ANNUAL REPORT 2004 - Skanska

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Skanska 2004 The headquarters of the United Kingdom Ministry of Defence in Whitehall, central London, was refurbished in order to improve working environment and security. The three-year project, completed in 2004, was one of the U.K.’s largest Private Finance Initiative (PFI) construction projects to date. Skanska’s contract amounted to SEK 4.7 billion (GBP 352 M). Skanska in brief Flap The year in brief Flap Skanska’s four business streams Flap Comments by the President and CEO 2 Strategy for profitability 4 Organization 6 Financial targets and their fulfillment 7 Construction 8 Residential Project Development 14 Commercial Project Development 18 BOT 22 Sustainable development 25 Risk management 26 Employees 27 Share data 28 Report of the Directors 30 Consolidated income statement 39 Consolidated balance sheet 40 Consolidated statement of changes in shareholders’ equity 42 Consolidated cash flow statement 43 Parent Company income statement 44 Parent Company cash flow statement 44 Parent Company balance sheet 45 Parent Company statement of changes in shareholders’ equity 46 Notes including accounting and valuation principles 47 Proposed allocation of earnings 96 Auditors’ Report 97 Board of Directors 98 Corporate governance 99 Senior Executive Team 100 Annual Shareholders’ Meeting 101 More information about Skanska 101 Abbreviations and definitions 102 Addresses 103 This document is in all respects a translation of the Swedish original Annual Report. In the event of any differences between this translation and the Swedish original, the latter shall prevail.
The year in brief Nordic residential development under one roof With about 4,500 residential units under construction in the Nordic countries, Skanska is one of the largest housing developers in the region. Through its new business unit Project Development Residential Nordic (PDR Nordic), Skanska is further focusing its operations to take advantage of the synergies that exist between the Swedish, Finnish and Norwegian residential markets. Safety and profitability Accident-free work sites are the goal of Skanska’s employee health and safety programs. All Skanska business units in local markets where comparable industry statistics are available (thus not including Poland and Russia) are now better than the national construction industry average in terms of accidents that cause employee absences. The number of accidents in the Group also fell by 15 percent compared to 2003. Experience shows that a safe working environment also contributes to greater profitability. Large customers choose Skanska Hydro’s Ormen Lange offshore gas processing project, Pfizer’s new Swedish offices, Stora Enso’s record-sized paper machine, Amtrak’s railroad tunnels in New York City, and assignments from British Telecom and Anglian Water are among the new orders for which large international customers chose Skanska. During 2004, Skanska was also selected for new public-private partnerships, including two schools in the United Kingdom and a highway in Poland. Property divestments earn capital gains of more than SEK 1 billion Skanska’s commercial project development operations remained successful, despite a generally weak leasing market. During 2004, the Group sold commercial projects in Stockholm, Malmö, Gothenburg, Copenhagen, Prague and Budapest worth SEK 4.6 billion in all, including capital gains totaling SEK 1.5 billion. SEK M EUR M Net sales 121,263 13,282 Operating income 3,853 422 Income after financial items 3,819 418 Earnings per share, SEK/EUR 6.33 0.69 Return on equity, % 17.5 17.5 Return on capital employed, % 17.9 17.9 Order bookings 1 116,008 12,706 Order backlog 1 113,498 12,611 1 Refers to Construction operations. • Net sales in 2004 amounted to SEK 121.3 billion. • During the year, the Group sold SEK 4.6 billion worth of properties in Commercial Project Development, with capital gains totaling SEK 1.5 billion. • Income from discontinued businesses amounted to SEK 0.8 billion, which included operating income from divested businesses as well as the effects of the divestments on income. • The Group’s operating income amounted to SEK 3.9 billion. For the full year, the Group reported a net profit of SEK 2.6 billion. Earnings per share was SEK 6.33. The Board of Directors proposes a regular dividend of SEK 4.00 for 2004.
Page 1: ANNUAL REPORT 2004
Page 5 and 6: Skanska’s four business streams C
Page 7 and 8: STRONG RESULTS IN PROJECT DEVELOPME
Page 9 and 10: The units of the Skanska Group coll
Page 11 and 12: Financial targets and their fulfill
Page 13 and 14: Non-residential building and civil
Page 15 and 16: Currently under construction in sub
Page 17 and 18: International energy companies are
Page 19 and 20: Skanska is one of the largest resid
Page 21 and 22: Botanica, a new residential area in
Page 23 and 24: Commercial Project Development is o
Page 25 and 26: Skanska Project Development - Book
Page 27 and 28: In Derby, construction is underway
Page 29 and 30: Sustainable development Our vision
Page 31 and 32: Employees It is the thousands of in
Page 33 and 34: Skanska’s Series B shares are als
Page 35 and 36: the Group’s core business will be
Page 37 and 38: Net sales and percentage outside Sw
Page 39 and 40: Net divestments in project developm
Page 41 and 42: employees. Of the members elected b
Page 43 and 44: Consolidated income statement Conti
Page 45 and 46: SEK M Note 2004 2003 SHAREHOLDERS
Page 47 and 48: Consolidated cash flow statement SE
Page 49 and 50: Parent Company balance sheet SEK M
Page 51 and 52: Notes, including accounting and val
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es the exchange rate effect when tr
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In connection with contracting assi
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Note 2 Effects of changes in accoun
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Note 3 Segment reporting The divisi
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Note 3 continued B. Secondary segme
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Credit risk Credit and counterparty
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Note 4 continued The Group’s unre
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Note 6 continued Net sales by type
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Note 11 Depreciation/amortization D
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Note 14 Borrowing costs Borrowing c
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Note 17 continued Information about
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Note 19 continued Receivables from
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Note 22 Associated companies Associ
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Note 26 continued Number of shares
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Note 28 continued Provisions for pe
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Note 31 Expected recovery periods o
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Note 32 continued Assets pledged fo
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Note 33 continued Consolidated bala
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Note 34 continued Relation between
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Note 35 continued Terms for the Boa
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Note 35 continued Absence from work
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Note 40 continued Discontinuing ope
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Note 42 Five-year Group financial s
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Note 43 Definitions Interest-bearin
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Auditors’ Report To the Annual Me
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Corporate governance Skanska AB is
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Annual Shareholders’ Meeting The
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Addresses Skanska AB SE-169 83 Soln
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Production: Skanska Investor Relati
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ANNUAL REPORT 2004 - Skanska

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