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Interim report January – March 2024 Sweco AB (publ)

May 16, 2024 | Interim report

Sweco’s (NASDAQ: SWEC-B) first quarter report is a positive start to the year, with solid organic growth and improved EBITA levels. Sweco sees a strong demand within the green transition in energy, transportation, industry and urban development, as well as in growth segments such as defence, pharma, and data centres.

January–March 2024

  • Net sales increased to SEK 7,720 million (7,140)
  • EBITA amounted to SEK 793 million (849), margin 10.3 per cent (11.9)
  • EBITA increased 16 per cent year-on-year after adjustment for the significant negative calendar effect in the quarter
  • EBIT amounted to SEK 778 million (839), margin 10.1 per cent (11.7)
  • Net debt amounted to SEK 3,118 million (2,916)
  • Net debt/EBITDA amounted to 1.1x (1.1)
  • Profit after tax decreased to SEK 558 million (625), corresponding to SEK 1.55 per share (1.75)

Comments from President and CEO Åsa Bergman:

"A positive start to the year

Sweco delivered a good first quarter. Net sales increased 8 per cent and EBITA improved 16 per cent, adjusted for the significant negative calendar effect from Easter.

The improvement was mainly driven by continued positive momentum in pricing as well as strong demand within the green transition in energy, transportation, industry and urban development. We are also seeing increasing demand in growth segments such as pharma, defence and data centres. Sweco’s strong market position is reflected in a growing order backlog. 

Overall, the demand for Sweco’s services was favourable in most segments, although demand in residential and commercial buildings, as well as traditional industry, remained weaker.

A solid quarter with operational improvements

Net sales increased to SEK 7,720 million (7,140), with an organic growth of 4 per cent, adjusted for calendar. Nominally, EBITA decreased to SEK 793 million (849) and the margin to 10.3 per cent (11.9), both driven by the large negative calendar effect. Adjusted for calendar effects, EBITA increased 16 per cent or SEK 139 million. 

The EBITA improvement was mainly driven by higher average fees, a growing number of employees and contribution from acquisitions, while higher personnel expenses and a lower billing ratio impacted negatively. 

Six out of eight business areas reported positive organic growth and EBITA improvements. Sweco Belgium, Denmark and Sweden all reported good organic growth and EBITA improvements, with double-digit margins. Germany and Central Europe continued to improve operational performance with strong organic growth and an increasing EBITA and margin. Finland improved its margin in the quarter, partly driven by the previously communicated redundancy program, and is also taking further improvement actions. The Netherlands reported higher EBITA levels. The weaker performance in Norway is explained by the calendar effect from the early Easter holiday.

The repositioning of Sweco’s UK business is progressing and the performance improved significantly compared to the previous quarter. As part of the turnaround, the UK is making further personnel reductions in the first half of 2024.

Projects and acquisitions 

The projects won in the first quarter highlight Sweco’s multi-disciplinary role in the green transition. In the Netherlands, Sweco won a SEK 1,100 million contract to support energy operator Gasunie in the development of new energy infrastructure for the transportation of hydrogen, carbon dioxide, renewable gas and heat. In Belgium, Sweco has been commissioned to design an open-access rail terminal in Zeebrugge’s back port and in Germany, Sweco will support the City of Bremen in the expansion of its public transportation. In Norway, we will provide architectural design to support a sustainable uplift of an urban area in Oslo. 

In early January we closed the first acquisition this year – Econsultancy. With their team of 200 environmental experts, we are strengthening Sweco’s position and offering, both in the Netherlands and across Europe within ecological and environmental services.

Priorities going forward

Our focus ahead is clear: to capture growth opportunities in the market and deliver continued profitable growth, with improved margins. This requires investments in attractive segments in combination with firm measures to optimise our offering and efficiency. The actions we are taking in the UK, the adjustments of staffing in Finland, Norway and Sweden, and the ongoing organisational review to streamline our operations in all business areas are designed to drive efficiency. A lean, efficient and client-centric organisation has always been and will continue to be our recipe for success."

Information meeting 
Sweco's President and CEO Åsa Bergman and CFO Olof Stålnacke will present the report in a webcast and teleconference on May 16 at 09:00 CET. 

This disclosure contains information that SWECO is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on 16-05-2024 07:20 CET.

Attached information

Anna Elisabeth Olsson

Head of Press and Public Affairs