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Nine month report 2018 We build for a better society. - - PowerPoint PPT Presentation

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Nine month report 2018 We build for a better society. Brattrkaia Powerhouse Trondheim Norway Nine month report 2018 Operating income SEK 2.4 bn (4.8 bn) Write downs and goodwill impairment charge in US Construction totaling

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SLIDE 1

We build for a better society. Brattørkaia Powerhouse Trondheim Norway

Nine month report 2018

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SLIDE 2

− Operating income SEK 2.4 bn (4.8 bn)

– Write downs and goodwill impairment charge in US Construction totaling SEK 1.3 billion in Q3 – Strong performance in Project Development

− Strategic review completed – additional measures taken − Strong financial position maintained

Nationalmuseum, Stockholm, Sweden

Nine month report 2018

November 8, 2018 Skanska Nine month report 2018 2

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SLIDE 3

− Revenue SEK 115.3 bn (109.0) − Order bookings SEK 102.6 bn (118.6)

– Book-to-build 87% R-12 – Order backlog SEK 186.3 bn (194.7) – More disciplined bidding

− Operating income SEK 231 M (1,426)

– Operating margin 0.2% (1.3) – Write-downs and charges impacting profitability

Storåselva, hydroelectric power plant, Hedmark, Norway

Construction

November 8, 2018 Skanska Nine month report 2018 3

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SLIDE 4

Improvement measures – Reducing risks

Poland

− Restructuring into mainly Building operations servicing our Project Development business in 6-7 cities

USA

− Exit the power sector − Stop bidding for mega design-build PPP and EPC projects

UK and Czech Republic/Slovakia

− Focus on core business

Group

− A more effective organization closer to operations

Construction

Storåselva, hydroelectric power plant, Hedmark, Norway

November 8, 2018 Skanska Nine month report 2018 4

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SLIDE 5

− Revenue SEK 6.6 bn (10.1)

– 2,214 (3,052) homes sold – 2,725 (2,803) homes started

− Operating income SEK 1,122 M (1,322)

– Operating margin 17.0% (13.1) – Release of provisions and land sale included

− ROCE 11.9% (18.2) − Sales pace in Sweden and Norway still slow − Continue to grow the business long-term − Well positioned to pursue market opportunities

Björk, Norra Djurgårdsstaden, Stockholm, Sweden

Residential Development

November 8, 2018 Skanska Nine month report 2018 5

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SLIDE 6

− Operating income SEK 1,788 M (1,851)

– Gain on sale SEK 2.4 bn (2.0)

− ROCE 13.8% (13.8) − 56 ongoing projects

– SEK 33.3 bn in investment value upon completion – 45% occupancy rate – 55% completion rate – 23 projects started

− 391,000 sq m leased (479,000) R-12 − Strong interest from tenants and investors

Fairview 400, Seattle, USA

Commercial Property Development

November 8, 2018 Skanska Nine month report 2018 6

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SLIDE 7

− Operating income SEK -11 M (885)

– Comparable period includes SEK 0.9 bn divestment gain from A1 motorway in Poland

− ROCE 26.9% (25.3) − The project portfolio’s net present value increased to SEK 3.5 bn (2.9), surplus value 1.2 bn (0.9) − Closing down the project development

  • rganization

Infrastructure Development

Rv3, road project , Løten to Elverum, Norway

November 8, 2018 Skanska Nine month report 2018 7

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SLIDE 8

Storåselva, hydroelectric power plant, Hedmark, Norway

Construction

Order situation

50 100 150 200 250

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

SEK bn

Order backlog Order bookings, R-12 Revenue, R-12 Order bookings per quarter

Book-to-build 87%

SEK bn Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Revenue 115.3 109.0 150.1 Order bookings 102.6 118.6 151.8 Order backlog 186.3 194.7 188.4

November 8, 2018 Skanska Nine month report 2018 8

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SLIDE 9

Storåselva, hydroelectric power plant, Hedmark, Norway

Construction

Order bookings

SEK bn Jan–Sep 2018 Jan–Sep 2017 Book- to-build, R-12, % Months of production

Nordics 45.8 43.8 100 13

  • f which Sweden

24.6 25.7 93 12 Europe 22.2 24.7 86 13 USA 34.6 50.0 75 16 Total 102.6 118.6 87 14

November 8, 2018 Skanska Nine month report 2018 9

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SLIDE 10

Storåselva, hydroelectric power plant, Hedmark, Norway

  • 30

30 60 90 120 150 180

  • 1

1 2 3 4 5 6

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

Construction

Income statement

Revenue Operating margin

Operating margin, R-12, % Revenue, R-12, SEK bn

SEK bn Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Revenue 115.3 109.0 150.1 Gross income 5.4 6.3 8.3 Selling and administrative expenses

  • 5.2
  • 4.9
  • 7.1

Operating income 0.2 1.4 1.2 Gross margin, % 4.7 5.7 5.5 Selling and administrative expenses, %

  • 4.5
  • 4.5
  • 4.8

Operating margin, % 0.2 1.3 0.8

November 8, 2018 Skanska Nine month report 2018 10

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SLIDE 11

Storåselva, hydroelectric power plant, Hedmark, Norway

Construction

Income statement

Operating income, SEK M Operating margin, %

Jan–Sep 2018 Jan–Sep 2017 Jan–Sep 2018 Jan–Sep 2017

Nordics 1,577 1,593 3.8 4.1

  • f which Sweden

1,192 1,093 4.8 4.5 Europe

  • 564
  • 284

neg neg USA

  • 782

117 neg 0.3 Total 231 1,426 0.2 1.3

November 8, 2018 Skanska Nine month report 2018 11

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SLIDE 12

Storåselva, hydroelectric power plant, Hedmark, Norway

Construction

Income statement

November 8, 2018 Skanska Nine month report 2018 12

Jan–Sep 2018 Jan–Sep 2017

Of which Of which SEK bn Operating income Restructu- ring Positive

  • ne-offs

Impair- ments Write downs Operating income Write downs

Nordics 1.6 1.6 Europe

  • 0.6
  • 0.4

0.3

  • 0.6
  • 0.3
  • 0.5

USA

  • 0.8
  • 0.0

0.2

  • 0.4
  • 1.4

0.1

  • 0.6

Total 0.2

  • 0.4

0.5

  • 0.4
  • 2.0

1.4

  • 1.1

Operating margin, % 0.2 1.3

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SLIDE 13

Björk, Norra Djurgårdsstaden, Stockholm, Sweden

5 10 15 20 5 10 15 20

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

Residential Development

Income statement, segment reporting

Revenue Operating margin

Operating margin, R-12, % Revenue, R-12, SEK bn

SEK M Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Revenue 6,619 10,101 13,237 Gross income 1,619 1,815 2,382 Selling and administrative expenses

  • 497
  • 493
  • 666

Operating income 1,122 1,322 1,716 Gross margin, % 24.5 18.0 18.0 Selling and administrative expenses, %

  • 7.5
  • 4.9
  • 5.0

Operating margin, % 17.0 13.1 13.0

November 8, 2018 Skanska Nine month report 2018 13

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SLIDE 14

Björk, Norra Djurgårdsstaden, Stockholm, Sweden

Residential Development

Income statement

Operating income, SEK M Operating margin, %

Jan–Sep 2018 Jan–Sep 2017 Jan–Sep 2018 Jan–Sep 2017

Nordics 1,003 1,244 17.1 13.4

  • f which Sweden

536 817 17.0 15.3 Europe 119 78 15.7 9.7 Total 1,122 1,322 17.0 13.1

November 8, 2018 Skanska Nine month report 2018 14

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SLIDE 15

Björk, Norra Djurgårdsstaden, Stockholm, Sweden

1,000 2,000 3,000 4,000 5,000

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

Homes, R-12

Sold Started

Residential Development

Homes started and sold

Homes started Homes sold

Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017 Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

2,725 2,803 4,318 2,214 3,052 4,285

November 8, 2018 Skanska Nine month report 2018 15

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Björk, Norra Djurgårdsstaden, Stockholm, Sweden

10 20 30 40 50 60 70 80 90 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Sold under construction Unsold under construction Unsold completed Sales rate

Residential Development

Homes in production

Homes in production Of which sold, % Unsold completed homes

Sep 30, 2018 Sep 30, 2017 Sep 30, 2018 Sep 30, 2017 Sep 30, 2018 Sep 30, 2017

7,538 8,006 72 81 261 90

November 8, 2018 Skanska Nine month report 2018 16 Homes %

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SLIDE 17

Fairview 400, Seattle, USA

Commercial Property Development

Income statement, segment reporting

SEK M Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Revenue 9,189 7,755 11,440 Gross income 2,377 2,169 2,989 Selling and administrative expenses

  • 630
  • 624
  • 899

Income from joint ventures and associated companies 41 306 624 Operating income 1,788 1,851 2,714

  • f which gain from divestments
  • f properties1

2,352 2,049 2,879

  • f which write downs/reversal
  • f write downs
  • 3
  • 7
  • 6

1 Additional gain included in eliminations 184 118 197

November 8, 2018 Skanska Nine month report 2018 17

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SLIDE 18

Fairview 400, Seattle, USA

Commercial Property Development

Divestments, segment reporting

2 4 6 8 10 12 14

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Revenue from divestments, R-12 Operating income from divestments, R-12

SEK bn

Sale of commercial properties

SEK M Sales price Capital gain

Year-to-date 8,777 2,352

November 8, 2018 Skanska Nine month report 2018 18

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SLIDE 19

Fairview 400, Seattle, USA

Commercial Property Development

Unrealized and realized gains, segment reporting

1 2 3 4 5 6 7 8 9 10

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

SEK bn

Unrealized gains in: Land Ongoing projects at completion Completed projects Realized gains, R-12

November 8, 2018 Skanska Nine month report 2018 19

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SLIDE 20

Fairview 400, Seattle, USA

Commercial Property Development

Leasing

0% 20% 40% 60% 80% 100% 100 200 300 400 500

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Leasing, R-12 Occupancy rate, ongoing projects Degree of completion, ongoing projects

000 sq m November 8, 2018 Skanska Nine month report 2018 20

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SLIDE 21

Infrastructure Development

Income statement

SEK M Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Revenue 86 59 81 Gross income

  • 29
  • 80
  • 96

Selling and administrative expenses

  • 116
  • 97
  • 121

Income from joint ventures 134 1,062 1,142 Operating income

  • 11

885 925

  • f which gains from divestments
  • f shares in projects

58 912 985

November 8, 2018 Skanska Nine month report 2018 21

Rv3, road project , Løten to Elverum, Norway

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SLIDE 22

Rv3, road project , Løten to Elverum, Norway

Infrastructure Development

Project portfolio

3.0 0.3 0.1 0.2 3.5

Dec 31, 2017 Derisk/ Time value Investments/ Divestments Currency effect Sep 30, 2018 Net present value of projects, SEK bn Net present value of projects, SEK bn

SEK bn Sep 30, 2018 Sep 30, 2017 Dec 31, 2017

Present value of cash flow from projects 4.5 3.8 3.8 Net present value of projects 3.5 2.9 3.0 Carrying amount

  • 2.5
  • 2.6
  • 2.5

Unrealized development gain 1.0 0.3 0.5 Cash flow hedge 0.2 0.6 0.6 Effect in unrealized Equity 1.2 0.9 1.1

November 8, 2018 Skanska Nine month report 2018 22

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SLIDE 23

Nationalmuseum, Stockholm, Sweden

Group

Income statement

SEK M Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Operating income from business streams 3,130 5,484 6,560 Central

  • 628
  • 616
  • 944

Eliminations

  • 58
  • 102
  • 112

Operating income 2,444 4,766 5,504 Net financial items 53 32 45 Income after financial items 2,497 4,798 5,549 Taxes

  • 406
  • 452
  • 615

Profit for the period 2,091 4,346 4,934 Earnings per share, SEK 5.07 10.58 12.01 Tax rate, % 16 9 11

November 8, 2018 Skanska Nine month report 2018 23

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SLIDE 24

Nationalmuseum, Stockholm, Sweden

Group

Cash flow

  • 6
  • 4
  • 2

2 4 6 8 10

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 SEK bn

Cash flow from business

  • perations,

quarterly R-12

SEK bn Jan–Sep 2018 Jan–Sep 2017 Jan–Dec 2017

Cash flow from operations

  • 0.1
  • 1.2

2.9 Net strategic investments – – – Dividend etc.

  • 3.5
  • 3.8
  • 3.9

Cash flow before change in interest- bearing receivables and liabilities

  • 3.6
  • 5.0
  • 1.0

November 8, 2018 Skanska Nine month report 2018 24

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SLIDE 25

Nationalmuseum, Stockholm, Sweden

Construction

Free working capital

4 8 12 16 20 5 10 15 20 25

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 % SEK bn

Free working capital, SEK bn Average free working capital/Construction revenue, R-12, % Free working capital, end of Q3, SEK bn

November 8, 2018 Skanska Nine month report 2018 25

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SLIDE 26

Nationalmuseum, Stockholm, Sweden

Group

Investments, divestments and capital employed

  • 10
  • 8
  • 6
  • 4
  • 2

2 4 6 8 10

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

SEK bn

Divestments, quarterly Investments, quarterly Net investments, R-12

SEK bn Sep 30 2018 Sep 30 2017 Dec 31 2017

Capital employed in: Residential Development 14.7 12.0 12.7 Commercial Property Development 27.1 23.6 24.5 Infrastructure Development 2.2 2.2 1.8 Total in Project Development 43.9 37.8 38.9

November 8, 2018 Skanska Nine month report 2018 26

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SLIDE 27

Nationalmuseum, Stockholm, Sweden

Group

Financial position

4 8 12 16

Q4 Q1 2014 Q2 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3

Operating net financial assets/liabilities, SEK bn

SEK bn Sep 30 2018 Sep 30 2017 Dec 31 2017

Total assets 116.9 107.4 109.4 Equity attributable to equity holders 28.0 25.3 27.2 Interest-bearing net receivables (+)/net debt (-)

  • 3.7
  • 5.6
  • 1.1

Operating net financial assets/liabilities 7.3 6.2 9.7 Capital employed, closing balance 45.6 42.6 44.1 Equity/assets ratio, % 24.0 23.6 24.8

November 8, 2018 Skanska Nine month report 2018 27

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SLIDE 28

Nordics

− Mixed building market in Sweden − Stable building market in Norway and Finland − Very strong civil market in Sweden and strong market in Norway but with fierce competition; Finland stable

Europe

− Poland building market stable − Brexit continues to impact the UK non-residential market − Stable civil market in the UK and Poland, weak in Czech Republic − Rapid cost escalation in Poland and Czech Republic

USA

− The US continues to be a good market, but with fierce competition

Market outlook

Construction

A14 highway Cambridge to Huntingdon, UK

November 8, 2018 Skanska Nine month report 2018 28

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SLIDE 29

Nordics

− Continued uncertainty and slow sales pace in Sweden and Norway − Finland stable

Europe

− Robust market in Central Europe

Market outlook

Residential Development

Örgryte torp, Gothenburg, Sweden

November 8, 2018 Skanska Nine month report 2018 29

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SLIDE 30

Nordics

− Strong interest from investors and low vacancy rates in Sweden especially − Finland improving

Europe

− Strong demand from tenants and investors in Poland and improving in other parts of Central Europe

USA

− Strong investor appetite and good tenant demand

Sthlm 04, Stockholm, Sweden

Market outlook

Commercial Property Development

November 8, 2018 Skanska Nine month report 2018 30

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SLIDE 31

November 8, 2018 Skanska Nine month report 2018 31