Net sales and profit

Acquisition of Nordic paving and mineral aggregates operations

Elimination and reversal of internal profit amounted to SEK 37 million (-53) of which the reversal of construction profit in connection with the distribution of Annehem Fastigheter was SEK 56 million. Depreciation and write-downs for the fourth quarter were SEK -348 million (-292), of which SEK -70 million is related to acquired business.

Net financial items amounted to SEK -18 million (-25) of which net interest was SEK -13 million (-24). Pre-tax profit was SEK 1,807 million (772). Profit for the fourth quarter amounted to SEK 1,655 million (620).

Operating profit and operating margin, per quarter

January – December 2020

Group net sales for 2020 increased by four percent to SEK 57,417 million (55,349), of which acquired operations were SEK 5,891 million. After adjustments for acquired and divested units net sales decreased by seven percent.

Net sales in business area Construction contracted by eight percent and the decrease was related to our Swedish operations while net sales increased in our Norwegian and Finnish operations. In business area Civil Engineering net sales shrunk by four percent compared to last year. Net sales in business area Industry grew by 40 percent. Not including the acquired operations net sales in business area Industry contracted by four percent. The reduction stems from Transportation and Machines, Rentals and Construction System. In business area Project Development net sales shrunk in both Property Development and Housing Development. The reduction in Housing Development stems from Swedish and Finnish operations.

Of the period’s net sales SEK 17,005 million (11,260) were attributable to sales and production outside Sweden. Most of the increase is related to the acquired paving and mineral aggregates operations in business area Industry.

Operating profit for 2020 amounted to SEK 3,541 million (2,610), of which the acquired operations were SEK 250 million and the effect of the distribution of Annehem Fastigheter was SEK 952 million. Last year included an income contribution of SEK 170 million from the divestiture of property in the partially owned company Acturum. The operating margin was 6.2 percent (4.7). Without the effect of the distribution of Annehem Fastigheter the operating margin was 4.5 percent.

The acquisition of the paving and mineral aggregates operations was finalized on April 1, 2020, which meant the acquisition occurred when the season started. The underlying operations in the acquired companies contributed during the period April-December to the operating profit by SEK 494 million. Depreciation on surplus values for, among other things, customer contracts in the order backlog taken over and fixed assets amounted during the same period to SEK -189 million. Depreciation on surplus values for customer contracts in the order backlog taken over hace been high throughout 2020 and will also affect part of 2021. In addition, acquisition costs and transfer tax in Finland have charged profits in total by SEK -55 million. All in all operating profit for the year was positively affected by SEK 250 million related to the acquired operations. Because the acquired operations have a very clear seasonal pattern the first quarter is characterized by considerable deficits since the season starts in the second quarter. If the acquisition had taken place on January 1, 2020 profit in the first quarter would have been affected by SEK -297 million and the underlying operations would have had an accumulated operating profit for January-December 2020 of SEK 197 million.

The operating margin in business area Construction was 2.5 percent (2.4) in 2020. In business area Civil Engineering the operating margin improved to 3.0 percent (2.8). The operating margin in business area Industry was 5.9 percent (7.0). Not including the acquired operations the operating margin was 6.7 percent. The lower operating margin in Industry is due to a lower margin in Rentals and Construction System. Operating profit in Project Development increased to SEK 1,669 million (1,015), however, without the effect of the distribution of Annehem Fastigheter of SEK 896 million operating profit contracted. Last year an income contribution of SEK 170 million from Acturum was included in Property Development. During the year some operations in Property Development were affected negatively by SEK -64 million due to the corona pandemic, where SEK -44 million was related to Ängelholm Helsingborg Airport, of which SEK -20 million refers to writing down goodwill. The operating profit in Housing Development decreased slightly during the year but the operating margin improved to 9.6 percent (8.6).

Eliminations and reversal of internal profit in our own projects have affected operating profit net by SEK 23 million (-142), of which the reversal of construction profits in connection with the distribution of Annehem Fastigheter was SEK 56 million. Last year several of our own major office projects were under construction. Elimination is reversed in connection with the external divestment of a project.

Depreciation and write-downs for the year were SEK -1,412 million (-1,094), of which SEK -310 million is related to acquired operations in business area Industry.

Alta Assisted Living

Alta, Norway

Net financial items amounted to SEK -108 million (-31), of which net interest amounted to SEK -56 million (-72). Net financial items from acquired operations amounted to SEK -27 million during the year. Net financial items included currency exchange rate differences of SEK -88 million (-2). Currency exchange rate differences have for the most part occurred on receivables in subsidiaries in Norway and Finland, and have no effect on cash flow.

Pre-tax profit was SEK 3,433 million (2,579). Tax for the year was SEK -485 million (-441) corresponding to a tax rate of 14 percent (17). The lower tax rate is due to non-taxable income from, among others, the profit/loss effect of the distribution of Annehem Fastigheter.

Profit for the year was SEK 2,948 million (2,138).

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 will be even stronger with the acquisition of the paving and mineral aggregates operations.

Operating profit and operating margin, rolling 12 months

*Q1-Q3 2019 not translated according to the changed accounting principles for our own developed housing projects.