Interim Report January-June 2018

”ÅF delivers strong second quarter results and its best half-year results ever, which lays the groundwork for continued profitable growth,” said Jonas Gustavsson, President and CEO.

Second quarter 2018

• Net sales amounted to SEK 3,608 million (3,231)
• EBITA excl items affecting comparability, was SEK 366 million (302)
• EBITA margin, excl items affecting comparability, was 10.2 percent (9.4)
• EBITA totalled SEK 366 million (282)
• EBITA margin was 10.2 percent (8.7)
• EBIT (operating profit) was SEK 353 million (273)
• Basic earnings per share: SEK 3.35 (2.52)
•  

January-June 2018

• Net sales amounted to SEK 7,023 million (6,496)
• EBITA excl items affecting comparability, was SEK 691 million (589).
• EBITA margin, excl items affecting comparability, was 9.8 percent (9.1)
• EBITA totalled SEK 691 million (568)
• EBITA margin was 9.8 percent (8.7)
• EBIT (operating profit) was SEK 664 million (560)
• Basic earnings per share: SEK 6.29 (5.17)

COMMENTS BY THE CEO

ÅF reports strong earnings and growth for the second quarter. EBITA was SEK 366 million (282), an increase of 30 percent, and the EBITA margin was 10.2 percent (8.7). Meanwhile sales rose by 11.7 percent (9.8).

Market trend

The ongoing trends of globalisation, urbanisation and digitalisation continue to fuel demand for complex solutions. Extensive, disruptive transitions are taking place in several sectors, and the need for sustainable solutions has never been greater.

The general market trend and demand were good in the second quarter and remained largely unchanged compared with the previous quarter. The industrial market continues to perform well, with healthy demand in most of our segments. Investments in infrastructure and commercial and public properties remain at a high level. Sweden’s new transport plan will involve ambitious investments in roads and railways. The energy market has partially stabilised and the quarter saw a slight increase in demand in Sweden, although from historically low levels. The market for digitalisation continues to be healthy in all sectors.

Performance among the divisions

The Infrastructure Division is delivering strong growth at almost 20 percent, with a good level of profitability. Positions have strengthened in commercial and public properties, where we are seeing robust performance. Initiatives have been stepped up to meet the recruitment need for engineers in the division, and just over 500 employees have been taken on since the start of the year.

The Industry Division delivers strong earnings but has not managed to grow, and is now fully focused on expanding growth. The Industry Division is continuing with its strategic transition towards increasing customer value via more end-to-end projects both in Sweden and abroad. Demand for end-to-end solutions is on the rise, particularly from our automotive customers. The area of Automation is also displaying solid development.

The Energy Division is exhibiting stable earnings and consolidated its offering in the second quarter via the acquisition of Facilia, a Swedish company with expertise in nuclear waste management and decommissioning. Meanwhile, we are seeing several interesting projects in renewable energy both in and outside Scandinavia.

The Digital Solutions Division is delivering strong growth with a persistently good level of profitability. To further boost our offering within digital solutions, the division acquired three businesses during the quarter. Digitalisation of the industry is continuing apace, and the division has won several assignments in the automotive industry focusing on solutions for active safety and autonomous drive.

Implementation of strategy

We are working intensively on the implementation of the new strategy and are noticing progress in several areas. The strategy involves developing our business model to increase the value we deliver to our customers through project assignments, packaged solutions and concepts. One example is the project assignment with Arla Foods, where ÅF is responsible for the conversion of Falkenberg Dairy into a more environmentally sustainable facility. The project is being carried out in a cross-functional partnership between ÅF’s experts in Sweden and Denmark.

To increase value for our customers, we also strengthened our digital offering further via the acquisition of two Sweden-based IT niche companies, Samtanke and Konsultbolag1, as well as the acquisition of digital advisor Mometo, based in Norway.

Our robust employer brand is crucial in attracting the right skills and delivering leading solutions. We are therefore proud to be sharing first place with ABB and Astra Zeneca as the employer most researchers want to work for. The survey was published by research journal Framtidens Forskning.

We are also working actively to recruit newly immigrated engineers who were born outside Sweden. So far around 100 engineers have been recruited under the “New Immigrated Engineers” programme. The initiative has been successful and ÅF now has two diversity coaches working with the programme.

Sustainability in focus

Our mission is to create sustainable engineering and design solutions, which is why sustainability is at the core of all our customer offerings. We work continually to increase our own level of expertise in, and awareness of sustainability issues. As an example, all new employees are required to participate in a workshop to improve their understanding of how to improve the sustainability aspect in our solutions.

Looking back on the first half of 2018 we can state that we have achieved the highest half-year earnings ever, with EBITA amounting to SEK 691 million (568) and an EBITA margin of 9.8 percent (8.7). This paves the way for continued profitable growth and increased value for all our stake­holders.

Together with over 10,000 brave and dedicated colleagues, we will now continue our journey towards achieving our vision of supplying leading solutions for generations to come – Making Future.

For further information:

Jonas Gustavsson, President and CEO, +46 70 509 16 26
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

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 13 July 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.

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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