Report from Skanska´s annual general meeting
REPORT FROM SKANSKA´S ANNUAL GENERAL MEETING
"The foundation of Skanska’s operations remains unchanged. Our construction and project development skills, with a strong base in our local markets, constitute our core operations and main focal point."
"The primary objective of our operations is, of course, to provide all of our shareholders with the return and value growth that are required if Skanska is to continue to be an attractive investment alternative."
With these words, Skanska’s CEO Claes Björk opened the 1998 Annual General Meeting on April 29, which was attended by 800 shareholders.
He stated that the past year had held both triumphs and difficulties for the company.
"The Group’s earnings after tax amounted to SEK 7.5 billion, which was the highest ever in Group history. The upward trend in order bookings and revenue also continued in 1997."
"The growth of the past few years has been in markets outside Sweden, and last year, international operations represented more than half of our revenue."
Claes Björk also commented on the events at Hallandsåsen.
"I’m pleased to be able to state that the leakage of the RocaGil sealant will not have any long-term negative effects on humans or the environment. The risk zone has been declared safe and the inhabitants who have been financially affected by the incident have received prompt handling of their claims."
"The incident at Hallandsåsen has, of course, been a cause to reflect. Despite our high environmental ambitions, our knowledge about chemical substances is inadequate. We must improve in this area and we are working hard to increase our level of expertise.
Our goal is that all units in the Group will have environmental certification not later than the year 2000 and all of our employees will have an ingrained sense of responsibility for the environment."
He also addressed the prospects for the four business areas.
"Skanska in the U.S. is one of the largest construction companies in the American market, but our market share is no larger than about one percent. In other words, there is great potential to further develop and expand our operations."
"In the Swedish market, I believe that we have the capacity – despite our rationalization measures – to increase production in order to meet the increased demand that is expected in certain markets. The housing market is a primary area in which we can expect an increase from today’s exceptionally low level."
Claes Björk saw favorable growth possibilities in most markets for Skanska in Europe. This includes both housing construction as well as engineering and component operations.
He was also optimistic with regards to Skanska Project Development and Real Estate.
"For the first time in many years, there is once again a market for the development of new real estate projects. These types of projects are beneficial in that they combine our skills as a construction contractor and property manager with our strong presence in local markets and our financial resources."
The transfer of the debt-free property company, Drott, to shareholders was also mentioned.
"Drott mainly owns properties to which Skanska does not have much more to add in its role as a real estate developer. It is part of our business concept to continuously sell these types of properties in order to achieve the turnover and value realization that we want in our portfolio."
"After distribution of Drott and the ordinary dividend, the Group will have a shareholders´ equity of about SEK 12 billion and an equity/assets ratio of about 30 %. In addition, there are surplus values in the remaining property portfolio and share assets and our nebt debt is relatively low. Accordingly, we still have the financial strenght to implement the established strategy for profitable development and growth."
In his speech, Claes Björk also emphasized Skanska’s aim to be involved in the entire value chain of the construction process. A large portion of the total project value lies in after-sales, a market which is currently at least twice the size of new construction in most Western nations.
Claes Björk concluded by commenting on the earnings for the first quarter.
"Positive earnings and strong order bookings show the value of our international presence and direction. Skanska is today a knowledge-based company that operates in all phases of the construction process. This, in combination with financial strength, led to our largest order ever – the express railway between Kennedy Airport and Manhattan in New York City."
It was decided at the Annual General Meeting to transfer a newly established property group to Skanska’s shareholders by distributing all shares in the subsidiary, Drott AB. It was also resolved that the shares in Drott shall be of two types. The record date shall be on September 21.
At the Annual General Meeting, Roger Flanagan and Finn Johnsson were elected to the Board of Directors. They will replace Melker Schörling and Carl-Olof Ternryd. Bo Rydin was appointed Chairman of the Board at the statutory board meeting which followed. He will succeed Melker Schörling. Sven Hagströmer was appointed Vice Chairman.
Danderyd, April 29, 1998
SKANSKA AB
Group Corporate Communications
For further information, please contact: Cecilia Schön, Senior Vice President Corporate Communications, telephone +46 8 753 87 99, mobile +46 70 543 87 99