Capital Markets Meeting 2011
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Transcript of Capital Markets Meeting 2011
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Capital Markets MeetingCapital Markets Meeting
21 September 2011p
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WHO WE ARE• Among the largest players in Europe
• Subsidiaries and offices in 11 countries
• Ongoing assignments in 80 countriesg g g
• 6,000 employees
• 10 000 customers• 10,000 customers
• 30,000 assignments yearly
• Revenues SEK 5,495 million (rolling 12 months Q2 2011)
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Sweco´s business segmentsSegment Share of net sales
Water & Environment 17%
Infrastructure
Energy Systems
16%
14%gy y
Building Service Systems
Structural Engineering
14%
13%
Industry
Architecture
9%
9%
Project Management
Geographic IT
6%
2%
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Strong market positionsEstablished in 11 countries and successful
project export around the world SwedenNorway
Finland
Russiap j p
• Market leader in Sweden
• One of the leading players in Norway and Finland
Sweden
DenmarkLithuania
RussiaEstonia
• Strong niche positions in Central and Eastern Europe
• Ongoing assignments in 80 countries CzechRepublic
Poland
• Capacity to offer total solutions for projects across
national borders
RepublicSlovakia
Bulgaria
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Client mixBalanced base of around 10,000 clients
• Ten largest clients account for 20 percent of net sales
• Sweco is not dependent of any individual clients
Assignment volume
48% 52% PrivatePublicsector 52%
sectorsector
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Decentralised business model
Sweco’s business model is based on simplicity and client focus
• Each consultant and manager is responsible for business, people, clients, projects and profitability
• Simplicity and client focus makes it easy to do business with us
• Proven successful in recession
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Powerful growth last 10 years
• Operating profit grew on average 16 per cent annually
• Growth in net sales has averaged at approximately
Operating profit
• Growth in net sales has averaged at approximately 12 per cent annually
• From 2,200 to 6,000 employees
Net sales
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High total return
1000
1200
• Dividend return averaged at 7.0 per cent last ten years
CAGR:+25%
800
• Low volatility- beta value 0.6
400
600
CAGR:+6%200
400
029-12-2000 29-12-2001 29-12-2002 29-12-2003 29-12-2004 29-12-2005 29-12-2006 29-12-2007 29-12-2008 29-12-2009 29-12-2010
SIX RX Sweco B Total Return
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SIX RX Sweco B Total Return
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H1 Interim report
Income statement• Net sales growth SEK M 2011 2010 2011 2010 Jun 2011 2010
Net sales 1 506 7 1 365 5 2 927 4 2 704 5 5 495 3 5 272 4
Jan-Jun Jan-JunApr-jun Apr-Jun Jul 2010- Full year
• Improved operating margin
• Still big variations and
Net sales 1 506,7 1 365,5 2 927,4 2 704,5 5 495,3 5 272,4Other operating income - 3,6 - 3,6 0,3 3,9Other external expenses -358,2 -368,1 -684,0 -682,3 -1 401,9 -1 400,2Personnel costs -994,2 -865,4 -1 929,5 -1 743,3 -3 535,2 -3 349,0Amortisation/depreciation • Still big variations and
price pressure
• Write-downs Norway
pand impairment losses -26,3 -23,4 -49,3 -47,9 -95,8 -94,4
Operating profit 128,0 112,2 264,6 234,6 462,7 432,7Net f inancial items -1,8 -1,1 -3,9 -4,1 -8,8 -9,0
Profit before tax 126,2 111,1 260,7 230,5 453,9 423,7Income tax expense -33,7 -28,6 -71,1 -61,4 -133,5 -123,8
Profit for the period 92,5 82,5 189,6 169,1 320,4 299,9
Operating margin 8,5 8,2 9,0 8,7 8,4 8,2Billing ratio 74,0 73,8 73,5 73,5 73,4 73,4
Basic EPS 1,01 0,91 2,08 1,88 3,51 3,31Diluted EPS 1,01 0,90 2,08 1,85 3,51 3,28
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Operating profit rolling 12 months
550600
SEK M
300350400450500
50100150200250300
050
Quarterly profit Rolling 12 months
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New assignments 2011
Boliden will expand the ore production in Garpenberg, Sweden. Sweco has been commissioned for structural design and project management services in connection with the expansion
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New assignments 2011
Sweco is working at Nya Karolinska Sjukhuset with multiple disciplines, focus on building service systems
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service systems
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New assignments 2011New assignments 2011
Sweco has been awarded several contracts in Africa. The latest projects are aimed at improving the supply of electricity in several areas of Tanzania and Kenya
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improving the supply of electricity in several areas of Tanzania and Kenya
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New assignments 2011New assignments 2011
Bekkelaget, a waste water facility in Oslo will be enlarged to double its capacity. Swecohas been chosen to study and propose a number of technical solutions that will create the conditions for the plant's future expansion
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New assignments 2011New assignments 2011
Sweco’s Norwegian consultants were awarded a major project management contract for construction of a new terminal building at Flesland Airport in Bergen.
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g p g
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Airplane. Photo: Avinor
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New assignments 2011New assignments 2011
Sweco's industrial consultants have signed a major contract with Stora Enso regarding its investment in a new paper machine in Ostrołęka Mill Poland
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investment in a new paper machine in Ostrołęka Mill, Poland
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New assignments 2011
Sweco's industrial consultants has together with the Russian company Soyuz been chosen to lead and supervise the rehabilitation of three major CHP plants in Moscow
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Growth is backRevenue growth H1 2011 vs. H1 2010, Per cent
8.32.2
4.4
6.1Growth in local
currencies (acquired and organic) 10 5%and organic) 10,5%
Net growthCurrencyeffects
Acquiredgrowthlocal
OrganicgrowthLocal
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currencycurrency
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Organic growth – Accelerated recruitingNet employee additions H1 2011 vs. H1 2010
I di id l
Nor a 46
Sweden 233
Individuals Per cent
5 3
8.7
Finland 2
Norway 46
3.0
5.3
Russia 16
CEE 34
4.4
-3.9
Group 255
Industry 10
4.9
-1.6
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Powerful acquisition-driven growth
Successful integration of acquired companies.
• 82 acquisitions since 2001• 82 acquisitions since 2001
• 4,000 employees
• Approx SEK 2 800 SEK million in annual sales• Approx. SEK 2,800 SEK million in annual sales
Number of employees in acquired company/Number of employees in acquired company/
Σ 82
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Acquisitions – Disciplined “string of pearls” approachstring of pearls approachAcquisitions H2 2010 to September 2011
Company Employees
Pro forma acquired growth
• 576 employees
CompanyAros Arkitekter, SwedenEffekt RI, NorwayEiendomsprosjektering, Norway
Employees76315 • 576 employees
• 328 MSEK revenues
• 35 MSEK EBIT
TD VVS Konsult, SwedenAPA Markowski Architekci, CEEAxro, SwedenOppland Bygg Consult, Norway
5203523 35 MSEK EBIT
Average weighted EV/EBIT
Oppland Bygg Consult, Norway NIPI and IKTP, RussiaUSK, SwedenPROWS, Industry
232643325 Average weighted EV/EBIT
multiple 4,5xHydrocoop, CEEEnergetioks Linijos, CEEInmind, SwedenMetrix, Sweden
22341110
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Total 565
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Order backlog June 2008 – June 2011
• + 29% H1 2011- H1 2010
• +23 % YTD 2011-06
• Order backlog > 6 month
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Sweco is positioned in strong countriesMacroeconomic indicators 2011Macroeconomic indicators 2011
GDP growthPer cent
Public debtPer cent of GDP
Lithuania 6.5
Estonia 6.5
31.6
7.2
Sweden 4.3
Russia 4.3
36.0
8.3
Czech Rep 2 2
Finland 2.9
Poland 4.1
49.2
42 0
54.0
Norway 1.4
Czech Rep. 2.2
Euro zone 1.7 87.9
N/A
42.0
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23Source: Economist Intelligence Unit August 2011, SEB Nordic outlook August 2011
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Market developmentConstruction, Sweden, SEK billions, 2011 Prices Growth 2011 2012Construction, Sweden, SEK billions, 2011 Prices
265.0284.3
273.4260 4265.4
Growth 2011-2012Per cent
4.0
89.7
251.7
83.5
99.7
Housing
260.4
95.696.6107.0
4.3
79.378 784.683.3
89 01.5
79.3
7.723.2
78.7
R ilRoads
Other buildings
8.527.8
8.224.5
8.425.5
6 818.6
89.0
6 617.6
84.2
9.00.8
2009
25.2
33.4
2008 2011
26.3
34.3Energy and water
Rail
Other civil
2012
27.2
36.6
25.4
33.4
2010
25.0
29.06.8
2007
24.7
25.36.6
6.9
3.5
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20092008 2011 201220102007
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Market developmentConstruction Norway, NOK billions, 2011 Prices Growth 2011 2012Construction Norway, NOK billions, 2011 Prices
294.6298.1287 7
299.4312.9
Growth 2011-2012Per cent
5.3
110.1102.7111.7
91.3102.1
278.3287.7
93.0Housing7.9
131 5 3 8131.5126.7128.2 124.7128.6138.9
Roads
Other buildings3.8
4.940.4
2011
15.6 9.15.2
36.0
2007
7.42.6
32.7
2010
15.4 7.84.9
34.2
15.6
2009
14.0 7.75.0
39.3
2008
14.3 7.33.8
32.4
10.1Other civilEnergy and water
Rail
2012
16.0
12.1
2.511.0-6.2
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20112007 201020092008 2012
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Proven resilience in recession
Nordic 3 7
Percent
Nordiccountries
GDP growth
2.5*2.7
-0.1
3.23.72.93.5
1.61.6
-4.9
6.64 45.0
S
9.0**8.28.3
10.89.59.3
8.1
0403
4.4
02
Swecooperating
margin
11100908070605
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26*) Estimate 2011, **) H1 2011
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Priorities for further growth
• Consolidate leadership position in the Nordics
• Strengthen growth platforms in Eastern Europe
• Consider acquisition in Western Europe if opportunity arise
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Strategic priorities• Growth
• KnowledgeKnowledge
• People
• Brand
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Sweco as an attractive investment
• Strong track record
Growth is back• Growth is back
• Resilience in case of recession
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Q&AQ&A
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