ÅF’s services – a summary
ÅF’s operational activities comprise four divisions offering technical consulting services for industry (approximately 70 percent of revenue) and infrastructure projects (approximately 30 percent).
The Energy Division focuses on technical and financial consulting for the energy sector, from advice in connection with business models to implementing investments in power plants and all manner of environmental considerations associated with this. The division possesses world-class expertise in nuclear power.
The Engineering Division is northern Europe’s leading industrial consultant offering services in process technology, automation, industrial IT, electrical power systems and mechanical engineering.
The Infrastructure Division holds a leading position in consulting services for infrastructure development in Scandinavia with clients in industry, the public sector, defence and the property sector.
The Inspection Division is an independent third-party inspection body that inspects, tests and certifies plant and systems for clients in both industry and infrastructure.
Major clients 2008
ÅF’s ten largest clients in 2008 were Atel, Banverket (the Swedish National Rail Administration), Ericsson, Fortum, FMV (the Swedish Defence Materiel Administration), Peab, Stockholm’s regional transport authority (SL), Vattenfall, Volvo Cars and Westinghouse. Together these clients accounted for 21 percent of total invoiced sales.
Market
The market for ÅF’s services was very good in 2008, although there was a slight dip in demand towards the end of the year.
The market for the Energy Division started the year strong in all segments, with the rise in global energy consumption leading to widespread capacity shortages. Demand eased as the year drew to a close, however, as many investment decisions were shelved as a result of the financial crisis.
The market for the Engineering Division was very strong during the year but here, too, demand began to flag towards the end of the year, particularly from manufacturing industries. Orders came chiefly in the form of efficiency improvements in manufacturing plants, environmental engineering projects, the development of alternative fuels and conversion to efficient energy management.
The market for infrastructure consulting services was also strong with the exception of consulting services in product development, where demand tailed off at the year-end. Environmental adaptations and energy-efficiency projects are the clear engines for growth in this market and are acquiring ever greater significance.
Demand for the services of the Inspection Division remained stable and the trend pointed upwards in 2008. The market as a whole has grown slightly, but Inspection has expanded more quickly, capturing new shares of the market. Demand was particularly brisk within testing, which led to some shortage of capacity. The ongoing harmonisation processes in the EU and the fact that increasing numbers of sectors are now regulated by technical inspections are fuelling an increase in demand in this field.
Outlook – Nordic countries
Demand for technical consulting services of the kind offered by ÅF is expected to remain good despite the downturn in the economy. We are well prepared to meet rapid changes, and capacity shortages in certain areas enable us to transfer resources to meet shifts in patterns of demand.
The prevailing trend of globalisation is unaffected by the economic downturn and will continue to intensify the competitive situation for industry in Sweden and among its Nordic neighbours. Many industrial plants still need modernising to improve efficiency so that they can compete successfully in a global market.
Over the next few years the Nordic energy market will begin to see the implementation of investment decisions, chiefly in the form of an increased focus on nuclear power in Finland and on biofuels in the other Nordic countries. There is often an energy or environmental perspective to industry’s demands for improved efficiency, and this will fuel demand for technical consulting services throughout the Nordic region for a long time to come.
Within the Nordic process industries, demand is expected to remain high for projects aimed at making production facilities more efficient and at reducing costs by saving energy. Demand is expected to remain high in industries such as mining, petrochemicals, energy, food processing and pharmaceuticals whereas on the manufacturing side, for example the automotive industry, demand is expected to fall even further in 2009. Projects dependent on venture capital will no doubt continue to be under pressure.
Several environmentally-oriented pilot projects in Swedish industry are expected to be turned into export products and should thus contribute to maintaining the demand for technical consulting services.
Sweden stands at the threshold of huge investments in road and rail infrastructure at the same time as interest in environmental initiatives and energy-efficiency projects remains keen. As a result, ÅF believes the market for technical consulting services in infrastructure will continue to remain favourable. It is a similar picture in certain other Nordic regions. As far as the Installations business area is concerned, however, there is growing uncertainty throughout the Nordic market about the immediate future of major projects in the property sector, such as shopping malls and office blocks.
In the field of technical inspections, a gradual deregulation of the Nordic markets is taking place. The Inspection Division is following this development carefully and intends to take an active role in the changes that this may lead to.
Outlook – other markets
Despite economic unrest in the wake of the financial crisis there is still great potential in Russia and other Eastern European markets. Many industries are in dire need of modernisation and all the signs are that future demand for energy will be great.
It is expected that Western Europe will expand its nuclear power generation capacity and make coal-fired power plants more efficient and better adapted to the environment. Russia is badly affected by the financial crisis but will nonetheless carry out new projects primarily within coal and gas. The economic situation is much the same in India and South-East Asia, where current investments in hydropower and thermal power plants will be carried out, but fewer new ones will be initiated.
European industry’s appetite for energy remains insatiable and this will lead to strong demand for services in power generation and transmission while demand for environmentally-related industrial projects is also expected to be high.
As far as pulp and paper are concerned, ÅF sees interesting markets in Africa and South America, while demand in Europe is expected to be weak, except for the paper recycling sector, where ÅF also possesses special expertise.
There is plenty of potential, too, in the market for inspection services in Europe. Not only is there a clear need for qualified inspection services in the wake of deregulation, but the process of EU harmonisation is also fuelling growth in this sector. ÅF has chosen the Czech Republic as its platform for expansion in this field in Central Europe.
Increased internationalisation
With each passing year ÅF becomes increasingly international. A great deal of effort has been made to standardise the structure of our international competence centres, internal information banks, intranet and graphic profile, and to communicate shared corporate values and aims. Each part of ÅF enjoys considerable autonomy which helps secure strong local roots at the same time as there is always access to the company’s global structure and capacity.
Of a total of approximately 4,400 ÅF co-workers, some 1,200 now work outside Sweden.