Report from Skanska Annual General Meeting
"Skanska shall be a leader on all markets in which we are active in our core operations of building-related services and project development. We will be best at meeting customer needs and as a result be the customer's first choice."
Report from Skanska Annual General Meeting
"Skanska shall be a leader on all markets in which we are active in our core operations of building-related services and project development. We will be best at meeting customer needs and as a result be the customer's first choice."
With this description of Skanska's vision, President and CEO Claes Björk opened his address to the more than 700 shareholders attending the Skanska Annual General Meeting in Malmö on Monday.
Against the background of the average 20% growth in recent years and the 29% increase in sales last year to slightly more than SEK 64 billion, Claes Björk emphasized that Skanska is truly a growth company and that growth is being achieved concurrent with profitability.
"Earnings performance in our core operations was positive. Excluding noncomparable items, operating profit rose by slightly more than SEK 1 billion to more than SEK 3 billion. Return on capital employed increased from 12% to 18%," he said.
"Moreover, it is worth noting that most of this growth is organic."
Claes Björk also reported on the strategic focus of strengthening positions in key growth markets through company acquisitions. Polar in Finland, the Tidewater group in the US as well as this year's acquisition of the leading construction companies in Argentina and Switzerland, SADE and Steiner, respectively, means that the Group gains added competence and an expended international customer base.
"Continued internationalization reduces dependence on individual markets. Markets outside Sweden accounted for two thirds of Skanska's sales in 1998," Claes Björk continued.
"The shares held in Sandvik and the forest assets in Boxholm were sold last year, with highly favorable results. We have now also signed a binding agreement to sell our shares in Scancem to Heidelberger Cement. The selling list currently contains the remaining non-core shareholding in SKF.
"We have also re-evaluated our ownership of the component companies, Nybron, with Kährs and the other wood-flooring companies, as well as Poggenpohl, Essmann and ElitFönster. We intend to find new suitable owners for these operations in the years ahead."
According to Claes Björk, an order backlog at year-end 1998 of SEK 70 billion and several development projects provide continued favorable future prospects for Skanska.
"The overall status remains very positive. We foresee a somewhat stronger business climate for the building industry in Sweden, primarily in housing construction. In Sweden and in the US, where construction investments remain at a high level, we are also improving our operating margins. The business climate in the construction industry in Finland is also strong, while conditions in Denmark are weakening. However, the favorable order backlog also in this market provides for positive earning performance.
"The trend in the real estate operations continues to be favorable. We have ongoing commercial projects valued at about SEK 3 billion which will be completed in the next two years.
"Through the recent acquisitions, SADE and Steiner, we have also expanded our international market base with Argentina and large parts of Latin America as well as in Switzerland and France through Steiner," Claes Björk said.
The Annual General Meeting resolved that the Articles of Association be amended to provide the possibility for holders of series A shares to convert their A shares to B shares. The change is being made to facilitate trading in the A shares.
The current Board of Directors, comprising Bo Rydin, Claes Björk, Per-Olof Eriksson, Roger Flanagan, Sören Gyll, Finn Johnsson and Clas Reuterskiöld, was re-elected. At the subsequent statutory Board meeting, Bo Rydin was re-elected Chairman.
The Meeting approved the dividend of SEK 12 per share (11.00), with a record date of May 6.
Malmö, May 3, 1999
SKANSKA AB
Group Communication
For additional information, contact:
Cecilia Schön, Senior Vice President, Group Communication Skanska AB,
Tel +46 8 753 87 99 or +46 70 553 87 99