ÅF AB Interim Report January - September 2015

Third quarter 2015

• Net sales amounted to SEK 2,147 million (1,873)
• Operating profit totalled SEK 112 million (120)
• Operating margin was 5.2 percent (6.4)
• Operating profit, excluding items affecting comparability, totalled SEK 143 million (134)
• Operating margin, excluding items affecting comparability, was 6.7 percent (7.2)
• Profit after tax totalled SEK 67 million (79)
• Earnings per share, before dilution: SEK 0.84 (1.03)

January-September 2015

• Net sales amounted to SEK 7,133 million (6,429)
• Operating profit totalled SEK 578 million (528)
• Operating margin was 8.1 percent (8.2)
• Operating profit, excluding items affecting comparability, totalled SEK 575 million (542)
• Operating margin, excluding items affecting comparability, was 8.1 percent (8.4)
• Profit after tax totalled SEK 418 million (382)
• Earnings per share, before dilution: SEK 5.35 (4.95)

A few words from the President, Jonas Wiström:

ÅF's third quarter operating profit, excluding items affecting comparability, rose by 7 percent to SEK 143 million (134), owing to overall persistently satisfactory market conditions and a healthy inflow of orders, particularly in Scandinavia. SEK 143 million is the highest third quarter result ÅF has ever reported, and the same applies to the nine-month period accumulated. It is also pleasing to note that cash flow for the quarter was strong. The operating margin for the quarter, excluding items affecting comparability, was 6.7 percent (7.2).

Sales rose by 15 percent, 5 percentage points of which comprised organic growth. ÅF now has annual sales of more than EUR 1 billion, which is consistent with the target established five years ago. One of our new, long-term objectives is for ÅF to continue to experience strong growth and increase revenue to at least EUR 2 billion by 2020. 

It is gratifying to see that ÅF continues to be an extremely attractive employer. This provides ÅF with the perfect conditions to allow the company to maintain solid organic growth and in particular, to be selective in its recruitment process. At the end of the third quarter, M.Sc. engineers voted ÅF Sweden's second most attractive employer after Google, while B.Sc. engineers voted the company Sweden's most attractive employer (Universum).

The reorganisation of the Industry and Technology Divisions, which was announced at the end of the second quarter, was completed over the past quarter. Synergy effects and cost savings of SEK 40 million on an annual basis have been identified, with the full effect being apparent from the beginning of next year. Provision has now been made for all costs relating to the reorganisation and efficiency measures. The change also means that the Technology Division has been refined into a strong operation with focus on digitisation and the networked society, while the Industry Division has become an even more comprehensive partner to industry by taking over responsibility for the business segments that focus on mechanical design. These changes have already been well received by ÅF's clients.

The Industry and Technology divisions reported satisfactory earnings for the quarter, despite the implementation of the reorganisation and savings programme. The operating margins were 7.3 (8.0) percent and 5.9 percent (5.6) respectively.  The Infrastructure Division continues to display strong growth and reported growth of roughly 16 percent in the quarter, with an increase in the operating margin from 8.0 percent to 8.6 percent. It is also pleasing to see that the International Division continued to report improved earnings in the quarter. The operating margin rose to 6.2 percent (5.9), despite the persistently weak energy market in Europe.

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.

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

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 11.00 on October 23, 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