ÅF AB Year-end report January - December 2014

Fourth quarter 2014

• Net sales amounted to SEK 2,376 million (2,291)
• Operating profit totalled SEK 229 million (274)
• Operating profit, excluding non-recurring items, totalled SEK 205 million (220)
• Operating margin, excluding non-recurring items, was 8.6 percent (9.6)
• Profit after tax totalled SEK 171 million (207)
• Earnings per share, before dilution: SEK 2.21 (2.69)

January - December 2014

• Net sales amounted to SEK 8 805 million (8 337)
• Operating profit totalled SEK 756 million (722)
• Operating profit, excluding non-recurring items, totalled SEK 747 million (724)
• Operating margin, excluding non-recurring items, was 8.5 percent (8.7)
• Profit after tax totalled SEK 553 million (525)
• Earnings per share, before dilution: SEK 7.16 (6.70)
• The Board proposes a dividend per share for 2014 of SEK 3,50 (3.25)

A few words from the President, Jonas Wiström:

Excluding non-recurring items, ÅF's operating profit totalled SEK 747 million (724) for full-year 2014, which is the highest annual profit in ÅF's history. Cash flow was strong and growth amounted to 5.6 percent. For the fourth quarter, operating profit, excluding non-recurring items, totalled SEK 205 million (220) and the operating margin was 8.6 percent (9.6). ÅF's cash flow was also strong in the fourth quarter. Activity in the Swedish industrial sector was lower than expected at the end of the year. 

Growth amounted to 4.5 percent in the fourth quarter, adjusted for the sale of Russian subsidiary Lonas, but December was a weak calendar month. The highest growth, about 8 percent, was delivered by the Infrastructure Division through its continued success in the market and a high rate of new engineer recruitment. ÅF currently has more than 7,100 highly qualified employees with ongoing projects in some 80 countries, and ÅF's network has grown to comprise 25,000 skilled sub-consultants.

It is satisfying that the Industry and Infrastructure Divisions continue to deliver double-digit margins, despite a slightly weaker market for Industry. It is also gratifying that several structural and organizational changes to the International Division are now beginning to have an effect. International reported growth, adjusted for the divestment of Lonas, and more than doubled underlying earnings compared with last year. The margin rose to 7.6 percent in the fourth quarter. Technology continued to operate in markets with varying conditions depending on industry and geography. The operating margin was 7.5 percent (8.5).

The overall outlook for 2015 is cautiously optimistic. The market for Infrastructure is expected to remain strong. The market outlook for energy investments in Sweden has deteriorated, while it remains unchanged in the rest of the world. The outlook for the industrial market remains difficult to assess.

ÅF's 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 should be combined with growth - both organic and through acquisitions. Last year, new long-term objectives were introduced, which included increasing ÅF's 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 08.00 a.m. on February 10, 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