström Anders G. Carlberg
Gunnel Duveblad Johan Nordström Eva Lindqvist Board member Board member Board member
Board member Board member
Pernilla Ström Carola Teir-Lehtinen
Thomas Holm Göran Karloja Anna Leonsson Employee representative Employee representative Employee representative
Tomas Carlsson President & CEO Board member
This report has not been examined by the company's independent auditors.
| Income statement, SEK M | Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
Jul 2012 - Jun 2013 |
Full year 2012 |
|---|---|---|---|---|---|---|
| Net sales | 2,010.5 | 1,943.1 | 3,942.1 | 3,852.7 | 7,592.9 | 7,503.5 |
| Other operating income | 0.4 | - | 0.4 | - | 12.9 | 12.5 |
| Other external expenses | -449.9 | -459.2 | -880.3 | -876.8 | -1,820.9 | -1,817.4 |
| Personnel costs | -1,333.0 | -1,296.6 | -2,661.4 | -2,522.3 | -4,978.4 | -4,839.3 |
| Amortisation/depreciation and impairment |
-37.1 | -37.1 | -74.6 | -71.4 | -180.9 | -177.7 |
| Operating profit | 190.9 | 150.2 | 326.2 | 382.2 | 625.6 | 681.6 |
| Net financial items | -9.4 | 2.7 | -10.4 | -3.5 | -35.4 | -28.5 |
| Profit before tax | 181.5 | 152.9 | 315.8 | 378.7 | 590.2 | 653.1 |
| Income tax expense | -45.3 | -30.9 | -77.4 | -91.7 | -162.9 | -177.2 |
| Profit for the period | 136.2 | 122.0 | 238.4 | 287.0 | 427.3 | 475.9 |
| Profit for the period attributable to: | ||||||
| Owners of the parent | 135.2 | 120.8 | 236.2 | 285.0 | 421.6 | 470.4 |
| Non-controlling interests | 1.0 | 1.2 | 2.2 | 2.0 | 5.7 | 5.5 |
| Earnings per share attributable to owners of the parent, SEK |
||||||
| - Basic | 1.48 | 1.32 | 2.59 | 3.12 | 4.62 | 5.15 |
| - Diluted | 1.48 | 1.32 | 2.59 | 3.12 | 4.62 | 5.15 |
| Average number of shares | 91,135,382 | 91,342,847 | 91,135,382 | 91,386,584 | 91,228,784 | 91,354,385 |
| Average number of shares after dilution |
91,135,382 | 91,342,847 | 91,135,382 | 91,386,584 | 91,228,784 | 91,354,385 |
| Dividend per share, SEK | - | - | - | - | - | 3.25 |
| Statement of comprehensive income, SEK M |
Apr-Jun 2013 |
Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
Jul 2012 - Jun 2013 |
Full year 2012 |
|---|---|---|---|---|---|---|
| Profit for the period | 136.2 | 122.0 | 238.4 | 287.0 | 427.3 | 475.9 |
| Items that will not be reclassified to profit or loss |
||||||
| Remeasurement of defined benefit pensions, net after tax1) |
- | - | - | - | 113.6 | 113.6 |
| Items that may be reclassified subsequently to profit or loss |
||||||
| Currency translation differences | 27.4 | -20.4 | -23.4 | -18.7 | -17.3 | -12.6 |
| Comprehensive income for the period |
163.6 | 101.6 | 215.0 | 268.3 | 523.6 | 576.9 |
| Profit for the period attributable to: | ||||||
| Owners of the parent | 161.7 | 100.6 | 212.6 | 266.6 | 518.0 | 572.0 |
| Non-controlling interests | 1.9 | 1.0 | 2.4 | 1.7 | 5.6 | 4.9 |
| 1) Tax on remeasurement of defined benefit pensions |
- | - | - | - | -44.2 | -44.2 |
| Cash flow statement, SEK M | Apr-Jun 2013 | Apr-Jun 2012 |
Jan-Jun 2013 |
Jan-Jun 2012 |
Jul 2012 - Jun 2013 |
Full year 2012 |
|---|---|---|---|---|---|---|
| Cash flow from operating activities before changes in |
||||||
| working capital and paid tax | 231.5 | 176.5 | 389.0 | 428.4 | 723.8 | 763.2 |
| Paid tax | -68.9 | -50.1 | -141.0 | -142.9 | -195.8 | -197.7 |
| Changes in working capital | -82.3 | 22.3 | -104.2 | -57.2 | -197.7 | -150.7 |
| Cash flow from operating activities | 80.3 | 148.7 | 143.8 | 228.3 | 330.3 | 414.8 |
| Cash flow from investing activities | -25.9 | -69.1 | -56.2 | -571.8 | -139.9 | -655.5 |
| Cash flow from financing activities | -208.8 | -171.2 | -259.9 | 464.6 | -331.3 | 393.2 |
| Cash flow for the period | -154.4 | -91.6 | -172.3 | 121.1 | -140.9 | 152.5 |
| Balance sheet, SEK M | 30 Jun 2013 | 30 Jun 2012 | 31 Dec 2012 |
|---|---|---|---|
| Goodwill | 1,422.3 | 1,453.4 | 1,418.1 |
| Other intangible assets | 124.7 | 168.3 | 144.6 |
| Property, plant and equipment | 286.0 | 257.8 | 288.5 |
| Financial assets | 28.8 | 96.4 | 28.9 |
| Current assets excl. cash and cash equivalents | 2,839.5 | 2,594.9 | 2,400.3 |
| Cash and cash equivalents incl. short-term investments | 184.6 | 335.9 | 366.8 |
| Total assets | 4,885.9 | 4,906.7 | 4,647.2 |
| Equity attributable to owners of the parent | 1,562.2 | 1,353.2 | 1,651.7 |
| Non-controlling interests | 19.0 | 18.1 | 22.3 |
| Total equity | 1,581.2 | 1,371.3 | 1,674.0 |
| Non-current liabilities | 839.1 | 1,074.1 | 833.5 |
| Current liabilities | 2,465.6 | 2,461.3 | 2,139.7 |
| Total equity and liabilities | 4,885.9 | 4,906.7 | 4,647.2 |
| Pledged assets | 1.8 | 28.4 | 1.8 |
| Contingent liabilities | 222.0 | 225.8 | 194.3 |
| Changes in equity, SEK M | Jan-Jun 2013 | Jan-Jun 2012 | ||||||
|---|---|---|---|---|---|---|---|---|
| Equity attributable to owners of the parent |
Non controlling interests |
Total equity |
Equity attributable to owners of the parent |
Non controlling interests |
Total equity |
|||
| Equity, opening balance | 1,651.7 | 22.3 | 1,674.0 | 1,493.2 | 10.5 | 1,503.7 | ||
| Effect of changed accounting standard | - | - | - | -168.2 | - | -168.2 | ||
| Adjusted equity, opening balance | 1,651.7 | 22.3 | 1,674.0 | 1,325.0 | 10.5 | 1,335.5 | ||
| Comprehensive income for the period | 212.6 | 2.4 | 215.0 | 266.6 | 1.7 | 268.3 | ||
| Distribution to the shareholders | -296.2 | -5.7 | -301.9 | -274.0 | -0.8 | -274.8 | ||
| Holdings of non-controlling interests in acquired companies |
- | - | - | - | 6.9 | 6.9 | ||
| Acquisition of non-controlling interests | - | - | - | 0.1 | -0.2 | -0.1 | ||
| Issue of treasury shares | - | - | - | 46.9 | - | 46.9 | ||
| Purchase of treasury shares | -7.1 | - | -7.1 | -12.0 | - | -12 | ||
| Share savings schemes | 1.2 | - | 1.2 | 0.6 | - | 0.6 | ||
| Equity, closing balance | 1,562.2 | 19.0 | 1,581.2 | 1,353.2 | 18.1 | 1,372.3 |
| Key ratios1) | Jan-Jun 2013 | Jan-Jun 2012 | Full year 2012 |
|---|---|---|---|
| Operating margin, % | 8.3 | 9.9 | 9.1 |
| Profit margin, % | 8.0 | 9.8 | 8.7 |
| Billing ratio, % | 73.8 | 74.5 | 74.2 |
| Return on equity, % | 28.9 | 34.1 | 29.9 |
| Return on capital employed, % | 26.8 | 34.9 | 34.0 |
| Net debt/equity ratio, % | 40.9 | 37.1 | 24.4 |
| Net debt/EBITDA | 0.8 | 0.7 | 0.5 |
| Equity/assets ratio, % | 32.4 | 27.9 | 36.0 |
| Earnings per share, SEK | |||
| - Basic | 2.59 | 3.12 | 5.15 |
| - Diluted | 2.59 | 3.12 | 5.15 |
| Equity per share for profit attributable to owners of the parent, SEK |
|||
| - Basic | 17.14 | 14.81 | 18.10 |
| - Diluted | 17.14 | 14.81 | 18.10 |
| Interest-bearing liabilities, SEK M | 830.7 | 844.9 | 776.1 |
| Of which, liabilities to credit institutions | 830.7 | 844.2 | 776.1 |
| Average number of employees | 7,559 | 7,200 | 7,336 |
| Number of shares on closing date | 91,135,382 | 91,342,847 | 91,233,682 |
| Number of shares after dilution on closing date | 91,135,382 | 91,342,847 | 91,233,682 |
| Number of shares after full dilution on closing date | 91,135,382 | 91,342,847 | 91,233,682 |
| Number of class B treasury shares | 381,465 | 174,000 | 283,165 |
1) The definitions of key ratios are unchanged and can be found in Sweco's annual report for 2012.
| Business area | Net sales SEK M |
Operating profit SEK M |
Operating margin % |
Average no. of employees |
||||
|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| Sweco Sweden | 2,141.4 | 2,044.7 | 226.4 | 233.2 | 10.6 | 11.4 | 3,310 | 3,159 |
| Sweco Norway | 931.8 | 910.7 | 86.6 | 89.9 | 9.3 | 9.9 | 1,196 | 1,141 |
| Sweco Finland | 460.7 | 415.3 | 31.7 | 45.3 | 6.9 | 10.9 | 1,188 | 974 |
| Sweco Central & Eastern Europe | 112.5 | 134.5 | -0.3 | 4.3 | -0.3 | 3.2 | 746 | 828 |
| Sweco Russia | 26.0 | 59.7 | -7.1 | -5.8 | -27.3 | -9.7 | 235 | 338 |
| Sweco Industry | 382.1 | 384.7 | 8.9 | 33.3 | 2.3 | 8.7 | 869 | 745 |
| 1) Group-wide, eliminations, etc. |
-112.4 | -96.9 | -20.0 | -18.0 | - | - | 15 | 15 |
| Total Group | 3,942.1 | 3,852.7 | 326.2 | 382.2 | 8.3 | 9.9 | 7,559 | 7,200 |
1) Operating profit for group-wide consists mainly of the Parent Company's loss of SEK –17.6 (–23.9).
In the period under review Sweco acquired Planstyring AS and MEK-Consult AS with a total of 34 employees. Based on the preliminary purchase price allocations, these acquisitions have affected the Group's balance sheet and cash and cash equivalents as shown in the table below. During the period the acquired companies have contributed net sales of SEK 21.8 million and operating profit of SEK 1.2 million. If all of the companies had been acquired at 1 January 2013, the contribution would have been around SEK 23 to net sales and around SEK 1 million to operating profit. The period's transaction costs for the acquisitions are recognised in operating profit and amounted to SEK 0.1 million. Total transaction costs for these acquisitions in this period and earlier periods amount to SEK 0.3 million.
| Acquisitions, SEK M | Acquisitions |
|---|---|
| Intangible assets | 16.8 |
| Property, plant and equipment | 0.3 |
| Current assets | 21.0 |
| Deferred tax | -1.0 |
| Other current liabilities | -17.4 |
| Total consideration | 19.7 |
| Unsettled purchase price commitments | -3.5 |
| Settled purchase price commitments for acquisitions in earlier years |
4.6 |
| Cash and cash equivalents in acquired companies | -8.9 |
| EFFECT ON THE GROUP'S CASH AND CASH EQUIVALENTS |
11.9 |
The Group's financial assets measured at fair value amounted to SEK 13.4 million (14.2). The derivative instruments are forward exchange contracts and the fair value of these is estimated based on quoted prices for forward exchange contracts on the balance sheet date (Level 2). The fair value of unquoted financial assets is determined through the use of valuation techniques (observable market inputs), such as recent transactions, quoted prices of similar instruments and discounted cash flows. When there are no reliable inputs available for determining fair value, financial assets are measured at historical cost (Level 3). There were no transfers between any of the levels during the period.
| Parent Company income statement, SEK M |
Jan-Jun 2013 | Jan-Jun 2012 | Full year 2012 |
|---|---|---|---|
| Net sales | 136.0 | 113.8 | 214.4 |
| Other external expenses | -117.8 | -110.5 | -202.1 |
| Personnel costs | -29.6 | -22.1 | -45.6 |
| Amortisation/depreciation and impairment | -6.2 | -5.1 | -10.7 |
| Operating loss | -17.6 | -23.9 | -44.0 |
| Net financial items | 218.1 | 32.8 | 433.5 |
| Profit after net financial items | 200.5 | 8.9 | 389.5 |
| Appropriations | - | - | -86.8 |
| Profit before tax | 200.5 | 8.9 | 302.7 |
| Income tax expense | - | -0.2 | -70.1 |
| Profit after tax | 200.5 | 8.7 | 232.6 |
| Parent Company balance sheet, SEK M | 30 Jun 2013 | 31 Dec 2012 |
|---|---|---|
| Intangible assets | 5.4 | 6.9 |
| Property, plant and equipment | 20.9 | 14.3 |
| Financial assets | 1,103.3 | 1,111.9 |
| Current assets | 844.1 | 1,662.8 |
| Total assets | 1,973.7 | 2,795.9 |
| Equity | 1,167.5 | 1,270.8 |
| Untaxed reserves | 88.0 | 88.0 |
| Non-current liabilities | 670.7 | 670.6 |
| Current liabilities | 47.5 | 766.5 |
| Total equity and liabilities | 1,973.7 | 2,795.9 |
| Five-year overview1) | Jul 2012- Jun 2013 |
20122) | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Net sales, SEK M | 7,592.9 | 7,503.5 | 5,987.6 | 5,272.4 | 5,338.7 |
| Operating profit, SEK M | 625.6 | 681.6 | 531.3 | 432.7 | 443.6 |
| Profit before tax, SEK M | 590.2 | 653.1 | 526.8 | 423.7 | 443.6 |
| Operating margin, % | 8.2 | 9.1 | 8.9 | 8.2 | 8.3 |
| Billing ratio, % | 73.8 | 74.2 | 73.9 | 73.4 | 73.6 |
| Return on equity, % | 28.9 | 29.9 | 25.6 | 19.9 | 19.6 |
| Return on capital employed, % | 26.8 | 34.0 | 34.2 | 26.5 | 27.5 |
| Net debt/equity ratio, % | 40.9 | 24.4 | -9.4 | -16.8 | -26.2 |
| Equity/assets ratio, % | 32.4 | 36.0 | 46.2 | 47.8 | 50.6 |
| Earnings per share, SEK | |||||
| - Basic | 4.62 | 5.15 | 4.11 | 3.31 | 3.31 |
| - Diluted | 4.62 | 5.15 | 4.11 | 3.28 | 3.28 |
| Dividend per share, SEK | - | 3.25 | 3.00 | 3.00 | 2.00 |
| Redemption amount per share, SEK | - | - | - | - | 2.00 |
| Average number of employees | 7,510 | 7,336 | 5,772 | 4,986 | 5,082 |
1) The definitions of key ratios are unchanged and can be found in Sweco's annual report for 2012.
2) Due to changed accounting standards, the figures for 2012 have been restated.
| Business area | 2013 Q2 |
2013 Q1 |
2012 Q41) |
2012 Q31) |
2012 Q21) |
2012 Q11) |
2011 Q4 |
2011 Q3 |
2011 Q2 |
2011 Q1 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK M | ||||||||||
| Sweco Sweden | 1,081.1 | 1,060.3 | 1,130.3 | 820.9 | 1,013.8 | 1,030.9 | 1,053.2 | 750.5 | 923.3 | 869.7 |
| Sweco Norway | 482.9 | 448.9 | 456.3 | 349.3 | 438.2 | 472.5 | 405.7 | 307.2 | 339.5 | 349.4 |
| Sweco Finland | 241.0 | 219.7 | 263.8 | 214.4 | 259.3 | 156.0 | 27.0 | 21.4 | 23.9 | 20.1 |
| Sweco Central & Eastern Europe |
56.3 | 56.2 | 85.4 | 61.7 | 68.1 | 66.4 | 86.5 | 54.3 | 60.8 | 54.9 |
| Sweco Russia | 11.8 | 14.2 | 28.0 | 6.7 | 27.2 | 32.5 | 44.4 | 33.1 | 27.1 | 5.1 |
| Sweco Industry | 192.0 | 190.1 | 179.9 | 142.9 | 191.9 | 192.8 | 210.0 | 137.6 | 157.3 | 144.5 |
| Group-wide, eliminations, etc. |
-54.6 | -57.8 | -50.2 | -38.6 | -55.4 | -41.5 | -40.7 | -30.0 | -25.2 | -23.0 |
| Total Group | 2,010.5 | 1,931.6 | 2,093.5 | 1,557.3 | 1,943.1 | 1,909.6 | 1,786.1 | 1,274.1 | 1,506.7 | 1,420.7 |
| Operating profit, SEK M |
||||||||||
| Sweco Sweden | 121.9 | 104.5 | 134.4 | 45.6 | 94.7 | 138.5 | 139.2 | 53.4 | 113.6 | 106.1 |
| Sweco Norway | 61.1 | 25.5 | 94.8 | 27.6 | 20.8 | 69.1 | 45.2 | 26.7 | 16.4 | 37.6 |
| Sweco Finland | 17.3 | 14.4 | 26.7 | 32.8 | 29.5 | 15.8 | 0.3 | 2.2 | 2.9 | 1.9 |
| Sweco Central & Eastern Europe |
1.0 | -1.3 | 0.7 | 1.6 | 1.7 | 2.6 | 5.3 | -1.1 | 0.6 | -3.2 |
| Sweco Russia | -0.5 | -6.6 | -21.2 | -9.0 | -3.0 | -2.8 | 5.9 | 3.0 | 1.7 | -0.3 |
| Sweco Industry | 5.0 | 3.9 | -10.6 | 1.3 | 12.1 | 21.2 | 14.0 | 4.1 | 3.8 | 3.0 |
| Group-wide, eliminations, etc. |
-14.9 | -5.1 | -24.2 | -1.1 | -5.6 | -12.4 | -18.3 | -13.2 | -11.0 | -8.5 |
| Total Group | 190.9 | 135.3 | 200.6 | 98.8 | 150.2 | 232.0 | 191.6 | 75.1 | 128.0 | 136.6 |
| Operating margin, % | ||||||||||
| Sweco Sweden | 11.3 | 9.9 | 11.9 | 5.6 | 9.3 | 13.4 | 13.2 | 7.1 | 12.3 | 12.2 |
| Sweco Norway | 12.7 | 5.7 | 20.8 | 7.9 | 4.8 | 14.6 | 11.1 | 8.7 | 4.8 | 10.8 |
| Sweco Finland | 7.2 | 6.5 | 10.2 | 15.3 | 11.4 | 10.1 | 1.0 | 10.5 | 12.0 | 9.5 |
| Sweco Central & Eastern Europe |
1.6 | -2.3 | 0.8 | 2.7 | 2.4 | 3.9 | 6.1 | -2.1 | 1.1 | -5.9 |
| Sweco Russia | -3.8 | -46.8 | -75.8 | -135.5 | -11.1 | -8.5 | 13.5 | 8.9 | 6.2 | -5.1 |
| Sweco Industry | 2.6 | 2.0 | -5.9 | 0.9 | 6.3 | 11.0 | 6.7 | 3.0 | 2.4 | 2.1 |
| Total Group | 9.5 | 7.0 | 9.6 | 6.3 | 7.7 | 12.1 | 10.7 | 5.9 | 8.5 | 9.6 |
1) Due to changed accounting standards, all quarters in 2012 have been restated.
On 1 July 2013 Sweco carried out an organisational change in which the Sweco Industry business area was split up and transferred to the Sweco Finland, Sweco Sweden and Sweco Norway business areas. After the change, Sweco has five business areas.
Business area 2013 Jan-Jun 2013 Jan-Mar 2012 Jan-Dec1) 2012 Jan-Sep1) 2012 Jan-Jun1) 2012 Jan-Mar1) 2013 Q2 2012 Q4 1) 2012 Q3 1) 2012 Q2 1 Net sales, SEK M Sweco Sweden 2,253.1 1,114.0 4,220.1 3,028.2 2,161.8 1,090.2 1,139.1 1,191.9 866.4 1,071.6 Sweco Norway 950.3 457.0 1,753.2 1,287.2 931.0 482.3 493.3 466.0 356.2 448.7 Sweco Finland 675.8 330.4 1,272.9 920.5 629.2 263.9 345.4 352.4 291.3 365.3 Sweco Central & Eastern Europe 112.5 56.2 281.6 196.2 134.5 66.4 56.3 85.4 61.7 68.1 Sweco Russia 26.0 14.2 94.4 66.4 59.7 32.5 11.8 28.0 6.7 27.2 Group-wide, eliminations, etc. -75.6 -40.2 -118.7 -88.5 -63.5 -25.7 -35.4 -30.2 -25.0 -37.8 Total Group 3,942.1 1,931.6 7,503.5 5,410.0 3,852.7 1,909.6 2,010.5 2,093.5 1,557.3 1,943.1 Operating profit, SEK M Sweco Sweden 239.0 109.6 423.0 292.9 244.2 144.8 129.4 130.1 48.7 99.4 Sweco Norway 88.4 25.9 216.0 120.3 92.1 69.9 62.5 95.7 28.2 22.2 Sweco Finland 26.2 12.8 115.3 95.8 65.4 29.9 13.4 19.5 30.4 35.5 Sweco Central & Eastern Europe -0.3 -1.3 6.6 5.9 4.3 2.6 1.0 0.7 1.6 1.7 Sweco Russia -7.1 -6.6 -36.0 -14.8 -5.8 -2.8 -0.5 -21.2 -9.0 -3.0 Group-wide, eliminations, etc. -20.0 -5.1 -43.3 -19.1 -18.0 -12.4 -14.9 -24.2 -1.1 -5.6 Total Group 326.2 135.3 681.6 481.0 382.2 232.0 190.9 200.6 98.8 150.2 Operating margin, % Sweco Sweden 10.6 9.8 10.0 9.7 11.3 13.3 11.4 10.9 5.6 9.3 Sweco Norway 9.3 5.7 12.3 9.3 9.9 14.5 12.7 20.5 7.9 5.0 Sweco Finland 3.9 3.9 9.1 10.4 10.4 11.3 3.9 5.5 10.4 9.7 Sweco Central & Eastern Europe -0.3 -2.3 2.4 3.0 3.2 3.9 1.6 0.8 2.7 2.4 Sweco Russia -27.3 -46.8 -38.2 -22.3 -9.7 -8.5 -3.8 -75.8 -135.5 -11.1 Total Group 8.3 7.0 9.1 8.9 9.9 12.1 9.5 9.6 6.3 7.7
Net sales, operating profit and operating margin according to the new organisation as of July 1, 2013.
1) Due to changed accounting standards, all quarters in 2012 have been restated.
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