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Interim Report for January – March 1999

April 28, 1999 | Interim report

Interim Report for January – March 1999

* Profit doubled compared with 1998

* Profit before tax of MSEK 21 (10)

* Order stock and capacity utilisation improved

* Shareholding in NewSec sold

PROFIT AND FINANCIAL POSITION

Income and profit
The Group’s net sales amounted to MSEK 432.8 (372.5) and profit before tax
totalled MSEK 20.9 (10.2).

A gain of MSEK 3 arose in connection with redemption of pension
liabilities, which was taken to profit for the period January-March 1999.

Profit Summary 1999 1998
MSEK 3 mon 3 mon
Architecture, Construction and Installation
19.0 4.4
Environment, Building and Installation
7.2 6.9
Real Estate Consulting -1.8 –
Group eliminations
– joint costs, incl. goodwill -3.7 -1.3
Consolidated net financial items
-0.2 0.2
Minority share 0.4 –
Profit before tax 20.9 10.2

Earnings per share
Profit after tax corresponded to earnings per share of SEK 1.00 (0.50).

Investments
The Group’s net investments in fixed assets totalled MSEK 4.6 (9.0).

Financial position
The Group’s interest-bearing assets in the form of liquid funds and
interest-bearing receivables amounted to MSEK 109.1 (184.7 at year-end).
Interest-bearing liabilities on the same dates totalled MSEK 42.2 (87.2).

Personnel
The number of full-time employees in the Group during the period amounted
to 2,349 (2,239).

Parent Company
The Parent Company’s income amounted to MSEK 20.0 (13.4). Profit before
tax totalled MSEK -2.0 (-1.8).

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.

OPERATIONS
Since 1 January 1999, SWECO operates via two business areas. In addition,
real estate consulting is conducted via NewSec, in which SWECO owned 85
per cent of the shares during the period under review.

Business Area Architecture, Building and Installation
The market for building-related operations improved during the first
quarter. The upswing is mainly discernible in the metropolitan areas and
university towns.

Capacity utilisation for our architects is rising. This also applies to
our installation and building consultants, although with continued price
pressure. Demand is strong in the project management segment and the order
backlog is good.

The business area’s net sales totalled MSEK 218.7 (180.1). Operating
profit amounted to MSEK 19.0 (4.4). The number of full-time employees was
1,133 (1,067).

Business Area Environment, Civil Engineering and Industry
The environmental market is undergoing expansion both in Sweden and
abroad, and capacity utilisation remains good. The market for road and
railway projects has declined, but several large-scale projects will be up
for negotiation during the year. At present, the industrial and power
segments are hesitant and our current capacity utilisation is
unsatisfactory.

International operations have shown favourable development during the
beginning of the year and several major contracts were signed in the envi-
ronmental and civil engineering segments.

The business area’s net sales amounted to MSEK 207.2 (199.1). Operating
profit totalled MSEK 7.2 (6.9) The number of full-time employees was 1,065
(1,110).

Real Estate Consulting
The market for real estate consulting and brokerage is healthy, but few
deals have been closed.

The business area’s net sales totalled MSEK 22.2. Operating profit
amounted to MSEK -1.8. The number of full-time employees was 104.

EVENTS AFTER THE END OF THE PERIOD

On 15 April, SWECO solid its holding in NewSec AB. The sale has enabled
SWECO to further focus its operations on architectural and technical con-
sulting.

OTHER
Annual General Meeting
The Annual General Meeting on 20 April passed a resolution to raise a
convertible debenture for a maximum of MSEK 30 directed to the employees
in the SWECO Group. The purpose of the convertible debenture is to
increase employee commitment to the company.

Forecast
A forecast will be provided in the interim report for January – June 1999.

Stockholm, 28 April 1999
SWECO AB (publ)

Lars Hansson

Managing Director and CEO

The interim report for the period January – June 1999 will be published on
24 August 1999.

SWECO (publ) Org. no. 556542-9841,
Gjörwellsgatan 22, Box 34044, SE-100 26 Stockholm, Sweden.
Telephone +46-8-695 60 00, Fax +46-8-695 6610,
E-mail: info@sweco.se,www.sweco.se

1999 1998 1998
3 mon. 3 mon. Full year
PROFIT AND LOSS ACCOUNT, MSEK

Net sales 432.8 372.5 1,588.7
Capital gains – – 41.4
Share in profit of associated companies 0.3 – 0.8
Total operating income 433.1 372.5 1,630.9

Other external expenses -121.4 -102.9 -492.9
Staff costs -281.4 -250.7 -1,045.1
Depreciation -9.6 -8.9 -39.5
Operating profit 20.7 10.0 53.4

Net financial items -0.2 0.2 1.1
Profit after net financial items 20.5 10.2 54.5

Minority share 0.4 – -19.0
Profit before tax 20.9 10.2 35.5

Tax -5.7 -2.9 -16.8
Minority share of tax – – 5.2
Profit after tax 15.2 7.3 23.9

BALANCE SHEET, MSEK 31 Mar. 31 Mar. 31 Dec.
99 98 98
Properties r 1.5 0.2 1.5
Other fixed assets 103.5 86.1 104.3
Other current assets 459.1 378.4 446.8
Cash and bank 109.1 154.0 184.7
Total assets 673.2 618.7 737.3

Shareholders’ equity 209.6 177.6 194.6
Minority share 8.2 0.8 8.6
Provisions r 70.7 158.5 126.6
Liabilities to credit 37.0 19.8 22.0
institutions
Other liabilities 347.7 262.0 385.5
Total shareholders’ equity 673.2 618.7 737.3
and liabilities

CASH FLOW STATEMENT, MSEK 1999 1998 1998
3 mon. 3 mon. Full year

Cash flow from ongoing -29.0 44.2 95.5
operations
Cash flow from investment -8.5 -9.1 -25.4
activities
Cash flow from financing -37.9 1.8 -2.9
activities
Change in liquid funds -75.4 36.9 67.2

KEY RATIOS

Profit margin, % 5 3 3
Return on shareholders’ 30 17 13
equity, %
Return on capital employed, 31 17 22
%
Earnings per share, SEK 1.00 0.50 1.60
Equity/assets ratio, % 31 29 26
Shareholders’ equity per 14 12 13
share, SEK
Number of full-time 2,349 2,239 2,334
employees
Number of shares 14,803,605

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The following files are available for download:
http://www.bit.se/bitonline/1999/04/28/20000418BIT00030/bit0001.doc
http://www.bit.se/bitonline/1999/04/28/20000418BIT00030/bit0002.pdf

Anna Elisabeth Olsson

Head of Press and Public Affairs