Skanska Six month report, 2003

1
Skanska Six month report, 2003

2
Q2 in brief
3
Q2, 2003 year on year

• Order bookings of SEK 34 (39) bn
• Unchanged adjusted for currency effects
• Currency effect -12 percent
• Significant improvement in USA Building and Hong
  Kong
• EBIT of SEK 1,647 (816) M
• Increase in commercial project development SEK
  1,097 (4) M
• Impacted by USA Building writedowns of SEK 260 M
• Net interest-bearing debt SEK 5,086 (Dec 2002
  9,030) M
• Strong operating cash flow
• Reduction of non-strategic assets continues
• Gearing sharply improved despite RR29 impact
• Capital employed SEK 28 (Dec 2002 32) bn
• Settlement CityCronan will give further reduction
  by SEK 2 bn
• New more transparent reporting format used

4
Market outlook Construction

• Market outlook remains weak.
• Construction investments are declining in main
  markets
• Exceptions are Czech Republic and PFI projects in
  the UK
• Continued pressure on industrial and commercial
  building in most markets
• Previously stable segments in the U.S. are
  weakening due to lower public appropriations
• Civil construction weaker in publicly funded
  segments

5
Market outlook Project Development

• Residential PD activity level maintained in Czech
  Republic, Finland and Russia
• Reduced level of investment in high-end segment
  in Norway and Sweden while stable in the
  mid-range
• Cautious approach to new investments in
  Commercial PD due to economic conditions

6
Actions following the strategic review

• Reduce capital employed by about 20 to SEK 30 bn
  by year-end 2004
• CE Q3 02 SEK 36 bn
• CE adjusted Q2 03 SEK 26 bn
• Increase visibility return on capital employed
  (ROCE) key determining factor
• Reporting by business stream and market
• Pursue growth in U.S., the UK and Czech Republic
• BFW in Texas
• Exit peripheral markets like Latvia, Lithuania,
  Hungary
• Exit Skanska International Projects not in line
  with home market strategy
• Divest Skanska Project Development USA
• Exit Residential PD in Denmark
• ? Action taken

7
Order situation Construction Services
SEK bn
8
Performance analysis Q2 Business Streams
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Construction Services, Q2
10
Residential Project Development, Q2
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Residential Project Development, June 30, 2003
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Commercial Project Development, Q2
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Commercial Project Development
Land bank increase was due to internal transfer
from Construction units
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Income statement
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Balance sheet
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Change in net debt
Last day of quarter
SEK M
12,000
10,000
8,000
6,000
4,000
2,000
0
Q1
Q2
Q3
Q4
2001
2002
2003
17
Financial position update
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Cash flow
19
Group net investments
20
Summary

• Reporting in new format
• Improved financial position
• Strong cash flow from operations
• Reduction of capital employed ahead of plan
• Impact from stronger SEK
• Order backlog unchanged since year-end
• Outlook remains weak