Skanska preliminary year-end report, 2000

SKANSKA PRELIMINARY YEAR-END REPORT, 2000 Strong growth in core business * Order bookings rose by 31 percent * Order backlog rose by 72 percent to SEK 160.7 bn * Net sales rose by 37 percent till SEK 108.0 bn * Operating income in the Group's core business rose by 65 percent to SEK 4.4 bn * Operating income totaled SEK 7.2 bn In the income statement, the item called "Items affecting comparability," which is part of operating income, was lower than last year, amounting to SEK 2.4 bn (3.3) * Income after financial items totaled SEK 8.5 bn * Net profit per share rose by 43 percent to SEK 53.60 Claes Björk, President and CEO of Skanska, commented on the Preliminary Year-End Report: "We had good growth in our core business during 2000. Because of strong order bookings, especially from the United States and Sweden, and new input from acquired businesses, we are optimistic about developments in 2001." Stockholm, January 25, 2001 Skanska AB For further information, please contact: Anders Nyrén, Executive Vice President and CFO, +46 (0)8 - 753 88 00 Peter Wallin, Head of Investor Relations, +46 (0)8 - 753 88 86 SKANSKA'S PRELIMINARY YEAR-END REPORT, 2000 Skanska Group highlights, 2000 Billions of Swedish kronor (SEK bn) 2000 1999 Changes Net sales 108.0 79.1 37% Operating income in core business 4.4 2.7 65% Operating income 7.2 6.9 4% Income after financial items 8.5 6.9 24% Operating margin in construction operations 2.3% 2.7% Net profit per share, SEK* 53.60 37.60 43% Return on capital employed, excluding items affecting comparability 18.2% 17.3% Order bookings 127.0 97.3 31% Order backlog 160.7 93.7 72% * The average number of shares outstanding in 2000 was 111.2 (113.9) million. THE FOURTH QUARTER IN BRIEF During the fourth quarter, Skanska continued to grow and to strengthen its position in its selected main markets. The British-based company Kvaerner Construction (which has changed its name to Skanska Construction Ltd) and U.S.-based Baugh Enterprises became part of Skanska effective in November 2000. During the fourth quarter, as a step in the Group's increased focus on its core business, additional shareholdings were sold. Skanska divested its shares in the Stockholm-based construction and real estate company JM and in the Swedish commercial real estate company Norrporten. The total capital gain of these divestments amounts to SEK1 bn. Its shareholding in the British construction company Costain Group PLC was sold as a consequence of its acquisition of Kvaerner Construction. Orange Sverige AB was awarded one of the four UMTS licenses for expansion of the third-generation mobile telecommunications networks in Sweden. Skanska has a 10 percent stake in Orange Sverige. ORDER BOOKINGS AND BACKLOG The Group's order bookings for 2000 were SEK 127.0 bn (97.3), representing a 31 percent increase on 1999. Order bookings in its core business - construction-related services and project development - increased by 37 percent. Year-end order backlog was SEK 160.7 bn (93.7), representing a 72 percent increase. Order backlog is equivalent to 1.5 years of construction work. Adjusted for acquired and divested businesses as well as currency rate effects, the increase in order bookings amounted to 6 percent and order backlog rose by 9 percent. Growth factors - changes from full-year 1999 to full-year 2000 Order Order Net bookings backlog sales Organic growth 6% 9% 16% Acquisitions 19% 52% 15% Currency rate 6% 11% 6% effects Total 31% 72% 37% NET SALES AND EARNINGS Net sales rose by 37 percent to SEK 108.0 bn (79.1). For comparable units and adjusted for currency rate effects, the increase was 16 percent. Operating income in Skanska's core business rose by 65 percent to SEK 4.4 bn (2.7). Behind the good earnings trend was favorable growth in most main markets. Adjusted for Skanska's gain on the sale of properties, operating income in its core business rose by 27 percent. Highlights of 2000, in SEK bn Business area Order Order Net sales Operating bookings backlog income 2000 1999 2000 1999 2000 1999 2000 1999 USA 60.2 50.7 93.6 67.1 49.4 35.4 1.0 0.9 Sweden 30.1 23.4 19.6 13.6 24.6 23.6 1.0 0.7 Europe, core 31.6 16.6 47.3 12.4 30.2 14.2 0.4 0.4 business Project Development and 1.4 1.3 2.4 1.4 Real Estate Services 2.0 - 0.2 - 1.9 - 0.1 - Other and -2.5 -2.1 -0.5 -0.7 eliminations Total core 123. 90.7 160. 93.1 105. 72.4 4.4 2.7 business 9 7 0 Non-core business 3.1 6.6 0.0 0.6 3.0 6.7 0.1 0.3 Items affecting comparability and share of income 2.7 3.9 in associated companies Skanska Group 127. 97.3 160. 93.7 108. 79.1 7.2 6.9 total 0 7 0 Operating income, including items affecting comparability, totaled SEK 7.2 bn (6.9). During the fourth quarter, about SEK 1 bn in capital gains on shares plus SEK 0.4 bn in Skanska's share of refunded surplus pension- related payments from the retirement insurance company SPP were reported as items affecting comparability. Items affecting comparability totaled SEK 2.4 bn (3.3). Income after financial items totaled SEK 8.5 bn (6.9). Net profit amounted to SEK 6.0 bn (4.3). Net profit per share rose by 43 percent to SEK 53.60 (37.60). INVESTMENTS AND DIVESTMENTS The Group's net divestments amounted to SEK 0.6 bn (3.9). Acquisitions of companies and investments in current project development increased the total investment volume to SEK 16.5 bn (8.9) during the year. Meanwhile the sale of projects as well as shares and businesses resulted in a higher level of divestments, which totaled SEK 17.1 bn (12.8). Investments SEK bn 2000 1999 Investments Properties in real estate operations -2.4 -2.5 Current-asset properties -5.2 -3.4 Acquisition of subsidiaries -6.0 -1.4 Other fixed assets -2.9 -1.6 -16.5 -8.9 Divestments Properties in real estate operations 3.9 1.4 Current-asset properties 4.3 2.3 Businesses and shares 8.5 8.8 Other divestments 0.4 0.3 17.1 12.8 Net divestments 0.6 3.9 CASH FLOW AND FINANCIAL POSITION The Group's cash flow for the year was SEK 0.9 bn (2.1). Liquid assets and interest-bearing receivables increased by SEK 2.3 bn to SEK 10.1 bn (7.8). Interest-bearing liabilities rose by SEK 5.4 bn to SEK 13.8 bn (8.4). This represents an overall increase in net interest-bearing liabilities by SEK 3.1 bn to SEK 3.7 bn (0.6). The visible equity/assets ratio of the Group was 24.5 percent (32.5). The debt/equity ratio was 0.2 (0.0). Cash flow SEK bn 2000 1999 From business operations 1.7 3.2 Taxes -0.7 -0.6 From business operations, net 1.0 2.6 Net investments 0.6 3.9 Of which, not affecting cash flow 0.5 -1.1 Change in financial receivables -0.8 0.1 Taxes -0.7 -1.1 From investment operations, net -0.4 1.8 From financing operations, net 0.3 -2.3 Cash flow for the year 0.9 2.1 Buy-backs of Skanska's own shares On December 31, Skanska had repurchased 7.3 million shares (6.4 percent of the number of shares outstanding) at a total price of SEK 2.6 bn. The average price of the repurchased shares was SEK 356 or 10 percent lower than the January 24 closing price of SEK 396. The weighted number of shares outstanding was 111.2 million (113.9) for the year 2000 as a whole. On December 31, the number of shares outstanding was 106.5 million. IMPORTANT DATES The Group will publish its Year-End Report on February 21. The official Swedish version of the Annual Report is expected to appear early in April and the English translation shortly thereafter. The Annual Meeting of Shareholders will be held on April 26 in Gothenburg, Sweden. Stockholm, January 25, 2001 Claes Björk President and CEO This preliminary report has not been subjected to separate examination by the Company's auditors. [REMOVED GRAPHICS] ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/01/25/20010125BIT00950/bit0001.doc http://www.bit.se/bitonline/2001/01/25/20010125BIT00950/bit0002.pdf