Skanska Nine month report 2005

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SkanskaNine month report 2005

• Modern House industrialized project, Sweden

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Q1-Q3 2005 in brief

• Revenue in Construction up 4 percent in local
  currencies
• Operating income in continuing operations of SEK
  3,299 M (3,041)
• of which gains from divestment of properties
  SEK 1,342 M (1,312)
• Order bookings in Construction up by 1 percent to
  SEK 87.5 bn (86.8)
• Backlog of SEK 131.3 bn represents 14 months of
  sales

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Business Streams in Q3

• Construction
• Continued positive earnings trend in most
  markets. Norway particularly strong due to
  completion of civil projects
• Operating margin reaching 3.1 percent in the
  quarter
• U.S. operations improving slowly excluding Yeager
• Strong order bookings, up 38 percent compared to
  Q3 2004
• Residential Project Development
• Continuing strong residential markets
• Operating margin up to 11.9 percent and RoCE 24
  percent
• Commercial Project Development
• No substantial divestments
• Two new projects started in the quarter
• Infrastructure Development
• Start of construction on A1 highway in Poland

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Order situation Construction
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Order bookings
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Construction
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Residential Project Development
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Residential Project Development September 30,
2005
All sold units include reserved units in this
summary.
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Commercial Project Development
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Commercial Project Development
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New projects
1 Sold projects
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Infrastructure Development
Remaining investment commitments at the end of
the period amounted to SEK 0.8 billion. The five
projects in the preferred bidder stage1 would at
financial close add further commitments of SEK
1.0 bn. At year-end 2004, market value of
projects exceeded book value by approx. SEK 0.9
billion 1Barts Royal London Hospitals, Kings
Mill and Mansfield Community Hospitals, A1
Highway, E18 Highway, Midlothian Schools
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Performance analysis, Group
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Income statement
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Balance sheet
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Change in interest-bearing assets and liabilities
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Operating cash flow
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Group net investments
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Pension obligations

• Change in IAS 19 expected during 2005,
  alternative method recognizing actuarial
  gains/losses in balance sheet
• Skanska is currently updating actuarial
  assumptions for annual calculation of net pension
  liability
• The estimated consequence will be a reduction of
  SEK 1.6 bn in equity and SEK 2.1 bn in
  interest-bearing net receivables
• Changed actuarial assumptions imply that earnings
  will decline by approximately SEK 100 M on an
  annual basis going forward

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Market outlook Construction

• Continuation of the favorable trend in the
  Nordics
• Positive trend in Central Europe though lead
  times are long in Poland
• PPP still strong in the U.K., low activity in
  other segments
• Continued good outlook for projects in the oil
  and gas industries in Latin America
• U.S. cautiously positive
• Long-term decision on federal funding of
  infrastructure was made in early fall. Effects
  from program in 2006 and beyond
• Healthcare and education are still strong sectors

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Market outlook Project Development

• Residential PD activity maintained at a high
  level in most markets
• Czech market showing initial signs of oversupply
• The residential market in Sweden is increasing
• Accelerating land prices
• Interest in new facilities continues to lead to
  new project starts in Commercial PD but at a
  moderate pace
• Continued strong investor interest in office,
  retail and logistics properties
• PPP projects gaining ground in many home markets

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Summary

• Continued improvement in underlying margins in
  Construction and Residential Project Development
• Continued optimism about order bookings going
  forward
• Several ID projects reaching financial close.
  After close of the period the E18 highway reached
  financial close
• Overall market situation stable to positive in
  most home markets

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