Interim Report January-September 2022

Strong organic growth in all divisions

“The third quarter showed strong organic growth in all divisions with a continued high demand especially in our industrial and energy segments. EBITA is on a stable level and the cost savings program delivers according to plan. At the same time, the uncertainty in the market has increased”, said Jonas Gustavsson, President and CEO.

Third quarter 2022

– Net sales increased by 19.9 percent to SEK 5,298 million (4,419)

– Organic growth adjusted for calendar effects was 10.4 percent (7.5)

– EBITA, excl. items affecting comparability was SEK 384 million (369)

– EBITA margin, excl. items affecting comparability was 7.3 percent (8.3)

– EBITA totalled SEK 376 million (367)

– EBITA margin was 7.1 percent (8.3)

– EBIT (operating profit) amounted to SEK 265 million (326)

– Basic earnings per share: SEK 1.59 (2.18)

January–September 2022

– Net sales increased by 16.1 percent to SEK 16,943 million (14,596)

– Organic growth adjusted for calendar effects was 6.9 percent (4.7)

– EBITA, excl. items affecting comparability was SEK 1,308 million (1,217)

– EBITA margin, excl. items affecting comparability was 7.7 percent (8.3)

– EBITA totalled SEK 1,167 million (1,197)

– EBITA margin was 6.9 percent (8.2)

– EBIT (operating profit) amounted to SEK 917 million (1,107)

– Basic earnings per share: SEK 5.08 (7.31)

COMMENTS BY THE CEO JONAS GUSTAVSSON

The third quarter showed strong organic growth in all divisions with a continued high demand especially in our industrial and energy segments. EBITA is on a stable level and the cost savings program delivers according to plan. At the same time, the uncertainty in the market has increased.

Net sales amounted to SEK 5,298 million, an increase by 19.9 percent compared to last year, and the organic growth was 10.4 percent adjusted for calendar effects. The organic growth was mainly a result of continued high demand in most of our markets, but also price increases. All divisions reported strong organic growth, in particular Process Industries driven by large CAPEX projects in South America. I am also very pleased that our order stock continues to strengthen and is at a historical high level.

EBITA, excluding items affecting comparability, amounted to SEK 384 million (369). The EBITA development was supported by the strong growth, our cost saving programme and price increases.

The corresponding EBITA margin was 7.3 percent (8.3). The margin was negatively impacted mainly by a high employee turnover, an increased use of sub-consultants and a less favourable project mix. The lower margin in the quarter compared to the previous year is also explained by the fact that we then finalised a large energy project with a positive effect on the margin. The EBITA margin in the Infrastructure Division improved due to the cost measures taken over the course of the year and price increases. At the same time, we see an increased uncertainty in the real estate sector in Sweden. 

We have completed our earlier announced cost savings program according to plan. The roll-out of our ERP-system continues and we have reached a milestone with the implementation of the majority of the Swedish operations with 6,000 users.

In the quarter we announced the divestment of our Russian subsidiary to local management. The divestment is expected to close in the fourth quarter and has resulted in a write-down impacting the net result of SEK -66 million.

Looking ahead, we see increased uncertainty in the market, impacted by the geopolitical situation, rising inflation, increased interest rates and high energy prices. We experience more careful decision-making processes and some postponed projects. We continue to focus on efficiency improvements, cost optimisation and price increases as well as strengthening our client offering. At the same time, we are working with action plans in response to a potentially weakening demand.

The transition towards a more sustainable society is apparent and AFRY is well positioned to take the lead. We have a well-diversified portfolio with continued strong demand especially in the industrial and energy segments as well as a healthy mix of the public and ­private sector.

For further information:

Jonas Gustavsson, President and CEO, +46 70 509 16 26
Juuso Pajunen, CFO, +358 10 33 26 632

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 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 October 2022, 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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