Interim Report January-March 2022

Strong growth and stable result in the first quarter

“Growth was strong in the first quarter and four divisions reported year-on-year higher EBITA. The high demand for sustainable and digital solutions are driven by the industrial sector and transition to clean energy”, said Jonas Gustavsson, President and CEO.

First quarter 2022

– Net sales increased by 13.4 percent to SEK 5,670 million (4,999)

– Organic growth adjusted for calendar effects was 3.3 percent (0.5)

– EBITA, excl. items affecting comparability was SEK 472 million (432)

– EBITA margin, excl. items affecting comparability was 8.3 percent (8.6)

– EBITA totalled SEK 359 million (419)

– EBITA margin was 6.3 percent (8.4)

– EBIT (operating profit) amounted to SEK 317 million (388)

– Basic earnings per share: SEK 1.97 (2.57)

COMMENTS BY THE CEO JONAS GUSTAVSSON

The growth was strong in the first quarter and four divisions reported year-on-year higher EBITA. The high demand for sustainable and digital solutions are driven by the industrial sector and transition to clean energy.

Net sales increased by a total of 13.4 percent and the organic growth was 3.3 percent adjusted for calendar effects. The growth was strong in the Industrial & Digital Solutions, Process Industries and Management Consulting Divisions. Infrastructure and AFRY X reported lower growth rates impacted by more sick leave than normal at the beginning of the quarter. The Energy Division showed a negative growth mainly explained by the fact that the Nuclear business was at a particularly high level last year due to one large project.

EBITA, excluding items affecting comparability, amounted to SEK 472 million (432), with an EBITA margin of 8.3 percent (8.6). The performance at the beginning of the quarter was impacted by higher sick leave, with a negative effect of approximately SEK 60 million on the results. We saw a sequential improvement during the quarter that ended on a strong note. The margin within the Process Industries, Energy and Management Consulting Divisions was at a continued high level. The Infrastructure and Industrial & Digital Solutions Divisions delivered improved margins, and within AFRY X the service business delivered a strengthened margin.

To meet the high demand, we have accelerated the pace of recruitment in all divisions and announced two acquisitions in 2022 with annual net sales of SEK 50 million.

We have acquired Weop with strategic expertise within cyber-security and Svea Power that delivers customised high-tech products and solutions within hydropower. During the last twelve months we have grown by a total of 1,700 employees through acquisitions and new recruitments, an increase by more than 10 percent. As the competition for the best talent is fierce, we will continue to strengthen our employer brand to attract new employees.

As previously communicated, we are executing on the cost savings of SEK 100 million where we expect full effect during the second half of 2022. The total restructuring cost of SEK 100 million was taken in the quarter. Our actions to improve profitability in the Infrastructure division and to improve the administrative efficiency in our larger countries, are developing according to plan.

The world is still overshadowed by the war in Ukraine and our immediate focus has been to ensure the safety and wellbeing of our colleagues. As earlier communicated, we have decided to not take on any new projects in Russia and the work to end operations is underway.

The geopolitical situation caused by the war in Ukraine, disruptions in customers’ supply chains, as well as rising inflation and construction material costs are causing an increased uncertainty in the market.

Despite the uncertainty that prevails, we continue to see strong drivers to accelerate the transition in society. We are ready to meet the demand with a position and offer stronger than ever.

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

For further information:
Juuso Pajunen, CFO, +358 10 33 26 632

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 28 April 2022, at 11.00 CET.

All forward-looking statements in this report are based on the company’s best assessment 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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