Annual Report 2000 - Skanska

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NorwayThe construction market weakened inNorway during 2000, and it is anticipatedthat construction investments will decreaseduring 2001 as well. This applies especiallyto commercial space and civil constructionprojects.FinlandDuring 2000, Finland had a continued strongconstruction market, especially for residentialand commercial space. The market is expectedto remain strong during 2001 as well, althoughthe growth rate may be somewhat slower.Czech RepublicThe Czech construction market developedfavorably during 2000, and the market forcivil construction projects is expected to growduring the next few years.DenmarkThe Danish construction market weakenedduring 2000 and is projected to remain weakduring 2001, especially in civil construction.However, the market for commercial space isexpected to grow during the next few years.PolandThe Polish construction market is showinghigh growth. Within a few years it is expectedto be one of the larger construction marketsin Europe. This trend is naturally affected toa great extent by Poland’s planned EU membership.Hong KongThe outlook for Gammon, Skanska’s halfownedcompany in Hong Kong, is consideredgood during 2001. Forecasts of market conditionsare optimistic.ArgentinaArgentina’s economic situation has been weakin recent years. Conditions recently stabilized,however, and there is cautious optimism concerningconstruction investments during 2001.Project DevelopmentThe demand for commercial space remainsstrong in the markets where Skanska has projectdevelopment business. Skanska ProjectDevelopment is currently pursuing 23 projects,17 of them in Sweden. Projects in Stockholmmake up nearly two thirds of expected investmentvolume.About 60 percent of the space in ongoingprojects has been pre-leased. During 2000,value growth was 10 percent for comparableunits in Skanska’s real estate portfolio.Continued high turnover in the portfolio isexpected during the coming year.In the short term, Skanska’s BOT projectwill not generate any contribution to theearnings of Skanska Project Development,because these projects are in the constructionphase or were recently placed in service.New businessesSkanska Services works in different geographicmarkets with varying degrees of maturity.Over the next few years, more and morecompanies are expected to divest or to phaseout their internal service functions and insteadoutsource such services. This trend is expectedto generate rapid growth for facilities management,especially in the Nordic markets.Skanska Telecom Networks operates in arapidly growing sector with strong underlyinggrowth. The growth rate in the near futurewill be affected, among other things, by thepace of construction of the third-generationmobile telecommunications network in Europe.Skanska’s main markets, 2000GDP growth, Market size, Market growth, Skanska’s growth, EstimatedMarket % SEK bn % % market share, %United States 5.0 8,203 7 42 1Sweden 4.0 116 6 12 12Great Britain 3.0 905 5 » 1 1Norway 2.2 103 –1 » 1 7Finland 5.4 108 6 7 6Czech Republic 2.5 40 5 » 1 14Denmark 2.8 113 5 26 5Poland 4.9 174 8 » 1 3Hong Kong 9.0 155 6 » 1 3Argentina 2.0 292 –5 –7 1Sources: Swedish Construction Federation et al, Byggkonjunkturen i Norden, No. 2, 2000; OECD, Economic Outlook, No. 68, December2000, for both historic figures and forecasts; Norwegian historic figures (source Statistics Norway); U.S. historic figures (source Bureauof Economic Analysis); U.S. Census; Euroconstruct; Hong Kong Government; Engineering News Record, December 4, 2000.1 » is larger than 200 percent.Investment propertiesSEK bn 2000 1999 1998Market value 1 12.4 13.2 11.6Book value 6.3 6.9 6.4Surplus value 6.1 6.3 5.21 Estimated in collaboration with outside appraisers, withDecember 31, 2000 as the appraisal date.Return on real estate investmentin Project Development 1% 2000 1999 1998Total return 18 19 18of which, change in value 9 9 111 Including operating net and change in value of investmentproperties plus development gains on fully developed properties.20 MARKET REVIEW Skanska Annual Report 2000
Unutilized commercial building rights,December 31, 2000 (including Skanska’sshare in partly owned companies)000 sq mStockholm 240Gothenburg 100Øresund 160Other Europe 170Buenos Aires 50Total 720Financial highlights,construction servicesConstruction service operations take place inbusiness units that work under the Skanskaname in different geographic markets. In thetables below, they are presented using theResidential building rights (housing units),December 31, 2000Total number ofbuilding rightsSweden 11,500Finland 5,530Poland 2,740Norway 1,950Czech Republic 1,100Other Europe 1,000Total 23,820Skanska’s housing starts last year totaled about 10,000.previous organizational structure, based onbusiness areas. Skanska’s financial reportingfor the first quarter of 2001 will follow thisprevious structure. For further descriptionand details, see Part 2 of this Annual Report.Investment volume ofongoing commercial projectsby geographic area 1StockholmMalmöGothenburgCopenhagenOther Europe1 For more information,see Part 2, page 40.65%13%4%7%11%Financial highlights, using the previousbusiness area structure, SEK MSkanska USASkanska USA total 2000 1999Net sales 49,356 35,437Operating income 1 004 851Order backlog 93,597 67,124Skanska USA Building 2000 1999Net sales 19,661 11,340Operating income 245 106Order backlog 45,154 31,848Beers Skanska 2000 1999Net sales 16,733 13,228Operating income 229 166Order backlog 22,326 18,224Slattery Skanska 2000 1999Net sales 4,510 4,024Operating income 249 351Order backlog 9,962 8,371Koch Skanska 2000 1999Net sales 829 844Operating income 82 88Order backlog 4,268 1,273Tidewater Skanska 2000 1999Net sales 3,873 2,598Operating income 132 108Order backlog 5,221 3,936Sade Skanska 2000 1999Net sales 2,910 2,910Operating income 34 1Order backlog 4,665 3,472Spectrum Skanska 2000 1999Net sales 818 427Operating income 82 49Order backlog – –Skanska SwedenTotal 2000 1999Net sales 24,630 23,561Operating income 1,002 737Order backlog 19,581 13,553Percentage of net sales in the business area,by division2000 1999Skanska UndergroundConstruction and Bridges 7 7Skanska Residential Development 13 12Skanska Commercial Buildings 34 34Skanska Industrial Construction 19 19Skanska International Civil Engineering 4 5Skanska Road Construction 23 23Skanska EuropeSkanska Europe total 2000 1999Net sales 30,184 14,241Operating income 400 355Order backlog 47,291 12,412Central and Eastern Europe 2000 1999Net sales 15,679 8,231Operating income 658 345Order backlog 15,666 5,927International 2000 1999Net sales 741 499Operating income –34 –61Order backlog 1,620 894Denmark and Norway 2000 1999Net sales 9,601 5,133Operating income –157 92Order backlog 9,107 4,134Great Britain 2000 1999Net sales 3,917 378Operating income 13 5Order backlog 20,500 1,457MARKET REVIEW Skanska Annual Report 2000 21
Page 1 and 2: “A world leadingcompany inconstru
Page 3 and 4: Skanska’s mission is to develop,
Page 6 and 7: Comments by thePresident and CEOSka
Page 8 and 9: Mission and strategyLIVING TRAVELIN
Page 10 and 11: Profitable growthSkanska’s perfor
Page 12 and 13: New businessesSkanska’s performan
Page 14 and 15: Strategic fieldsof developmentSkans
Page 16: Santiagode ChileBOT - Developmentan
Page 19 and 20: Project DevelopmentWith the help of
Page 21: MARKET CONDITIONSGeneral economic c
Page 26 and 27: Share dataShare performance and tra
Page 28 and 29: Five-year groupfinancial summaryPro
Page 30 and 31: Styrelse Board of DirectorsBo Rydin
Page 32 and 33: Annual shareholders’meetingFinanc
Page 34: AddressesSkanska ABBox 1195SE-111 9
Page 37 and 38: LIVING TRAVELING WORKINGMissionSkan
Page 39 and 40: Report of the DirectorsStructural c
Page 41 and 42: construction market continued to im
Page 43 and 44: Financing and liquidityOver time, t
Page 45 and 46: Consolidatedincome statementSEK M N
Page 47 and 48: Consolidatedbalance sheetSEK M Note
Page 49 and 50: Comments onthe balance sheetThe bal
Page 51 and 52: Parent Companyincome statementSEK M
Page 53 and 54: SEK M Note 2000 1999SHAREHOLDERS' E
Page 55 and 56: Accounting andvaluation principlesA
Page 57 and 58: Provisions for deferred taxes on su
Page 59 and 60: Note 6Distribution of income from a
Page 61 and 62: Note 12Fees and other remuneration
Page 63 and 64: GroupParent CompanyFrom Other From
Page 65 and 66: Note 32Maturity dates of liabilitie
Page 67 and 68: Consolidatedquarterly results2000 1
Page 69 and 70: Proposed allocationof earningsThe B
Page 71 and 72: Project Developmentand Real EstateT
Page 73 and 74:
Property listProperty list on Decem
Page 75 and 76:
County, municipality, Year built/ L
Page 77 and 78:
Ongoing real estate projectsProject
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