ÅF AB Interim Report January - June 2015
| For further information, please contact: | |
| Jonas Wiström, President and CEO | +46 70 608 12 20 |
| Stefan Johansson, CFO | +46 70 224 24 01 |
Second quarter 2015
- Net sales amounted to SEK 2,589 million (2,281)
- Operating profit totalled SEK 260 million (207)
- Operating margin was 10.0 percent (9.1)
- Operating profit, excluding non-recurring items, totalled SEK 225 million (207)
- Operating margin, excluding non-recurring items, was 8.7 percent (9.1)
- Profit after tax totalled SEK 199 million (154)
- Earnings per share, before dilution: SEK 2.55 (2.00)
First half year 2015
- Net sales amounted to SEK 4,986 million (4,556)
- Operating profit totalled SEK 466 million (408)
- Operating margin was 9.4 percent (8.9)
- Operating profit, excluding non-recurring items, totalled SEK 432 million (408)
- Operating margin, excluding non-recurring items, was 8.7 percent (8.9)
- Profit after tax totalled SEK 351 million (303)
- Earnings per share, before dilution: SEK 4.51 (3.92)
A few words from the President, Jonas Wiström:
ÅF's second-quarter operating profit, excluding non-recurring items, rose by 9 percent to SEK 225 million (207). Despite costs incurred due to restructuring parts of the business, these are the highest second quarter earnings ÅF has ever reported, and the same applies to the accumulated earnings of the first six months. The operating margin was 8.7 percent (9.1) in the second quarter. Capacity utilisation continued to improve, reaching 77.8 percent (76.6). Six businesses have been acquired since the beginning of the year, and they are expected to contribute sales of about SEK 800 million over the full year. Net sales rose by 13,5 percent, of which 6.3 percentage points represented organic growth.
The reorganisation of the Industry and Technology Divisions was well received. The change means that as of 1 July the Technology Division is devoted solely to digitalisation and the networked society, while the Industry Division takes over responsibility for the business segments that focus on mechanical design and can thereby offer end-to-end solutions for product and production development. A number of efficiency measures were implemented as a result of this reorganisation. The cost of these measures was charged to the second quarter and totalled SEK 10 million. Identification of efficiency measures will continue and will be completed over the next quarter.
ÅF now has a workforce of just over 7,700 with a stronger, more comprehensive range of engineering services than ever before. ÅF can also offer customers a pool of around 25,000 engineers from its own unique partner network. It is gratifying that more and more customers are discovering ÅF's breadth of technological expertise and its possibilities for end-to-end solutions. Examples can be found in the infrastructure planning sector, where ÅF has supplied mobile services along with road and rail expertise.
The trend from the end of the first quarter continued into the second quarter with more overall demand for the company's services as compared with the end of last year and the beginning of 2015. Infrastructure demand remains strong, while the industrial market has improved and stabilised at a higher level. The energy sector continues to be influenced by low levels of investment in the Nordic countries and the rest of Europe.
The Infrastructure Division reported growth of 15 percent and an operating margin of 11.8 percent (12.4) in the quarter. Demand is more variable in the Industry Division. The recovery in the industrial market that began at the end of the last quarter continued, while demand from the energy sector remained weak. Thanks to the Division's size and flexibility and the ability to move resources between sectors, together with higher demand, the quarter ended on a strong note with a margin of 11.1 percent (10.6). The growth was 10.0 percent whereof a negative organic growth of 2.4 percent. For the International Division, which operates in a weak energy market in Europe, restructuring measures and expansion into new geographic markets have produced results. Excluding the divestment of Lonas, growth for the quarter stood at 19 percent and the margin was 6.0 percent (3.3). Adjusted for currency effects, the corresponding growth was 8 percent. The Technology Division increased its net sales by 17 percent and profit by 11 percent. The operating margin was 7.3 percent (7.6). Efforts to improve profitability have been intensified.
ÅF's position in the infrastructure market was further strengthened and two companies were acquired during the quarter: EQC Group with about 180 road and rail employees, and L.E.B Consult with about 50 employees in HVAC project planning and energy conservation.
ÅF's most important objective is to be the most profitable company among its closest comparable competitors in the industry and achieve an operating margin of at least 10 percent over a business cycle. This will be combined with growth - both organic and through acquisitions. One of ÅF's long-term objectives is to increase revenue to at least EUR 2 billion by 2020.
Group Head Office:
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
This report has not been subject to review by the company's auditors.
The information in this interim report fulfils ÅF AB's disclosure requirements under the provisions of the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was released for publication at 10.30 a.m. on July 13, 2015.
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