Sweco AB

The green transition is happening all around us, driven by sustainability trends and customer and investor demand, fueled by global goals and geopolitical uncertainty. And we're at the heart of it. you'll find us deep in the energy transition, supporting the electrification of society and industry. Our wind, solar, hydrogen and energy storage expertise is leading the essential shift from fossil fuels. And as Europe's most sought-after consultant in systems, grids, transmission and distribution, our vision aligns with major energy investment. you'll find us powering the transport transition, embracing electric vehicles, improving public transport, modernising travel infrastructure. Our experience right across this field is critical for creating the transport systems of tomorrow. And as Europe's leading rail consultant, we're part of the journey to double its high-speed network by 2030. You'll find us shaping the industrial transition, where huge efforts and investment are committed to decarbonising entire industries. As trusted advisor to some of Europe's most ambitious projects, we're influencing net-zero innovation in carbon capture, circularity, energy supply and game-changing battery technologies. And we're at the core of the urban transition. being engineers and architects with expertise as deep as it is broad we understand the urban development question in full and respond with world-class planning design and construction underpinned by circularity resilience and nature-based solutions Each of our 22,000 consultants are driving the green transition with the flexibility to adapt and the stability to stay focused. It's how we make a difference in everything we do. And it's how we transform society together.

Good morning, everyone, and thank you for joining us for this presentation of Sweco's Q1 report. With me this morning, I have Sweco CEO Åsa Bergman and CFO Olof Stolnacke. They will take us through the results of this first quarter, and afterwards, of course, we will open up for questions. But now I leave the floor to Åsa Bergman. Please, Åsa.

Welcome everyone to Sweco's Q1 presentation. Before we present the first quarter of 2024, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in eight geographical business areas across 15 markets in Europe. We are a well-diversified business operating across three different segments with good balance between public and private clients. The foundation for Sweco's long-term success is our mix of competencies spread across 22,000 experts. Our focus on organic and acquired growth as well as our efficient and decentralized operational model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success. With this introduction, let's move over to the Q1 highlights. In summary, Q1 was a good quarter for Sweco. We continue to capture growth opportunities driven by the green transition in the industry, energy, transportation and urban areas. Net sales increased by 8% in the quarter, of which 4% is organic growth, and EBITDA improved by 16%, adjusted for the significant calendar effect. These improvements are mainly driven by good demand, higher average fees and an increased number of FTEs. Even though the actions that we are taking to improve efficiency are starting to have effect, the billing ratio continues to have a negative impact. We are taking further actions to improve the billing ratio, and I will get back to this later in this presentation. With this summary, let us dive into more details in the first quarter. As mentioned, we have had a positive start of the year with performance improvements across most business areas. Six out of eight business areas reported positive organic growth and improved EBITDA compared to last year. Belgium, Denmark and Sweden delivered strong growth and positive EBITDA development and double-digit margins. And Germany, Central Europe continues to improve their performance. These improvements are mainly driven by a continued positive momentum in pricing and good demand linked to the green transition, as well as from growth segments such as pharma, defense and data centers. In the quarter, there is a significant calendar effect due to the early Easter holidays, corresponding to a negative year-on-year impact on 195 million SEC. Olof will get back to this in more details later in this presentation. We are starting to see effects from the measures taken in Finland and the UK, but the billing ratio remains a challenge for us. Improving efficiency and billing ratio is a top priority and I would also like to give you an update on our ongoing measures. The billing ratio is a key component in improving our margins going forward, and we are taking several actions. In Finland, the actions taken in Q4 2023 and Q1 2024 are starting to have effect. Further actions have been taken in April to adapt staffing, mainly in the buildings and industry segments, and this is to meet the current market situation. The repositioning of our UK business shows positive progress with a substantially improved result compared to Q4 2023. As part of this turnaround, Sweco UK is making further redundancies during the first half of 2024. Sweco Sweden is also making staffing adjustments during the first half of 2024 affecting approximately 140 employees. We are also currently conducting a review across all our business areas to further streamline our operations, including making sure we have the optimal team size and staffing. These actions for improved efficiency are starting to show effect, but taking sufficient measures will be a gradual process. Looking then at the overall market situation. The demand for services related to the green transition continues to be good, while parts of the building segments remain weaker. Demand in water, energy and most industry segments remains strong overall, powered by the demand connected to Europe's green transition, although we see weaker demand in traditional industry services. Transport infrastructure remains good in most markets, driven by large needs to update Europe's transport infrastructure. In the building segments, the demand for public buildings remains stable, while the demand in residential and commercial real estate continues to be weak, with variations across markets and sub-segments. With that, I will hand over to Olof to walk you through the numbers. Please, Olof.