Year-end report 1999

Year-end report 1999 * Net sales up 3 per cent till MSEK 1,631 * Pre-tax profit of MSEK 3 (36) * Proposed dividend of SEK 1.20 per share * Wigon Thuresson new Managing Director & CEO as of 1 January 2000 PROFIT AND FINANCIAL POSITION Income and profit The Group's net sales amounted to MSEK 1,630.8 (1,586.7) and profit before tax was MSEK 2.7 (35.6). Profit was charged with costs of MSEK 8.6 for planned and ongoing renewal and efficiency measures and provisions of MSEK 11.3 for severance pay to senior executives. Risk exposure in a number of specific projects led to provisions of MSEK 7.9. Goodwill was written down by MSEK 8.9 due to lower profitability in acquired companies, and fourth quarter development was somewhat weaker than anticipated. A gain of MSEK 5 arose through redemp- tion of pension liabilities. The profit shortfall relative to the earlier forecast of MSEK 50 is mainly attributable to the above items. The above costs were charged to the business areas in the amount of MSEK 7.4. The remaining MSEK 29.3 was charged to joint-Group expenses, of which MSEK 7.7 can be attributated to Architec- ture, Construction and Installation and MSEK 4.4 to Environment, Civil En- gineering and Industry. Profit summary 1999 1998 MSEK Architecture, Construction and Installation 16.8 14.6 Environment, Civil Engineering and Industry 31.7 14.0 Capital gains - 41.4 Group eliminations/ - joint, incl. Goodwill -46.2 -16.5 Consolidated net financial items 0.2 1.1 Minority share 0.2 -19.0 Profit before tax 2.7 35.6 Earnings per share Profit after tax corresponded to earnings per share of SEK 0 (1.60). Investments The Group's net investments in tangible fixed assets totalled MSEK 28.1 (36.8). Financial position The Group's interest-bearing assets in the form of liquid assets and in- terest-bearing receivables amounted to MSEK 66.8 (184.7). Interest-bearing liabilities totalled MSEK 20.7 (87.2). The decrease in liquid assets is mainly due to redemption of pension liabilities and substantial tax pay- ments. Dividend The Board proposes a dividend of SEK 1.20 per share (1.20) for the 1999 financial year. Personnel The number of full-time employees in the Group during the year was 2,188 (2,334). The decrease is largely due to the sale of NewSec. Parent Company Income in the Parent Company totalled MSEK 80.8 (58.3) and profit before tax was MSEK 16.0 (41.1). Convertible debenture loan In 1999, convertible notes of MSEK 12.4, corresponding to 265,800 new shares, were issued to employees in the SWECO Group. The dilution effect upon full conversion is 1.76% of the total number of shares. Repayment of pension funds According to SPP, SWECO will be reallocated pension funds of approximately MSEK 575. The Swedish Competition Authority rejected SPP's proposed guidelines for utilisation of these funds, after which SPP has revised the rules and filed a new application. SPP will provide information about the new rules in April 2000 at the earliest. SWECO has not taken any portion of these funds to profit. Aside from repayment from SPP, SWECO will receive pension funds from the Architects' Pension Fund (AP) in an amount previously estimated at MSEK 40-50. Final notification from AP is awaited during the current year. OPERATIONS After selling its holding in NewSec AB during April, SWECO's operations are focused exclusively on architecture and technical consulting, which are conducted in two business areas. Net sales in the two business areas increased by 8 per cent to MSEK 1,612.2 (1,491.2). Profit was MSEK 48.5 (28.6). Architecture, Construction and Installation The market for building-related operations continued to improve. Growth is concentrated on new production and refers to housing, offices and public buildings. This positive trend is most distinct in the metropolitan areas and university cities. The business area's net sales rose by 4 per cent to MSEK 784.3 (751.8). Operating profit was MSEK 16.8 (14.6) and the operating margin improved from 1.9 to 2.1 per cent. The number of full-time employees was 1,070 (1,116). Environment, Civil Engineering and Industry The environmental market remains expansive in both Sweden and abroad. Al- though the roads and railways market slackened somewhat during 1999, several major products are scheduled for the next few years. The market in the power and energy area continued to strengthen and the market for heavy industrial engineering stabilised. SWECO's operations in the water and environmental segment have showed strong development in both demand and profit. SWECO's international operations, which are mainly conducted in this busi- ness area, won contracts worth MSEK 128 during the year, primarily in the environmental and energy segments. The business area's net sales rose by 12 per cent and amounted to MSEK 866.4 (775.7). Operating profit improved by MSEK 17.7 to MSEK 31.7 (14.0) and the operating margin rose from 1.8 per cent to 3.7 per cent. The num- ber of full-time employees was 1,044 (1,066). FORECAST The market for SWECO's services has improved, and both order bookings and capacity utilisation strengthened during the beginning of the year. The SWECO Group is carrying out a renewal programme to enhance growth and boost profitability, which is expected to bear fruit later in the year. Stockholm, 15 February 2000 SWECO AB (publ) The Board of Directors The annual report for 1999 will be distributed in mid-March. The Annual General Meeting will be held at 4 p.m. on 12 April in the audi- torium of Norra Latin, Stockholm City Conference Centre, Drottninggatan 71 B, Stockholm The interim report for January-March 2000 will be published on 4 May 2000. SWECO AB (publ) Org. no. 556542-9841, Gjörwellsgatan 22, Box 34044, SE-100 26 Stockholm Telephone: +46 8 695 60 00, Fax: +46 8 695 66 10, E-mail info@sweco.se, www.sweco.se PROFIT AND LOSS ACCOUNT, MSEK 1999 1998 Net sales 1,630.8 1,588.7 Capital gains - 41.4 Share in profit of associated companies 0.4 0.9 Total operating income 1,631.2 1,631.0 Other external costs -517.0 -492.9 Staff costs -1,060.7 -1,045.1 Depreciation -51.2 -39.5 Operating profit 2.3 53.5 Net financial items 0.2 1.1 Profit after net financial items 2.5 54.6 Minority share 0.2 -19.0 Profit before tax 2.7 35.6 Tax -2.0 -16.9 Minority share in tax - 5.2 Profit after tax 0.7 23.9 BALANCE SHEET, MSEK 31 Dec. 99 31 Dec. 98 Fixed assets 86.1 105.8 Other current assets 410.4 446.8 Cash and bank 66.8 184.7 Total assets 563.3 737.3 Shareholders' equity 177.3 194.6 Minority share 1.0 8.6 Provisions 66.0 126.6 Liabilities to credit institutions 6.0 22.0 Other liabilities 313.0 385.5 Total shareholders' equity and liabilities 563.3 737.3 CASH FLOW STATEMENT, MSEK 1999 1998 Cash flow from operating ac- 13.3 95.5 tivities Cash flow from investing ac- -67.0 -25.4 tivities Cash flow from financing ac- -63.8 -2.9 tivities Change in liquid assets -117.5 67.2 KEY RATIOS Profit margin, % 0 3 Return on shareholders' equity, % 0 13 Return on capital employed, % 2 22 Earnings per share (before dilu- 0.00 1.60 tion), SEK Equity/assets ratio, % 31 26 Shareholders' equity per share 12 13 (before dilution), SEK Number of full-time employees 2,188 2,334 Number of shares 14,803,605 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/15/20000418BIT00090/bit0001.doc http://www.bit.se/bitonline/2000/02/15/20000418BIT00090/bit0002.pdf