Annual Shareholders Meeting Stockholm, April 9, 2015 Johan Karlstrm - - PowerPoint PPT Presentation

Annual Shareholders’ Meeting

Stockholm, April 9, 2015

Johan Karlström

President and CEO

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April 9, 2015 Skanska Annual Shareholders' Meeting

The Group – revenue and profit

SEK bn 2014 2013

Revenue 145.0 136.4 Profit for the year 4.1 3.5

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Financial targets 2011–2015

Target 2014 Outcome The Group Return on equity 18-20% 20% Financial strength – net cash position1, SEK bn Positive 8.4 Construction Average operating margin over a business cycle 3.5-4.0% 3.5% Project development business streams Return on capital employed 10-15% 10%

1 Excluding net pension liabilities and construction loans for cooperative housing associations

April 9, 2015 Skanska Annual Shareholders' Meeting 4

2014 in brief

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Construction Improved result, higher margin, increased order bookings Residential Development Improved result and return on capital Commercial Property Development Good gain on sale, increased investments Infrastructure Development Increased value of portfolio, enhanced position in the U.S.

April 9, 2015 Skanska Annual Shareholders' Meeting

Proposed dividend

SEK/share 2014 2013

Dividend 6.75 6.25

• f which regular dividend

6.75 6.25

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Dividend

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Ordinary dividend, SEK Extra dividend, SEK Dividend yield, % SEK

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Operating net financial assets/liabilities, SEK bn

Financial strength

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24.1% 26.8% 23.7% 21.9% 24.4% 23.1% 0% 5% 10% 15% 20% 25% 30% 5,000 10,000 15,000 2009 2010 2011 2012 2013 2014

Equity/to asset ratio, %

April 9, 2015 Skanska Annual Shareholders' Meeting

Development in Skanska’s home markets

Year-on-year change, real

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• 15%
• 10%
• 5%

0% 5% 10%

GDP

2009 2010 2011 2012 2013 2015 2014

Forecast

April 9, 2015 Skanska Annual Shareholders' Meeting

Development in Skanska’s home markets

Year-on-year change, real

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• 15%
• 10%
• 5%

0% 5% 10%

Construction investments GDP

2009 2010 2011 2012 2013 2015 2014

Forecast

April 9, 2015 Skanska Annual Shareholders' Meeting

Construction

SEK bn 2014 2013

Revenue 128.9 119.1 Operating income 4.5 3.9 Operating margin, % 3.5 3.3 Free working capital

• 18.1 -18.5

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Gullibron, Kongsvinger, Norway

April 9, 2015 Skanska Annual Shareholders' Meeting

Construction

Continued strong results in Sweden, Poland, U.S. and UK Improved results in Norway, Finland and Czech Republic/Slovakia

. . . but still below target

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Norra Länken

Stockholm, Sweden

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Skanska projects:

Värtan Interchange, the Norra Station tunnels etc.

Contract value (total): SEK 1.9 bn

Safety award 2010–2014 Environmental award 2014

Completion: 2014

April 9, 2015 Skanska Annual Shareholders' Meeting

UN Headquarters

New York, U.S.

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“I welcome you to the renovated General Assembly Hall which has been restored, renewed and re-invented. Now we see the wonderful result. I thank you all for making it happen.”

– Secretary-General of the United Nations, Mr. Ban Ki-moon

Renovation

Contract value:

ca SEK 12 bn Construction period: 2007–2014

April 9, 2015 Skanska Annual Shareholders' Meeting

Transbay Transit Center

San Francisco, U.S.

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Contract value: ca SEK 1.5 bn

Completion:

2015

April 9, 2015 Skanska Annual Shareholders' Meeting

Construction

SEK bn 2014 2013

Order bookings 147.4 114.2 Book-to-Build, % 114 96 Order backlog 170.9 134.7

M1 Junction 19, Midlands, UK

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Nordic countries Other European countries North America

Construction

Market outlook 2015

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Świnna Poręba reservoir, Kraków, Poland

April 9, 2015 Skanska Annual Shareholders' Meeting

Residential Development

SEK bn 2014 2013

Revenue 9.6 9.2 Operating income 0.7 0.6 Operating margin, % 7.1 6.2 Return on capital employed, % 7.1 7.4

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Trollberget, Halmstad, Sweden

April 9, 2015 Skanska Annual Shareholders' Meeting

Ranheimsfjæra, Trondheim, Norway

Residential Development

2014 summary

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Market Result

Sweden

+ +

Norway

+ +

Finland

• +

Prague

+ +

Warsaw

+

April 9, 2015 Skanska Annual Shareholders' Meeting

BoKlok Tomtberget

Botkyrka, Stockholm

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Number of Units: 66 Row houses: 16 Completion: 2014 Sold BoKlok homes: 874

April 9, 2015 Skanska Annual Shareholders' Meeting

Liljekonvaljen, Järvastaden

Solna/Sundbyberg

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Number

• f homes:

145 Occupancy: 2017 Svanen eco-labeled

April 9, 2015 Skanska Annual Shareholders' Meeting

Milíčovský háj

Prague, Czech Republic

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Number of homes: 911 (6 phases) Construction period: 2007–2016 Strong green focus

April 9, 2015 Skanska Annual Shareholders' Meeting

Nordic countries Central Europe

Flemingsbergsdalen, Stockholm, Sweden

Residential Development

Market outlook 2015

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Residential Development

Targets 2016 10%

• perating margin

10% return on capital employed

Targets

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Fredriksdal, Stockholm, Sweden

April 9, 2015 Skanska Annual Shareholders' Meeting

Kapelanka 42, Kraków, Poland

Commercial Property Development

SEK bn 2014 2013

Revenue 10.2 6.2 Operating income 1.7 1.1

• f which gain on sale

2.0 1.4

Return on capital employed1, % 11.4 10.7

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1 Adjusted

April 9, 2015 Skanska Annual Shareholders' Meeting

Green House, Budapest, Hungary

• 10
• 5

5 10 2010 2011 2012 2013 2014

SEK bn Divestments Investments Capital gains

Commercial Property Development

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1776 Wilson Boulevard, Washington, D.C., U.S.

Commercial Property Development

SEK bn 2014 2013

Investments 6.9 4.5 Ongoing projects

Number of projects 43 30 Total investment 15.1 11.5

New leases, sq m (000) 287 330 Estimated surplus value 4.9 4.3

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ÅF Building

Gothenburg

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Total area: 15,000 sq m Completion/sold: 2014 LEED Platinum environmental certification

April 9, 2015 Skanska Annual Shareholders' Meeting

Green Court

Bucharest, Romania

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Total area: 36,700 sq m (two phases) Completion: 2014/2015 Sales agreement signed

April 9, 2015 Skanska Annual Shareholders' Meeting

Stone34

Seattle, U.S.

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Total area: 12,000 sq m Completion: 2014 Office Development of the Year in Seattle!

April 9, 2015 Skanska Annual Shareholders' Meeting

Commercial Property Development

Wrocław Warsaw Oslo Malmö Helsinki Bucharest Stockholm Copenhagen Prague Łodz Poznań Kraków Katowice Gothenburg Budapest Ostrava Washington DC Houston Seattle Boston

Nordics 38% Central Europe 34% U.S. 28%

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1 As of Dec 31, 2014

Capital employed – distribution by market1

Commercial Property Development

Market outlook 2015

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Klipporna, Malmö, Sweden

Nordic countries Other European countries North America

April 9, 2015 Skanska Annual Shareholders' Meeting

Bristol Local Education Partnership, UK

Infrastructure Development

SEK M 2014 2013

Operating income 463 401

• f which gain on sale

127 118

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Infrastructure Development

Projects in the portfolio 11

• f which completed

7

• ngoing

4 Investment, SEK bn 4.1

• f which invested

2.4

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Infrastructure Development

SEK bn 2014 2013

Portfolio, net present value 5.3 4.9 Unrealized development gain (estimated) 2.1 1.8

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Interstate 4

Orlando, U.S.

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Skanska’s share

Contract value: ca SEK 7 bn Investment: ca SEK 0.6 bn Construction period: 2015–2021

April 9, 2015 Skanska Annual Shareholders' Meeting

Elizabeth River Tunnels

Virginia, U.S.

Skanska’s share

Contract value: ca SEK 4.4 bn Investment: ca SEK 0.9 bn Construction period: 2012–2018

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New Karolinska Solna

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Contract value: SEK 14.5 bn Investment: SEK 0.6 bn

(Skanska’s share)

Completion: 2016/2017

April 9, 2015 Skanska Annual Shareholders' Meeting

Infrastructure Development

Market outlook 2015

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North America Europe

April 9, 2015 Skanska Annual Shareholders' Meeting

This about the result . . .

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Skanska Latin America

− Decision to finish operations − Disappointing profitability in Construction

− Writedowns of results 2014 of SEK -0.8 bn − Winding down step by step 2015–2016

− Operational & Maintenance

− To be divested

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2014 results were good But you can expect more

• f Skanska!

accidents ethical breaches environmental incidents defects loss-making projects

The five zeros vision

April 9, 2015 Skanska Annual Shareholders' Meeting

Allegations of unethical actions by Skanska in Czech Republic and Brazil

− Skanska can never accept unethical behavior in its operations − Investigations of alleged breaches

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Risk management

− Skanska’s operations = projects − Several thousands ongoing projects in various countries − Exposed to risks in every project − Risk Management is essential

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Medarbetare Our people demonstrate our values in practice

April 9, 2015 Skanska Annual Shareholders' Meeting

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Outlook 2015 Solid financial position Strong order backlog and project portfolio Positive and stable market outlook

46 April 9, 2015 Skanska Annual Shareholders' Meeting

Annual Shareholders’ Meeting

Stockholm, April 9, 2015