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Skanska Six month report, 2003

Skanska Six month report, 2003 Q2 in brief Q2, 2003 – year on year Order bookings of SEK 34 (39) bn Unchanged adjusted for currency effects Currency effect -12 percent Significant improvement in USA Building and Hong Kong EBIT of SEK 1,647 (816) M

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Skanska Six month report, 2003

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  1. Skanska Six month report, 2003

  2. Q2 in brief

  3. Q2, 2003 – year on year • Order bookings of SEK 34 (39) bn • Unchanged adjusted for currency effects • Currency effect -12 percent • Significant improvement in USA Building and Hong Kong • EBIT of SEK 1,647 (816) M • Increase in commercial project development SEK 1,097 (4) M • Impacted by USA Building writedowns of SEK 260 M • Net interest-bearing debt SEK 5,086 (Dec 2002: 9,030) M • Strong operating cash flow • Reduction of non-strategic assets continues • Gearing sharply improved despite RR29 impact • Capital employed SEK 28 (Dec 2002: 32) bn • Settlement CityCronan will give further reduction by SEK 2 bn • New more transparent reporting format used

  4. Market outlook – Construction • Market outlook remains weak. • Construction investments are declining in main markets • Exceptions are Czech Republic and PFI projects in the UK • Continued pressure on industrial and commercial building in most markets • Previously stable segments in the U.S. are weakening due to lower public appropriations • Civil construction weaker in publicly funded segments

  5. Market outlook – Project Development • Residential PD activity level maintained in Czech Republic, Finland and Russia • Reduced level of investment in high-end segment in Norway and Sweden while stable in the mid-range • Cautious approach to new investments in Commercial PD due to economic conditions

  6. Actions following the strategic review • Reduce capital employed by about 20% to SEK 30 bn by year-end 2004 • CE Q3 ’02: SEK 36 bn • CE adjusted Q2 ’03: SEK 26 bn • Increase visibility – return on capital employed (ROCE) key determining factor • Reporting by business stream and market • Pursue growth in U.S., the UK and Czech Republic • BFW in Texas • Exit peripheral markets like Latvia, Lithuania, Hungary • Exit Skanska International Projects – not in line with “home market” strategy • Divest Skanska Project Development USA • Exit Residential PD in Denmark = Action taken

  7. Order situation – Construction & Services SEK bn

  8. Performance analysis Q2 –Business Streams

  9. Construction & Services, Q2

  10. Residential Project Development, Q2

  11. Residential Project Development, June 30, 2003

  12. Commercial Project Development, Q2

  13. Commercial Project Development Land bank increase was due to internal transfer from Construction units

  14. Income statement

  15. Balance sheet

  16. Change in net debt Last day of quarter SEK M 12,000 10,000 8,000 6,000 4,000 2,000 0 Q1 Q2 Q3 Q4 2001 2002 2003

  17. Financial position – update

  18. Cash flow

  19. Group net investments

  20. Summary • Reporting in new format • Improved financial position • Strong cash flow from operations • Reduction of capital employed ahead of plan • Impact from stronger SEK • Order backlog unchanged since year-end • Outlook remains weak

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