STOCKHOLM, Sweden, Feb. 15, 2002 (PRIMEZONE) -- Scandiaconsult:
-- Profit after net financial items improved by 22 per cent to
MSEK 127.5 (104.5 in 2000 excluding the refund from Alecta).
-- Operating profit rose 16 per cent to MSEK 99.2 (85.7 in 2000
excluding the refund from Alecta) and net sales were up 12 per
cent to MSEK 1,519.6 (1,352.4).
-- The Board proposes a dividend of SEK 1.75 per share (1.50), an
increase of 17 per cent, in addition to an extraordinary dividend
of SEK 2.00 per share and a share buy-back program.
-- Scandiaconsult's strong Nordic position and favourable market
outlook vouch for continued robust development in 2002.
-- Starting in March 2002, cash payment of company-specific
pension funds (MSEK 160) will generate a positive income effect
of MSEK 19 during the first quarter in 2002.
Scandiaconsult, with 2000 employees in 50 locations in Sweden, Norway, and Finland, is a leading consulting engineering company in the Nordic market. The Group offers comprehensive solutions in all technical disciplines from concept and analysis, planning, design and project management to operation and maintenance. Scandiaconsult's technical competence is combined with solid knowledge in the fields of environment, and sustainable use of natural resources. Scandiaconsult has annual sales of SEK 1.5 billion and is quoted on the A list of the Stockholm Stock Exchange. For more information visit www.scc.se
The year in review Scandiaconsult posted net sales of MSEK 1,519.6 (1,352.4), up 12 per cent on the year-earlier figure. Fourth quarter sales rose 10 per cent to MSEK 412.0 (373.2). Market shares increased in the Nordic region, owing partly to acquisitions in the past few years.
Scandiaconsult's positioning with a large share of operations in geotechnical and civil engineering has a stabilizing effect in relation to the more volatile construction and industrial market. At present, Norway is showing more vigorous economic development than Sweden and Finland.
Scandiaconsult's geographic focus on Sweden, Norway and Finland, with an emphasis on geotechnical and civil engineering, continued to generate good capacity utilization in 2001.
Profit after net financial items improved by MSEK 23.0, or 22 per cent, to MSEK 127.5 (104.5 in 2000 excluding the refund from Alecta). The year's profit includes interest income of MSEK 8.5 pertaining to company- specific funds and a capital gain of MSEK 15.0 resulting from an additional purchase sum in connection with the sale of Arsenalen. The year-earlier figure included a capital gain of MSEK 14.2. Fourth quarter profit after financial items rose 36 per cent to MSEK 26.8 (19.7).
The improvement in earnings was generated by sales growth with retained profitability, thanks to higher efficiency in operations and a shift towards segments with more rigorous demands on advanced and integrated consulting services.
Acquisitions and Sales
In 2001 Scandiaconsult acquired operations in Norway with a total of 80 employees active in project development, project management, planning and design, as well as structural, geotechnical and water & sewer engineering. Among other things, this has strengthened Scandiaconsult's position in the Vestlandet region. The acquired units had a combined annual turnover of around MSEK 60.
As part of the focus on Scandiaconsult's core activities, the environmental lab in Malmo with net sales of approx. MSEK 6 was sold to SGAB - Svensk Grundamnesanalys AB.
National Markets Operations in Sweden
Scandiaconsult in Sweden offers consulting services in structural, geotechnical, electrical and environmental engineering, heating, water & sanitation and project management including project and cost control, quality control, construction management and environmental management. Infrastructure assignments account for close to half of income. The average number of employees during the year was 928.
During the year, Scandiaconsult's net sales in Sweden rose 4 per cent to MSEK 834.2 (802.2). Adjusted for reduced use of subconsulting services, net sales were up 7 per cent. Fourth quarter sales amounted to MSEK 218.7 (229.7). The drop in sales is mainly explained by a lower number of working hours and reduced use of subconsulting services.
Operating profit for the year improved to MSEK 53.9 (51.3), an increase of 5 per cent. For the fourth quarter, operating profit was MSEK 9.0 (12.7). In the final quarter of the year, Swedish consulting operations were charged with non-recurring structural expenses of around MSEK 5.
In 2001 the Swedish market was characterized by keen demand for consulting services. Demand was strongest for units in geotechnical and civil engineering, but declined in the building and industrial construction segment. The price level remained stable in most areas of operation and regions.
Scandiaconsult has been commissioned to plan and design a new motorway route through Motala and a 700-meter long elevated bridge over Motala Bay.
Operations in Norway
Scandiaconsult in Norway works with an emphasis on infrastructure and construction projects such as offices, housing, healthcare facilities and schools. The clients are found primarily in the national, county and local governments. The average number of employees during the year was 429.
During the year Scandiaconsult's net sales in Norway rose 34 per cent to MSEK 385.5 (287.9). Adjusted for currency effects, the increase was 25 per cent. Net sales in the fourth quarter improved by MSEK 106.8 (73.8). The number of employees increased and the price scenario improved.
Operating profit rose dramatically to MSEK 27.9 (18.1), up 54 per cent on the year-earlier figure. Adjusted for currency effects, the increase was 43 per cent. Operating profit for the third quarter improved by MSEK 8.5 to 11.5 (3.0), mainly due to the effects of a strong infrastructural sector and newly acquired units in Bergen.
In 2001 demand in Norway remained strong in most markets, particularly the civil engineering segment. There is reason to believe that government investments in schools, healthcare and public facilities will increase next year and Scandiaconsult is well poised to benefit from growth in these areas.
Scandiaconsult has been chosen to plan and design "London Snow World". The facility, located just outside London, will house an indoor slalom slope with an adjoining shopping and restaurant galleria.
Operations in Finland
Scandiaconsult in Finland offers services and expertise in urban planning, structural, geotechnical and environmental engineering, water & sewer and environmental technology. The clients are found mainly in the public sector, predominantly in infrastructure assignments. The average number of employees during the year was 468.
During the year, Scandiaconsult's net sales in Finland improved by 19 per cent to MSEK 312.3 (261.7). Adjusted for currency effects, the increase was 12 per cent. The improvement in sales is primarily explained by a significantly better price scenario. Net sales for the fourth quarter rose to MSEK 88.2 (67.0).
Operating profit for the year amounted to MSEK 18.9 (15.5), which is 22 per cent higher than in 2000. Adjusted for currency effects, the increase was 15 per cent. For the fourth quarter, operating profit was MSEK 4.9 (4.3).
Demand was stable during the year. Investments in the building construction sector have declined somewhat, while demand in the geotechnical and engineering segments is deemed stable.
Scandiaconsult has been commissioned to plan and design the first phase of Finland's largest infrastructural project, the new railway line between Helsinki and Lahti. The order includes soil surveys as well as geotechnical and railroad engineering studies.
Financial Position
Cash and bank and short-term investments at the end of the year totalled MSEK 174.2 (238.6). Interest-bearing liabilities decreased to MSEK 46.8 (57.3). Cash flow after investments was MSEK 75.2 (96.5) or SEK 3.24 per share (4.11). The year's cash flow was affected by share dividends of MSEK 127.1 (29.9) and a supplementary tax payment of MSEK 60.1 (9.7) that was mainly related to the refund from Alecta.
The Group's financial position is still strong, providing scope for future acquisitions and participation in restructuring of the industry The equity ratio at the end of the period was 45 per cent (46). Shareholders' equity amounted to MSEK 366.9 (391.4), corresponding to equity per share before dilution of SEK15.87 (16.94).
Tax The year's tax expense was MSEK 34.0, corresponding to 27 per cent of profit before tax.
Investments
New investments in tangible fixed assets amounted to MSEK 29.7 (31.3) and referred primarily to computers and other IT equipment. Depreciation of machinery and equipment during the year totalled MSEK 26.9 (25.4). During the year, Scandiaconsult signed an agreement for a new group-wide business system. Deployment of the system was started in Finland during the autumn.
Employees
The average number of employees during the year was 1,841 (1,732). Including temporary staff, the number of employees at the end of the period was 1,983 (1,898).
Parent Company
The Parent Company's net sales during the year amounted to MSEK 26.4 (25.9). Profit after net financial items for the year 2001 was MSEK 48.7 (73.3). Investments in machinery and equipment totalled MSEK 0.0 (0.6). Cash and bank and short-term investments amounted to MSEK 155.9 (186.4).
Future Outlook 2002
Although economic development forecasts are increasingly uncertain, the construction market in general is expected to remain strong. Scandiaconsult's position with a high relative share of income from the geotechnical and civil engineering sector and with operations in Sweden, Norway and Finland provides a solid platform for growth in 2002. The industry organization Svensk Teknik och Design expects total building investments in Sweden to increase by around 2 per cent in 2002.
Accounting Principles
This interim report has been prepared in accordance with the Swedish Annual Accounts Act and the recommendations of the Swedish Financial Accounting Standards Council. As of 2001, Scandiaconsult applies the new recommendations of the Swedish Financial Accounting Standards Council. The application of RR9, Income taxes, has entailed a change of accounting principle and the comparative figures have been adjusted accordingly. In all other respects, the same accounting and valuation principles have been applied as in the most recent annual report.
Events After Year-End
Scandiaconsult has reached an agreement with the trade unions SIF and CF for a so-called direct payment of company-specific pension funds. The application has been approved, which means that a sum of around MSEK 160 will be paid during the period March 2002 to February 2003. An amount of approx. MSEK 19 will be taken to profit in the first quarter of 2002.
Dividend
The Board proposes a regular dividend of SEK 1.75 per share (1.50) and an extraordinary dividend of SEK 2.00 per share (4.00). The proposed record date for payment of dividends is 13 May. The Board will submit a proposal to the Annual General Meeting regarding an authorization for a buy-back of Scandiaconsult shares up to 10 per cent of the total number of shares less current holdings.
Annual General Meeting The Annual General Meeting will be held at 4:30 p.m. on 7 May, in Wallenbergsalen, IVA, Grev Turegatan 16, Stockholm.
Financial Information in 2002
Annual report for 2001: Will be sent to the shareholders by mail
at the beginning of April.
Interim report (3 months): 7 May.
Interim report (6 months): 9 August.
Interim report (9 months): 25 October.
This report is also available at www.scc.se.
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www.waymaker.net/bitonline/2002/02/15/20020215BIT00850/bit0002.doc Full Year-End Report www.waymaker.net/bitonline/2002/02/15/20020215BIT00850/bit0002.pdf Full Year-End Report