Interim report January-June 2002

Interim report January-June 2002 · Profit after net financial items improved by 13 per cent to MSEK 84.1 (74.2). · Operating profit excluding the refund from Alecta rose 10 per cent to MSEK 60.3 (55.0). · Net sales increased by 7 per cent to MSEK 833.6 (778.4). · Scandiaconsult is further strengthening its Finnish operations through the acquisition of Vesihydro Oy. · The favourable market outlook in Scandiaconsult's key areas of operation and the company's wide geographic coverage in the Nordic region vouch for continued strong development in 2002. The company has decided to exercise its authorization to carry out a buy- back of Scandiaconsult shares. For more information contact CEO Torbjörn Torell or CFO Per Leopoldson, telephone +46 8 615 60 00. This report is also available at www.scc.se. [REMOVED GRAPHICS] Scandiaconsult is a leading consulting engineering company in the Nordic market. The Group offers comprehensive solutions in the fields of infrastructure and construction - from concept and analysis, planning, design and project management to operation and maintenance. Scandiaconsult's technical competency is combined with in-depth knowledge about the environment, international development issues and sustainable use of natural resources. Scandiaconsult has 2,000 employees at 50 locations in Sweden, Norway and Finland. The Group has an annual turnover of SEK 1.5 billion and is quoted on the A list of the Stockholm Stock Exchange. For more information see www.scc.se. The period in review For the first six months of 2002 Scandiaconsult posted net sales of MSEK 833.6 (778.4), up 7 per cent on the corresponding period of last year. The Group's second quarter sales rose 11 per cent to MSEK 428.3 (385.4). The increase in sales is primarily attributable to a better price scenario. Demand for consulting engineering services in the Nordic market continued to show considerable variations. Demand was strongest in the civil engineering sector but declined in the building construction segment, particularly in Sweden and Finland. The Norwegian market is continuing to show more vigorous development than Sweden and Finland. Scandiaconsult has been successful in evening out variations in demand between different locations and sectors. Increased packaging of the company's services has also contributed to an improved price level. Profit after net financial items during the period amounted to MSEK 84.1 (74.2), an increase of MSEK 9.9 or 13 per cent compared with the same period of last year. Profit for the period included reallocated client company pension funds of MSEK 17.8, while the year-earlier figure included an additional payment MSEK 15.0 for the sale of Arsenalen. Second quarter profit after net financial items increased to MSEK 23.8 (18.2). This earnings growth was attributable to ongoing efficiency improvements, a shift towards segments with favourable demand and an increased need for qualified and coordinated services. The operating margin improved to 7.2 per cent excluding client company pension funds (7.1). Acquisitions and sales In Finland the firm of Vesihydro Oy has been acquired with around 90 employees. The transfer of ownership will take place on 1 September 2002. The company, with an annual turnover of around MSEK 45, is active in the Helsinki and Seinäjoki areas. Vesihydro's main areas of operation are water and environmental engineering and research, traffic and marine fairway planning, environmental planning and geotechnical engineering. On 1 January 2002, Scandiaconsult took over the firm of Siv. Ing Tom R Hansen in Norway. The company, which was acquired during 2001, is located in Sandefjord, Norway, and provides consulting engineering services in structural, civil and water/wastewater engineering, with special expertise in underwater engineering. The company has an annual turnover of around MSEK 5. National markets Operations in Sweden Scandiaconsult in Sweden offers consulting services in structural, civil, electrical and environmental engineering, HVAC and sanitary engineering and project management including project, cost and quality control, construction management and environmental management. Infrastructure assignments account for close to half of income. The average number of employees during the period was 914. Scandiaconsult's net sales in Sweden during the first six months amounted to MSEK 448.8 (437.3), an increase of 3 per cent. Second quarter sales rose 8 per cent to MSEK 228.9 (211.8), mainly due to an improved price level. For the first six months of the year, operating profit reached MSEK 36.6 (36.0). Operating profit for the second quarter improved to MSEK 13.9 (12.0). In the first half of 2002, the Swedish market was characterized by relatively robust demand for consulting services. Demand was strongest for units in civil engineering, but declined in the building and industrial construction segment. A six kilometer long railway tunnel, the City Line, is being planned in Stockholm as a partial solution to increasing traffic congestion in the metropolitan area. Scandiaconsult has been assigned responsibility for tunnel construction in the ongoing railway study that will be completed in the first half of 2003. 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 primarily in the national, county and local governments. The average number of employees during the period was 441. In the first half of the year, Scandiaconsult's net sales in Norway rose 17 per cent to MSEK 222.9 (191.0). Adjusted for currency effects, the increase was 9 per cent. Sales growth was largely due to an improved price level and increased capacity utilisation. Second quarter sales were up 17 per cent to MSEK 113.5 (96.8). Adjusted for currency effects, the increase was 9 per cent. Operating profit rose to MSEK 13.6 (8.4), up 62 per cent on the year- earlier figure. Adjusted for currency effects, the increase was 51 per cent. Operating profit for the second quarter increased to MSEK 5.6 (1.6). This earnings growth was mainly attributable to units in structural and civil engineering. Development in the civil engineering market remained robust during the second quarter, with particularly strong growth for investments in the energy sector, roads and railways. The housing construction market continued to show favourable development during the period. Scandiaconsult has been commissioned by the Norwegian government for remediation of contaminated sediment in the Port of Trondheim, primarily with regard to PCBs. The project is being carried out in close collaboration with Scandiaconsult's office in Finland, which has special expertise in this field. Operations in Finland Scandiaconsult in Finland offers services and expertise in urban planning, structural, civil, water/wastewater and environmental engineering. The clients are found mainly in the public sector, predominantly in infrastructure assignments. The average number of employees during the period was 486. In the first six months of 2002, Scandiaconsult's net sales in Finland rose 8 per cent to MSEK 170.5 (158.1). Adjusted for currency effects, the increase was 7 per cent. For the second quarter, sales were up 12 per cent to MSEK 90.2 (80.8). Adjusted for currency effects, the increase was 11 per cent. The improvement in sales is primarily explained by an improved price scenario and a higher number of employees. Operating profit totalled MSEK 10.5 (10.4). Operating profit for the second quarter improved to MSEK 5.4 (4.6). This earnings growth owes mainly to the improved margins resulting from efficiency gains. Development in the infrastructural segment remained strong during the period. However, the building construction sector noted a continued decrease in investments due to declining industrial and office construction. In central Helsinki, work has been started on the conversion of a former bus terminal into a new shopping center. Scandiaconsult has been commissioned to plan and design technical services. Financial position Despite dividend payments of MSEK 86.7 during the period, the Group has maintained favourable liquidity. Cash and bank and short-term investments at the end of the period totalled MSEK 173.7 (114.6). Interest-bearing liabilities decreased to MSEK 48.2 (56.7). Cash flow after investments was MSEK 87.1 (4.3), or SEK 3.77 per share (0.18). The Group's financial position remains strong and the equity ratio at the end of the period was 41 per cent (42). Shareholders' equity amounted to MSEK 339.7 (325.3), corresponding to equity per share before dilution of SEK 14.70 (14.08). Tax The period's tax expense was MSEK 25.4, corresponding to 30 per cent of profit before tax. Investments New investments in tangible fixed assets amounted to MSEK 14.0 (15.4) and referred primarily to computers and other IT equipment.. Depreciation of machinery and equipment during the period totalled MSEK 13.6 (13.5). Employees The average number of employees during the period was 1,858 (1,852). Including temporary staff, the number of employees at the end of the period was 2,031 (1,960). Parent Company The Parent Company's reported net sales of MSEK 15.3 (12.3) during the period. Profit after net financial items was MSEK 10.7 (19.0). The year- earlier figure included an additional payment of MSEK 15.0 for the sale of Arsenalen. Investments in machinery and equipment totalled MSEK 0.0 (0.0). Cash and bank and short-term investments amounted to MSEK 162.6 (80.7). Future outlook 2002 The construction market is expected to remain stable with strong demand in the near term, although demand is expected to vary widely between areas of operation and locations. Scandiaconsult's position with a high relative share of activity in the civil engineering sector in Sweden, Norway and Finland provides a solid platform for growth in 2002. The Swedish Federation of Architects and Consulting Engineers expects total building investments in Sweden to increase by around 2 per cent in 2002, with a growth rate of up to 5 per cent anticipated for 2003. 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 same accounting and valuation principles have been applied as in the most recent annual report. Financial information in 2002 Interim report (9 months): 25 October Stockholm, 9 August 2002 Scandiaconsult AB (publ) Torbjörn Torell Managing Director & CEO This report is also available at www.scc.se. Auditors' examination report I have conducted a limited review of the accompanying interim report in accordance with the recommendation issued by FAR. A limited review is considerably less in scope than an audit. Nothing has come to my attention that indicates that the interim report does not fulfill the requirements of the Swedish Stock Exchange Act and the Swedish Annual Accounts Act. Stockholm, 9 August 2002, 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/2002/08/09/20020808BIT00790/wkr0001.doc The full report http://www.waymaker.net/bitonline/2002/08/09/20020808BIT00790/wkr0002.pdf The full report