ÅF: Interim Report, January-September 2006 - Strong growth and improved profits

ÅF: Interim Report, January-September 2006 - Strong growth and improved profits For further information, please contact: Jonas Wiström, President and CEO +46 (0)8-657 11 15 / +46 (0)70-608 12 20Viktor Svensson, Director, Corporate Information+46 (0)8-657 12 01 / +46 (0)70-657 20 26 Net sales amounted to SEK 2,140 million (figure for corresponding period in 2005: SEK 1,683 million) Operating profit was SEK 111 million (SEK 77 million) Profit after net financial items was SEK 102 million (SEK 73 million) Profit after tax totalled SEK 61 million (SEK 52 million) Earnings per share, before dilution, were SEK 4.67 (SEK 4.35) A few words from the President, Jonas Wiström ÅF has recorded strong growth and increased profitability for the nine-month period and for the third quarter. This improvement is largely due to acquisitions and sustained strong performance in the industrial sector. The integration of the companies acquired this year (with a total of just over 1,000 employees) is going well. The merger in May between Benima and ÅF's automation operations has created an expansive consulting company that is a market leader in automation and industrial IT. The acquisitions have significantly strengthened ÅF's offer, and paved the way towards a number of new contracts. The cost synergies have begun to feed through, and are expected to increase progressively in extent during the coming quarters. The Infrastructure, Systems, ÅF-Benima and Inspection Divisions achieved a quarter on a par with or above expectations. The Process Division improved its profits and operating margin to some extent compared with the preceding quarter. However, profitability remains unsatisfactory, and so intensive efforts will continue to be made to improve this situation. Eero Auranne, formerly in charge of ÅF-Enprima, was appointed to lead the work of the Process Division after the end of the third quarter. Eero has long and wide experience of the international energy market. With the acquisitions made, the continuing high level of business activity and our strong position on the market, I believe that the ÅF Group is well placed to continue to grow and improve its profitability. Corporate acquisitions and collaborations during the third quarter In July, ÅF acquired the Swedish IT consulting company, Combra, with 60 employees in Stockholm, Uppsala and Lund. Combra specialises in embedded systems for the telecommunications, medical technology and high-tech industries. In August, ÅF acquired the Swedish technology consulting firm, JämtTeknik vid Storsjön AB, with 65 employees in Östersund, Sollefteå, Trollhättan and Gothenburg. JämtTeknik specialises in integrated logistics support (ILS) and consulting assignments for the defence industry. ÅF's new share issue A review of ÅF's new share issue on 18 August 2006 showed that 3,216,292 new B shares, equivalent to 99.5% of the B shares offered, were subscribed through subscription rights. In accordance with the procedure described in the prospectus, the 15,872 unsubscribed shares (0.5 percent of the total) were allocated to those shareholders who wished to subscribe for B shares without the support of subscription rights. The issue was, thus, fully subscribed, providing ÅF with almost SEK 290 million in the third quarter. Significant events during the third quarter ÅF was commissioned to carry out an extensive pulp project by the South African pulp and paper group, Sappi. The value of the order for ÅF is around SEK 90 million. ÅF (through the Process Division) won the project in conjunction with its joint-venture partner Murray & Roberts. ÅF was part of the project group which won the architectural and design competition for a new university hospital to be located within the existing Karolinska Sjukhuset and Karolinska Institutet hospital complex in the Stockholm suburb of Solna. The competition was organised by Locum on behalf of Stockholm County Council. Significant events after the close of the reporting period Eero Auranne has been appointed Divisional Manager for the Process Division. He took up the post on 9 October, becoming a member of the ÅF Group's senior management team at the same time. In his previous position, Eero was a member of the management team for the Process Division. He has a great deal of experience from the international energy and process industries, including 20 years with Fortum, where he served as Managing Director of Fortum Service and Vice President of the Fortum Group. The following have been appointed to serve on AB Ångpanneföreningen's Nominations Committee: Gunnar Svedberg, Chairman of Ångpanneföreningen's Foundation for Research & Development (also Chairman of the Nominations Committee) Carl-Erik Nyquist, Chairman of AB Ångpanneföreningen Erik Sjöström, Skandia LivSales and earnings Net sales amounted to SEK 2,140 million (corresponding period 2005: SEK 1,683 million), an increase of 27 percent. SEK 446 million of sales originate from acquisitions made this year. For the third quarter, sales totalled 746 million (SEK 466 million), and, of this figure, SEK 237 milAttachment: Interim Report, January-September 2006Text version / Internet version / Print / Close