Interim report January – June 2022 Sweco AB (publ)
Solid organic growth
April – June 2022
- Net sales increased to SEK 6,116 million (5,643)
- EBITA amounted to SEK 486 million (529), margin 7.9 per cent (9.4)
- EBITA increased 0.4 per cent year-on-year after adjustment for calendar effects
- EBIT increased to SEK 535 million (509), margin 8.8 per cent (9.0)
- Profit after tax increased to SEK 409 million (379), corresponding to SEK 1.14 per share (1.06)
January – June 2022
- Net sales increased to SEK 12,193 million (11,181)
- EBITA increased to SEK 1,134 million (1,070), margin 9.3 per cent (9.6)
- EBITA increased 1 per cent year-on-year after adjustment for calendar effects
- EBIT increased to SEK 1,165 million (1,032), margin 9.6 per cent (9.2)
- Net debt/EBITDA decreased to 0.9 x (1.0)
- Net debt amounted to SEK 2,014 million (1,942)
- Profit after tax increased to SEK 872 million (771), corresponding to SEK 2.44 per share (2.17)
Comments from President and CEO Åsa Bergman:
Demand for Sweco’s services remains strong, driven by the accelerating sustainable transformation across our customer segments and business areas.
In the second quarter, we reported organic growth of 5 per cent, adjusted for calendar effects. Organic growth was supported by increased average fees and a positive momentum in recruitment, with a net addition of close to 400 new experts. EBITA improved slightly, adjusted for a significant negative calendar effect.
We continued to strengthen our order book, positioning Sweco as an expert in complex, transformational projects. We noted increased demand from clients in the industry, energy and infrastructure segments.
The second quarter was also the starting point for several exciting projects. One such project is the assignment to support the Swedish battery manufacturer Northvolt in planning the conversion of a paper mill in Sweden into a new giga factory, with a strong focus on energy transition and circularity. Another example is our work for BASF, the world’s largest chemical company that has chosen Sweco as a partner in Belgium for the rebuilding and conversion of a laboratory building into a sustainable office building. These are two good examples of how we support our clients in sustainable transformation of industries.
Organic growth in all business areas
Net sales increased 8 per cent to SEK 6,116 million (5,643) in the second quarter, with organic growth of 5 per cent, adjusted for calendar effects. EBITA amounted to SEK 486 million (529), resulting in an EBITA margin of 7.9 per cent (9.4). Adjusted for calendar effects, EBITA increased 0.4 per cent. Higher average fees, a higher number of employees and acquisitions had positive impact on EBITA while higher operating expenses compared to the levels during the pandemic, as well as a lower billing ratio in some of our business areas had a negative impact. Higher absence, primarily linked to Covid-19, also impacted negatively.
All business areas reported organic growth, while four out of eight business areas reported EBITA improvements in the quarter.
Belgium and Sweden continued to deliver strong margins close to our margin target and Germany and Central Europe as well as the UK showed significant EBITA improvements. Norway had strong underlying organic growth and an improved EBITA, but was impacted by a negative calendar effect related to the Easter holidays.
Our financial position remains strong, allowing us to act on opportunities in the market.
New acquisition enables leading position in Norway
On 3 May, we announced the acquisition of the Norwegian architecture firm Arcasa Arkitekter, with 70 employees and annual sales of SEK 130 million. Arcasa has leading expertise in residential development. Together with our previous acquisition of TAG Arkitekter in the autumn of 2020, we have built a strong platform in the Norwegian architecture market and a truly integrated engineering and architecture offering in line with Sweco’s strategy. With the acquisition of Arcasa Arkitekter, Sweco becomes the largest player in residential architecture in Norway and number three overall in the Norwegian architecture market.
Well-positioned for long-term trends
The market situation remains fragmented. On the one hand, we have lingering effects from the pandemic and Russia’s invasion of Ukraine, resulting in challenges in supply chains and cross-border trade, as well as increasing inflation and costs. On the other hand, we have the long-term sustainable transformation that generates increasing investment needs in many of Sweco’s core segments. Despite the short-term market uncertainties, I feel confident that Sweco is well-positioned to benefit from the mid-term and long-term trends. Our focus is to continue to work closely together with our clients and to be the partner of choice in the ongoing transformation of society.
Anna Elisabeth OlssonHead of Press and Public Affairs