Good morning, and welcome to this presentation of Sweco's Q1 report. With me this morning, I have Sweco's President and CEO, Åsa Bergman, and CFO, Jan Allde. After their presentation, they will take your questions, and we will give you the instruction at that point. Over to you, Åsa.
Welcome, everyone, to Sweco's Q1 presentation. Before we present the result for the first quarter, let me give you a quick overview of Sweco. Sweco is Europe's leading architecture and engineering consultancy with operations in eight geographical business areas across some 15 markets in Europe. We are a well-diversified business operating across three different segments with a good balance of private and public clients. The foundation for Sweco's long-term success is a mix of competencies spread across 23,300 experts, our focus on organic and acquired growth as well as our efficient and decentralized operational model. With a strong financial track record and financial position, we are focused on continuing our growth journey and build on Sweco's success. With this introduction, let me start the presentation with a summary of the first quarter of 2026.
In Q1, Sweco delivered a stable result in a mixed market characterized by positive organic growth, increasing fees and billing ratio, and continuing acquisition activity. Net sales increased 3% to SEK 8.3 billion, and the organic growth rate was 3%. EBITA amounted to SEK 869 million, corresponding to a margin of 10.4%. EBITA increased by 5% adjusted for calendar effects. Higher average fees, a higher billing ratio, and contribution from acquisitions had a positive effect on the result in the quarter, while restructuring and integration costs, as well as the higher personal expenses, had a negative impact. Our acquisition activity continued with three acquisitions in this quarter. Now let us go into more details. Overall, most business areas delivered a stable first quarter.
Five out of eight business areas delivered positive organic growth, and five out of eight also improved EBITA in the quarter. We continue to navigate the market well and increased our order backlog. We also maintained a strong focus on internal efficiency, as reflected in the billing ratio compared to last year. I would also like to highlight the positive performance in Sweden that delivered solid organic growth and a positive EBITA improvement, supported by synergies from the recent acquisition of Projektengagemang. However, the result was negatively impacted by project adjustments and restructuring and integration costs taken in Sweco Finland. We are pleased to see that most business areas performed well in this quarter.
Let us now turn to the market overview. Demand for Sweco services was broadly consistent with previous quarters. Demand remained good in energy, water, environment, infrastructure, as well as security and defense.
Residential and commercial buildings and part of the industry segment remained weak. The uncertainty in the broad macro and geopolitical environment increased, but a decentralized operating model and well-diversified business model with a clear European focus provided resilience in the quarter. As capital and policy attention increasingly shift towards Europe's competitiveness and resilience, this focus is becoming even more relevant for Sweco. With that, I welcome our CFO, Jan Allde, to walk you through the numbers. Please, Jan.
Thank you, Åsa. Net sales came in at SEK 8.3 billion with an organic growth rate of 3%, acquired growth of 5%, and a negative FX impact of 3%, giving the total net sales growth of 3% in the quarter. The calendar effect was five less working hours in Q1 versus last year. EBITA increased 5% or SEK 43 million adjusted for the calendar effect. EBITA margin came in at 10.4%, and the net debt to EBITA ratio of 0.5 times at the end of March, same as last year. Looking at net sales, the organic growth of 3% in Q1 was primarily driven by higher average fees and a higher billing ratio. From a BA perspective, we saw organic growth in five out of eight BAs.
Germany and Central Europe had the strongest organic growth rate at 9%, driven by higher average fees and FTE growth in an overall stable market. Growth in Finland was flat in the quarter as the Finnish market remains challenging, and Denmark reported a negative growth rate of -2% due to a stable but somewhat weaker demand situation within the industry and energy market segments. The other BAs reported organic growth rates between 3%-5%. Looking at EBITA, which increased SEK 43 million or 5% versus last year, adjusted for calendar effects. Overall, the EBITA improvement was driven by higher average fees, improved billing ratio, and contributions from the acquisitions made in 2025. While higher personnel expenses had a negative impact. The reported EBITA margin was 10.4% in Q1 versus 11.2% last year.
Adjusting for calendar effects with negative impact in Sweden and Norway, the EBITA margin was on par with last year. From a BA perspective, we saw a strong performance in Sweden in Q1, with the margin significantly above last year adjusting for the calendar effects. Norway also reported slightly higher margin than last year, adjusting again for the calendar effect. The EBITA margin in Finland was impacted by negative project adjustment as well as restructuring and integration cost. The margins in the other BAs were roughly in line with last year. Important to note though is that Belgium and Denmark continue to deliver very strong margins. Now let's look at the EBITA bridge by BA.
The result in Sweden was SEK 68 million, or 26% higher than last year, driven by higher billing ratio, higher average fees, and a positive contribution from the Projektengagemang acquisition last year, despite having SEK 30 million of integration and restructuring cost in Q1. The result in Finland was SEK 28 million lower than last year and was impacted by negative project adjustment as well as integration and restructuring cost of SEK 17 million following personnel reductions in the quarter. The integration of both Projektengagemang and Fimpec is progressing well, and we expect synergies to materialize gradually during 2026. Norway, Netherlands, Belgium, and the U.K. delivered EBITA improvements, while the result in Denmark and Germany and Central Europe were slightly lower.
The calendar effect was five less working hours in Q1 versus last year, corresponding to a negative year-on-year impact of SEK 75 million, affecting the result in Sweden and Norway. Now look at the financial position of the company. Cash flow in Q1 was negatively impacted by a seasonal increase in working capital, resulting in a net debt position at SEK 1.9 billion at the end of March, slightly higher than last year. M&A cash flow, cash outflow was SEK 46 million, and this means that the net debt EBITA ratio at the end of March was 0.5 times, same as last year. Hence, our leverage is well below our target, and we remain financially very strong to pursue an active M&A agenda. Finally, a reminder of the calendar effects for 2026.
The expected total number of working hours for 2026 expected to be seven hours more than in 2025, and in Q2, we expect five hours more than the same quarter last year. By that, I hand back to you, Åsa.
Thank you. Acquisitions remained one of Sweco's key growth drivers, and we started 2026 with three new acquisitions. In January, we acquired the Finnish architecture firm Näkymä, with 20 experts specializing in the design of historical and cultural sites. Later in the quarter, we announced the acquisition of Belgian firm CONIX RDBM Architects, a well-known and award-winning practice with 50 experts that will further strengthen Sweco's position in large-scale urban development projects. We also acquired the Belgian architecture firm a-tract architecture, with 10 experts specializing in sustainable architecture. At the same time, we continue to integrate the 13 acquisitions completed in 2025, which are now step by step being added to our offering across several business areas. Our M&A agenda remains active and disciplined, and we continue to evaluate opportunities across our core markets.
Projects won during the quarter highlight Sweco's role in Europe's transition to a more resilient and sustainable society. In Norway, Sweco was appointed lead consultant by Å Energi to support the development of the Åseral South Hydro Project, hydro power project, strengthening renewable power generation through cross-border collaboration and digital delivery. Sweco also won contracts to support public transport across transport operators across Europe in developing the infrastructure required for electrification. This includes next-generation electrical bus depots in Belgium, enabling low-emission public transport and future-ready mobility systems. In the U.K., Sweco was awarded a major office development project in the city of London, the Dovetail Building, where we deliver technical and sustainability services, including life cycle carbon analysis. In addition, Sweco leads a major system restoration project in Belgium. The project restores natural hydrology, raising groundwater, improving water quality, and rebalancing flood dynamics.
To summarize, Sweco delivered a stable first quarter in a mixed market, and we have set clear priorities going forward. First, we will continue to be responsive to market developments. Operating in a mixed market with increasing geopolitical uncertainty makes it essential to remain active and agile. Sweco's decentralized operating model helps us stay close to the market and enables both proactivity in sales and the ability to quickly respond to changing market conditions. Second, we will maintain our focus on internal efficiency and further margin improvements building on the progress we have made over the past quarters. Third, we will continue developing our AI capabilities, strengthening both our offering and our internal efficiency. Finally, we will continue the integration of acquisitions and maintain an active and disciplined M&A agenda.
With a strong market position, diversified portfolio, and solid financial position, Sweco is well-positioned to continue to navigate the market. Thank you.
Thank you, Åsa and Jan, and now is the time to open up for questions. Please, operator, if you could give us the details.
Thank you, dear participants. As a reminder, if you would like to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one and one again. Alternatively, you can submit your questions via the webcast. Please stand by while we compile the Q&A roster. This will take a few moments. Now we're going to take our first question.
Yes.
It comes to the line of Dan Heimer from SEB. Your line is open. Please ask your question.
Yes. Good morning, Åsa and Jan. A couple of questions from my side.
Good morning, Dan.
Good morning. Maybe starting a little bit on M&A and integration. You clearly put a lot of effort into integration of M&A in the last couple of quarters here. On the integration cost, how far would you say you are in the process of integrating, mainly Projektengagemang and Fimpec? Is the heavy work done now, in terms of cost at least? Or how do you view it here during 2026? Thank you.
Yeah. If I start with Projektengagemang, that we bought last summer, we integrated them structurally, so to say, into our organization first of January, meaning that they are fully integrated in our organization and in our systems. With that said, it take time before we get, you know, fully up to speed in all units. So of course, I would say that we are done with the structural parts of the integration, but now it's more about getting every employee and the full kind of synergy when it comes to our business synergies ahead. According to plan and a good stage, so to say, or state.
When it comes to Fimpec, that was an acquisition that we did later last year, meaning that we are taking some integration costs in this quarter in Finland, and we are working with the integration in this quarter. You will see a gradual improvement linked to those acquisitions. The same goes for our SAR Architects, where we established a new division in Belgium focusing on architects. We reorganized all architects into one division in Belgium, and now we are number one on the Belgian market when it comes to architecture. I hope that answers your question.
Yes, it does. Thank you very much. Maybe one more on the demand, the annual demand. You say, yeah, market is mixed. It looks like your outlook is similar as previous quarters, but seems to increase your order book a little bit here. Can you give any sense of the increase in the order book? Is it growing roughly in line with sales, or is it growing more or less? Just to get an indication there. Thank you.
Yes. Dan, I would say we continue to strengthen our order book, and I would say both in absolute terms and also in relation to our kind of LTM sales. I think I see a you know a good development order on the order book. When it comes to the market, maybe you want to comment some more, Åsa?
I mean, as we reported, we see a quarter with almost the same, you know, demand and sectors that is strong and a bit weak that we have seen in previous quarters. When it comes to our order backlog, of course, we grow across, but it's very much linked to those segments where we see good demand. That work we will continue, of course. I mean, it's fair to comment on the geopolitical environment in this quarter. We don't see any direct effects in our portfolio linked to the situation globally and. With that said, you know, you need to pay attention to it and have great respect for the situation.
Of course, if it gets prolonged, our clients might be influenced by energy prices and the overall investment climate, so to say. Of course, then we might see things in our project portfolio. When we talk about the business model, it's really about making sure that we really focus on our clients and, you know, on our projects, so we really understand what is going on ahead. Another comment is also that when crisis like this occurs, I mean, we are in the midst of this right now. Of course, there might be a push for even a faster energy transition into more renewables in Europe. I think the same agenda sticks. I mean, we need to really understand ahead what is going on.
Like everyone else, we are following the situation closely and staying close to our clients.
Yes. Makes sense. Thank you very much for calling. Maybe a little bit final one from my side that was on the project adjustment in Finland. Can you give a sense on the total side total size? I'm not sure you specified that, but is it just a couple of SEK millions or... Yeah, how much is that project adjustment you made in Finland?
Yeah. Dan, I would say, you know, project adjustments, whether they are negative or positive, you know, it's really part of our ongoing business. I mean, you've seen the reduction in the profit in Finland. We have given you the integration and restructuring costs. I think the remaining deviation, you can get a sense of the size of the negative project adjustments.
Okay. Fair.
Yeah.
I think that was it from my side. Thank you very much.
Thank you.
Thank you. Now we're going to take our next question. It comes from the line of Daniel Djurberg from Handelsbanken. Your line is open. Please ask the question.
Thank you, operator, and good morning Åsa and Jan .
Good morning.
Just a few questions from my side as well. First, if you could comment a little bit on the improvements seen in the average fees and billing ratios that you mentioned, expanded to 74.4%. Do you see large variations between the regions? Obviously, Finland is tough, but and also to what extent are these fees increases figured by pricing power versus, you know, mixed effects in the product?
I mean, first of all, we have continued our focus on billing ratio, meaning that we work with efficiency measures in all our business areas. To your question, of course, we know what good looks like within Sweco and there is deviations between the different BAs, and that has more to do with how we are exposed in the specific markets and how, you know, how the market is playing out right now. Of course, there is deviation. We use that as best practice and benchmarking across the different business areas to really drive continuous performance. We will continue to focus on this one and expand ahead as well. That is an important area for you.
When it comes to your other question, of course, for us, it's about focusing on increasing our prices on the market, and making sure that we expand the prices when we put them out. Another part of that mix that you refer to is about how we deliver and execute our projects, so we minimize any negative project adjustments, and work really efficient in our projects. That is one part, and another part is hard to measure as we distribute 150,000 projects a year, but we work with all those measures...
Yeah
...In parallel to really make sure that we expand the prices. It's also about, you know, selecting and deselecting projects, of course, making sure that we try to win on quality and that we are, you know, not putting any pressure on our prices.
Perfect. May I also ask you, coming back to Finland, being a drag in the quarter and so on, tough market, and you did this restructuring integration post. In Finland, you also can use this system of temporary layoffs. My question is really if that's more or less fully utilized, then you have this SEK 17 million of our restructuring integration. Also, should we expect now that Finland at least will have a decent or strong billing ratio on following these adjustments? Yes. Just a little bit more comment or color on Finland would be great.
Yes. We use, of course, the available tools that we have, temporary layoffs we continue to use in Finland. It's a little bit lower than last year, but we still absolutely use it. What we did in Finland is to reduce on a permanent basis some 38 people in the quarter, and this is really driven by, I would say, three things. One, of course, is that we have to adapt to the current market situation. Secondly is that we continue to drive efficiency improvement programs, and thirdly, we have the integration of Fimpec.
All of these, say, f actors are behind the personnel reduction in Finland. To answer your question, yes, we continue to use all the tools available.
Just a comment from my side is that that we have spoken about the Finnish market for quite a long time, but I have great trust in the Finnish management and that they are taking the right measures and maneuver the market in a really good way. We are winning great projects as well, and I mean, so, I mean, the market is what the market is, but our management and our organization is doing a great job over there.
Good. May I also, last question from my side. Obviously, we hear these AI questions and AI development all the time, but is it possible to give some more, you know, concrete examples and products where you're using AI now, can improve your own efficiency and productivity? If you've seen, you know, big impact on prices so far in the market triggered by AI usage.
I mean, our strategy is to work with AI or use AI in three different dimensions. One is the individual productivity across Sweco, and there we have implemented, and we did in 2023, so we're talking now three years, more or less on the date, where we have our own ChatGPT platform where everyone works and uses this in the Sweco environment every week. There we have assistance across different applications. I mean, we have more than 70% recurring use of that platform every week across. The second part is that we work to automate our processes and rethinking our different processes in our projects. That has to do with more of a structural change when it comes to how we work.
The third part is digital innovation, where we sell more of AI solutions to our clients and supporting them with AI in the projects or in kind of new ways totally. I would say that if you think about where we are right now, we're talking three years in with AI and we are focusing on expanding our prices and making sure that we are competitive and stay strong and that we have the relevant competence and that we make sure that we are you know calibrating where we have our competencies and where we grow and how we grow. Of course, if you look at the scale of Sweco and that we are, our strategy is to integrate AI across, it's really hard to you know, so far, measure the real implications of AI.
Of course, that is on our agenda all the time. But I think back to what we talked about before, expanding the prices, making sure that we stay competitive, and that we win our contracts in the right way, and that we continuously evaluate new AI solutions, that is, like, what we're focusing on right now. I think it's important also to mention that, I mean, there is a huge scarcity when it comes to qualified competencies across Europe. Of course, I've said it before, this is a tool for us to let AI support our engineers and architects, so we actually can focus on qualified work, analyses, and advising our clients, and be more productive, as a whole, but also as individuals.
That is where we are right now. I mean, concrete examples are, like, hundreds and hundreds. I mean, it has to do with when we do, you know, re-report writing, when we do specific analysis, and when we test solutions to make a certain choice, we can test much more with this tool. Of course, we have spent time, you know, in previous times on things that is, like, volume work that we use AI and that we can concentrate more on the analysis and the, you know, the decisions and the support for the client. Hope that answers your question.
Perfect.
It's a quite big question.
Yeah, I know. A good answer. Thank you so much.
Thank you. Now we're going to take our next question. The next question comes from the line of Johan Dahl from Danske Bank. Your line is open. Please ask your question.
Yes. Good morning, everyone. Just a few quick questions. Firstly, on the you talked about 5% contribution to top line from M&A in the first quarter. Could you give an indication how much on the EBITA that was from acquisitions made last year and this year, approximately sort of round numbers? And also if you could update us on the timeline, I presume the idea making these acquisitions were that they would close in on sort of group average in terms of margins. When do you set that sort of timeline when you can be at that level?
Good morning, Johan.
Yeah, good morning. As Åsa was saying, the integration is progressing. I would say very well, and we see good contributions from the acquisitions that have been made last year. I won't give you an exact number, Johan, but what I can tell you is that the contribution that we see in the first quarter from a margin point of view is on par with the group average. That I think can give you a sense for the contribution so far.
All right. Gotcha. Speaking specifically about Sweden, I mean, if you add back the restructuring charges and calendar, I think you increased results 29% year-on-year. Is there anything other than acquisitions that is sort of contributing here? I'm just trying to understand sort of underlying dynamics in the Swedish operations, whether there are any structural improvements there to talk about.
I mean, this has to do with the focus in the Swedish organization. I mean, that we have worked with for quite a long time when it comes to efficiency and also, you know, the right kind of focus in the business and good project wins. I mean, it's a strong quarter from the Swedish organization. Of course, adding the effects of the integration of Projektengagemang.
Got you. Just finally, I think you talked about flat margin year-over-year adjusting for the calendar. Still, you know, the billing ratio is up almost, I think it's up 80 basis points year-over-year. You know, I understand there are some one-offs, you know, some sort of charges and also some project adjustments. Is there anything else that is sort of working in the negative direction, such as the net price, wages, et cetera, in this quarter?
Well, if I would mention, you know, we did do some employee reductions in some selected countries, as I said, to you know, adapt to the current market situation. We continue to drive the internal efficiency programs. We are integrating, you know, the acquisitions from last year. There are some workforce reductions in countries like Finland, Denmark, U.K., part of Sweden. Of course that is impacting a bit the overall growth.
Thanks. Thanks a lot.
Thank you. Thank you. Now we'll go and take our next question. The question comes from the line of Johan Lonnqvist Sundén from DNB Carnegie. Your line is open. Please ask your question.
Good morning. Thank you for taking my questions.
Good morning, Johan.
Three from my side. The first is a little bit back on Dan's question on the kind of restructuring integration work. Can you give some specific guidance for coming, say, one or two quarters of anticipated kind of restructuring charges that you're planning to take out?
Okay. I think the way you should look at this is that the Projektengagemang integration there we have taken almost all of the costs. When it comes to Fimpec, we took some of the costs this quarter in relation to some personnel reductions. We will take some more costs on the Fimpec integration during 2026, more related to office consolidation, IT consolidation, things like that. They will not be higher than what you saw in Q1. In short, Projektengagemang, you shouldn't expect really any significant costs coming through. Fimpec integration, there will be some additional costs coming in the remainder of the year.
Just to be super clear, when you say not higher than what we saw in Q1, do you refer to the total amount for the rest of the year or the quarterly kind of pace of amount?
I'm saying we took the SEK 17 million charge in Finland in Q1 related to both restructuring and integration cost. The additional integration cost to come is less than that.
In total.
Less than what we booked in Q1.
Yep. My second question is on the kind of cash flow statement. I note that you're building up a little bit of working capital than you normally do, okay? I cannot find any kind of more detailed comment in the report other than seasonality. From my perspective, you're building up more than the seasonal patterns. Should say that you should build up. What is the dynamics and driving forces behind the working capital build up?
Yeah. I would say what you see in the first quarter is on one hand the seasonal kind of increase in working capital, similar like we saw last year. This year we had some larger invoicing, the timing of some invoices that came a little bit different this year versus last year. Nothing extraordinary, it's just the timing of some invoices that came through in the quarter.
Is it more like invoices came at the end of 2025 and is hampering our Q1 2026? Or is it like invoicing should come in and support in Q2, so the kind of H1 is kind of normal level?
Yeah. I don't see, let's say, any abnormality in terms of build up of overdue invoice or you could say trade receivable overdues or any. What you see is that work in progress normally sort of say comes up in Q1, because on one hand you had the strong decrease in Q4 the previous year. I would say we see very similar pattern like we've seen in previous years. The only difference, as I said, this quarter is the timing of some invoices and difference versus the same quarter last year.
Okay. So, you know, kind of full year, the full year working capital swing should not deviate materially from what we have seen historically, so to say?
No, of course I can't stand here and give a forecast for the full year, but I'm just saying, Johan, I don't see a change in the working capital build up here versus previous years. I would expect the same kind of seasonal pattern as we've seen in earlier years. There's nothing else that indicates something different.
That's fine. My final question is on the Danish business where we saw organic growth, revenue falling organically, but the margins being maintained. You mentioned that they perform well. We've seen them performing well for quite a while. Should we be worried that given lower kind of investment activity in the Danish kind of pharma industry that the Danish business can maybe, say, roll down both margin-wise and volume-wise?
I mean, first maybe a comment from my side when it comes to the market. I mean, you will know that the investments in the pharma sector in Denmark has decreased a lot, and it of course affects the whole market. Our Danish business has really been able to you know, distribute other kinds of work, you know, in parallel with this decrease. If you look at the decrease of our Danish business or actually that they're not growing in line with previous quarters, I would argue that in relation to that, they are doing a good job of sales and focusing on other segments. With that said, we work in that sector continuously, and it's an important sector for us. I mean, it's...
They have, as you say, strong margins. They have focus on the right things, and it's really about, you know, continue growing in other segments in parallel.
No reason to anticipate the margin downtick in, say, the rest of 2026?
I mean, we don't give any forecast, but I mean, the focus they have on operational excellence that they will continue to work with.
Yeah. Perfect. Those were my three questions. I get back in line. Thank you.
Thank you, Johan.
Thank you. Dear participants, as a reminder, if you would like to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. Alternatively, you can submit your questions via the webcast. Now we're gonna take another question on audio line, and it comes line of Julia Sundvall from ABG Sundal Collier. Your line is open. Please ask your question.
Yes. Hi, and good morning. Just one question from my side, and it's regarding the market, and especially the weak real estate market. I was just wondering, we have seen some positive signs regarding the market within the residential market in Sweden. Even though it's from low levels, have you seen any light in some way regarding the residential market in Sweden, or do you view it as weak?
Good morning, Julia. Yeah, I have to say, if I look back, you know, I mean, the overall residential market then commercial real estate has been weaker or weak since the inflation increase and the war broke out in Ukraine. I mean, of course, I mean, our portfolio is quite broad, and we have worked with residential commercial real estates all along, but on lower levels. I mean, it's... We don't see a strengthening market or any market that opens up, if that is your question. It's still on the weak side.
Yeah. Okay.
I have to also add, with the uncertainty that we now have, I mean, it's really about, you know, focusing on understanding how the market will play out ahead, of course.
Yep. Okay, perfect. That was all from my side. Thank you.
Thank you.
Thank you. Dear speakers, there are no further questions on audio lines, and I would like to hand over to Marcela Sylvander for any written questions.
Thank you so much. We have one question from Edward Donohue, OneInvest, and I think I'm sending this one to you, Jan. Question goes like this: Good morning, he also says. I was wondering why Germany & Central Europe strength of organic growth was not reflecting in the EBITA percentage progression.
Yeah. Thank you for the question, online question there. I would say, Germany had a bit higher cost coming through in Q1. Besides that, I would say the performance in Q1 is in line with the previous seasonal view for Q1. Yeah, I would say otherwise pretty much in line with our expectation, except for a little bit higher cost coming through in the quarter.
Okay. Thank you for that question. With that, no further questions on my part, and I don't think in the phone line either. Operator? No. With that, we'd like to thank you for joining us this morning. Also a quick reminder of that Sweco will release our Q2 report on the 17th of July. Thank you, and have a nice day.
Thank you.
Thank you.