Thank you, Katarina, and welcome everyone to this Q4 presentation of Sweco. I will start by giving you an overview of the company of today. Sweco is today, Europe's leading engineering and architectural consultancy. We operate on eight core markets, and we are executing our business in more than 17 countries. We are a year and more than 17,000 employees, meaning that last year, we grow the number of FTEs or employees with 1,500 people. We have now net sales exceeding SEK 20 billion, and a margin of 9.1%. Last year was a good year for Sweco, and we achieved a lot. And I will come back to this later, as well as the focus going forward. But let us first go through the fourth quarter.
So the fourth quarter was another solid quarter with profitable growth. We delivered an organic growth of 5% and acquired growth, adding 5% to that. The EBITDA is SEK 532 million. That means an increase of 13% compared with last year, adjusted for calendar. In January, we also announced a strategic acquisition. We signed and closed the acquisition of Talboom Group. The company is experts in the fields of pharmaceutical, biotech, and infrastructure. I will get back to that acquisition more in detail later in this presentation. The trends in the market situation is in line with previous quarters. So to summarize Q4, we delivered a solid quarter with continued profitable growth. To the right, on the picture, you see a project that we won during Q4.
It's a light rail line that connects eastern part of Helsinki to downtown, a new track of 10 km. This project shows how we are part of the ongoing transformation into sustainable transportation and sustainable urban planning. Before we dive into Q4, more in detail, I would like to summarize 2019. 2019 is Sweco's best year to date. We delivered solid growth of 10%, with organic growth of 5%. We reached a new milestone where we exceeded SEK 20 billion on our net sales. We improved EBITDA with 15%. We made a clear margin improvement. We have a strong financial position, which ensures that we can continue to act on opportunities on the market.
Based on Sweco's performance in 2019 and our strong financial position, the board of directors has proposed an increase of dividend of SEK 6.2 , and this is in line with our dividend policy. Let us now take a closer look at the quarter, starting with the growth. We see that we delivered a solid organic growth of 5%. I'm really pleased to see that this quarter, all business areas contributed to the growth. Germany and Central Europe and Belgium delivered strong organic growth, while Sweden, Norway, and Finland delivered solid organic growth. The main driver in this quarter is in line with previous quarter. We improve our prices, we continue to hire new experts, and our growth is supported by a stable order backlog. We also see that orders received is in line with our expectations.
Let us now move over to the results for the quarter. Adjusted for calendar, EBITDA increased with 13% or SEK 64 million. As you can see, seven out of eight business areas had a positive EBITDA development compared to last year. Sweden, Finland, and Belgium continued to deliver strong margins, while Norway and the Netherlands delivered solid improvements compared with last year. Looking at Denmark, you see that there is a major improvement. Please note that there is a large portion of project adjustments in this improvement. In U.K., you can also see a clear improvement compared to Q4 last year. This is due to the continued positive effect of the MLM acquisition, but also some large public previously postponed contracts that I talked about last year now have been signed, and we have been starting working with those contracts.
Looking at Germany and Central Europe, the performance in the quarter is not satisfactory. We continue to deliver good organic growth in Germany, and we see good market opportunities. However, there is work for us to do, and we are continuously implementing the Sweco model in Germany. But this will take some time, and it's not a quick fix, but we are taking steps in the right direction. So all together, I'm really pleased and summarized that we delivered yet another solid quarter. So let me now walk you through the acquisition that we recently announced. On sixteenth of January, we announced and closed the acquisition of Talboom Group. This gives Sweco Belgium a leading position in the area of pharmaceutical and also strengthen our business in infrastructure. The outlook for the pharmaceutical market in Europe is healthy.
And Belgium is a core market for pharmaceutical R&D. This offers an interesting market opportunity for us, as we deliver a range of services in, clean room technology, process knowledge in the cell industry, safety regulations. So to give you some more details about the acquisition, this company was founded in 1969. They have 110 employees, and 2018, the revenue was EUR 12.2 million. This acquisition is in line with our strategy to, acquire businesses that strengthen our position in segments and in markets, by clearly matching our culture and values at the same time. The acquisition was closed sixteenth of January and now is part of Sweco, and the integration of the company is going well, according to plan.
Looking at the market, it remains fairly unchanged with last quarter. The demand for our services, as I talked about before, is driven by strong underlying trends. And one example of this is how we see that the transformation of the energy energy market and also the electrification of cities and societies across Europe is driving demand for our services in the energy segment. Looking at the other segments, we see-
The quarter. EBITDA, as also said, is SEK 532 million in the quarter. That's an improvement of SEK 64 million and an EBITDA growth of 13%, excluding the negative calendar effect. And the calendar effect of -SEK 25 million primarily affected Sweden in the quarter. Looking then at the EBITDA development by business area, the main drivers in the quarter are Denmark and U.K. In both countries, we see higher average fees and positive project adjustments, and in U.K., development is also supported by the MLM acquisition. We see improvements also in Sweden, Norway, Netherlands, Belgium, and Finland. In Finland, despite the fact that we had a three-day industry-wide strike in December. The only country with a negative EBITDA development, as also, Åsa has already talked about, is Germany, and as previous quarters, this is due to negative project adjustments.
Looking at the same summary for the full year, calendar adjusted, we have an EBITDA improvement in the year of close to SEK 250 million. Of that, more than half comes from Finland and Belgium. In both countries, we show strong performance on all dimensions: higher average fees, FTE growth, and billing ratio. Sweden, Norway, Denmark, Netherlands, and the U.K. also show solid improvement. Sweden maintains a margin at 11.5%, and the four other markets all improve their margins. Germany, again, is an exception. Top line growth is strong in Germany, but EBITDA development is unsatisfactory. Where does this then take us, if you look at the longer term? Over the 10 last years, we have increased net sales by 16% annually and EBITDA by 17% annually.
This means that net sales is close to four times what it was in 2010, and EBITDA is more than four times what it was in 2010. Back to Q4 then, and the cash flow. It's a seasonally strong quarter, so we see a significant working capital release, taking the quarterly operating cash flow to over SEK 1 billion, and the full year operating cash flow to SEK 2.3 billion. And with that cash flow, net debt is SEK 2.1 billion at year-end, which means that we have financed close to SEK 1 billion in M&A, to a large extent from cash. Leverage is one, and we have SEK 2.7 billion of available funds, giving significant firepower for, continued M&A. And then finally, the dividend.
As also said, the proposal to the AGM is a dividend of SEK 6.20, which is a continuation of the historical trend of around 12% DPS growth, and it's a payout ratio of around 53%. With that, back to you, Åsa.
Thank you, Olof. Let me conclude then, Q4. It's another solid quarter with continued profitable growth. All business areas show positive organic growth, and we see strength and margins across the group. We have also a strong financial position, and we see an overall good demand for our services and opportunities on the markets that we operate. Before we end this presentation, I would like to share my thoughts on 2019 and our priorities and focus going forward. So 2019 is Sweco's best year so far. We reached another milestone, exceeding SEK 20 billion in net sales. We delivered solid organic growth in line with our historical average, and we also added 3% acquired growth from strategic acquisitions.
I'm also pleased to see that we continue to deliver across business areas. We improved our results with 50% and have clear margin improvements. One market I would like to highlight is Belgium, where we see continued growth and strong margins. It really shows that the way that we work actually gives results, and that we can deliver strong margins and results outside the Nordics. Another highlight of 2019 are our strategic acquisitions, MLM in U.K., imp in Germany, and also the rail design part of NRC Group in Finland and Sweden. They are all good examples of how we continue to strengthen our position on core markets and segments, and how we also can integrate and get results out of new units into Sweco.
We also keep taking important steps forward when it comes to implementing the Sweco model. Again, Belgium is a good example of this, where we see that when we work with strong client focus, having the best people in place, high internal efficiency, and working in a decentralized way, it really shows good results. I have mentioned before that the demand for our services is strongly supported by the big trends in the society. A good example of this is that last year, Sweco was appointed from the Danish Parliament on how to set a baseline and increase awareness in Denmark around the efforts how Denmark should work to actually work according to the United Nations Sustainable Development Goals, the SDGs.
So with a good year behind us, and with a strong financial position, the board proposed a dividend of SEK 6.2 per share. So to summarize, we closed another good year for Sweco, and I'm pleased to say that we have taken several steps in line with our strategy and in line with our plans. We also have a very clear route ahead of us, and I would like to end this presentation with that. So our focus for 2020 and beyond is to continue to stay relevant and focus, develop sustainable solutions together with our clients. Our society, cities, and industries are going through major transformations.
Our focus is to grow on our eight core markets and to be part of the consolidation of these markets, to really secure the long-term development of Sweco. Our goal is to obtain top three positions on all those markets, and that is to ensure that we are the top choice for the clients and for the employees on those markets. Going forward, we continue to execute on our strategy and implement the Sweco model on all our markets. So with that said, Katarina?
Yes, thank you, Åsa, and thank you, Olof. Now we will open up for questions, and I think we will begin with questions in the room. So do we have any questions in the room? Yes, please go ahead. We will give the microphone here. I think.
Good morning, Ola Södermark, Kepler Cheuvreux. You mentioned that you have some project adjustments in Denmark, U.K., and also in Germany. Can you quantify them and talk a little bit about them?
Well, we don't give details on the project adjustment, but it's fair to say that the improvement in both Denmark and U.K., around half, is from positive project adjustments. And in Germany, again, in sort of half or I would say rather the full amount of the negative development is from project adjustments.
Okay, that's very helpful. And in U.K., you also highlighted that you have seen that the projects seem to coming along, because you have said before that are quite standstill in large projects. So this is a trend that we can expect to continue?
I would say that last year we experienced uncertainty from Brexit, and we talked about it. We have sensed that there is a weakness when it comes to this decision making. And those postponed contracts was one, that they didn't start those contracts. But we're now seeing that some of those contracts are signed, and we start working on them. So we see some signs that is positive, but it's also so that the Brexit uncertainty is still there. So we see some signs, but it's too early to say, but we have started to work on those contracts, yes.
Then, yes, out of curiosity, the high-speed train line that Mr. Johnson seemed to push through in the U.K., is it something you are – is it important for you in the U.K., or is it not in your space?
It's not. We work with all kind of infrastructure projects. So if there will be projects, and then we can take on those and design those. But it's also so that we are focusing on a broad portfolio of clients and a broad portfolio of projects. So it's not that we are—they're not that important for us, so it's, you know, something that really affects us in that sense.
Okay, so it's not really, really triggered, in other words, for you. Okay, thank you.
Yes, we have more questions from the room. Please go ahead.
Dan Johansson at SEB. Three questions from my side. I'll start with a question on organic growth. How much in the quarter was fee development, and how much was full-time employees? Was it about evenly split or?
Half, half.
It's about half, half. It's the same as in Q3. Yes.
Thank you. Second question on Germany. I mean, you had quite nice growth for a couple of quarters now, but profitability is a bit below where you want to be, of course. Going into 2020, will you have more emphasis on improving the margin, or should we expect much lower growth, or could you elaborate a little on that?
So we are focusing on growth where we have healthy businesses, so we grow on the healthy platform of the business, and then we need to work with our plans and really implement in the operating model in those divisions that doesn't work the way we want them to work. That is our plans.
Maybe last question from my side. On the outlook, it's basically stable conditions, same outlook as we had in the previous quarters. Is there any sort of nuances? Do you see the residential segments perhaps improving compared to Q3, or yes, it's down year-over-year, of course, but is there any delta there?
I would say that the market and the demand looks you know, fairly unchanged. There might be like, some small changes in some segments, but we are so broad, and we operate in so broad perspective also when it comes to different segments, it doesn't affect us quarter to quarter that much. But of course, we stay very close to the forecast on the market and the dialogue in the market. But so far our order backlog is stable, and the orders received is growing in line with our expectations.
Okay, thank you.
Right. Thank you. Erik Elander from Handelsbanken. I have three questions regarding organic growth in different business areas. So first of all, why did the number of employees decrease in Denmark? Was it layoffs from your side, or was it consultants ending voluntarily?
It's a mix. It's a mix of that. We always ensure that we actually handle our business, so we have the right competence in place. It's also so that the market circumstances also, you know, push pressure on personal turnover. I would like to see more growth when it comes to number of FTEs in Denmark, so we're focusing heavily on getting that into place.
Regarding organic growth in the Netherlands, you're stating in the report here that the market is very good, but the organic growth is still quite weak, I mean, compared to the other parts of the business. Why is that?
I would say that this is also linked to how we operate and the history. Like the way we work is that we like to be very strong locally, have strong client relationships with our clients. But we are on a journey here where we need to continue to strengthen our client relationships and really to broaden the portfolio of our projects, because that gives us organic growth.
Okay, very clear. And lastly, regarding organic growth in Central Europe and Germany, it was very strong in Q4 now. What is behind this? Are you focusing a lot on recruitment in just this business area, or what's happening here?
It's a mix. Also PC development. We have imp in the portfolio, the company that we acquired in the energy sector, and also new employees in those divisions that is having a healthy profit.
So, last question for me then. I mean, Germany and Central Europe was the only business area which decreased in the quarter due to this large project adjustments. Can you go into more details, what are those about, since they are affecting the profit in the business area so much?
I think sometimes in our business, what happens is that you see units where you actually don't have control in detail of some projects, or we actually end up in a difficult situation. This is strongly linked in some parts of the German business to certain parts of it and certain contracts. It's about how we execute the project. It's about how we follow up. It's about what kind of contract we have in the portfolio. Now we are implementing the way we would like to work in details in those units. That is kind of the explanation.
Okay, thank you very much. That's all for me.
Thank you. If we do not have more questions in the room, we open up for questions coming in from... on the telephone. Do you have anyone with us?
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Yes, so I know we have a question coming in, so please go ahead.
Hello?
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Yeah. Not yet, but we're, we're waiting for you.
Okay. Johan Dahl, Danske. Just wondering on the topic of acquisitions, you conclude 3% growth from acquisitions in last year. I think you're at 4% for 2020. Do you see any reason also to beef up the capabilities on acquisitions, change processes to accelerate this?
So we have, we have some focusing on acquisition, and, as I said before, we have a pipe, and, we work, we work with strong focus on this in all business areas. But again, it's about timing, and it takes some time. But, we have the capability, and we have the processes in place. So, so I think we are in good shape.
Okay. On project adjustments, just assuming mean reversal of this, of the impact on earnings, you talked in Q2 that it was a tailwind in 2019. Should we assume that this is negative in 2020, all other things equal?
You mean project adjustments in total?
Correct. Yeah.
No, I think you should, you should assume, you should assume that we... I mean, a neutral effect on that, because, I mean, we will have some quarters with positive and some with negative, I think, just as we've had historically. I think in Germany, where we talk about negative project adjustments, you can also see Belgium and Finland with very strong processes in those areas, which, which have, almost no negative project adjustments.
Okay. And then finally, on net recruitment in the group, what sort of signal are you sending to the divisions? Is it full steam ahead in terms of net recruitment or anything else? And also on pricing, am I correctly seeing a sort of a declining tailwind from net prices in Q4, or, or is that incorrect?
First of all, we are, you know, continuously focusing on higher new, higher new competence. It might be so that it might be, and it's always so that in some segments, we might not go full speed, but it's about where we want to grow. So we are focusing on continuously growing our number of employees. And when it comes to price development, we see, as I said, the drivers and the trend we see in Q4 is continuous price development, and we continue to focus on that, going into 2020.
The price effect is roughly the same as previous quarters, so no major change there.
Okay, thanks.
Thank you. There are no further questions at this time. Please continue.
Okay, thank you very much. With that, I think we will end today. Thank you, Åsa, and thank you, Olof, and thank you everyone for joining. Have a good day. Thank you.
Thank you.
Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.