Interim Report January - December 2018
Strong growth and stable profit
”2018 was characterized by a high rate of growth and stable profit. We look forward to another exciting year in which we deliver leading solutions to our clients and realise the planned acquisition of Pöyry,” said Jonas Gustavsson, President and CEO.
Fourth quarter 2018
- Net sales amounted to SEK 3,957 million (3,500)
- EBITA excl items affecting comparability, was SEK 357 million (344)
- EBITA margin, excl items affecting comparability, was 9.0 percent (9.8)
- EBITA totalled SEK 332 million (344)
- EBITA margin was 8.4 percent (9.8)
- EBIT (operating profit) was SEK 328 million (348)
- Basic earnings per share, before dilution: SEK 2.85 (3.28)
- Net sales amounted to SEK 13,975 million (12,658)
- EBITA excl items affecting comparability, was SEK 1,268 million (1,117)
- EBITA margin, excl items affecting comparability, was 9.1 percent (8.8)
- EBITA totalled SEK 1,243 million (1,027)
- EBITA margin was 8.9 percent (8.1)
- EBIT (operating profit) was SEK 1,203 million (1,033)
- Basic earnings per share, before dilution: SEK 10.98 (9.58)
- Board of Directors proposes a dividend for 2018 of SEK 5.00 (5.00)
COMMENTS BY THE CEO
ÅF delivered strong growth and achieved stable profit in the fourth quarter. Net sales increased by 13.0 percent (11.6). EBITA excluding items affecting comparability was SEK 357 million (344), and the corresponding EBITA margin was 9.0 percent (9.8). Cash flow remains strong.
The transition to reducing climate impact and the global urbanisation and digitalisation trends continue to drive demand for sustainable solutions in all of ÅF’s operations.
The general market trend and demand remained good in the fourth quarter and was largely unchanged compared with the previous quarter. Demand in the industrial sector for digitalisation, electrification and automation remains strong. The need for investments in infrastructure in the Nordic region and Switzerland, which are ÅF’s principal markets, continues to drive demand in both commercial and public buildings and road & rail, as well as in niche areas such as architecture and design. The energy market is in a process of transformation, and we see stable demand for our services in the Nordic region. There is also stable demand on the global energy market. However, our international energy business is affected by the changes we are currently making.
Performance among the divisions
Based on the strong demand on the market, the Infrastructure Division continues to develop well with good growth and profitability. The level of investment in roads and railways remains strong, and the buildings segment, with the focus on sustainable solutions, is developing well. During the quarter, Swedavia renewed its trust in ÅF for the continued expansion of Arlanda Airport, with a contract value of approximately SEK 55 million.
The Industry Division delivered a stable profit and slightly higher growth than in the previous quarters of the year. Trends are positive in the automotive industry, the manufacturing industry and Food & Pharma. The division supports its clients in their transition towards a sustainable industry, driving continued strong orders in the process industry. Industrial clients demand increasingly advanced automation solutions to enhance both quality and productivity in their plants.
The Energy Division enjoyed a stable profit and growth on the Nordic market, but the international market remains challenging. We are changing our energy operations to improve profitability and transform our business model in line with the ongoing energy transformation. This entails greater focus on our core markets and, in line with this change, energy expert P.A.P in Denmark and Swiss-based IFEC Ingegneria were acquired during the quarter.
The Digital Solutions Division delivered strong growth of 20 percent and continued good profitability. Digitalisation in industry and society at large is driving demand for digital services, and ÅF’s ability to deliver end-to-end solutions for the entire development chain in all sectors is producing results. During the quarter, ÅF entered a partnership contract with Ericsson, combining our deep knowledge of industry and digitalisation with Ericsson’s telecommunications expertise. We thus have a strong offering when our clients take the next step in Industry 4.0.
Successful implementation of strategy
In 2018, we successfully implemented our strategy, focusing on developing our business model, increasing growth and strengthening our profitability. During the year, we grew organically by 6.3 percent (3.3) and acquired 11 businesses that strengthen our position in selected segments and geographical regions. In line with the strategy, we are now taking the next step to further enhance our competitiveness, meet our clients’ increased demand for end-to-end suppliers with global reach and meet the ongoing consolidation in the sector. The planned acquisition of Pöyry gives us the opportunity, in selected segments, to become a leading international supplier of sustainable solutions, while creating a platform for continued value growth and international expansion. With our combined expertise and size, we will be able to take on even larger, more complex assignments. This also generates interesting career and development opportunities for our employees, further enhancing our employer brand.
We have now left 2018 behind us. Annual sales were SEK 14 billion, an increase of 10.4 percent on 2017. EBITA excluding items affecting comparability was SEK 1,268 million (1,117), and the corresponding EBITA margin was 9.1 percent (8.8). In 2018, ÅF continued to grow and return profits, laying a sound foundation for the future.
We look forward to an exciting year with our clients, employees and shareholders and will continue to focus on the journey towards our vision of providing leading solutions for generations to come – Making Future.
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 / firstname.lastname@example.org
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 08.00 CET on 7 February 2019.
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 AB (publ), Frösundaleden 2, SE-169 99 Stockholm
Telefon +46 10 505 00 00, säte i Stockholm, www.afconsult.com
Organisationsnr 556120-6474, momsreg.nr SE556120647401
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.