Interim report Jan- Mar 2018€¦ · portfolio of service offer across industries We’re an...

Interim report Jan- Mar 2018

JONAS GUSTAVSSON, CEO STEFAN JOHANSSON, CFO

APRIL 25, 2018

INTERIM REPORT JAN - MAR 2018

Agenda

— Business overview

— Market and highlights

— Financials

— Divisional performance

— Strategy implementation

— Summary

2

Q1, 2018

Improved result in a continued favourable market

Net Sales: 3 415 SEK M

EBITA: 325 SEK M

EBITA-margin: 9.5% (8,8%)


+4.6 %

+13.5 %

— Improved profit and margin

— Overall favourable market

— Good demand in all divisions

— Slowed organic growth due to resource shortage

3

13 BSEKNet Sales 2017

10,000Employees

The market’s most comprehensive

portfolio of service offer across

industries

We’re an engineering and design company


Industry 34%

Infrastructure 39%

Digital Solutions 16%

Energy 11%

Divisions

100Activity in more than 100 countries

Numbers represent 20174

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 20175

InfrastructureBuildings

Rail & Road

Project Management

Water & Environment

Architecture & Design

IndustryAdvanced Manufacturing

Automotive R&D

Food & Pharma

Process Industry

Product Development

Industrial Engineering

Specialized Technical Service

Energy

Thermal Heat & Power

Hydro Power

Renewable Energy

Nuclear Energy

Transmission & Distribution

Oil & Gas

Energy Markets

DigitalSolutions

Experience Design

IT Solutions

Embedded Systems

Systems Management

INTERIM REPORT JAN - MAR 2018 6

Our solutions respond to global trends

SMART CITIES AND INFRASTRUCTURE

FUTUREMOBILITY

INDUSTRIAL DIGITALIZATION

CHANGING ENERGYMARKETS

7INTERIM REPORT JAN - MAR 2018

Market development Q1


— The overall market is largely unchanged compared

to previous quarter

— Industrial market still strong in most of the sectors

— Continued high rate of investments in the

infrastructure market in Sweden and Norway

— The energy market is stabilized, but still weak in

Europe. Conversion to fossil-free production and

increased need for energy storage and smart grids

— The digitalization trend drives increasing demand

for digital solutions in all markets

8

HIGHLIGHTS

New projects Q1

— New automation order for Henriksdals purification plant,

Stockholm Vatten och Avlopp ~ 200 SEK M

— Expansion of the world’s largest dissolving pulp mill in South

Africa, Sappi

— Extended strategic partnership with Electrolux

— Pre study of the expansion of Arlanda Terminal 5, Swedavia

— Green profile design assignment of new biomass plant,

Hamburg

— Design of Rhône bridge St. Triphon, Switzerland

— New hydropower plant in South Asia


HIGHLIGHTS

Acquisitions

— January: Gottlieb Paludan Architects - Danish architect

specialized in transport infrastructure, energy and

industrial plants. 90 employees and sales ~SEK 140

million

— January: Arcad Architects – based in Switzerland and

specialized in industrial and commercial buildings.

8 employees and sales ~SEK 10 million

— April: Samtanke –based in Karlstad with experts within

app, web and integration solutions. 6 employees


Net sales: 3 415 SEK M (3 265)

Total growth: 4.6%

Organic growth: 0.3%

Adjusted/underlying organic growth: 2%

- Overall favourable market

- Good demand in all divisions

- Slowed organic growth due to resource shortage

Growth in Q1

Q1, 2018

COMMENTS


NET SALES, SEK M

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

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Quarter Rolling 12 mths

11

EBITA increased to 325 SEK M (286)

EBITA margin 9.5% (8.8%)

- Improved profitability in 3 out of 4 divisions

- Focused efforts in all divisions including positive

effects from restructuring program

Improved profitability

Q1, 2018


EBITA, SEK M AND %

excl. items affecting comparability

0

50

100

150

200

250

300

350

Q116

Q216

Q316

Q416

Q117

Q217

Q317

Q417

Q118

0

200

400

600

800

1 000

1 200

Quarter Rolling 12 mths

COMMENTS

12

Cash flow and Net debt

SEK M Comments

Net Debt as of Dec 31, 2017 2 631

Cash flow from operating activities -221

Capex 20

Acquisitions and Earn Outs 74 2 acquisitions

Dividend -

Buyback of shares -

Other 16

Net Debt as of Mar 31, 2018 2 521

Net Debt/EBITDA 2.2


CASH FLOW FROM OPERATIONS GENERATED SEK M 221 (132) 2018

13

Q1 2018

Infrastructure division— Strong growth and increased profitability

— Investments in Norway and Sweden on high levels. Demand for

smart solutions for plants, buildings and urban planning. Also high

demand for ÅF’s strong architecture and design brands.

— New orders from Swedavia, Rhône-bridge Switzerland, design of

biomass plant, Germany.

— In January, acquistion of Gottlieb Paludan Architects, Denmark


Jan – Mar 2018 Jan – Mar 2017 Full year 2017

Net sales, SEK M 1 456 1 314 5 110

EBITA, SEK M 165 137 515

EBITA % 11.3 10.4 10.1

Average FTEs 4 253 3 843 3 969

Total growth, % 10.8 - -

of which organic growth, % 3.2 - -

adjusted/underlying organic growth, %

5.4 - -

Comparing numbers for growth 2017 are not available due to the fact that2016 numbers have not been adjusted with regard to changes in organisation 14

Q1 2018

Industry division


— Stable profitability and slowed growth due to resource shortage

— Continued good demand. Automotive shows high activity, as well as life

science and chemical/petrochemical. Strong international demand in

pulp & paper

— New orders from the world’s largest dissolving pulp mill, Sappi in South

Africa, automation order from Stockholm Vatten och Avfall and product

development assignments from Volvo Cars


Net sales, SEK M 1 124 1 121 4 371

EBITA, SEK M 98 100 387

EBITA % 8.8 9.0 8.9

Average FTEs 3 100 3 071 3 097

Total growth % 0.3 - -

of which organic growth, % -0.9 - -


0.4 - -

Comparing numbers for growth 2017 are not available due to the fact that2016 numbers have not been adjusted with regard to changes in organisation

15

Q1 2018

Energy Division


— Improved profitability and in a continued weak European market.

Traditionally new assignments are fewer in the beginning of the year.

— Market is largely unchanged. In Scandinavia refurbishment of existing

installations is still moderately strong and investments in smart grids

continues. The market for nuclear related services has picked up and

renewables is gaining momentum.

— New orders include services of nuclear installations, geothermal

renewable project in Turkey, and a new hydropower plant in Asia.


Net sales, SEK M 353 363 1 467

EBITA, SEK M 14 9 88

EBITA % 4.0 2.4 6.0

Average FTEs 979 1 055 1 015

Total growth, % -2.6 - -



0.2 - -


16

Q1 2018

Digital Solutions


— Increased profitability and slowed growth due to resource shortage

— Continued strong demand for digital solutions. Clients demand long

term partnership in product development, Electrolux is one example.

The defence industry continues to be strong.

— Extended partnership with Electrolux including transfer of approx 50

R&D engineers to ÅF. Small digital business in Sweden was acquired

and the integration of InUse goes as planned.


Net sales, SEK M 566 544 2 046

EBITA, SEK M 58 52 199

EBITA % 10.2 9.5 9.7

Average FTEs 1 208 1 102 1 112

Total growth, % 4.1 - -



0.9 - -


17

Summary - Development divisions, Q1


Division Infrastructure Industry Energy Digital Solutions

Share of net sales 42% 32% 10% 16%

Growth 10.8% 0.3% -2.6% 4.1%

whereof organicgrowth

3.2% -0.9% -2.6% -0.7%

adjusted/underlying organic growth

5.4% 0.4% 0.2% 0.9%

EBITA margin 11.3% 8.8% 4.0% 10.2%

18

OUR VISION

Providing leadingsolutions for generationsto come.


ÅF – Making Future.

19

OUR MISSION

We create sustainable engineering and design solutions


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

21

Our revised Business Model

SERVICE PROJECTS

PRODUCTS

CONCEPTS

SOLUTIONS

Professional services

Professional Teams

After market – 24/7

Time & Material Projects

Fixed price projects

Turn key projects

Claiming the value chain and increase value add to our clients

Scalable and repetitive delivery

Leverage from our extensive competence portfolio - cross disciplinary projects

Direction

22

Operating “Satellites”

39%Service

61%Projects

%Concepts/Solutions


Three main tracks in the strategy implementation

1. ENGAGE AND INVOLVE

EVERYONE

• Future ÅF Programme

• Visualize strategy and

vision + continuous

communication (e.g.

Future Tour

• Leadership support &

training

2. DRIVE CROSS-ÅF SOLUTIONS

& BUSINESS DEVELOPMENT

• Develop solutions in

Smart Cities

• Business Development

function

• Programmatic M&A

3. IMPLEMENT REVISED

STRUCTURES AND TOOLS

• New organization

• Revised Performance

Management

• Revise incentive models


Strengthen our position


WHO 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

24


SUSTAINABILITY AT ÅF

Choices that make a difference— Improved sustainable performance - SBPI

— Our clients assess that we to a higher degree

contribute with sustainable value

— Our employees are more aware of how we

contribute with sustainable value in our

assignments.

— The initiative New Immigrated Engineers

has resulted in more than 70 recruitments

25

WORKING AT ÅF

Attractive workplace

1. Ikea

2. ÅF

3. Google


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

26

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

27

Q1 summary


NET SALES 3 415 SEK M (3 265) +4.6%

EBITA 325 SEK M (286) +13.5%

— Improved profit and margin

— Overall favourable market

— Good demand in all divisions

— Slowed organic growth due to resource shortage

— Continued focus on strategy execution

28

Thank you!

Interim report Jan- Mar 2018€¦ · portfolio of service offer across industries We’re an...

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