STOCKHOLM, Sweden, May 18, 2004 (PRIMEZONE) -- Skanska is announcing a plan for its US building unit to achieve a highly focused organization with the goal of above market growth in sales and earnings. The plan includes centralization of all support services, which will enable the most senior line officers and managers to concentrate on customers and project execution at local levels. The new structure will result in improved service to customers as well as improved control. The changes will also mean lower administrative costs.
A one-time expense of approximately SEK 150 million (USD 20 million) will be charged against earnings in the second quarter. No project provisions are expected as a result of the actions taken. The expected pay back on the one-time expense is less than two years in the form of lower overhead as a percentage of net sales.
"The actions we are taking should result in higher order bookings by 2005 and a significant increase in earnings by 2006, assuming reasonable economic conditions" says Stuart Graham, President and CEO of Skanska AB. "With this organization we will be in much better position to capitalize on opportunities around the US by bringing our best resources to service our customers wherever they may be. At the same time we remain committed to having local operations managers close to the customers. Even centralized services will be provided to customers through local offices."
``The new structure will enhance growth through responding quicker to changes in corporate customers' needs as well as taking better advantage of a wider range of other national sectors including health care, education, biopharmaceutical and Government contracts, and it will help improve market share in a challenging environment", says Michael Healy, President of Skanska USA Building. ``The change will also help ensure that profitable growth will continue for the US building business for the foreseeable future."
These actions will result in the closing of low growth potential offices in Littleton, Colorado; Harrisburg, Pennsylvania; Milford, Connecticut; and Winston Salem, North Carolina; early retirement of a few executives and a reduction of some 100 other managers and staff primarily related to the office closures. In addition, and as a result of these actions, certain assets will be written off.
Skanska USA Building Inc. is a leading national and local provider of construction, pre-construction consulting, general contracting, design build, and pharmaceutical validation services to a broad range of U.S. industries, including biopharmaceutical, educational, high-tech, healthcare, transportation and sports and entertainment. The company, part of Skanska Group, is headquartered in Parsippany, New Jersey, and has more than 5,300 employees in the U.S. Since 1990 Skanska USA Building has grown from USD 100 million in sales to USD 3,7 billion in 2003.
For further information:
Hans Biorck, CFO, Skanska AB, tel +46 8 753 88 00 Anders Lilja, Senior Vice President, Investor Relations, Skanska AB, tel +46 8 753 88 01 Peter Gimbe, Press Officer, Skanska AB, tel +46 8 753 88 38 or +46 70 543 88 38 Tom Crane, Senior Vice President, Corporate Communications, Skanska USA Building, tel +1 973 394 9100
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