Annual Report • Feb 5, 2021
Annual Report
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ÅF PÖYRY AB (PUBL) YEAR-END REPORT JANUARY–DECEMBER 2020
"The fourth quarter was still affected by the pandemic, however the recovery from previous quarter continues. The EBITA-margin improved in line with our long-term target of 10 percent and the cash flow was strengthened."
Pöyry was consolidated into ÅF Pöyry as of 28 February 2019.
1)Excluding items affecting comparability
Pöyry was consolidated into ÅF Pöyry as of 28 February 2019.
We are leaving 2020 behind us; a challenging year marked by the Covid-19-pandemic and its effects on our operations. We took precautions at an early stage, reorganised our operations to allow remote work and expanded our digital collaborations, all while managing significant drops in volume in certain segments as a result of the pandemic.
Fourth quarter: strong profitability and financial position The fourth quarter continued to be affected by the pandemic, although we are seeing a stabilisation and cautious recovery in all segments compared with the previous quarter. Net sales amounted to SEK 4,907 million, which corresponds to a negative organic growth of -5.5 percent. The automotive segment, weak development in the real estate segment and the repositioning in the Energy Division all had a negative effect on net sales. Meanwhile, Food & Life Science and several other business areas within Process Industries and Management Consulting showed a continued strong development.
The operating margin improved in line with our longterm target of 10 percent despite lower net sales, and cash flow was strong. EBITA, excluding items affecting comparability, amounted to SEK 490 million (516) and the EBITA margin was 10.0 percent (9.5). Four out of five divisions noted improved margins compared with previous year. The increase during the quarter was due to a strong performance primarily in the Energy and Management Consulting Divisions, as well as support from our shortand long-term savings initiatives. The costs in the quarter decreased by around SEK 660 million compared to the same period last year.
The net debt/EBITDA ratio, excluding the effect of IFRS 16 and items affecting comparability, amounted to 1.6x (2.3). We improved our financial position, thus creating opportunity to increase our focus on acquired growth.
Despite the pandemic, 2020 was an eventful year in which we contributed with sustainable solutions to our client projects, established our new AFRY brand in the market, raised the ambitions of our sustainability and digitalisation efforts and launched a new and clear growth strategy.
Total net sales for 2020 fell sharply as a result of the pandemic, particularly during the second quarter in the automotive segment. Thanks to extensive measures, we achieved an operating margin in line with 2019. Net sales for the full year amounted to SEK 18,991 million, which corresponds to a negative organic growth of -6.4 percent. EBITA, excluding items affecting comparability, amounted to SEK 1,635 million (1,731) and the EBITA margin was 8.6 percent (8.7). Accumulated longterm savings amounted to SEK 210 million during the year, compared with the SEK 120 million that has been previously communicated. We strengthened our balance sheet during the year thanks to a clear focus on
cash flow, and we are now able to increase our focus on growth. I can now assert that we succeeded in navigating through the effects of the pandemic, although the ongoing uncertainty continues to place high demands in terms of flexibility, measures and our capacity to exploit attractive opportunities for growth.
The Infrastructure Division was primarily affected by a weak growth in the real estate segment. A continued strong growth was noted in water and environment. We are seeing healthy underlying demand for our services as society transforms and there is a greater need for sustainable solutions.
The Industrial & Digital Solutions Division continued to be affected by the negative trends in the automotive industry, although compared with the previous quarter we can see a higher level of activity. Food & Life Science continued to show a strong development during the quarter.
The Process Industries Division noted a strong development, primarily in Sweden, Finland and Latin America, with major projects progressing as planned.
The Energy Division had a strong development in Nuclear, Thermal & Renewables and Transmission & Distribution. The ongoing repositioning is progressing above expectations, which helped increase stability and improve the results.
Within the Management Consulting Division the energy consulting business continued to perform strongly, and clear signs of increased activity in the bioindustry sector were noted during the quarter.
We entered several exciting agreements during the quarter. In particular, I would like to highlight a framework agreement with Scania for product development, in which AFRY will bear overall responsibility, and the engineering assignments during the year from Metsä Fibre for the construction of the world's most modern sawmill and their new planned bioproduct factory in Kemi, Finland. The key objectives of Metsäs investments are increased environmental efficiency and fossil free operations by utilising advanced technology and digitalisation, where AFRY will contribute with leading sustainable solutions and digital expertise.
We presented the new Take-off strategy for growth at our Capital Markets Day in November, which strongly focuses on sustainability, digitalisation and growth in transforming segments. A new mission was launched simultaneously to accelerate the transition to a more sustainable society. The new strategy outlines how we will get there and is based on five pillars;
Based on our strong balance sheet, we will accelerate our acquisition agenda targeting both add-ons as well as platforms. In recent times we have added three small but strategically important add-ons to our portfolio. AFRY will also increase organic growth in core markets by attracting new and retain talent.
AFRY will focus on segments that show strong, longterm growth and in which we have a strong position in the customer value chains. Examples of segments include Infrastructure, Food & Life Science, Clean Energy and Bioindustry.
AFRY aims to be a driver of industrial digitalisation and to be the best at applying digital in our core sectors. Within the next five years, our target is to triple revenue from the digital area.
AFRY is uniquely positioned to adopt a leading role as an enabler of the transition towards sustainability in our client projects, while also focusing on reducing our own carbon footprint. In line with this strategy, AFRY is now joining the Science Based Targets' Initiative (SBTi).
AFRY has established a scalable platform to enable efficient cross-sales, improved quality and better usage of information, as well as to exploit economies of scale in core markets and increase the use of excellence centres.
Although the fourth quarter was characterised by continued recovery and greater optimism, we remain in the midst of a pandemic and great uncertainty remains. We are therefore maintaining our focus on our employees' health and safety, cost optimisation and flexibility whilst at the same time we are planning to exploit growth opportunities. The need for a green recovery following the Covid-19-pandemic has increased the demand for digital and sustainable solutions where AFRY has a market-leading position and a broad exposure to a variety of industries and markets.
I am proud of how our employees have navigated a historically turbulent year, and we are entering 2021 with a positive momentum throughout the organisation. I would also like to thank our clients and partners for a rewarding collaboration – we are looking forward to an exciting year together.
Stockholm, 5 February 2021
Jonas Gustavsson President and CEO
Net sales for the quarter amounted to SEK 4,907 million (5,447), a decrease of -9.9 percent (37.7). The organic decrease was -5.5 percent (-3.9) and -6.5 percent (-2.6) when adjusted for calendar effects.
During the quarter the Group received state aid, primarily as a result of the short-term furloughing that has been implemented. State subsidies is recognised as other income and amounts to SEK 31 million (0).
Adjusted for items affecting comparability, EBITA was SEK 490 million (516). The corresponding EBITA margin was 10.0 percent (9.5). Items affecting comparability totalled SEK 12 million (189) and relate to restructuring costs for the Industrial & Digital Solutions Division. The comparative period related to integration costs pertaining to the acquisition of Pöyry.
EBITA was SEK 478 million (327) and the EBITA margin was 9.7 percent (6.0). The effects of IFRS 16 Leases were SEK 9 million (7) on EBITA, SEK 136 million (141) on EBITDA and SEK 13 million (15) in increased interest expenses.
Capacity utilisation was 75.2 percent (75.4) in the quarter.
EBIT totalled SEK 484 million (298). The difference between EBIT and EBITA consists of acquisition-related non-cash items: amortisation of acquisition-related non-current assets amounting to SEK 40 million (62), the change in estimates of future contingent considerations amounting to SEK 42 million (31) and capital losses from divestment of operations of SEK 5 million (1).
| Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 | |
|---|---|---|---|---|
| Net sales | ||||
| Net sales, SEK million | 4,907 | 5,447 | 18,991 | 19,792 |
| Total growth, % | -9.9 | 37.7 | -4.0 | 41.6 |
| Structural changes, % | -0.8 | 40.9 | 4.2 | 39.0 |
| Organic, % | -5.5 | -3.9 | -6.4 | 1.7 |
| Currency, % | -3.7 | 0.6 | -1.9 | 0.9 |
| Adjusted/underlying organic growth due to calendar effect, % | -6.5 | -2.6 | -7.1 | 2.1 |
| Earnings | ||||
| EBITA excl. items affecting comparability, SEK m | 490 | 516 | 1,635 | 1,731 |
| EBITA margin excl. items affecting comparability, % | 10.0 | 9.5 | 8.6 | 8.7 |
| EBITA, SEK m | 478 | 327 | 1,584 | 1,368 |
| EBITA margin, % | 9.7 | 6.0 | 8.3 | 6.9 |
| Operating profit (EBIT), SEK m | 484 | 298 | 1,456 | 1,276 |
| Profit after net financial items, SEK m | 435 | 234 | 1,270 | 1,039 |
| Profit after tax, SEK m | 358 | 182 | 991 | 821 |
| Key ratios | ||||
| Basic earnings per share, SEK | 3.17 | 1.63 | 8.81 | 8.07 |
| Diluted earnings per share, SEK | 3.16 | 1.61 | 8.82 | 7.99 |
| Cash flow from operating activities, SEK m | 762 | 1,078 | 2,085 | 1,993 |
| Net debt, SEK m1 | – | – | 2,756 | 4,424 |
| Net debt/equity ratio, %1 | – | – | 27.3 | 47.2 |
| Net debt/EBITDA, rolling 12 months, times1 | – | – | 1.6 | 3.0 |
| Number of employees | – | – | 15,871 | 16,348 |
| Capacity utilisation, % | 75.2 | 75.4 | 75.6 | 75.8 |
1) Excluding effects of IFRS 16 Leases.
* Net debt/EBITDA excluding the effect of IFRS 16 and items affecting comparability, including combined operations rolling 12m is 1.6 (2.3).
Profit after financial items amounted to SEK 435 million (234) and profit after tax for the period was SEK 358 million (182). Net financial items in the quarter totalled SEK -48 million (-64), the decline mainly relates to currency effects. Net financial items were also affected by discount rates related to leases in accordance with the IFRS 16 standard and revaluation of contingent considerations that do not affect cash flow, amounting to SEK 13 million (15) and SEK 2 million (3) respectively.
The tax expense amounted to SEK 78 million (53), corresponding to a tax rate of 17.8 percent (22.4). The tax rate for the current period was affected by non-recurring effects attributable to the revaluation of deferred tax assets.
Pöyry was consolidated as of 28 February 2019. Net sales for the period amounted to SEK 18,991 million (19,792), a decrease of -4.0 percent (41.6). The organic decrease excluding Pöyry totalled -6.4 percent (1.7) and -7.1 percent (2.1) when adjusted for calendar effects.
During the period the Group received state aid, primarily as a result of the short-term furloughing that has been implemented. State subsidies is recognised as other income and amounts to SEK 188 million (0).
Adjusted for items affecting comparability, EBITA was SEK 1,635 million (1,731). The corresponding EBITA margin was 8.6 percent (8.7). Items affecting comparability totalled SEK 52 million (364) and relate to restructuring costs for the Energy and Industrial & Digital Solutions Divisions. The comparative period related to transaction and integration costs pertaining to the acquisition of Pöyry.
EBITA and the EBITA margin were SEK 1,584 million (1,368) and 8.3 percent (6.9). The effects of IFRS 16 Leases were SEK 33 million (31) on EBITA, SEK 554 million (551) on EBITDA and SEK 55 million (60) in increased interest expenses.
Capacity utilisation was 75.6 percent (75.8) for the period.
If Pöyry had been consolidated as of 1 January 2019 (combined operations), net sales would have amounted to approximately SEK 18,991 million (20,827), a decline of 8.8 percent. The corresponding EBITA and EBITA margin adjusted for items affecting comparability would have amounted to approximately SEK 1,635 million (1,809) and 8.6 percent (8.7) respectively.
EBIT totalled SEK 1,456 million (1,276). The difference between EBIT and EBITA consists of acquisition-related non-cash items: amortisation of acquisition-related non-current assets amounting to SEK 184 million (211), the change in estimates of future contingent considerations amounting to SEK 62 million (119) and capital losses from divestment of operations of SEK -6 million (1).
Profit after financial items was SEK 1,270 million (1,039) and profit after tax for the period was SEK 991 million (821). Net financial items totalled SEK -185 million (-237) in the period. In the previous year, net financial items were affected by non-recurring financing costs of SEK 32 million related to the acquisition of Pöyry.
Net financial items were affected by discount rates related to leases in accordance with the IFRS 16 standard and revaluation of contingent considerations that do not affect cash flow, amounting to SEK 55 million (60) and SEK 9 million (16) respectively.
The tax expense amounted to SEK 279 million (219), corresponding to a tax rate of 22.0 percent (21.0).
Consolidated net debt including IFRS 16 Leases amounted to SEK 5,193 million (7,203). Consolidated net debt excluding IFRS 16 Leases amounted to SEK 2,756 million (4,424) at the end of the year, and SEK 4 424 million (3 455) at the start of the year. Cash flow from operating activities reduced net debt by SEK 603 million (944) in the fourth quarter and by SEK 1,586 million (1,473) for the full year. Two small acquisitions were made during the fourth quarter which increased net debt by SEK 24 million.
As has already been communicated, the Board has withdrawn the previously announced dividend proposal for the purposes of further consolidating the Group's financial position. In the first quarter of 2020, some of the Group's credit facilities were also renewed, extending them by three years and increasing them by SEK 500 million. A previous bond loan of SEK 700 million was repaid in May. This bond maturity was partly financed using a three-year bank loan of SEK 500 million. During the third quarter, a previous credit facility loan (RCF loan) of SEK 200 million was repaid. In the month of August, borrowing increased by SEK 149 million via the annual staff convertible programme. This loan had no effect on consolidated net debt but strengthened the Group's cash and cash equivalents, as the AGM resolved that no shares will be repurchased during the year for the 2020 convertible programme.
Consolidated cash and cash equivalents totalled SEK 1,930 million (997) at the end of the period, and unused credit facilities amounted to SEK 3,050 million (2,297).
ÅF Pöyry's chief priority during the pandemic has been, and remains, the health and safety of our employees and clients. The company quickly moved most activities over to remote working and expanded digital collaborations. ÅF Pöyry launched a centralised crisis management team to execute a global contingency and action plan for the global pandemic, and introduced travel restrictions and guidelines in close cooperation with international experts to help our employees. The company has established a Covid-19 safety protocol to maintain safe operations. Since the pandemic is developing at different stages in different markets, we have adopted more market-specific safety measures, and we anticipate that measures will continue to be adapted to specific business areas and markets going forward.
ÅF Pöyry has broad exposure to a number of industries and currently operates in several markets. The effects of the Covid-19 pandemic have varied, with the greatest impact being on the automotive segment, which saw a notable decline in volume during the year. The manufacturing segment also noted a significant impact, as investments have been postponed. On the other hand, segments such as the process industry, food & pharma, nuclear power and transport infrastructure experienced a neutral trend compared with previous trends.
ÅF Pöyry quickly implemented several extensive measures throughout the organisation to mitigate the financial impact of the lower level of demand caused by the Covid-19 pandemic, such as various furlough schemes. As per end of November all of the various furlough schemes in Sweden was ended. State aid recognised in the Group and parent is detailed on pages 4-6.
Accumulated long-term savings amounted to SEK 210 million during the year, compared with the SEK 120 million previously communicated. The investment programme connected to the systems platform is being adapted to the current situation. All in all, the measures ensure that the company will continue to be in a good position going forward and will be well placed operationally and financially once the situation has stabilised.
ÅF Pöyry tested the valuation of the Group's goodwill as of the third quarter; this test did not give rise to any impairment. As a result of the developments in the Covid-19 pandemic, a follow-up was carried out to examine whether there were any indications showing a need to conduct updated impairment tests as of 31 December 2020; no such indications were found.
No significant provisions were made during the period as a direct consequence of the pandemic.
During the quarter, ÅF Pöyry acquired the sound design agency Lexter, which will strengthen the company's offering to clients in public and digital spaces. The company has annual sales of around SEK 16 million and employs seven people in Sweden.
ÅF Pöyry also acquired the software and expertise company Ramentor in Finland. The company has annual sales of around SEK 7 million and employs six people in Finland.
Parent company operating income for the January– December period totalled SEK 1,289 million (972) and relates chiefly to internal services within the Group. During the period, the parent company received state aid, primarily for the short-term furloughing that has been implemented. State aid is recognised as other income and amounts to SEK 4 million (0). Earnings after net financial items totalled SEK 376 million (300). Cash and cash equivalents amounted to SEK 889 million (133). Gross investments in intangible non-current assets and property, plant and equipment totalled SEK 98 million (92). One business was divested during the period; the consideration paid was SEK 10 million on a debt-free basis and the capital loss was SEK -42 million.
The average number of FTEs was 15,271 (14,680). The total number of employees at the end of the period was 15,871 (16,348).
After the end of the reporting period, AFRY acquired product company ProTAK in Sweden with annual sales of around SEK 13 million and 9 employees. ITE Østerhus in Kristiansand, Norway, with annual sales of some SEK 40 million and 22 employees. EKOM in Sweden with annual sales of around SEK 5 million and three employees.
ÅF Pöyry appointed Jenny Lilja Lagercrantz as Head of Human Resources and a member of Group management. She took up her post in January 2021.
The Infrastructure Division provides technical solutions for buildings and infrastructure, in areas such as road and rail, as well as water and environment. The division also operates in the fields of architecture and design. The division's strengths include its in-depth knowledge of sustainable, high-tech solutions, and its clients are primarily within the property and urban development sectors. The division is led by Malin Frenning and operates in the Nordic region and Central Europe.
The Industrial & Digital Solutions Division conducts engineering operations in the field of product development and production systems, as well as IT and defence technology. The division is active in all industry sectors and works with both private and public sector clients. Technical capabilities include project management, industrial design, mechanical product development, automation, quality assurance and digitalisation services for various industries to develop and connect systems and products and create the society of the future. Services encompass the entire value chain and the assignments are project-based or end-to-end solutions for specific functions. The division is led by Robert Larsson and operates primarily in the Nordic region.
The Process Industries Division provides engineering and consulting services, project management and implementation services to clients in the process industry. Its clients are primarily in the forest, chemical and biorefinery industries, as well as the metal and mining industries. Focus sectors extend from pulp and paper to chemicals and biorefining, metals and mining and other process industries, and the division delivers solutions for both new investment projects and reconstruction of existing plants. The division, led by Nicholas Oksanen, delivers solutions globally and operates primarily in the Nordic region and South America.
The Energy Division provides international engineering and consulting services to clients in over 80 countries. The division has expertise in the transmission and distribution of all types of electricity generated from various energy sources, such as water, coal, gas, bio- and waste fuel, nuclear power and renewable energy sources, and holds a leading position in hydro. The division has a high level of technical capability when it comes to complex environmental aspects. Owing to the division's ability to cover the entire spectrum of power generation as well as the complete investment life cycle, it can offer its clients comprehensive expertise. The division, led by Richard Pinnock, delivers solutions globally and operates primarily in the Nordic region, Switzerland, Czech Republic and Southeast Asia.
The Management Consulting Division provides strategic and operational advisory services across the value chain, underpinned by in-depth expertise and market insights. Core services encompass a wide range of consulting services and include corporate and business strategies; resource, technology and investment strategies; operational and organisational excellence; market insights and modelling; sales and supply chain strategies; M&A and due diligence; as well as innovation management and digitalisation. The services are primarily aimed at the energy sector, the forest industry and bio-based industries. The division is led by Roland Lorenz and has operations in 17 offices across three continents.
Net sales in the fourth quarter amounted to SEK 1,982 million (2,105) a decrease by -5.9 percent. Adjusted for negative currency effects and structural changes, the negative organic growth was -3.3 percent. The decrease in sales is mainly related to a weak development within the real estate segment, where larger projects are still being postponed. A continued strong growth was noted in water and environment. Overall demand improved over the previous quarter and sales activities are on a high level within all the division's markets.
EBITA amounted to SEK 182 million (191) and the corresponding margin was 9.2 percent (9.0). The margin was positively impacted by the transportation and environment segments together with cost saving activities, whereas the development in the real estate segment and a somewhat weaker development in Central Europe had a negative impact on the margin.
The Covid-19-pandemic had a continued negative impact on the real estate market, although smaller projects and refurbishments are still in high demand. Within transport infrastructure, investments remain stable with indications of increase as the segment is at the beginning of a digital and sustainability transformation, that has been accelerated by the pandemic. The water segment has not been impacted by the pandemic and the continued need to modernise and upgrade wastewater plants continues to drive the demand for the division's services in this area.
| Oct–Dec 2020 |
Oct–Dec 2019 |
Full year 2020 |
Full year 2019 |
|
|---|---|---|---|---|
| Net sales. SEK million | 1 982 | 2 105 | 7 650 | 7 670 |
| EBITA. SEK million | 182 | 191 | 652 | 685 |
| EBITA margin. % | 9.2 | 9.0 | 8.5 | 8.9 |
| Average number of fulltime employees (FTEs) |
5 868 | 5 962 | 5 915 | 5 729 |
| Total growth. % | -5.9 | 25.3 | -0.3 | 28.8 |
| Structural changes. % | 0.1 | 23.3 | 3.1 | 22.2 |
| Currency. % | -2.6 | 0.5 | -1.5 | 1.0 |
| Organic. % | -3.3 | 1.5 | -1.9 | 5.5 |
| Adjusted/underlying organic growth due to calendar effect. % |
-4.4 | 2.3 | -2.8 | 5.7 |
| Combined growth2. % | – | – | -2.5 | 8.9 |
The historical figures above have been adjusted to account for organisational changes.
1) Excluding effects of IFRS 16 Leases. which are recognised under Group Common item.
Net sales in the fourth quarter amounted to SEK 1,341 million (1,540), a decrease by -12.9 percent. Adjusted for negative currency effects and structural changes, the negative organic growth was -12.4 percent. The lower sales is mainly related to the automotive and manufacturing segments where some of the clients had a low level of activities in both production and development. A continued strong growth was noted in food & life science.
EBITA amounted to SEK 107 million (131) and the corresponding margin was 8.0 percent (8.5). The lower margin is mainly due to lower net sales in the automotive and Manufacturing segments. However, effective cost saving activities contributed to mitigate some of the shortfall in sales. The result was affected by a non-recurring cost of SEK 12 million, concluding the repositioning in the Automotive segment. This expense is reported as a non-recurring item within Group Common item.
The Covid-19-pandemic had a continued impact on the automotive and manufacturing industry in the quarter as decision making keeps being postponed due to clients' cost control. However, compared to the previous quarter, the activity level was increasing, albeit from low levels.
| Oct–Dec 2020 |
Oct–Dec 2019 |
Full year 2020 |
Full year 2019 |
|
|---|---|---|---|---|
| Net sales, SEK million | 1 341 | 1 540 | 5 097 | 5 805 |
| EBITA, SEK million | 107 | 131 | 326 | 486 |
| EBITA margin, % | 8.0 | 8.5 | 6.4 | 8.4 |
| Average number of fulltime employees (FTEs) |
3 469 | 3 797 | 3 592 | 3 800 |
| Total growth, % | -12.9 | -5.4 | -12.2 | 0.4 |
| Structural changes, % | 0.3 | 0.8 | 0.7 | 1.2 |
| Currency, % | -0.8 | 0.2 | -0.4 | 0.2 |
| Organic, % | -12.4 | -6.4 | -12.5 | -1.0 |
| Adjusted/underlying organic growth due to calendar effect, % |
-14.1 | -4.7 | -13.3 | -0.6 |
The historical figures above have been adjusted to account for organisational changes.
1) Excluding effects of IFRS 16 Leases, which are recognised under Group Common item.
Net sales in the fourth quarter amounted to SEK 892 million (917), a decrease by -2.7 percent. Adjusted for negative currency effects (mainly Brazilian real) and structural changes, the organic growth was 5.6 percent. The growth is mainly supported by ongoing large pulp and paper engineering projects in Latin America and a strong development in Finland and Sweden. Professional services and the OPEX-business are accelerating again having a positive impact on both sales and EBITA.
EBITA amounted to SEK 119 million (119) and the corresponding margin was 13.3 percent (13.0). The margin was positively impacted by cost savings and a strengthened development in Sweden, Finland and Latin America, but negatively by currency effects.
The Covid-19-pandemic continued to have an impact on decision-making processes. However, major projects already in order stock have been carried out according to plan, bringing new orders. The market was gradually recovering in the quarter, especially in smaller scale and mid-sized investments. The most important drivers continue to be the ongoing transition if the bioindustry sectors, sustainability, digitalisation and overall efficiency.
| Oct–Dec 2020 |
Oct–Dec 2019 |
Full year 2020 |
Full year 2019 |
|
|---|---|---|---|---|
| Net sales, SEK million | 892 | 917 | 3 441 | 3 047 |
| EBITA, SEK million | 119 | 119 | 363 | 323 |
| EBITA margin, % | 13.3 | 13.0 | 10.6 | 10.6 |
| Average number of fulltime employees (FTEs) |
3 306 | 3 075 | 3 243 | 2 680 |
| Total growth, % | -2.7 | 311.4 | 12.9 | 275.5 |
| Structural changes, % | -0.5 | 292.0 | 13.3 | 262.1 |
| Currency, % | -7.8 | 0.4 | -5.5 | 0.5 |
| Organic, % | 5.6 | 18.9 | 5.2 | 13.0 |
| Adjusted/underlying organic growth due to calendar effect, % |
5.9 | 20.2 | 4.6 | 14.0 |
| Combined growth2, % | – | – | 0.8 | 8.9 |
The historical figures above have been adjusted to account for organisational changes.
1) Excluding effects of IFRS 16 Leases, which are recognised under Group Common item.
Net sales in the fourth quarter amounted to SEK 759 million (871), a decrease by -12.9 percent. Adjusted for negative currency effects and structural changes, the negative organic growth was -3.6 percent. The repositioning within the division and the completion of a large EPC+ project early 2020 resulted in lower net sales in the quarter compared to the same period last year. Growth within the nuclear business continued to be strong, particularly in the Nordics and Central Europe.
Adjusted EBITA amounted to SEK 76 million (73) and the corresponding margin increased to 10.0 percent (8.3). The improved margin is due to the repositioning in the Division, cost savings and strong performances in Thermal & Renewables, Nuclear and Transmission & Distribution.
The Covid-19-pandemic continues to have an impact with slower start-ups of new projects mainly in the hydro, thermal and renewable sectors. Travel restrictions continued to effect projects in especially the hydro sector. The energy sector is gradually improving in most operational areas however the recovery in Asia and Latin America operations is expected to be slower.
| Oct–Dec 2020 |
Oct–Dec 2019 |
Full year 2020 |
Full year 2019 |
|
|---|---|---|---|---|
| Net sales, SEK million | 759 | 871 | 2 773 | 3 001 |
| EBITA, SEK million | 76 | 73 | 257 | 215 |
| EBITA margin, % | 10.0 | 8.3 | 9.3 | 7.2 |
| Average number of fulltime employees (FTEs) |
1 720 | 2 016 | 1 752 | 1 885 |
| Total growth, % | -12.9 | 102.6 | -7.6 | 92.5 |
| Structural changes, % | -4.7 | 103.1 | 2.0 | 93.1 |
| Currency, % | -4.6 | 3.1 | -1.3 | 2.8 |
| Organic, % | -3.6 | -3.6 | -8.4 | -3.4 |
| Adjusted/underlying organic growth due to calendar effect, % |
-3.5 | -2.4 | -9.3 | -2.4 |
| Combined growth2, % | – | – | -16.6 | 7.6 |
The historical figures above have been adjusted to account for organisational changes.
1) Excluding effects of IFRS 16 Leases, which are recognised under Group Common item.
Net sales in the fourth quarter amounted to SEK 220 million (211), an increase by 4.4 percent. Adjusted for negative currency effects and structural changes, the organic growth was 12.2 percent. The positive development is mainly related to the energy consulting business, driven by demand related to the energy transition and increasing offering in AFRYs core countries. In addition, there were clear signs of increased activity in the bioindustry sector towards the end of the year.
EBITA amounted to SEK 39 million (28) and the corresponding margin increased to 17.8 percent (13.3). The improved margin is mainly related to a strong development within the energy consulting business, higher success fees and cost savings.
The energy transition continues to drive a stable demand for advice and an increased activity level within the bioindustry sector was noted in the quarter. The Covid-19 pandemic continues to have an impact on projects that require international travel and onsite work, but thanks to the adaption to new ways of working, most projects have been carried out according to plan.
| Oct–Dec 2020 |
Oct–Dec 2019 |
Full year 2020 |
Full year 2019 |
|
|---|---|---|---|---|
| Net sales, SEK million | 220 | 211 | 813 | 668 |
| EBITA, SEK million | 39 | 28 | 104 | 92 |
| EBITA margin, % | 17.8 | 13.3 | 12.8 | 13.7 |
| Average number of fulltime employees (FTEs) |
425 | 362 | 419 | 300 |
| Total growth, % | 4.4 | – | 21.8 | – |
| Structural changes, % | -0.6 | – | 18.3 | – |
| Currency, % | -7.3 | – | -3.0 | – |
| Organic, % | 12.2 | – | 6.6 | |
| Adjusted/underlying organic growth due to calendar effect, % |
12.3 | – | 9.0 | |
| Combined growth2, % | – | – | 3.0 | -2.1 |
There are no comparative figures for growth in 2019 since the division was completely formed by Pöyry.
1) Excluding effects of IFRS 16 Leases, which are recognised under Group Common item.
The significant risks and uncertainties to which the ÅF Pöyry 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 ÅF Pöyry's Annual Report for 2019. No significant risks are considered to have arisen since then apart from the effects of the Covid-19 pandemic, see page 5.
The number of normal working hours during 2020, based on a twelve months' sales-weighted business mix, is broken down as follows:
| 2021 | 2020 | 2019 | Difference2) | |
|---|---|---|---|---|
| Q1 | 498 | 507 | 506 | 1 |
| Q2 | 488 | 480 | 473 | 7 |
| Q3 | 527 | 528 | 527 | 1 |
| Q4 | 505 | 500 | 495 | 5 |
| Full year | 2,018 | 2,015 | 2,001 | 14 |
1) As a result of an internal redistribution between the second and third quarters, figures for the year and comparative figures have been adjusted to provide a better reflection of operations.
2) Refers to 2020 vs. 2019.
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 the Annual Report for 2019 (Note 1).
New or revised IFRS standards that came into force in 2020 did not have any material impact on the Group. The parent company complies with the Swedish Financial Reporting Board's Recommendation RFR 2, which requires that the parent's annual report apply all IFRS standards and interpretations approved by the EU as far as is possible within the constraints of the Annual Accounts Act and the Pension Obligations Vesting Act (Tryggandelagen), and while considering the relationship between reporting and taxation. Disclosures according to IAS 34 16A can partly be found on the pages preceding the condensed consolidated income statement.
ÅF Pöyry applies hedge accounting to interest rate derivatives. The upcoming IBOR reform, when implemented, will impact future cash flows as regards interest income and interest expenses. ÅF Pöyry expects continued hedge effectiveness with no material net interest impact. The nominal value of outstanding exposures with a STIBOR interest rate is SEK 3.6 billion, of which SEK 2.0 billion is hedged at a fixed interest rate. ÅF Pöyry will continue to monitor any changes to the STIBOR reference rate and update the relevant financial agreements accordingly, together with counterparties, when these changes occur.
ÅF Pöyry accounts for state subsidies in accordance with IAS 20. Reporting of receivables and income is done once the assessment is made that there is reasonable certainty that conditions will be fulfilled, and it is reasonably certain that the support will be received.
There were no material transactions between ÅF Pöyry and its related parties during the period.
Key ratios and alternative performance measures used in this report are defined in ÅF Pöyry's Annual Report for 2019.
The ÅF Pöyry share price at the end of the reporting period was SEK 251.20 (218.60).
| Votes | 151,637,068 |
|---|---|
| of which own Class B shares | - |
| Total number of shares | 113,024,044 |
| B shares | 108,733,708 |
| A shares | 4,290,336 |
Shares were converted during the quarter as per the 2017 staff convertible programme, increasing the number of B shares by 223,229.
The Board of Directors proposes a dividend for 2020 of SEK 5.00 (0.00)
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Net sales | 4,907 | 5,447 | 18,991 | 19,792 |
| Personnel costs | -2,978 | -3,243 | -11,860 | -11,782 |
| Purchases of services and materials | -1,044 | -1,217 | -3,811 | -4,408 |
| Other costs | -278 | -503 | -1,269 | -1,608 |
| Other income | 35 | 12 | 198 | 27 |
| Share of profits of associates | 1 | 2 | 5 | 4 |
| EBITDA | 643 | 497 | 2,253 | 2,024 |
| Depreciation/amortisation and impairment of non-current assets1 |
-165 | -170 | -670 | -657 |
| EBITA | 478 | 327 | 1,584 | 1,368 |
| Acquisition-related items2 | 6 | -29 | -128 | -91 |
| Operating profit (EBIT) | 484 | 298 | 1,456 | 1,276 |
| Net financial items | -48 | -64 | -185 | -237 |
| Profit after financial items | 435 | 234 | 1,270 | 1,039 |
| Tax | -78 | -53 | -279 | -219 |
| Profit for the period | 358 | 182 | 991 | 821 |
| Attributable to: | ||||
| Shareholders in the parent | 358 | 182 | 992 | 821 |
| Non-controlling interest | 0 | 0 | 0 | 0 |
| Profit for the period | 358 | 182 | 991 | 821 |
| Basic earnings per share, SEK | 3.17 | 1.63 | 8.81 | 8.07 |
| Diluted earnings per share, SEK | 3.16 | 1.61 | 8.82 | 7.99 |
| Number of shares outstanding | 113,024,044 | 112,174,128 | 113,024,044 | 112,174,128 |
| Average number of basic shares outstanding | 112,909,670 | 111,643,840 | 112,544,514 | 101,712,840 |
| Average number of shares outstanding after dilution | 114,690,735 | 113,926,467 | 114,251,822 | 104,043,894 |
1) Depreciation/amortisation and impairment of non-current assets refers to property, plant and equipment excluding intangible assets related to acquisitions.
2) Acquisition-related items are defined as depreciation/amortisation and impairment of goodwill and acquisition-related intangible assets, revaluation of contingent considerations and gains/losses on divestment of companies and operations. See page 20 for further details.
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Profit for the period | 358 | 182 | 991 | 821 |
| Items that have been or will be reclassified to profit or loss for the period |
||||
| Change in translation reserve | -372 | -254 | -501 | 81 |
| Change in hedging reserve | 92 | 83 | 72 | 14 |
| Change in fair value reserve | - | – | - | 5 |
| Tax | -10 | -18 | -6 | -4 |
| Items that will not be reclassified to profit or loss for the period | ||||
| Pensions | 27 | -98 | 32 | -97 |
| Tax | -11 | 18 | -10 | 18 |
| Other comprehensive income | -274 | -270 | -413 | 16 |
| Comprehensive income for the period | 84 | -88 | 578 | 837 |
| Attributable to: | ||||
| Shareholders in the parent | 84 | -88 | 579 | 837 |
| Non-controlling interest | 0 | 0 | 0 | 0 |
| Total | 84 | -88 | 578 | 837 |
| SEK MILLION | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 12,912 | 13,355 |
| Property, plant and equipment | 539 | 587 |
| Other non-current assets | 2,567 | 2,929 |
| Total non-current assets | 16,018 | 16,872 |
| Current assets | ||
| Current receivables | 5,662 | 6,505 |
| Cash and cash equivalents | 1,930 | 997 |
| Total current assets | 7,592 | 7,502 |
| Total assets | 23,610 | 24,375 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Attributable to shareholders in the parent | 10,095 | 9,367 |
| Attributable to non-controlling interest | 1 | 1 |
| Total equity | 10,096 | 9,369 |
| Non-current liabilities | ||
| Provisions | 894 | 1,032 |
| Non-current liabilities | 5,420 | 7,207 |
| Total non-current liabilities | 6,314 | 8,240 |
| Current liabilities | ||
| Provisions | 74 | 101 |
| Current liabilities | 7,125 | 6,666 |
| Total current liabilities | 7,199 | 6,767 |
| Total equity and liabilities | 23,610 | 24,375 |
| SEK MILLION | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Equity at start of period | 9,369 | 5,465 |
| Comprehensive income for the period | 578 | 837 |
| Dividend paid | - | -560 |
| Private placement | - | 3,967 |
| Conversion of convertible bonds into shares | 142 | 147 |
| Value of conversion option | 7 | 8 |
| Share buy-backs/sales | - | -164 |
| Hybrid | - | -331 |
| Equity at end of period | 10,096 | 9,369 |
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Profit after financial items | 435 | 234 | 1,270 | 1,039 |
| Adjustment for items not included in cash flow and other | -10 | 243 | 460 | 880 |
| Income tax paid | 39 | -29 | -163 | -284 |
| Cash flow from operating activities before change in working capital | 465 | 448 | 1,567 | 1,635 |
| Cash flow from change in working capital | 298 | 630 | 518 | 358 |
| Cash flow from operating activities | 762 | 1,078 | 2,085 | 1,993 |
| Cash flow from investing activities | -72 | -171 | -345 | -5,290 |
| Cash flow from financing activities | -158 | -717 | -987 | 4,066 |
| Cash flow for the period | 532 | 190 | 753 | 769 |
| Opening cash and cash equivalents | 1,299 | 808 | 997 | 239 |
| Exchange difference in cash and cash equivalents | 98 | -1 | 180 | -11 |
| Closing cash and cash equivalents | 1,930 | 997 | 1,930 | 997 |
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Opening balance | 3,523 | 5,112 | 4,424 | 3,455 |
| Cash flow from operating activities | -603 | -944 | -1,586 | -1,473 |
| Investments | 47 | 70 | 174 | 197 |
| Acquisitions and contingent considerations | 32 | 93 | 159 | 5,201 |
| Rights issue | - | – | - | -3,967 |
| Dividend | - | – | - | 560 |
| Share buy-backs/sales | - | – | - | 164 |
| Repayment of hybrid bond | - | – | - | 331 |
| Other | -242 | 93 | -415 | -44 |
| Closing balance | 2,756 | 4,424 | 2,756 | 4,424 |
| SEK MILLION | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Loans and credit facilities | 4,344 | 5,034 |
| Net pension liability | 341 | 387 |
| Cash and cash equivalents | -1,930 | -997 |
| Group | 2,756 | 4,424 |
| 31 Dec 2020 | 31 Dec 2019 |
|---|---|
| 6,782 | 7,813 |
| 341 | 387 |
| -1,930 | -997 |
| 5,193 | 7,203 |
| SEK MILLION | Full year 2020 | Full year 2019 |
|---|---|---|
| Return on equity, % | 10.1 | 10.6 |
| Return on capital employed, % | 8.1 | 8.3 |
| Equity ratio, % | 42.8 | 38.4 |
| Equity per share, SEK | 89.32 | 83.51 |
| Interest-bearing liabilities, SEK m | 7,142 | 8,201 |
| Average number of full-time employees (FTEs) | 15,271 | 14,680 |
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Transaction costs, Pöyry | – | – | – | -44 |
| Integration costs, Pöyry | – | -84 | – | -215 |
| Restructuring costs, Energy Division | – | -105 | -17 | -105 |
| Restructuring costs, Industrial & Digital Solutions Division | -12 | – | -35 | – |
| Total | -12 | -189 | -52 | -364 |
| Industrial & | Process | Management | Group Common/ |
||||
|---|---|---|---|---|---|---|---|
| SEK MILLION | Infrastructure | Digital Solutions | Industries | Energy | Consulting | eliminations | Total Group |
| Project Business | 7,528 | 1,823 | 2,267 | 2,326 | 795 | -486 | 14,253 |
| Professional Services | 122 | 3,274 | 1,175 | 447 | 18 | -298 | 4,738 |
| Total | 7,650 | 5,097 | 3,441 | 2,773 | 813 | -784 | 18,991 |
The Group applies the new accounting standard IFRS 15 Revenue from Contracts with Customers as of 1 January 2018. ÅF Pöyry's business model is divided into two client offerings: Project Business and Professional Services. Project Business is ÅF Pöyry's offering for major projects and end-to-end solutions. In such projects, ÅF Pöyry acts as a partner for the client, leading and running the entire project. Professional Services is ÅF Pöyry's offering where the client leads and runs the project, while ÅF Pöyry provides suitable expertise at the right 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, ÅF Pöyry sometimes receives advance payments or deposits from 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.
| 2019 | 2020 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK million | Q1 | Q2 | Q3 | Q4 | Full year | Q1 | Q2 | Q3 | Q4 | Full year |
| Infrastructure | 1,808 | 2,020 | 1,738 | 2,105 | 7,670 | 2,084 | 1,986 | 1,598 | 1,982 | 7,650 |
| Industrial & Digital Solutions | 1,578 | 1,483 | 1,204 | 1,540 | 5,805 | 1,450 | 1,249 | 1,056 | 1,341 | 5,097 |
| Process Industries | 447 | 914 | 770 | 917 | 3,047 | 918 | 889 | 743 | 892 | 3,441 |
| Energy | 539 | 830 | 761 | 871 | 3,001 | 711 | 707 | 596 | 759 | 2,773 |
| Management Consulting | 74 | 197 | 185 | 211 | 668 | 203 | 206 | 184 | 220 | 813 |
| Group Common/eliminations | -56 | -50 | -96 | -197 | -399 | -112 | -229 | -157 | -286 | -784 |
| Group | 4,389 | 5,393 | 4,562 | 5,447 | 19,792 | 5,255 | 4,808 | 4,021 | 4,907 | 18,991 |
| 2019 | 2020 | |||||||||
| EBITA, SEK m | Q1 | Q2 | Q3 | Q4 | Full year | Q1 | Q2 | Q3 | Q4 | Full year |
| Infrastructure | 182 | 195 | 118 | 191 | 685 | 189 | 173 | 108 | 182 | 652 |
| Industrial & Digital Solutions | 145 | 131 | 80 | 131 | 486 | 111 | 62 | 46 | 107 | 326 |
| Process Industries | 42 | 88 | 73 | 119 | 323 | 99 | 84 | 62 | 119 | 363 |
| Energy | 30 | 61 | 51 | 73 | 215 | 66 | 65 | 50 | 76 | 257 |
| Management Consulting | 13 | 30 | 20 | 28 | 92 | 21 | 21 | 23 | 39 | 104 |
| Group Common/eliminations1 | -86 | -100 | -33 | -214 | -432 | -11 | -44 | -18 | -45 | -119 |
| Group | 327 | 405 | 309 | 327 | 1,368 | 474 | 361 | 271 | 478 | 1,584 |
| 2019 | 2020 | |||||||||
| EBITA margin, % | Q1 | Q2 | Q3 | Q4 | Full year | Q1 | Q2 | Q3 | Q4 | Full year |
| Infrastructure | 10.1 | 9.6 | 6.8 | 9.0 | 8.9 | 9.1 | 8.7 | 6.8 | 9.2 | 8.5 |
| Industrial & Digital Solutions | 9.2 | 8.8 | 6.6 | 8.5 | 8.4 | 7.6 | 5.0 | 4.4 | 8.0 | 6.4 |
| Process Industries | 9.5 | 9.6 | 9.5 | 13.0 | 10.6 | 10.8 | 9.4 | 8.4 | 13.3 | 10.6 |
| Energy | 5.7 | 7.3 | 6.7 | 8.3 | 7.2 | 9.3 | 9.2 | 8.3 | 10.0 | 9.3 |
| Management Consulting | 18.1 | 15.3 | 10.7 | 13.3 | 13.7 | 10.1 | 10.3 | 12.6 | 17.8 | 12.8 |
| Group | 7.5 | 7.5 | 6.8 | 6.0 | 6.9 | 9.0 | 7.5 | 6.7 | 9.7 | 8.3 |
| 2019 | 2020 | |||||||||
| Average number of full-time employees (FTEs)2 |
Q1 | Q2 | Q3 | Q4 | Full year | Q1 | Q2 | Q3 | Q4 | Full year |
| Infrastructure Industrial & Digital Solutions |
5,098 3,845 |
5,954 3,825 |
5,916 3,738 |
5,962 3,797 |
5,729 3,800 |
5,935 3,748 |
6,013 3,632 |
5,851 3,522 |
5,868 3,469 |
5,915 3,592 |
| Process Industries | 1,471 | 3,111 | 3,084 | 3,075 | 2,680 | 3,195 | 3,220 | 3,249 | 3,306 | 3,243 |
| Energy | 1,326 | 2,146 | 2,059 | 2,016 | 1,885 | 1,809 | 1,793 | 1,688 | 1,720 | 1,752 |
| Management Consulting | 112 | 379 | 359 | 362 | 300 | 415 | 422 | 416 | 425 | 419 |
| Group functions | 228 | 279 | 267 | 363 | 285 | 314 | 396 | 343 | 355 | 351 |
| Group | 12,081 | 15,693 | 15,422 | 15,575 | 14,680 | 15,416 | 15,476 | 15,069 | 15,143 | 15,271 |
| 2019 | 2020 | |||||||||
| Number of working days | Q1 | Q2 | Q3 | Q4 | Full year | Q1 | Q2 | Q3 | Q4 | Full year |
| Sweden only | 63 | 59 | 66 | 61 | 249 | 63 | 60 | 66 | 63 | 252 |
1)Including IFRS 16 Leases as of 2019, which is recognised under Group Common item.
2)As a result of an internal redistribution between the second and third quarters 2019, comparative figures have been adjusted to provide a better reflection of operations.
All countries 63 60 65 62 250 63 60 66 63 252
The historical figures above have been adjusted based on the organisational changes implemented on 1 June 2019, involving certain changes among the divisions.
Since 22 February 2019, ÅF Pöyry's operations are conducted through five divisions: Infrastructure, Industrial & Digital Solutions, Process Industries, Energy and Management Consulting.
| Company | Country | Division | sales | Average no. of employees |
|---|---|---|---|---|
| One World AS | Norway | Infrastructure | 15 | 8 |
| Ramentor Oy | Finland | Energy | 7 | 6 |
| Lexter Ljuddesign AB | Sweden | Infrastructure | 16 | 7 |
| 38 | 21 | |||
| SEK million | Full year 2020 |
|---|---|
| Intangible assets | 1 |
| Property, plant and equipment | 0 |
| Financial assets | 0 |
| Accounts receivable and other receivables | 7 |
| Cash and cash equivalents | 9 |
| Accounts payable, loans and other liabilities | -7 |
| Net identifiable assets and liabilities | 11 |
| Non-controlling interest | – |
| Goodwill | 59 |
| Fair value adjustment, intangible assets | 3 |
| Fair value adjustment, non-current provisions | -1 |
| Purchase consideration including estimated contingent consideration |
72 |
| Transaction costs | 1 |
| Less: | |
| Cash (acquired) | 9 |
| Estimated contingent consideration | 28 |
| Net cash outflow | 35 |
Acquisition analyses are preliminary as the assets in the companies acquired have not been conclusively analysed. The purchase considerations for acquisitions for the year were larger than the book assets of the acquired companies, which means that the acquisition analyses have resulted in intangible assets. When acquiring consulting companies, the main asset acquired is human capital in the form of employee skills, which is why the majority of the acquired companies' intangible assets are attributable to goodwill.
Total undiscounted contingent consideration for the company acquired during the year is a maximum of SEK 29 million.
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.
Outstanding orders and client relationships were identified and measured in conjunction with the completed acquisition.
Transaction costs are recognised in Other external costs in profit or loss. Transaction costs amount to SEK 0.7 million.
The acquired companies are expected to contribute sales of approximately SEK 38 million and operating profit of roughly SEK 5 million over a full year for 2020.
| SEK million | 31 Dec 2020 |
|---|---|
| Opening balance 1 January 2020 | 358 |
| Acquisitions for the year | 28 |
| Payments | -62 |
| Changes in value recognised in income statement | -62 |
| Adjustment of preliminary acquisition analysis | -3 |
| Discounting | 9 |
| Translation differences | 1 |
| Closing balance | 269 |
Contingent considerations are measured at fair value and classified at 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 change in the balance sheet items is recognised in the adjacent table.
As regards other financial assets and liabilities, no significant changes in fair value measurement have been made since the 2019 Annual Report. Fair values are essentially consistent with carrying amounts.
| SEK million | Oct-Sep 2020 | Oct-Sep 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Amortisation and impairment of intangible non-current assets | -40 | -62 | -184 | -211 |
| Revaluation of contingent considerations | 42 | 31 | 62 | 119 |
| Divestment of operations | 5 | 1 | -6 | 1 |
| Total | 6 | -29 | -127 | -91 |
| SEK MILLION | Oct–Dec 2020 | Oct–Dec 2019 | Full year 2020 | Full year 2019 |
|---|---|---|---|---|
| Net sales | 262 | 175 | 986 | 701 |
| Other operating income | 75 | 70 | 303 | 271 |
| Operating income | 336 | 245 | 1,289 | 972 |
| Personnel costs | -57 | -55 | -184 | -225 |
| Other costs | -345 | -247 | -1,132 | -853 |
| Depreciation/amortisation | -11 | -9 | -41 | -34 |
| Operating profit/loss | -77 | -66 | -68 | -140 |
| Net financial items | 493 | 489 | 444 | 440 |
| Profit after financial items | 416 | 423 | 376 | 300 |
| Appropriations | -38 | 248 | -38 | 248 |
| Pre-tax profit | 378 | 671 | 338 | 548 |
| Tax | 9 | -33 | 10 | 2 |
| Profit for the period | 387 | 638 | 349 | 549 |
| Other comprehensive income | 5 | 23 | -8 | 9 |
| Comprehensive income for the period | 392 | 661 | 340 | 558 |
| SEK MILLION | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Intangible assets | 161 | 61 |
| Property, plant and equipment | 142 | 155 |
| Financial assets | 14,197 | 13,267 |
| Total non-current assets | 14,500 | 13,483 |
| Current assets | ||
| Current receivables | 2,072 | 2,875 |
| Cash and bank balances | 889 | 133 |
| Total current assets | 2,961 | 3,007 |
| Total assets | 17,462 | 16,490 |
| EQUITY AND LIABILITIES | ||
| Equity | 9,487 | 8,997 |
| Untaxed reserves | 120 | 82 |
| Provisions | 66 | 100 |
| Non-current liabilities | 3,489 | 4,803 |
| Current liabilities | 4,299 | 2,508 |
| Total equity and liabilities | 17,462 | 16,490 |
| Full year 2020 | Full year 2019 | |
|---|---|---|
| Net sales, SEK million | ||
| Infrastructure | 7,650 | 7,917 |
| Industrial & Digital Solutions | 5,097 | 5,805 |
| Process Industries | 3,441 | 3,442 |
| Energy | 2,773 | 3,284 |
| Management Consulting | 813 | 785 |
| Group Common/eliminations | -784 | -405 |
| Group | 18,991 | 20,827 |
| EBITA excl. items affecting comparability, SEK m | ||
| Infrastructure | 652 | 702 |
| Industrial & Digital Solutions | 326 | 486 |
| Process Industries | 363 | 371 |
| Energy | 257 | 238 |
| Management Consulting | 104 | 103 |
| Group Common/eliminations1 | -68 | -91 |
| Group | 1,635 | 1,809 |
| EBITA margin excl. items affecting comparability, % | ||
| Infrastructure | 8.5 | 8.9 |
| Industrial & Digital Solutions | 6.4 | 8.4 |
| Process Industries | 10.6 | 10.8 |
| Energy | 9.3 | 7.3 |
| Management Consulting | 12.8 | 13.1 |
| Group | 8.6 | 8.7 |
1)Including IFRS 16 Leases 2019, which is recognised under Group Common item.
AFRY is an international company that works with technology, design and consulting. We help our clients advance in the areas of sustainability and digitalisation. We are 17,000 dedicated experts in the areas of infrastructure, industry and energy who work all over the world to create sustainable solutions for future generations.
Stockholm, 5 February 2021
ÅF Pöyry AB (publ) Jonas Gustavsson President and CEO
This report has not been subjected to scrutiny by the company's auditors.
This information fulfils ÅF Pöyry AB's (publ) disclosure requirements under the provisions of the EU's Market Abuse Regulation and the Swedish Securities Markets Act. This information was released, through the agency of the above-mentioned contact person, for publication on 5 February 2021, 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.
Jonas Gustavsson, President and CEO +46 70 509 16 26
Juuso Pajunen, CFO +358 10 33 26632
Head Office: ÅF Pöyry AB, SE-169 99 Stockholm, Sweden Visiting address: Frösundaleden 2, Solna Tel: +46 10 505 00 00 www.afry.com [email protected] Corp. ID no 556120-6474
| Time: | 5 February at 10.00 CET | |
|---|---|---|
| Webcast: | https://youtu.be/nNFjlvF0b9M | |
| For analysts/ investors: |
Join Microsoft Teams Meeting With opportunities to ask questions |
|
| By telephone: | +46 8 535 270 39, conference code 967 830 373#. | |
| Q1 2021 | 29 April 2021 (7.00 am) |
|---|---|
| Annual General Meeting |
3 June 2021 |
| Q2 2021 | 14 July 2021 (7.00 am) |
| Q3 2021 | 26 October 2021 (7.00 am) |
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