Annual Report 2011 - Skanska

Avkastning på eget kapital•Avkastning på sysselsatt kapitalFinancing and liquidityAt year-end 2011, the Group had interest-bearing net receivables,including provisions, amounting to SEK 2,929 M (9,914). The Group’sunutilized credit facilities totaled SEK 7,102 M (7,350) at year-end.Of these, SEK 6,688 M was an unutilized long-term credit that runsthrough June 2014. The proportion of interest-bearing net assets inforeign currencies, after taking derivatives into account, increased to61 (28) percent. A large part of this decrease is attributable to a relativedecrease in SEK-denominated net assets, among other things asa consequence of the regular and extra dividend. Interest-bearingassets decreased to SEK 13,510 M (14,845). Of these, receivables inforeign currencies accounted for 71 (75) percent. The average interestrate refixing period for all of the Group’s interest-bearing assets was0.3 (0.5) years, and the interest rate amounted to 1.22 (0.91) percent atyear-end.Change in interest-bearing assets and liabilitiesSEK M 2011 2010Net interest-bearing receivables, January 1 9,914 8,091Cash flow from business operations 2,602 4,630Cash flow from financing activities excludingchanges in interest-bearing liabilities and receivables–108 –43Cash flow from strategic investments –1,444 –15Dividend etc 1 –5,096 –2,873Acquired/divested interest-bearing liabilities 37 –4Exchange rate differences –353 –726Change in pension liability –2,593 760Reclassifications 0 0Other changes –30 94Net interest-bearing receivables, December 31 2,929 9,9141 Of which repurchases of shares –184 –252The Group’s interest-bearing liabilities and provisions increasedto SEK 10,581 M (4,931), of which pension liabilities and provisionsamounted to SEK 3,822 M (1,265) and construction loans to cooperativehousing associations totaled SEK 2,980 M (1,111). The averageinterest rate refixing period, excluding pension liabilities, for allinterest-bearing liabilities was 0.5 (0.9) years, and the average maturitywas 1.5 (1.4) years.The interest rate for all Group interest-bearing liabilities, excludingpension liabilities, amounted to 3.02 (3.09) percent at year-end. Theproportion of loans in foreign currencies decreased to 27 (44) percent.The Group’s total assets and liabilities/equity amounted toSEK 82.8 (77.7) billion. Due to currency rate effects, the total decreasedby SEK 0.6 billion.Return on equity and capital employedReturn on equity and capital employed%40353025201510502007•20082009Return on equityReturn on capital employed20102011Comparative figures for 2007–2008 have not been adjusted for theeffects of IFRIC 12 and IFRIC 15.At year-end 2011, the equity of the Group attributable to equity holdersamounted to SEK 19,413 M (20,670). Aside from total comprehensiveincome for the year, SEK 3,673 M, the change in equity is explainedmainly by disbursement of a dividend of SEK –4,945 M and repurchasesof shares totaling SEK –184 M as well as long-term employee ownershipand share award programs totaling SEK 228 M.Return on equity increased to 38.0 (21.0) percent.Capital employed amounted to SEK 30,164 M (25,723). Return oncapital employed amounted to 30.6 (21.6) percent.Equity/assets and debt/equity ratioThe net debt/equity ratio amounted to –0.1 (–0.5), and the equity/assets ratio was 23.7 (26.8) percent.Parent CompanyThe Parent Company carries out administrative work and includes theSenior Executive Team and management units.Profit for the year amounted to SEK 2,461 M (3,703) and mainlyconsisted of dividends from subsidiaries. The average number ofemployees was 91 (84).Material risks and uncertainty factorsThe construction and project development business is largely aboutrisk management. Practically every project is unique, with size, shapeand environment varying for each new assignment. The constructionindustry differs in this way from a typical manufacturing companythat has permanent facilities and serial production.In Skanska’s operations there are many different types of risks. Identifying,managing and pricing these risks are of fundamental importanceto profitability. These risks are normally of a technical, legal andfinancial nature, but political, ethical, social and environmental aspectsare also part of assessing potential risks. There are many different typesof contractual mechanisms in Skanska’s operations. The degree of riskassociated with the price of goods and services varies greatly dependingon the contract type.In Construction operations, sharp increases in prices of materialsmay pose a risk, especially in long projects with fixed-price commitments.Shortages of human resources as well as certain intermediategoods may potentially have an adverse impact on operations. Delays inthe design phase or changes in design are other circumstances that mayadversely affect projects.Skanska Annual Report 2011 Report of the Directors 87