Three month report 2020 We build for a better society. Slussen - - PowerPoint PPT Presentation

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Three month report 2020 We build for a better society. Slussen - - PowerPoint PPT Presentation

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Three month report 2020 We build for a better society. Slussen Stockholm, Sweden Three month report 2020 Strong performance in all three business streams Improving operating margin in Construction Strong volumes in

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SLIDE 1

We build for a better society.

Slussen Stockholm, Sweden

Three month report 2020

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SLIDE 2

April 28, 2020 Skanska Three month report 2020 2

Three month report 2020

Slussen, Stockholm, Sweden

− Strong performance in all three business streams

– Improving operating margin in Construction – Strong volumes in Residential Development – Impressive gains in Commercial Property Development

− All-time-high operating income in Q1 and R-12 − Return on Equity 27.0% (13.4) − Rapidly deteriorating and uncertain market outlook

– Protecting our people and the company – Dividend proposal withdrawn – Strong financial position

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SLIDE 3

− Revenue SEK 35.9 bn (35.3) − Order bookings SEK 41.3 bn (27.3)

– Book-to-build 100%, R-12 – Order backlog SEK 199.0 bn (190.1)

− Operating income SEK 589 M (371)

– Operating margin 1.6% (1.1)

− Profitability continues to improve − About 370 projects impacted by inefficiencies or shutdowns due to Covid-19 − Weaker market outlook − Strategy remains: Selective bidding, improved commercial focus and increased cost efficiency

April 28, 2020 Skanska Three month report 2020 3

Construction

Bridge over the Potomac River, Virginia, USA

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SLIDE 4

− Revenue SEK 3.4 bn (2.1)

– 911 (740) homes sold – 971 (423) homes started

− Operating income SEK 394 M (198)

– Operating margin 11.6% (9.2)

− ROCE 11.5% (11.3) − Strong volumes and good profitability − Slowdown in sales after Covid-19 outbreak − Hand-overs according to plan, but some postponements − Weaker market outlook − Long-term ambition to be a leading developer in our markets

April 28, 2020 4

Residential Development

Čertův vršek, Prague, Czech Republic Skanska Three month report 2020

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SLIDE 5

− Operating income SEK 2,112 M (84)

– Gain on sale SEK 2,282 M (345), including JVs – All-time-high gain on sale

− ROCE 16.0% (8.9) − 37 ongoing projects

– SEK 25.9 bn in investment value upon completion – 57% occupancy rate / 60% completion rate – 1 project started

− 48,000 sq m leased (86,000) − Risk-averse investors and slower leasing − Weaker market outlook − Long-term ambition to grow this business stream

High 5ive, Krakow, Poland April 28, 2020 5

Commercial Property Development

Skanska Three month report 2020

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Bridge over the Potomac River, Virginia, USA April 28, 2020 Skanska Three month report 2020 6

Construction

Order situation

SEK bn Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Revenue 35.9 35.3 159.6 Order bookings 41.3 27.3 145.8 Order backlog 199.0 190.1 185.4

50 100 150 200 250

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 SEK bn Order backlog Order bookings, R-12 Revenue, R-12 Order bookings per quarter

Book-to-build 100%

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SLIDE 7

April 28, 2020 Skanska Three month report 2020 7

Construction

Order bookings

Bridge over the Potomac River, Virginia, USA

SEK bn Jan–Mar 2020 Jan–Mar 2019 Book- to-build, % Months of production

Nordics 15.8 12.5 105 13

  • f which Sweden

8.2 8.4 106 13 Europe 11.6 3.9 87 12 USA 13.8 10.9 101 17 Total 41.3 27.3 100 15 Postponement in new order approvals by clients

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SLIDE 8

April 28, 2020 Skanska Three month report 2020 8

Construction

Income statement

Bridge over the Potomac River, Virginia, USA

  • 30

30 60 90 120 150 180

  • 1

1 2 3 4 5 6

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 Revenue, R-12, SEK bn Operating margin, R-12, %

SEK bn Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Revenue 35.9 35.3 159.6 Gross income 2.2 1.9 10.4 Selling and administrative expenses

  • 1.6
  • 1.6
  • 6.7

Operating income 0.6 0.4 3.8 Gross margin, % 6.2 5.5 6.5 Selling and administrative expenses, %

  • 4.5
  • 4.5
  • 4.2

Operating margin, % 1.6 1.1 2.4

Revenue Operating margin

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SLIDE 9

April 28, 2020 Skanska Three month report 2020 9

Construction

Income statement

Bridge over the Potomac River, Virginia, USA

Operating income, SEK M Operating margin, %

Jan–Mar 2020 Jan–Mar 2019 Jan–Mar 2020 Jan–Mar 2019

Nordics 280 270 2.1 2.1

  • f which Sweden

150 149 2.0 2.0 Europe

  • 4
  • 94

neg neg USA 313 195 1.9 1.3 Total 589 371 1.6 1.1

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Čertův vršek, Prague, Czech Republic April 28, 2020 Skanska Three month report 2020 10

Residential Development

Income statement, segment reporting

5 10 15 20 5 10 15 20

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 Revenue, R-12, SEK bn Operating margin, R-12, %

SEK bn Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Revenue 3,400 2,141 12,483 Gross income 554 368 1,986 Selling and administrative expenses

  • 160
  • 170
  • 791

Operating income 394 198 1,195 Gross margin, % 16.3 17.2 15.9 Selling and administrative expenses, %

  • 4.7
  • 7.9
  • 6.3

Operating margin, % 11.6 9.2 9.6

Revenue Operating margin

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SLIDE 11

Čertův vršek, Prague, Czech Republic April 28, 2020 Skanska Three month report 2020 11

Residential Development

Income statement

Operating income, SEK M Operating margin, %

Jan–Mar 2020 Jan–Mar 2019 Jan–Mar 2020 Jan–Mar 2019

Nordics 355 164 11.7 8.9

  • f which Sweden

198 44 13.8 4.8 Europe 39 34 10.7 11.1 Total 394 198 11.6 9.2

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SLIDE 12

Čertův vršek, Prague, Czech Republic April 28, 2020 Skanska Three month report 2020 12

Residential Development

Homes started and sold

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

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 Homes, R-12

Sold Started

Homes started Homes sold

Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019 Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

971 423 3,407 911 740 3,853

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SLIDE 13

Čertův vršek, Prague, Czech Republic April 28, 2020 Skanska Three month report 2020 13

Residential Development

Homes in production

Homes in production Of which sold, % Unsold completed homes

Mar 31, 2020 Dec 31, 2019 Mar 31, 2020 Dec 31, 2019 Mar 31, 2020 Dec 31, 2019

6,948 7,130 68 70 139 134

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

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 % SEK bn Sold under construction Unsold under construction Unsold completed Sales rate IP

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SLIDE 14

High 5ive, Krakow, Poland April 28, 2020 14

Commercial Property Development

SEK M Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Revenue 4,759 884 17,850 Gross income 2,330 182 4,101 Selling and administrative expenses

  • 215
  • 229
  • 960

Income from joint ventures and associated companies

  • 3

131 146 Operating income 2,112 84 3,287

  • f which gain from divestments
  • f properties1

2,285 214 4,275

  • f which write downs/reversal
  • f write downs
  • 69
  • 89

1 Additional gain included in eliminations 122 22 240

Skanska Three month report 2020

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SLIDE 15

High 5ive, Krakow, Poland April 28, 2020 15

Commercial Property Development

Unrealized and realized gains, segment reporting

1 2 3 4 5 6 7 8 9 10

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 SEK bn Unrealized gains in: Land Ongoing projects at completion Completed projects Realized gains, R-12 Skanska Three month report 2020

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High 5ive, Krakow, Poland April 28, 2020 16

Commercial Property Development

Completion profile, unsold projects

68 93 37 2 62 24 19

10 20 30 40 50 60 70 80 90 100 1 2 3 4 5 6 7

Q1 2020 Q2 Q3 Q4 Q1 2021 Q2 Q3 Q4 Q1 2022 Q2 Q3 Q4 % SEK bn Total investment at completion, unsold ongoing projects Completed unsold projects Weighted occupancy rate, % Skanska Three month report 2020

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SLIDE 17

High 5ive, Krakow, Poland April 28, 2020 17

Commercial Property Development

Leasing

10 20 30 40 50 60 70 80 90 100 100 200 300 400 500 600

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 % 000 sq m Leasing, R-12 Occupancy rate, ongoing projects Degree of completion, ongoing projects Skanska Three month report 2020

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April 28, 2020 Skanska Three month report 2020 18

Group

Income statement

Slussen, Stockholm, Sweden

SEK M Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Operating income from business streams 3,095 653 8,254 Central

  • 121
  • 148
  • 388

Eliminations

  • 73
  • 17
  • 38

Operating income 2,901 488 7,828 Net financial items

  • 48
  • 62
  • 103

Income after financial items 2,853 426 7,725 Taxes

  • 470
  • 71
  • 1,353

Profit for the period 2,383 355 6,372 Earnings per share, SEK 5.78 0.87 15.46 Tax rate, % 16 17 18

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SLIDE 19

April 28, 2020 Skanska Three month report 2020 19

Slussen, Stockholm, Sweden

Group

PPP portfolio

SEK bn Mar 31, 2020 Mar 31, 2019 Dec 31, 2019

Present value of cash flow from projects 4.9 4.8 4.9 Net present value of projects 3.9 3.8 3.8 Carrying amount

  • 2.4
  • 2.5
  • 2.5

Unrealized development gain 1.5 1.3 1.3 Cash flow hedge 0.3 0.3 0.3 Effect in unrealized Equity 1.8 1.6 1.6

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April 28, 2020 Skanska Three month report 2020 20

Slussen, Stockholm, Sweden

Group

Cash flow

SEK bn Jan–Mar 2020 Jan–Mar 2019 Jan–Dec 2019

Cash flow from operations 1.6

  • 1.3

3.8 Dividend etc.

  • 2.5

Cash flow before change in interest- bearing receivables and liabilities 1.6

  • 1.3

1.3

  • 6
  • 4
  • 2

2 4 6 8 10 12

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 SEK bn Cash flow from business

  • perations,

quarterly Rolling 12 months

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SLIDE 21

April 28, 2020 Skanska Three month report 2020 21

Slussen, Stockholm, Sweden

Construction

Free working capital

2 4 6 8 10 12 14 16 18 5 10 15 20 25 30

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 % SEK bn Free working capital, SEK bn Average free working capital/ Construction revenue, R-12, % Free working capital, end of Q1, SEK bn

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April 28, 2020 Skanska Three month report 2020 22

Slussen, Stockholm, Sweden

Group

Investments, divestments and capital employed

  • 10
  • 5

5 10 15

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 SEK bn Divestments, quarterly Investments, quarterly Net investments, R-12

SEK bn Mar 31 2020 Mar 31 2019 Dec 31 2019

Capital employed in: Residential Development 13.3 12.9 13.0 Commercial Property Development 34.9 32.8 34.5 Total in Project Development 48.2 45.7 47.4

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April 28, 2020 Skanska Three month report 2020 23

Slussen, Stockholm, Sweden

Group

Financial position

SEK bn Mar 31 2020 Mar 31 2019 Dec 31 2019

Total assets 131.5 125.6 126.0 Equity attributable to equity holders 34.8 28.0 33.0 Interest-bearing net receivables (+)/net debt (-)

  • 3.2
  • 7.2
  • 4.9
  • Adj. interest-bearing net receivables (+)/net debt (-)

5.3 0.9 3.2 Capital employed, closing balance 58.8 52.8 55.9 Equity/assets ratio, % 26.5 22.3 26.2

  • 8
  • 6
  • 4
  • 2

2 4 6

Q2 Q3 Q4 Q1 2016 Q2 Q3 Q4 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3 Q4 Q1 2020 Adjusted interest-bearing net receivables (+)/net debt (-), SEK bn

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SLIDE 24

18% 27% 55%

Central funding

Bilaterial loan Green bonds Green bilateral loans

April 28, 2020 Skanska Three month report 2020 24

Slussen, Stockholm, Sweden

Group

Available funds: SEK 19.3 bn,

  • /w unutilized credit facilities SEK 7.1 bn

0.0 0.4 0.8 1.2 1.6

2020 2021 2022 2023 2024

SEK bn

Maturity profile

SEK 3.7 bn

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SLIDE 25

April 28, 2020 Skanska Three month report 2020 25

Market outlook

Slussen, Stockholm, Sweden

Construction

− Country/City lock-downs impacting projects − Disruption in supply-chain of materials, equipment and subcontractors − Lower demand from private clients − Public investments into infrastructure to stimulate the economies

Residential Development

− Consumer confidence impacted by rising unemployment − Weakening demand and housing prices − Low interest rate policies and housing shortage supportive long-term

Commercial Property Development

− Uncertainties in financial markets, investors more risk-averse and limiting credit − Decrease in leasing activity − Monetary and fiscal stimuli packages and reduced uncertainty contributes to recovery

Outlook compared to previous quarter Weaker Unchanged Improved

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April 28, 2020 Skanska Three month report 2020 26

Group

Summary

Slussen, Stockholm, Sweden

− Strong performance in all three business streams − Rapidly deteriorating and uncertain market outlook − Protect our people and the company − Top priority to get back in full production − Adapt to a new normal after the pandemic − Long-term ambition remains:

– Strong financial position – Improve profitability in Construction – Leading Residential Developer in our home markets – Grow Commercial Property Development

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SLIDE 27

April 28, 2020 Skanska Three month report 2020 27