3 takeaways from Skanska’s 2024 results as it rides high on US orders
10 February 2025
Despite ongoing challenges in the European building sector, Skanska, the Sweden-based global construction and development firm, delivered strong financial results in 2024, reporting a record-high order backlog and double-digit revenue growth.
Skanska’s cover page for its full year and fourth quarter report for 2024. Pictured is work on the Portal North Bridge project for commuter rail provider Amtrak. (Image: Skanska)
The company – at its 7 February fourth quarter (Q4) and full-year conference call – cited continued strength in US infrastructure projects and the booming data centre sector as key drivers, while noting civil construction in Europe remained stable.
Skanska’s full-year revenue climbed 13% to SEK 177.2 billion (US$17.3 billion), driven by strong demand in the US and strategic growth in key sectors.
Operating income for the year reached $687 million, a 121% increase year-over-year, reflecting strong operational efficiency.
“We have a record-high backlog,” Skanska President and CEO Anders Danielsson said at the onset of the conference call, noting later in the discussion: “We go with projects where we see that we have a competitive advantage and the right teams in place.”
1) Record-high backlog led by outperforming US infrastructure and data centres segments
Skanska’s president and CEO, Anders Danielsson. Photo: Skanska
Skanska’s order backlog reached an all-time high, with construction order bookings totalling $4.8 billion in Q4, an 11% increase over last year when adjusted for currency effects. For the full year, order bookings amounted to $20.3 billion, up 25% from 2023.
A key driver of this backlog was the US market, where Skanska reported a book-to-build ratio of 152%.
“Which gives us 24 months of production,” said Danielsson. “The US order backlog has a longer duration, now, than we have seen before.”
The company is currently engaged in major US infrastructure projects, including the Gateway Program’s new railway connection between New Jersey and Manhattan called the Portal North Bridge replacement project. This scheme involves replacing the existing Portal Bridge with a new two-track fixed structure over the Hackensack River.
The new bridge will rise more than 50 ft above the river and, including the approaches, will span nearly 2.5 miles of the Northeast Corridor. The firm is constructing key bridge components – prefabricated in upstate New York – transported via the Hudson River for on-site assembly. Skanska, in partnership with Traylor Bros, secured a contract with NJ TRANSIT to construct the Portal North Bridge replacement at a total contract value is $1.6 billion, with Skanska’s share amounting to $1.1 billion.
Regarding potential disruptions in federal project payments or contract structures with the newly appointed Trump administration, Skanska leadership felt unimpeded by any potential impact. “We have good contracts with the repeat clients in the US on the public side, so we don’t see any trend downwards when it comes to the pipeline, either. It continues to be strong and stable,” Danielsson said.
Skanska also pointed to data centres as a significant growth sector, particularly in the US, where demand for cloud computing infrastructure is accelerating.
“It’s a very attractive segment, the data centres,” Danielsson remarked. “We are well positioned when it comes to that segment in the market, especially in the US, where we see the strongest activity. There are multiple clients, repeat clients, that want to build out. We see a strong pipeline.”
Skanska is anticipating the completion of two data centres early this year: one in Virginia and another in Georgia. An ongoing project in Arizona is scheduled to finish in 2026.
2) European civil construction holds steady, but building sector remains weak
Render of the South Molton project in Mayfair, London. (Image courtesy Skanska)
In Europe, Skanska saw stable demand for civil infrastructure projects in Finland and Sweden, with notable challenges in Norway, where the market showed early signs of cooling.
Order bookings in Europe increased, but the company noted that building construction, particularly in the commercial and residential sectors, remains weak.
Skanska said civil projects in Sweden are stable, driven by ongoing public infrastructure investments. The company also highlighted its growing presence in Finland, where transportation projects are a major focus.
However, the residential development market remains sluggish, and the firm said this was another segment and region where it is employing strategic selectivity as it expands its footprint there. Danielsson said strength and stabilisation in the civil markets in Norway are buoying optimism.
“Overall, a stable market will continue [there],” he said, adding the outlook was unchanged for the rest of the continent. “Weak for the rest of Europe when it comes to building and residential development, also an overall weak market outlook in the Nordics.
“Having said that, we have seen some improvements, but we believe it will take some time before we are back on normal levels here in Europe.”
Despite the challenges, Skanska said it is gradually increasing residential development projects, having started 573 new units in Q4 across its home markets. The firm said it plans to scale up cautiously while maintaining a focus on Central Europe, where demand has remained more level.
A significant project in the UK for Skanska is on the HS2 Main Works project, where the company is part of a joint venture responsible for constructing two tunnels approaching the London terminus at Euston station. This contract involves building twin 21km-long and (up to) 50m-deep tunnels, covering more than 26km. Work is scheduled for completion in 2031.
3) Ending the year on a strong note, selectivity in the future
Overhead render of the War Memorial Plaza and Auditorium in Nashville, Tennessee, US. (Image courtesy Skanska)
Skanska’s operating cash flow reached SEK 5.1 billion ($497 million) in Q4, contributing to a sound net cash position of $1.2 billion.
Looking ahead, Skanska remains committed to office development and diversifying into life sciences and multi-family rental housing to adapt to evolving market trends. Analysts have suggested life-science builds, in particular, could be productive in 2025 and forward.
“We continue to believe in the office market long term,” Danielsson said, adding Skanska is increasing its focus on life sciences builds and rental housing, which he said are showing stronger demand.
The company leased 55,000m² of commercial space in Q4, though it reported a decline in leasing ratios due to the addition of newly completed properties with lower occupancy rates.
Danielsson called the leasing market “polarised” but added the “flight to quality is really clear”. He said office and commercial projects may not be as frequent but, in some cases, the standards have increased, “and that’s exactly the type of product we can offer the market.”
Skanska expects an increased pace of investment in both residential and commercial development while remaining selective in bidding.
“We are not starting any project where we don’t have the right financial fundamentals,” Danielsson said. “We will start projects selectively where we see we have the business case in place.”
Skanska construction’s 2025 outlook
The first of three arches is delivered and installed on Skanska USA/Traylor Bros’ Portal North Bridge project (Image: Amtrak)
Skanska expects the US market to remain its primary growth engine, with infrastructure and data centres driving demand.
In Europe, civil projects should remain stable, while residential and commercial building markets may see a slow recovery.
“Infrastructure investment remains strong, and we see continued opportunities in the US and select European markets,” said a Skanska representative.
“We remain focused on strategic project selection, disciplined investment, and capturing opportunities in high-growth sectors.”
With a record order backlog and expanding presence in high-demand construction segments, Skanska’s results suggest contractors and civil builders, in general, should be positioned for another financially strong year in 2025, provided they bid the right value on the right projects.
Danielsson said, “Summarising 2024, I am pleased with the performance in construction. We are capturing market opportunities and growing the business while remaining true to the strategy that has enabled stable delivery in line with our long-term target.
“At the same time, it is promising to see that market recovery is underway for our project development businesses.
“Looking into 2025, prioritising a robust financial position and churning the project development portfolio will allow us to make the most of market opportunities as they arise.”
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