Interim report January – September 2023 Sweco AB (publ)

Sweco’s (NASDAQ: SWEC-B) third quarter report demonstrates continued strong growth and increasing EBITA levels. The order book was strengthened with projects that support clients in the green transition in Europe and overall demand for Sweco’s services remained stable. Three acquisitions were announced in the quarter, amounting to a total of 10 acquisitions and more than 1 200 new experts joining Sweco during the year so far.

July–September 2023

• Net sales increased to SEK 6,417 million (5,372)
• EBITA increased to SEK 465 million (382), margin 7.2 per cent (7.1)
• EBITA increased 41 per cent year-on-year after adjustment for calendar effects
• EBIT increased to SEK 428 million (387), margin 6.7 per cent (7.2)
• Profit after tax amounted to SEK 267 million (278), corresponding to SEK 0.75 per share (0.78)

January–September 2023

• Net sales increased to SEK 20,806 million (17,565)
• EBITA increased to SEK 1,877 million (1,516), margin 9.0 per cent (8.6)
• EBITA increased 28 per cent year-on-year after adjustment for calendar effects 
• EBIT increased to SEK 1,798 million (1,552), margin 8.6 per cent (8.8)
• Net debt/EBITDA amounted to 1.5 x (0.9)
• Net debt amounted to SEK 4,200 million (2,206)
• Profit after tax increased to SEK 1,250 million (1,150), corresponding to SEK 3.48 per share (3.21) 

Comments from President and CEO Åsa Bergman:

"Strong growth and result in the quarter

The third quarter marked a significant improvement compared to last year, with net sales growth of 19 per cent and an EBITA improvement of 41 per cent, adjusted for calendar effects. 

The positive development was the result of fee increases and continued recruitment, as well as the measures initiated in the third quarter of last year to manage costs and adapt to the current mixed market environment. 

The green transition in society remains a core driver in all our markets. We kept strengthening our order book, despite the fact that the demand in some segments was negatively impacted by the macro-economic situation. During the quarter, we also continued to execute on our growth strategy by signing three new acquisitions. 

Continued improvements across most business areas

Net sales increased to SEK 6,417 million (5,372), with a calendar-adjusted organic growth rate of 9 per cent. EBITA increased to SEK 465 million (382), an increase of SEK 158 million or 41 per cent, adjusted for calendar effects. The positive result was primarily driven by higher average fees and a higher number of employees.

Seven out of eight business areas reported positive organic growth in the quarter, with six business areas also reporting higher EBITA levels, adjusted for calendar effects. Sweco Belgium and Denmark reported yet another quarter with strong growth and margins. The Netherlands reported a quarter with good growth and solid margin. Germany delivered a good quarter, a sign that it is continuing to develop in the right direction. Sweden reported strong organic growth, improved EBITA and a margin in line with last year, despite the negative calendar effects. Finland and Norway both delivered solid organic growth, with EBITA improvement in Finland and a slight decline in Norway, adjusted for calendar effects.

The market situation remains challenging in parts of the UK market and we noted negative growth and a negative EBITA in the quarter. The loss was partly driven by redundancy costs for actions taken to bring the UK business back on track.

Acquisitions and projects

In the third quarter, we acquired OJ Rådgivende Ingeniører, one of Denmark’s leading engineering firms in the building market with a turnover of SEK 400 million. The company has both public and private clients in healthcare, social housing, industry, offices, education and residential. With this acquisition, Sweco will almost double the size of the building business in Denmark and strengthen its geographical footprint as well as its position as a top engineering and architecture firm in the country. 

In Sweden, we strengthened our position in a strategic niche through the acquisition of Medins Havs och Vatten-konsulter. The firm has a turnover of SEK 37 million and 35 experts specialised in surveys of watercourses, lakes and seas. Expertise regarding aquatic environments is vital in the green transition and Sweco is noting increasing demand across Europe from clients in both the private and public sector. This acquisition will make Sweco the leading aquatic environment consulting firm in Sweden. 

The demand in the energy segment remains good across all markets. One key area in the energy transition is the redesign and development of energy grids. In the third quarter, Sweco Sweden was commissioned to support Svenska kraftnät with a review and upgrade of the Swedish  electricity transmission system. In Germany, Sweco will support the development of the Rhine-Main-Link, a central grid to supply Germany with climate-neutral energy.
 
Focus on the green transition

Sweco’s role in the green transition in Europe provides a solid foundation for profitable growth. Our strong market position, diversified portfolio and decentralised business model continues to prove its strength in the third quarter. Our focus going forward is to continue taking proactive measures to mitigate challenges in the market, while capturing growth opportunities and improving our efficiency."

Information meeting 
Sweco's President and CEO Åsa Bergman and CFO Olof Stålnacke will present the report in a web cast and teleconference on October 27, 2023 at 09:00 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). The information was submitted for publication, through the agency of the contact person, on 27-10-2023 07:20 CET.