ÅF AB Interim Report January - March 2013
For further information, please contact:
Jonas Wiström, President and CEO +46 70 608 12 20
Stefan Johansson, CFO +46 70 224 24 01
Viktor Svensson, Director Corporate Information +46 70 657 20 26
First quarter 2013
- Net sales totalled SEK 2,125 million (1,407)
- Operating profit totalled SEK 166 million (127)
- Operating profit, excluding integration cost, totalled SEK 183 million (127)
- Operating margin, excluding integration cost, was 8.6 percent (9.0)
- Profit after tax totalled SEK 121 million (92)
- Earnings per share, before dilution: SEK 3.04 (2.72)
A few words from the President, Jonas Wiström:
ÅF's first-quarter operating profit in 2013, excluding integration costs, rose by 44 percent to SEK 183 million (127). Integration costs for the first quarter totalled SEK 17 million. The first quarter comprised two fewer working days than the corresponding period last year, and this has been calculated to have had a negative effect on earnings of approximately SEK 20 million.
Epsilon, which was acquired towards the end of 2012, has been trading under the ÅF brand since 1 January, and work on integrating consulting operations is developing well. The merger has significantly strengthened ÅF's market position and its potential to win major assignments in research-intensive industries. Initiatives to realise cost synergies have exceeded expectations; we now estimate that cost synergies will be in excess of SEK 75 million a year, compared with our original estimate of SEK 50 million. To achieve these extra synergies the total integration costs have been recalculated at approximately SEK 50 million instead of the previously communicated figure of SEK 30 million. These costs will be charged to first-half profit.
For the first quarter of the year ÅF's operating margin, excluding integration costs, was 8.6 percent (9.0). The main explanation for this slight dip in operating margin is weaker demand in terms of investments in industry and energy than we saw in the corresponding period in 2012.
Growth in the first quarter was approximately 50 percent, mostly attributable to the acquisition of Epsilon and the Norwegian consulting company, Advansia. Organic growth was 2 percent, although this equates to 5 percent when adjusted to take account of the lower number of working days.
Cash flow from operating activities was weaker than usual, but this can be explained by the build-up of working capital, primarily in the Infrastructure Division.
The highest level of profitability was reported by the Infrastructure Division with an operating margin of 13.8 percent (12.2); operating profit for the division rose by approximately 50 percent and growth was good. The Industry and Technology divisions began to feel the effect of weaker demand in the market, which was reflected in operating margins of 7.6 percent (11.0) and 8.3 percent (12.1) respectively, while the International Division, which continued to work in what remains a weak market in Europe, reported an operating margin of 3.1 percent (2.0).
The market prospects for the remainder 2013 do not present a uniform picture. While the outlook would appear to remain very good for infrastructure projects, the prospects for investments in industry and energy are less certain.
Interest in ÅF as an employer remains very strong. In March ÅF was named as the consulting industry's most attractive employer and was recently ranked among Sweden's Top Ten Employers, all categories, by Swedish engineering students in a Universum survey.
ÅF's most important objective is to continue to generate levels of profitability that place us among the very best performers in our industry - regardless of the state of the economy. The company now has 7,000 highly qualified employees, backed up by a network of 17,000 independent consultants. Our ambition is to continue to grow, both organically and through acquisitions, without compromising profitability.
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 / firstname.lastname@example.org
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 CET on 26 April 2013.
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