Interim report January – September 2022 Sweco AB (publ)
Strong organic growth in a mixed market
July – September 2022
- Net sales increased to SEK 5,372 million (4,691)
- EBITA, excl. items affecting comparability, amounted to SEK 382 million (415), margin 7.1 per cent (8.8)
- EBITA decreased 6 per cent year-on-year after adjustment for calendar effects and items affecting comparability
- EBITA increased to SEK 382 million (359), margin 7.1 per cent (7.6)
- EBIT increased to SEK 387 million (360), margin 7.2 per cent (7.7)
- Profit after tax increased to SEK 278 million (267), corresponding to SEK 0.78 per share (0.75)
January – September 2022
- Net sales increased to SEK 17,565 million (15,872)
- EBITA, excl. items affecting comparability, increased to SEK 1,516 million (1,484), margin 8.6 per cent (9.3)
- EBITA decreased 1 per cent year-on-year after adjustment for calendar effects and items affecting comparability
- EBITA increased to SEK 1,516 million (1,428), margin 8.6 per cent (9.0)
- EBIT increased to SEK 1,552 million (1,392), margin 8.8 per cent (8.8)
- Net debt/EBITDA decreased to 0.9 x (1.1)
- Net debt amounted to SEK 2,206 million (2,119)
- Profit after tax increased to SEK 1,150 million (1,038), corresponding to SEK 3.21 per share (2.91)
Comments from President and CEO Åsa Bergman:
Organic growth was 9 per cent in the quarter, the highest level for a decade. It is being driven by a steady inflow of new projects, accelerated recruitment and higher average fees.
All business areas reported positive organic growth, and six out of eight business areas also delivered EBITA improvements. However, impacted by lower earnings in Finland and Sweden, EBITA for the Group decreased 6 per cent in the quarter. This is an unsatisfactory development and targeted actions are being taken to improve billing ratio and cost efficiency.
Solid order book
Healthy demand for our services enabled us to strengthen our order book in the quarter. Demand was particularly strong in the industry, energy and infrastructure segments and we also noted strong development for our digital services. Demand for services in parts of the building and real estate segment on the other hand, remained weak.
With all the challenges facing energy supply and other market developments, it is very satisfying that Sweco is playing a pivotal role in supporting and accelerating the energy transition. In the third quarter, we started a range of energy projects that showcases our deep and broad expertise. In Belgium, we won an assignment to support in transforming the Belgian gas grid to enable transportation of hydrogen, and in Finland we are supporting a study on the possibilities for renewable energy and green hydrogen production in the North Ostrobothnia region. These are just a few examples of the variety of energy projects Sweco is conducting.
Increased net sales
Net sales increased 15 per cent to SEK 5,372 million (4,691) in the third quarter. EBITA excluding items affecting comparability amounted to SEK 382 million (415), resulting in an EBITA margin of 7.1 per cent (8.8). Higher average fees and a higher number of employees 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.
Off-setting part of the EBITA decline in Sweden and Finland, we noted positive EBITA development in all other business areas. Denmark increased EBITA significantly and posted an all-time high EBITA margin. Belgium maintained long-term positive momentum and the UK continued on the positive trend from the second quarter. Norway and the Netherlands maintained their EBITA margins and in Germany and Central Europe we continued to see gradual profitability improvement.
Acquisition in Belgian growth segments
In the quarter, Sweco announced the acquisition of Belgian consultancy RK-TEC. The company is primarily active within the pharmaceutical and industrial sectors and has over 60 specialists with a turnover of approximately SEK 68 million. The acquisition strengthens Sweco’s offering in the pharma and other important industry segments in the Belgian market.
Sweco also completed the acquisition of Dayspring, a consultancy in Sweden primarily active in project management within construction.
Market situation favours action and flexibility
The market situation remains mixed. On the one hand, there is strong demand for Sweco’s services in many of our segments such as energy, industry, transportation infrastructure and environmental services. On the other hand, we are now seeing the first effects of the slowdown within the building and real estate segments driven by the macro-economic development. However, Sweco’s well-diversified portfolio in strategic segments and business model both with private and with public clients makes us well-positioned both to capture the opportunities in the market and to be flexible in shifting resources and skills to where they are needed.