Annual Report 2008 - Skanska

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Business streams Skanska has a high degree of common standards and also utilizes the same materials and suppliers. The new organization also makes it easier to transfer knowledge and experience. Percentage of completion method 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. By virtue of its size and leading position, Skanska can undertake the largest, most complex assignments for the most demanding customers. Markets The Nordic countries Skanska’s operations in the Nordic markets – Sweden, Norway and Finland including Estonia – encompass a broad spectrum of construction services. The largest product segments in the Nordic countries consist of new construction of office buildings, industrial facilities, retail centers, hotels, homes and infrastructure facilities − mainly for the transportation sector − as well as various types of renovations and construction services. The market for construction of commercial space, such as office buildings and shopping malls, was good in Sweden, Norway and Finland during 2008, although a slowdown occurred toward the end of the year. All Nordic construction units achieved good earnings in non-residential construction, but earnings were pulled down by one project in Norway. Several large office projects were started for Skanska Commercial Development Nordic. The civil construction market was also good, with high public sector investments. Execution was successful except for a few projects in Norway and Finland. The year began with a good volume of housing construction in Sweden and Finland, but during the autumn there was a significant decline in buyer interest. In Norway and Estonia, the housing markets were weak throughout the year. Skanska’s Nordic construction units carry out thousands of projects each year. Many projects are small or medium-sized, but a number of large contracts were signed during 2008. In Sweden these included the Partihall interchange in Gothenburg as well as a major expansion of the Bromma Center shopping mall in Stockholm and a new detention facility in nearby Sollentuna. An agreement on completion of the railway tunnel through the Hallandsås (Halland Ridge) in southern Sweden was signed. Dashwood House reaches new heights Skanska UK has completed Dashwood House near Old Broad Street in the City of London. The building underwent a total renovation, and four new stories were added. Skanska was in charge of the whole project: demolition, renovation and expansion, as well as some of the external work. Dashwood House now offers over 21,000 sq. m (226,000 sq. ft.) of prime office space and nearly 700 sq. m (7,500 sq. ft.) of retail space. Strong earnings in Sweden Skanska Sweden exceeded its “Outperform” targets, but turbulence in the financial system and a general economic downturn led to weakening markets toward the end of 2008. The business unit thus announced that employee cutbacks will be necessary. In Norway, the largest new contracts were for expansion of the Lambertseter shopping center and construction of the new Fornebu residential area in Oslo (the latter for the Fornebu Boligspar residential development company) and construction of new student housing in Trondheim. In Finland, Skanska continued to build shopping centers. The latest contract was for construction of a Kesko hypermarket in Vantaa, near Helsinki. During the year, Skanska also built the Lintulahti office property in Helsinki, its first commercial development project for its own account in Finland. Construction market developments in Estonia were hampered by the country’s economic problems. Public sector crucial in 2009 The overall Nordic construction market is expected to shrink during 2009, but the downturn can be moderated if the Nordic governments invest in upgrading public infrastructure facilities, accelerate planned projects or enact various stimulus packages. Because private investments are projected to decline during 2009, Nordic construction market developments will depend largely on public investments. Civil construction is expected to remain at a high level. In Sweden, several major projects will be tendered, for example the Citybanan commuter 22 Construction Skanska Annual Report 2008
Water is one of the basic necessities. Upon completion in 2012, the Croton Water Treatment Plant in the Bronx will provide a billion liters, 290 million gallons, of fresh drinking water – per day. That’s about ten percent of New York City’s need of drinking water. The contract is valued at USD 1.3 billion and is Skanska’s largest order to date in North America. The customer is the New York City Department of Environmental Protection. Skanska Annual Report 2008 Construction 23
Page 1 and 2: Annual Report 2008
Page 3 and 4: Contents President and CEO “Our a
Page 5 and 6: “Our ambition is to be the leadin
Page 7 and 8: In the “Group overview” section
Page 9 and 10: Infrastructure Development Skanska
Page 11 and 12: New initiatives in 2008 Skanska too
Page 13 and 14: Risk management procedures Risk man
Page 15 and 16: Green construction is booming Green
Page 17 and 18: To facilitate recruitment work, a G
Page 19 and 20: • SIX Bygg- & Anläggningsrelater
Page 21 and 22: 20 23 26 New railroad hub in Prague
Page 23: Project opportunities are also crea
Page 27 and 28: The United States The American cons
Page 29 and 30: Skanska Annual Report 2008 Construc
Page 31 and 32: 30 32 33 A sedate, small-scale neig
Page 33 and 34: Product platforms In residential co
Page 35 and 36: Ullstorps Gårdar attracting famili
Page 37 and 38: 36 39 40 First LEED building in the
Page 39 and 40: property investors. Land value also
Page 41 and 42: In Poland, vacancies fell to 2 perc
Page 43 and 44: Skanska Annual Report 2008 Commerci
Page 45 and 46: 46 47 49 Stimulating school environ
Page 47 and 48: The availability model In the avail
Page 49 and 50: Public-private partnership projects
Page 51 and 52: A much-anticipated highway opened T
Page 53 and 54: 52 53 56 Safety training and awaren
Page 55 and 56: Posters promoting training and awar
Page 57 and 58: What a supplier says: ”As part of
Page 59 and 60: Report of the Directors Skanska Ann
Page 61 and 62: American (North and Latin America),
Page 63 and 64: Commercial Development had 18 proje
Page 65 and 66: Return on equity and return on capi
Page 67 and 68: Skanska’s first Global Trainee Pr
Page 69 and 70: Consolidated income statement SEK M
Page 71 and 72: Consolidated balance sheet SEK M No
Page 73 and 74: Consolidated cash flow statement SE
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Parent Company balance sheet SEK M
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Notes including accounting and valu
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only when cashed. Cash and cash equ
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operating expenses. If the amount h
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A provision is made for disputes re
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IFRS 7, “Financial Instruments: D
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Note 04 Segment reporting The divis
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Note 04 Continued B. Secondary segm
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Note 06 Financial instruments Finan
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Note 06 Continued Reconciliation wi
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Note 06 Continued Collateral The Gr
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Note 06 Continued Liquidity reserve
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Note 07 Acquisitions of shares/busi
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Note 10 Operating income Operating
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Note 13 Impairment losses/Reversals
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Note 16 Continued The net amount of
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Note 17 Continued Information about
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Note 18 Continued Goodwill impairme
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Note 20 Continued Specification of
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Note 22 Current-asset properties/Pr
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Note 23 Inventories etc. Note Equit
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Note 26 Continued Equity attributab
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Note 28 Continued The ITP 1 occupat
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Note Provisions are reported in com
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Note 32 Expected recovery periods o
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Note 34 Effect of changes in foreig
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Note 34 Continued Consolidated bala
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Not 35 Continued Relation between c
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37 Note Remuneration to senior exec
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Note 37 Continued tion based on the
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Note 40 Continued B. Skanska as les
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Note 43 Five-year Group financial s
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Note 43 Continued Financial ratios
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Parent Company notes Note 45 Financ
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Note 51 Financial non-current asset
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Note 58 Liabilities, Parent Company
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Note 63 Related party disclosures,
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Auditors’ Report To the Annual Sh
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Corporate governance report of Skan
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For more detailed information about
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mation on the President and CEO and
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Senior Executive Team Johan Karlstr
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Sir Adrian Montague United Kingdom,
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For about SEK 1.8 billion, Skanska
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146.9 M, about SEK 900 M, which wil
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More information about Skanska Worl
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Annual Shareholders’ Meeting Cale
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Annual Report 2008 - Skanska

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