Interim report January-June 2001

Interim report January-June 2001 · Profit after net financial items up 15 per cent to MSEK 74.2 (MSEK 64.8 excluding the refund from Alecta). · Operating profit improved by 14 per cent to MSEK 55.0 (MSEK 48.4 excluding the refund from Alecta). · Net sales rose 15 per cent MSEK 778.4 (676.3). · Demand for consulting services in Scandiaconsult's areas of operation is expected to remain strong throughout the year. · For more information, contact CEO Torbjörn Torell or CFO Per Leopoldson, telephone +46 8 615 60 00. The report is also available at www.scc.se. Scandiaconsult, with 2000 employees at 50 locations in Sweden, Norway and Finland, is a leading consulting engineering company in the Nordic market. The Group offers comprehensive solutions in all technical disciplines from concept and analysis, planning and project management to operation and maintenance. Scandiaconsult has annual sales of SEK 1.5 million and is quoted on the A list of the Stockholm Stock Exchange. For more information visit www.scc.se. The period in summary Scandiaconsult's net sales for the first half of 2001 amounted to MSEK 778.4 (676.3), up 15 per cent on the year-earlier figure. Second quarter sales rose 15 per cent to MSEK 385.4 (333.9). The rise in sales is attributable to a better price scenario in the Nordic markets, particularly Finland and Sweden, and an increase in market share owing partly to acquisitions in 2000. Scandiaconsult's strategy is to become the Nordic leader by focusing on development of the company's regional units. Profit after net financial items improved by MSEK 9.4 or 15 per cent to MSEK 74.2, compared with MSEK 64.8 (excluding the refund from Alecta in 2000) in the same period of 2000. Profit for the period included a capital gain of MSEK 15.0 arising from an additional purchase sum for the sale of Arsenalen. The corresponding period of the last year included a capital gain of MSEK 14.2. For the second consecutive quarter, profit after net financial items strengthened by 17 per cent to MSEK 18.2 (15.5 excluding the refund from Alecta in 2000). The improvement in earnings was generated by sales growth with retained profitability thanks to improved efficiency in operations and a shift towards segments with higher demands on advanced and integrated consulting services. National markets Operations in Sweden Scandiaconsult in Sweden offers consulting services in structural, geotechnical, electrical and, environmental engineering, heating, water & sanitation and project management including project and cost control, quality control, construction management and environmental management. Infrastructure assignments account for close to half of income. The average number of employees during the first six months was 934. In the first half of 2001 Scandiaconsult's net sales in Sweden rose 8 per cent to MSEK 437.3 (403.2). Second quarter sales contributed to this positive trend with a 6 per cent increase to MSEK 211.8 (199.1). As earlier in the year, growth in both sales and profit is mainly explained by a higher number of employees and a better price level. Operating profit for the first half of the year was MSEK 36.0 (30.5), up 18 per cent. The improved mid-year result, like the increase in sales, is primarily attributable to a higher number of employees and a better billing ratio. As an effect of efforts to package the company's services, the price level has also improved. For the second consecutive quarter, operating profit was MSEK 12.0 (12.8). The quarterly results for 2001 were adversely affected by a lower number of working hours during the period relative to earlier years. Scandiaconsult signed a general agreement with Ericsson during the second quarter. The agreement gives Scandiaconsult the status of "Global Approved Resource Provider" and means that Scandiaconsult has been selected as an approved supplier of services for construction of mobile networks - 3G. Operations in Norway Scandiaconsult in Norway works with an emphasis on infrastructure and construction projects such as offices, housing, healthcare facilities and schools. The clients are found mainly in the national, municipal and county governments. The average number of employees during the first half of the year was 435. In the first six months of 2001 Scandiaconsult's net sales in Norway rose 34 per cent to MSEK 191.0 (142.3). Adjusted for currency effects the increase was 26 per cent. For the second consecutive quarter, net sales improved by 49 per cent to MSEK 96.8 (65.1). The growth in sales is largely due to an increased number of employees. Operating profit in the Norwegian operations declined to MSEK 8.4 (10.0). The drop in earnings reflects a decrease in capacity utilization and an increase in non-recurring costs for premises. However, for the second consecutive quarter operating profit increased by MSEK 0.6 to MSEK 1.6 (1.0), mainly thanks to a strong accretive profit from acquired units. The situation in the Norwegian construction and civil engineering was largely unchanged between the first and second quarters. However, as time goes by the high Norwegian interest rates and overheated labour market are causing a hesitancy to start up new private sector projects, particularly in the housing segment. The order backlog going into the third quarter is largely unchanged compared with the preceding quarter. One significant order booked during the quarter is a commission in connection with a large-scale extension of Radiumhospitalet in Oslo. Operations in Finland Scandiaconsult in Finland offers services and expertise in urban planning, structural, geotechnical and environmental engineering and water & sewer technology. The clients are found mainly in the public sector, predominantly in infrastructure assignments. The average number of employees during the first half of the year was 468. In the first six months of the year, Scandiaconsult's net sales in Finland improved by 19 per cent to MSEK 158.1 (132.6). Adjusted for currency effects the increase was 15 per cent. For the second consecutive quarter, net sales rose 16 per cent to MSEK 80.8 (69.9). Adjusted for currency effects the increase was 11 per cent. The improvement in sales was primarily attributable to a better price scenario and a higher number of employees. Operating profit in the Finnish operations amounted to MSEK 10.4, compared with MSEK 7.0 in the same period of last year. For the second consecutive quarter, operating profit improved by MSEK 2.2 to MSEK 4.6 (2.4). The improvement in earnings is explained partly by a better price scenario and partly by a higher number of employees. In addition, the co- location of all operations in Espoo in joint premises has generated positive income effects. Demand for Scandiaconsult's services in Finland remains stable, although a certain slackening in the market was noted during the second quarter. During the period, Scandiaconsult won assignments connected to renovation of an expressway around Helsinki. Acquisitions Norman AS and Arkon AS in Norway were acquired during the period. Norman with 50 employees and Arkon with 22 employees are both located in Bergen. The companies posted net sales of MSEK 40 and MSEK 11, respectively, in 2000 and are active in areas such as project development, project management, architecture and structural engineering. Financial position Despite the fact that dividends of MSEK 127,1 were paid during the period, the Group's liquidity remains good. Liquid assets and short-term investments per 30 June totalled MSEK 114.6, compared with MSEK 166.4 on the same date of last year. Interest-bearing liabilities have decreased to MSEK 56.7 (76.0). The cash flow after investments was MSEK 4.3 (19.3) or SEK 0.18 per share (0.80). In the second quarter, dividends were paid in the amount of MSEK 127.1 (29.9). The Group's financial position remains strong and the equity ratio at the end of the period was 42 per cent. Shareholders' equity amounted to MSEK 325.3 (355.1 including the refund from Alecta), corresponding to equity per share before dilution of SEK 14.08 (15.35 including the refund from Alecta). Tax The tax expense during the period was MSEK 19.2, corresponding to 25.9 per cent of profit before tax. The low tax rate is explained by the fact that claimed tax deductions in Norway and Finland, pertaining to earlier fiscal years, were approved by the tax authorities during the first quarter. Investments New investments in tangible fixed assets amounted to MSEK 15.4 (12.9) and referred primarily to computers and other IT equipment. Depreciation of machinery and equipment during the period totalled MSEK 13.5 (13.1). Employees The average number of employees during the first half of the year was 1,852 (1,668). Including temporary staff, the number of employees at the end of the period was 1,960 (1,853). Parent Company The Parent Company's net sales during the period amounted to MSEK 12.3 (14.3). Profit for the period decreased to MSEK 19.0 (26.8). Investments in machinery and equipment totalled MSEK 0.0 (0.1). Liquid assets and short-term investments amounted to MSEK 80.7 (143.3). Future outlook 2001 Demand for Scandiaonsult's services remained strong in most areas of operation during the first half of the year, with a 15 per cent increase in net sales. Despite economic slowing in many sectors, the construction market remains robust. In light of Scandiaconsult's market positioning, vigorous demand is anticipated throughout the remainder of the year Accounting principles This interim report has been prepared in accordance with the Swedish Annual Accounts Act and the recommendations of the Swedish Financial Accounting Standards Council. The interim report has been prepared with the application of the same accounting and valuation principles used in the most recent annual report. As of 2001, Scandiaconsult applies the new recommendations of the Swedish Financial Accounting Standards Council. Financial information in 2001 Interim report (9 months): 2 November Stockholm, 10 August 2001 Scandiaconsult AB (publ) Torbjörn Torell Managing Director & CEO This report is also available at www.scc.se. Auditor's report I have reviewed the interim report for the period 1 January 2001 - 30 June 2001 according to the recommendations issued by the Swedish Institute of Authorized Public Accountants. A review is significantly limited in relation to an audit. I have found nothing to indicate that the interim report does not meet the requirements of the Stock Exchange Act and the Swedish Companies Act. Stockholm, August 2001, Caj Nackstad, Authorized Public Accountant, KPMG ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/10/20010810BIT00500/bit0002.pdf The full report