interim report - providing leading solutions for ... · — acquisition of profil-bau industrial...

Interim report

JONAS GUSTAVSSON, CEOSTEFAN JOHANSSON, CFO

24 OCTOBER, 2018

JANUARY - SEPTEMBER

Agenda

— Business overview

— Market and highlights

— Financials

— Divisional performance

— Strategy implementation

— Summary

Net Sales: 2 995 (2 662) SEK M

EBITA*: 220 (184) SEK M

EBITA-margin*: 7.4 (6.9) %

Net Sales: 10 018 (9 158) SEK M

EBITA*: 911 (772) SEK M

EBITA-margin*: 9.1 (8.4) %

JAN – SEP, 2018

Improved profit and good growth

+13%

JUL- SEP, 2018

+18%

*excluding items affecting comparability

+20%

+9%

— Good growth

— Improved profit and margin

— Overall good demand

— Strategy implementation according to plan

We’re an engineering and design company

Industry 34%

Infrastructure 39%

Digital Solutions 16%

Energy 11%

Divisions

Numbers represent 2017

10,000Employees

13 BSEKNet Sales 2017

100Activity in more than 100 countries

90%Net Sales in the Nordic Region

Moving businesses and society forward

Infrastructure 19%

Real Estate 17%

Automotive & Vehicle 16%

Energy and Power 14%

Life Science, Food & Pharma 8%

Manufacturing Industry 6%

Process Industry 6%

Telecom and ICT 5%

Defence 4%

Other 5%

IndustrySegments

33%Public Sector

67%Private Sector

Numbers represent 2017

Our solutions respond to global trends

SMART CITIES AND INFRASTRUCTURE

FUTUREMOBILITY

INDUSTRIAL DIGITALIZATION

CHANGING ENERGYMARKETS

Market development Q3

— The general market trend and demand is good

— The industrial market continues to perform well, with

healthy demand in most sectors

— Investments in infrastructure and commercial and public

building remain at high levels.

— The energy market is generally unchanged, although there

has been a slight increase in demand for ÅF’s services in

the Nordic region

— The market for digitalization services continues to be good

in all sectors

HIGHLIGHTS

New projects Q3— ÅF and Volvo Cars will deliver smart transport solutions to Trafikverket

(Swedish Transport Administration)

— Groundwater and subsidence solutions to the Stockholm County Council

(Stockholms läns landsting, SLL)

— ÅF’s architects Gottlieb Paludan Architects will design the new archive in

Frederikssund for the Danish Agency for Culture and Palaces

— ÅF will deliver new automated production lines based on robotic production to

Volvo Cars

— Automation assignment for Tetra Pak to introduce upgrades for a production

line to improve personal safety.

— An extended assignment from BillerudKorsnäs/Gruvön Mill relating to their

new paperboard machine

— Several refurbishment assignments for existing power plants in the Nordics

— Solutions for two pumped storage hydropower plants in India with a duration

of four years

— Several orders to develop the next generation of production systems and

smart solutions for factories – Industry 4.0

Acquisitions ~140 SEK M

July: LBP – based in Switzerland, focused on electrical

engineering for traffic infrastructure. 17 employees and

sales ~SEK 24 million

Sep: Profil-Bau Industrial – based in Finland, focused on

industrial engineering. 70 employees and sales ~SEK 60

million

Oct: P.A.P – energy specialist based in Denmark.

46 employees and sales ~SEK 60 million

HIGHLIGHTS Q3 PLUS OCTOBER

Acquisitions 2018Q1, 2018 ~ 150 SEK M

Gottlieb Paludan Architects

Arcad Architects

Q2, 2018 ~ 205 SEK M

Facilia

Effekt

Samtanke

Konsultbolag1

Mometo

SEGMENT

Architecture & Design

Architecture & Design

Nuclear decommissioning

Buildings

Digital Solutions

Digital Solutions

Digital Solutions

BASED IN

Q3, 2018 + OCT ~ 140 SEK M

LBP

Profil-Bau Industrial

P.A.P

Buildings

Industrial engineering

Energy

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

Q3

17

Q4

17

Q1

18

Q2

18

Q3

18

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Quarter Rolling 12 mths

Net sales: 2 995 (2 662) SEK M

Total growth: 12.5 (13.4)%

Organic growth: 8.0 (2.6)%

Adjusted/underlying organic growth: 6.0 (3.6)%

- Overall good demand

- Strong growth in the Infrastructure Division and Digital Solution Division

- Focus on improving growth in the Industry Division and Energy Division

- Continued focus on identifying strategic

acquisitions

Growth in Q3

Q3, 2018

COMMENTS

NET SALES, SEK M

excl. items affecting comparability

EBITA increased to 220 SEK M (184)

EBITA margin 7.4% (6.9%)

- Improved profitability

- Previous year, EBITA was effected negatively by

restructuring costs of SEK 69 million (items

affecting comparability)

- Focused efforts in all divisions to increase value in

line with the strategy

Improved profitability

Q3, 2018 EBITA, SEK M

excl. items affecting comparability

COMMENTS

0

50

100

150

200

250

300

350

400

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

Q3

17

Q4

17

Q1

18

Q2

18

Q3

18

0

200

400

600

800

1 000

1 200

1 400

Quarter Rolling 12 mths

SEK M Comments

Net Debt as of Dec 31, 2017 2 631

Cash flow from operating activities -515

Capex 71

Acquisitions and Earn Outs 263 Q1: 2 acquisitions, Q2: 5 acquisitions, Q3: 2 acquisitions

Dividend 387

Buyback of shares 177

Other -63

Net Debt as of Sep 30, 2018 2 950

Net Debt/EBITDA rolling 12 months 2.2

Cash flow and Net debtCASH FLOW FROM OPERATIONS GENERATED SEK M 112 (-80) IN Q3 AND 515 (287) YTD 2018

Q3 2018

Infrastructure division— Strong growth and increased profitability

— The offerings within buildings, road & rail and architecture continue

to generate both strong growth and profitability

— Solutions to SLL to extend the underground in Stockholm, Volvo

Cars and ÅF will deliver smart transport solutions to Trafikverket

and Gottlieb Paludan Architects will design the new archive in

Frederikssund for the Danish Agency for Culture and Palaces

— Acquisition of LBP – an expert in electrical engineering for

infrastructure based in Switzerland

Jul – Sep 2018

Jul – Sep 2017

Jan – Sep 2018

Jan – Sep 2017

Full year2017

Net sales, SEK M 1 279 1 057 4 270 3 656 5 110

EBITA, SEK M 114 70 454 347 515

EBITA % 8.9 6.6 10.6 9.5 10.1

Average FTEs 4 455 3 950 4 367 3 918 3 969

Total growth, % 21.0 - 16.8 - -

of which organic growth, %

16.7 - 12.3 - -

of which adjusted/ underlying organicgrowth, %

13.6 - 10.9 - -

Comparing numbers for growth 2017 are not available due to the fact that 2016 numbers have not been adjusted with regard to changes in organisation

Q3 2018

Industry division— Stable earnings and focus on driving growth

— The industrial market continues to perform well, with healthy demand in

most of our segments.

— New automated production lines based on robotic production to Volvo

Cars, automation assignment for Tetra Pak, extended assignment from

BillerudKorsnäs/Gruvön Mill relating to new paperboard machine.

— Acquisition of Profil-Bau Industrial – an expert in industrial engineering

and automation based in Finland


Jul – Sep 2018

Jul – Sep 2017

Jan – Sep 2018

Jan – Sep 2017

Full year2017

Net sales, SEK M 963 935 3 231 3 178 4 371

EBITA, SEK M 65 64 271 267 387

EBITA % 6.7 6.8 8.4 8.4 8.9

Average FTEs 3 127 3 069 3 115 3 077 3 097

Total growth, % 3.0 - 1.7 - -


1.1 - 0.1 - -

of which adjusted/underlying organicgrowth, %

0.6 - -0.3 - -

Q3 2018

Energy Division— Earnings and growth are reflected by a stable trend in the Nordics but held

back by pricing pressure and volatility on the international market.

— The market is generally unchanged compared with the previous quarter,

although a slight increase in demand for ÅF’s services in the Nordic region.

— Ongoing review of the energy business with the aim of;

─ improving profitability and minimizing exposure on the international market

─ adjusting the business model in line with the ongoing energy transformation and focus on our core markets, to boost growth and improve profitability

— New refurbishment assignments for existing power plants in the Nordics and

orders for solutions for two pumped storage hydropower plants in India.

— Acquisition of P.A.P – energy specialist based in Denmark


Jul – Sep 2018

Jul – Sep 2017

Jan – Sep 2018

Jan – Sep 2017

Full year2017

Net sales, SEK M 360 333 1 114 1 080 1 467

EBITA, SEK M 15 23 55 58 88

EBITA % 4.1 7.0 5.0 5.4 6.0

Average FTEs 946 990 966 1 025 1 015

Total growth, % 8.3 - 3.1 - -


7.4 - 2.6 - -


1.5 - 0.7 - -

Q3 2018

Digital Solutions

— Good growth and profitability

— The market for digitalization services continues to be good in all sectors

— Several assignments within IoT

— An innovation and development centre has been established in Chengdu,

China to increase delivery capacity, both locally in China and to Swedish

units


Jul – Sep 2018

Jul – Sep 2017

Jan – Sep 2018

Jan – Sep 2017

Full year2017

Net sales, SEK M 505 418 1 681 1 481 2 046

EBITA, SEK M 45 37 164 141 199

EBITA % 8.9 8.9 9.8 9.5 9.7

Average FTEs 1 354 1 087 1 291 1 096 1 112

Total growth, % 20.8 - 13.5 - -


8.2 - 4.3 - -


7.9 - 4.2 - -

Development divisions, Q3

Division Infrastructure Industry Energy Digital Solutions

Share of net sales 41% 31% 12% 16%

Total growth 21.0% 3.0% 8.3% 20.8%

of which organicgrowth

16.7% 1.1% 7.4% 8.2%

of which adjusted/underlying organic growth

13.6% 0.6% 1.5% 7.9%

EBITA margin 8.9% 6.7% 4.1% 8.9%

Strengthen our positionWHO WE ARE

OUR VISION

OUR VALUES OUR MISSION

Providing leading solutionsfor generations to come

ÅF – Making Future

WE ARE

BraveDevotedTeam Players

We create sustainable engineering and design solutions

HOW WE WIN

GROWTH DRIVERS OUR STRATEGY

Smart infrastructureand cities

Future mobility

Industrial digitalization

Changingenergymarkets

GROWTH

International expansion into leading positions

VALUE CREATION

Business model shift to deliver higher value

OPERATIONS

Operational excellence

PEOPLE

Best in class people practices

Strategy execution

International expansion into leading positions

GROWTH

Geographical expansion in core countries

International growth in selected niches

Expansion in international investment projects

Business model shift to deliver higher value

VALUE CREATION

Increase share of projects and solutions

Cross ÅF solutions to meet global growth drivers

Invest in and develop conceptsand selected products

Optimisation of professional services

Operationalexcellence

OPERATIONS

Simplified and focused organisation

Adjusted financial steering

Optimised pricing and sourcing

Ethical commitment

Best in classpeople practices

PEOPLE

Leadership development

People engagement and development

Employer branding

Recruitment and onboarding

Diversity and inclusion

Future CitiesVALUE CREATION

— Growing population and increased urbanization

lead to complex challenges

— Future Cities aims to optimize cities based on

human needs without jeopardizing future

generations’ access to nature and its resources

— Today ÅF are already providing sustainable

solutions for cities and districts

— With strong capabilities in societal development

and digital solutions, ÅF aims to develop

sustainable cities regionally, nationally and

internationally

Strategy implementation according plan

ENGAGE AND INVOLVE

EVERYONE

• Future ÅF Programme

• Visualize strategy and

vision

• Culture change

DRIVE CROSS-ÅF SOLUTIONS &

BUSINESS DEVELOPMENT

• Develop solutions in

Smart Cities

• Business Development

function

• Programmatic M&A

• R&D

IMPLEMENT REVISED

STRUCTURES AND TOOLS

• New organization

• Revised Performance

Management

• Balance Scorecard

• Revised model for internal

revenue sharing

• Tools for business

planning

POSITIONING ÅF

• New brand platform

• Define future position

• Marketing & PR plan

• Spokespersons & experts

WORKING AT ÅF

Attractive workplace

1. Ikea

2. Volvo Cars

3. Google

4. ÅF

We are one of Sweden’s most popular employers among young professionals and scientific researchers. Our ambition is to attract, develop and retain the best talents in the world, wherever we meet them.

YOUNG PROFFESIONALS SCIENTIFIC RESEARCHERS

1. ÅF

— ABB

— Astra Zeneca

Financial targets

GROWTH

— 10 % organic growth and add on

acquisitions

— Platform acquisitions on top

EBITA MARGIN

— 10 % over a business cycle

NET DEBT

— Net debt/EBITDA 2.5

Summary

Net Sales: 2995 (2 662) SEK M

EBITA*: 220 (184) SEK M

EBITA-margin*: 7.4 (6.9)%

Net Sales: 10 018 (9 158) SEK M

EBITA*: 911 (772) SEK M

EBITA-margin*: 9.1 (8.4)%

JUL-SEP, 2018

JAN–SEP, 2018— Good growth

— Improved profit and margin

— Overall good demand

— Continued focus on strategy execution

*excluding items affecting comparability

AGENDA FOR THE DAY

9.00 AM - 9.30 COFFEE AND REGISTRATION

9.30 AM - 1.00 PRESENTATIONS

1.00 AM - 1.30 LUNCH

FROM 1.30 ONE-TO-ONE INTERVIEWS WITH MANAGEMENT

Welcome to ÅF’s Capital Markets DayNOVEMBER 20

interim report - providing leading solutions for ... · — acquisition of profil-bau industrial...

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