Interim report January-June 2024

Improved profitability in a stable quarter

Second quarter 2024

– Net sales increased by 4.7 percent to SEK 7,191 million (6,869)

– Organic growth adjusted for calendar effects was 2.2 percent (10.8)

– Calendar effects had a positive impact of SEK 135 million on net sales and SEK 104 million on EBITA

– EBITA, excl. items affecting comparability, was SEK 572 million (421)

– EBITA margin, excl. items affecting comparability, was 8.0 percent (6.1)

– EBITA totalled SEK 572 million (398)

– EBITA margin was 8.0 percent (5.8)

– EBIT (operating profit) amounted to SEK 541 million (363)

– Earnings per share amounted to SEK 3.33 (1.77)

January–June 2024

– Net sales increased by 2.2 percent to SEK 14,082 million (13,784)

– Organic growth adjusted for calendar effects was 1.4 percent (13.2)

– Calendar effects had a negative impact of SEK 23 million on net sales and SEK 18 million on EBITA

– EBITA excl. items affecting comparability was SEK 1,162 million (1,110)

– EBITA margin, excl. items affecting comparability, was 8.3 percent (8.0)

– EBITA totalled SEK 1,154 million (1,087)

– EBITA margin was 8.2 percent (7.9)

– EBIT (operating profit) amounted to SEK 1,082 million (1,008)

– Earnings per share amounted to SEK 6.46 (5.62)

COMMENTS BY THE CEO JONAS GUSTAVSSON

The second quarter shows an improved margin, driven by the ongoing improvement programme in Infrastructure and a positive calendar effect. The market is mixed, with strong demand in the energy sector and continued weak demand in pulp & paper and the real estate segment.

In the quarter, there was a strong demand in the energy sector, with continued investment in fossil-free electricity production, storage solutions, transmission and distribution. Within infrastructure, public investments in transport infrastructure are stable, while demand in the real estate segment remains weak. In the industrial sector, demand in pulp & paper is still at a low level. Demand from the automotive and life science industries is healthy, while the market for IT consultants is weak.

Net sales amounted to SEK 7,191 million in the second quarter, an increase of 4.7 percent compared to the same period last year. Organic growth adjusted for calendar effects increased sequentially to 2.2 percent. All divisions with the exception of Process Industries reported positive adjusted organic growth. The order stock was stable at SEK 20 billion.

EBITA, excluding items affecting comparability, amounted to SEK 572 million (421), corresponding to an EBITA margin of 8.0 percent (6.1). The calendar effect of nine more hours during the quarter, had a positive effect of SEK 135 million on net sales and SEK 104 million on EBITA compared to the previous year. This means that the EBITA margin was higher than last year, also once adjusted for calendar effects.

Cash flow from operating activities totalled SEK 420 million, and net debt/EBITDA was 2.6 at the end of the quarter.

The EBITA improvement in the second quarter was driven largely by Infrastructure, which had strong development. The improvement programme to further enhance profitability is proceeding according to plan. We see stability in the operations and a gradually improved utilisation rate. Energy and Management Consulting also contributed positively, with continued strong results during the quarter, driven by healthy demand and a strong position.

Process Industries continues to have healthy profitability but the margin was weaker, compared to previous year, due to lower demand in pulp & paper. Further measures to adapt capacity are being implemented and the division continues to strengthen the client offering to other segments. Industrial & Digital Solutions development was stable but continues to be affected by weak demand in certain segments.

AFRY is well-positioned in the ongoing energy and industrial transition and won several important projects during the quarter. An assignment to highlight is from Vattenfall to develop the technical analysis of the Juktan pumped power station in Sweden to meet the growing need for fossil-free energy. We also won a project to a food-tech company to build a factory in Sweden to produce the food of tomorrow.

We continue the work to strengthen our profitability, while at the same time developing our client offering.

Finally, I would like to thank our clients, partners and employees for great collaboration.

For further information:

Jonas Gustavsson, President and CEO, +46 70 509 16 26
Bo Sandström, CFO, +46 70 545 87 87

Head Office: AFRY AB, SE-169 99 Stockholm, Sweden

Visiting address: Frösundaleden 2, Solna, Sweden

Tel: +46 10 505 00 00

www.afry.com

info@afry.com

Corp. ID no 556120-6474

This report has not been subjected to scrutiny by the company’s auditors.

This information fulfils AFRY AB’s (publ) disclosure requirements under the provisions of the EU’s Market Abuse Regulation and the Swedish Securities Markets Act. This information was released, through the agency of the above-mentioned contact person, for publication on 16 July 2024, at 07.00 CET.

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.

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