ANNUAL REPORT 2006 - Skanska

CONSTRUCTION
On the way to hit
“Outperform” targets
Verksamheter
Tidsfördelning
Orderstock, 135 Mdr kr
•
Husbyggande, 53%
Geografisk fördelning
•
Sverige, 15%
Övriga Norden, 14%
• Anläggningsbyggande,
37%
Bostäder, 5%
• Service, 5% •
Kundstruktur
•
• Produktion
under 2007, 60%
• • Produktion
2008–, 40%
Övriga Europa, 37%
USA, 32%
Övriga marknader, 2%
Stat och kommun, 41%
• Institutioner1) , 10%
Företag, 22%
Kommersiella fastighetsutvecklare,
13%
•
Bostäder, 5%
Övrigt, 9%
•
1) Främst hälsovård och
utbildning i privat regi
SEK M 2006 2005
Revenue 118,710 114,478
Operating income 3,336 2,860
Operating margin, % 2.8 2.5
Capital employed 2,530 3 178
Return on capital employed,% >100 64.5
Operating cash flow from operating activities 1 3,348 3,536
Order bookings 134,125 115,848
Order backlog 135,106 127,916
Number of employees 54,480 51,185
1 Before taxes, financing operations and dividends
Operations
Duration
Order backlog, SEK 135 bn
• Building
construction, 53%
Civil construction, 37%
Residential, 5%
•
Service, 5%
• Construction
in 2007, 60%
• Construction
in 2008–, 40%
Geographic area
•
Sweden, 15%
Other Nordic
•
countries, 14%
•
Other European
countries, 37%
United States, 32%
•
Other markets, 2%
Customer structure
Government, 41%
• Institutional1 , 10%
•
Corp. Industrial, 22%
• Commercial
Development, 13%
•
Residential, 5%
Other, 9%
•
1 Mainly private healthcare
and educational institutions
Construction is Skanska’s largest business stream. Its mission is to
offer services in non-residential building and civil construction as
well as residential construction. The business stream also performs
assignments of a service nature: construction-related services,
repairs and the like as well as operation and maintenance of industrial
and transportation facilities. Operations focus on serving
corporate customers and public agencies. By virtue of its size and
leading position, Skanska can undertake the largest, most complex
assignments for the most demanding customers.
Construction business units also perform contracting assignments
for Skanska’s other business streams, which develop commercial
space, residential projects and privately financed infrastructure
(PPP). This collaboration generates both large construction
assignments and synergies.
During 2006, Skanska’s Construction units performed
SEK 3.5 billion worth of work for projects in the Residential
Development business stream. The corresponding figure for projects
in Commercial Development was SEK 0.7 billion. For projects
in Infrastructure Development in which Skanska is a co-owner,
Construction units performed assignments worth SEK 5.4 billion.
Project opportunities are also created by taking advantage of
the Group’s financial expertise. Skanska Financial Services can help
arrange financing solutions for certain types of projects when customers
request this.
Non-residential building and civil construction, as well as
residential construction, are the core of the Construction business
stream. Order backlog, which totaled SEK 135 billion at the end of
2006, is divided among several thousand projects.
Non-residential building construction accounts for 53 percent,
civil construction 37 percent and residential construction
5 percent of order backlog for the business stream.
Projects are accounted for using the percentage of completion
method. This means that earnings are recognized as costs are
accrued. Each project is evaluated on a quarterly basis, with adjustments
in the percentage of completion being made for any changes
in the estimated project completion cost.
Estimated losses in ongoing projects are recognized in their
entirety as soon as it is possible. A loss-making project that previously
reported a profit must expense the entire previously recognized
profit. In addition, the entire estimated loss must be recognized.
All else being equal, the project will then recognize zero
gross profit during the remainder of the construction period.
14 Construction
Skanska Annual Report 2006