Interim Report January - March 2018
Improved result in a continued favourable market
”We deliver improved results and have a positive view of the current market and its strong incentives for sustainable solutions, both in the Nordic region and internationally. We are also firmly focused on implementing our new strategy and are pleased that the year has started well,” said Jonas Gustavsson, President and CEO.
First quarter 2018
- Net sales amounted to SEK 3,415 million (3,265)
- EBITA totalled SEK 325 million (286)
- EBITA margin was 9.5 percent (8.8)
- EBIT (operating profit) was SEK 311 million (287)
- Basic earnings per share: SEK 2.94 (2.65)
COMMENTS BY THE CEO
We have begun 2018 with stronger results for the first quarter in a market that remains favourable. EBITA for the quarter amounted to SEK 325 million (286), an increase of 13 percent compared with the same period in the previous year, and net sales increased by 5 percent.
The general outlook for the market remains good and is largely unchanged since last quarter. Industrial demand remains healthy in most sectors, both in Sweden and internationally. Investments in infrastructure in Sweden and Norway are still at a high level. One strong driving force is that more municipalities, cities and private operators are increasing their demand for flexibility and smart solutions in their plants, urban planning and properties. This is where we can use our cross-functional skills to create end-to-end solutions for smart cities. The European energy market has stabilised, but remains weak. Meanwhile the shift to more fossil-free energy production is creating greater demand in areas such as cogeneration plants based on renewable fuels. The process of digitalisation that is currently under way is a motivator that is leading to sustained demand in the industrial, energy and infrastructure markets. It has also resulted in increased competition for engineers, which slowed our growth during the quarter.
Performance among the divisions
The Infrastructure Division continues to deliver strong growth with a good level of profitability. The division has converted its operations to cope with the shift from a small number of larger infrastructure projects to a greater number of medium to small projects.
The Industry Division continues to show stable profitability. We are strengthening our position within selected niches and increasing the number of projects in strategic partnerships both inside and outside the Nordic Region. Essentially all segments are experiencing healthy demand.
The Energy Division is showing improved profitability, and during the quarter it received several assignments for the maintenance, operation and renovation of existing power plants.
The Digital Solutions Division is showing higher profitability and seeing high demand for digital solutions. Customers are increasingly inquiring about digitalisation suppliers with the capability to deliver long-term end-to-end product development solutions. One example is our partnership with Electrolux, where ÅF took on around 50 qualified development engineers from the company, while also receiving a major assignment.
Implementation of our strategy is proceeding
Implementation of the new Future ÅF strategy is proceeding according to plan. The strategy means a shift in our business model, where we increase the value we deliver to our customers through complex project assignments, packaged solutions and concepts. This entails a gradual change from hourly fees towards a more value-based business model. We are cultivating the international market in selected niches, which has resulted in new transactions such as an assignment for Sappi in South Africa, our largest order in the pulp and paper sector so far. Another initiative that is consolidating our competitiveness and position as an engineering and design company is the acquisition of architectural firm Gottlieb Paludan Architects in Denmark.
It is extremely important for our managers and employees to understand the drivers of our business, as well as to feel committed to our new vision, strategy and values. Therefore, all employees are participating in a digital change programme where they gain new insights into the road ahead, both individually and in teams.
An active sustainability agenda
ÅF’s sustainability efforts are producing results, which can be seen in an improvement in the Sustainable Business Performance Indicators (SBPI), which measure our total sustainability performance. We are seeing progress in several areas: our employees are increasingly aware of how we apply sustainable values in our client assignments; our customers feel that we have contributed to greater sustainability. Our New Immigrated Engineers programme, has also proven to be a success in recruiting newly immigrated engineers.
We have an exciting year ahead of us, as the new strategic direction and increasing demand for ÅF’s solutions form the foundation for continued profitable growth in 2018.
ÅF AB (publ), SE-169 99 Stockholm, Sweden
Visitors’ address: Frösundaleden 2, 169 70 Solna, Sweden
Tel. +46 10 505 00 00 Fax +46 10 505 00 10
www.afconsult.com / email@example.com
Corporate ID number 556120-6474
This report has not been subjected to scrutiny by the company’s auditors.
This information fulfils ÅF AB’s (publ) disclosure requirements under the provisions of the EU’s Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication through the agency of the contact person set out above at 11.00 CET on 25 April 2018.
All assumptions about the future that are made in this report are based on the best information available to the company at the time the report was written. As is the case with all assessments of the future, such assumptions are subject to risks and uncertainties, which may mean that the actual outcome differs from the anticipated result.
This is a translation of the Swedish original. The Swedish text is the binding version and shall prevail in the event of any discrepancies.
The full report including tables (pdf) is available for download.
Link to press-images
For further information:
Jonas Gustavsson, President and CEO, +46 70 509 16 26
Stefan Johansson, CFO, +46 70 224 24 01
ÅF is an engineering and design company within the fields of energy, industry and infrastructure. We create sustainable solutions for the next generation through talented people and technology. We are based in Europe and our business and clients are found all over the world.
ÅF – Making Future.