Annual Review 2013
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Review of 2013 USD version Contents Highlighting green certification Group overview Throughout this Annual Review the relevant logos are used to indicate 2013 in brief 2 when projects are or are in process to be certified to a green certification Comments by the President and CEO 4 scheme. Green certification provides voluntary third-party validation Mission, goals and strategy 6 of the environmental design and/or performance of buildings and Financial targets 8 infrastructure. Skanska took a strategic decision a few years ago to Business model 10 build its own competency around a number of the schemes most Risk management 12 relevant to its Home Markets. Today over 500 Skanska employees are accredited by external agencies regarding this capability. This compe- Sustainable development 16 tency is used to execute projects for our customers and for our own Social agenda 19 development units. Environmental agenda 27 Economic agenda 31 Leadership in Energy and Environmental Design, LEED Employees 32 Share data 36 Business streams 40 Construction 42 Nordics 46 Other European countries 52 Green House, The Americas 54 Budapest, is the first Residential Development 58 LEED Platinum office in Hungary. Nordics 62 Other European countries 64 Commercial Property Development 66 BRE Environmental Assessment Method, BREEAM Nordics 70 Other European countries 72 United States 76 Infrastructure Development 78 Project portfolio 81 Brent Civic Centre in Financial information London, is the UK´s greenest public building Skanska Financials 2013 85 on target to achieve Corporate governance report 93 BREEAM Outstanding. Consolidated income statement 103 Consolidated statement of comprehensive income 104 Civil Engineering Environmental Quality Assessment and Award Scheme, CEEQUAL Consolidated statement of financial position 105 Consolidated statement of changes in equity 107 Consolidated cash flow statement 108 Notes, table of contents 110 Statement by the President and Chief Executive Officer 174 Independent Auditors’ Report 175 Senior Executive Team 178 Interchange Ingenting Board of Directors 180 in Solna, Sweden, Major events during 2013 182 received highest CEEQUAL International Definitions and abbreviations 186 score to date. Addresses 187 Reporting of revenue and earnings in the first part of the Annual Review (pages 1–84) com- More information about Skanska 187 plies with the segment reporting method. The statements of financial position and cash flow Annual Shareholders’ Meeting 188 are presented in compliance with IFRS in all parts of the Annual Review. Investors 188 The financial statements presented in this Review have been prepared in USD (Umited States dollar) as the presentation currency. As the functional currency of the Parent Company is SEK (Swedish kronor), Skanska’s statutory Annual Report including the consolidated financial statements and the financial statements of the Parent Company has been prepared using Swedish kronor (SEK) as the presentation currency. For currency exchange rates, see page 156. Skanska is one of the world’s leading project development and construction groups, concentrated on selected home markets in the Nordic region, other European countries and in the Americas. Making the most of global trends in urbanization, demographics and energy, and with a focus on green construction, ethics, occupational health and safety, Skanska offers competitive solutions – not least for the most complex assignments. The interaction of its construction and project development operations in the various markets generates added value for Skanska’s shareholders. 2013 Revenue Operating income Key ratios USD M EUR M SEK M Revenue 20,928 3 15,759 3 136,345 Operating income 789 3 594 3 5,139 Income after financial items 753 3 567 3 4,904 Earnings per share, SEK/EUR/USD 1 1.293 0.973 8.43 Return on equity, % 17.4 17.4 17.4 Order bookings 2 18,414 3 13,866 3 119,968 Order backlog 2 21,595 4 15,691 4 139,602 Employees, number 57,105 57,105 57,105 1 Earnings for the period attributable to equity holders divided by the average number of shares outstanding. Construction, 89% Construction, 65% 2 Refers to Construction operations Residential Development, 7% Residential Development, 10% 3 Average 2013 exchange rates: EUR = SEK 8.65, USD = SEK 6.52 4 Exchange rates on 2013 balance sheet day: EUR 1 = SEK 8.90, USD 1 = SEK 6.47 Commercial Property Development, 4% Commercial Property Development, 18% Infrastructure Development, 0% Infrastructure Development, 7% Skanska’s home markets United States Sweden Finland Norway Denmark Poland Latin America Czech United Kingdom Republic Slovakia Hungary Romania Nordic countries 43% of revenue Employees: Around Revenue Commercial 17,000 Construction, 81% Residential Property Infrastructure Home markets Construction Development Development Development Revenue: USD 9.5 bn Residential Development, 14% Revenue: Commercial Property Development, 5% Sweden Earnings: Infrastructure Development, 0% Norway Order backlog: Finland Denmark Other European countries 19% of revenue Employees: Around Revenue Commercial 16,000 Construction, 93% Residential Property Infrastructure Revenue: USD 4.2 bn Home markets Construction Development Development Development Residential Development, 3% Poland Revenue: Commercial Property Development, 4% Earnings: Infrastructure Development, 0% Czech Republic Order backlog: Slovakia Hungary Romania United Kingdom The Americas 38% of revenue Employees: Around Revenue Commercial 24,000 Construction, 97% Residential Property Infrastructure Revenue: USD 8.3 bn Home markets Construction Development Development Development Residential Development, 0% United States Revenue: Commercial Property Development, 3% Earnings: Infrastructure Development, 0% Latin America Order backlog: Skanska’s strengths Positions Employees Financials –Leader in home markets –Shared values –Financial synergies –Diverse operations covering various –Retaining and developing employees –Attractive business model geographical markets and sectors –Standardized processes and work methods –Solid balance sheet –In-depth knowledge of the local market –Project development and execution skills –Solid cash flow –A strong brand –Risk management focus Entré Lindhagen is the jewel of Lindhagensgatan in Stockholm. Skanska’s new head office and Nordea’s offices are Activity Based Workplaces, designed for efficient and flexible working. Sweden’s most energy-efficient office – energy use is 50 percent lower than the national standard – is aiming for the environmental certification, LEED Platinum. With 55,000 sq m and neighboring 170 homes, the investment of USD 384 M is one of Skanska’s largest project investments ever. 2013 in brief First quarter Second quarter The Polish property projects Nordea House, Green Skanska Global Safety Week – the world’s largest Corner and Green Towers are sold for USD 215 M in private corporate initiative for occupational safety – is held total. for the ninth consecutive year. Green Court Bucharest – Skanska’s first commercial Skanska signs an additional contract for the construction property project in the Romanian capital Bucharest – aims of state-of-the-art R&D facilities in the U.S., worth for LEED Gold. The investment value is USD 61 M. USD 660 M. A specialist highways maintenance company is acquired Skanska signs a contract to reconstruct the Bayonne from the British company Atkins. Bridge in the north-east U.S., worth USD 399 M. Under Bond Street in central London Skanska is to build the station for the new Crossrail commuter link. The contract value is USD 85 M. The Latin American business wins an oil and gas contract in Colombia worth USD 51 M. Around 800 decision-makers take part in Skanska’s Future Days (Framtidsdagarna) in Stockholm, Gothenburg and Malmö. This year’s theme was “The Living City.” Deep Green Cooling – Skanska’s concept for ground source heating and cooling – is registered by the Swedish Patent and Registration Office. In Norway, Skanska signs a contract worth USD 230 M to build a nine kilometer long railway. Skanska is ranked most attractive employer by engineers in both Sweden and Poland. The Indian River Inlet Bridge in Delaware and Harvard Law School’s Wasserstein Hall win Build America Awards. The World Green Building Council publishes The Polish occupational health and safety authority names its report “The Business Case for Green Building” with a Skanska’s Green Horizon and Green Towers the safest foreword by Skanska’s CEO Johan Karlström. building projects in the country. At the end of the quarter, accumulated: At the end of the quarter, accumulated: –– Revenue USD 4.3 billion –– Revenue USD 9.6 billion –– Operating income USD 80 M –– Operating income USD 307 M –– O rder b o o kings USD 3.7 billion –– O rder b o o kings USD 9.3 billion 2 2013 in brief Skanska Review of 2013– USD version At year-end, Commercial Property Development had 30 ongoing projects. Third quarter ”Fourth quarter The renovation of the UN headquarters in New York The Swedish Transport Administration continues with the General Assembly Hall undergoing a (Trafikverket) introduces safety stand downs after serious USD 65 M restoration. work site accidents, using Skanska’s Global Safety Stand Down as its model. Breakthrough in the Hallandsås Tunnel means that boring of both rail tunnels is complete. In 2015 train Katy Dowding, Managing Director of Skanska UK capacity will increase to 24 trains per hour compared with Facilities Services, wins the 2013 Woman of Achievement 3–4 over the