ÅF’s services – a summary
Each year ÅF carries out around 57,000 assignments for some 21,000 clients. Projects vary in duration from just a few hours to over 200,000 hours commanding contract fees of from just a few thousand kronor to as much as SEK 200 million.
ÅF works with technical consulting for industry (approximately 70 percent of revenue) and infrastructure projects (approximately 30 percent).
ÅF works with both process and manufacturing industries throughout the entire chain from product development (Systems Division) to automation and industrial IT (Engineering Division), as well as with the planning and development of production plant and the processes and environmental considerations associated with this (Process Division).
The Infrastructure Division supplies systems, mostly electrical, IT and HVAC and sanitation, to commercial properties and plant: examples include sophisticated climate control technology for buildings and factories and also railway signalling systems.
The Inspection Division inspects, tests and certifies plant and systems for clients in both industry and infrastructure.
Clients
ÅF’s ten largest clients in 2007 were Banverket (the Swedish National Rail Administration), Ericsson, FMV (the Swedish Defence Materiel Administration), Fortum, LKAB, Sappi, Stockholm’s regional transport authority (SL), Vattenfall, Volvo Cars and Westinghouse.
Together these clients accounted for 20 percent of total invoiced sales.
Market
Technical consulting is a very large industry in Sweden. According to the Swedish Federation of Consulting Engineers and Architects (STD), sales for Swedish companies working in this field totalled some SEK 40.5 billion in 2007, with the ÅF Group accounting for almost 10 percent of this amount. The industry employed 43,100 people, slightly more than 8 percent of whom worked for the ÅF Group.
During 2007 the market for ÅF’s services as a whole was good.
The market for the Engineering Division was strong in all segments, with investments in the environment and energy industries continuing to drive developments.
Demand was also strong for all of the services offered by the Infrastructure Division. Environmental improvements and efficiency gains are major driving forces in this sector.
Demand for the services of the Inspection Division developed well and by more than for the market in general. The trend is for more and more sectors to be regulated by technical inspections at the same time as ongoing harmonisation processes in the EU are fuelling an increase in demand.
For the Process Division the market remained very buoyant in all energy-related segments, particularly nuclear power, hydropower and thermal power stations. In the pulp & paper industry demand was brisk from the chemical pulp segment in 2007.
The market for the Systems Division was good in all segments and industries in 2007, with telecoms performing particularly well.
Outlook – Nordic countries
Demand is expected to remain strong for consulting services despite certain warning signals about a downturn in the economy. The trend towards globalisation that has driven demand and intensified the competitive situation for industry in Sweden and its Nordic neighbours seems set to continue.
Many industrial plants in Sweden need to be modernised to improve efficiency, and the country is also on the threshold of extremely extensive investments in road and rail infrastructure, so the market for consulting services in these areas is considered to be very good. The situation in Norway is similar.
Efficiency investments in industry often focus on energy and the environment and this will fuel demand for consulting services throughout the Nordic region for a long time to come.
ÅF anticipates that demand for services in the energy sector will remain strong in both Sweden and Finland, particularly in renewable fuels.
For the pulp & paper sector projects in the Nordic countries and the rest of Europe alike are focused on maintenance investments, which is expected to lead to moderate rates of growth in ÅF’s case.
High energy prices continue to drive a brisk process of change in Norway’s oil and gas industries, but, in addition, demand for consulting services in infrastructure remains strong in Norway.
In Denmark, while foodstuffs and pharmaceuticals remain strong sectors, demand for consulting services is also rising as a result of the pressure for change in the Danish oil and gas industries.
Outlook – Other markets
There is great potential in Russia, Eastern Europe and South-East Asia. Industry is in dire need of modernisation and demand for energy is great. However, there are signs that the market is becoming overheated in the energy sector in Russia and Eastern Europe. Feasibility studies lead almost invariably to investment phases, and suppliers have raised their prices significantly. However, in view of the extent of the new investments needed, it is difficult to see how the market can cool off in the immediate future.
The enlargement of the EU, and the increased demand for the harmonisation of technical safety regulations that follows in its wake, means that demand for third-party inspections is rising continuously. This clearly benefits ÅF’s inspection operations.
In the pulp & paper industry most of the big investments are being made in Asia and South America where the raw materials cost less.
Increased internationalisation
ÅF is becoming an increasingly international company and work is taking place continuously to standardise the structure of our internal information banks, develop the ÅF intranet, adopt a common graphic profile and develop guidelines in the form of methods, systems and processes, and shared corporate values and aims.
Of a total of approximately 4,000 ÅF co-workers, some 900 now work outside Sweden.