ÅF Interim Report, January-March 2010

For further information, please contact: Jonas Wiström, President/CEO                        +46 (0)70-608 12 20
Jonas Ågrup, CFO                                    +46 (0)70-333 04 95

Viktor Svensson, Director, Corporate Information    +46 (0)70-657 20 26

First quarter 2010

  * Net sales totalled SEK 1,107 million (Q1 2009: SEK 1,205 million)
  * Operating income totalled SEK 1,565 million (SEK 1,208 million)
  * Operating profit was SEK 541, incl. capital gain of SEK 458 million (SEK
    106 million)
  * Operating profit excl. other operating income was SEK 83 million (SEK 104
  * Operating margin excl. other operating income was 7.5 percent (8.6 percent)
  * Operating margin excl. other operating income and ÅF-Inspection was 8.2
  * Earnings per share, before dilution, were SEK 30.53 (SEK 4.51)

A few words from the President, Jonas Wiström

The market remained subdued in the first quarter, although there were
indications of a gradual recovery as the reporting period progressed. Our
capacity utilisation rate was relatively low, but rose month by month, and our
operating margin for March was 10 percent.

The clearest signs of recovery so far have been in the energy sector worldwide,
which currently accounts for 40 percent of ÅF's sales. Investments in new
electricity production have once again begun to pick up on the back of a more
stable situation in the credit market. ÅF won several major power plant orders
in the first quarter and the level of activity is now significantly higher than
it was a year ago. The Energy Division reported an operating margin in excess of
10 percent for the quarter, with profitability highest in the division's Russian
operations, where some 250 consultants are currently employed.

The Inspection Division, whose operations had a negative effect on the Group's
operating profit in the first quarter, was sold at the end of March. The income
from this transaction has left ÅF in a strong financial position, and the future
focus will now be to grow the core business through corporate acquisitions in
existing and new markets.

ÅF remains of the opinion that 2010 will be a challenging year, albeit with a
gradual improvement in the market as the year advances. Our objective is clear:
to continue to report levels of profitability that place us among the best
performers in our industry at the same time as we increase our growth rate.

Income and earnings

Net sales for the reporting period totalled SEK 1,107 million (Q1 2009: SEK
1,205 million)
Operating income totalled SEK 1,565 million (SEK 1,208 million).

Operating profit amounted to SEK 541 million (SEK 106 million).
Operating profit excluding other operating income was SEK 83 million (SEK 104

The operating margin excluding other operating income was 7.5 percent (8.6

Profit after net financial items amounted to SEK 538 million (SEK 104 million).

Capacity utilisation was 70 percent (71 percent).

Profit after tax totalled SEK 518 million (SEK 77 million).

Earnings per share before dilution were SEK 30.53 (SEK 4.51).

Acquisitions and disposals

On 25 March ÅF signed an agreement to transfer 100 percent of the shares in the
ÅF Inspection Division, ÅF-Kontroll and its subsidiaries, to DEKRA AG in

Based on an enterprise value of SEK 610 million, DEKRA paid SEK 550 million for
the shares in ÅF-Kontroll. (The sale included the transfer of net liabilities of
SEK 60 million.)

The transaction led to a capital gain of SEK 458 million in the ÅF accounts. The
Inspection Division´s results were deconsolidated from ÅF with effect from 25
March 2010.

Important events during Q1 and after the reporting date

ÅF signed an agreement with Fortum to provide technical consulting and project
management services in conjunction with the construction of a new cogeneration
plant in Klaipeda, Lithuania. This is a so-called "waste-to-energy" plant which
generates electricity from incinerating domestic and industrial waste. The order
is worth several million euros for ÅF.

ÅF signed an agreement with Latvia's state-owned energy company, Latvenergo, to
provide technical consulting and project management services in conjunction with
the construction of a new, 420 MW natural gas-fired power plant in Riga. The
order is worth several million euros for ÅF.

ÅF won an additional assignment for a hydropower contract currently being
performed for Nant de Drance SA in Switzerland. (ÅF announced the initial 27
million euro order for this project on 23 September 2009). The main focus of
this additional contract is on analysis and design engineering services to
increase the power plant's capacity from 600 MW to 900 MW.


Gross investment in property, plant and equipment during the reporting period
totalled SEK 9 million (SEK 7 million).

Cash flow and financial position

Cash flow from operating activities was SEK 1 million (SEK 20 million).

Total cash flow for the period was SEK 467 million (SEK -7 million). The sale of
ÅF-Kontroll generated a positive cash flow of SEK 592 million, while the net of
borrowing and amortisation of loans had a negative effect on cash flow of SEK
114 million (SEK -2 million).

The Group's cash and cash equivalents at the end of the reporting period
totalled SEK 805 million (SEK 281 million).

The Group's net cash balance at the end of March was SEK 550 million (SEK -187

Equity per share was SEK 135.89 and the equity/assets ratio was 61.9 percent. At
the beginning of 2010 equity per share was SEK 107.36 and the equity/assets
ratio was 51.0 percent. On 31 March 2010 equity totalled SEK 2,311 million.

Divisional performance

Energy     Operating income Q1: SEK 236 million (SEK 313 m)

           Operating margin Q1: 10.6% (7.9%)

The Energy Division is a front-rank international energy consultant and a world
leader in nuclear power consulting.

The market for energy consulting picked up during the fourth quarter of last
year. This positive trend was sustained throughout the first three months of
2010, leading to a rise in capacity utilisation and an inflow of orders that
exceeded expectations. One of the main reasons for this improvement in the
market is the stabilisation of the global credit market.

Demand was particularly strong for expertise in project management and
specialist competence with regard to biofuel and waste-to-energy cogeneration
plants in Europe. The first quarter also saw brisk demand in a number of
countries for strategic studies related to investments in nuclear power, a field
in which the division enjoys a position as a world leader among independent
consulting companies.

The Energy Division's clients are private and publicly owned power companies,
other energy-intensive industries, authorities and financial institutions.
Investments are often substantial and extend over many years. Energy has
well-filled order books, equivalent to almost two years' sales, and is currently
involved in power plant projects in more than 30 countries.

Engineering     Operating income Q1: SEK 337 million (SEK 344 m)

                Operating margin Q1: 6.8% (10.7%)

The Engineering Division is Northern Europe's leading technical consultant for

The first quarter was marked by caution in the market. The completion of one or
two large-scale projects for the division and the fact that a number of
industrial clients are still biding their time before committing to major, new
investments led to a slight dip in capacity utilisation.

However, market activity picked up towards the end of the reporting period and
the division won a number of important contracts with clients that include
Scania and SSAB. After the reporting period, ÅF was appointed lead technical
consultant for a major environmental engineering project in the form of a
biofuel-fired block heat power plant on an industrial site, adjacent to one of
the Korsnäs company's pulp and paper mills. The client is Bomhus Energi and the
order is worth approximately SEK 50 million for ÅF.

Infrastructure     Operating income Q1: SEK 467 million (SEK 497 m)

                   Operating margin Q1: 8.6% (9.2%)

The Infrastructure Division holds a leading position in consulting services for
infrastructure development in Scandinavia. Clients are found in industry, the
public sector, the defence industry and the property market.

In comparison with the situation at the end of 2009, the market for
infrastructure consulting services showed some signs of recovery during the
first quarter of the year. The most noticeable improvement was in the number of
projects relating to public investment in infrastructure, particularly in terms
of investments in the Nordic road and rail network. The division is currently
involved in rail projects in Sweden, Norway and Denmark.

The Infrastructure Division's largest business area, Installations, which has
operations in both Sweden and Norway, reported a good quarter given that the
market for construction-related services for industry and private construction
and property companies remains weak. A new collaborative agreement relating to
energy-efficiency measures in properties was initiated during the first quarter
with Ahlsell, a Swedish trading company that supplies goods and services to
professional users.

The first quarter also saw Ove Guttormsen recruited as the new manager for ÅF in
Norway, where Infrastructure is the largest of ÅF's divisions. ÅF currently
employs 150 consultants in Norway. Ove, who joins the company after holding a
number of managerial positions with Siemens/Bravida, brings with him
considerable experience from the industry and infrastructure sectors. He takes
up his new position at ÅF on 3 May. His objective is to expand ÅF in Norway over
the coming years at the same time as he increases the company's profitability.

Inspection     Operating income 1 Jan-25 March: SEK 89 million (SEK 94 m)

               Operating margin 1 Jan-25 March: -1.4 % (7.4%)

The Inspection Division was sold to DEKRA, a German company, on 25 March 2010.
For further information, please refer to the section headed "Acquisitions and
disposals" above, or see www.afconsult.com <http://www.afconsult.com/>

Number of employees

The number of FTE's was 4,150 (4,249). The total number of employees at the end
of the reporting period was 3,890 (4,443); 2,741 in Sweden and 1,149 outside
Sweden. The Inspection Division, which was sold on 25 March, had 512 employees.

Parent company

Parent company sales, primarily for various intra-group services, totalled SEK
76 million for the period (SEK 66 million). The parent company reported a profit
after net financial items of SEK 464 million (SEK -8 million). This includes the
profit of SEK 469 million that the parent company made on the sale of
ÅF-Kontroll. Cash and cash equivalents totalled SEK 548 million (SEK 0.3
million), and gross investment in machinery and equipment for the period January
through March amounted to SEK 2 million (SEK 2 million).

Accounting principles

This interim report has been prepared in accordance with IAS 34 ("Interim
Financial Reporting"). The report conforms with International Financial
Reporting Standards (IFRS), as well as with statements on interpretation from
the International Financial Reporting Interpretations Committee (IFRIC) as
approved by the European Commission for use in the EU, and with the relevant
references to Chapter 9 of the Swedish Annual Accounts Act. The report has been
drawn up using the same accounting principles and methods of calculation as
those in the Annual Report for 2009 (see Note 1, page 79). As from 1 January
2010 IFRS 3 Business Combinations (revised) and IAS 27 Consolidated and Separate
Financial Statements (revised) will be applied. The parent company has
implemented the Swedish Financial Reporting Board's Recommendation RFR 2.3,
which means that the parent company in the legal entity shall apply all the IFRS
and related statements approved by the EU as far as this is possible, while
continuing to apply the Swedish Annual Accounts Act and the Pension Obligations
Vesting Act and paying due regard to the relationship between accounting and
taxation in the preparation of the legal entity's annual accounts.

Risks and uncertainty factors

The significant risks and uncertainty factors to which the ÅF Group is exposed
include business risks linked to the general economic situation and the
propensity of various markets to invest, the ability to recruit and retain
qualified co-workers, and the effect of certain political decisions. In
addition, the Group is exposed to a number of financial risks, including
currency risks, interest-rate risks and credit risks. The risks to which the
Group is exposed are described in detail in ÅF's Annual Report for 2009. No
significant risks are considered to have arisen since the publication of the
annual report.

ÅF shares

The ÅF share rose by 15.3 % during the first quarter. This can be compared with
the Stockholm Stock Exchange OMXSPI index that rose by 8.3 % and the Mid Cap
index that rose by 9.4 % during the same period.

Financial information - schedule for 2010
Interim report January-June 2010          14 July

Interim report January-September 2010     21 October

Stockholm, Sweden - 5 May 2010
Jonas Wiström, President & CEO, ÅF AB

This interim report has not been subjected to scrutiny by the company's

The information in this interim report is that which ÅF AB is required by
Swedish law to disclose under the terms of the Swedish Securities Exchange and
Clearing Operations Act and/or the Financial Instruments Trading Act. The
information was released for publication at 08.30 C.E.T. on 5 May 2010.

All forward-looking statements in this report are based on the company's best
assessment at the time of the report. Like all assessments of the future, such
statements include risks and uncertainties that may mean that the actual outcome
is different.

               ÅF AB (publ) Corporate identity number 556120-6474
                  Frösundaleden 2, SE-169 99 Stockholm, Sweden
                         Telephone +46 (0)10 505 00 00
             E-mail:info@afconsult.com <mailto:info@afconsult.com>
                 www.afconsult.com <http://www.afconsult.com/>

The full report including tables can be downloaded from the following link:


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