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ÅF - Interim Report, January-March 2009

Published maj 05, 2009
For further information, please contact:

Jonas Wiström, President/CEO                      +46 (0)70-608 12 20
Viktor Svensson, Director, Corporate              +46 (0)70-657 20 26

ÅF Q1: EBIT 8.8%, Growth 14%

First quarter 2009

  * Net sales totalled SEK 1,208 million (Q1 2008: SEK 1,064 million)
  * Operating profit totalled SEK 106 million (SEK 117 million)
  * Profit after tax totalled SEK 77 million (SEK 80 million)
  * Earnings per share, before dilution, amounted to SEK 4.51 (SEK

A few words from the President, Jonas Wiström

The market for qualified technical consulting services proved to be
somewhat better in the first quarter than we had forecast in the
previous quarterly report. This helped to limit the cost of ÅF's
restructuring programme to SEK 5 million, compared to the SEK 19
million that we had originally estimated.

The operating margin reached 8.8 percent for the first quarter,
compared to 10.1 percent last year (adjusted for the pension premium
reduction from Alecta for 2008).

Growth totalled 14 percent, of which 2 percent was organic. ÅF
continues to gain market share in prioritised growth areas, and
substantial investments were made to further consolidate ÅF's
position as the world's largest independent consulting company in the
field of nuclear power. During the first quarter of the year ÅF
expanded its cooperation with Vattenfall with regard to nuclear
power, while the Inspection Division took steps to reinforce its
offer in this area. We also introduced the ÅF Nuclear Trainee
Programme, the industry's first training programme, which has already
been well received by the labour market and our clients.

The outlook for the near future remains unchanged. ÅF is braced for a
tough 2009 in a very challenging marketplace: there are as yet few
signs that the economy has hit its lowest point, and important new
investments for industry are still on hold. ÅF's aim, however, is to
continue to deliver levels of profitability and growth that are among
the very best in our industry. The company still enjoys a
well-established position in the market, long-term relationships with
its clients and a strong brand.

Sales and earnings

Net sales totalled SEK 1,208 million, a 14 percent increase on the
figure of SEK 1,064 million for the corresponding period in 2008.

Operating profit amounted to SEK 106 million (Q1 2008: SEK 117
The operating margin was 8.8 percent (10.9 percent).

It is also worth mentioning in this connection that the profit for Q1
2008 was affected by a pension premium reduction from Alecta, which
had a positive impact on earnings of SEK 9.5 million.

Profit after net financial items amounted to SEK 104 million (SEK 109
The profit margin was 8.6 percent (10.2 percent).

Capacity utilisation was 71 percent (74 percent).

Profit after tax totalled SEK 77 million (SEK 80 million).
Earnings per share, before dilution, were SEK 4.51 (SEK 4.69).

Important events during Q1 and after the reporting date

ÅF signed a four-year framework agreement with Vattenfall that
extends from 2009 to 2012. The agreement is for technical consulting
services and encompasses everything from project management, analysis
and investigation, to technical calculations and mechanical
construction and design in all technical disciplines. Vattenfall was
already one of ÅF's largest clients prior to the signing of this
agreement, and it is now expected that sales to Vattenfall will
increase substantially.

Through its Inspection Division, ÅF was commissioned by Forsmarks
Kraftgrupp AB to conduct periodic inspections of pipes and components
using sophisticated testing systems. The assignment relates to
reactors 1, 2 and 3 at the Forsmark nuclear power plant during the
2009-2011 audit period, with the option of a subsequent two-year

ÅF was ranked in 7th place overall among the most attractive employer
in Sweden in Universum's annual survey of technology students, and
was awarded the "Best in Industry" prize among technical consulting
companies. Among young engineering professionals (2-8 years' working
experience) ÅF was rated in 8th place overall and again topped the
rankings among technical consulting companies.

Acquisitions / New Markets / Disposals

ÅF has, via its Inspection Division (ÅF-Kontroll), established a new,
wholly owned subsidiary in Lithuania. Operations will concentrate on
testing and inspection services for the nuclear power industry. In
the start-up phase the new company has a staff of 30, all of whom
have been transferred to ÅF as part of an agreement with the
state-owned Ignalina Nuclear Power Plant (INPP). A service contract
has been signed with INPP relating to the supply of all inspection
and testing services for the plant.


Gross investment in property, plant and equipment for the period
totalled SEK 7 million (Q1 2008: SEK 15 million). The first quarter
2008 also saw investments of SEK 7 million in land and buildings for
ÅF's Swiss subsidiary, ÅF-Colenco.

Cash flow and financial position

Cash flow for the period was negative at SEK -7 million (Q1 2008; SEK
-46 million). Cash flow so far this year has been affected by SEK 5
million relating to the buy-back of ÅF shares. The net of borrowing
and amortisation of loans had a positive effect on cash flow of SEK 3
million (SEK -66 million).

The Group's liquid assets totalled SEK 281 million (SEK 269 million)
at the end of the reporting period.

Equity per share was SEK 103.4 and the equity/assets ratio was 49.4
percent. At the beginning of 2009, equity per share was SEK 99.5 and
the equity/assets ratio was 47.1 percent.

The Group's net loan debt (cash and cash equivalents minus
interest-bearing liabilities) amounted to SEK 187 million (SEK 61
million) at the end of March.

Divisional performance

Energy Division                     Sales Q1:  SEK 313  million  (SEK
                                    207 million)
                                    Operating margin Q1: 7.9% (9.2%)

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

The economic downturn has impacted on the demand for energy
consulting services and there is a heightened sense of uncertainty in
the market, particularly in the Russian, Baltic and South-East Asian
markets. However, the inflow of orders was good in Q1, thanks to a
new nuclear power assignment and a new hydropower assignment in

Energy Division clients are private or public-sector power companies,
other energy-intensive industries, government authorities and
financial institutions. Client investments are often considerable and
extend over many years. The Energy Division has a substantial order
book that is worth about SEK 2.2 billion and includes ongoing nuclear
power projects in more than 40 countries. ÅF-Colenco, ÅF's Swiss
subsidiary, and Lonas Technologia, the Russian company acquired in
December 2008, achieved results that exceeded expectations in Q1,
thanks primarily to the strength of their order books.

Nuclear and thermal power accounted for the strongest demand in the
Energy Division.

Engineering           Division     Sales Q1: SEK 344 million (SEK 369
                                   Operating margin Q1: 10.7% (11.6%)

The Engineering Division is Northern Europe's leading technical
consultant for industry.
While the Engineering Division is feeling the effects of a weaker
industrial economy in Sweden and internationally, the division
successfully maintained good levels of profitability and capacity
utilisation throughout the past quarter thanks to intensified sales
efforts, a strong local presence in the market and the long-term
nature of its relationships with clients.

Strategic, long-term work to improve the project economics of major
fixed-price assignments is also starting to yield tangible and
positive results for the division's earnings.

The strongest demand during the reporting period came from the
nuclear power, food processing and pharmaceutical industries. Clients
are investing mainly in efficiency improvements in production plants,
environment-related projects, the development of alternative fuels
and the transition to efficient energy management.

Infrastructure Division                 Sales  Q1:  SEK  497  million
                                        (SEK 451 million)
                                        Operating  margin  Q1:   9.2%

The Infrastructure Division holds a leading position in consulting
services for infrastructure development in Scandinavia. It has
clients in industry, the public sector, the defence sector and the
property market.

The market for infrastructure consulting services remained robust in
Q1. Most business areas continued to report high levels of capacity
utilisation and a good inflow of orders.

The weaker market that affected the Product Development business area
at the end of 2008 prevailed, but did not weaken further. In the
first quarter some 20 members of staff were laid off and a similar
number were redeployed within the company.

The sustained high level of activity in Installations, which is the
largest business area and has more than 600 employees in Sweden and
Norway, is an achievement worthy of special note. While strong demand
for more efficient energy solutions in commercial, industrial and
public premises is a significant contributory factor to this success,
the size of projects is tending to decrease in the wake of the
financial crisis and recession.

Infrastructure Planning, the second-largest business area, also
reported a strong market, thanks to extensive investments in Swedish
railways. Mats Påhlsson assumed the position of new business area
manager on 1 April. Mats has a long and solid background as a
consulting manager in the infrastructure sector.

Inspection Division                Sales Q1: SEK  94 million (SEK  69
                                   Operating margin Q1: 7.4 % (7.6%)

The Inspection Division works with technical inspections, chiefly in
the form of periodic inspections, testing and certification.

The market for technical inspection services remained buoyant in the
first quarter. The Inspection Division maintained a good level of
capacity utilisation and reported its best ever profitability for a
first quarter, after taking account of Alecta's reduction in pension
premium in 2008. The first quarter figures also included
non-recurring expenses amounting to approximately SEK 3 million
relating to business development activities and the expansion of the
service portfolio.

The Inspection Division has continued to win new shares of the market
in Sweden and internationally. Organic growth was 15 percent in the
first quarter. There is a lack of experienced testing engineers and
inspection engineers in Sweden and neighbouring countries.

The process of technical harmonisation in the EU will be a powerful
new force in the future. The division expects that a number of
European markets will be deregulated and privatised in the coming
years, creating a more international market and changing the
competitive situation. In light of this, the Inspection Division has
accelerated its pace of international expansion. In September the
division established a bridgehead in the Czech Republic by acquiring
Qualitest with 85 employees, and in the first quarter of 2009 an
office was opened in Lithuania with 30 employees who are specialists
in nuclear power.

Number of employees

The number of full-time equivalents employed by the company was 4,249
(Q1 2008: 3,747). The actual number of employees at the end of the
reporting period was 4,443 (3,938): 3,170 in Sweden and 1,273 outside

Parent company

Parent company operating income totalled SEK 66 million (Q1 2008: SEK
57 million) and the parent company reported a loss of SEK 8 million
(SEK -4 million) after net financial items. Cash and cash equivalents
totalled SEK 0.3 million (SEK 0.4 million), and gross investment in
machinery and equipment for the period January to March 2009 amounted
to SEK 2 million (SEK 3 million).

Accounting principles

This interim report has been prepared in accordance with IAS 34
("Interim Financial Reporting"). The report has been drawn up in
accordance 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 2008 (see
Note 1, page 83). The parent company has implemented the Swedish
Financial Reporting Board's Recommendation RFR 2.1 ("Accounting for
Legal Entities"), 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 in the preparation of the legal entity's

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
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 on pages 56-60 of ÅF's Annual Report for 2008. No
significant risks are considered to have arisen, but risk exposure
has increased as a result of turbulence in the financial markets, for
example in Russia.

ÅF shares

The ÅF share price fell by 9.9 percent during the first quarter of
2009. During the same period the Stockholm Stock Exchange all-share
index (OMXSPI index) fell by 2.0 percent, and the Mid-Cap index by
4.1 percent.


During the fourth quarter in 2008 a total of 37,000 ÅF shares was
acquired and in the first quarter of 2009 a further 45,000 ÅF shares
were acquired under the mandate given to the Board at the Annual
General Meeting of ÅF shareholders on 23 April 2008. The mandate
authorised the purchase of up to 230,000 ÅF class B shares in the
period prior to the Annual General Meeting on 5 May 2009.
The purpose of the buy-backs is to safeguard the company's
obligations with regard to the 2008 performance-related share
programme approved by the AGM.

Financial information - schedule for 2009

Interim report January-June 2009                              17 July
Interim report January-September                              21
2009                                                          October

Stockholm, Sweden - 5 May 2009
Jonas Wiström
President & CEO, ÅF AB

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 5 May 2009.

The full report including tables can be downloaded from the following

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