Q4 and Year-end Report 2023 Sweco AB (publ)

Sweco’s (NASDAQ: SWEC-B) fourth quarter and year-end report demonstrates a strong year for Sweco, despite a weaker fourth quarter. Net sales increased 17 per cent and EBITA 18 per cent for the full year. For the fourth quarter, net sales increased 15 per cent and EBITA decreased 4 per cent. The Board of Directors proposes a dividend distribution of SEK 2.95 per share.

October–December 2023

• Net sales increased to SEK 7,717 million (6,732)
• EBITA amounted to SEK 654 million (709), margin 8.5 per cent (10.5)
• EBITA decreased 4 per cent year-on-year after adjustment for calendar effects 
• EBIT amounted to SEK 618 million (693), margin 8.0 per cent (10.3)
• Profit after tax amounted to SEK 417 million (502), corresponding to SEK 1.16 per share (1.40)

January–December 2023

• Net sales increased to SEK 28,523 million (24,296)  
• EBITA increased to SEK 2,531 million (2,225), margin 8.9 per cent (9.2)
• EBITA increased 18 per cent year-on-year after adjustment for calendar effects
• EBIT increased to SEK 2,416 million (2,245), margin 8.5 per cent (9.2)
• Net debt/EBITDA amounted to 1.1 x (0.4)
• Net debt amounted to SEK 2,961 million (1,075)
• Profit after tax increased to SEK 1,667 million (1,652), corresponding to SEK 4.65 per share (4.61) 
• The Board of Directors proposes a dividend distribution of SEK 2.95 per share (2.70)

Comments from President and CEO Åsa Bergman:

A strong year 
In 2023, we continued to execute on our strategy by delivering profitable growth and strengthening Sweco’s position as the leading architecture and engineering consultancy in Europe. Net sales increased 17 per cent and EBITA 18 per cent, adjusted for calendar, for the full year. 

We ended the year with another quarter of strong growth. Net sales increased 15 per cent, and organic growth amounted to 6 percent, supported by continued solid demand. We also continued to deliver on our acquisition strategy, with 7 per cent growth from acquisitions. EBITA decreased 4 per cent, adjusted for calendar effects and was negatively impacted by the restructuring actions taken in UK and Finland.

The demand for Sweco’s services remained solid in most segments and markets, with continued strong demand in energy, water, environmental services and transport infrastructure, while demand in parts of the building segments remained weak. 

Mixed development in the quarter
Net sales increased to SEK 7,717 million (6,732) and EBITA decreased to SEK 654 million (709), resulting in an EBITA margin of 8.5 per cent (10.5). Higher average fees and contribution from acquisitions had a positive impact, while higher costs, project write-downs and lower billing ratio had a negative effect. 

Six out of eight business areas reported positive organic growth, and four out of eight reported double-digit margins. Belgium delivered yet another quarter of strong growth and EBITA. Sweden and Denmark reported good organic growth and solid margins, and the Netherlands reported a strong uplift in EBITA. Germany continued to deliver significant profit improvement, supported by positive project adjustments. 

Norway posted a lower EBITA and has taken restructuring actions within architecture. Finland reported a decline in EBITA in the quarter due to continued weakening demand within buildings and traditional industry. The quarter was impacted by the previously announced Finnish redundancy program. 

However, Sweco’s negative EBITA development in the quarter was mainly linked to the UK. As previously communicated we are taking firm actions to position our UK business toward existing and new growth segments. In the fourth quarter, this resulted in significant project write-downs  and reductions in personnel and office space. 

Acquisitions and projects
Acquisitions are essential to our growth strategy and to our ambition to build market leading positions in all business areas. In 2023, we completed ten acquisitions that added SEK 1.8 billion in revenue, more than 1,200 new experts, and extended our expertise and reach. 

In January 2024, we announced the acquisition of Econsultancy, one of the leading environmental consultancies in the Netherlands. This acquisition is in line with our ambition to reach a top three market position in the Netherlands with a leading sustainability offering.

Planning and designing Europe’s green transition of energy systems, urban areas, transportation and industries is the core of our business. This is manifested by many of the projects we won in the fourth quarter. In Norway, we won a large framework agreement with Statnett to upgrade the Norwegian energy grid. In Sweden, Sweco will support the expansion of the Stockholm metro, a major urban development project for sustainable public transportation. We have also won exciting projects to establish modern healthcare facilities both in Belgium and in Norway. 

Executing on our growth strategy
All in all, 2023 was yet another strong year for Sweco. We are well-positioned as the European leader and we are committed to accelerate our growth journey to capture the opportunities that arise from the large transformative trends in society. To achieve our goals, we will focus on attractive growth segments, act on acquisition opportunities and increase our efforts to improve the internal efficiency.

I would like to conclude by thanking all our employees for your dedicated work this year. In partnership with our clients, we are truly transforming society together. 

Information meeting 
Sweco's President and CEO Åsa Bergman and CFO Olof Stålnacke will comment on the report in a webcast and teleconference on Febrary 9 at 09:00 CET. Webcast registration: Click here Conference call registration: Click here

 

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 09-02-2024 07:20 CET.