Interim Report January-December 2017

Strong result with continued good growth

”The fourth quarter was eventful, we delivered strong results with a good growth rate, and at the same time we launched a new strategy and direction for ÅF. These results, together with the new strategic direction and increasing demand for ÅF’s solutions, form the foundation for continued profitable growth in 2018,” said Jonas Gustavsson, President and CEO.

Fourth quarter 2017

• Net sales amounted to SEK 3,500 million (3,138)
• EBITA totalled SEK 344 million (306)
• EBITA margin was 9.8 percent (9.7)
• EBIT (operating profit) was SEK 348 million (302)
• Basic earnings per share before dilution SEK 3.28 (2.84)

January-December 2017

• Net sales amounted to SEK 12,658 million (11,070)
• EBITA, excl. items affecting comparability, was SEK 1,117 million (996)
• EBITA margin, excl. items affecting comparability, was 8.8 percent (9.0)
• EBITA totalled SEK 1,027 million (992)
• EBITA margin was 8.1 percent (9.0)
• EBIT (operating profit) was SEK 1,033 million (965)
• Basic earnings per share before dilution SEK 9.58 (9.32)
• Board of Directors proposes a dividend for 2017 of SEK 5.00 (4.50)

COMMENTS BY THE CEO

ÅF shows strong results for the fourth quarter. EBITA was the highest ever for both the fourth quarter and the full year. EBITA for the quarter amounted to SEK 344 million (306), an increase of 13 percent. At the same time, growth is still good with sales growth of 12 percent. The EBITA margin is over 10 percent for all divisions.

During the quarter, ÅF launched the new strategy, called Future ÅF, together with reformulated financial targets and a new organisation adapted to deliver according to the new direction. The strategy has a clarified international focus and entails that ÅF will offer customers more package solutions and concepts. The new strategy strengthens ÅF’s position as an engineering and design company. In line with this, the design company InUse in Sweden was acquired during the quarter, and the architectural firm Gottlieb Paludan Architects in Denmark was acquired after the end of the quarter.

Our assessment of the market is largely unchanged compared to the previous quarter. Industrial activity is still good in Sweden, which is reflected in the demand from the automotive, forestry and food industries, as well as the paper and pulp industry. Demand from the mining and steel industries continues to increase, but from low levels. Investments in infrastructure in Sweden and Norway are still at a high level, but there is a shift in the market from a few major infrastructure projects to mostly small and medium sized projects. The energy market is still weak in Europe, while the shift to more fossil-free energy production is creating greater demand in areas such as cogeneration plants based on renewable fuels. The ongoing digitalization is increasing, leading to good demand for embedded systems and IT in the industrial, energy and infrastructure markets.

The Industry Division continues to show good growth and stable profitability. Digital solutions have become a key component in ÅF’s offer and we see increased demand for industrial digitalization and automation solutions. For example, the division was commissioned to build a robot cell for handling roller bearings and to streamline an existing production line at SKF’s factory in Sweinfurt, Germany. Demand from the automotive industry is still strong, and during the quarter, ÅF expanded its customer base with a new assignment for a vehicle manufacturer in the United States.

The Infrastructure Division reports strong results with good profitability. Demand in road and rail continues to be good, and during the quarter, the division was awarded a comprehensive project for the Follobanen line, a new railway between Oslo and Ski in Norway. Demand in architecture and the property segment is very good, where ÅF operates mainly in commercial and public properties. Among other things, an assignment was received for the new Kiruna Cultural Centre, as well as significant framework agreements with Kiruna Municipality, which is facing a major transformation.

The International Division ends the year on a strong note. In Switzerland, the division was commissioned to consult with the government on preparation of its National Energy Strategy 2050. The division will also manage the planning of a road to be constructed between Lugano and Mendrisio in Switzerland. Growth in the quarter is entirely related to infrastructure operations through the acquisition of AF-Toscano at the end of 2016.

The Technology Division continues to grow with good profitability. Demand for the division’s services is strong, with customers increasingly seeking partnerships with suppliers capable of delivering long-term end-to-end solutions with customised business and supplier models. New assignments were also secured from clients such as Telia, FMV and clients in the automotive industry.

The strong year-end contributed to a stronger result for the full year. EBITA, excluding items affecting comparability, amounted to SEK 1,117 million (996) and net sales increased 14 percent. These results, together with the new strategic direction and increasing demand for ÅF’s solutions, form the foundation for continued profitable growth in 2018.

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 8 February 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.

The full report including tables (pdf) is available for download.

For futher information please contact:

Marta Tiberg, Head of Communication, +46 73 072 70 48

Stefan Johansson, CFO, +46 70 224 24 01

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 / info@afconsult.com
Corporate ID number 556120-6474

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.