Interim report for January-June 1999

* Earnings growth of 60 per cent compared with 1998

* Profit before tax is MSEK 27 (17)

* Net sales up 3 per cent to MSEK 843

* SWECO wins City Tunnel project

PROFIT AND FINANCIAL POSITION

Income and profit
The Group’s net sales amounted to MSEK 843.5 (819.3) and profit before tax
was MSEK 27.1 (16.7). Redemption of pension liabilities has given rise to
a gain of MSEK 4.4, which was charged to profit for the period January-
June 1999.

Profit summary 1999 1998
MSEK 6 6
mon. mon.
Architecture, Construction and Installation 21.4 15.5
Environment, Civil Engineering and Industry 14.0 8.2
Real Estate Consultancy -2.5 0.1
Group eliminations/
– joint, incl. goodwill -5.6 -7.2
Consolidated net financial items
-0.5 0.6
Minority share 0.3 -0.5
Profit before tax 27.1 16.7

Earnings per share
Profit after tax corresponded to earnings per share of SEK 1.30 (0.80).

Investments
The Group’s net investments in tangible fixed assets totalled MSEK 16.8
(16.2).

Financial position
The Group’s interest-bearing assets in the form of liquid assets and
interest-bearing receivables amounted to MSEK 62.8 (184.7 at year-end).
Interest-bearing liabilities for the same periods amounted to MSEK 33.9
(87.2).

Personnel
The number of full-time employees in the Group during the period amounted
to 2,245 (2,342).

Parent Company
Parent Company income totalled MSEK 42.6 (27.8) and profit before tax was
MSEK 5.3 (-8,8).

Convertible subordinated debenture
Convertible debentures of MSEK 12.4, equal to 265,800 new shares, were
issued to the employees in the SWECO Group during the period. Upon full
conversion, the number of shares will be diluted by 1.76 per cent.

Profit effect of SPP funds
As reported in the 1998 Annual Report, SPP will return a portion of the
surplus funds in the pension system to its client companies during autumn
1999. For the SWECO Group, preliminary estimates indicate a sum in the
range of MSEK 160-200.

If SPP returns these funds according the current guidelines, SWECO would
be provided with a positive profit effect of approximately MSEK 80 for the
1999 financial year. Of this amount, around MSEK 50 refers to a non-
recurring redemption of pension liabilities and around MSEK 30 to annual
pension premiums to SPP.

No portion of the funds expected to be received from SPP has been charged
to profit for the first half of the year.

OPERATIONS
After selling its holding in NewSec AB on 15 April, SWECO’s operations are
focused on architecture and technical consulting operations. These
activities are conducted in two business areas.

Both business areas showed higher net sales and profit than in the
corresponding period of 1998.

Architecture, Construction and Installation
The market for building-related operations has improved considerably.
Growth is above all discernible in the metropolitan areas and university
towns, and mainly refers to new production of housing, as well as private
and public sector construction of offices and facilities.

The business area’s net sales rose by 11 per cent to MSEK 418.5 (375.7).
Operating profit improved by 38 per cent and amounted to 21.4 (15.5) and
the operating margin strengthened from 4.1 per cent to 5.1 per cent. The
number of full-time employees was 1,095 (1,096).

Environment, Civil Engineering and Industry
The environmental market remains expansive in both Sweden and abroad. In
the road and railways segment, where the market has slackened somewhat,
SWECO won the assignment to plan and design the Malmö City Tunnel in
fierce competition. The investment cost for the project is estimated at
approx. SEK 7 billion.

In the power installations segment, both the market trend and capacity
utilisation were weak in the early part of the year. However, some
improvement is anticipated in the second half of 1999. In industrial
operations, much of our resources are focused on
the mining and pulp & paper industries, where market activity has been
sluggish.

SWECO’s international operations, which are mainly conducted in this
business area, showed strong growth. A number of major environmental and
civil engineering contracts were signed.

The business area’s net sales rose by 5 per cent and amounted to MSEK
421.1 (400.0). Operating profit improved by 71 per cent to MSEK 14.0 (8.2)
and the operating margin increased from 2.0 per cent to 3.3 per cent. The
number of full-time employees was 1,052 (1,109).

ACQUISITIONS
On 30 June, SWECO acquired all of the shares in Sten Olssons Ingeniörsbyrå
AB in Sundsvall. The company, with 18 employees, is active in the HVAC
segment and will be integrated with THEORELLS’ branch office in Sundsvall.

FORECAST
Market growth will continue. SWECO’s full-year profit for 1999 will exceed
the 1998 level and amount to MSEK 50 before tax (35.5), corresponding to
SEK 2.40 per share after tax (1.60). Profit for 1998 included a net
capital gain of MSEK 22.8. If SPP’s repayment of pension funds is carried
out starting in 1999, profit will be increased by approx. MSEK 130 before
tax, or SEK 6.30 per share after tax.

Stockholm, 23 August 1999

SWECO AB (publ)

Lars Hansson
Managing Director & CEO

We have conducted an examination of this interim report in accordance with
the recommendations of the Swedish Institute of Authorised Public
Accountants (FAR). An examination is substantially limited in relation to
an audit. We have not found anything to indicate that the interim report
does not fulfil the requirements in the Act on Trading and Clearing
Activities or the Annual Accounts Act.

Stockholm, 23 August 1999
PricewaterhouseCoopers KB

Michael Bengtsson
Authorised Public Accountant

The interim report for the period January-September 1999 will be published
on Thursday, 28 October 1999.

SWECO AB (publ) Org no. 556542-9841,
Gjörwellsgatan 22, Box 34044, SE-100 26 Stockholm
Telephone: +46-8-695 60 00, Fax: +46-8-695 66 10,
E-mail: info@sweco.se, www.sweco.se

PROFIT AND LOSS ACCOUNT, MSEK 1999 1998 1998
6 mon. 6 mon. full year

Net sales 843.5 819.3 1,588.7
Capital gains – – 41.4
Share in profit of associated 0.4 0.7 0.8
companies
Total operating income 843.9 820.0 1,630.9

Other external costs -242.1 -248.5 -492.9
Staff costs -553.6 -536.2 -1,045.1
Depreciation -20.9 -18.7 -39.5
Operating profit 27.3 16.6 53.4

Net financial items -0.5 0.6 1.1
Profit after net financial items 26.8 17.2 54.5

Minority share 0.3 -0.5 -19.0
Profit before tax 27.1 16.7 35.5

Tax -7.5 -4.8 -16.8
Minority share in tax – – 5.2
Profit after tax 19.6 11.9 23.9

BALANCE SHEET, MSEK 30 June 99 30 June 98 31 Dec. 98
Fixed assets 100.3 93.0 105.8
Other current assets 416.6 564.4 446.8
Cash and bank 62.8 62.2 184.7
Total assets 579.7 719.6 737.3

Shareholders’ equity 196.4 182.2 194.6
Minority share 0.9 15.5 8.6
Provisions 62.7 155.6 126.6
Liabilities to credit 23.0 36.9 22.0
institutions
Other liabilities 296.7 329.4 385.5
Total shareholders’ equity 579.7 719.6 737.3
and liabilities

CASH FLOW STATEMENT, MSEK 1999 1998 1998
6 mon. 6 mon. full
year

Cash flow from operating activities -21.7 -79.5 95.5
Cash flow from investing activities -54.6 -17.7 -25.4
Cash flow from financing activities -45.4 42.2 -2.9
Change in liquid assets -121.7 -55.0 67.2

KEY RATIOS
Profit margin, % 3 2 3
Return on shareholders’ equity, %* 17 12 13
Return on capital employed, %* 26 12 22
Earnings per share, SEK 1.30 0.80 1.60
Equity/assets ratio, % 34 25 26
Shareholders’ equity per share, SEK 13 12 13
Number of full-time employees 2,245 2,342 2,334
Number of shares, 14,803,605
*Return on shareholders’ equity and capital employed is calculated
according to moving 12-month profit.
Ratios for the preceding period have been similarly adjusted.

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