Sweco AB

Good morning and welcome to the presentation of Sweco's results from this year's first quarter. To present the results and the report is Sweco's president and CEO Åsa Bergman and CFO Olof Stolnacke. After the presentation, there of course will be room and time for questions. Please, Åsa.

Welcome everyone to Sweco's Q1 presentation. Before we move into the quarter, let me give you a quick recap of Sweco. Sweco is today Europe's leading architecture and engineering consultancy with operations in eight geographical business areas across some 15 markets in Europe. We are a well-diversed business with projects in three broad segments. Building urban areas, water energy industry and transport infrastructure. We have a good balance of private and public clients, and the foundation for Sweco's long-term success is our mix of competencies spread across 20,000 experts, organic and acquired growth, as well as our efficient and decentralized operational model. With our solid financial position, we continue to build Sweco. As you can see, we have a steady improvement in sales and EBITDA. Our net debt EBITDA after the latest acquisition landed on 1.1%. Now let us take a look at the result of the first quarter. We started the year with excellent momentum, delivering strong organic growth and an all-time high EBITDA. Net sales increased to 7.1 billion SEC and the organic growth adjusted for calendar was 10%. We achieved a total growth of 17%. EBITDA increased by 19% year-on-year to 849 million SEK, adjusted for calendar. Our operating margin improved to 11.9%, more or less on par with our financial target of 12%. The strong performance was driven by solid demand connected to the green transition in Europe, higher average fees and a good FTE growth. If we move over then to the operational highlights in the quarter, There was a continued strong demand in most business areas. We had a solid inflow of new orders with the strengthened order book and we also had a good momentum in recruitment. All business areas reported strong organic growth and six out of eight business areas reported increased EBITDA. I especially want to highlight Sweden, Norway, Denmark and Belgium that all achieved EBITDA margins exceeding 14%. We also made four acquisitions during this quarter welcoming around 700 new experts to Sweco and we won several high-profile projects which I will come back to later in this presentation. The market overview shows that although the current macro situation continues to be uncertain there was overall good demand in the market of projects connected to the green transition in all segments. We have a particularly strong demand within water, energy and industry, where the markets for investments continue to be solid in building and urban areas. We see a good demand in public buildings. There is, however, continued declining demand in residential and in parts of commercial real estate. Within transportation infrastructure, we see continued good demand. Concluding the quarter proves the strength of our diverse offering and position in attractive segments. I will now hand over to Olof to take us through the numbers. Olof, please.

Thank you, Åsa, and good morning, everyone. Starting with an overview, we see net sales, as Åsa said, of 7.1 billion in the quarter, with 10% organic growth and M&A and FX each contributing 3%. EBITDA, 849 million, which is an all-time high for the second quarter in a row. We increased EBITDA by over 200 million versus last year, and we have a 19% EBITDA growth excluding the calendar effect. And the margin expansion is 1.2 percentage points up to 11.9%. Leverage increased to 1.1. That is driven by M&A and by a seasonal working capital buildup. On net sales, we are pleased to see solid organic growth in all BAs, ranging from Finland and Germany and Central Europe at around 6%, up to Belgium, Denmark, Norway and Netherlands at double digits. Very positive also to see that Sweden continues to increase growth and was at over 8% in the quarter, and that the UK is close to 10%. Across the board, the drivers have been continued price increases and FTE growth. We continue to have good momentum in recruiting and personnel turnover has declined somewhat in the quarter. In addition, part of the negative impact from sickness absence that we saw last year has been reversed. Looking at EBITDA, on the EBITDA side, we see margin improvements in 6 out of 8 BAs and double-digit margins in 5 BAs, with, as also said, Sweden, Norway, Denmark and Belgium all delivering above 14%. The EBITDA drivers are much the same as the growth drivers. Price increases, FTE growth, and also that about half the negative impact from sickness absence from last year has been reversed. Other operating expenses increased, but as in Q4, declined as percent of net sales and continues to be on a sustainable level. Billing ratio is the only disappointment in the quarter, declining by 0.4 percentage points. Looking at the EBITDA bridged by business area, it's Belgium and Denmark that continue to lead the EBITDA growth, but we also see significant contributions in Sweden, Norway and Netherlands. Finland is impacted by a one-off payment as part of the collective salary agreement of around 20 million SEK. In Germany and Central Europe, the negative impact comes from the Central European countries, which had a weak start in parts of their business. UK continues to improve in a challenging market. And it is important also to mention that the calendar makes this into a very big production quarter for us with eight more working hours. And that corresponds to 75 million in net sales and EBITDA impact. On the financial position, net debt is at 2.9 billion, significantly up versus last year. The LTM cash flow from operation is outweighed by larger outflows for dividends and M&A in Q1, especially the larger acquisition of VK, as well as seasonal and growth-driven working capital build-up. Leverage is also up at 1.1, just over half of our target maximum, but we remain financially strong with available liquid assets of 3.1 billion. And with that, back to you, Åsa.