Sweco AB

Good morning and welcome to this presentation of Sweco's Q3 report. Sweco's president and CEO Åsa Bergman is with us this morning together with CFO Jan Alde. Together they will take us through the results of the third quarter and they were presented earlier this morning as you are aware and after their presentation we will open up for questions. So please Åsa.

Welcome everyone to Sweco's Q3 presentation. Before we present the third quarter results, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operation 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 23,000 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, let's go into the presentation of Q3 2025. Sweco delivered a strong result in a mixed market. Net sales increased by 5% to 7.1 billion SEK, and the organic growth rate was 4%. EBITDA increased to 702 million SEK, an increase of 19%, with a margin of 9.8%. The positive development was driven by further improvements in average fees and billing ratio and a higher number of employees, as well as improved cost control and realized synergies from previous acquisitions. We also maintained a high M&A activity, closing five acquisitions in the quarter, including the listed company project engagement in Sweden. And after the quarter, we added another three in October. I will get back and give you an overview of these acquisitions later in the presentation. In alignment with our strategy focusing on selective core markets in Europe, we also divested Sweco's check operations in the quarter. Altogether, a strong result and a positive performance in Q3 driven by price, billing ratio and M&A synergies as we continue to deliver on our strategic priorities. Now let us go into more details from the quarter. In Q3, seven out of eight business areas reported positive organic growth and seven out of eight business areas reported EBITDA improvements. We navigate successfully in a mixed market, improving both our order intake and order backlog during the quarter. The solid operational trend continues across most business areas, with three reporting double-digit margins. Sweco Germany and Central Europe was the largest contributor to the EBITDA improvements in the quarter, benefiting from efficiency improvement and positive project adjustments. We also continue to see improvements in the UK. We have continued effects from the efficiency measures we have taken, resulting in further improvements of our billing ratio. Overall, we are pleased that we continue to make consistent progress across our business areas. Let us now turn to the market overview. Overall, the demand for Sweco services was broadly consistent with previous quarters, with some variations between segments and markets. Demand remained good in the energy and infrastructure and water and environment segments, and with increases in security and defense. Certain areas of the building and real estate segments continued to be weak, while demand was somewhat healthier in the public buildings. We also saw continued weak demand in parts of the industry segment. This quarter demonstrates that our well-diversified business continues to be a strength for us and provides stability, resilience, the green transition, resilience and the green transition, digitalization and AI, and demographic shifts continue to be the key drivers for our business. With that, I will welcome our new CFO, Jan Alde, to walk you through the numbers. Welcome, Jan.

Thank you, Åsa, and it's also very nice to be here. So let's start with the summary. Net sales came in at 7.1 billion SEK, organic growth of 4%, acquired growth of 3%, and a negative FX impact of 2%, giving a total growth of 5% in the quarter. We have the same number of working hours in Q3 as in last year. And EBITDA increased by 19% or 140 million SEK to 702. EBITDA margin increased to 9.8%. And our net debt to EBITDA ratio stands at 0.9 times. Looking at sales, so we see organic growth in seven out of eight BAs. Germany and Central Europe had the strongest organic growth at 13%, driven by positive project adjustment, higher average fees, higher FTEs, and also a higher billing ratio. The UK and Netherlands also reported strong organic growth at 11% and 9%, respectively. Due to the recent acquisitions, the Netherlands also reported an 8% acquired growth. The organic growth in Sweden was flat in a stable but mixed market. The acquisition of Projekt Engagemang added 7% acquired growth in the quarter. All other BAs grew between 2 and 5%. So overall, the organic growth was driven by higher average fees, higher number of FTEs and a higher billing ratio. Looking at the EBITDA, it increased 140 million SEK or 19% versus last year. The EBITDA margin increased to 9.8% versus 8.7% last year. Germany and Central Europe, Denmark and Belgium reported significantly improved and double-digit margins. Norway also reported higher margins, but from a low level last year. The UK delivered 7% margin in another quarter of improvement, and the Netherlands and Finland was roughly in line with last year. So overall, the EBITDA improvement was driven by higher average fees, higher billing ratio and FTE growth with higher personnel expenses had a negative impact. With regards to the calendar effect, we had the same number of working hours in Q3 this year as last year. So the group result was impacted by transaction and integration costs related to the acquisition of project engagement of 33 million, where 28 million impacted the result in Sweden negatively. Excluding this, the result in Sweden improved by 24 million. Germany and Central Europe, Denmark, Belgium and Norway all delivered significant EBITDA improvement. The improvement in Germany and Central Europe was driven by positive project adjustments, higher average fees and a higher billing ratio. The improvement in Denmark was driven by lower operational cost and also less absence, while the improvement in Belgium was the result of higher average fees and higher billing ratio. We have also started to see a gradual positive impact from previous acquisitions coming through in Belgium and Denmark. And Norway was positively impacted by the higher average fields, but also some one-off costs last year. The Netherlands and the UK and Finland also reported higher EBITDA. Let's look at the financial position. Cashflow during the first nine months of the year was impacted by an increase in working capital, partly a seasonal effect and partly effect of the recent acquisitions. M&A cashflow for the whole period was 739 million SEK. And then we had the dividend of 1187 million SEK. With regards to the net debt position, it now stands at 3.1 billion SEK at the end of Q3, and the net debt to EBITDA ratio was 0.9 versus 1.1 at the same time last year. Hence, our leverage is well below our target and we remain financially very strong. And finally, let's take a look at the calendar effect for 2025. So in Q4, we expect one more working hours compared to last year, which means that the total impact for the year is eight working hours less than in 2024. Please also note that we have included a table in the Q3 report showing the expected number of normal working hours per quarter in 2026 versus 2025. And by that, I hand back to Åsa.