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ÅF - Interim report January-June 2010

Published July 14, 2010
Jonas Wiström, President/CEO                     +46 (0)70-608 12 20

Jonas Ågrup, CFO                                 +46 (0)70-333 04 95

Viktor Svensson, Director, Corporate Information +46 (0)70-657 20 26



Second quarter 2010
  * Operating income totalled SEK 1,042 million (Q2 2009: SEK 1,199 million)
  * Operating profit totalled SEK 80 million (SEK 100 million)
  * Operating margin was 7.7 percent (8.4 percent)
  * Earnings per share before dilution were SEK 1.64 (SEK 2.01)


First six months 2010
  * Operating income totalled SEK 2,607 million (SEK 2,407 million)
  * Operating  profit totalled SEK  621 million (SEK 206 million),  where of SEK
    458 million in capital gains
  * Operating margin was 23.8 percent (8.6) percent
  * Earnings per share before dilution were SEK 16.91 (SEK 4.26)


A few words from the President, Jonas Wiström:
ÅF's operating margin rose slightly in the second quarter compared with the
figure for the first three months of the year, excluding capital gains, thanks
in the main to a gradual month-on-month improvement in the capacity utilisation
rate. The situation in the market has stabilised, even though the recovery is
slow and from a low base.

When making comparisons with last year's second-quarter performance, it should
be borne in mind that earnings on that occasion included a capital gain of SEK
8 million from the sale of the Norwegian company Brekke & Strand and profits of
SEK 9 million from ÅF-Kontroll, ÅF's Inspection Division that was sold on 25
March 2010.

ÅF has a strong balance sheet. Over the past three months we have signed
agreements for the acquisition of companies with a total of 200 employees that
we believe will spur growth in the strategically important areas of Energy and
Infrastructure Planning.

ÅF remains of the opinion that 2010 will be a challenging year, albeit with a
gradual improvement in the market as the year advances. Our plans include the
continued growth of ÅF by taking over other companies and a return to organic
growth during the second half of the year as we step up the pace of our
recruitment activities. Interest in ÅF as an employer has never been greater.
During the second quarter ÅF was ranked among Europe's top 50 most attractive
employers in a survey of some 21,000 technology and engineering students at 100
European universities that was conducted by the opinion research company,
Universum.

ÅF will continue to report levels of profitability that place us among the best
performers in our industry at the same time as we increase our growth rate in
the future.

Important events during Q2 and after the reporting date

ÅF was appointed lead technical consultant for an investment in a new block heat
power plant on the Korsnäs industrial site in Gävle, Sweden, adjacent to the
Korsnäs company's pulp and paper mill. The order is worth SEK 50 million for ÅF.
The client is Bomhus Energi AB, which is jointly owned by Gävle Energi AB and
Korsnäs AB.

ÅF was appointed lead technical consultant for a new reserve power plant in
Forssa, Finland, The contract is worth EUR 1.6 million for ÅF. The client is the
Finnish national grid operator, Fingrid, which will build a new 2x120 MW gas
turbine plant at Forssa.

ÅF, in collaboration with the engineering consultancy Scott Wilson UK, was
awarded two of the four contracts to provide technical consulting services for
the major Stockholm Bypass project. The contract is worth almost SEK 200
million, of which approximately 2/3 will accrue to ÅF. The principal is the
Swedish Transport Administration.

Income and earnings, Q2 2010

Operating income totalled SEK 1,042 million (SEK 1,199 million).

Operating profit amounted to SEK 80 million (SEK 100 million) to give an
operating margin of 7.7 percent (8.4 percent).

Capacity utilisation was 72.4 percent (71.6 percent).

Profit after net financial items was SEK 77 million (SEK 97 million) to give a
profit margin of 7.4 percent (8.0 percent).

Profit after tax totalled SEK 58 million (SEK 70 million).

Earnings per share before dilution were SEK 1.64 (SEK 2.01).

Income and earnings, Q1-Q2 2010

Operating income totalled SEK 2,607 million (SEK 2,407 million).

Operating profit amounted to SEK 621 million (SEK 206 million) to give an
operating margin of 23.8 percent (8.6 percent).

Operating profit excluding other operating income, chiefly in the form of a
capital gain of SEK 458 million from the sale of the ÅF subsidiary ÅF-Kontroll
on 25 March 2010, was SEK 161 million (SEK 202 million).
Operating margin excluding other operating income was 7.5 percent (8.1 percent).

Capacity utilisation was 71.1 percent (71.3 percent).

Profit after net financial items was SEK 615 million (SEK 200 million) to give a
profit margin of 23.6 percent (8.3 percent).

Profit after tax totalled SEK 575 million (SEK 147 million).

Earnings per share before dilution were SEK 16.91 (SEK 4.26).

Acquisitions during Q2 and after the reporting date

ÅF acquired the Czech technical consulting company Meacont. The company, which
is headquartered in Prague, has 90 employees and clients who are active in the
energy sector, including the nuclear power industry. The purchase sum was SEK
46 million, plus an additional consideration to be based on future earnings
trends. Meacont sold services for approximately SEK 80 million in 2009 and
reported an operating margin of 8 percent for the year. Its business operations
were consolidated into the ÅF Group on 1 May.

ÅF acquired the technical consulting company VPC Mechanical Design in Skellefteå
from the Swedish state-owned energy company, Vattenfall. VPC Mechanical Design
has 10 employees based in the north of Sweden and its main focus is on qualified
engineering services for the mining industry. The company's biggest clients are
LKAB and Boliden. Business operations will be consolidated into the ÅF Group on
1 July.

ÅF acquired the consulting operations of the City of Gothenburg's highways and
traffic management department, Göteborgs Gatuaktiebolag. This municipal company
has almost 100 employees engaged in consulting activities relating to
investigations, analyses and the project engineering and project management of
existing and new infrastructure investments in the Gothenburg region. The
purchase price was SEK 26 million. Business operations will be consolidated into
the ÅF Group with effect from 1 September.

Cash flow and financial position

Operating cash flow for the second quarter was SEK 56 million (Q2 2009: SEK 174
million). Total cash flow for the period was negative at SEK -279 million (SEK
-8 million). Cash flow for the second quarter was affected by the pay-out of a
shareholders' dividend totalling SEK 135 million (SEK 110 million), while the
net of borrowing and amortisation of loans also had a negative effect on cash
flow of SEK 8 million (SEK -50 million).

An additional consideration of SEK 106 million has been paid to the former
owners of ÅF's Swiss subsidiary, ÅF-Colenco. Other corporate acquisitions and
additional considerations paid totalled SEK 78 million (SEK 18 million). The
change in working capital for the quarter was just SEK 1 million (SEK 103
million).

Cash flow for the period January-June overall was SEK 188 million (SEK -15
million). The sale of ÅF-Kontroll led to a positive cash flow of SEK 592
million, while the net of borrowing and amortisation of loans had a negative
effect on cash flow of SEK 122 million (SEK -48 million). Acquisitions completed
and additional considerations paid amounted to a total of SEK 184 million (SEK
32 million).

The Group's cash and cash equivalents totalled SEK 530 million (SEK 270 million)
at the end of the first half-year. The Group's net cash balance totalled SEK
286 million (SEK -146 million) at the end of June.

Equity per share was SEK 66.22 and the equity/assets ratio was 62.7 percent. At
the beginning of 2010, equity per share was SEK 53.68 and the equity/assets
ratio was 51.0 percent. Equity as per 30 June 2010 totalled SEK 2,252 million.

Investments

Gross investment in property, plant and equipment during the period January-June
2010 totalled SEK 14 million (SEK 23 million).

Divisional performance

Energy Operating income Q2: SEK 230 million (SEK 302 m)

       Operating margin Q2: 9.4% (9.5%)



       Operating income Q1-Q2: SEK 466 million (SEK 615 m)

       Operating margin Q1-Q2: 10.0% (8.7%)


The Energy Division is a front-rank international energy consultant and a world
leader in nuclear power consulting.

The market for energy consulting services remained good throughout the second
quarter. Demand was particularly strong for competence and expertise in projects
relating to combined heat and power plants in Europe that are fuelled by biomass
and refuse. The division's capacity utilisation rate showed a slight improvement
on that for the corresponding period last year and the value of the order books
rose by a couple of hundred million Swedish kronor. Important new orders were
won in Finland, South-East Asia, Brazil and Russia.

The highest levels of profitability were reported by the division's units in
Russia, the Czech Republic and Finland. However, results for Energy's Swiss
subsidiary, ÅF-Colenco, which accounts for roughly one third of the division's
sales, were affected by a negative development in the exchange rate between the
euro and the Swiss franc during the second quarter.

Halfway through the quarter ÅF acquired the Czech-based technical consulting
company, Meacont, with 90 employees. Meacont's clients are to be found in the
energy sector, including the nuclear power industry, and the company has
specialist expertise in fields that include control systems and automation
systems. Following this acquisition, ÅF now has around 125 technical consultants
in the Czech Republic.

Engineering Operating income Q2: SEK 339 million (SEK 343 m)

            Operating margin Q2: 7.3% (10.0%)



            Operating income Q1-Q2: SEK 676 million (SEK 687 m)

            Operating margin Q1-Q2: 7.1% (10.3%)


The Engineering Division is Northern Europe's leading technical consultant for
industry.

The market for the services of the Engineering Division improved little by
little during the second quarter, which led to a month-on-month rise in capacity
utilisation. More and more clients are now beginning to make the decision to
invest in new production facilities or efficiency-enhancement projects. While
this increase in demand is evident across the board, it was spearheaded by
developments in the mining and energy sectors.

The division secured new project agreements in the nuclear power industry, both
within Sweden and elsewhere. Another important contract was signed with Bomhus
Energi, appointing ÅF as technical consultant for an environmentally motivated
investment in a biomass-fuelled block heat power plant adjacent to one of the
Korsnäs company's pulp and paper mills. The order is worth SEK 50 million for
ÅF.

During the second quarter, operations in a couple of small units, whose
profitability has been below par over a fairly long period of time, were wound
up. At the same time, around 30 new co-workers were recruited to meet rising
demand in other areas of activity.

Infrastructure Operating income Q2: SEK 486 million (SEK 442 m)

               Operating margin Q2: 8.3% (7.5%)



               Operating income Q1-Q2: SEK 953 million (SEK 939 m)

               Operating margin Q1-Q2: 8.5% (8.4%)


The Infrastructure Division holds a leading position as a consultant for
infrastructure development in Scandinavia.

The market for qualified consulting services in the infrastructure sector
remained good throughout the second quarter, underpinned as it is by the
constant increase in the number of publicly funded projects that represent major
investments in new roads and railways.

Capacity utilisation improved during the second quarter. The strongest earnings
were reported by units within the division that work primarily with the property
sector, telecommunications and the defence industry, all of whom achieved
operating margins in excess of 10 percent.

At the same time, two factors dragged down profitability for the division as a
whole in the second quarter. The first came in the form of disappointing
earnings from our operations in Norway, which led to a change of management
there. The second was the temporary pressure on profitability for the
Infrastructure Planning business area in the wake of high organic growth. ÅF is
determined to be a leading name in the field of infrastructure planning, and a
recruitment campaign is currently under way. In July a major contract was signed
under which ÅF will play a significant role in the Stockholm Bypass Project.

After the end of the reporting period a further 100 or so consultants in the
field of infrastructure planning were acquired with the operations of the City
of Gothenburg's highways and traffic management department, Göteborgs
Gatuaktiebolag. As a result of this acquisition ÅF has become one of the leading
names in this field in Sweden, able to call upon the resources of 450
consultants who are experts in all aspects of infrastructure planning.

Number of employees

The number of full-time equivalents was 3,973 (4,232).
The total number of employees at the end of the reporting period was 4,014
(4,333); 2,767 in Sweden and 1,247 outside Sweden. ÅF-Kontroll, which was sold
on 25 March, had 512 employees.

Parent company

Parent company operating income totalled SEK 162 million (SEK 144 million) for
the period January-June. Profit after net financial items was SEK 512 million
(SEK -13 million): this includes the profit of SEK 469 million that the parent
company made from the sale of ÅF-Kontroll. Cash and cash equivalents totalled
SEK 265 million (SEK 2 million), and gross investment in machinery and equipment
amounted to SEK 3 million (SEK 4 million).

Risks and uncertainty factors

The significant risks and uncertainty factors to which the ÅF Group is exposed
include business risks linked to the general economic situation and the
propensity of various markets to invest, the ability to recruit and retain
qualified co-workers, and the effect of certain political decisions. In
addition, the Group is exposed to a number of financial risks, including
currency risks, interest-rate risks and credit risks. The risks to which the
Group is exposed are described in detail in ÅF's Annual Report for 2009. No
significant risks are considered to have arisen since the publication of the
annual report.

Accounting principles

This interim report has been prepared in accordance with IAS 34 ("Interim
Financial Reporting"). The report conforms with International Financial
Reporting Standards (IFRS), as well as with statements on interpretation from
the International Financial Reporting Interpretations Committee (IFRIC) as
approved by the European Commission for use in the EU, and with the relevant
references to Chapter 9 of the Swedish Annual Accounts Act. The report has been
drawn up using the same accounting principles and methods of calculation as
those in the Annual Report for 2009 (see Note 1, page 79). With effect from 1
January 2010 IFRS 3 ("Business Combinations" (revised)) and IAS 27
("Consolidated and Separate Financial Statements" (revised)) have been applied.
The parent company has implemented the Swedish Financial Reporting Board's
Recommendation RFR 2.3, which means that the parent company in the legal entity
shall apply all the IFRS and related statements approved by the EU as far as
this is possible, while continuing to apply the Swedish Annual Accounts Act and
the Pension Obligations Vesting Act and paying due regard to the relationship
between accounting and taxation in the preparation of the legal entity's annual
accounts.

ÅF shares

At the end of the reporting period the ÅF share was valued at SEK 105; this
represents a 7.4 percent rise in value since the start of the year. During the
same period the Stockholm Stock Exchange OMXSPI index rose by 4.5 percent. The
record day for the 2:1 share split was 2 June.

Capital Market Day

This year ÅF's Capital Market Day will take place on Thursday 23 September, from
9 o'clock to midday at ÅF's head office in Stockholm. If you would like to
attend the event, please e-mail:viktor.svensson@afconsult.com

Next interim report

The ÅF interim report for January-September 2010 will be published on 21
October.

The Board of Directors and the President /CEO certify that this half-year
interim report gives a true and fair presentation of the Parent Company's and
the Group's operations, financial position and profits, and that it describes
the material risks and uncertainties facing the Parent Company and the companies
that together constitute the ÅF Group.


Stockholm, Sweden - 14 July 2010,
ÅF AB (publ)

Ulf Dinkelspiel,        Lena Treschow Torell, Patrik Enblad,

Chairman of the Board   Deputy Chair          Director


Eva-Lotta Kraft,        Jon Risfelt,          Anders Snell

Director                Director              Director


Helena Skåntorp,        Björn O. Nilsson,     Patrik Tillack,

Director                Director              Employee representative


Fredrik Sundin,         Jonas Wiström

Employee representative President/CEO



This interim report has not been subjected to scrutiny by the company's
auditors.
The information in this interim report is that which ÅF AB is required by
Swedish law to disclose under the terms of the Swedish Securities Exchange and
Clearing Operations Act and/or the Financial Instruments Trading Act. The
information was released for publication at 08.30 C.E.T. on 14 July 2010.

All forward-looking statements in this report are based on the company's best
assessment at the time of the report. Like all assessments of the future, such
statements include risks and uncertainties that may entail that the actual
outcome is different.

The full report including tables can be downloaded from the following link:




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