This article first appeared on GuruFocus .
-
Construction Revenue:SEK46 billion, up 7% in local currencies and 9% in Swedish krona year over year.
-
Construction Operating Income:SEK2.3 billion, up 28% year over year.
-
Construction Operating Margin:5% in Q3; 4.5% on a rolling 12-month basis, above the 4% target.
-
Order Bookings:Record SEK68 billion, matching Q2 levels; book-to-bill of 128% on a rolling 12-month basis.
-
Order Backlog:Record high of SEK328 billion, corresponding to 22 months of production.
-
Residential Development Revenue:SEK1.5 billion, slightly lower than the same period last year.
-
Residential Development Result:Negative operating result and margin, driven by impairments; Nordics at negative SEK480 million, Central Europe at SEK111 million with a 23% operating margin.
-
Residential Impairments:Goodwill impairment of SEK143 million (Norway) and other impairments of SEK340 million (mainly nonstrategic land).
-
Residential Units:Just under 3,000 homes in production; sales rate up from 51% to 56%; unsold completed homes reduced to 298 units.
-
Commercial Property Development Revenue:SEK3.2 billion, with operating income of SEK171 million.
-
Commercial Property Gains:Gain on divestments of SEK513 million; write-downs of SEK378 million, mostly on completed US properties.
-
Commercial Property Portfolio:17 ongoing projects (~SEK13 billion investment upon completion); 17 completed projects (SEK19.5 billion total investments); 82% occupancy on completed portfolio (up from 77% in Q2).
-
Commercial Leasing:22,000 square meters leased in the quarter; leasing ratio of 54% versus completion ratio of 57%.
-
Investment Properties Operating Income:SEK87 million, stable versus recent quarters (SEK143 million in the comparable quarter, which included a revaluation).
-
Investment Properties Portfolio:Seven office buildings valued at SEK8.3 billion; economic occupancy rate of 80%; average valuation yield of 4.7%.
-
Group Operating Income:SEK2.2 billion from the businesses, with central costs of SEK116 million.
-
Tax:Tax cost of SEK541 million, representing a 24% tax rate.
-
Cash Flow:Strong cash flow from operations of SEK2.8 billion, supported by positive working capital development in Construction.
-
Working Capital:SEK37 billion, at likely all-time high levels, including a positive currency impact of SEK1 billion.
-
Available Funds:SEK26.3 billion, of which SEK7.2 billion in unutilized credit facilities.
-
Net Receivable:Adjusted interest-bearing net receivable of SEK11.6 billion, up around SEK3 billion since Q2.
-
Return on Equity:11.4% on a rolling 12-month basis.
-
Return on Capital Employed:1.6% in Project Development and 4.1% in Investment Properties on a rolling 12-month basis.
-
Warning! GuruFocus has detected 11 Warning Signs with SKBSY.
-
Is SKBSY fairly valued? Test your thesis with our free DCF calculator.
Release Date: November 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Skanska AB ( SKBSY ) achieved a record high order backlog of SEK328 billion, with a book-to-bill ratio of 128% on a rolling 12-month basis.
-
Construction operating margin reached 5% in Q3 2026, well above the 4% target, with all geographies delivering improved results and margins.
-
Strong cash flow from operations of SEK2.8 billion, supported by positive working capital development in construction.
-
Skanska AB ( SKBSY ) maintains a robust financial position with available funds of SEK26.3 billion and adjusted interest-bearing net receivable of SEK11.6 billion.
-
Central European residential and commercial property development markets remain strong, with solid sales and profitability.
Negative Points
-
Project development was negatively impacted by impairment charges of SEK378 million on completed US properties and SEK340 million on nonstrategic land, plus SEK143 million goodwill impairment in Norway.
-
Residential Development in the Nordics showed weak performance with a negative operating result of SEK480 million, driven by low-margin projects and impairments.
-
Investment Properties economic occupancy rate declined to 80% from previous quarter, with lower leasing activity.
-
Commercial Property Development return on capital employed was only 2.5%, impacted by impairments and slow transaction market in the US.
-
Nordic residential market remains weak, with slow sales and starts, and no clear signs of normalization despite slight improvement in Sweden.
Q & A Highlights
Q: Julia Sundvall of ABG asked about the driver behind the very strong construction margin in Q3 and whether any one-off effects were included. A: CEO Anders Danielsson explained that there were no one-off effects in the construction margin. The strong 5% margin was driven by the completion or maturing of large, very profitable projects. He noted that Skanska takes a conservative profit takeout in the early days of a project, which boosted the margin in the single quarter, but the underlying performance is represented by the rolling 12-month margin of 4.5%.
Q: Julia Sundvall of ABG asked if Skanska remains disciplined with its record-high order backlog and whether the margins in the backlog support current levels. A: CEO Anders Danielsson stated that the backlog is of very high quality. While he did not disclose exact margins, he expressed strong confidence that the margin in the backlog definitely supports the company's target for construction operations.
Q: Graham Hunt of Jefferies asked for color on the drivers of the very strong Q3 order intake, whether it was due to timing or pull-forward from Q4, and for commentary on the US market following the midterm election results. A: CEO Anders Danielsson attributed the high order intake to a good hit rate on projects Skanska has been working on for a long time, noting it was a coincidence that they boosted Q3. Regarding the US election, he stated it is too early to say any impact, but noted Skanska has worked with many administrations over 50 years and expects no dramatic short-term changes, as willingness to invest in infrastructure exists on both sides.
Q: Graham Hunt of Jefferies asked for a comment on the data center pipeline in the Nordic countries. A: CEO Anders Danielsson noted that Skanska has a few data center projects in Finland and has been building in Sweden and Norway, though at a lower level than in the US. He sees customer interest in Nordic data centers, but noted that permits, power access, and land acquisition take time, though he expects activity to increase.
Q: Julia Sundvall of ABG asked about the effect of data center orders on the order backlog, referencing earlier comments on a high burning rate. A: CEO Anders Danielsson confirmed that data center activity in the US, which was slow in the first couple of quarters, took off in Q3. He explained that data centers generally have a higher burn rate because they are shorter, large-scale projects compared to the average.
Q: Arnaud Lehrmann of Bank of America asked if the high single-digit construction sales growth at the group level, and double-digit growth in the US, could be the new run rate into 2027 based on order bookings. A: CEO Anders Danielsson declined to give a specific forecast but acknowledged the revenue pickup. He stated that the order backlog definitely supports revenue going forward but would not provide figures.
Q: Arnaud Lehrmann of Bank of America asked about the construction margin, noting that higher sales with stable SG&A lowered the percentage, and inquired if there were any specific impacts to mention. A: CFO Pontus Winqvist stated that it was simply steady cost management and higher revenue, with nothing special happening. He noted that the SG&A percentage is easier to hold at a good level with increased revenue, and the company focuses on managing costs across all businesses and at the central level.
Q: Arnaud Lehrmann of Bank of America asked about the strong cash performance in the quarter and whether it was all related to order bookings in construction or if there were other effects. A: CFO Pontus Winqvist confirmed that the majority of the improved cash flow came from working capital development within construction. He noted that Skanska continues to see favorable payment plans for new and existing construction contracts.
Q: Kevian Shrivanpour of SEB asked for a sense of how much of the operating profit in the quarter came from projects that reached critical milestones. A: CEO Anders Danielsson declined to provide specific figures but reiterated that the rolling 12-month margin of 4.5% represents the performance over time and provides guidance.
Q: Kevian Shrivanpour of SEB asked about the timing of the cash flow impact from sold but not transferred properties, specifically how much would come this year versus beyond 2028. A: CFO Pontus Winqvist did not have the exact numbers on hand but stated that some cash flow would be seen in Q4, with the remainder coming next year depending on delivery timing. He could not confirm the analyst's estimate of SEK1.5 billion due in 2029.
Q: Kevian Shrivanpour of SEB asked about the backlog conversion rate and revenue growth in US construction, given the higher share of large, shorter-duration projects. A: CEO Anders Danielsson described the US picture as mixed, noting a diversified portfolio that includes longer-duration civil infrastructure projects alongside shorter data center and semiconductor projects. He confirmed a high burn rate on buildings that have picked up but declined to give a forecast.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
