Annual Report 2011 - Skanska

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Andel av orderstockenIncreased order backlog and growth in revenueVerksamheterGeografisk fördelningTidsfördelningKundstrukturThe ambition of the business plan for 2011–2015 is that Skanska’s Construction operations shall growby Husbyggande,increasing54%market Sverige, 19% shares, • Produktionwithout sacrificing Stat & kommun, a 53% good, stable operating margin. In 2011, the operating• Anläggnings-Övr. Norden, 14% under 2012, 53%Institutionermargin amounted to 3.0 percent, • 1) , 16%byggande, 38%Övr. Europa, 22% Produktionwhich Företag, 14%is consistent with the target in the business plan. DespiteBostäder, 4%USA, 39%2013–, 47% • Kommersiella fastighetsutvecklare,11%financial • Service, 4%turmoil • Latinamerika, 6%and weaker construction Bostadsutvecklare,demand4%in various markets, order backlog increased by1) Främst hälsovård och utbildning i privat regi7 percent and totaled SEK 156 billion at• Övrigt, 2%year-end.Breakdown of order backlogOperations Geographic areaDurationCustomer structureMajor global contractors 1 , sales, June 30, 2011 2, 3Company Country SEK bn EUR bnVINCI France 326.5 35.9Bouyges France 288.8 31.8Hochtief AG Germany 190.9 21.0Grupo ACS Spain 157.8 17.4Fluor Corporation United States 145.0 16.0Skanska AB Sweden 119.2 13.2• Building construction,54%• Civil construction, 38%• Residential, 4%• Service, 4%• Sweden, 19%• Other Nordiccountries, 14%• Other Europeancountries, 22%• USA, 39%• Latin America, 6%1 Mainly private healthcare and educational institutions.• Productionin 2012, 53%• Productionin 2013–, 47%Government, 53%Institutional 1 , 16%Corp. Industrial, 14%• CommercialDevelopment, 11%• ResidentialDevelopment, 4%• Other, 2%1 Excluding Asian construction companies.2 Rolling 12 months.3 Including non-construction-related companies.Sources: Half-year reports for 2010-2011 for each respective company.Generating valueSkanska’s Construction business stream performsbuilding, civil and residential construction. It alsoperforms assignments of a service-related nature, suchas construction services and facility operation andmaintenance.In keeping with Skanska’s business model, Constructionalso performs contracting assignments forSkanska’s other business streams in the development ofcommercial and residential properties as well as infrastructure.This collaboration generates both large constructionassignments and synergies for the Group.Potential projects and synergies are also createdthanks to the financial capabilities of the Group.Skanska Financial Services often helps to arrangefinancial solutions.A combination of financial strength and global expertisein project development and construction enablesSkanska to take on large, complicated projects for internationalcustomers with strict standards of quality andexecution. In the very largest projects, which requirehigh-level performance guarantees, few competitorscan measure up to Skanska in expertise and strength.With its focused risk assessment work in the tenderstage, Skanska has been able to concentrate on winningthe right projects, which provide a balance betweenrisk level and expected margin. Skanska’s ambitionis to increase its share of negotiated contracts, wherecustomers value service level, quality and reliability inaddition to price in their tender evaluation. Skanska’sclear focus on sustainable development – such as worksite health and safety, ethics and the environment – isalso a factor that strengthens its customer offering.Major eventsDuring 2011, Construction operations showed divergenttrends in Skanska’s markets and segments. Inthe United Kingdom, the United States and the CzechRepublic, public sector cost-cutting affected the market,but in certain building construction segments – suchas healthcare, the pharmaceutical industry and datacenters in the U.S. – demand was good. The Norwegianmarket also showed a positive trend, while the residentialconstruction market weakened, especially inSweden.The civil construction market remained stable, butthe number of bidders is still large. An increased presenceby international players in various markets meanstight bidding margins.Order bookings in Construction generally showed acontinued positive trend during the year, with a numberof new assignments each worth SEK 1 billion or more,both in the U.S. and Europe. Order backlog increasedby 7 percent and totaled SEK 155.7 billion at year-end,equivalent to 16 months of construction.During 2011, Skanska signed agreements to acquirethree companies: the U.S.-based Industrial ContractorsInc., with 2,400 employees and annual sales ofabout SEK 3.2 billion; Finland’s Soraset Yhtiöt Oy,with 270 employees and sales of about SEK 900 M; andPoland’s PUDiZ Group, with 450 employees and salesof about SEK 350 M. These strategic acquisitions willmake further expansion of Skanska’s operations possiblein these countries.30 Construction Skanska Annual Report 2011
SEK156Order backlogbnBreakdown of order backlog, SEK 156 bnServices, %CivilBuilding ResidentialBusiness unitconstruction construction constructionServicesSweden 21 64 15 0Norway 44 55 1 0Finland 1 24 48 23 5Poland 55 45 0 0Czech Republic 2 60 39 1 0United Kingdom 24 54 0 22USA Building 0 100 0 0USA Civil 100 0 0 0Latin America 73 0 0 271 Including Estonia.2 Including Slovakia.Water treatment facilities for Anglian Water, U.K.Earnings for the yearTotal Construction revenue increased by 2 percentduring 2011, amounting to SEK 114,972 M (113,213).Adjusted for currency rate effects, revenue increased by8 percent. Operating income decreased to SEK 3,467 M(4,388), with currency rate effects having a negativeimpact of SEK –255 M. Earnings for the year showedlarge variations between different markets. Operatingmargin amounted to 3.0 percent, but it also showedlarge variations between markets.Future outlookThe building construction market is expected to remainlargely stable during 2012, although continued variationsbetween local markets can be anticipated. Looking a littlefurther ahead, however, general economic trends will becrucial in determining the size of future constructioninvestments. In Europe, the outlook for residentialconstruction in particular is expected to be adverselyaffected by financial turmoil. In the U.S., the increasein private investments may offset the decline in publicsector construction investments to some extent.In civil construction, a continued favorable trend isexpected in 2012.Green new construction and refurbishment are agrowing market with major potential, in which Skanskais well positioned for new assignments. In particular,refurbishment of commercial space is expected to growdue to stricter energy and emission standards andbecause both investors and tenants also increasinglydemand green premises.The Snöflingan and Iskristallen residential projects and the Courtyard by Marriotthotel, Stockholm, Sweden.Construction of a new 120 km (75 mi.) long section of highway in Antofagasta, Chile.Skanska Annual Report 2011 Construction 31
Page 1 and 2: Annual Report 2011
Page 4 and 5: NordenÖvriga EuropaIntäkterByggve
Page 6: 2011 in briefFirst quarterSecond qu
Page 9 and 10: In Central Europe, our new green of
Page 11 and 12: ”The business plan for 2011-2015
Page 13 and 14: Return on capital employed 2007−2
Page 15 and 16: 20,000students participated.Safe ro
Page 17 and 18: per day to the blogenabled the gene
Page 19 and 20: ”The divestment of the Group’s
Page 21 and 22: Skanska uses a Groupwide procedure
Page 23 and 24: New Karolinska Solna (NKS) , a univ
Page 25 and 26: A day on the job with John Crecco,
Page 27: A day on the job with Cecilia Fasth
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Page 36 and 37: Nordic countriesAndel av orderstock
Page 38 and 39: Partihall InterchangeLength: 1,150
Page 40 and 41: Other European countriesAndel av or
Page 42 and 43: Heron TowerAddress: 110 Bishopsgate
Page 44 and 45: The AmericasAndel av orderstockenUS
Page 46 and 47: 1960 - 20111960: Karl Koch Erecting
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Page 52 and 53: Nordic countriesSwedenNorwayFinland
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Page 58 and 59: 4. Byggande5. Förvaltning3. Uthyrn
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200100Skanska takes the lead0200420
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Mdr kr175175The Board of Directors
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Operating incomeSEK M 2011 2010Oper
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Investments/DivestmentsSEK M 2011 2
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Certain counterparties − for exam
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The members and deputy members of t
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Aside from day-to-day operations of
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local management teams and were app
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Consolidated income statementSEK M
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Consolidated statement of financial
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Consolidated statement of changes i
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Consolidated cash flow statementCon
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Parent Company balance sheetSEK M N
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Parent Company cash flow statementS
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Note01Consolidated accounting and v
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Note01Continuedcontract premium is
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Note01Continuedintended manner. Exa
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Note01ContinuedIf the terms of a de
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of transfers of resources to a comp
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Note04Continued2011 ConstructionRes
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Note04ContinuedExternal revenue by
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Note06ContinuedSEK M Maturity Curre
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06NoteContinuedThe role of financia
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Note06ContinuedReconciliation with
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06NoteContinuedCollateralThe Group
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Note08RevenueNoteProjects in Skansk
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Note13Impairment losses/Reversals o
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Note16ContinuedTax assets and tax l
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Note18GoodwillGoodwill is recognize
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Note20Investments in joint ventures
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Note20ContinuedInformation on the G
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Note22Current-asset properties/Proj
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Note26Equity/earnings per shareIn t
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Note27Financial liabilitiesNoteFina
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NotePension obligations2011 2010Jan
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Note31Specification of interest-bea
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34NoteContinuedConsolidated stateme
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35NoteContinuedRelation between con
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Note37Remuneration to senior execut
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37NoteContinuedRemuneration and ben
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NoteThe dilution effect through 201
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Note42Consolidatedquarterly results
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Note43Five-yearGroup financial summ
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Financial ratios etc. 4, 5 Dec 31,
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Parent Company notes45NoteFinancial
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Note58Liabilities, Parent CompanyLi
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Note63Related party disclosures, Pa
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Auditors’ ReportTo the Annual Sha
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180 Notes, including accounting and
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Senior Executive TeamJohan Karlstr
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Board of DirectorsSverker Martin-L
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Major events during 2011This page s
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Below are the investments, divestme
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Definitions and explanationsAverage
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Annual Shareholders’ MeetingInves
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1887 Aktiebolaget Skånska Cementgj
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Skanska ABwww.skanska.comRåsundav
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