Q3 Presentation 23 October, 2014
Tomas Carlsson, President and CEO
Jonas Dahlberg, CFO
2
Q3 highlights
3
• Operating profit highest in any third
quarter so far
• Solid financial development
• Strong organic growth in Norway and
Finland
• Profit improvement due to successful
and completed integration of Vectura,
and turnaround in Central Europe
• New financial target, long term debt
financing secured
• Stable market
Q3 financial summary
• Net sales SEK 2,000 million (1,810)
• + 11%, of which 4%u organic
• Norway +8% organic, Finland +5% organic
• Operating profit (EBIT) SEK 143 million (106)
• EBITA SEK 155 million (118)
• Net debt/EBITDA 1.9x (1.9x)
4
5
EBIT by quarter and rolling 12 months
SEK million
65
95 122 112
70
128 137 128
75
192
232
149
99
200
134
191
106 128
212
156 143
0
100
200
300
400
500
600
700
800
0
50
100
150
200
250
300
350
400
450
500
0909
1209
0310
0610
0910
1210
0311
0611
0911
1211
0312
0612
0912
1212
0313
0613
0913
1213
0314
0614
0914
Quarter
Rolling 12 months
6
2014 Q3 by BA – vs last year
Q3 2014 Q3 2013 Diff.
Sweden 81.0 79.1 1.9
Norway 41.5 34.9 6.6
Finland 26.5 26.1 0.4
Central Europe 4.3 -5.9 10.2
Group and eliminations 1.9 -16.0 17.9
Amortisations and impairments -12.0 -12.2 0.2
Total 143.2 106.0 37.2
Business Area
Operating profit, SEK M
• Increased volume in July impacting approximately
SEK -15 million • Improved gross margin, volume effect, lower billing
ratio
• Improved billing ratio, project losses in international
business and restructuring costs
• Positive impact of restructuring in Poland and Russia
• No integration cost, last year integration cost SEK 15
million
Income statement
7
Jul-Sep 2014
• Growth 11% – Organic 4%u, acquired
5%u, currency 2%u
• Increased volume in July due to
Vectura integration contributing
SEK -15 million compared to Q3 last
year
• Limited calendar effect, +2 hours,
SEK +5 million
• Billing ratio +1.8%-u – Improvement
in Finland, Central Europe and
Sweden, Norway lower – Negative
mix effects limiting margin impact
Jan-Sep 2014
• Growth 16% – Organic 2%u, acquired
14%u, currency 0%u
• Calendar effect -4 hours, SEK -19
million
• Billing ratio +1.3%-u – Negative mix
effects limiting margin impact
SEK M Jul-Sep 2014 Jul-Sep 2013 Jan-Sep 2014 Jan-Sep 2013 LTM Sep 2014 FY 2013
Net sales 2,000.1 1,809.7 6,659.1 5,729.0 9,095.1 8,165.0
Other income 0.0 -0.0 0.1 0.0 0.1 0.0
Other external expenses -515.4 -458.2 -1,551.3 -1,316.7 -2,178.8 -1,944.2
Personnel costs -1,290.6 -1,197.8 -4,448.7 -3,859.8 -6,022.2 -5,433.3
EBITDA 194.1 153.7 659.2 552.5 894.2 787.5
Amortisation/depreciation
and impairments-38.9 -35.5 -111.2 -90.1 -156.2 -135.1
EBITA 155.2 118.2 548.0 462.4 738.0 652.4
Amortisation of acquisition-
related intangible assets-12.0 -12.2 -37.6 -31.8 -99.9 -94.1
Operating profit (EBIT) 143.2 106.0 510.4 430.6 638.1 558.3
Net financial items -9.0 -13.5 -39.1 -22.6 -48.5 -32.0
Profit before tax 134.2 92.5 471.3 408.0 589.6 526.3
Income tax expense -41.9 -21.7 -126.5 -98.8 -174.4 -146.7
Profit for the period 92.3 70.8 344.8 309.2 415.2 379.6
EBITA-margin, % 7.8 6.5 8.2 8.1 8.1 8.0
Operating margin (EBIT), % 7.2 5.9 7.7 7.5 7.0 6.8
Billing ratio, % 76.0 74.2 75.4 74.1 75.1 74.2
New financial target and
long term financing
New financial target
• New target: Net debt/ EBITDA < 2.0
• Replacing current target on Net debt/Equity
Long term financing secured
• Refinancing of existing SEK 800 million credit
facility from Vectura acquisition with new 5
year facility – Lower cost, improved terms
(from 3 to 5 years)
• Combined with existing facility, SEK 1.7 billion
in debt finance secured for more than 3 years
• Cost efficient
capital structure
• Financing available
for further value
creating acquisitions
• Balanced risk-taking
Balance sheet
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• Net Debt/EBITDA 1.9x (1.9x)
• Disposable liquid assets including
unutilized credit facilities amount to
SEK 667 million
• Long-term debt financing of SEK
1,700 million secured for more
than 3 years
• Increase of working capital
impacting cash flow and net debt
SEK M 30 Sep 2014 30 Sep 2013 31 Dec 2013
Goodwill 2,153.5 2090.0 2,088.4
Other intangible assets 128.9 159.7 150.6
Tangible assets 398.2 395.0 394.7
Financial assets 65.6 53.1 55.9
Current assets excl cash and cash
equivalents3,499.9 3,077.3 2,994.5
Cash and cash equivalents 148.5 209.8 318.7
Total Assets 6,394.6 5,984.9 6,002.8
Equity attributable to owners of the
Parent Company1,677.2 1,566.8 1,617.6
Non-controlling interests 14.4 20.3 15.1
Total Equity 1,691.6 1,587.1 1,632.6
Non-current liabilities 1,618.4 1,759.5 1,638.4
Current liabilities 3,084.6 2,638.3 2,731.7
Total Equity and Liabilities 6,394.6 5,984.9 6,002.8
Pledged assets - 1.8 -
Contingent liabilities 215.0 220.7 188.9
Net debt, MSEK 1,703.8 1,550.7 1,323.6
Net debt/Equity, % 100.7 97.7 81.1
Net debt/EBITDA, times 1.9 1.9 1.7
Equity/Assets ratio, % 26.5 26.5 27.2
Cash flow
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• Stable contribution from
operating activities
• Increase of working capital
of transitory nature
SEK M
Jul-Sep
2014
Jul-Sep
2013
Jan-Sep
2014
Jan-Sep
2013
LTM Sep
2014FY 2013
Cash flow from operating activities before
changes in working capital and paid tax189.1 142.0 633.2 529.6 843.9 740.3
Paid tax -61.4 -51.7 -239.5 -192.7 -273.9 -227.1
Changes in working capital -258.2 -36.8 -337.6 -138.4 -216.5 -17.3
Cash flow from operating activities -130.5 53.5 56.1 198.5 353.5 495.9
Cash flow from investing activities -50.1 -867.1 -114.6 -923.3 -187.1 -997.6
Cash flow from financing activities 148.1 851.6 -139.1 591.7 -258.8 472.0
Cash flow for the period -32.5 38.0 -197.6 -133.1 -92.4 -29.7
Sweco Sweden, Q3
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• Organic growth 3% – Stable market
• Commissioned by Stockholm County Council
to design 11km underground metro – Order
value SEK 500-600 million – Accentuating
Sweco’s market leadership in Infrastructure
• Increased billing ratio from improved utilization
and administrative efficiency (Synergies)
• Increased volume in July due to Vectura
estimated to have SEK -15 million impact
on EBIT
Jul-Sep Jul-Sep Jan-Sep Jan-Sep FY
2014 2013 2014 2013 2013
Net sales, SEK M 1,219.0 1,103.0 4,132.2 3,356.1 4,893.9
Organic growth, % 3 4 0 4 2
Acquisition related growth, % 8 24 23 7 14
Operating profit, SEK M 81.0 79.1 359.5 323.2 496.0
Operating margin, % 6.6 7.2 8.7 9.6 10.1
Average number of employees 4,456 4,102 4,568 3,750 3,994
Sweco Norway, Q3
• Organic growth 8%
• Previously delayed government
infrastructure projects starting to come out
on tender
• Solid demand, but slower than normal –
Market in building and energy sectors
impacting billing ratio negatively
• Margin improvements due to volume effect
and cost reductions
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Jul-Sep Jul-Sep Jan-Sep Jan-Sep FY
2014 2013 2014 2013 2013
Net sales, SEK M 419.1 377.6 1,396.5 1,327.9 1,814.5
Organic growth, % 8 8 8 4 6
Acquisition related growth, % 0 2 0 2 3
Operating profit, SEK M 41.5 34.9 121,0 126.5 186.0
Operating margin, % 9.9 9.2 8.7 9.5 10.2
Average number of employees 1,246 1,187 1,241 1,189 1,196
Sweco Finland, Q3
• Solid development in a challenging macro
economic environment: +5% organic growth
• Improved billing ratio compared to last year
• Satisfactory demand in building sector,
especially public buildings/health care
• Lower operating margin mainly driven by
restructuring and losses in project export
• +9 hours vs Q3 2013 (SEK +6 million)
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Jul-Sep Jul-Sep Jan-Sep Jan-Sep FY
2014 2013 2014 2013 2013
Net sales, SEK M 341.9 293.1 1,088.5 946.1 1,292.3
Organic growth, % 5 -5 6 -1 -1
Acquisition related growth, % 6 1 4 8 6
Operating profit, SEK M 26.5 26.1 81.0 60.3 69.5
Operating margin, % 7.7 8.9 7.4 6.4 5.4
Average number of employees 1,878 1,768 1,844 1,792 1,763
Sweco Central Europe, Q3
• Improved operating profit due to higher billing
ratio and successful restructuring in Poland and
Russia
• Continued challenging market – Early signs of
improved market conditions and new round of EU
funds ahead
• Downside risks in general economy and
geopolitical situation
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Jul-Sep Jul-Sep Jan-Sep Jan-Sep FY
2014 2013 2014 2013 2013
Net sales, SEK M 67.7 71.4 194.5 209.8 301.4
Organic growth, % 3 -24 1 -35 -17
Acquisition related growth, % -10 0 -9 0 0
Operating profit, SEK M 4.3 -5.9 6.8 -11.6 -13.5
Operating margin, % 6.3 -8.2 3.5 -5.5 -4.5
Average number of employees 820 925 809 962 949
Market outlook
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• Stable market – Unchanged in Q3 vs. Q2
• Sweco’s markets trailing the general
macro economic development
• Mixed market signals – Positive sentiment
combined with macroeconomic risks