ÅF AB Interim Report January-December 2016
For further information:
Jonas Wiström, President and CEO, +46 70 608 12 20
Stefan Johansson, CFO, +46 70 224 24 01
Increased profit and continued growth
Comment from Jonas Wiström:
ÅF's operating profit for both the fourth quarter and the full year was the highest ever. The high profit and pace of acquisitions, coupled with the fact that this year Universum ranked us Sweden's most popular employer among postgraduate engineers gives us a solid platform for continued growth in 2017.
Fourth quarter 2016
- Net sales amounted to SEK 3,138 million (2,717)
- Operating profit, excl. items affecting comparability, was SEK 297 million (257)
- Operating margin, excl. items affecting comparability, was 9.5 percent (9.5)
- Operating profit totalled SEK 302 million (261)
- Operating margin was 9.6 percent (9.6)
- Profit after tax totalled SEK 221 million (191)
- Earnings per share, before dilution: SEK 2.84 (2.46)
- Net sales amounted to SEK 11,070 million (9,851)
- Operating profit, excl. items affecting comparability, totalled SEK 964 million (832)
- Operating margin, excl. items affecting comparability, was 8.7 percent (8.4)
- Operating profit totalled SEK 965 million (839)
- Operating margin was 8.7 percent (8.5)
- Profit after tax totalled SEK 711 million (609)
- Earnings per share, before dilution: SEK 9.32 (7.81)
- The Board proposes a dividend for 2016 of SEK 4.50 per share (3.75)
COMMENTS BY THE CEO
ÅF's operating profit for both the fourth quarter and full year 2016 was the highest ever. Excluding items affecting comparability, operating profit for the quarter amounted to SEK 297 million (257), a rise of 16 percent. Meanwhile, we are continuing to see healthy growth, with a sales increase of 15 percent. In line with ÅF's strategy, a number of acquisitions were carried out in Q4 that have reinforced the company's presence in Denmark and Switzerland. Norway is seeing persistent growth, which totalled over 40 percent in 2016.
ÅF believes there is a slight improvement in the market outlook compared with the year-earlier period. There is continued strong demand from certain parts of the industrial sector, primarily in the automotive, pulp, food and pharmaceutical industries. Meanwhile, demand in infrastructure planning is strong in both roads and railways, as well as the construction sector. There has been a rise in demand within renewable energy, transmission and distribution, and there were indications that the weak mining, steel and nuclear power industries were stabilising.
The Industry Division is exhibiting profitable growth. The automotive business in China is continuing to perform well and in the fourth quarter ÅF also won a three-year assignment for AB Volvo in Brazil. The Industry Division strengthened its offering through the acquisition of Reinertsen's Swedish chemicals and petrochemicals business, with just over 100 employees.
The Infrastructure Division is gaining market share on the robust infrastructure market and experiencing healthy growth of 27 percent. Profitability remains stable at over 10 percent, although investments mainly in Norway have had a negative impact on profitability in the short term. Demand for the division's services is high throughout Scandinavia. Growth in Norway is continuing and the business in Denmark is being strengthened through the acquisition of the company Midtconsult.
The International Division finished the year on a high, as is usual for this time of year. The market for power production in Europe remains weak, while demand in Africa and Southeast Asia is persistently strong. Q4 saw the acquisition of Edy Toscano, a leading engineering and consultancy firm in Switzerland, operating primarily within infrastructure. The acquisition makes ÅF one of the largest engineering and consultancy companies in Switzerland. ÅF is also broadening its energy offering via the acquisition of the international solar energy company Aries.
The Technology Division continues to grow, mainly organically, with persistently healthy profitability. Demand for embedded systems and digital solutions remained high, particularly in the automotive industry. ÅF's wide ranging industry expertise and the Technology Division's in-depth knowledge of application and systems development for the interconnected world combine to produce a solid offering within digital transformation. This digitalisation expertise will be an increasingly significant feature of ÅF's overall offering for clients within the fields of industry, infrastructure and energy.
The strong end to the year meant that operating profit excluding items affecting comparability amounted to SEK 964 million (832) in 2016, an increase of 16 percent. The pace of acquisitions has been high in 2016 and a total of 15 companies were acquired, with combined sales totalling SEK 1.5 billion. The acquisitions have positioned ÅF for further growth primarily in Norway, Denmark and Switzerland, as well as in new fields, such as architecture with the acquisition of sandellsandberg.
The acquisitions completed in 2016 secures a good growth in 2017. Combined with our financial earnings and ÅF's strong ranking as an attractive employer for postgraduate engineers, this provides the company with a solid platform for continued growth in 2017. The target for 2020 remains: generate net sales of at least EUR 2 billion and achieve an operating margin of at least 10 percent over a business cycle.
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 information is information that ÅF AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 3 February at 11.30 am 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.