Interim report January – June 2024 Sweco AB (publ)
Sweco’s (NASDAQ: SWEC-B) second quarter report shows solid growth and improved efficiency. Net sales increased 11 per cent and EBITA 12 per cent, adjusted for calendar. The EBITA margin improved to 9.8 per cent. The positive development is driven by solid demand, higher fees and higher billing ratio. The market remained in line with previous quarter, with good demand related to Europe’s green transition and in segments such as defence and security, health care and pharma.
April–June 2024
- Net sales increased to SEK 8,077 million (7,249)
- EBITA increased to SEK 794 million (564), margin 9.8 per cent (7.8)
- EBITA increased 12 per cent year-on-year after adjustment for the significant positive calendar effect in the quarter
- EBIT increased to SEK 783 million (532), margin 9.7 per cent (7.3)
- Profit after tax increased to SEK 540 million (357), corresponding to SEK 1.50 per share (0.99)
January–June 2024
- Net sales increased to SEK 15,797 million (14,389)
- EBITA increased to SEK 1,587 million (1,412), margin 10.0 per cent (9.8)
- EBITA increased 15 per cent year-on-year after adjustment for calendar effects
- EBIT increased to SEK 1,561 million (1,370), margin 9.9 per cent (9.5)
- Net debt/EBITDA decreased to 1.1x (1.5)
- Net debt decreased to SEK 3,451 million (4,097)
- Profit after tax increased to SEK 1,098 million (982), corresponding to SEK 3.06 per share (2.74)
Comments from President and CEO Åsa Bergman:
"Solid growth and improved efficiency
Sweco’s positive momentum continued in the second quarter. Net sales increased 11 per cent and EBITA 12 per cent, adjusted for the calendar effect. The EBITA margin improved to 9.8 per cent.
The positive trend is driven by solid demand, higher average fees and increased efficiency. The measures taken in the past quarters are starting to have effect, resulting in a higher billing ratio and stronger profitability.
The overall demand for Sweco’s services remained good, particularly related to the green transition. Demand in the residential and commercial buildings segments, as well as in traditional industry, remained weaker.
Positive operational trend
Net sales increased to SEK 8,077 million (7,249) with organic growth of 6 per cent adjusted for calendar effects. EBITA increased to SEK 794 million (564) and the EBITA margin increased to 9.8 per cent (7.8). Adjusted for calendar effects, EBITA increased 12 per cent or SEK 68 million. Higher average fees, a higher billing ratio, FTE growth, the contribution from acquisitions and lower operating expenses, all had a positive effect, while higher personnel costs as well as restructuring cost of SEK 58 million had a negative effect.
Sweco Belgium, Denmark, Norway and Sweden all achieved positive organic growth and double-digit margins. Sweco Germany & Central Europe, Finland and the Netherlands delivered improved EBITA in combination with significant margin improvements. The ongoing repositioning in the UK is progressing according to plan, with Sweco UK remaining profitable in the quarter.
Projects and acquisitions
The turnaround in Germany has progressed steadily and I am happy to announce our first acquisition in Germany for many years; Frilling + Rolfs, with 30 experts specialised in water and wastewater treatment, enabling Sweco to capture more business opportunities in a growing segment.
Today, we also announced the acquisition of Valstar Simonis in the Netherlands, with around 60 experts within circularity and technical installations for sustainability, comfort and safety in buildings. This acquisition consolidates Sweco’s position as one of the leading companies in the Netherlands in the field of sustainable buildings.
We continue to win projects across a broad range of expertise and customer segments, reflecting the diverse nature of our business. In the Netherlands, Sweco has been commissioned by VoltH2 to support with engineering and procurement services for a 60 MW green hydrogen plant.
In Finland, we have been contracted to provide design services for the first tramway in the City of Turku in Finland, thereby accelerating the city’s growth and supporting its climate goals.
In Belgium, Sweco will support the government in developing a sustainable mobility strategy for a rapidly expanding business park in Ghent. The governance model created by Sweco will support companies in offering mobility solutions for joint multimodal infrastructure to their employees.
In the quarter, we also announced a large four-year framework agreement with the Danish Ministry of Defence Estate Agency worth SEK 238 million. Sweco will provide strategic consultancy in construction, maintenance, development and sustainability of military properties across Denmark, the Faroe Islands and Greenland.
Priorities going forward
We remain focused on improving efficiency to further strengthen our margins. This will remain a key priority going forward, to continue our history of profitable growth with industry leading margins. I am pleased that the measures taken are having effect and that we have reached a milestone in our turnaround in Germany, marked by the acquisition of Frilling + Rolfs.
In addition to the business opportunities from Europe’s green transition, we see growth in segments such as defence and security, health care and pharma. Sweco continues to support its clients in these segments, and we are well-positioned to continue to grow our business."
Information meeting
A webcast and telephone conference will be held following the release of the results, starting at 13:30 CEST. Åsa Bergman, President and CEO, and Olof Stålnacke, CFO, will comment on the report.
• Webcast registration: Click here
• Conference call registration: Click here
Slides used in the presentation and the report will be available at the Group’s web site.
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 16-07-2024 12:30 CET.