Interim report January - September 2024 Sweco AB (publ)

STOCKHOLM, Oct. 30, 2024 /PRNewswire/ -- Sweco (NASDAQ: SWEC-B) delivers a solid third quarter with continued efficiency improvements. Net sales grew 6 per cent and EBITA increased 5 per cent, adjusted for calendar. The EBITA margin improved to 8.7 per cent. The positive performance is driven by higher fees and improved billing ratio. Overall demand for Sweco's services was good in the energy, water, infrastructure, defence and security segments, as well as in parts of the industry segment. Europe's green transition continues to be a strong driver. Sweco has now passed the milestone of SEK 30 billion in last 12 months net sales.

July–September 2024

• Net sales increased to SEK 6,779 million (6,417)
• EBITA increased to SEK 588 million (465), margin 8.7 per cent (7.2)
• EBITA increased 5 per cent year-on-year after adjustment for the positive calendar effect in the quarter
• EBIT increased to SEK 569 million (428), margin 8.4 per cent (6.7)
• Profit after tax increased to SEK 376 million (267)
• Earnings per share increased to SEK 1.05 (0.75) and diluted earnings per share increased to SEK 1.04 (0.74)

January–September 2024

• Net sales increased to SEK 22,576 million (20,806)
• EBITA increased to SEK 2,175 million (1,877), margin 9.6 per cent (9.0)
• EBITA increased 12 per cent year-on-year after adjustment for calendar effects
• EBIT increased to SEK 2,130 million (1,798), margin 9.4 per cent (8.6)
• Net debt/EBITDA decreased to 1.1x (1.5)
• Net debt decreased to SEK 3,533 million (4,200)
• Profit after tax increased to SEK 1,475 million (1,250)
• Earnings per share increased to SEK 4.10 (3.48) and diluted earnings per share increased to SEK 4.09 (3.48)

Comments from President and CEO Åsa Bergman:

"A solid quarter with continued efficiency improvements

Sweco delivered a solid third quarter. Net sales grew 6 per cent and EBITA increased 5 per cent, adjusted for the positive calendar effect in the quarter. The EBITA margin improved to 8.7 per cent. I am also pleased that we passed the milestone of SEK 30 billion in last 12 months net sales.

The positive performance for the quarter was mainly driven by higher average fees and an improved billing ratio as a result of the continued focus on internal efficiency.

The overall demand for Sweco's services was good and the quarter saw an increase in the order backlog. Continued healthy demand was noted in the energy, water, infrastructure, defence and security segments as well as in parts of the industry segment, while demand remained weaker in the residential and commercial buildings segments.

Financial performance

Net sales increased to SEK 6,779 million (6,417) and EBITA increased to SEK 588 million (465), corresponding to an EBITA margin of 8.7 per cent (7.2). While there was a positive calendar effect of SEK 101 million in the quarter, this fell in July and therefore only partly materialised due to vacations. Adjusted for the calendar effect, the organic growth rate was 4 per cent and EBITA increased 5 per cent or SEK 22 million. 

Higher average fees and a higher billing ratio were the main contributors to the improved performance, while higher personnel costs had a negative effect. 

We take steps forward in improving efficiency and profitability, while continuing to grow. In the third quarter, most business areas improved their EBITA, margin and billing ratio. Belgium and Denmark continued to deliver doubledigit margins and Sweden improved EBITA. Germany & Central Europe continued its positive trend with strong organic growth and margin development, and UK made further progress in repositioning the business. Finland posted a solid performance in a challenging market, while in Norway a continued weak demand in the buildings segments had a negative impact on the result.

New projects and acquisitions

Acquisitions are at the core of Sweco's growth strategy, and we are successfully integrating acquisitions while continuously evaluating new opportunities. As previously communicated, we made two acquisitions in the quarter: the German wastewater treatment consultancy Frilling + Rolfs, with 30 experts; and Valstar Simonis, a company based in the Netherlands with 60 experts, offering services that improve sustainability, comfort and safety in buildings.

We continue to win exciting projects connected to the green transition. In Belgium, Sweco will design one of continental Europe's largest battery parks, Green Turtle, with a storage capacity of 2,800 MWh of electricity. The facility will contribute to the energy grid by providing stored renewable energy during periods of low solar and wind energy production, thereby reducing Belgium's reliance on gas power plants. 

We have won a contract for the Swedish Transport Administration supporting an extensive expansion of passenger and freight transport between Stockholm and the neighbouring city Uppsala. The contract is worth SEK 400 million and will be running from 2024 to 2035. 

In Finland Sweco will support the biotech company Enifer in establishing a new plant for the industrial production of mycoprotein. Production is set to start in 2026, and the plant will be the world's first to utilise side streams from food production on a commercial scale.

Priorities going forward

I am pleased to see that we are making progress in delivering growth with improved efficiency and margins. We will continue to focus on efficiency, while concurrently capturing growth opportunities in existing and new market segments. A good example of this is our recent growth in areas such as defence and security, as well as pharma, which adds to our strong position as an advisor in the ongoing green transition across all sectors."

Information meeting 
A webcast and telephone conference will be held following the release of the results, starting at 09:00 CET. 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). The information was submitted for publication, through the agency of the contact person, on 30-10-2024 07:20 CET.

For additional information, please contact:
Anna E Olsson, Head of Press, Sweco Group, +4670 557 33 26, anna.e.olsson@sweco.se

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