S w e c o A n n u A l R e p o R t 2 0 0 6
every h our,
the Sun
pro vid
es earth with as much energy a s all
of ma
nkind uses
in an en
tir ey
ea r.
An d w
e h um
an s hav
e only jus
t beg un
lear ning
how to effectively harness th
epotential of
solar energ
y.
without a doubt, there are many challenges ahead for those of us working to
make our planet a better place.
2 HIGHLIGHTS OF 2006
4 MESSAGE FROM THE MANAGING DIRECTOR 6 GROUP OVERVIEW
8 BUSINESS MISSION, VISION, STRATEGIES, GOALS SWECO GROUP 10 GROWTH AND INTERNATIONALISATION
12 EFFECTIVE TOOLS FOR PROFITABLE GROWTH 14 MARKET
16 EMPLOYEES, CORPORATE CULTURE, SKILLS DEVELOPMENT 18 RELATIONS, BUSINESS ETHICS, ENVIRONMENTAL RESPONSIBILITY
22 SWECO SWEDEN
27 SWECO GRØNER – NORWAY SWECO’S BUSINESS UNITS 29 SWECO FINLAND
30 SWECO BALTIC & EASTERN EUROPE AND SWECO RUSSIA 32 SWECO PIC – INDUSTRY
36 BOARD OF DIRECTORS’ REPORT 42 CONSOLIDATED INCOME STATEMENT 43 CONSOLIDATED BALANCE SHEET
44 CONSOLIDATED CASH FLOW STATEMENT
FINANCIAL REPORT 45 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 46 PARENT COMPANY ACCOUNTS
50 NOTES
76 PROPOSED APPROPRIATION OF PROFITS 77 AUDIT REPORT
80 THE SWECO SHARE 82 FIVE-YEAR OVERVIEW 84 CORPORATE GOVERNANCE
SHAREHOLDER INFORMATION 88 BOARD OF DIRECTORS AND AUDITORS 90 GROUP MANAGEMENT
92 ANNUAL GENERAL MEETING AND FINANCIAL CALENDAR 93 DEFINITIONS
contentS
ARlAnDA
At Arlanda Airport outside Stockholm, SWECO is instrumental in a project to reduce energy usage by 30–50 per cent, among other things by creating Europe’s largest thermal energy reservoir deep beneath the surface.
HIGHlIGHtS oF 2006
conSolIDAteD net SAleS conSolIDAteD opeRAtInG pRoFIt
AnD opeRAtInG MARGIn DIVIDenD peR SHARe
StRonG eARnInGS AnD poweRFul GRowtH
• operating profit improved by 33 per cent to SeK 36.9 million (27.6).
• operating margin was 9.3 per cent (8.).
• net sales increased by 6 per cent to SeK 3,894.7 million (3,372.2).
• profit before tax totalled SeK 364.4 million (35.2).
• profit after tax was SeK 258.3 million (274.), equal to earnings per share of SeK 5.02 (5.88).
net financial items for the previous year included one-time items of SeK 79.8 million, equal to SeK 4.72 per share.
• the Board proposes a dividend of SeK 7.50 per share, a redemption procedure corresponding to SeK 8.50 per share and a 5-for- share split in which each existing share will be split into five new ones.
The City of Gothenburg, Sweden, is planning Västlänken, a railway tunnel under the city centre with a number of new stations. This large-scale project is of vital impor- tance for regional growth and development and will support increased traffic volumes while at the same time improving the environment through reduced air pollution,
2006 was a record year of high profitability and powerful growth. this strong performance was driven by continued success in the market, completed acquisitions, increased project collaboration between units in the Group and an effective business model built on simplicity and entrepreneurship. Sweco further strengthened its positions in the nordic home markets, above all in the energy area. At the same time, Sweco made new progress in the growth markets of the Baltic and eastern europe and won several significant contracts. Sweco carried out around 24,000 assignments on behalf of 7,000 clients. During the year, companies were acquired in Sweden, norway, Finland and lithua- nia. At the end of 2006, the number of employees in the Group had risen to approximately 4,200. Sweco introduced a new geographically-ori- ented organisation in order to improve the scope for international expansion. the share price rose by 27 per cent in 2006. total yield on the Sweco share, defined as the sum of share price growth and dividends received and reinvested, has averaged at 38 per cent over the past five years.
0 1,000 2,000 3,000 4,000
2006 2005 2004 2003 2002 SEK M
0 100 200 300 400
2006 2005 2004 2003 2002 SEK M
0.0 2.5 5.0 7.5 10.0
Operating profit Operating margin
0 4 8 12 16
2006 2005 2004 2003 2002 SEK
Regular dividend Extraordinary dividend
pRoFIt AnD KeY RAtIoS, GRoup 2006 2005
net sales, SeK M 3,894.7 3,372.2
operating profit, SeK M 36.9 27.6
profit before tax, SeK M 364.4 35.2
operating margin, % 9.3 8.
Billing ratio, % 75.3 74.2
Return on equity, % 29.9 35.3
equity/assets ratio, % 40.8 43.2
earnings per share, SeK 5.02 5.88
equity per share, SeK 49.00 5.37
Distribution to the shareholders per share, SeK 6.00) 5.50
Average number of employees 3,986 3,626
1) A proposed dividend of SEK 7.50 per share and a share redemption for a price of SEK 8.50 per share.
noise and traffic congestion. Four alternative alignments are being evaluated and architects and engineers from SWECO have been commissioned by the National Rail Administration to perform studies on land use, design and architecture, traffic analysis and socioeconomic impacts. If implemented, construction will begin in 2008.
MAtS wäpplInG new MAnAGInG DIRectoR AnD ceo oF Sweco Mats wäppling was appointed Managing Director and ceo of Sweco effective January 2007. Mats, who is 50 years old and holds a civil engineering degree in land surveying from the Royal Institute of technology (KtH), comes most recently from a post as Deputy ceo of ncc AB and president of ncc property Development. prior to that he worked for Skanska from 979 to 2002, among other things as Vice president and Business Area Manager. Mats wäppling has served on the Board of Sweco AB since 2003.
“Sweco is growing with strong profitability. our earnings for 2006 show that the company is among best in class, and it will be tremen- dously exciting to take part in guiding Sweco forward as one of the lead players in the consulting engineering industry. the Group has both the organisation and the financial muscles needed to secure and defend a top tier position. the prospects for ongoing expansion are favourable and Sweco’s ambition is to grow with sustained profitabil- ity by more aggressively targeting the nordic region and extending our reach and breadth in the growth markets,” says Mats wäppling.
WIGON THURESSON, VD OCH KONCERNCHEF
In preparation for the refurbishment of Stortorget in Gävle, SWECO’s landscape architects created a proposal in which the main square and market stalls are given a new structure and division into three separate zones defined by trees and ground coverings.
GRowtH wItH HIGH
pRoFItABIlItY
looking back on a very eventful 2006, it stands out as a truly outstanding year for Sweco.
operating margin approached 0 per cent and net sales improved by 6 per cent to SeK 3,895 million. operating profit reached SeK 362 million, up by a full 33 per cent. these suc- cesses owe to an explicit strategy for the company’s growth with sustained profitability, a business model based on simplicity and a spirit of entrepreneurship throughout the organisation.
we have continued to create value for our shareholders.
In 2006 the price of the class B share rose by 27 per cent, from SeK 208 to SeK 264. over the past five year period, total yield on the Sweco share has averaged at 38 per cent.
All business units in the Group delivered strong results thanks to many years of contin- uous development in the service offering, working methods and organisation, but also to a rising degree of interdisciplinary teamwork in major projects. this is clearly illustrated by the massive infrastructural and industrial projects currently underway in the Kiruna- Malmberget-narvik region where virtually all of the Group’s technical disciplines are involved.
And the Sydlänken traffic route, where several units are collaborating in the Swedish national Grid’s effort to eliminate transmission con- straints between northern and southern Swe- den. or the major hydroelectric power project in laos, where Swedish and norwegian experts are working together to increase gen- eration capacity on the theun-Hinboun River, one of the Mekong River’s main tributaries. In 2006 we further consolidated our positions in all markets.
Several strategic acquisitions were made in norway. In Sweden, our highly sought-after energy consultants have now also taken the lead in power transmission following the acquisition of eltel’s consulting operations. In Finland we have opened opportunities for new business in architecture and project manage- ment. the industrial consultants at Sweco pIc strengthened their positions through acquisitions in Finland in the electronics area and in norway in the marine and offshore industries.
In 2006 we pursued an ambitious mobilisa- tion of resources in the east and today Sweco is the largest provider of consulting engineering services in lithuania and estonia.
In Russia we are continuing to build on the environmental consulting company lenvo- dokanalproekt. we now have close to 500 employees in Russia and the Baltic countries, a market region bubbling with optimism and a GDp growth rate of 8–0 per cent annually.
these are markets where the needs are vast and the projects many, and where there are few consulting engineering companies with the capacity to assume total responsibility for major projects extending over several years.
In May 2006 a new geographically-oriented organisation was introduced to facilitate the Group’s international expansion, and the new national managers are now taking decisive steps to strengthen the positions in their respective markets. As part of the reorganisa- tion we also appointed new managers for sev- eral business units, and I am pleased to say that all of these were recruited internally.
Sweco is well poised for the future and ongoing expansion. Moving forward, the prior- ities are to strengthen the positions in estab- lished markets, diversify the service offering into new and closely related areas, introduce the full range of services in more markets and increase the focus on growth markets to the east.
As ceo of Sweco I now pass the baton to Mats wäppling.
Sweco is a company with a solid financial position, an effective business model, an unparalleled breadth of expertise and a well defined strategy for the future. A company with a strong corporate culture dominated by curiosity, commitment and responsibility.
It will be exciting to follow the company’s continued growth and development.
Stockholm, February 2007
wIGon tHuReSSon
Managing Director and ceo until 3 December 2006
GRoup oVeRVIew
Sweco is a provider of qualified consulting services in the fields of consulting engineer- ing, environmental technology and architec- ture. with its approximately 4,200 employees, the Group is among the dominant players in europe and the market-leader in several seg- ments of the nordic market.
engineers, architects and environmental experts in the Sweco companies work together to build a safer, more environmen- tally sound and sustainable society. the tan- gible results of their work are clean air and pure water, attractive and functional living and working environments, roads and bridges that increase traffic safety and shorten travel- ling time and industries that are efficient, profitable and environmentally sound.
Sweco’s services are often performed at an early stage of client projects, and can include conceptual development, structural engineering, feasibility studies, risk and needs analyses, strategic planning, mapping, plan- ning and design and project management.
the home market is the nordic region, but Sweco also conducts extensive and steadily growing operations in the global arena.
Around 50 per cent of sales are currently gen- erated outside Sweden. every year, some 24,000 projects are carried out for approxi- mately 7,000 clients. Since undertaking its first international assignment in 903, Sweco has carried out projects in more than
00 countries.
Sweco’s services are demanded by cli- ents across numerous market segments,
such as industry, environment, energy, infra- structure, construction, property and trans- portation. 60 per cent of the project volume comes from the private sector and 40 per cent from municipal and county govern- ments, national administrations and public authorities. the ten largest clients account for 20 per cent of sales.
operations are conducted in six business units: Sweco Sweden, Sweco norway, Sweco Finland, Sweco Baltic and eastern europe, Sweco Russia and Sweco pIc.
Sweco has subsidiaries in eight countries and projects currently underway in 75 coun- tries worldwide. Because local presence is vital, Sweco has 75 local offices in the nordic region and an additional 5 around the world.
AReAS oF opeRAtIon
ARcHItectuRe
Qualified services in architecture, urban planning, landscape architecture and interior architecture. the service offering includes expertise in architecture for homes, offices and industries, as well as educational, care and medical facilities.
StRuctuRAl enGIneeRInG
Structural engineering services for technologically advanced industrial and building con- struction projects. the service portfolio includes industrial design, building construction, complex steel structures, dynamic analyses, advanced foundational engineering and environmental performance of buildings.
BuIlDInG SeRVIce SYSteMS
A full range of consulting services in HVAc and plumbing, electrical, telecom, fire pro- tection and building automation systems. the offered services range from advice, plan- ning and design to control and monitoring, inspection, energy optimisation and mainte- nance planning of service systems.
tRAnSpoRt AnD cIVIl enGIneeRInG
consulting services in land and transportation, hydraulic works and civil engineering.
the services include studies, planning and design of roads, railways, bridges, tunnels, dams, harbours and power stations, as well as projects related to traffic planning, public transportation and traffic safety.
wAteR AnD enVIRonMent
comprehensive consulting services related to water and the environment. the service offering consists of studies, analysis and planning in areas such as water supply, mains
systems, wastewater treatment, waste management, soil and site remediation, industrial environmental engineering and various types of environmental studies and impact assessments.
pRoJect MAnAGeMent
project management and administration services for projects of all types. the services include administration and management of building and infrastructure projects, man- agement and development of diverse quality, development and environmental projects and services for property owners and tenant support.
eneRGY SYSteMS
energy consulting services in areas such as power and heat generation, power trans- mission networks, infratechnology, plant supervision, energy settlement, telecommuni- cations, energy analysis and operational development.
GeoGRApHIc InFoRMAtIon SYSteMS
consulting services based on the use of maps and geographic positioning to structure and present large quantities of information in a clear and easy-to-grasp manner. A com- prehensive service offering with an emphasis on Geographic Information Systems (GIS), enterprise portals and mobile information systems.
InDuStRIAl enGIneeRInG
Advice, engineering design and other qualified consulting services for the process, prod- uct and manufacturing, electronics and marine technology industries. the assignments include everything from feasibility studies to implementation in areas like product devel- opment, production engineering and investment planning.
AReAS oF opeRAtIon SHARe oF GRoup SAleS In 2006
eneRGY SYSteMS, 4% (0)
wAteR & enVIRonMent, 5% (7) GeoGRApHIc
InFoRMAtIon SYSteMS, 2% () InDuStRIAl enGIneeRInG, 20% (23)
StRuctuRAl enGIneeRInG, 8% (7)
pRoJect MAnAGeMent, 5% (5)
ARcHItectuRe, 9% (0)
BuIlDInG SeRVIce SYSteMS, 2% ()
tRAnSpoRtAtIon &
cIVIl enGIneeRInG,
5% (6)
Sweco’S clIentS SAleS BY clIent cAteGoRY In 2006
otHeR pRIVAte SectoR coMpAnIeS, 2% (7)
MunIcIpAl AnD countY GoVeRnMentS, 2% (2)
InDuStRIAl coMpAnIeS, 34% (34) HouSInG, ReAl eStAte
AnD conStRuctIon coMpAnIeS, 4% (8)
puBlIc ADMInIStRAtIonS AnD AGencIeS, 9% (20)
SWECO’s mission is to actively contribute to sustainable development of society.
Since undertaking its first international assignment in 1903 SWECO has carried out projects in more than 100 countries worldwide. Today, around half of the Group’s sales come from operations outside Sweden.
Aside from Sweden, SWECO has fixed establishments in Norway, Denmark, Finland, Russia, Estonia, Lithuania and Bulgaria.
The volume of project exports is considerable. Many Asian countries are pursuing projects in the energy, environmental and infractructure areas. In China SWECO is successful primarily in architecture, environment and industry, and in India we are involved in projects related to future energy issues. On the African continent, a number of projects have been launched to improve the environment, infrastructure and energy supply. In Central and South America, SWECO’s consultants are working in a range of projects focusing on the environment, infrastructure, energy and industry. Russia, the Baltic countries and the rest of Eastern Europe are the largest and fastest- growing export markets, where SWECO’s consultants are pursuing projects in all of the Group’s areas of operation.
In 2006 SWECO carried out assignments in 75 countries on behalf of some 7,000 clients.
otHeR pRIVAte SectoR coMpAnIeS, 2% (7)
MunIcIpAl AnD countY GoVeRnMentS, 2% (2)
InDuStRIAl coMpAnIeS, 34% (34) HouSInG, ReAl eStAte
AnD conStRuctIon coMpAnIeS, 4% (8)
puBlIc ADMInIStRAtIonS AnD AGencIeS, 9% (20)
BuSIneSS concept
Sweco’s business concept is to create value by delivering qualified consulting services.
pRoFItABIlItY tARGet
over the course of an economic cycle Sweco will generate a profit that is above the average for the sector, equal to at least 8 per cent of sales before net financial items.
StRAteGIeS AnD pRIncIpleS
Sweco will establish a position as the most respected knowledge company in the fields of consulting engineering, environmental tech- nology and architecture by further developing the core competencies of its business units and employees. At the same time, Sweco will diversify its business through ongoing expansion into new, closely related growth areas. Development and growth will be accompanied by strict profitability standards.
organisation
Sweco will maintain a flat, effective and client-driven organisation.
client orientation
Sweco will strengthen its position as a client-oriented company that delivers creative and customised solutions with a high knowledge con- tent, based on experience and in-depth knowledge of the clients’ oper- ations and business objectives.
Knowledge sharing and teamwork
Sweco is a transparent, curiosity-driven and responsive company in which knowledge-sharing and teamwork between the employees and units is an integral aspect of client projects.
wider international presence
Sweco will safeguard its long-term competitiveness and profitability by expanding its international presence. this will be achieved through strategic acquisitions and the establishment of international opera- tions. Sweco will also build up the resources necessary to provide cli- ents with superior service in their international projects.
Lunds Energi is planning the construction of a new biomass CHP plant in Örtofta, Sweden. Instead of a traditional boxy industrial structure, SWECO’s architects have presented a design proposal in which the plant’s lines harmonise with those of the surrounding landscape.
BuSIneSS MISSIon VISIon
StRAteGIeS
GoAlS
In the city of Sauda in western Norway, SWECO Grøner and the power plant opera- tor Elkem have created a solution to increase the population of salmon trout with the help of a man-made landscape, consisting of an artificial riverbed with deep water pools, spawning grounds and maturation habitats.
VISIon
Sweco’s vision is to be one of europe’s most respected knowledge companies in the fields of consulting engineering, environmental technology and architecture.
MISSIon
Sweco’s mission is to actively contribute to sustainable development of society.
BuSIneSS MoDel
the business model is based on simplicity and client focus, where the idea is that it should be easy for clients to do business with Sweco. with a high degree of personal freedom and responsibility, the individual architects and consultants are always the hub of operations.
eMploYeeS
Sweco’s employees are committed to, and proud to be part of, a team in which everyone is prepared to take responsibility for building a better world.
In the past three years Sweco has grown by an average of 2 per cent annually through organic and acquisition-driven growth. the integration of acquired units has been suc- cessful and contributed to enhanced profita- bility and stronger market positions.
As earlier, the main pillars of Sweco’s future strategy are sustained growth and internationalisation. By playing an active role in the ongoing international consolidation of the industry, Sweco’s goal is to establish a position among europe’s most respected knowledge companies in the fields of con- sulting engineering, environmental technol- ogy and architecture.
Growth is critical for two reasons.
there is an international tendency towards projects of greater size and scope, in which experts from diverse areas combine their skills to take end-to-end responsibility. this trend is driving a consolidation into large con- sulting engineering companies with broad resources and interdisciplinary expertise.
the second is an increased need for investment in structural capital such as technology, support systems and brand. In order to continuously invest in cAD models, simulation software and other It-related tools, the costs must be spread between a larger number of employees.
StRonGeR poSItIonS In tHe eStABlISHeD MARKetS
Sweco is aiming for growth in the estab- lished markets. In Sweden, for example, Sweco energuide gained new ground in power transmission and distribution through the acquisition eltel network Konsult AB with 00 consultants. In norway Sweco Grøner acquired three companies, including the environmental and energy consulting firm of e-co tech. the industrial consultants at Sweco pIc advanced their position in the nordic market through the takeover of pI- Rauma’s consulting operations for the ship- building and offshore industries and the
acquisition of the telecom company capri- code’s consulting operations.
VentuReS In new GRowtH MARKetS Sweco is continuing to grow in the markets of eastern europe. Many countries have been granted sizeable subsidies from eu’s structural funds and programmes to improve infrastructure, repair environmental damage, build communities and schools, organise traffic and communications, upgrade energy systems and optimise production. consult- ing services are urgently needed in a wide range of areas. In Russia alone, the market for environmental consulting services is esti- mated at SeK .5 billion annually.
the 2 new eu member states are increasingly procuring consulting services at a central level, which means that local repre- sentation will be decisive for growth in these markets. In the Baltic and St. petersburg area, Sweco is already the leading engineer- ing consultancy with close to 500 employees.
GRowtH AnD
InteRnAtIonAlISAtIon
For many years, SWECO has been active in hydropower and infrastructure projects in Laos. At present, SWECO’s Swedish and Norwegian hydropower experts are analysing the technical and economic feasibility of a capacity increase in an existing hydropower plant on the Theun-Hinboun River, which runs between Vietnam and Laos. The topographical conditions and intensive monsoon periods make the river ideally suited for hydropower production.
Following the acquisition of lithuanian lSpI with 20 employees, Sweco’s lithuanian subsidiary Sweco BKG is now the country’s largest engineering consultancy. In estonia, the subsidiary Sweco eesti was merged with etp Grupp and eesti projekt to form the country’s largest engineering firm, Sweco projekt, with more than 200 employees.
these, together with the earlier acquisition of the Russian environmental consulting com- pany lenvodokanalproekt and the newly established subsidiary in Bulgaria, are strate- gic stepping stones for Sweco’s ongoing growth in these expansive markets.
DIVeRSIFIcAtIon In eStABlISHeD MARKetS
Some of the Sweco units have prominent positions in geographical markets where their sister companies are not yet estab- lished. For instance, Sweco’s industrial consultants are leaders in Finland and the environmental consultants have a strong foothold in the Baltic countries and Russia.
By leveraging the positions of already established units, other units can improve their opportunities for growth in these mar- kets. In one such example from the project management area, operations were built up in Finland through the acquisition of the country’s leading project management con- sultancy, cM-urakointi oy, with special expertise in construction and infrastructure projects. In norway, Sweco pIc established operations by acquiring the industrial con- sulting company Mec AS, which offers serv-
ices for the marine technology, shipbuilding, chemical and pharmaceutical industries.
IncReASeD teAMwoRK wItHIn tHe GRoup
to continue growing across multiple markets, it is crucial that the professional knowledge and experience gained by Sweco’s consult- ants is preserved and redeployed in future assignments. the Group’s business system makes it possible for employees to quickly access information about earlier assignments and identify colleagues with special expertise and experience.
consultants from different Sweco com- panies are increasingly working side-by-side in client projects, such as many of the large- scale infrastructure projects currently under- way in Sweden. on the new railway line between Skutskär and Furuvik, Sweden, sev- eral companies are involved in a project that includes railways, bridges, signalling sys- tems and environmental aspects. In Finland, Sweco VIAK joined forces with Sweco pIc to complete a due diligence project on 92 properties throughout the country in record time. In laos and Romania, several of the sister companies are teamed in major hydro- power projects.
new oRGAnISAtIon FoR InteRnAtIonAl expAnSIon
During the spring, the Group introduced a new geographically-oriented organisation that is designed to improve the scope for international expansion.
SWECO has considerable resources and in-depth expertise in planning and engineering for rail-bound traffic. Consultants from many different SWECO units are collaborating on the new rail- way line between Skutskär and Furuvik, Sweden, in a project that includes railways, bridges, signal- ling systems and environmental aspects.
eFFectIVe toolS
FoR pRoFItABle GRowtH
SWECO continuously invests in advanced processes, methods and customised support systems that assist the consultants in their day-to-day work and ensure optimal performance of assignments.
Sweco’s powerful expansion in recent years is the result of an explicit growth strategy and a clear and well tested business model. the central objective in the business model is for all Sweco companies to have leading posi- tions in their technical disciplines, adequate resources to continuously develop their core competencies and good profitability.
the business model is based on simplic- ity and client focus, where the idea is that it should be easy for clients to do business with Sweco. For that reason, Sweco has a decentralised, efficient and client-driven organisation with few central functions. this business model demands powerful group- wide tools that facilitate and effectivise the work processes so that all energy can be focused on business activities and the indi- vidual employees’ involvement in client projects.
poweRFul BuSIneSS SYSteMS
Sweco continuously invests in processes, methods and support systems that guaran- tee optimal performance of assignments and high client benefit. the support systems contain the company’s joint work models for project implementation and provide all of the help functions needed by the individual employees. this is cost-effective, since all project activities follow uniform routines. It also creates a common interface through
which consultants from different countries and business units can work together in projects.
cuStoMISeD ISo-ceRtIFIeD MAnAGeMent SYSteM
sweco@work, which is certified according to ISo 900:2000 and ISo 400:2004, is a group-wide It support system that is used by the architects and consultants throughout the assignment process. the system pro- vides a set of routines, practical guides and tools. the routines are the steering docu- ments in which the requirements are speci- fied. the practical guides describe how these requirements are to be met and the tools provide group- and company-wide per- formance aids for project implementation.
the system is divided into three processes:
• the assignment process where the assign- ments are handled from initial inquiry to archiving.
• the support process with guidance for aspects such as purchasing procedures and management of environmental factors.
• the business development process which focuses on areas such as knowledge recy- cling and skills development.
sweco@work is a powerful competitive tool that improves efficiency and control of the work process, and therefore also capacity utilisation. By basing the system on its certi-
fied quality and environmental management systems, Sweco has ensured that quality, environmental, health and safety aspects are automatically integrated throughout the assignment process. sweco@work supports both large and complex projects. the sys- tem, which serves as an integrated platform for all project work, ensures error-free project management and a consistent approach to the assignment process and client relationship.
GReAteR InteGRAtIon Between BuSIneSS AReAS AnD MARKetS
the group-wide business system contains a contact and competency function, Sweco contact, where all employees in the Group are registered with their professional experi- ence and special expertise. this makes it possible to seek colleagues in other busi- ness units or countries that have skills and knowhow in a specific area.
pRoFItABIlItY MAnAGeMent
the Group’s business system contains a number of features for financial manage- ment, control and follow-up. A user-friendly reporting system allows easy entry of time reports and enables project managers to continuously monitor project performance in relation to budget and schedule. there is also a standardised web-based reporting
SWECO’s architects have created a design proposal for a brand new convention and event centre in Örebro, Sweden. The building, known as “Stinsen”, has 7,000 sq. m. of floor space and an architectural expression that announces the city’s visions and contributes to marketing of events.
system for monitoring of projects, business unit performance and key ratios.
GRoup-wIDe IntRAnet
A new group-wide intranet for all countries was launched during the spring. the aim is to link together all operations and countries in a common platform from which it is possible to access all business systems and where all internal informa- tion in the Group is published. the intranet offers multi-language functionality so that all employees can receive information in their native tongue. the joint intranet also features a technical forum where employees can network and exchange knowledge across national and organisational boundaries.
sweco@work, which is based on SWECO’s certified quality and environmental management systems, ensures efficient project management and a consistent approach to the assignment proc- ess throughout the Group. sweco@work is an essential tool in the day-to-day work of SWECO’s consultants.
Sweco’s home market is the nordic region, but extensive operations are also conducted in eastern europe through the Group’s sub- sidiaries in Russia, estonia, lithuania and Bulgaria. At the same time, Sweco has a substantial volume of project exports to eastern europe, Asia, Africa, the Middle east and central and South America.
the foremost competitors that are active in several of Sweco’s markets include uK- based wSp, Finland-based pöyry, Swedish ÅF and Danish Rambøll and cowI.
In 2006 Sweco enjoyed powerful demand for its services both in the nordic countries and internationally. the assessment is that all areas of operation will enjoy continued favourable market conditions throughout the early part of 2007.
SweDen
the Swedish market for Sweco’s services remains vigorous and the regional variations are minor. Favourable demand for building- related consulting services is generating substantial planning and design volumes in the construction sector.
In the infrastructure sector, planning and design volumes remain strong and are expec- ted to continue at a high level. the energy sector is showing keen long-term demand for qualified consulting services and 2007 is expected to be another year of excellent mar- ket conditions for Sweco’s energy consult- ants. Sweco’s water and environmental serv- ices are increasingly sought after by clients in both the public and private sectors.
the market for industrial consulting serv- ices has improved during the year with espe- cially brisk growth in assignment volumes for planning and design of industrial facili-
and process technology in the mining and steelworking industries are stimulating demand for Sweco’s services.
noRwAY
In norway, demand is strong in all of Sweco Grøner’s areas of operation and is expected to remain stable in 2007.
overall planning and design volumes in the construction sector remain high. capital spending on housing construction is expec- ted to level out in 2007, but to be offset by increased demand for office and industrial construction. Development in the offshore sector is characterised by robust demand, particularly in planning and design under- water and steel structures.
Volumes in the infrastructure sector were high during the year and continued strong demand is awaited in connection with planned investments in the road and railway network. Development in the water and envi- ronment sector is positive and rising activity is being noted in areas such as environmen- tal management, hydrology and environmen- tal economy. In the energy sector there is a growing demand for consulting services in development of wind power, bioenergy and small hydropower plants.
FInlAnD
the market for consulting engineering serv- ices showed positive development in 2006 and is expected to remain favourable in 2007.
there is a growing inflow of investment to the infrastructure sector and the building sector is noting stable strong demand for commercial space, housing and public facili- ties. Growth in the environmental market remains brisk, but has slowed somewhat.
ices is expanding rapidly with rising invest- ment in industrial facilities for the process industry and energy sector. In the marine sec- tor, order backlogs for the shipbuilding indus- try are growing steadily. the manufacturing and telecom industries are increasingly con- tracting out product development and indus- trial design to external consultants, which is boosting demand for Sweco’s services.
Domestic investments in 2007 are expected to remain stable at the current levels.
eASteRn euRope AnD RuSSIA
the eastern european economies are under- going dramatic expansion and their ongoing adaptation to eu standards is continuing to act as a powerful driver for modernisation of water and sewage systems, transport sys- tems, energy supply, industrial facilities, hous- ing and commercial premises. the projects are many and financing is available, but many markets lack access to qualified consulting resources. this is creating an urgent demand for Sweco’s services, particularly for environ- mental services in the Baltic Sea region, but increasingly also in the industrial, infrastruc- ture, energy and architecture areas.
ReSt oF woRlD
Demand for qualified consulting services is growing at the global level. urbanisation, environmental improvements and industrial development are contributing to a sustained strong export market for Sweco’s services in Asia, Africa, the Middle east and latin America, above all for services in environ- ment, energy, industry, infrastructure and architecture. china, in particular, is showing an escalating interest in Sweco’s architec- tural and urban planning services.
Rising global demand for steel and iron ore products is fuelling febrile activity in the Malmberget-Kiruna-Narvik region. The mines are being enlarged, parts of the city of Kiruna are being moved and new industrial and port facilities are being built at brisk pace. Virtually all of the SWECO companies are involved in the various projects. The new pelletising plant outside Kiruna is the largest investment in LKAB’s 115-year history and is scheduled for completion in the spring of 2008. The structure contains 16,000 tonnes of steel, twice the amount used to build the Eiffel Tower in Paris. SWECO is responsible for construction planning in association with NCC and LKAB.
MARKet
KEY RATIOS AND OPERATIONS SWECO ÅF WSP Pöyry Rambøll COWI
Net sales, SEK M 3,895 3,114 5,599 6,038 4,786 3,406
Operating margin, % 9.3 4.81) 6.7 7.8 6.7 6.5
Average number of employees 3,986 3,167 7,0002) 6,038 4,905 3,5613)
Architecture l l
Structural Engineering l l l l
Building Service Systems l l l l l
Transportation & Civil Engineering l l l l l l
Water & Environment l l l l l l
Project Management l l l l l l
Energy Systems l l l l l
Geographic Information Systems (GIS) l l l
Industrial Engineering l l l l
1) Excluding one-time income. 2) According to the year-end report, approximate number at end of year. 3) Number at end of year.
COMPETITORS IN 2006
In Armenia, SWECO has been selected together with Sweden-based SweRoad to plan 1,000 miles of rural roads, ramps and bridge connections. SWECO has previously studied alternatives for development of the transportation system in the Armenian capital city of Jerevan.
SWECO’s architects have been suc- cessful in China for several years. One notable project was the preparation of a master plan for the city of Gangdong southeast of Tianjin, where a new dis- trict is being built for a population of 145,000 residents. A central ambition in the plan was to emphasise the waterfront location by interweaving a system of canals and lakes throughout the development.
eMploYeeS
coRpoRAte cultuRe SKIllS DeVelopMent
AVeRAGe nuMBeR oF eMploYeeS VAlue ADDeD peR eMploYee
Univeristy degree 62% (54) Upper
secondary 35% (43)
Other 3% (3)
> 10 years 33% (34)
4–9 years 30% (31)
< 1 year 15% (13)
1–3 years 22% (22)
> 50 years 31% (31)
41–50 years 23% (22)
< 31 years 16% (15)
31–40 years 30% (32) eMploYee tuRnoVeR
eDucAtIon teRM oF eMploYMent AGe StRuctuRe
0 1,000 2,000 3,000 4,000
2006 2005 2004 2003 2002 Number
Men Women
0 3 6 9 12 15
2006 2005 2004 2003 2002
%
0 200 400 600 800
2006 2005 2004 2003 2002 SEK 000s
Sweco is a knowledge company and the products we sell are our expertise, experi- ence, creativity and ability to solve complex problems. In Sweco’s decentralised organi- sation, the individual architects and consult- ants form the hub of operations. this demands a powerful entrepreneurial spirit and attitude that permeate all aspects of the Group’s operations. the cornerstones of Sweco’s corporate culture are curiosity, commitment and responsibility.
efforts to reinforce the corporate culture are a top priority. when the Group expands into new markets, it is important that new employees from different cultures and coun- tries understand and act according to the shared values.
Sweco’S eMploYeeS
Sweco had around 4,200 employees at year-end 2006, an increase of around 500 compared to 2005. Most new employees that are hired have a university degree. when recruiting new managers, Sweco prioritises internal recruitment and strives for an even
distribution between women and men. In pace with internationalisation and the acqui- sition of new companies, the number of employees of foreign nationalities has increased, which is a positive stimulus for the entire Group.
DeVelopMent oF SKIllS AnD leADeRSHIp
At the same time that internationalisation is creating new career opportunities for the employees, it is also raising the demands on training, skills development and recruitment of the top talent. to meet this need, Sweco continuously invests in strategic skills devel- opment.
All new consultants complete an intro- ductory course and are provided with train- ing in consulting law and presentation tech- nique. once a year, performance reviews are conducted with all employees and individual training and development plans are formu- lated. the “Absolute Success” programme, designed to strengthen the consultants in their capacity for business-driven assign-
ment management, leadership and team development, continued during the year.
pReFeRReD eMploYeR oF enGIneeRS AnD enVIRonMentAl ScIentIStS Sweco is regarded as one of the most attractive employers for a future career.
every year, universum communication measures attitudes among Swedish students and recent graduates. In 2006 Sweco was chosen as one of the most attractive employers for young engineers. Among young environmental scientists, Sweco was rated as the best workplace.
new GeneRAtIon
every year a new batch of students is accepted into the new Generation trainee programme for recent graduates in engi- neering, architecture and natural sciences.
new Generation is a six-month programme including both theory and hands-on experi- ence in various Sweco assignments.
Sweco often serves as an advisor to com- panies, public agencies, national govern- ments and ministries in far-reaching projects that have a direct impact on the develop- ment of society and quality of life. In pace with its international expansion, Sweco is exposed to increasing demands on consid- eration to social ethical and socioeconomic aspects in different cultures and countries.
Sweco strives to uphold the highest standards of conduct and business ethics.
For this to be possible, all employees must understand their personal responsibility for complying with international laws and con- ventions. they must also have the necessary knowledge of, and respect for, local regula- tions, competition rules, environmental leg- islation and labour laws.
to be a socially responsible corporate cit- izen in every way, Sweco works to continu- ously enhance employee awareness of the Group’s attitudes towards ethical conduct.
coDe oF etHIcS
Sweco supports the “code of ethics” formu- lated by the international consulting industry organisation FIDIc, and respects the rules and recommendations issued by the un, the world Bank, the oecD and the Swedish Inter- national Development cooperation Agency (Sida) for internationally active companies.
through involvement in the industry organisa- tion Swedish consultants, Sweco drives issues related to procurement and competi- tion on equal terms, anti-corruption and the utilisation of Sweden’s resource base in the environmental area.
Sweco was one of the first companies
Responsibility (Globalt Ansvar), the Swedish Government’s answer to Secretary-General Kofi Annan’s Global compact, which was ini- tiated by the un and has gained wide sup- port among the world’s leading companies.
By taking this step, Sweco has pledged to pursue and advocate issues related to human rights, religion, culture, tradition, health, labour rights and anti-corruption.
collABoRAtIon FoR tHe BeneFIt oF SocIetY
Sweco is an active participant in numerous initiatives aimed at creating a better society for the future. one of these is Building, liv- ing and property, a collaborative effort between the business sector, municipalities and the national government to steer the Swedish construction and property sector towards sustainable development. In con- nection with the signing of an agreement between the Swedish government and the state of california for joint development in the biogas area in June 2006, representa- tives from Sweco participated as technical advisors and biogas experts.
woRKInG FoR A BetteR enVIRonMent Sweco’s overall mission is to actively con- tribute to a sustainable society. Since virtu- ally all the activities of the Sweco compa- nies affect the environment in some way, Sweco has greater scope than most to tan- gibly influence the environment and make a significant and lasting contribution to sus- tainable development. Architects, structural engineers and building service system experts design attractive and functional
tion. engineers plan and design systems for transportation, water and wastewater, energy and industry. Sweco has a certified and established environmental policy, and the employees are well aware of their special responsibility for protecting the environment.
SuStAInABle cItY
the world’s fast-growing megacities are a threat to our future living environment. envi- ronmental problems and pressure on the city centres is leading to severe exploitation.
together with the Swedish government, Sweco has developed the “Sustainable city” concept illustrating how these prob- lems can be solved through close collabora- tion between experts in areas such as urban and physical planning, architecture, land- scape and traffic planning, as well as envi- ronmental and energy planning. the concept is being studied by numerous metropolitan regions and is attracting strong interest.
ReSeARcH GRAntS
Sweco is active in several initiatives to reward individuals and companies who have made active contributions for a better envi- ronment.
every year, grants are awarded by the J. Gust. Richert Memorial Fund to promote research and education in environmental conservation, energy, community planning and transportation engineering. In 897, J. Gust. Richert founded Vattenbyggnads- byrån, which is now part of the Sweco Group. In 2006, the Fund approved 36 grants for a total of SeK 4.5 million.
the Swedish energy prize honours out-
RelAtIonS
BuSIneSS etHIcS enVIRonMentAl ReSponSIBIlItY
Sustainable City is a holistic concept for sustainable urban development through close col- laboration between experts in areas like urban planning, land management and architecture, as well as landscape, traffic, environmental and energy plan- ning. The concept, which has attracted keen international interest and been implemented in countries like China, Canada and South Africa, has been applied in the new Hammarby Sjöstad area of Stockholm.
The Skogskyrkogården cemetary in the Enskede area of Stockholm is inscribed on Unesco’s World Her- itage List. The Holy Cross Chapel was originally built with a retractable entrance wall of steel and glass that was designed by Vattenbyggnadsbyrån, now SWECO VBB, but has been out of order for some 55 years. A team of engineers from SWECO has now restored the machinery so that the wall can once again be retracted, realising the architect Gunnar Asplund’s vision for funeral visitors to reemerge from death back to life.
arranged by Sweco theorells in association with the Royal Swedish Academy of engi- neering Sciences (IVA). the 2006 prize went to Hans nilsson, chairman of the Demand Side Management committee of the IeA for his efforts over the past 20 years to acceler- ate the introduction of new energy-efficient technology among manufacturers of heat pumps, white goods and lighting.
every year, Sweco also presents the Sweco prize, which is awarded to a person or group in the nordic or Baltic Rim coun- tries whose work has contributed to long- term protection or improvement of our shared water resources.
Sweco is a sponsor of the annual Stockholm world water week symposium, where the aim is to promote global efforts to preserve the world’s water resources.
QuAlItY AnD enVIRonMentAl polIcY:
SWECO offers qualified consulting services in consulting engineering, environmental technology and architecture. Specialists from different areas work together to create better conditions for individuals, businesses and society, and thereby contribute to sus- tainable development for future generations.
Virtually everything SWECO does has some effect on society and the environment.
As consultants we have the privilege of being involved in projects at an early stage. This gives us the opportunity to exert an influence, but also the obligation to take responsibility for any aspects within our control. As a result, we carefully weigh the possible consequences when faced with matters relating to the qual- ity and environmental impact of the assign- ments. We monitor and comply with all laws,
regulations and requirements that are of rele- vance for our operations.
SWECO has an efficient, decentralised organisation with delegated responsibility for implementation of the assignments. Each individual consultant is responsible for deliv- ering client-adapted solutions with a high knowledge content, of the right quality and with the intended client benefit. Our busi- ness system is centred around the assign- ment process and is accessible to the con- sultants at all times.
At SWECO we strive for continuous improvement and development of our work- ing methods. Strategic skills development programmes are used to meet the consult- ants’ need for ongoing education and train- ing. The knowledge and experience gained by the consultants in the assignments is preserved and developed for future use.
The Rya wastewater treatment plant outside Gothenburg, Sweden, is planning a major new investment to further improve removal of nitrogen and phosphorous from the purified wastewater before it is released
The Swedish Energy Prize is arranged by SWECO Theorells in association with the Royal Swedish Academy of Engineering Sciences (IVA). The prize is awarded every year for technical ideas and innovations that have been tested and proven viable.
Architects at SWECO in Östersund have designed the Arctura accumulator tank, a heat reserve containing 26 million litres of hot water built by Jämtkraft in the middle of the new ski stadium in Östersund, Sweden. The 65 metre high and spectacularly illuminated tower has become a major landmark. The top floor of the tower houses a restaurant, a café, a theatre and party facilities that can be divided into larger or smaller units with the help of retractable walls.
Sweco SweDen 22
Sweco GRØneR – noRwAY 27
Sweco FInlAnD 29
Sweco BAltIc & eASteRn euRope, Sweco RuSSIA ...30
Sweco pIc – InDuStRY 32
Sweco’S BuSIneSS unItS
Managing Director and CEO
Business Development Finance
Corporate Communications, Accounting, HR, IT
and Legal Affairs
Building Service Systems
SWECO
Baltic & Eastern Europe SWECO – Russia SWECO PIC – Industry SWECO – Finland
SWECO – Sweden SWECO Grøner – Norway
SWECO Position
Geographic Information Systems SWECO Energuide
Energy Systems SWECO Projektledning Project Management SWECO VIAK Water & Environment SWECO VBB Transportation & Civil Engineering SWECO Theorells Building Service Systems SWECO BLOCO Structural Engineering SWECO FFNS Architecture
Land & Transportation Structural & Civil Engineering Water & Environment
Energy SWECO CMU
SWECO BKG
SWECO Bulgaria
Lenvodokanalproekt Process industry
Energy
Product and Manufacturing industry
Marine industry Electronics industry
SWECO’S STRUCTURE
SWECO Projekt
SWECO’s consultants have contributed to the layout, design proposals and preconstruction planning of a new container and Ro-Ro port at Norviks udde in Nynäshamn, Sweden. When completed, the port is planned to have a capacity of 600,000 20-foot containers per year.
Sweco SweDen ARcHItectuRe
StRuctuRAl enGIneeRInG BuIlDInG SeRVIce SYSteMS
tRAnSpoRtAtIon & cIVIl enGIneeRInG wAteR & enVIRonMent
pRoJect MAnAGeMent eneRGY SYSteMS
GeoGRApHIc InFoRMAtIon SYSteMS net sales ... SeK 2,344 M (2,070) operating profit ... SeK 234 M (84) operating margin ... 0.0% (8.9) no. of employees at 3 December ... 2,302 (2,0)
Sweco Sweden is one of the country’s lead- ing consulting engineering firms and the Group’s largest business unit, with some 2,300 employees in 44 locations. operations include architecture, structural engineering, building service systems, transportation and civil engineering, water and environment, project management, energy systems and geographic information systems.
Sweco Sweden has extensive project exports to countries in eastern europe, Africa, Asia, the Middle east and latin America.
Around 49 per cent of the clients come from the public sector and 5 per cent from
the private sector. clients are found among Swedish municipalities and government agencies like the national road and rail administrations, as well as major companies in the energy, forestry, industrial, construc- tion and property sectors.
2006 was characterised by strong demand and favourable market development both in Sweden and the international export markets.
In the past year, the energy consulting form of eltel networks Konsult AB was acquired with 00 employees and an agree- ment was finalised for the acquisition of Autosolvia with 20 employees.
Sweco FFnS – ARcHItectuRe
Sweco FFnS is the nordic region’s leading architectural firm and one of the largest in europe, with resources and specialists in archi- tecture for homes, offices and industries, as well as educational, care and medical facilities.
the company also offers expertise in interior design, urban planning, landscape architecture and advanced visualisation. Sweco FFnS has some 370 employees in Sweden, Denmark, Fin- land and estonia. Key clients in Sweden include peab, Skolfastigheter i Stockholm, Astra- Zeneca, ncc , Skanska, norrporten, Aberdeen, HSB, Riksbyggen, the Swedish Armed Forces
and Akademiska Hus, as well as municipal and county governments.
the past year saw rising demand and many new assignments in the nordic region and the international arena. Many of the year’s projects were related to production of new housing in Sweden, such as the Kalk- bruket block in Årstadal, Stockholm, with 60 condominiums, and St. lilian in central enköping, with 60 condominiums. one large- scale ongoing project in the healthcare sec- tor involved planning and design of the Karo- linska Institute Science park in Stockholm.
In estonia, assignments in 2006 ranged from detail planning to conceptual design and construction documents for both private and public sector clients. urban development proposals were created for a new city district in Riga, latvia, and agreement was signed to prepare a master plan for a new commercial district in tianjin new town, china, with a population of 50,000.
the outlook for 2007 in the Swedish mar- ket is positive, although some slowing is expected in sectors like housing construc- tion. For project exports, growth is antici- pated in the markets of eastern europe, Rus- sia and china, particularly in areas such as recreation, tourism and planning.
