Sweco AB

Good morning and welcome to this presentation of Sweco's Q4 and year-end report for 2024. With us to take us through the result is Sweco's president and CEO Åsa Bergman and CFO Olof Stolnacke. After their presentation, we will open up for questions. But now, please, Åsa.

Welcome everyone to Sweco's Q4 presentation. Before we present the fourth quarter and full year, 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 a good balance of private and public 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. With this introduction, let me start the presentation by summarizing 2024. 2024 was a successful year for Sweco, marked by many positive milestone achievements. Our net sales surpassed the milestone of 30 billion SEK, EBITDA exceeded 3 billion SEK, and we reported a full-year double-digit margin for the first time in over a decade. Despite the challenging macroeconomic climate, we continue to grow, improve, and deliver on a strategy. Net sales increased to 30.7 billion SEK with a solid organic growth rate of 5% and acquisition adding 3%. EBITDA increased by more than 20%. or more than half a billion SEK, and the full-year EBITDA margin amounted to 10%. We are also pleased that all business areas improved EBITDA. The Board of Directors proposes a dividend distribution of 3.30 per share. All in all, 2024 was a successful year for Sweco. Looking at Sweco's financial performance from a long-term perspective, you can see that our journey of profitable growth continues. From 2014 to 2024, we have managed to increase net sales with on average 13% annually and EBITDA with 14%. The solid long-term trend shows the strength of our strategy and operational model. During 2024, we have further strengthened our position as Europe's leading architecture and engineering consultancy, and we have entered 2025 with a positive momentum. Moving then from the year to the result and performance of the fourth quarter. We end the year with a strong Q4, continued growth and improved margins. Net sales increased by 5%, of which 4% was organic growth. Our EBITDA increased by 44%, or 288 million SEC adjusted for negative calendar effect. The Q4 EBITDA margin increased to 11.1%. And the positive development in this quarter is driven by further effects from our efficiency measures, as well as higher average fees and improved billing ratio. Let us dive into more details looking into the operational highlights. In this quarter, seven out of eight business areas reported EBITDA improvements and six out of eight reported positive organic growth. We continue to successfully navigate in the market and the organic growth rate was on a solid level in the quarter. We secured new exciting projects, further strengthening our order backlog. And as I mentioned, we continue to see positive effects from the efficiency measures taken during the year. For example, Sweco UK continued to progress according to plan and turned a significant loss in Q4 last year into a profit in this quarter. Finland is another example where performance improvement measures and cost savings have been carried out, which has resulted in Finland delivering a double-digit margin in a challenging market. I'm very pleased to see that we are able to increase our billing ratio with 1.3 percentage points and reduce operating costs. Our internal efficiency measures are having effect and as can be seen from the strong margin across six of our business areas. Let us now take a look at the market development. The overall demand for Sweco services remained good. We saw good to strong demand within energy, infrastructure, water, environment and public buildings, as well as parts of industry and security and defense. Demand in residential and commercial real estate segments remained weak. And with that, I will hand over to Olof to walk you through the numbers. Please, Olof.

Thank you, Åsa, and good morning, everyone. Starting again with a summary of the quarter. We had net sales of 8.1 billion with 4% calendar-adjusted organic growth, 1% from M&A and no FX impact in the quarter. EBITDA, 901 million SEC, excluding the negative calendar effect, we are 288 million or 44% up and margin is at 11.1%. Leverage is down significantly from last year at 0.4%. Looking at net sales, we see organic growth in six out of eight BAs. UK has the strongest growth, but that is driven by a weak Q4 last year with significant negative project adjustments. Denmark and the Netherlands show very strong growth, and we see solid growth also in Sweden and Norway, while Germany and Central Europe is a bit lower this quarter. Finland and Belgium has negative growth, the Finnish market continues to be challenging and in Belgium we see some headwind in the industry segment. The growth drivers overall continue to be average fees increasing and also lower project adjustments and a higher billing ratio. On the EBITDA side, we see a 44% increase. We are up against a relatively weak Q4 last year, but this is still a very strong EBITDA quarter. Germany and Central Europe, Sweden, Finland, Denmark, Belgium and the Netherlands deliver double-digit margins. UK delivers 6% in another profitable quarter, and Norway improves the margin despite continued headwind in the private buildings market. Looking then at the EBITDA bridge by business area. Overall, as for sales, its higher average fees and project adjustments continue to be a positive driver. And that's together with a higher billing ratio. And we saw higher personnel expenses having a negative impact. Looking at the BAs, seven out of eight deliver increased EBITDA. UK delivered the largest improvement, but again, this was primarily due to significant negative one-offs in Q4 last year. Finland, the improvement there is also partly due to restructuring costs last year, but it's mainly the result of successful efficiency improvements. Sweden, Germany and Central Europe, Denmark, Norway and the Netherlands all deliver solid improvements. Belgium is slightly negative but maintains a high margin and would have been positive excluding restructuring costs, which are mainly related to realizing synergies from M&A. The calendar effect from three less working hours corresponded to a negative 44 million in net sales and EBITDA impact. Looking then at financial position, net debt at 1.5 billion is significantly down versus Q4 last year, driven by an improved working capital position and lower M&A outflows. We are pleased with a full year operating cash flow improving from 2.5 to 4.1 billion. Leverage is at 0.4, also significantly down versus last year and well below our target. We are financially very strong with available liquid assets of 5.3 billion at the end of the year. The dividend, as Åsa said, 3.30 per share based on the financial position we have. This is a dividend growth of 12% and a 57% payout ratio, which is in line with historical levels and also in line with our policy. And finally on the numbers, a reminder of the calendar effects for 2025. The big thing as usual is Easter, which once again moves between quarters, and this year falls in Q2. And the significant impact in this, as those who follow us know, is in Norway. And the total for the year is back to negative, with one working day less in total. And one hour now corresponds to roughly 14 million SEC in effect on net sales and EBITDA. And with that, back to you Åsa.