Introducing Skanska UK. Gregor Craig, President and CEO Kelly Gangotra, Chief Financial Officer

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1 Introducing Skanska UK Gregor Craig, President and CEO Kelly Gangotra, Chief Financial Officer

2 Global business streams Construction Heron Tower, London, England Residential Development Stavstensudde, Trelleborg, Sweden Commercial Property Development Green Court, Bucharest, Romania Infrastructure Development M25 motorway, England November 2017 SEB presentation 2

3 Local presence global strength 35% 43% Revenue R-12 26% 29% EBIT R-12 22% Nordics Europe USA 23% 22% Construction Residential Development Commercial Property Development Infrastructure Development November 2017 SEB presentation 3

4 Our business model Free working capital in Construction combined with the profits generated by the Group enables the financing of investments in project development Revenue from external customers Construction Revenue with associated contract profits Investment opportunities Internal contracts are generated by investments in project development Project Development Development gains are generated and are realised upon divestment Operating margin Return on capital employed Return on equity Dividend November 2017 SEB presentation 4

5 The UK construction market November 2017 SEB presentation 5

6 UK construction industry Construction accounts for 6 7% of UK GDP There are over 251,000 construction companies in the UK Only 60 companies larger than 1,200 people... about 2.1 million people are employed in the industry (6.1% of UK s workforce, 10% at peak) Top 20 companies account for c % of 135bn market (in Sweden the top three account for 40-45%) November 2017 SEB presentation 6

7 How construction works in the UK Different types of clients Public: National/local authority Regulated: Utilities Private: Commercial/industrial Large services market Many different procurement routes 50bn services 85bn construction Source: ONS November 2017 SEB presentation 7

8 Delivery models UK market Concept Development Design Construction Operate/ maintain Build only Design and construct Frameworks PFI/PPP Trends - Early involvement - Integrated/collaborative - Total solutions - Best value/whole life - Asset management November 2017 SEB presentation 8

9 Skanska in the UK November 2017 SEB presentation 9

10 UK sectors November 2017 SEB presentation 10

11 Geography Edinburgh Manchester Birmingham Bristol Cambridge London November 2017 SEB presentation 11

12 In the UK Established in ,000 employees 2016 revenue billion 2016 operating income 35.1 million 2016 operating margin 2.1% The Gherkin, London November 2017 SEB presentation 12

13 Competitive landscape Average margin over 5 last years BAM 1.0% BAM 2.0% Costain 2.1% Skanska UK 2.9% Carillion 3.6% Balfour Beatty -4.2% Laing O'Rourke -2.7% Over 3% 2-3% 1-2% Below 1% 1 Includes latest set of filed accounts for period ending March 2016 May 2017 Public information Skanska UK presentation 13

14 Skanska UK executive management team Gregor Craig Katy Dowding Thomas Faulkner Harvey Francis Mark Galloway Kelly Gangotra Martin Neeson November 2017 SEB presentation 14

15 Senior Management Team (SMT) Adrian Cooke Gregor Craig Adam Crossley Graeme Culliton Katy Dowding Andrew English Thomas Faulkner Cameron Foley Harvey Francis Mark Galloway Kelly Gangotra Russell Hallmark Steve Holbrook Andrew MacAskill Anna Mann Helen Martin Adam McDonald Jon Morris Martin Neeson James Richardson Dylan Roberts Barry Smith November 2017 SEB presentation 15

16 November 2017 SEB presentation 16

17 Skanska s position in the UK Top three player Skanska Group strength and security Strong brand Values green, code of conduct, society, safety Great culture inclusion Thought leader November 2017 SEB presentation 17

18 Being One Skanska ESS Lund, Sweden New Karolinska, Sweden AstraZeneca headquarters, UK Tønsberg Healthcare JV November 2017 SEB presentation 18

19 November 2017 SEB presentation 19

20 November 2017 SEB presentation 20

21 November 2017 SEB presentation 21

22 Brexit and the UK November 2017 SEB presentation 22

23 Brexit impact on Skanska UK Response plan in place and monitored closely Higher than expected growth in 2016 Lower growth in 2017 with greatest impact in 2018 onwards Greatest uncertainty in private sector Impact on skills, labour and cost pressure External activities ICE Brexit Leadership Group, CBI and Construction Leadership Council, All Party Parliamentary Group November 2017 SEB presentation 23

24 Skanska Group financial performance November 2017 SEB presentation 24

25 Nine Month Report 2017 Operating income SEK 4.8bn (4.9) Strong performance in Project Development Strong performance in Nordic Construction Write downs in U.S. Construction Increase in earnings per share SEK (9.30) Continued good ROCE in Project Development 16.3% (15.8) Strong financial position St Giles Circus, London, UK November 2017 SEB presentation 25

26 Construction Revenue SEK 109.0bn (99.2) Order bookings SEK 118.6bn (130.6) Book-to-build: 107%, R-12 Strong order backlog SEK 194.7bn Operating income SEK 1.4bn (2.3) Operating margin 1.3% (2.3) Nordics strong and Sweden especially Write down of SEK 220M in U.S. operations Focus on restoring profitability continues Olympic Stadium, Helsinki, Finland November 2017 SEB presentation 26

27 Residential Development Revenue SEK 10.1bn (8.7) 3,052 (2,978) homes sold 2,803 (2,926) homes started Operating income SEK 1.3bn (0.9) Operating margin 13.1% (10.6) Strong performance in all markets ROCE 18.2% (14.2) Good market conditions in general Signs of a more normalised market in Sweden Mörtnäsviken, Värmdö, Sweden November 2017 SEB presentation 27

28 Commercial Property Development Operating income SEK 1.9bn (2.0) Gain on sale SEK 2.0bn (2.4) JV divestment in Q3 ROCE 13.8% (16.5) 53 ongoing projects SEK 28.6bn in investment value 41% pre-leasing rate 46% completion rate 21 projects started 332,000 sq m leased Scandic hotel, Copenhagen, Denmark November 2017 SEB presentation 28

29 Infrastructure Development Operating income SEK 885M (343) Divestment of A1 motorway in Poland for SEK 1.4bn in the first quarter Project portfolio s net present value SEK 2.9bn (5.7) Majority of projects under construction or in ramp up phase ROCE 25.3% (16.6) LaGuardia Airport, New York, USA November 2017 SEB presentation 29

30 Our key actions Controlled growth in Construction Home market strategy Enhanced Risk management Higher level of early involvement Continued focus on working capital Stable Residential Development Increase capital efficiency Grow BoKlok Establish Residential Development Europe Design to cost Expand Commercial Property Development Increase investments Drive cost efficiency Consider expansion in the U.S./CEE Landbank focus to backfill pipeline Leverage Infrastructure Development business model Grow presence in USA Establish presence in Norway Enhance values in portfolio and divest mature projects November 2017 SEB presentation 30

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