Net sales and profit

January – September 2022

Group net sales for the period January-September 2022 increased by eight percent and amounted to SEK 46,087 million (42,506). After adjustments for acquired and divested units and exchange rate effects net sales increased by seven percent. A large part of the increase is explained by higher material and energy costs which have affected pricing to customers. Of the period’s net sales SEK 13,959 million (12,852) were attributable to sales and production outside Sweden. Net sales during the latest rolling 12 month period were SEK 63,607 million compared to SEK 60,026 million for the full year 2021. The proportion of public sector customers was 41 percent (46) while private customers represented 59 percent (54) of total net sales.

Net sales in business area Construction increased by ten percent and the increase was related to the Swedish and Norwegian operations. Net sales in business area Civil Engineering increased by four percent with increases in Infrastructure and Operation and maintenance. Net sales in business area Industry increased by 16 percent with the increase primarily related to Paving, Concrete and Construction System. In business area Project Development net sales increased by five percent where the increase was generated in Property Development due to a positive impact from property sales. In Housing Development net sales decreased slightly, declining in Finland and Norway while increasing somewhat in Sweden.

Operating profit for the period January-September 2022 amounted to SEK 1,888 million (1,852) and the operating margin was 4.1 percent (4.4). In the latest rolling 12 month period the operating margin amounted to 4.9 percent compared to 5.2 percent for the entire year of 2021. During 2021 and 2022 prices for material and energy have risen dramatically. We have for the most part handled price hikes and delivery disruptions through adjustments and streamlining but since we have not been able to fully compensate for cost increases they have had negative impact on the operating margin.

In business area Construction the operating margin was 2.2 percent (2.7) where the effect of rising costs was apparent in all countries. In business area Civil Engineering the operating margin was unchanged at 3.0 percent (3.0). All in all the operating margin for construction contract operations amounted to 2.5 percent (2.8). Operating margin in business area Industry was 2.9 percent (3.8). The operating profit in Paving was lower as a result of higher energy and fuel costs that have not been fully recompensed through higher prices to customers, particularly in Norway, Finland and Denmark. Other product areas in business area Industry reported more or less unchanged or improved profitability. The operating profit in Project Development improved during the period where the increase refers to Property Development and is largely due to higher contributions from partially owned companies. Capital gains from property transactions amounted to SEK 83 million (67).

The operating margin in Housing Development was 10.5 percent (10.9). A greater number of homes in production has had a positive effect during the period even though the number of production-starts has been lower. During the third quarter the market has become more wary, especially in Sweden.

Depreciation and write-downs for the period were SEK -984 million (-1,000).

Elimination and reversal of internal profit in our own projects have affected operating profit during the period net by SEK -31 million (-25).

Net financial items amounted to SEK -36 million (-16) of which net interest was SEK -66 million (-44). In net financial items exchange rate differences had an effect of SEK -4 million (9).

Pre-tax profit was SEK 1,852 million (1,836). Profit for the period was SEK 1,495 million (1,440).

Seasonal variations

Group operations, particularly in Industry and Civil Engineering, are affected by fluctuations that come with the cold weather during the winter half of the year. Normally the first quarter is weaker than the rest of the year. The seasonal pattern has now become even stronger due to the acquisition in April 2020 of the paving and mineral aggregates operations in business area Industry.