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Interim report January – September 2021 Sweco AB (publ)

October 29, 2021 | Interim report

Mixed performance in the quarter

July – September 2021

  • Net sales increased to SEK 4,691 million (4,547)
  • EBITA, excl. items affecting comparability, amounted to SEK 415 million (417), margin 8.8 per cent (9.2)
  • EBITA increased 1 per cent year-on-year after adjustment for calendar effects and items affecting comparability
  • EBITA amounted to SEK 359 million (417), margin 7.6 per cent (9.2)
  • EBIT amounted to SEK 360 million (404), margin 7.7 per cent (8.9)
  • Profit after tax amounted to SEK 267 million (295), corresponding to SEK 0.75 per share (0.83)

January – September 2021

  • Net sales increased to SEK 15,872 million (15,716)
  • EBITA, excl. items affecting comparability, amounted to SEK 1,484 million (1,542), margin 9.3 per cent (9.8)
  • EBITA decreased 1 per cent year-on-year after adjustment for calendar effects and items affecting comparability
  • EBITA amounted to SEK 1,428 million (1,542), margin 9.0 per cent (9.8)
  • EBIT amounted to SEK 1,392 million (1,459), margin 8.8 per cent (9.3)
  • Profit after tax amounted to SEK 1,038 million (1,057), corresponding to SEK 2.91 per share (2.98)
  • Net debt increased to SEK 2,119 million (1,410)
  • Net debt/EBITDA increased to 1.1 x (0.6)

Comments from President and CEO Åsa Bergman:

In the third quarter net sales increased 3 per cent. EBITA increased slightly during the quarter, adjusted for calendar effects and one-off cost related to execution of the turn-around plan in Germany, with mixed performance across our business areas. The fee development continued the positive trend from previous quarters and we are back to FTE growth. At the same time, we saw more vacation used and increasing costs compared to last year. 

We maintain a strong financial position and continue to act on opportunities in the market, with two new acquisitions in the quarter. 

The order book also remains strong. During the quarter,  we won several new, exciting projects. In the UK, we have been appointed to design one of London’s largest data centres. In Sweden, we have been selected to design the expansion of one of Stockholm’s largest water treatment plants. Two examples of how we are part of transforming society together with our clients.

Strong performance in Belgium, Finland and Denmark

Net sales amounted to SEK 4,691 million (4,547) in the quarter. Organic growth was positive in Belgium, Denmark, the UK, and Norway, while it was negative in Sweden and the Netherlands, resulting in a total organic growth of 1 per cent, adjusted for items affecting comparability (IAC) and calendar effects. We noted a somewhat slower quarter in Sweden, partly driven by more and later vacation than usual.

EBITA increased 1 per cent to SEK 415 million, with an EBITA margin of 8.8 per cent (9.2), adjusted for IAC and calendar effects. 

Sweco Belgium’s strong business momentum remains, delivering yet another strong quarter with double-digit margins and a high growth rate. Sweco Finland has returned to strong margins after a slower first half of the year. Sweco Denmark delivered continued solid growth and strong margins in the quarter. We noted improvements in growth and margins in the UK, even if the market conditions remain challenging.

As all business areas have gradually returned to their offices, normal activities increased during the third quarter, resulting in higher costs in most of our business areas. 

Execution on turnaround plan in Sweco Germany

The new leadership in Sweco Germany has taken an important step in the turnaround plan in the quarter, closing down underperforming parts of the architecture business. The IACs of SEK 56 million in the quarter are provisions related to the execution of the turnaround plan. Focus going forward in Germany is to secure profitable growth based on the right leadership, offering and project portfolio.

Continued focus on acquisitions

In August, we acquired the Swedish consultancy firm AdviceU, specialising in IT-centric management and business development. AdviceU is a perfect fit in the expansion of Sweco’s highly qualified and innovative digital service offering. 

In September, we acquired Bureau Stedelijke Planning. The Dutch consultancy firm is mainly involved in the early planning phase of urban development, specialised in residential and workspace areas, shopping districts and leisure facilities. This acquisition strengthens our offering in urban planning and strategic advisory. 

A call for climate action

In August, the Intergovernmental Panel on Climate Change (IPCC) issued yet another report. The world is off-track to meet the goals of the Paris Agreement of limiting global warming to 1.5°C. 

COP26 is arranged in Glasgow, Scotland. Sweco will take part in the climate conference as well as initiate dialogues with our clients to jointly work to create sustainable communities and cities. Limiting climate change is the single greatest challenge of our time and we are committed to work together with our clients and other stakeholders to continue to transform society in a sustainable direction.

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