ÅF AB Interim Report January - March 2015

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First quarter 2015

• Net sales amounted to SEK 2,397 million (2,276)
• Operating profit totalled SEK 207 million (200)
• Operating margin was 8.6 percent (8.8)
• Profit after tax totalled SEK 152 million (149)
• Earnings per share, before dilution: SEK 1.95 (1.92)

A few words from the President, Jonas Wiström:

ÅF's first-quarter operating profit in 2015 rose to SEK 207 million (200). These are the highest first quarter earnings ÅF has ever reported. The operating margin was 8.6 percent (8.8). The beginning of the first quarter was weaker than expected, whereas the quarter finished strong, with the capacity utilisation rate rising by two percentage points between January and March.

Growth for the ÅF Group, excluding divested operations, amounted to nearly 7 percent in the first quarter. Excluding acquisitions, growth was 3 percent.  ÅF now has a workforce of 7,600 highly qualified employees, with a stronger and more comprehensive range of services to offer our customers than ever before. ÅF can also offer customers a pool of around 25,000 engineers from a unique network.

The highest level of profitability was delivered by the Infrastructure Division with an operating margin of 12.8 percent (11.9). Growth was 9 percent and mostly organic. The Industry Division started the quarter on a weak note due to reduced investments in the energy market in Sweden. But the quarter ended strong due to Industry's size and ability to quickly switch between industries, combined with an industrial market showing signs of recovery. These factors led to an operating margin for the quarter of 10.0 percent (10.1). The International Division was able to maintain its trend of gradually improved earnings despite a continued weak energy market in Europe and negative currency effects. The operating margin was 4.6 percent (4.0) for the quarter. The Technology Division showed good growth, but in the wake of a continued weak market in southern Sweden, the operating margin decreased to 6.8 percent (8.6). Measures were taken during the quarter to improve profitability.

Two important acquisitions with about 450 highly qualified engineers strengthened ÅF during the first quarter. PRC Engineering has a strong market position, particularly in the pharmaceutical industry, and LeanNova has unique comprehensive expertise in the automotive industry. Both acquisitions follow the strategy of creating added value for our customers by offering industry expertise, technical breadth, and long-term, close-knit partnerships. ÅF continues to increasingly win the trust of its customers and the number of project assignments continues to grow.

Market conditions are considered to be somewhat stronger than at year-end, as confirmed by a generally strong finish to the quarter. The infrastructure market is expected to remain strong while the industrial market is showing signs of improvement. The energy market continues to be influenced by low levels of investment in Europe, with a more encouraging outlook in the Asian and South American markets.

ÅF's most important goal is to be the most profitable company among its closest comparable competitors in the industry and achieve an operating margin of at least 10 percent over a business cycle. This will be combined with growth - both organic and through acquisitions. One of ÅF's long-term objectives is to increase revenue to at least EUR 2 billion by 2020.

Group Head Office:
ÅF AB (publ), SE-169 99 Stockholm, Sweden
Visitors' address:  Frösundaleden 2, 169 70 Solna, Sweden
Tel. +46 10 505 00 00   Fax +46 10 505 00 10
www.afconsult.com / info@afconsult.com
Corporate ID number 556120-6474

This report has not been subject to review by the company's auditors.

The information in this interim report fulfils ÅF AB's disclosure requirements under the provisions of the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was released for publication at 11.00 a.m. on April 29, 2015.

All assumptions about the future that are made in this report are based on the best information available to the company at the time the report was written. As is the case with all assessments of the future, such assumptions are subject to risks and uncertainties, which may mean that the actual outcome differs from the anticipated result.

This is a translation of the Swedish original. The Swedish text is the binding version and shall prevail in the event of any discrepancies.

The full report including tables (pdf) is available for download