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Acquisitions propel Sweco to a profitable second quarter

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Sweco, the engineering consulting giant, had a strong second quarter buoyed by the financial contribution of its recent corporate acquisitions.

Sweden-headquartered Sweco works on a range of projects ranging from bridges to office towers. A few years ago, it helped plan Bloomberg’s European headquarters, an imposing two-building complex located in London.

Sweco’s net sales in the second quarter amounted to 7.249 billion Swedish kronor, which works out to about $657 million. That’s a 9% increase compared with the year-ago period, which is a solid increase for a well-established consultancy growing from a large revenue base.

Sweco breaks down its revenue by region to show investors which parts of its business are driving sales growth. The key takeaways: the company’s Belgian unit delivered strong top line momentum in the second quarter, while its subsidiaries in Germany, Central Europe Norway, Finland and the Netherlands also increased their revenue.

But it’s Sweco’s EBITA that was the main star of its second quarter earnings call. The firm’s EBITA jumped by a whopping 29%, or three times as fast as its revenue, to the Swedish krona equivalent of $50 million.

Sweco says its improved profitability was driven by increased project fees and the contribution of the engineering firms it has bought in Europe over the past few years.

During the second quarter, Sweco acquired three more companies to expand its regional reach. It picked up a surveying firm in Sweden, a building inspections outfit in the U.K. and a Finnish architectural firm.

Sweco also nabbed a few notable client deals, which it made sure to highlight to investors during its second quarter earnings call. Two key highlights: a wood-based construction project in Finland and a collaboration with a Belgian public transit firm to retrofit its network of bus depots for supporting electric vehicles.