SWECO

January – March 2023

• Net sales increased to SEK 7,140 million (6,077)
• EBITA increased to SEK 849 million (648), margin 11.9 per cent (10.7)
• EBITA increased 19 per cent year-on-year after adjustment for calendar effects
• EBIT increased to SEK 839 million (629), margin 11.7 per cent (10.4)
• Net debt amounted to SEK 2,916 million (997)
• Net debt/EBITDA amounted to 1.1x (0.4)
• Profit after tax increased to SEK 625 million (463), corresponding to SEK 1.75 per share (1.29)

Comments from President and CEO Åsa Bergman

2023 started with excellent momentum in various aspects, delivering strong organic growth, an all-time-high EBITA and a strengthened order book. The positive trend was driven by solid demand for Sweco’s services fuelled by the green transition in society, higher average fees and good FTE growth. At the same time, we keep working with all our business areas to mitigate salary and other cost increases associated with the current inflation. A strong focus on fee increases, efficiency and cost control remains a priority going forward.

Solid growth in all business areas
Net sales increased to SEK 7,140 million (6,077), with an organic growth rate of 10 per cent, adjusted for calendar effects. EBITA increased 19 per cent to SEK 849 million (648), adjusted for calendar, resulting in an EBITA-margin of 11.9 per cent (10.7). The profit improvement is primarily driven by higher fees, FTE growth and lower absence. Higher operating expenses and personnel costs, as well as a slightly lower billing ratio, had a negative effect.

All business areas reported positive organic growth in the quarter, and six out of eight business areas reported EBITA improvements. In the quarter, Sweden, Norway, Denmark and Belgium all reported strong growth and margins. Finland had a solid quarter but a one-time payment as part of the industry salary agreement had a negative impact on the earnings. The Netherlands and the UK delivered strong growth and improved margins, whereas Germany & Central Europe also grew significantly, but noted a margin decline driven by the Central European countries.

New acquisitions and projects
We completed four new acquisitions in the first quarter, welcoming around 700 experts to Sweco.

The largest one, VK architects+engineers with 600 experts and net sales of around SEK 890 million was completed in late March after approval from the Belgian competition authorities. This acquisition is in line with our strategy to have a strong integrated engineering and architecture offering and strengthens our position in the Belgian market in sectors such as healthcare, industry and infrastructure.

We also announced acquisitions of two Dutch firms, the architecture and engineering company Van Aken and the architecture firm JHK Architecten, bringing around 70 experts in total. Van Aken brings extensive knowledge and experience in the private sector as well as from urban studies. JHK Architecten has a strong position within nonresidential building projects in the private sector.

In addition, we aquired Pro-Consult in Norway, adding 35 experts specialised in project management and constructional engineering.

We also won several exciting projects in the quarter. To mention a few: Sweco, together with Team Aker, will design Norway’s largest hospital in Oslo – New Aker, currently the largest construction project in Norway. The project includes new construction and reuse of existing buildings. In Frankfurt am Main, Germany, Sweco is commissioned in an engineering consortium, with the planning of new tunnels as well as the new underground station for long-distance traffic below Frankfurt central station. The new Frankfurt long-distance railway tunnel will help to increase capacity at the Frankfurt transport hub.

Remaining focused and agile
Sweco’s strategy and market position enables us to keep catering to the demand driven by the green transition in Europe. Our long-term strategy and diversified portfolio of solutions and clients will remain the foundation of Sweco, and it is evident, particularly in this market, that it is a strength.

We continue to note solid demand for Swecos services with public as well as private clients. We are also maintaining good momentum in recruiting, and the Sweco Group is growing. However, the current market situation remains uncertain, which makes us place even further importance on managing fees, efficiency and costs. The key going forward is to stay focused and agile to deliver on our targets.