ÅF AB Interim report January - June 2014
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|
Second quarter 2014
- Net sales amounted to SEK 2,281 million (2,152)
- Operating profit totalled SEK 207 million (153)
- Operating margin was 9.1 percent (7.1)
- Operating profit, excluding non-recurring items, totalled SEK 207 million (191)
- Operating margin, excluding non-recurring items, was 9.1 percent (8.9)
- Profit after tax totalled SEK 154 million (107)
- Earnings per share, before dilution: SEK 2.00 (1.35)
First half year 2014
- Net sales amounted to SEK 4,556 million (4,277)
- Operating profit totalled SEK 408 million (319)
- Operating margin was 8.9 percent (7.5)
- Operating profit, excluding non-recurring items, totalled SEK 408 million (374)
- Operating margin, excluding non-recurring items, was 8.9 percent (8.7)
- Profit after tax totalled SEK 303 million (227)
- Earnings per share, before dilution: SEK 3.92 (2.87)
A few words from the President, Jonas Wiström:
ÅF's second-quarter operating profit, excluding non-recurring items, rose by more than 8 percent to SEK 207 million (191). These are the highest second quarter earnings ÅF has ever reported, and the same applies to the accumulated earnings of the first six months.
The operating margin rose to 9.1 percent (8.9) in the second quarter. Notably, the second quarter contained three fewer working days compared to the first quarter.
Revenue growth in the second quarter amounted to 6 percent, of which just over 2 percent was organic growth. Adjusted for ÅF Russia, whose sales have declined over the past year, growth was nearly 8 percent, of which 4 percent was organic. Due to weak profitability and lack of synergies it was agreed to divest the Russian subsidiary Lonas effective from July 2014 (see separate press release from 11 July 2014). The sale is expected to have a positive effect on ÅF's profitability going forward.
After the sale in Russia, ÅF will have a workforce of about 7,000 highly qualified employees, with a stronger and more comprehensive range of engineering services than ever before. ÅF can also offer customers a pool of around 20,000 engineers from its own unique partner network. Proof of our strength is that ÅF continues to gain more and more trust from its customers; the number of project assignments are growing and now account for roughly 60 percent of our business, which follows our strategy of creating added value for our customers via long-term, close-knit partnerships.
The highest profitability in the quarter was delivered by the Infrastructure Division followed by Industry, with operating margins of 12.4 (13.3) and 10.6 (11.3) percent, respectively. It is highly satisfactory that two divisions with more than half of ÅF's overall staff continue to show high growth, margins over 10 percent, and a strong order intake. At the end of the second quarter the Infrastructure Division proved once again to be a leading player in the Nordic infrastructure and urban development market by being appointed as the Swedish Transport Administration's chief technical consultant for phase 1 of the East Link, Sweden's first high-speed railway.
The Technology Division operated in a slowly improving market for advanced product development and IT, increasing its operating margin from 7.0 to 7.6 percent. The International Division reported an operating margin of 3.3 percent (7.6). The declining profitability is explained by continued weak performance in Russia and Spain, as well as non-recurring charges for a cost savings program (Spain) in the second quarter. In light of steps taken in both Russia and Spain, the future prospects of the International Division have improved.
The outlook for the ÅF Group in the second half of the year 2014 is cautiously optimistic. The market for infrastructure is estimated to remain strong while the industrial market situation is better compared to a year ago. The energy market continues to be influenced by low levels of investment in Europe, while opportunities continue to be good in the Asian and South American markets.
ÅF's most important goal is 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 shall be combined with growth - both organically and through acquisitions. At ÅF's annual capital market day in early 2014, new long-term objectives were introduced , which included increasing ÅF's revenue to at least EUR 2 billion by 2020.
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 / email@example.com
Corporate ID number 556120-6474
This report has not been subject to review by the company's auditors.
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 a.m. on 11 July, 2014.
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