Year-end Report 1 February 6, 2009 Skanska Year-end Report
JanuaryDecember in brief Revenue for the Group SEK 143.7 bn (138.8) Revenue in Construction SEK 139.5 bn (129.3) Up 8 percent in local currencies Backlog of SEK 142.4 bn represents 11 months of construction Operating income of SEK 4.1 bn (5.4) Gains from divestment of properties SEK 1.2 bn (1.1) Gains from divestment of Ponte de Pedra SEK 0.7 bn Writedowns and provisions of SEK 1.3 bn Assets in RD, CD, ID SEK 649 M Downsizing of personnel SEK 519 M Additional cost in operations under closing of SEK 98 M 2 February 6, 2009 Skanska Year-end Report
Current conditions Construction Order bookings indicate revenues approx 10 percent down in local currencies New orders from private clients down significantly Stable civil construction Residential Development Sales in Nordics very weak Unsold completed units up (especially in Finland) Commercial and Infrastructure Development Increasing yield requirements Fewer buyers and transactions 3 February 6, 2009 Skanska Year-end Report
Going forward Focus on cash flow and risk management Adjust cost structure to prevailing market conditions Restrictive with project start-ups in Project Development Unrealized development gains of SEK 9 bn Increased interest in green construction 4 February 6, 2009 Skanska Year-end Report
Financial targets Financial turmoil and market conditions uncertain Financial targets Keep levels Timing Not 2010 When normalized market conditions develop 5 February 6, 2009 Skanska Year-end Report
Dividend The Board of Directors proposes a regular dividend of SEK 5.25 (5.25+3.00) per share for the financial year Dividend policy: 50 80 percent of the profit for the year provided that Skanska s overall financial situation is stable and satisfactory 6 February 6, 2009 Skanska Year-end Report
Construction Significant project writedowns UK, Finland, Czech Republic and Norway Strong earnings in several construction units Sweden, USA Civil, USA Building, Poland and Latin America Downsizing in the Nordics Croton Water Filtration Plant, New York 7 February 6, 2009 Skanska Year-end Report
Residential Development Loss due to writedowns Falling prices Increased unsold homes Very few project start-ups Downsizing 8 February 6, 2009 Skanska Year-end Report
Commercial Development Slow investment market Good development gains SEK 2 bn unrealized gains Low vacancy rates and strong tenants in our properties 195,000 sq. m of new leases in Court House, Malmö 9 February 6, 2009 Skanska Year-end Report
Infrastructure Development Harder to finance SEK 6 bn in unrealized gains Sale of Ponte de Pedra SEK 684 M A1 phase II in Poland M25 in UK The London Hospital, U.K. 10 February 6, 2009 Skanska Year-end Report
Order situation Construction SEK bn Revenue Order bookings Order backlog 175.0 15 125.0 10 75.0 5 25.0 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Order backlog Order bookings, rolling 12 month basis 11 February 6, 2009 Skanska Year-end Report 139.5 126.5 142.4 129.3 143.4 146.0 38.3 27.6 Order bookings per quarter Revenue, rolling 12 month basis 35.8 35.6
Order bookings Construction SEK bn Sweden Norway Finland Poland Czech Republic UK USA Building USA Civil Latin America Total 27.3 10.7 6.7 9.4 14.1 13.1 26.0 13.7 5.6 126.5 29.3 13.3 9.8 5.4 9.3 18.2 34.6 17.7 5.8 143.4 6.0 1.9 1.5 2.4 3.6 1.2 8.2 1.4 1.4 27.6 7.4 2.8 3.2 1.3 3.0 6.9 6.1 4.0 0.9 35.6 12 February 6, 2009 Skanska Year-end Report
Construction SEK bn Revenue Gross income Selling and administrative expenses Income from joint ventures and associated companies Operating income 139.5 10.5-6.8 3.8 129.3 10.4-6.0 0.1 4.4 1.0 38.3 35.8 3.0 3.0-2.0-1.8 1.3 Gross margin, % Selling and admin. expenses, % Operating margin, % 7.5-4.9 2.7 8.0-4.6 3.4 7.8-5.3 2.5 8.4-5.0 3.5 13 February 6, 2009 Skanska Year-end Report
Construction Sweden Norway Finland Poland Czech Republic UK USA Building USA Civil Latin America Total Operating income SEK M 1,596 409 23 411 376-523 442 737 290 3,761 1,284 554 396 368 479 307 295 543 217 4,443 Operating margin % 5.3 3.1 0.2 5.4 2.8-2.9 1.5 6.4 5.2 2.7 4.7 4.3 4.1 4.7 4.2 1.7 1.1 5.0 5.0 3.4 14 February 6, 2009 Skanska Year-end Report
Residential Development SEK M Revenue Gross income Selling and administrative expenses Income from joint ventures and associated companies Operating income 6,450 479-731 75-177 7,679 1,158-549 115 724 1,187-314 -222 6-530 2,067 305-106 16 215 Operating margin, % -2.7 9.4-44.7 10.4 Capital employed, SEK bn Return on capital employed, % 6.3-3.1 4.4 14.9 15 February 6, 2009 Skanska Year-end Report
Residential Development Sweden Norway Denmark Finland Nordics Operating income SEK M 219-29 -249-284 -343 429 99-25 126 629 Operating margin % 6.8 12.5-3.1 5.7-91.9-4.1-32.8 10.1-6.5 9.0 Czech Republic Total 166-177 95 724 14.1-2.7 14.5 9.4 16 February 6, 2009 Skanska Year-end Report
Residential Development, Dec. 31, Sweden Norway Finland incl. Estonia Denmark Nordics Under construction # Q4, 2,408 177 756 76 3,417 Q3, 2,826 279 1,232 157 4,494 Of which sold % Completed unsold # Q4, Q3, Q4, Q3, 62 34 40 97 57 68 56 43 78 61 46 39 529 52 666 10 39 342 21 412 Czech Republic TOTAL 1,532 4,949 1,425 5,919 67 60 71 63 9 675 9 421 17 February 6, 2009 Skanska Year-end Report
February 6, 2009 Skanska Year-end Report 18 Residential Development Sold Started 375 146 229 2 89 15 123 1,051 145 906 24 344 48 490 3,018 1,009 2,009 19 671 103 1,216 301 1,258 777 23 1,365 Finland incl. Estonia 751 3,211 1,689 189 3,480 Nordics 951 200 11 44 395 3,858 647 106 441 1,406 2,388 432 4,196 TOTAL 243 0 7 159 699 18 83 811 716 Czech Republic 123 Denmark 464 Norway 1,528 Sweden
Residential Development Number of unsold units 3 000 2 500 2 000 1 500 1 000 500 0 2003 Dec 2004 Dec 2005 Mar 2005 Jun 2005 Sep 2005 Dec 2006 Mar 2006 Jun 2006 Sep 2006 Dec Mar Jun Sep Dec Mar Jun Sep Dec Completed unsold incl. reserve Ongoing unsold incl. reserve 19 February 6, 2009 Skanska Year-end Report
Commercial Development SEK bn Revenue Gross income Selling and administrative expenses 1 Operating income 4.0 1.3-0.3 1.0 3.1 1.2-0.3 0.9 1.1 0.3-0.1 0.1 1.0 0.3-0.1 0.2 of which gain from divestments of properties 2 of which operating net, completed properties 3 of which write-downs/reversal of write-downs Capital employed, SEK bn 1.2 0.1-0.1 11.5 1.1 0.1 7.3 0.2-0.1 0.3 1 Of which cost for development organization 2 Additional gain included in eliminations was 3 After selling and administrative expenses -0.3 0.1-0.2-0.1-0.1 20 February 6, 2009 Skanska Year-end Report
Sale of commercial properties, SEK M Q1Q3 Q4 Total Sales price Total 2,604 933 3,537 Of which ongoing projects Capital gain 1 Sales price Capital gain 1 972 1,696 541 266 1,238 753 2,449 173 714 1 Including eliminations of internal project gains New leases were signed for 35,000 sq.m of space in Q4, totaling 195,000 sq.m in Gains from ongoing projects are reported on a percentage of completion basis. Remaining profits in sold ongoing projects were about SEK 320 M. Two divestments in the fourth quarter Havneholmen Tower in Copenhagen ongoing office project with an investment of approx. SEK 690 M Chalmers Science Park in Gothenburg selling price of SEK 167 M and gain of SEK 62 M. 21 February 6, 2009 Skanska Year-end Report
New projects Leasable area, Occupancy Investment, Project sq m rate, % SEK M Q1Q3 Bylingen, office, Stockholm 16,000 97 550 Stora Bernstorp, retail, Malmö 1 9,000 18 150 Havneholmen Tower, office, Copenhagen 2 25,000 0 670 Gårda, Gothenburg 16,000 0 350 Vevaxeln, police building, Malmö 16,000 100 340 Forskaren, phase 2, office, Lund 3 5,600 100 130 Ljungby Retail, Ljungby 9,600 82 100 Q4 Backa 23:9, Göteborg Tobaksvej, Copenhagen TOTAL YTD Total 1,700 3,600 102,500 299,000 100 100 30 90 2,410 5,290 1 Divested during Q2, 2 Divested during Q4, 3 Will be merged with phase 1 22 February 6, 2009 Skanska Year-end Report
Commercial Development SEK bn Completed projects Completed projects Undeveloped land and development properties Subtotal Ongoing projects Total Carrying amount, end of period 2.1 1.7 2.5 6.3 3.3 9.6 Carrying amount upon completion 2.1 1.7 2.5 6.3 5.4 11.7 Market value, Dec 31, 2.9 2.3 2.7 7.8 3.8 11.6 Occupancy rate, % 94 88 78 Degree of completion, % 100 100 63 23 February 6, 2009 Skanska Year-end Report
Infrastructure Development SEK M Revenue Gross income Selling and administrative expenses Income from joint ventures and associated companies Operating income (EBIT) of which gains from divestments of projects 55-184 -202 782 396 684 116-92 -188 173-107 73 20-58 -81-30 -169 0 72 11-54 55 12 73 Capital employed, SEK bn 1.8 2.5 24 February 6, 2009 Skanska Year-end Report
Unrealized development gains, ID projects SEK bn Present value of cash flow from projects Present value of remaining investments NPV of projects Carrying amount Unrealized development gain Skanska ID Group eliminations Unrealized development gain, Group Dec. 31, 8.4-0.6 7.8-2.0 5.8 0.2 6.0 Dec 31, 9.4-0.8 8.5-2.5 6.1 0.4 6.5 25 Open information February 6, 2009 Skanska Year-end Report
Net Present Value of projects SEK bn 8.5 Sale Ponte de Pedra -1.0 Adj 7.6 De- Risking 0.2 Time Value 0.6 Change Cash Flow -0.2 Breitener -0.1 Cash Returns -0.3 FX 0.1 Adj Disc Rate +0.5% -0.5 Investments 0.4 7.8 26 Open information February 6, 2009 Skanska Year-end Report
Income statement SEK M Operating income from business streams Central Eliminations Operating income Net financial items Income after financial items Taxes Profit for the period 4,933-827 -20 4,086 324 4,410-1,253 3,157 5,970-558 -6 5,406 261 5,667-1,546 4,121 708-327 14 73-2 71-81 -10 1,745-99 -8 1,637 89 1,726-482 1,244 Earnings per share, SEK Tax rate, % 7.44 28 9.78 27 27 February 6, 2009 Skanska Year-end Report
Balance sheet summary SEK bn Total assets Equity attributable to equity holders Dec. 31, 83.5 19.1 Dec. 31, 78.9 20.5 Interest-bearing net receivables (+)/net debt (-) Working capital in construction, net 9.2-19.2 14.6-15.2 Capital employed, closing balance Equity/assets ratio, % 25.2 23.1 25.6 26.3 28 February 6, 2009 Skanska Year-end Report
Changes in equity summary SEK bn Opening balance Dividend Translation differences Effects of actuarial gains and losses on pensions Repurchase of shares Other Profit for the period Closing balance 20.7-3.4 1.1-2.0-0.3-0.1 3.2 19.2 19.3-3.5 0.6 0.1 4.1 20.7 19.3 0.5-0.5-0.1 19.2 19.6 0.3-0.5 0.1 1.2 20.7 29 February 6, 2009 Skanska Year-end Report
Operating cash flow SEK bn Cash flow from business operations before change in working capital Change in working capital Net investments Net interest items and other net financial items Taxes paid Dividend 1 Cash flow before change in interestbearing receivables and liabilities 3.2 1.9-3.6 0.5-1.9-3.8-3.8 4.3 4.4 0.3 0.2-1.2-3.5 4.5 0.5 3.4-1.1-0.5 2.3 1.4 6.0 0.8 0.1-0.4 7.9 1 of which repurchases of shares -0.3-30 February 6, 2009 Skanska Year-end Report
Change in interest-bearing net receivables SEK bn Cash flow before change in interest-bearing receivables and liabilities Translation differences, net receivables/net debt Change in pension liability Other changes, interest-bearing net receivables/net debt Change in interest-bearing net receivables/net debt -3.8 0.9-2.4-5.4 4.5 0.1 0.1-0.5 4.2 2.3 0.5-0.6 0.1 2.3 7.9-0.6-0.4 6.9 31 February 6, 2009 Skanska Year-end Report
Market outlook Construction Building construction is weakening, especially in residential and for private customers Civil construction less affected by the financial turmoil Government stimulus packages are expected to contribute to stability in the civil construction market Order bookings indicate a revenue decline of 10% in local currencies in 2009 32 February 6, 2009 Skanska Year-end Report
Market outlook Residential Development Weak residential markets Continued price pressure Declining volume in 2009 Started Sold 33 February 6, 2009 Skanska Year-end Report
Market outlook Commercial Development Vacancy rates expected to increase Pressure on rent levels Increased yield requirements Modern and green assets 34 February 6, 2009 Skanska Year-end Report
Market outlook Infrastructure Development Still a large volume of PPP projects in the U.K. Good interest in PPP in Central Europe Harder to finance 35 February 6, 2009 Skanska Year-end Report
Summary Strong earnings in several construction markets Strong cash flow in fourth quarter Weakening outlook in building construction Civil construction more stable outlook Weak residential markets Good quality in ID and CD portfolio A1 and M25 in ID Expectations of lower volume going forward 36 February 6, 2009 Skanska Year-end Report