Earnings Release • Feb 2, 2024
Earnings Release
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ndringar Fourth quarter 2023
0 500 1,000 1,500 2,000 2,500
1) Excluding items affecting comparability.
The fourth quarter shows a positive development with good growth, stable results and strong cash flow. The ongoing improvement programme in Infrastructure is proceeding according to plan.
There is a general good demand for our expertise in the market, especially within the energy sector. Within the industry sector, we experience a mixed market with strong demand in several segments, while we see delayed decision processes for major investment projects in the pulp & paper segment. Demand in the real-estate segment remains weak.
Net sales amounted to SEK 7,135 million in the fourth quarter, an increase of 8 percent compared to the same period last year. Organic growth was 6 percent, adjusted for calendar effects, which was sequentially lower than previous quarter. The order stock has been high during 2023, but decreased slightly in the fourth quarter and amounted to SEK 19 billion at the end of the year.
EBITA, excluding items affecting comparability, amounted to SEK 596 million (578) for the fourth quarter, corresponding to an EBITA margin of 8.4 percent (8.8). Adjusted for calendar effects, the EBITA margin was in line with previous year. Restructuring costs for redundancies and lease terminations amounted to SEK 55 million in the quarter. A strong operating cash flow of SEK 958 million during the quarter improved our financial position, with net debt/EBITDA improving to 2.4 at year-end.
The Process Industries, Energy and Management Consulting Divisions reported continued strong results in the quarter with margins above 10 percent, driven by our strong position in energy, pulp & paper, and other bio-based industries.
The Infrastructure Division improved its results compared to the previous year, mainly driven by a higher utilisation rate. The ongoing improvement programme goes according to plan, and we executed planned redundancies during the quarter and further reduced office space. The quarter was a step in the right direction, and we are continuing our efforts to improve profitability in the division.
The Industrial & Digital Solutions Division reported weak results in the quarter following a project write-down, but also due to postponed and cancelled projects in some segments, such as telecom and IT. Focus for the division is to improve the utilisation rate and on strengthening the position in segments where we see continued strong demand, for example the automotive and defence industry.
In line with our strategy and ambition to be a leading partner in the sustainable transformation, we have entered several new exciting customer assignments. In the quarter, we want to highlight the collaboration with Nordic Paper to reduce emissions in the paper mill in Bäckhammar and the development of a future power grid for Statnett in Norway.
In 2023 we saw a healthy demand for AFRY's services, contributing to net sales of SEK 27 billion and a total growth of 15 percent. We improved our result, but the margin weakened slightly during the year. We took several measures to strengthen the margin, such as expanding the improvement programme in the Infrastructure Division and the restructuring of the AFRY X Division.
In 2024, we will continue to build on our strong position in the ongoing transition in energy and industry and on implementing improvement measures to strengthen our profitability.
Finally, I would like to thank our clients, partners and employees for great collaboration during the year.
Jonas Gustavsson President and CEO
AFRY provides engineering, design, digital and advisory services to accelerate the transition towards a sustainable society. We are 19,000 devoted experts in industry, energy and infrastructure sectors, creating impact for generations to come. AFRY has Nordic roots with a global reach, net sales of SEK 27 billion and is listed on Nasdaq Stockholm.
Scale globally in decarbonisation, energy and biobased materials
Increase client value
Grow Nordic industrial and digital portfolio, expand internationally in niches
3
technology and leading partner in the sustainability transition
Pioneers of
Drive operational excellence
Be the employer of choice
Making future
We accelerate the transition towards a sustainable society
Brave Devoted Team players
Inclusive and diverse teams with deep sector knowledge
AFRY strives for profitable growth to generate long-term value for our shareholders and the society. The financial targets focus on growth, profitability and a strong financial position. The sustainability targets are key elements of our strategy. The targets focus on the development of sustainable solutions, responsible and ethical operations and our people.
27
Number of employees
19,000
Countries with projects
100
Nordic Paper is a leading specialty paper producer in Sweden, Norway and Canda. The paper mill in Bäckhammar is today one of the most climate-efficient facilities in the global kraft paper industry. Investments are now being made to further improve efficiency and AFRY has been awarded the contract to provide engineering and project management services for a new wood room and electrostatic filter. The project will increase production efficiency and is expected to cut emissions of dust into the air by more than two thirds.
Danish studio Bjarke Ingels Group has chosen AFRY as the general designer and local architect for a new concert hall in Prague, Czech Republic. The building is envisioned to become a national cultural centre for the public. Hand in hand with the concert centre, preparations for a challenging transport solution for the entire city area have been taking place. Therefore, the designers of AFRY work also on a complex solution that provides for transport by metro, trams, cars, buses, taxis, bicycles, river ferry and train.
AFRY has been awarded two framework agreements for Statnett in Norway. The agreements are aimed at facilitating the further development and expansion of the transmission network in Norway and includes both project management services and detailed engineering services. Statnett, the state-owned enterprise responsible for Norway's power transmission system, must renew and improve the main power grid across the country for enabling the green shift and a sustainable value creation, as well as securing the power capacity and supply.
Net sales for the quarter amounted to SEK 7,135 million (6,609), an increase of 8.0 percent (20.0). Organic growth was 5.0 percent (10.3) and 5.9 percent (11.3) when adjusted for calendar effects.
Adjusted for items affecting comparability, EBITA amounted to SEK 596 million (578). The corresponding EBITA margin was 8.4 percent (8.8). Items affecting comparability amounted to SEK -55 million (-16) and related to restructuring costs for the Infrastructure and AFRY X Divisions and costs for premature termination of leases. The figure for the comparative period related to adaption and configuration of cloud-based IT systems. For more information, see alternative performance measures for EBITA on page 25.
EBITA and the EBITA margin were SEK 541 million (562) and 7.6 percent (8.5) respectively. The effects of IFRS 16 Leases on EBITA were SEK 23 million (2) on EBITDA and SEK 170 million (147).
Capacity utilisation was 73.6 percent (74.4) for the quarter.
EBIT totalled SEK 501 million (527). The difference between EBIT and EBITA consists mainly of acquisition-related non-cash items: amortisation of acquisition-related non-current assets amounting to SEK -42 million (-44) and the change in estimates of future contingent considerations of SEK 4 million (9). For more information, see alternative performance measures for EBITA on page 25.
Profit after financial items was SEK 391 million (475) and profit after tax for the period was SEK 314 million (398). Net financial items for the quarter totalled SEK -110 million (-52). In addition to increased interest expenses, net financial items were impacted by discount rates related to leasing in accordance with IFRS 16 Leases of SEK -19 million (-14) as well as discounting of contingent considerations of SEK -2 million (-2), which did not impact cash flow.
The tax expense amounted to SEK -76 million (-77), corresponding to a tax rate of 19.6 percent (16.2). The tax rate during the quarter, as during the comparative period, was affected mainly by loss carryforwards without corresponding capitalisation of deferred tax.
Consolidated net debt including IFRS 16 Leases amounted to SEK 6,842 million (6,849).
Consolidated net debt excluding IFRS 16 Leases amounted to SEK 4,868 million (4,646) at the end of the quarter, and SEK 5,611 million (4,979) at the start of the quarter. Cash flow from operating activities reduced net debt by SEK 806 million (270) in the fourth quarter. During the quarter, the company paid a total of SEK 69 million in contingent considerations for previous acquisitions, thereby increasing net debt. At the end of the fourth quarter, the company had SEK 407 million in outstanding issued commercial paper under its commercial paper programme.
Consolidated cash and cash equivalents totalled SEK 1,167 million (1,088) at the end of the period and unused credit facilities amounted to SEK 3,055 million (3,056).
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales | ||||
| Net sales, SEK million | 7,135 | 6,609 | 26,978 | 23,552 |
| Total growth, % | 8.0 | 20.0 | 14.5 | 17.1 |
| (-) Acquired, % | 1.3 | 3.5 | 1.1 | 4.5 |
| (-) Currency effects, % | 1.7 | 6.2 | 3.8 | 4.9 |
| Organic, % | 5.0 | 10.3 | 9.6 | 7.8 |
| (-) Calendar effect, % | -0.9 | -1.0 | -0.6 | -0.3 |
| Organic growth adjusted for calendar effects, % | 5.9 | 11.3 | 10.2 | 8.1 |
| Order stock | – | – | 19,329 | 19,440 |
| Profit/loss | ||||
| EBITA excl. items affecting comparability, SEK million | 596 | 578 | 2,032 | 1,886 |
| EBITA margin excl. items affecting comparability, % | 8.4 | 8.8 | 7.5 | 8.0 |
| EBITA, SEK million | 541 | 562 | 1,938 | 1,729 |
| EBITA margin, % | 7.6 | 8.5 | 7.2 | 7.3 |
| Operating profit (EBIT), SEK million | 501 | 527 | 1,779 | 1,444 |
| Profit/loss after financial items, SEK million | 391 | 475 | 1,441 | 1,220 |
| Profit/loss after tax, SEK million | 314 | 398 | 1,100 | 974 |
| Key ratios | ||||
| Basic earnings per share, SEK | 2.77 | 3.51 | 9.71 | 8.60 |
| Diluted earnings per share, SEK | 2.771 | 3.511 | 9.711 | 8.601 |
| Cash flow from operating activities, SEK million | 958 | 401 | 1,794 | 1,042 |
| Net debt, SEK million2 | – | – | 4,868 | 4,646 |
| Net debt/equity ratio, percent2 | – | – | 39.1 | 38.2 |
| Net debt/EBITDA, rolling 12 months, times2 | – | – | 2.4 | 2.5 |
| Number of employees | – | – | 18,984 | 18,687 |
| Capacity utilisation, % | 73.6 | 74.4 | 73.5 | 74.7 |
1) Issued convertibles did not lead to any dilution during the period.
2) Excluding effects of IFRS 16 Leases.
Net debt/EBITDA excluding the effect of IFRS 16 and items affecting comparability over a rolling 12 months was 2.3 (2.3).
Improvement programme
The improvement programme in the Infrastructure Division involving a planned decrease of around 300 full-time positions is proceeding to plan. There was a reduction of around 200 full-time positions during the fourth quarter.
An agreement was entered into during the quarter to acquire all shares in SOM System Kft. and TTSA Mérnökiroda Kft (together "SOM") in Hungary, with annual sales of around SEK 30–40 million and 20 employees. The transaction is subject to approval by the authorities. The companies are expected to be consolidated into AFRY from February 2024.
Net sales for the period amounted to SEK 26,978 million (23,552), an increase of 14.5 percent (17.1). Organic growth was 9.6 percent (7.8) and 10.2 percent (8.1) when adjusted for calendar effects.
The order stock at the end of the period amounted to SEK 19,329 million (19,440), a decrease of 0.6 percent compared to the previous year.
Adjusted for items affecting comparability, EBITA amounted to SEK 2,032 million (1,886). The corresponding EBITA margin was 7.5 percent (8.0). Items affecting comparability amounted to SEK -94 million (-157) and related to restructuring costs for the Infrastructure and AFRY X Divisions and costs for
early termination of leases. The figure for the comparative period related to costs for adaption and configuration of cloud-based IT systems and restructuring costs for the Infrastructure Division and Group functions. For more information, see alternative performance measures for EBITA on page 26.
EBITA and the EBITA margin were SEK 1,938 million (1,729) and 7.2 percent (7.3) respectively. The effects of IFRS 16 Leases on EBITA were SEK 34 million (-10) on EBITDA and SEK 666 million (545).
Capacity utilisation was 73.5 percent (74.7) for the period.
EBIT totalled SEK 1,779 million (1,444). The difference between EBIT and EBITA consists of acquisitionrelated non-cash items: amortisation of acquisition-related non-current assets amounting to SEK -176 million (-170) and the change in estimates of future contingent considerations of SEK 19 million (14). The figure for the comparative period related to write-down of operations in Russia SEK -66 million and capital loss mainly from divestment of a property of SEK -63 million. For more information, see alternative performance measures for EBITA on page 26.
Profit after financial items was SEK 1,441 million (1,220) and profit after tax for the period was SEK 1,100 million (974). Net financial items for the period totalled SEK -337 million (-224). In addition to increased interest expenses, net financial items were impacted by discount rates related to leasing in accordance with IFRS 16 Leases of SEK -70 million (-48) as well as discounting of contingent considerations of SEK -11 million (-3), which did not impact cash flow. The net financial items for the comparative period were impacted by movements in the RUB/SEK exchange rate amounting to SEK -30 million.
The tax expense amounted to SEK -341 million (-246), corresponding to a tax rate of 23.7 percent (20.2). The tax rate during the period was affected by the divestment of operations in Russia, tax attributable to the previous year and, as in the comparative period, the utilisation of previously unrecognised accumulated tax losses and non-deductible costs.
Parent company's operating income totalled SEK 1,581 million (1,417) and relates primarily to internal services within the Group. Profit after net financial items was SEK 213 million (44). Cash and cash equivalents amounted to SEK 429 million (308). The tax rate for the period was affected by non-taxable income in the form of dividends from subsidiaries.
Gross investments in intangible assets and property, plant and equipment totalled SEK 56 million (41).
The average number of FTEs was 18,228 (17,340). The total number of employees at the end of the period was 18,984 (18,687).
The number of normal working hours during 2023, based on a 12-months' sales-weighted business mix, is broken down as follows.
| 2024 | 2023 | 2022 | Difference1 | |
|---|---|---|---|---|
| Q1 | 500 | 511 | 504 | 7 |
| Q2 | 485 | 476 | 482 | -7 |
| Q3 | 526 | 517 | 526 | -10 |
| Q4 | 494 | 498 | 502 | -4 |
| Full year | 2,005 | 2,001 | 2,014 | -13 |
1) Refers to 2023 compared with 2022.
The AFRY share price was SEK 139.70 (170.90) at the end of the reporting period.
| Class A shares | 4,290,336 |
|---|---|
| B shares | 108,961,405 |
| Total number of shares | 113,251,741 |
| of which own Class B shares | – |
| Number of votes | 151,864,765 |
The Board of Directors proposes a dividend of SEK 5.50 (5.50) per share for 2023.
Significant events after the end of the reporting period No significant events after the end of the reporting period were identified.
The division offers engineering and consulting services for buildings and infrastructure, for example in the areas of road and rail as well as water and environment. The division also operates in the fields of architecture and design. The division operates in the Nordics and Central Europe.
37% of net sales, 28% of EBITA
Industrial & Digital Solutions The division offers engineering and consulting services in the areas of product development, production systems & equipment, IT and defence. The division operates in all industry sectors with an emphasis on vehicles and food & pharma, and operates primarily in the Nordics.
24% of net sales, 20% of EBITA
The division offers engineering and consulting services, from earlystage studies to project implementation, in the areas of digitalisation, safety and sustainability solutions. The division operates in pulp and paper, chemicals, biorefining, mines and metals, as well as growth sectors such as batteries, hydrogen, textiles and plastics. The division operates globally.
20% of net sales, 28% of EBITA
The division offers engineering and consulting services in energy production from various energy sources such as hydro, gas, bio & waste fuels, nuclear power and renewable energy sources as well as services in transmission & distribution and energy storage. The division delivers solutions globally and has a leading position in hydropower.
13% of net sales, 16% of EBITA
Management Consulting The division works to meet challenges and opportunities in the energy, bioindustry, infrastructure, industry and mobility sectors through strategic consulting, forward-looking market analysis, operational and digital transformation as well as M&A and transaction services. The division operates globally.
6% of net sales, 8% of EBITA
8
Net sales during the fourth quarter amounted to SEK 2,737 million (2,492), an increase of 9.8 percent. Adjusted for calendar effects, organic growth was 8.0 percent. The growth was driven by a good demand and increased average fees. The order stock remains at a stable level.
EBITA amounted to SEK 229 million (195), which corresponds to a margin of 8.4 percent (7.8). The margin was positively impacted by efforts within the division's improvement programme.
The ongoing improvement programme is proceeding according to plan and during the quarter planned redundancies and continued reduction of office space were implemented.
The real estate market shows no signs of recovery yet, but the active industrial, defence and energy sectors continue to drive demand for the division's solutions. Increased consumption of clean energy, focus on sustainability and lack of capacity in energy infrastructure drive investments in renewable energy, where AFRY is well positioned. Public investments in transport infrastructure and the transition towards sustainable transport and mobility remain at a stable level in the division's markets. Demand for solutions within water and the environment remains strong.
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales, SEK million | 2,737 | 2,492 | 10,216 | 9,039 |
| EBITA, SEK million | 229 | 195 | 657 | 679 |
| EBITA margin, % | 8.4 | 7.8 | 6.4 | 7.5 |
| Order stock | – | – | 8,659 | 8,133 |
| Average full-time equivalents (FTEs) |
6,901 | 6,620 | 6,863 | 6,509 |
| Organic growth | ||||
| Total growth, % | 9.8 | 19.8 | 13.0 | 15.9 |
| (-) Acquired, % | 1.1 | 5.8 | 0.8 | 6.6 |
| (-) Currency effects, % | 1.2 | 4.8 | 3.2 | 3.9 |
| Organic, % | 7.6 | 9.3 | 9.0 | 5.4 |
| (-) Calendar effect, % | -0.4 | -1.2 | -0.5 | -0.3 |
| Organic growth adjusted for calendar effects, % |
8.0 | 10.4 | 9.5 | 5.6 |
The historical figures above have been adjusted to account for organisational changes.
Net sales during the fourth quarter amounted to SEK 1,775 million (1,785), a decrease of 0.6 percent. Adjusted for calendar effects, organic growth was -0.5 percent. The decrease was driven by a lower activity in telecom and for IT consultants, while there was a continued good demand in the defence-, manufacturing- and automotive industries. The order stock remains in line with last year.
EBITA amounted to SEK 113 million (152) and the corresponding margin was 6.3 percent (8.5). The margin was negatively affected by a larger project write-down, as well as a lower utilisation rate, primarily driven by delayed project starts and canceled projects.
Demand for design and development of products, services and production capacity was stable during the quarter. Clients have displayed continued high ambitions and needs driven by the transition towards a sustainable society, while there is a continued caution linked to the uncertainty in the market. The defence industry and manufacturing industry within the energy segment show high demand. Demand within the automotive industry is at a good level, while telecom and the IT market is more cautios.
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales, SEK million | 1,775 | 1,785 | 6,790 | 6,378 |
| EBITA, SEK million | 113 | 152 | 464 | 521 |
| EBITA margin, % | 6.3 | 8.5 | 6.8 | 8.2 |
| Order stock | – | – | 2,652 | 2,750 |
| Average full-time equivalents (FTEs) |
3,846 | 3,870 | 3,840 | 3,776 |
| Organic growth | ||||
| Total growth, % | -0.6 | 12.0 | 6.5 | 11.6 |
| (-) Acquired, % | 0.0 | 0.8 | 0.1 | 1.7 |
| (-) Currency effects, % | 0.2 | 1.4 | 0.7 | 1.1 |
| Organic, % | -0.8 | 9.8 | 5.6 | 8.8 |
| (-) Calendar effect, % | -0.3 | -0.1 | -0.5 | 0.0 |
| Organic growth adjusted for calendar effects, % |
-0.5 | 9.9 | 6.1 | 8.8 |
10
The historical figures above have been adjusted to account for organisational changes.
Net sales in the fourth quarter amounted to SEK 1,432 million (1,294), an increase by 10.7 percent. Adjusted for calendar effects, the organic growth was 7.6 percent. The growth was driven by steady performance in most of the Business Areas, especially in Sweden, North America, and Central Europe. The order stock is somewhat lower than last year mainly due to a weaker order intake of large investment projects.
EBITA amounted to SEK 170 million (148), and the corresponding margin was 11.9 percent (11.5). The margin was positively impacted by well-executed projects, but also by a good cost control.
Overall activities continued to remain on a high level in the quarter. However, some investment decision delays are seen in CAPEX projects due to increased material costs, inflation and the uncertain market environment. New CAPEX projects are expected to be decided in chemicals, biorefining and mining & metals sectors as well as in new growth sectors like hydrogen, battery sector, regenerated textile fibers and plastics recycling. Operational phase services, technical consulting and efficiency improvement project demand remains high in all process industry sectors.
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales, SEK million | 1,432 | 1,294 | 5,572 | 4,617 |
| EBITA, SEK million | 170 | 148 | 659 | 486 |
| EBITA margin, % | 11.9 | 11.5 | 11.8 | 10.5 |
| Order stock | – | 3,028 | 3,428 | |
| Average full-time equivalents (FTEs) |
4,230 | 4,314 | 4,336 | 4,116 |
| Organic growth | ||||
| Total growth, % | 10.7 | 20.9 | 20.7 | 21.0 |
| (-) Acquired, % | 3.1 | 0.0 | 1.8 | 1.1 |
| (-) Currency effects, % | 2.1 | 11.0 | 5.2 | 8.6 |
| Organic, % | 5.6 | 9.9 | 13.7 | 11.3 |
| (-) Calendar effect, % | -2.0 | -0.8 | -0.7 | -0.5 |
| Organic growth adjusted for calendar effects, % |
7.6 | 10.6 | 14.4 | 11.8 |
Net sales in the fourth quarter amounted to SEK 961 million (840), an increase by 14.4 percent. Adjusted for calendar effects the organic growth was 9.4 percent. Several segments reported positive organic growth. The order stock is at a continued high level but is affected in the quarter of seasonal variations.
EBITA amounted to SEK 110 million (94) and the corresponding margin was 11.5 percent (11.2). The margin was positively impacted by tight cost control and a continued strong performance, especially in Renewable, Thermal and Hydro.
The general outlook for the energy sector is strong and green capex industry investment drive the energy transition. There is a strong focus on solar and wind projects, on hydro and nuclear, waste-toenergy projects, pump storage projects as well as green ammonia/hydrogen. There is also a strong market for electrical power grids to connect new energy production, but also to strengthen the existing grids. There is also a definite trend towards modernisation, upgrades and maintenance of existing production capacity across the world. The prevailing economic situation, supply chain disturbances and the fight for talent are expected to continue to influence short term client decision making.
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales, SEK million | 961 | 840 | 3,581 | 3,032 |
| EBITA, SEK million | 110 | 94 | 360 | 294 |
| EBITA margin, % | 11.5 | 11.2 | 10.0 | 9.7 |
| Order stock | – | 4,570 | 4,798 | |
| Average full-time equivalents (FTEs) |
1,936 | 1,819 | 1,900 | 1,754 |
| Organic growth | ||||
| Total growth, % | 14.4 | 16.5 | 18.1 | 13.0 |
| (-) Acquired, % | 2.4 | 2.1 | 3.2 | 2.1 |
| (-) Currency effects, % | 3.9 | 9.0 | 6.7 | 6.6 |
| Organic, % | 8.1 | 5.3 | 8.3 | 4.3 |
| (-) Calendar effect, % | -1.3 | -3.6 | -1.2 | -0.6 |
| Organic growth adjusted for calendar effects, % |
9.4 | 8.9 | 9.4 | 4.9 |
Net sales in the fourth quarter amounted to SEK 453 million (366), an increase by 23.5 percent. Adjusted for calendar effects the organic growth was 20.4 percent. The growth reflects the continued strong consulting market driven by the energy and sustainability transitions.
EBITA amounted to SEK 46 million (48) and the corresponding margin was 10.2 percent (13.0). The margin was negatively impacted by a write down of software development.
A stable energy supply has been in strong focus during the quarter due to the continued uncertain geopolitical situation. As a result, companies are adapting their strategies and demand for digital transformation services is high. The shift towards sustainable practices is continuously increasing need for bio-based alternatives and circular solutions and is in turn driving demand for consulting services. At the same time, companies in the traditional bioindustry sectors of pulp and paper are showing slower decision-making processes.
| Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|
|---|---|---|---|---|
| Net sales, SEK million | 453 | 366 | 1,608 | 1,304 |
| EBITA, SEK million | 46 | 48 | 185 | 164 |
| EBITA margin, % | 10.2 | 13.0 | 11.5 | 12.6 |
| Order stock | – | – | 420 | 331 |
| Average full-time equivalents (FTEs) |
791 | 696 | 759 | 649 |
| Organic growth | ||||
| Total growth, % | 23.5 | 26.9 | 23.3 | 22.8 |
| (-) Acquired, % | 0.0 | 0.0 | 0.0 | 0.0 |
| (-) Currency effects, % | 5.0 | 12.4 | 9.0 | 9.5 |
| Organic, % | 18.6 | 14.5 | 14.3 | 13.3 |
| (-) Calendar effect, % | -1.8 | -0.7 | -0.9 | -0.2 |
| Organic growth adjusted for calendar effects, % |
20.4 | 15.2 | 15.1 | 13.6 |
The historical figures above have been adjusted to account for organisational changes.
| SEK million | Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|---|---|---|---|---|
| Net sales | 7,135 | 6,609 | 26,978 | 23,552 |
| Personnel costs | -4,271 | -3,894 | -16,310 | -14,428 |
| Purchases of services and materials | -1,550 | -1,435 | -5,585 | -4,897 |
| Other costs | -585 | -564 | -2,373 | -1,903 |
| Other income | 3 | 34 | 7 | 98 |
| Profit/loss attributable to participations in associates | 0 | 3 | 0 | 8 |
| EBITDA | 732 | 753 | 2,718 | 2,430 |
| Depreciation/amortisation and impairment of non-current assets1 | -191 | -191 | -780 | -702 |
| EBITA | 541 | 562 | 1,938 | 1,729 |
| Acquisition-related items2 | -41 | -35 | -159 | -285 |
| Operating profit (EBIT) | 501 | 527 | 1,779 | 1,444 |
| Financial items | -110 | -52 | -337 | -224 |
| Profit/loss after financial items | 391 | 475 | 1,441 | 1,220 |
| Tax | -76 | -77 | -341 | -246 |
| Profit/loss for the period | 314 | 398 | 1,100 | 974 |
| Attributable to: | ||||
| Shareholders of the parent company | 314 | 398 | 1,100 | 974 |
| Non-controlling interest | 0 | 0 | 0 | 0 |
| Profit/loss for the period | 314 | 398 | 1,100 | 974 |
| Basic earnings per share, SEK | 2.77 | 3.51 | 9.71 | 8.60 |
| Diluted earnings per share, SEK | 2.773 | 3.513 | 9.713 | 8.603 |
| Number of shares outstanding | 113,251,741 | 113,251,741 | 113,251,741 | 113,251,741 |
| Average number of basic shares outstanding | 113,251,741 | 113,251,741 | 113,251,741 | 113,247,847 |
| Average number of diluted shares outstanding | 113,251,741 | 113,251,741 | 113,251,741 | 113,247,8473 |
| SEK million | Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|---|---|---|---|---|
| Profit/loss for the period | 314 | 398 | 1,100 | 974 |
| Items that have been or will be reclassified to profit/loss for the period | ||||
| Change in translation reserve | -307 | 53 | -85 | 624 |
| Change in hedging reserve | -84 | 11 | -103 | 202 |
| Tax | 9 | -3 | 10 | -16 |
| Items that will not be reclassified to profit/loss for the period | ||||
| Revaluation of defined-benefit pension plans | -18 | 2 | -27 | -11 |
| Tax | 2 | 14 | 4 | 27 |
| Other comprehensive income | -397 | 77 | -201 | 826 |
| Comprehensive income/loss for the period | -83 | 475 | 899 | 1,800 |
| Attributable to: | ||||
| Shareholders of the parent company | -83 | 475 | 899 | 1,800 |
| Non-controlling interest | 0 | 0 | 0 | 0 |
| Total | -83 | 475 | 899 | 1,800 |
1) Depreciation/amortisation and impairment of non-current assets refers to non-current assets excluding acquisition-related intangible assets. 2) Acquisition-related items are defined as depreciation/amortisation and impairment of acquisition-related intangible non-current assets including goodwill, revaluation of contingent considerations and gains/losses on divestment of companies and operations. For more details, see Note 5, Note 6 and alternative performance measures for EBITA on page 25.
3) Issued convertibles did not lead to any dilution during the period.
| SEK million | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 15,760 | 15,590 |
| Property, plant and equipment | 382 | 355 |
| Other non-current assets | 2,020 | 2,272 |
| Total non-current assets | 18,162 | 18,217 |
| Current assets | ||
| Current receivables | 8,843 | 8,690 |
| Cash and cash equivalents | 1,167 | 1,088 |
| Total current assets | 10,010 | 9,778 |
| Total assets | 28,172 | 27,996 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Attributable to shareholders of the parent company | 12,454 | 12,176 |
| Attributable to non-controlling interest | 1 | 2 |
| Total equity | 12,454 | 12,178 |
| Non-current liabilities | ||
| Provisions | 607 | 657 |
| Non-current liabilities | 6,067 | 6,139 |
| Total non-current liabilities | 6,674 | 6,797 |
| Current liabilities | ||
| Provisions | 61 | 45 |
| Current liabilities | 8,982 | 8,975 |
| Total current liabilities | 9,043 | 9,021 |
| Total equity and liabilities | 28,172 | 27,996 |
| SEK million | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| Equity at start of period | 12,178 | 10,993 |
| Comprehensive income/loss for the period | 899 | 1,800 |
| Dividends paid | -623 | -623 |
| Conversion of convertible bonds into shares | – | 8 |
| Equity at end of period | 12,454 | 12,178 |
| SEK million | Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|---|---|---|---|---|
| Profit/loss after financial items | 391 | 475 | 1,441 | 1,220 |
| Adjustment for non-cash items, etc. | 195 | 50 | 1,041 | 1,005 |
| Income tax paid | -140 | -145 | -433 | -385 |
| Cash flow from operating activities before change in working capital | 445 | 380 | 2,049 | 1,840 |
| Cash flow from change in working capital | 512 | 21 | -255 | -797 |
| Cash flow from operating activities | 958 | 401 | 1,794 | 1,042 |
| Cash flow from investing activities | -139 | -8 | -756 | -873 |
| Cash flow from financing activities | -553 | -195 | -942 | -1,012 |
| Cash flow for the period | 265 | 199 | 95 | -843 |
| Opening cash and cash equivalents | 853 | 862 | 1,088 | 2,112 |
| Exchange difference in cash and cash equivalents | 49 | 28 | -16 | -180 |
| Closing cash and cash equivalents | 1,167 | 1,088 | 1,167 | 1,088 |
| SEK million | Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|---|---|---|---|---|
| Opening balance | 5,611 | 4,979 | 4,646 | 3,565 |
| Cash flow from operating activities (excl. IFRS 16) | -806 | -270 | -1,188 | -550 |
| Investments | 43 | 37 | 172 | 46 |
| Acquisitions/divestments and contingent considerations | 83 | -37 | 575 | 817 |
| Dividend distribution | – | – | 623 | 623 |
| Other | -62 | -63 | 40 | 147 |
| Closing balance | 4,868 | 4,646 | 4,868 | 4,646 |
| SEK million | Q4 2023 |
Q4 2022 |
Full year 2023 |
Full year 2022 |
|---|---|---|---|---|
| Net sales | 283 | 265 | 1,111 | 1,020 |
| Other operating income | 118 | 104 | 470 | 397 |
| Operating income | 401 | 369 | 1,581 | 1,417 |
| Personnel costs | -99 | -93 | -388 | -328 |
| Other costs | -418 | -355 | -1,599 | -1,431 |
| Depreciation/amortisation | -10 | -9 | -39 | -37 |
| Operating profit/loss | -125 | -88 | -446 | -379 |
| Financial items | 287 | -9 | 659 | 423 |
| Profit/loss after financial items | 162 | -97 | 213 | 44 |
| Appropriations | 313 | 299 | 313 | 299 |
| Profit/loss before taxes | 476 | 201 | 526 | 343 |
| Tax | -12 | -39 | 25 | 11 |
| Profit/loss for the period | 464 | 162 | 551 | 353 |
| Other comprehensive income | -51 | 0 | -43 | 73 |
| Comprehensive income/loss for the period | 412 | 162 | 507 | 427 |
| SEK million | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 2 | 5 |
| Property, plant and equipment | 146 | 133 |
| Financial assets | 14,156 | 14,142 |
| Total non-current assets | 14,303 | 14,281 |
| Current assets | ||
| Current receivables | 5,082 | 5,033 |
| Cash and cash equivalents | 429 | 308 |
| Total current assets | 5,511 | 5,340 |
| Total assets | 19,814 | 19,622 |
| EQUITY AND LIABILITIES | ||
| Equity | 9,089 | 9,204 |
| Untaxed reserves | 89 | 103 |
| Provisions | 14 | 36 |
| Non-current liabilities | 4,665 | 4,349 |
| Current liabilities | 5,957 | 5,930 |
| Total equity and liabilities | 19,814 | 19,622 |
This report was prepared in accordance with IAS 34, Interim Financial Reporting. The accounting policies conform with International Financial Reporting Standards (IFRS), as well as with the EU-approved interpretations of the relevant standards, the International Financial Reporting Interpretations Committee (IFRIC) and Chapter 9 of the Swedish Annual Accounts Act. The report has been drawn up using the same accounting policies and methods of calculation as those in AFRY's Annual and Sustainability Report 2022 (Note 1).
New or revised IFRS standards that came into force in 2023 did not have any material impact on the Group. Regarding the amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction that the International Accounting Standards Board (IASB) published in May 2021, the change is that the exception at the time of accounting does not apply to transactions where equal amounts of deductible and taxable temporary differences occur. The changes to IAS 12 take effect for reporting periods which begin on or after 1 January 2023. AFRY has analysed the future impact on the Group and the net effect will not have a significant impact on the financial statements.
The parent company complies with the Swedish Financial reporting Board's Recommendation RFR2, which requires that the parent company's annual reports apply all IFRS standards and interpretations approved by the EU as far as possible within the constraints of the Annual Accounts Act and the Pension Obligations Vesting Act (Tryggandelagen), and while considering the relationship reporting and taxation. Disclosures according to IAS 34.16A can partly be found on the pages preceding the condensed consolidated income statement.
The significant risks and uncertainties to which the AFRY Group is exposed include strategic risks linked to the market, acquisitions, sustainability and IT, and operational risks related to projects and the ability to recruit and retain qualified employees. In addition, the Group is exposed to several financial risks, such as currency risks, interest-rate risks and credit risks. The risks to which the Group is exposed are described in detail in AFRY's Annual and Sustainability Report 2022.
Geopolitical tensions and uncertainties in the economic situation entail various risks for AFRY and mainly pertain to delayed decision processes and project launches.
Reported contingent liabilities reflect one part of the AFRY Group's exposure to risk. AFRY provides clients with both corporate and bank guarantees when clients request them. This typically involves tender guarantees, advance payment guarantees or performance guarantees. Corporate guarantees are mainly provided by the parent company, AFRY AB, and bank guarantees by AFRY's banks. As at 31 December 2023, the Group's corporate guarantees amounted to SEK 464 million (356) and bank guarantees to SEK 629 million (539). The guarantee amounts do not include pension guarantees, advance payment guarantees or leasing, as these are already reported on the debt side in the balance sheet.
Note 3
| Jan–Dec 2023 | ||||||
|---|---|---|---|---|---|---|
| SEK million | Project Business |
Professional Services |
Total | |||
| Infrastructure | 9,956 | 260 | 10,216 | |||
| Industrial & Digital Solutions | 2,602 | 4,188 | 6,790 | |||
| Process Industries | 4,099 | 1,474 | 5,572 | |||
| Energy | 3,026 | 555 | 3,581 | |||
| Management Consulting | 1,581 | 26 | 1,608 | |||
| Group-common/eliminations | -580 | -209 | -789 | |||
| Group | 20,684 | 6,294 | 26,978 | |||
The Group applies the accounting standard IFRS 15 Revenue from Contracts with Customers. AFRY's business model is divided into two client offerings: Project Business and Professional Services. Project Business is AFRY's offering for major projects and end-toend solutions. In such projects, AFRY acts as a partner to the client, leading and running the entire project. Professional Services is AFRY's offering in which the client manages and runs the project, while AFRY provides suitable expertise at the appropriate time.
Invoicing in Project Business takes place as work proceeds in accordance with agreed terms and conditions, either periodically (monthly) or when contractual milestones are reached. Invoicing ordinarily takes place after the income has been recorded, resulting in contract assets. However, AFRY sometimes receives advance payments or deposits from our clients before the income is recognised, which then results in contract liabilities. In Professional Services, hours spent on a project are ordinarily invoiced at the end of each month. Performance obligations in Project Business are fulfilled over time as the service is provided. Revenue recognition is based on costs with accumulated costs set in relation to total estimated costs. In Professional Services, revenue is recognised by the amount that the unit is entitled to invoice, in accordance with IFRS 15 B16.
| SEK million | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| Infrastructure | 8,659 | 8,133 |
| Industrial & Digital Solutions | 2,652 | 2,750 |
| Process Industries | 3,028 | 3,428 |
| Energy | 4,570 | 4,798 |
| Management Consulting | 420 | 331 |
| Group | 19,329 | 19,440 |
As a result of organisational changes, comparative figures have been adjusted to provide a better reflection of the business.
Note 4
| 2022 | 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK million | Q1 | Q2 | Q3 | Q4 Full year | Q1 | Q2 | Q3 | Q4 | Full year | |
| Infrastructure | 2,276 | 2,305 | 1,966 | 2,492 | 9,039 | 2,629 | 2,601 | 2,249 | 2,737 | 10,216 |
| Industrial & Digital Solutions | 1,574 | 1,627 | 1,392 | 1,785 | 6,378 | 1,814 | 1,747 | 1,455 | 1,775 | 6,790 |
| Process Industries | 1,060 | 1,157 | 1,107 | 1,294 | 4,617 | 1,402 | 1,457 | 1,282 | 1,432 | 5,572 |
| Energy | 695 | 771 | 726 | 840 | 3,032 | 867 | 884 | 869 | 961 | 3,581 |
| Management Consulting | 293 | 333 | 311 | 366 | 1,304 | 372 | 398 | 385 | 453 | 1,608 |
| Group-common/eliminations | -228 | -218 | -203 | -169 | -818 | -167 | -218 | -182 | -222 | -789 |
| Group | 5,670 | 5,975 | 5,298 | 6,609 | 23,552 | 6,916 | 6,869 | 6,059 | 7,135 | 26,978 |
| 2022 | 2023 | |||||||||
| EBITA, SEK million | Q1 | Q2 | Q3 | Q4 Full year | Q1 | Q2 | Q3 | Q4 | Full year | |
| Infrastructure | 188 | 174 | 121 | 195 | 679 | 260 | 103 | 65 | 229 | 657 |
| Industrial & Digital Solutions | 143 | 127 | 98 | 152 | 521 | 182 | 101 | 69 | 113 | 464 |
| Process Industries | 123 | 113 | 101 | 148 | 486 | 199 | 168 | 122 | 170 | 659 |
| Energy | 72 | 71 | 58 | 94 | 294 | 91 | 80 | 79 | 110 | 360 |
| Management Consulting | 35 | 44 | 38 | 48 | 164 | 48 | 49 | 42 | 46 | 185 |
| Group-common/eliminations | -202 | -97 | -41 | -75 | -415 | -91 | -103 | -67 | -126 | -387 |
| Group | 359 | 432 | 376 | 562 | 1,729 | 689 | 398 | 310 | 541 | 1,938 |
| 2022 | 2023 | |||||||||
| EBITA margin, % | Q1 | Q2 | Q3 | Q4 Full year | Q1 | Q2 | Q3 | Q4 | Full year | |
| Infrastructure | 8.3 | 7.5 | 6.2 | 7.8 | 7.5 | 9.9 | 4.0 | 2.9 | 8.4 | 6.4 |
| Industrial & Digital Solutions | 9.1 | 7.8 | 7.1 | 8.5 | 8.2 | 10.1 | 5.8 | 4.7 | 6.3 | 6.8 |
| Group | 16,825 | 17,273 | 17,412 | 17,846 | 17,340 | 18,091 | 18,342 | 18,252 | 18,235 | 18,228 |
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2023 | |||||||||
| Number of working days | Q1 | Q2 | Q3 | Q4 Full year | Q1 | Q2 | Q3 | Q4 | Full year | |
| Sweden only | 63 | 60 | 66 | 63 | 252 | 64 | 59 | 65 | 63 | 251 |
All countries 63 60 66 63 252 64 59 65 62 250
Infrastructure 6,475 6,483 6,460 6,620 6,509 6,767 6,923 6,867 6,901 6,863 Industrial & Digital Solutions 3,679 3,771 3,784 3,870 3,776 3,839 3,840 3,834 3,846 3,840 Process Industries 3,870 4,072 4,202 4,314 4,116 4,394 4,383 4,334 4,230 4,336 Energy 1,676 1,738 1,783 1,819 1,754 1,851 1,907 1,906 1,936 1,900 Management Consulting 599 641 658 696 649 712 758 774 791 759 Group functions 527 567 523 527 535 527 531 537 530 531
2022 2023 Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year
Average number of employees
| 2022 | 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EBITA margin, % | Q1 | Q2 | Q3 | Q4 Full year | Q1 | Q2 | Q3 | Q4 | Full year | |
| Infrastructure | 8.3 | 7.5 | 6.2 | 7.8 | 7.5 | 9.9 | 4.0 | 2.9 | 8.4 | 6.4 |
| Industrial & Digital Solutions | 9.1 | 7.8 | 7.1 | 8.5 | 8.2 | 10.1 | 5.8 | 4.7 | 6.3 | 6.8 |
| Process Industries | 11.6 | 9.8 | 9.2 | 11.5 | 10.5 | 14.2 | 11.5 | 9.5 | 11.9 | 11.8 |
| Energy | 10.3 | 9.2 | 8.0 | 11.2 | 9.7 | 10.5 | 9.0 | 9.1 | 11.5 | 10.0 |
| Management Consulting | 11.8 | 13.1 | 12.3 | 13.0 | 12.6 | 12.9 | 12.3 | 10.8 | 10.2 | 11.5 |
| Group | 6.3 | 7.2 | 7.1 | 8.5 | 7.3 | 10.0 | 5.8 | 5.1 | 7.6 | 7.2 |
As a result of organisational changes, comparative figures have been adjusted to provide a better reflection of the business.
The calculation of the average number of FTEs has changed in connection with organisational changes. This has led to a more accurate and weighted calculation of the number of available hours for all divisions.
| Consolidated from |
Company1 | Country | Division | Annual net sales, SEK million |
Average number of employees |
|---|---|---|---|---|---|
| March | BLIX Consultancy B.V. | Netherlands | Energy | 50 | 25 |
| March | XPRO AS | Norway | Infrastructure | 71 | 40 |
| April | Grünenfelder + Keller Winterthur | Switzerland | Infrastructure | 19 | 11 |
| May | KSH Solutions Inc. | Canada | Process Industries | 180 | 130 |
| Total | 320 | 206 |
1) Company name at time of acquisition.
Acquisition analyses are preliminary as the net assets in the companies acquired have not been conclusively analysed. The purchase considerations for acquisitions for the year were larger than the booked net assets of the acquired companies, which means that the acquisition analyses have resulted in intangible assets.
Total undiscounted contingent consideration for the companies acquired during the year is a maximum of SEK 23 million.
Part of the purchase price withheld by the buyer as security for any claims against the seller, paid to the seller according to the agreed payment plan. The withheld parts of the purchase price are independent of conditions linked to the future performance of acquired companies.
Goodwill consists mainly of human capital in the form of employee skills and synergy effects. Goodwill is not expected to be tax deductible on acquisition of a company. The acquisition of a consulting business essentially involves the acquisition of human capital, and most of the intangible assets in the company acquired are thus attributable to goodwill.
Order stock and client relationships are identified and assessed in connection with completed acquisitions.
Transaction costs are recognised in Other external costs in profit or loss. Transaction costs amounted to SEK 10 million for the period.
The acquired companies are expected to contribute net sales of approximately SEK 320 million and operating profit of roughly SEK 56 million over a full year.
Since their acquisition dates, acquired companies have contributed SEK 240 million to consolidated revenue and SEK 26 million to operating profit.
During the second quarter, AFRY finalised the divestment of its Russian subsidiary to the local management team. The business included around 125 employees and accounted for less than 1 percent of AFRY's total net sales. The Group's estimated capital losses amounted to SEK -64 million, of which SEK -66 million impacted net profit in 2022, as a result of the write-down of our business in Russia. The divestment had an impact on the Group's cash flow of SEK -107 million.
After the end of the reporting period, no acquisitions have been concluded.
| SEK million | Jan–Dec 2023 |
|---|---|
| Intangible assets | – |
| Property, plant and equipment | 4 |
| Right-of-use assets | 6 |
| Financial assets | 0 |
| Trade and other receivables | 74 |
| Deferred tax asset | 0 |
| Cash and cash equivalents | 57 |
| Trade payables, loans and other liabilities | -70 |
| Net identifiable assets and liabilities | 72 |
| Goodwill | 350 |
| Fair value adjustment, intangible assets | 13 |
| Fair value adjustment, non-current provisions | -3 |
| Purchase consideration including estimated contingent consideration | 432 |
| Transaction costs | 10 |
| Less: | |
| Cash (acquired) | 57 |
| Estimated contingent consideration | 20 |
| Holdback | 10 |
| Net cash outflow | 355 |
Valuation principles and classification of the Group's financial assets and liabilities, as described in Note 13 of AFRY's 2022 Annual and Sustainability Report, have been applied consistently throughout the reporting period.
| SEK million | 31 Dec 2023 |
31 Dec 2022 |
|
|---|---|---|---|
| Financial assets measured at fair value | |||
| Interest rate derivatives, hedge accounting applied | 2 | 63 | 132 |
| Forward exchange contracts, hedge accounting applied | 2 | 26 | 15 |
| Forward exchange contracts, hedge accounting not applied |
2 | 36 | 45 |
| Bought foreign exchange options | 2 | 1 | 4 |
| Total | 125 | 197 | |
| Financial assets not recognised at fair value | |||
| Trade receivables | 5,429 | 5,205 | |
| Revenue generated but not invoiced | 2,442 | 2,325 | |
| Financial investments | 8 | 8 | |
| Non-current receivables | 8 | 12 | |
| Cash and cash equivalents | 1,167 | 1,088 | |
| Total | 9,053 | 8,638 |
| SEK million | Level | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|---|
| Financial liabilities measured at fair value | |||
| Interest rate derivatives, hedge accounting applied | 2 | 62 | 17 |
| Forward exchange contracts, hedge accounting applied | 2 | 13 | 18 |
| Forward exchange contracts, hedge accounting not applied |
2 | 75 | 54 |
| Sold foreign exchange options | 2 | 0 | 2 |
| Contingent considerations | 3 | 109 | 197 |
| Total | 260 | 287 | |
| Financial liabilities not recognised at fair value | |||
| Bank loans | 2,834 | 2,587 | |
| Bonds | 2,500 | 2,500 | |
| Commercial paper | 402 | 189 | |
| Staff convertibles | 148 | 316 | |
| Lease liabilities | 1,974 | 2,203 |
Work invoiced but not yet carried out 2,077 2,134 Trade payables 1,182 1,286 Total 11,117 11,214
Recognised and fair values of the Group's financial assets and liabilities are presented in the table on the left. The fair value of derivatives is based on level 2 of the fair value hierarchy. Contingent considerations are valued at market value in accordance with level 3. Derivative instruments where hedge accounting is not applied are measured at fair value through profit or loss, and derivatives where hedge accounting is applied are measured at fair value through other comprehensive income. All other financial assets and liabilities are measured at amortised cost. Compared with 2022, no switches have been made between different levels in the fair value hierarchy for derivatives or loans. Nor have any significant changes been made in terms of valuation techniques, inputs or assumptions.
Contingent considerations are valued at market value in accordance with level 3. The calculation of contingent consideration is dependent on parameters in the relevant agreements. These parameters are chiefly linked to expected EBIT for the acquired companies over the next two to three years. The changes in the balance sheet is recognised in the table below.
| SEK million | 31 Dec 2023 |
|---|---|
| Opening balance 1 January 2023 | 197 |
| Acquisitions for the year | 20 |
| Payments | -103 |
| Changes in value recognised in income statement | -19 |
| Adjustment of preliminary acquisition analysis | -1 |
| Discounting | 11 |
| Translation differences | 4 |
| Closing balance | 109 |
| SEK million | Level | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|---|
| Forward exchange contracts, hedge accounting not applied |
|||
| Total nominal values | 2,894 | 2,741 | |
| Fair value, profit | 2 | 36 | 45 |
| Fair value, loss | 2 | -75 | -54 |
| Fair value, net | -39 | -9 | |
| Forward exchange contracts, cash flowhedging reporting |
|||
|---|---|---|---|
| Total nominal values | 744 | 702 | |
| Fair value, profit | 2 | 26 | 15 |
| Fair value, loss | 2 | -13 | -18 |
| Fair value, net | 13 | -2 | |
| Bought foreign exchange options, |
| hedge accounting not applied | |||
|---|---|---|---|
| Total nominal values | 48 | 270 | |
| Fair value, profit | 2 | 0 | 2 |
| Fair value, loss | 2 | – | – |
| Fair value, net | 0 | 2 |
| Level | 31 Dec 2023 |
31 Dec 2022 |
|---|---|---|
| 92 | 540 | |
| 2 | 0 | 1 |
| 2 | 0 | 0 |
| 0 | 1 | |
| 14 | ||
|---|---|---|
| 2 | -47 | -17 |
| 2 | 1 | 31 |
| 1,850 | 1,850 | |
| -46 |
| Fair value, profit | 2 | 62 | 101 |
|---|---|---|---|
| Fair value, loss | 2 | -16 | – |
| Fair value, net | 47 | 101 |
There were no material transactions between AFRY and its related parties during the period.
No significant events after the end of the reporting period were identified.
The consolidated financial statements contain financial ratios defined according to IFRS. They also include measurements not defined according to IFRS, known as alternative performance measures. The purpose of this is to provide information for comparing trends across years and to understand the underlying operations. These terms may be defined in a different way by other companies and are therefore not always comparable to similar measures used by other companies.
Definitions
The key ratios and alternative performance measures (APMs) used in this report are defined in AFRY's Annual and Sustainability Report 2022 and on our website: https://afry.com/en/investor-relations/
Since the Group is active in a global market, sales are transacted in currencies other than the Swedish krona, which is the presentation currency. Exchange rates have been relatively volatile historically, and the Group carries out acquisitions/divestments of operations on an ongoing basis. Taken together, this has led to the Group's sales and performance being evaluated on the basis of organic growth. Organic sales growth represents comparable sales growth or sales reduction and enables separate valuations to be carried out on the impact of acquisitions/divestments and exchange rate fluctuations.
| Infrastructure | Industrial & Digital Solutions |
Process Industries |
Energy | Management Consulting |
Group1 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % | Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
|
| Total growth | 9.8 | 19.8 | -0.6 | 12.0 | 10.7 | 20.9 | 14.4 | 16.5 | 23.5 | 26.9 | 8.0 | 20.0 | |
| (-) Acquired | 1.1 | 5.8 | 0.0 | 0.8 | 3.1 | 0.0 | 2.4 | 2.1 | 0.0 | 0.0 | 1.3 | 3.5 | |
| (-) Currency effect | 1.2 | 4.8 | 0.2 | 1.4 | 2.1 | 11.0 | 3.9 | 9.0 | 5.0 | 12.4 | 1.7 | 6.2 | |
| Organic | 7.6 | 9.3 | -0.8 | 9.8 | 5.6 | 9.9 | 8.1 | 5.3 | 18.6 | 14.5 | 5.0 | 10.3 | |
| (-) Calendar effect | -0.4 | -1.2 | -0.3 | -0.1 | -2.0 | -0.8 | -1.3 | -3.6 | -1.8 | -0.7 | -0.9 | -1.0 | |
| Organic growth adjusted for calendar effects |
8.0 | 10.4 | -0.5 | 9.9 | 7.6 | 10.6 | 9.4 | 8.9 | 20.4 | 15.2 | 5.9 | 11.3 | |
| SEK million | |||||||||||||
| Total growth | 244 | 408 | -11 | 166 | 138 | 224 | 121 | 119 | 86 | 68 | 526 | 1,100 | |
| (-) Acquired | 26 | 118 | 0 | 11 | 40 | 0 | 20 | 15 | 0 | 0 | 86 | 193 | |
| (-) Currency effect | 29 | 99 | 4 | 19 | 27 | 118 | 33 | 65 | 18 | 31 | 112 | 339 | |
| Organic | 188 | 191 | -15 | 135 | 72 | 106 | 68 | 39 | 68 | 37 | 327 | 569 | |
| (-) Calendar effect | -11 | -24 | -6 | -1 | -26 | -8 | -11 | -26 | -7 | -2 | -61 | -53 | |
| Organic growth adjusted for calendar effects |
199 | 214 | -9 | 137 | 98 | 114 | 79 | 64 | 75 | 38 | 388 | 621 |
| Infrastructure | Industrial & Digital Solutions |
Process Industries |
Energy | Management Consulting |
Group1 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % | Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
| Total growth | 13.0 | 15.9 | 6.5 | 11.6 | 20.7 | 21.0 | 18.1 | 13.0 | 23.3 | 22.8 | 14.5 | 17.1 |
| (-) Acquired | 0.8 | 6.6 | 0.1 | 1.7 | 1.8 | 1.1 | 3.2 | 2.1 | 0.0 | 0.0 | 1.1 | 4.5 |
| (-) Currency effect | 3.2 | 3.9 | 0.7 | 1.1 | 5.2 | 8.6 | 6.7 | 6.6 | 9.0 | 9.5 | 3.8 | 4.9 |
| Organic | 9.0 | 5.4 | 5.6 | 8.8 | 13.7 | 11.3 | 8.3 | 4.3 | 14.3 | 13.3 | 9.6 | 7.8 |
| (-) Calendar effect | -0.5 | -0.3 | -0.5 | 0.0 | -0.7 | -0.5 | -1.2 | -0.6 | -0.9 | -0.2 | -0.6 | -0.3 |
| Organic growth adjusted for calendar effects |
9.5 | 5.6 | 6.1 | 8.8 | 14.4 | 11.8 | 9.4 | 4.9 | 15.1 | 13.6 | 10.2 | 8.1 |
| SEK million | ||||||||||||
| Total growth | 1,176 | 1,225 | 412 | 572 | 955 | 801 | 549 | 349 | 304 | 216 | 3,426 | 3,448 |
| (-) Acquired | 75 | 509 | 8 | 83 | 85 | 41 | 96 | 57 | 0 | 0 | 264 | 896 |
| (-) Currency effect | 286 | 302 | 47 | 56 | 240 | 329 | 203 | 177 | 118 | 90 | 903 | 980 |
| Organic | 815 | 414 | 357 | 434 | 630 | 431 | 250 | 116 | 186 | 126 | 2,259 | 1,572 |
| (-) Calendar effect | -47 | -21 | -33 | -2 | -32 | -19 | -35 | -16 | -11 | -2 | -151 | -59 |
| Organic growth adjusted for calendar effects |
862 | 435 | 390 | 436 | 663 | 450 | 285 | 132 | 197 | 128 | 2,410 | 1,632 |
Operating profit before associates and items affecting comparability refers to the operating profit after restored tangible items and events related to changes in the Group's structure and operations which are relevant for an understanding of the Group's performance on a comparable basis. This metric is used by Group Executive Management to monitor and analyse underlying profit/loss and to provide comparable figures between periods.
| Infrastructure | Industrial & Digital Solutions |
Process Industries |
Energy | Management Consulting |
Group1 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
Q4 2023 |
Q4 2022 |
| EBIT (operating profit/loss) | 229 | 195 | 113 | 152 | 170 | 148 | 110 | 94 | 46 | 48 | 501 | 527 |
| Acquisition-related items | ||||||||||||
| Amortisation and impairment of intangible assets | – | – | – | – | – | – | – | – | – | – | 42 | 44 |
| Revaluation of contingent considerations | – | – | – | – | – | – | – | – | – | – | -4 | -9 |
| Divestment of operations | – | – | – | – | – | – | – | – | – | – | 3 | 1 |
| Profit/loss (EBITA) | 229 | 195 | 113 | 152 | 170 | 148 | 110 | 94 | 46 | 48 | 541 | 562 |
| Items affecting comparability | ||||||||||||
| Restructuring costs AFRY X Division | – | – | – | – | – | – | – | – | – | – | 8 | – |
| Restructuring costs Infrastructure Division | – | – | – | – | – | – | – | – | – | – | 46 | – |
| Cost of customisation/configuration of cloud-based IT systems | – | – | – | – | – | – | – | – | – | – | – | 16 |
| EBITA excl. items affecting comparability | 229 | 195 | 113 | 152 | 170 | 148 | 110 | 94 | 46 | 48 | 596 | 578 |
| % | ||||||||||||
| EBIT margin | 8.4 | 7.8 | 6.3 | 8.5 | 11.9 | 11.5 | 11.5 | 11.2 | 10.2 | 13.0 | 7.0 | 8.0 |
| Acquisition-related items | ||||||||||||
| Amortisation and impairment of intangible assets | – | – | – | – | – | – | – | – | – | – | 0.6 | 0.7 |
| Revaluation of contingent considerations | – | – | – | – | – | – | – | – | – | – | -0.1 | -0.1 |
| Divestment of operations | – | – | – | – | – | – | – | – | – | – | 0.0 | 0.0 |
| EBITA margin | 8.4 | 7.8 | 6.3 | 8.5 | 11.9 | 11.5 | 11.5 | 11.2 | 10.2 | 13.0 | 7.6 | 8.5 |
| Items affecting comparability | – | – | – | – | – | – | – | – | – | – | 0.8 | 0.2 |
| EBITA margin excl. items affecting comparability | 8.4 | 7.8 | 6.3 | 8.5 | 11.9 | 11.5 | 11.5 | 11.2 | 10.2 | 13.0 | 8.4 | 8.8 |
The historical figures above have been adjusted to account for organisational changes.
| Infrastructure | Industrial & Digital Solutions |
Process Industries |
Energy | Management Consulting |
Group1 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK million | Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
Full year 2023 |
Full year 2022 |
| EBIT (operating profit/loss) | 657 | 679 | 464 | 521 | 659 | 486 | 360 | 294 | 185 | 164 | 1,779 | 1,444 |
| Acquisition-related items | ||||||||||||
| Amortisation and impairment of intangible assets | – | – | – | – | – | – | – | – | – | – | 176 | 170 |
| Revaluation of contingent considerations | – | – | – | – | – | – | – | – | – | – | -19 | -14 |
| Divestment of operations | – | – | – | – | – | – | – | – | – | – | 2 | 63 |
| Impairment of business | – | – | – | – | – | – | – | – | – | – | – | 66 |
| Profit/loss (EBITA) | 657 | 679 | 464 | 521 | 659 | 486 | 360 | 294 | 185 | 164 | 1,938 | 1,729 |
| Items affecting comparability | ||||||||||||
| Costs for the premature termination of leases for facilities | – | – | – | – | – | – | – | – | – | – | 23 | – |
| Restructuring costs AFRY X Division | – | – | – | – | – | – | – | – | – | – | 25 | – |
| Restructuring costs Infrastructure Division | – | – | – | – | – | – | – | – | – | – | 46 | 80 |
| Restructuring costs Group functions | – | – | – | – | – | – | – | – | – | – | – | 20 |
| Cost of customisation/configuration of cloud-based IT systems | – | – | – | – | – | – | – | – | – | – | – | 57 |
| EBITA excl. items affecting comparability | 657 | 679 | 464 | 521 | 659 | 486 | 360 | 294 | 185 | 164 | 2,032 | 1,886 |
| % | ||||||||||||
| EBIT margin | 6.4 | 7.5 | 6.8 | 8.2 | 11.8 | 10.5 | 10.0 | 9.7 | 11.5 | 12.6 | 6.6 | 6.1 |
| Acquisition-related items | ||||||||||||
| Amortisation and impairment of intangible assets | – | – | – | – | – | – | – | – | – | – | 0.7 | 0.7 |
| Revaluation of contingent considerations | – | – | – | – | – | – | – | – | – | – | -0.1 | -0.1 |
| Divestment of operations | – | – | – | – | – | – | – | – | – | – | 0.0 | 0.3 |
| Impairment of business | – | – | – | – | – | – | – | – | – | – | – | 0.3 |
| EBITA margin | 6.4 | 7.5 | 6.8 | 8.2 | 11.8 | 10.5 | 10.0 | 9.7 | 11.5 | 12.6 | 7.2 | 7.3 |
| Items affecting comparability | – | – | – | – | – | – | – | – | – | – | 0.3 | 0.7 |
| EBITA margin excl. items affecting comparability | 6.4 | 7.5 | 6.8 | 8.2 | 11.8 | 10.5 | 10.0 | 9.7 | 11.5 | 12.6 | 7.5 | 8.0 |
The historical figures above have been adjusted to account for organisational changes.
Net debt is the total of interest-bearing liabilities less cash and cash equivalents and interest-bearing assets. Lease liabilities after the deduction of receivables relating to subleases are included in net debt. Net debt also includes dividends approved but not yet paid out. Net debt is used by Group Executive Management to monitor and analyse the debt trend in the Group and evaluate the Group's refinancing requirements. Net
debt/EBITDA is a key ratio for net debt in relation to cash-generating profit in the operation, which provides an indication of the business's ability to pay its debts. This metric is commonly used by financial institutions to measure creditworthiness. A negative figure means that the Group has a net cash balance (cash and cash equivalents exceed interest-bearing liabilities).
SEK million
Depreciation/amortisation and
Net debt/EBITDA excl. IFRS 16 rolling 12 months
Apr 2021– Mar 2022 Jul 2021– Jun 2022
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Loans and credit facilities | 4,913 | 5,771 | 5,667 | 5,580 | 5,947 | 6,631 | 6,312 | 5,876 |
| Net pension liability | 206 | 207 | 174 | 155 | 156 | 155 | 152 | 159 |
| Cash and cash equivalents | -902 | -1,187 | -862 | -1,088 | -1,162 | -1,079 | -853 | -1,167 |
| Total net debt | 4,217 | 4,792 | 4,979 | 4,646 | 4,941 | 5,708 | 5,611 | 4,868 |
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Net debt | 4,217 | 4,792 | 4,979 | 4,646 | 4,941 | 5,708 | 5,611 | 4,868 |
| Equity | 11,420 | 11,318 | 11,703 | 12,178 | 12,602 | 12,552 | 12,537 | 12,454 |
| Net debt/equity ratio, % | 36.9 | 42.3 | 42.5 | 38.2 | 39.2 | 45.5 | 44.8 | 39.1 |
Oct 2021– Sep 2022
Profit/loss (EBITA) 1,602 1,623 1,632 1,729 2,059 2,025 1,958 1,938
Full year 2022 Apr 2022– Mar 2023 Jul 2022– Jun 2023 Oct 2022– Sep 2023
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Loans and credit facilities | 7,022 | 7,903 | 7,819 | 7,783 | 8,136 | 8,763 | 8,343 | 7,850 |
| Net pension liability | 206 | 207 | 174 | 155 | 156 | 155 | 152 | 159 |
| Cash and cash equivalents | -902 | -1,187 | -862 | -1,088 | -1,162 | -1,079 | -853 | -1,167 |
| Total net debt | 6,326 | 6,923 | 7,131 | 6,849 | 7,130 | 7,839 | 7,642 | 6,842 |
27
Full year 2023
Return on equity is the business's profit/loss after tax during the period in relation to average equity. This key ratio is used to show the return on the owners' invested capital, which gives an indication of the business's ability to create value for its owners.
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Profit after tax, rolling 12 months | 1,062 | 945 | 877 | 974 | 1,187 | 1,214 | 1,184 | 1,100 |
| Average equity | 10,715 | 10,872 | 11,171 | 11,522 | 11,844 | 12,071 | 12,314 | 12,465 |
| Return on equity, % | 9.9 | 8.7 | 7.8 | 8.5 | 10.0 | 10.1 | 9.6 | 8.8 |
The equity ratio shows the business's equity in relation to total capital and describes how large a proportion of the business's assets are not matched by liabilities. The equity ratio can be seen as the business's ability to pay in the long term. The key ratio is impacted by profitability during the period and by how the business is financed. This metric is often used to provide an indication of how the company is financed and also to see trends in how the business's funds are utilised. A change in the equity ratio over time may, for example, be an indication that the business is reviewing its financing structure or is utilising its equity to finance an expansion.
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Equity | 11,420 | 11,318 | 11,703 | 12,178 | 12,602 | 12,552 | 12,537 | 12,454 |
| Balance sheet total | 25,762 | 26,917 | 26,971 | 27,996 | 28,411 | 29,513 | 28,298 | 28,172 |
| Equity ratio, % | 44.3 | 42.0 | 43.4 | 43.5 | 44.4 | 42.5 | 44.3 | 44.2 |
Return on capital employed shows the business's profit/loss after financial items, adjusted for interest expenses in relation to average interest-bearing capital in the business's balance sheet total. The key ratio is used to evaluate how the company utilises capital which has some form of return requirement (for example, dividends on invested capital from shareholders as well as interest on bank loans).
| SEK million | 31 Mar 2022 |
30 Jun 2022 |
30 Sep 2022 |
31 Dec 2022 |
31 Mar 2023 |
30 Jun 2023 |
30 Sep 2023 |
31 Dec 2023 |
|---|---|---|---|---|---|---|---|---|
| Profit after financial items rolling 12 months |
1,324 | 1,196 | 1,116 | 1,220 | 1,498 | 1,549 | 1,526 | 1,441 |
| Financial expenses, rolling 12 months | 167 | 162 | 117 | 206 | 247 | 306 | 322 | 396 |
| Profit/loss | 1,491 | 1,358 | 1,233 | 1,426 | 1,746 | 1,855 | 1,848 | 1,837 |
| Average balance sheet total | 24,831 | 25,373 | 25,912 | 26,711 | 27,211 | 27,961 | 28,238 | 28,478 |
| Average other current liabilities | -6,164 | -6,386 | -6,496 | -6,853 | -6,964 | -7,184 | -7,163 | -7,278 |
| Average other non-current liabilities | -216 | -229 | -235 | -237 | -232 | -210 | -177 | -140 |
| Average deferred tax liability | -219 | -210 | -197 | -190 | -184 | -186 | -185 | -192 |
| Capital employed | 18,232 | 18,547 | 18,985 | 19,432 | 19,831 | 20,382 | 20,712 | 20,868 |
| Return on capital employed, % | 8.2 | 7.3 | 6.5 | 7.3 | 8.8 | 9.1 | 8.9 | 8.8 |
Stockholm, 2 February 2024
AFRY AB (publ) Jonas Gustavsson President and CEO
This report has not been subjected to scrutiny by the company's auditors.
This information fulfils the disclosure requirements of AFRY AB (publ) under the provisions of the EU's Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication through the agency of the contact person set out above on 2 February 2024 at 07.00 CET.
All forward-looking statements in this report are based on the company's best assessment 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.
Head Office: AFRY AB, SE-169 99 Stockholm, Sweden Visiting address: Frösundaleden 2, Solna, Sweden Tel: +46 10 505 00 00 www.afry.com [email protected] Corp. ID no. 556120-6474
| Time: | 2 February 2024 10.00 CET |
|---|---|
| Webcast: | https://www.youtube.com/watch?v=4uEpWew2U6U |
| For analysts/ investors: |
Click here to connect to the meeting With the opportunity to ask questions |
| Q1 2024 | 23 April 2024 |
|---|---|
| Annual General Meeting |
23 April 2024 |
| Q2 2024 | 16 July 2024 |
| Q3 2024 | 25 October 2024 |
| Q4 2024 | 7 February 2025 |
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