Year-end report 2020 Sweco AB (PUBL)
A challenging end to a strong year.
October – December 2020
- Net sales decreased to SEK 5,142 million (5,692)
- EBITA, excl. items affecting comparability, decreased to SEK 514 million (532), margin 9.5 per cent (9.4)
- EBITA decreased to SEK 224 million (532), margin 4.4 per cent (9.4)
- EBIT decreased to SEK 248 million (596), margin 4.8 per cent (10.5)
- Profit after tax decreased to SEK 235 million (472), corresponding to SEK 0.66 per share (1.34)
January – December 2020
- Net sales increased to SEK 20,858 million (20,629)
- EBITA, excl. items affecting comparability, increased to SEK 2,056 million (1,869), margin 9.7 per cent (9.1)
- EBITA decreased to SEK 1,766 million (1,869), margin 8.5 per cent (9.1)
- EBIT decreased to SEK 1,706 million (1,892), margin 8.2 per cent (9.2)
- Profit after tax decreased to SEK 1,293 million (1,393), corresponding to SEK 3.64 per share (3.95)
- Net debt decreased to SEK 943 million (2,114)
- Net debt/EBITDA decreased to 0.5x (1.0)
- The Board of Directors proposes a dividend distribution of SEK 2.20 per share (2.07)
Comments from President and CEO Åsa Bergman:
I am proud that we continued to grow our business and improve profitability in seven of our eight markets during such a challenging year. I am pleased that our two largest Business Areas, Sweden and Finland, outperformed the group profitability target and show EBITA margins well above 12 per cent. We end the year with a quarter impacted by the second wave of Covid-19 and a significant write-down in Germany. Demand and orders received remained stable and we see that the trends that drive our business – urbanisation, digitalisation and sustainability – will remain important drivers in society going forward.
Market uncertainty affects growth – profitability and cash-flow remains stable
Organic growth in the quarter was -5 per cent, adjusted for calendar effects and the write-down. Parts of the industry, and the private building and real estate segments continued to be impacted by Covid-19 during the fourth quarter, with an additional negative effect from lockdowns and other restrictions. The impact has been most visible in the UK.
We had strong, double-digit EBITA margins in Finland, Sweden and Belgium in the quarter and five of our eight Business Areas strengthened their operating margin compared with 2019. EBITA decreased 3 per cent to SEK 514 million (532), adjusted for the write-down in Germany. The negative impact from lower billing ratios and weak operating performances in Germany and the UK was only partly outweighed by cost reductions.
Net sales growth for the full year was -1 per cent (5), excluding the write-down in Germany and calendar effects. The full-year EBITA margin, excluding the write-down in Germany, improved to 9.7 per cent (9.1).
The order book remains stable. We have a strong financial position with stable cash flow and low net debt, giving us flexibility and allowing us to leverage opportunities.
Write-down in Germany
As previously communicated, the extensive review of the German project portfolio was completed at the end of 2020 and a decision was made to conduct a write-down of SEK 290 million. Sweco Germany now has full focus on implementing the Sweco model, including strict project governance and execution. With a new leadership, we have taken significant actions and I am positive about the long-term outlook for our German operations. This will be a change journey that will take time.
Acquisitions – an important part of our growth strategy
There was significant acquisition activity during 2020. In total, we completed ten acquisitions that strengthened our offerings and market positions. In January 2021, we announced two acquisitions, one of them strengthening our position in sustainable building design and architecture in Finland and the other in climate adaptation, urban planning and landscape architecture in the Belgian market.
Continued focus on profitable growth
We have a clear strategic focus on organic and acquired growth as well as on establishing market leading positions in all our Business Areas. By continuing to implement the Sweco model, we will achieve higher efficiency and continued profitable growth. We have a broad geographical foot-print and a diversified offering, which creates stability. We will continue to work closely with our clients and to stay relevant, and maintain high efficiency in our projects. We will continue to monitor the development of Covid-19 closely to take advantage of opportunities, but also to be prepared to take necessary action.
With a strong financial position and a stable full-year result, the Board proposes a dividend of SEK 2.20 per share.
I would also like to take the opportunity to thank all clients, partners and employees for everything that we have achieved together during 2020.