Interim report January – March 2021 Sweco AB (PUBL)
A stable start to the year
January – March 2021
- Net sales amounted to SEK 5,538 million (5,680)
- EBITA amounted to SEK 540 million (630), margin 9.8 per cent (11.1)
- EBITA increased 4 per cent year-on-year after adjustment for the substantial negative calendar effect in the quarter
- EBIT amounted to SEK 523 million (615), margin 9.4 per cent (10.8)
- Net debt improved to SEK 957 million (2,225)
- Net debt/EBITDA improved to 0.5 x (1.0)
- Profit after tax amounted to SEK 392 million (443), corresponding to SEK 1.10 per share (1.25)
Comments from President and CEO Åsa Bergman:
We have started the year with solid margins and slightly positive organic growth, despite the challenging market. Four out of eight Business Areas delivered double-digit margins, with three of them well above our profitability target of 12 per cent. We also saw a stable order inflow and order book. I am pleased to see that we are winning the right type of projects, and I am proud that Sweco plays an important role in the sustainable transformation of society. One example from this quarter is H2 Green Steel, a pioneering project to develop large-scale fossil-free steel production in the northern parts of Sweden.
The pandemic is still impacting growth – financial position remains strong
We delivered a slightly positive organic growth, adjusted for the negative calendar effect. Net Sales amounted to SEK 5,538 million (5,680) in the quarter. Belgium, Denmark, Germany & Central Europe and the Netherlands delivered positive organic growth in the quarter. Continued pandemic-related lockdowns and restrictions still have a significant impact on our growth, primarily in Norway and the UK. Restrictions and market uncertainty also adversely affected our recruiting and FTE growth.
EBITA amounted to SEK 540 million (630), with an EBITA margin of 9.8 per cent (11.1). There is a substantial negative calendar effect in the quarter and, after adjustment for this effect, EBITA increased 4 per cent. The improvement was driven by reduced absence, cost reductions and higher average fees.
Sweden, Finland and Belgium all continued to deliver good margins in the quarter. The Netherlands managed a significant uplift in profitability and an all-time high margin of 13.8 per cent. Sweco Netherlands has taken significant steps in their implementation of the Sweco model. This is a gradual process, and our focus remains on fully implementing the Sweco model in all Business Areas.
We maintain a strong financial position with stable cash flow and low net debt, giving us flexibility and allowing us to act on opportunities.
New leadership in Germany
As previously announced, a change in leadership in Germany is an important part of our plan for returning to profitable growth in Germany after the write-down in the fourth quarter. Therefore, I am pleased to announce that we have, as of April 12, appointed Julia Zantke as Business Area President Sweco Germany & Central Europe. Julia has extensive international experience from the consulting and engineering industry and is an experienced leader with the right skillset to lead the organisation in the right direction.
Continued focus on acquisitions
Our strong financial position enables us to maintain a continued focus on acquisitions. In the first quarter, we acquired BUUR, a Belgian consultancy specialised in urban planning and landscape architecture. In April, we announced two new acquisitions: Gaia Consulting, one of the leading sustainability consultancies in Finland with 60 employees; and Linja Arkkitehdit, an architecture firm with 60 experts on the design of educational establishments and residential and business premises.
Well-diversified business model provides stability
Our broad geographical footprint, well-diversified offering, balanced mix of public and private clients, and decentralised business model with focus on small and medium-sized projects provides stability. This is a strength that has served us well over time, and it has continued to do so throughout the pandemic, including the first quarter of this year.
Looking ahead, our focus is to execute on our strategy to deliver profitable growth. We continue to implement the Sweco model in all Business Areas and to work closely with our clients.