Interim report January – June 2023 Sweco AB (publ)

Sweco’s second quarter report demonstrates continued strong performance, where seven out of eight business areas achieved positive organic growth and increasing EBITA levels. Four acquisitions were completed in the quarter and another in the beginning of July, amounting to a total of eight acquisitions and close to new 900 experts joining in the first six months of the year. Demand for Sweco’s services remained good with a strengthened order book with projects that support clients in the green transition in Europe.

April–June 2023
•    Net sales increased to SEK 7,249 million (6,116)
•    EBITA increased to SEK 564 million (486), margin 7.8 per cent (7.9)
•    EBITA increased 29 per cent year-on-year after adjustment for calendar effects
•    EBIT amounted to SEK 532 million (535), margin 7.3 per cent (8.8)
•    Profit after tax amounted to SEK 357 million (409), corresponding to SEK 0.99 per share (1.14)

January–June 2023
•    Net sales increased to SEK 14,389 million (12,193)
•    EBITA increased to SEK 1,412 million (1,134), margin 9.8 per cent (9.3)
•    EBITA increased 23 per cent year-on-year after adjustment for calendar effects
•    EBIT increased to SEK 1,370 million (1,165), margin 9.5 per cent (9.6)
•    Net debt/EBITDA amounted to 1.5 x (0.9)
•    Net debt amounted to SEK 4,097 million (2,014)
•    Profit after tax increased to SEK 982 million (872), corresponding to SEK 2.74 per share (2.44)

Comments from President and CEO Åsa Bergman:

Continued strong performance
Sweco delivered a strong combination of organic and acquired growth, with total growth of 19 per cent in the second quarter. EBITA increased 29 per cent, adjusted for calendar effects. With the green transition in society as a core driver in all business areas, we continued to note higher average fees and solid FTE growth. VK Architects+Engineers (VK), our largest acquisition since 2015, is now part of Sweco Belgium and the Netherlands in the quarter. 

Demand for Sweco’s services remains good and we keep strengthening our order book, while also maintaining a positive momentum in recruitment and retention. Our decentralised business model and diversified client portfolio continue to prove their strength. 

Improvements across most business areas
Net sales increased to SEK 7,249 million (6,116), with an organic growth rate of 9 per cent. EBITA increased to SEK 564 million (486), resulting in an EBITA margin of 7.8 per cent (7.9). The EBITA improvement was primarily driven by higher average fees, a higher number of employees and the contribution from VK and other acquisitions, while higher personnel costs and other operating expenses had a negative impact. 

Seven out of eight business areas reported positive organic growth and increasing EBITA levels in the quarter. Sweco Belgium reported yet another strong quarter with high growth and margins, and Denmark continued to show positive momentum. Norway, Finland and the Netherlands also reported growth and EBITA improvements, while Sweden reported a solid quarter with good margins. 

Germany & Central Europe continues to take steps in the right direction, with good growth in the quarter and a steady inflow of new orders. The UK remains challenging, with weakening markets in infrastructure and commercial buildings impacting growth and EBITA. 

Acquisitions and projects
We continued to capture opportunities during the quarter, with four new acquisitions in four countries – Sweden, the UK, Finland and Belgium – and another acquisition on 5 July, adding around 220 experts. This amounts to a total of eight acquisitions this year with close to 900 new experts joining us. 

In Sweden, Sweco acquired Metria AB’s survey business with 110 experts, strengthening our already leading position in the market. We also strengthened our position in the UK market for building inspections through the acquisition of Ball & Berry, with 40 experts. In Finland, we acquired Neva Architects with 30 architects, thereby strengthening Sweco’s position in the high-growth Tampere region. In addition, we made an important addition in Belgium with the acquisition of fire protection consultancy firm FPC risk, with 30 experts.

We won several important projects during the quarter. To mention a couple: Sweco will help Belgium’s public transport company De Lijn to transform their bus depots into facilities for electric buses as part of the plan to make Belgium’s public transport emission-free by 2035; and in Finland, Sweco will, together with Stora Enso, develop a new wood building concept to increase circularity in buildings. 

Well positioned in a mixed market
Our decentralised business model and diversified client portfolio are the backbone of Sweco, and demonstrate their benefits in the current market. In the second quarter we continued to advance our market positions, building on our long-term strategy for growth and profitability. The demand for Sweco’s services remains solid, going hand-in-hand with the green transition we see in all of our business areas. With our strong financial position, continued focus on costs and efficiency, as well as our acquisition agenda, Sweco is well positioned to continue delivering on our strategy.
 

Information meeting
Sweco's President and CEO Åsa Bergman and CFO Olof Stålnacke will present the report in an audiocast and teleconference on July 18, 2023 at 13:15 CEST. The presentation will be held in English. Please go to this page for registration to participate.
 

This disclosure contains information that SWECO is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014) and the Swedish Securities Markets Act (2007:528). The information was submitted for publication, through the agency of the contact person, on 18-07-2023 12:00 CET.