Interim / Quarterly Report • Jul 14, 2020
Interim / Quarterly Report
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ÅF PÖYRY AB (PUBL) INTERIM REPORT JANUARY–JUNE 2020
"It has been a challenging quarter in many ways and I am proud of how quickly we have managed to adopt to the situation. Despite the lower sales in the quarter, we reported stable results and strong cash flow thanks to extensive measures."
Pöyry was consolidated into ÅF Pöyry as from 28 February 2019.
1) Excluding items affecting comparability
Pöyry was consolidated into ÅF Pöyry as from 28 February 2019.
As expected, the second quarter was affected by uncertainty and the impact of the ongoing Covid-19 pandemic. Our main focus continues to be the health and safety of our employees, while maintaining high delivery capacity for our clients all around the world via digital remote working.
Net sales declined during the quarter, primarily related to the automotive industry, which has heightened our need to reposition within this segment. We have taken extensive measures to mitigate the impact on our operations, with a focus on efficiency and cost savings. Despite the decline, we delivered stable results and a strong cash flow, which has strengthened our balance sheet. Towards the end of the quarter, we noted a slight recovery and stabilisation in demand. Given the uncertainty we see in the market and the ongoing repositioning, we expect to see continued limited growth in certain segments in the third quarter.
During quarter we have shifted our focus in portfolio towards strategically important growth segments such as infrastructure and the process industry, as well as the food and pharma industry.
Net sales for the quarter amounted to SEK 4,808 million (5,393), a decrease of 11 percent. The decrease was mainly driven by the automotive segment, where volume decreased by about 40 percent as several key clients drastically reduced or periodically halted operations. The drop in sales was also impacted by the ongoing repositioning within the Energy Division and a recently completed EPC+ project.
Despite the decline in volume, we were able to report stable results and a strong cash flow for the quarter due to the extensive measures taken. Excluding items affecting comparability, EBITA was SEK 383 million (481), corresponding to an EBITA margin of 8.0 percent (8.9). Net debt/EBITA excluding the effect of IFRS 16 and items affecting comparability amounted to 2.0.
AFRY was quick to introduce extensive measures in response to the Covid-19 pandemic in the first quarter. With the previously announced efficiency programme of SEK 120 million and additional activities implemented during the quarter, we succeeded in reducing total costs by approximately SEK 500 million through a combination of short-term and permanent savings. We have now begun a process for evaluating our offering to the automotive industry in order to provide even more value-adding services. This will result in a more resilient and stable business, with a higher share of project deliveries and less on-site professional services. This will also reduce the weight of the automotive segment in the total AFRY portfolio.
About 1,900 of our employees were affected by various short-term work allowance solutions during the quarter. We have also laid off about 200 employees mainly due to the situation in the automotive segment. The total cost of the restructuring in the automotive segment amounted to SEK 23 million during the quarter. We will continue with our repositioning work in the automotive segment in the second half of the year, with the aim of ensuring that the remaining business has a stronger position with improved profitability.
We are actively reviewing our strategic position and increasing operations in the segments where we see good recovery and long-term stable demand. This has strengthened our portfolio in the Infrastructure and Process Industries divisions. A stable and favourable trend in the Nordic public sector, primarily in road and rail, is contributing to developments and the persistently stable bioeconomy sector, where AFRY holds a world-leading position.
In the Infrastructure Division, demand was generally good during the quarter. Developments in transport infrastructure and water continued to be stable and have generated good growth, especially in the Nordics. However, developments in the buildings segment and our operations in Central Europe declined somewhat. Several of the division's projects are of societal importance and are being prioritised even in the current circumstances, and the division now accounts for about 40 percent of AFRY's total net sales.
The Industrial & Digital Solutions Division was impacted by the negative trend in the automotive industry, where volume declined by approximately 40 percent during the quarter. We took extensive measures in response to the falling demand, including short term work allowances and redundancies. There was a slight recovery in the second quarter, albeit from low levels. Based on this situation, we have initiated a repositioning of the automotive segment which will reduce AFRY's total exposure to the automotive segment. Meanwhile, we have noted strong growth in the food and pharma industry.
The Process Industries Division had a solid performance in the quarter with limited impact from the Covid-19 pandemic. We noted continued good growth in our core markets and major projects continue as planned. However, the division has noted a shift in client behaviour that entails longer decision-making processes, which has impacted growth in some markets.
The Energy Division's ongoing repositioning is proceeding as planned, which helped increase stability and boost the earnings trend. Due to the prevailing pandemic, several projects have been delayed or paused, but many projects were resumed in the quarter, especially in hydro and renewable energy and transmission & distribution. In
the latter part of the quarter, we noted increased activity in the market and the quarter ended with a strong order intake.
The Management Consulting Division noted strong demand in energy consulting operations. However, ongoing uncertainty related to Covid-19 continued to affect our transaction-related services, resulting in a negative impact on earnings. There was an increase in activity towards the end of the quarter, however.
This Covid-19 pandemic has made us keenly aware of the need for a long-term sustainable recovery and extensive stimulus measures are ongoing. This is expected to benefit AFRY as we have broad exposure to areas such as infrastructure but also to stable bioeconomy segments.
In the spring, we entered new partnerships to increase our contribution to sustainable development. We have partnered with "The 1.5°C Business Playbook" to adapt our climate strategies to the 1.5°C goal, and together with the Gapminder Foundation we will work to promote a more fact-based conception of the world linked to UN's global goals.
We have delivered exciting projects for our clients during the quarter, and I would particularly like to highlight our assignment for SunPine in Sweden, as the engineering partner for their new production plant for renewable fuel. We also won an order for an end-to-end solution to build a production line for Oatly, who is taking the next step in its global expansion and starting production in Singapore, and entered an agreement with Lund Municipality for a new innovation project.
Towards the end of the quarter we noted some market recovery and stabilisation but there is great uncertainty about the pandemic's continued impact on our operations and the macroeconomy. We therefore continue to focus on cost optimisation and flexibility in all our operations. We have a good financial position, and cash flow for the quarter was strong. This ensures that the company will continue to be in a good position going forward and will be well placed operationally and financially when the situation has stabilised.
I would like to take the opportunity to thank all our employees for their considerable commitment, flexibility and strong client focus throughout the first half of 2020.
Stockholm - 14 July 2020
Jonas Gustavsson President and CEO
Net sales for the quarter amounted to SEK 4,808 million (5,393). Growth amounted to-10.9 percent (49.5). Organic growth totalled –9.2 percent (2.5) and –9.8 percent (3.2) when adjusted for calendar effects.
During the quarter, the Group received state subsidies, mainly related to the short-term work allowances. State subsidies reported under other income amounted to SEK 87 million (0).
Adjusted for items affecting comparability, EBITA was SEK 383 million (481). The corresponding EBITA margin was 8.0 percent (8.9). Items affecting comparability amounted to SEK 23 million (76), and relates to restructuring costs for Division Industrial & Digital Solutions. The previous period relate to integration costs associated with the acquisition of Pöyry.
EBITA was SEK 360 million (405) and the EBITA margin was 7.5 percent (7.5). The effects of IFRS 16 Leases were SEK 7 million (8) on EBITA, SEK 138 million (150) on EBITDA and SEK 14 million (16) in increased interest expenses.
Capacity utilisation was 77.1 percent (76.6) in the quarter. Capacity utilisation was positively impacted by the short-term work allowances carried out in the quarter.
EBIT totalled SEK 331 million (392). The difference between EBIT and EBITA consists of acquisition-related non-cash items; amortisation of acquisition-related non-current assets amounting to SEK 41 million (60) and the change in estimates of future contingent consideration amounting to SEK 13 million (48).
| Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 | |
|---|---|---|---|---|---|
| Net sales | |||||
| Net sales, SEK million | 4,808 | 5,393 | 10,063 | 9,782 | 19,792 |
| Total growth, % | –10.9 | 49.5 | 2.9 | 39.3 | 41.6 |
| Acquired, % | –0.5 | 46.2 | 9.3 | 33.1 | 39.0 |
| Organic, % | –9.2 | 2.5 | –6.3 | 5.2 | 1.7 |
| Currency, % | –1.1 | 0.8 | –0.2 | 1.1 | 0.9 |
| Adjusted/underlying organic growth due to calendar effect, % | -9.8 | 3.2 | –6.7 | 5.0 | 2.1 |
| Earnings | |||||
| EBITA excl. items affecting comparability, SEK million | 383 | 481 | 858 | 870 | 1,731 |
| EBITA margin excl. items affecting comparability, % | 8.0 | 8.9 | 8.5 | 8.9 | 8.7 |
| EBITA, SEK million | 360 | 405 | 834 | 732 | 1,368 |
| EBITA margin, % | 7.5 | 7.5 | 8.3 | 7.5 | 6.9 |
| Operating profit (EBIT), SEK million | 331 | 392 | 742 | 705 | 1,276 |
| Profit after net financial items, SEK million | 264 | 336 | 627 | 578 | 1,039 |
| Profit after tax, SEK million | 211 | 266 | 489 | 450 | 821 |
| Key ratios | |||||
| Basic earnings per share, SEK | 1.88 | 2.59 | 4.35 | 4.94 | 8.07 |
| Diluted earnings per share, SEK | 1.88 | 2.55 | 4.36 | 4.87 | 7.99 |
| Cash flow from operating activities, SEK million | 908 | 51 | 1,277 | 343 | 1,993 |
| Net debt SEK million1 | – | – | 3,586 | 5,154 | 4,424 |
| Net debt/equity ratio, %1 | – | – | 36,7 | 69.4 | 47.2 |
| Net debt/EBITDA, rolling 12 months, times1 | – | – | 2.3 2 | 5.3 | 3.0 |
| Number of employees | – | – | 16,106 | 16,485 | 16,348 |
| Capacity utilisation, % | 77.1 | 76.6 | 75.9 | 76.3 | 75.8 |
1) Excluding effects of IFRS 16 Leases
2) Net debt/EBITA excluding the effect of IFRS 16 and items affecting comparability is 2.0.
Profit after financial items was SEK 264 million (336) and profit after tax for the period was SEK 211 million (266). Net financial items totalled SEK –68 million (–56) in the quarter, the increase is mainly driven by currency effects. In the previous year net financial items were affected by non-recurring financing costs of SEK 31 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 14 million (16) and SEK 2 million (6) respectively.
The tax expense amounted to SEK 53 million (70), corresponding to a tax rate of 19.9 percent (20.8).
Pöyry was consolidated as from 28 February 2019. Net sales for the period amounted to SEK 10,063 million (9,782). Growth amounted to 2.9 percent (39.3). Organic growth excluding Pöyry totalled -6.3 percent (5.2) and –6.7 percent (5.0) when adjusted for calendar effects.
During the period, the Group received state subsidies, mainly related to the short-term work allowances. State subsidies reported under other income amounted to SEK 94 million (0).
Adjusted for items affecting comparability, EBITA was SEK 858 million (870). The corresponding EBITA margin was 8.5 percent (8.9). Items affecting comparability amounted to SEK 23 million (138), and relates to restructuring costs for Division Industrial & Digital Solutions. The previous period relate to integration costs associated with the acquisition of Pöyry.
EBITA was SEK 834 million (732) and the EBITA margin was 8.3 percent (7.5). The effects of IFRS 16 Leases were SEK 16 million (16) on EBITA, SEK 280 million (260) on EBITDA and SEK 29 million (29) in increased interest expenses.
Capacity utilisation was 75.9 percent (76.3) in the period. Capacity utilisation is negatively affected by the fact that Pöyry offers fewer services within Professional Services and more projects and advisory business within areas such as Management Consulting. Capacity utilisation was positively impacted by the short-term work allowances carried out in the quarter.
If Pöyry had been consolidated as from 1 January 2019 (combined operations), net sales would have amounted to approximately SEK 10,063 million (10,824), a decrease of 7.0 percent. The corresponding EBITA and EBITA margin adjusted for items affecting comparability would have amounted to approximately SEK 858 million (948) and 8.5 percent (8.8) respectively.
EBIT amounted to SEK 742 million (705). The difference between EBIT and EBITA consists of acquisition-related non-cash items; amortisation of acquisition-related assets amounting to SEK 102 million (88), the change in estimates of future contingent consideration amounting to SEK 20 million (61) and divestment of operations of SEK 10 million (0).
Profit after financial items was SEK 627 million (578) and profit after tax for the period was SEK 489 million (450). Net financial items totalled SEK –116 million (–127) in the period. Net financial items were affected by non-recurring costs of SEK 31 million related to the acquisition of Pöyry.
Net financial items were impacted 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 28 million (29) and SEK 5 million (10) respectively.
Tax expense amounted to SEK 138 million (127), corresponding to a tax rate of 22.1 percent (21.9).
Consolidated net debt including IFRS 16 Leases amounted to SEK 6,166million (7,728). Consolidated net debt excluding IFRS 16 Leases amounted to SEK 3,586 million (5,154) at the end of the quarter and SEK 4,357 million (7,144) at the beginning of the quarter. Cash flow from operating activities reduced net debt by SEK 1,048 million (343), cash flow from operating activities including IFRS 16 amounted to SEK 1,277 million (343). Cash flow from operating activities increased due to changes in operating receivables. Net debt increased partly through considerations paid, including contingent considerations, of SEK 34 million. During the quarter, previously issued commercial papers were repaid in the amount of SEK 700 million, in part via the utilisation of a three-year term loan of SEK 500 million that was signed in March.
In order to further strengthen the Group's financial position, as previously announced, the Board of Directors has withdrawn the earlier proposed dividend. During the first quarter of 2020, ÅF Pöyry also renewed part of the groups credit facilities, which was increased by SEK 500 million and extended for three years.
Consolidated cash and cash equivalents totalled SEK 1,367 million (630) at the end of the period and unused credit facilities amounted to SEK 2,852 million (1,852).
Health and safety of employees and customers ÅF Pöyrys main priority during the pandemic is the health and safety of our employees and customers. We quickly restructured most of our activities to remote work and expanded our digital collaborations. ÅF Pöyry initiated a
centralised crisis alert team to carry out a global pandemic contingency and preparedness response plan as well as initiated travel rules and guidelines in close collaboration with international experts to help our employees. The company has established a Covid-19 Safety Protocol to ensure safe operations.
ÅF Pöyry has a broad exposure to a number of industries and is currently operating in various geographies. The effects of the Covid-19 pandemic have varied with the biggest impact on the automotive segment, experiencing a considerable reduction in volumes in the second quarter. The manufacturing segment also noted a considerable impact as many investments have been postponed. Other segments such us process industries, food & pharma, nuclear, thermal & renewables, and the transport infrastructure business have on the other hand noted a neutral development compared to earlier trends during the quarter.
Extensive measures to mitigate the financial impact ÅF Pöyry implemented several extensive measures across the organisation to mitigate the financial impact of the decline in volumes because of the Covid-19 pandemic.
About 1,900 employees have been on different types of short-term work allowances during the quarter, most of them connected to the automotive industry, but also including administrative staff. State subsidies affecting the groups result is reported on page 4 and 5. At the end of June about 200 employees related to the automotive industry have been been terminated. With the previously announced efficiency programme of SEK 120 million and additional activities implemented during the quarter, total costs were reduced by approximately SEK 500 million through a combination of short-term and permanent savings. The investment programme connected to the systems platform is being reviewed and adapted to the prevailing situation. The measures ensure that the company will continue to be in a good position going forward and will be well placed operationally and financially when the situation has stabilised.
Valuation of the Group's assets and provisions As a result of the development of Covid-19, ÅF Pöyry has assessed the valuation of the Group's goodwill, the assessment has not given rise to an indication of impairment. No significant provisions have been made during period.
No acquisitions or divestments were made during the quarter.
Parent company operating income for the January– June totalled SEK 646 million (492) and relates chiefly to internal services within the Group. During the quarter, the Parent Company received state subsidies due to short-term allowances. State subsidies reported under other income amounted to SEK 3 million (0). Profit after
net financial items was SEK –43 million (–100). Cash and cash equivalents totalled SEK 602 million (29). Gross investments in intangible assets and property, plant and equipment totalled SEK 51 million (39), the increase relates primarily to investments in new business systems. 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 full-time employees (FTEs) was 15,445 (13,771). The total number of employees at the end of the period was 16,106 (16,485)
ÅF Pöyry has appointed Elisabeth Virve Meesak as interim HR manager and member of group management and she took up office in June 2020.
No significant events have occurred after the reporting period.
The Infrastructure Division provides technical solutions for buildings and infrastructure, in areas such as road and rail, as well as water and the 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 second quarter amounted to SEK 1,986 million (2,020), a decrease by 1.7 percent. The minor decrease in net sales is due to a somewhat weak development within the real estate segment and the business in Central Europe. The development within transport infrastructure and water has remained stable, generating a continued growth, especially in Sweden and Finland.
EBITA amounted to SEK 173 million (195) and the corresponding margin was 8.7 percent (9.6). The market in the Nordics remain strong, however the lower margin is mainly caused by a weaker Central European market. Short-term work allowance and cost savings were initiated during the quarter which partly offset the lower sales.
The demand is still strong especially in the Nordics while Central Europe has been more impacted by the Covid-19 pandemic. In transport infrastructure the investments are on a high level, and additional budget suport given by several governments can contribute to a continued healthy market. Many of the division's projects are of societal importance and are being prioritised even in the current circumstances.
| Apr–jun 2020 |
Apr–jun 2019 |
Jan–jun 2020 |
Jan–jun 2019 |
Full year 2019 |
|
|---|---|---|---|---|---|
| Net sales, SEK million | 1,986 | 2,020 | 4,070 | 3,827 | 7,670 |
| EBITA, SEK million | 173 | 195 | 362 | 376 | 685 |
| EBITA margin, % | 8.7 | 9.6 | 8.9 | 9.8 | 8.9 |
| Average number of full time employees (FTEs) |
6,013 | 5,954 | 5,972 | 5,511 | 5,729 |
| Total growth, % | -1.7 | 31.4 | 6.3 | 27.8 | 28.8 |
| Structural changes, % | -0.2 | 26.0 | 6.2 | 18.7 | 22.2 |
| Currency, % | -1.3 | 1.1 | -0.3 | 1.5 | 1.0 |
| Organic, % | -0.2 | 4.3 | 0.4 | 7.7 | 5.5 |
| Adjusted/underlying organic growth due to calendar effect, % |
-1.6 | 6.4 | -0.7 | 8.0 | 5.7 |
| Combined growth2, % | - | - | -0.1 | 13.4 | 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 the Group-wide item.
2) The figures are presented as though consolidation of Pöyry took place on 1 January 2018. Combined operations are presented on page 23.
Net sales in the second quarter amounted to SEK 1,249 million (1,483), a decrease by 15.8 percent. The drop in net sales is related to the automotive segment where some of the larger clients opted to reduce or fully stop their activities in both production and development. The manufacturing segment also reported negative growth as many investments have been postponed. A favourable development within food & pharma contributed positively to the growth, while the defence and telecom segments had a stable development in the quarter.
EBITA amounted to SEK 62 million (131) and the margin decreased to 5.0 percent (8.8). The margin drop is due to lower sales mainly in the automotive segment. Extensive cost mitigation action was taken in the quarter such us short-term work allowance, staff reductions and cost reductions to meet the severe fall in demand. The division is ready to take further measures depending on how the market develops. The result in the quarter was affected by a non-recurring cost of SEK 23 million related to termination of staff mainly in the automotive segment.
The Covid-19 pandemic had a significant impact on the division in the quarter, linked to both disruption in the supply chains as well as the vast reduction in demand in the automotive industry. The automotive clients and their subcontractors are slowly starting up production at some levels. Some other sectors were also affected and demonstrated an increased caution in investments.
AFRY has decided and is in the process of repositioning its offerings in the automotive industry to improve the position as a high value adding service provider. This is expected to provide more resilient business with a higher share of project deliveries and less of on-site professional services, and also reduce the weight of the automotive segment in the total AFRY portfolio.
| Apr–jun 2020 |
Apr–jun 2019 |
Jan–jun 2020 |
Jan–jun 2019 |
Full year 2019 |
|
|---|---|---|---|---|---|
| Net sales, SEK million | 1,249 | 1,483 | 2,699 | 3,060 | 5,805 |
| EBITA, SEK million | 62 | 131 | 173 | 276 | 486 |
| EBITA margin, % | 5.0 | 8.8 | 6.4 | 9.0 | 8.4 |
| Average number of full time employees (FTEs) |
3,632 | 3,825 | 3,692 | 3,835 | 3,800 |
| Total growth, % | -15.8 | 0.7 | -11.8 | 4.6 | 0.4 |
| Structural changes, % | 1.0 | 1.0 | 0.9 | 1.9 | 1.2 |
| Currency, % | -0.4 | 0.2 | -0.2 | 0.2 | 0.2 |
| Organic, % | -16.3 | -0.5 | -12.5 | 2.5 | -1.0 |
| Adjusted/underlying organic growth due to calendar effect, % |
-18.5 | 1.6 | -13.3 | 3.3 | -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 the Group-wide item.
Net sales in the second quarter amounted to SEK 889 million (914), a decrease by 2.7 percent. The Covid-19 pandemic had a negative impact on professional service sales in Sweden, Finland and Norway as clients have cut down frame-work agreement based assignments. China had the biggest drop in growth whilst Brazil and North America had strong sales due to ongoing pulp and paper projects.
EBITA amounted to SEK 84 million (88) and the margin decreased to 9.4 percent (9.6). The somewhat lower margin is due to lower sales due to Covid-19. Short term work allowance and cost savings were initiated during the period, which partly offset the loss of volume.
The division has had limited impact from the Covid-19 pandemic and major projects already in order stock have been proceeding with full speed. However, the division has noted a shift in client behaviour that entails longer decision-making processes, which has impacted growth in some markets.
| Apr–Jun 2020 |
Apr–Jun 2019 |
Jan–Jun 2020 |
Jan–Jun 2019 |
Full year 2019 |
|
|---|---|---|---|---|---|
| Net sales, SEK million | 889 | 914 | 1,807 | 1,360 | 3,047 |
| EBITA, SEK million | 84 | 88 | 183 | 130 | 323 |
| EBITA margin, % | 9.4 | 9.6 | 10.1 | 9.6 | 10.6 |
| Average number of full time employees (FTEs) |
3,220 | 3,021 | 3,207 | 2,230 | 2,680 |
| Total growth, % | -2.7 | 329.7 | 32.8 | 225.3 | 275.5 |
| Structural changes, % | 0.1 | 316.8 | 30.5 | 214.3 | 262.1 |
| Currency, % | -3.6 | 0.5 | -2.5 | 0.6 | 0.5 |
| Organic, % | 0.7 | 12.4 | 4.7 | 10.4 | 13.0 |
| Adjusted/underlying organic growth due to calendar effect, % |
1.3 | 11.6 | 5.6 | 10.0 | 14.0 |
| Combined growth2, % | - | - | 2.8 | 9.2 | 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 the Group-wide item.
2) The figures are presented as though consolidation of Pöyry took place on 1 January 2018. Combined operations are presented on page 23.
Net sales in the second quarter amounted to SEK 707 million (830), a decrease by 14.8 percent. The repositioning within the division had a negative impact on net sales. During the first quarter, the EPC+ project in the Philippines was essentially completed with some final close-out actions left. The revenue levels for the contracting business are expected to be lower in 2020 compared to 2019 due to its completion. Growth within the nuclear business continued to be strong during the second quarter, particularly in the Nordics and Central Europe.
EBITA amounted to SEK 65 million (61) and the corresponding margin was 9.2 percent (7.3). The improved margin was due to the repositioning, cost savings, well executed projects within the contracting business in the Philippines, and a strong performance in nuclear, thermal and renewables.
Due to Covid-19 pandemic several projects have been delayed or paused, but many projects were resumed in the quarter, especially in hydro, renewables and transmission & distribution. The general outlook for the energy sector is improving in most operational areas however the recovery in Latin America operations is expected to be slower.
| Apr–Jun 2020 |
Apr–Jun 2019 |
Jan–Jun 2020 |
Jan–Jun 2019 |
Full year 2019 |
|
|---|---|---|---|---|---|
| Net sales, SEK million | 707 | 830 | 1,418 | 1,369 | 3,001 |
| EBITA, SEK million | 65 | 61 | 131 | 91 | 215 |
| EBITA margin, % | 9.2 | 7,3 | 9.2 | 6.7 | 7.2 |
| Average number of full time employees (FTEs) |
1,793 | 2,146 | 1,801 | 1,726 | 1,885 |
| Total growth, % | -14.8 | 104.6 | 3.6 | 79.0 | 92.5 |
| Structural changes, % | -4.6 | 106.3 | 10.2 | 78.5 | 93.1 |
| Currency, % | 0.9 | 2.3 | 2.2 | 2.7 | 2.8 |
| Organic, % | -11.1 | -4.0 | -8.9 | -2.2 | -3.4 |
| Adjusted/underlying organic growth due to calendar effect, % |
-11.5 | -4.4 | -10.3 | -3.9 | -2.4 |
| Combined growth2, % | - | - | -14.1 | 17.2 | 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 the Group-wide item.
2) The figures are presented as though consolidation of Pöyry took place on 1 January 2018. Combined operations are presented on page 22.
Net sales in the second quarter amounted to SEK 206 million (197), an increase by 4.5 percent. The key driver behind the increase was a strong performance from the Energy consulting business driven by demand related to the energy transition and building up offering in AFRY core countries.
EBITA amounted to SEK 21 million (30) and the corresponding margin was 10.3 percent (15.3). Ongoing uncertainty, arising out of Covid-19, continued to impact deal closing in the asset transaction related business, resulting in a materially lower level of success fees than in the same quarter previous year, which had a direct impact on EBITA and the related margin. Cost savings were initiated during the period.
The Covid-19 pandemic, with continued global travel restrictions, continues to have an impact on mainly the asset transaction related business. The energy transition and developments in the bioindustry continue, resulting in stable demand for advice. Whilst there was a slowdown at the start of the second quarter, activity has been increasing.
| Apr–Jun 2020 |
Apr–Jun 2019 |
Jan–Jun 2020 |
Jan–Jun 2019 |
Full year 2019 |
|
|---|---|---|---|---|---|
| Net sales, SEK million | 206 | 197 | 409 | 271 | 668 |
| EBITA, SEK million | 21 | 30 | 42 | 44 | 92 |
| EBITA margin, % | 10.3 | 15.3 | 10.2 | 16.1 | 13.7 |
| Average number of full time employees (FTEs) |
422 | 348 | 418 | 227 | 300 |
| Total growth, % | 4.5 | – | 50.6 | – | – |
| Structural changes, % | -0.5 | – | 46.1 | – | – |
| Currency, % | -0.7 | – | 1.9 | – | – |
| Organic, % | 5.7 | – | 2.7 | – | – |
| Adjusted/underlying organic growth due to calendar effect, % |
8.9 | – | 5.1 | – | – |
| Combined growth2, % | – | – | 4.7 | -0.9 | -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 the Group-wide item.
2) The figures are presented as though consolidation of Pöyry took place on 1 January 2018. Combined operations are presented on page 23.
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 co-workers. 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:
| 2020 | 2019 | Difference | |
|---|---|---|---|
| Q1 | 507 | 506 | 2 |
| Q2 | 475 | 477 | -2 |
| Q3 | 525 | 523 | 2 |
| Q4 | 499 | 495 | 4 |
| Full year | 2,005 | 2,000 | 5 |
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 has implemented the Swedish Financial Reporting Board's Recommendation RFR 2, which means that the parent in the legal entity shall apply all EU approved IFRS and related statements as far as this is possible, while continuing to apply the Swedish Annual Accounts Act and the Pension Obligations Vesting Act and paying due regard to the relationship between accounting 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 interest impact. The nominal value of outstanding exposures is SEK 2.0 billion. 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 200.00 (210.20).
| Class A shares | 4,290,336 |
|---|---|
| Class B shares | 108,160,599 |
| Total number of shares | 112,450,935 |
| Of which own Class B shares | – |
| Votes | 151,063,959 |
Shares were converted during the period as per the 2016 staff convertible programme, increasing the number of B-shares by 74,416.
Shares were converted during the period as per the 2017 staff convertible programme, increasing the number of B-shares by 36,950.
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 | Jul 2019– Jun 2020 |
|---|---|---|---|---|---|---|
| Net sales | 4,808 | 5,393 | 10,063 | 9,782 | 19,792 | 20,072 |
| Personnel costs | -3,117 | -3,194 | -6,352 | -5,804 | -11,782 | -12,330 |
| Purchases of services and materials | -961 | -1,210 | -1,945 | -2,190 | -4,408 | -4,163 |
| Other costs | -292 | -406 | -692 | -748 | -1,608 | -1,552 |
| Other income | 90 | 0 | 97 | 0 | 27 | 124 |
| Profit attributable to participations in associates | 1 | 1 | 2 | 1 | 4 | 5 |
| EBITDA | 530 | 584 | 1,174 | 1,041 | 2,024 | 2,157 |
| Depreciation/amortisation and impairment of non-current assets1 |
-170 | -180 | -340 | -309 | -657 | -687 |
| EBITA | 360 | 405 | 834 | 732 | 1,368 | 1,470 |
| Acquisition-related items2 | -28 | -13 | -92 | -27 | -91 | -156 |
| Operating profit (EBIT) | 331 | 392 | 742 | 705 | 1,276 | 1,314 |
| Net financial items | -68 | -56 | -116 | -127 | -237 | -225 |
| Profit after financial items | 264 | 336 | 627 | 578 | 1,039 | 1,089 |
| Tax | -53 | -70 | -138 | -127 | -219 | -230 |
| Profit for the period | 211 | 266 | 489 | 450 | 821 | 859 |
| Attributable to: | ||||||
| Shareholders in the parent | 211 | 267 | 489 | 452 | 821 | 859 |
| Non-controlling interest | 0 | -1 | -1 | -1 | 0 | 1 |
| Profit for the period | 211 | 266 | 488 | 450 | 821 | 859 |
| Basic earnings per share, SEK | 1.88 | 2.59 | 4.35 | 4.94 | 8.07 | – |
| Diluted earnings per share, SEK | 1.88 | 2.55 | 4.36 | 4.87 | 7.99 | – |
| Number of shares outstanding | 112,450,935 | 112,632,422 | 112,450,935 | 112,632,422 | 112,174,128 | |
| Average number of basic shares outstanding | 112,418,501 | 103,221,307 | 112,351,462 | 91,403,253 | 101,712,840 | |
| Average number of diluted shares outstanding | 113,989,981 | 105,654,432 | 113,989,981 | 93,955,588 | 104,043,894 |
1) Depreciation/amortisation and impairment of non-current assets refers to non-current assets excluding acquisition-related intangible non-current assets.
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 21 for further details.
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Profit for the period | 211 | 266 | 489 | 450 | 821 |
| Items that have been or will be reclassified to profit or loss for the period |
|||||
| Change in translation reserve | -213 | 143 | -107 | 202 | 81 |
| Change in hedging reserve | -111 | -12 | -5 | -9 | 14 |
| Change in fair value reserve | – | – | – | 5 | 5 |
| Tax | -25 | – | -1 | -1 | -4 |
| Items that will be not be reclassified to profit or loss for the period | |||||
| Pensions | 2 | 1 | 3 | 1 | -97 |
| Tax | -3 | 0 | -3 | 0 | 18 |
| Other comprehensive income | -349 | 131 | -112 | 198 | 16 |
| Comprehensive income for the period | -138 | 397 | 376 | 649 | 837 |
| Attributable to: | |||||
| Shareholders in the parent | -138 | 398 | 377 | 650 | 837 |
| Non-controlling interest | 0 | -2 | -1 | -1 | 0 |
| Total | -138 | 397 | 376 | 649 | 837 |
| SEK MILLION | 30 Jun 2020 | 30 Jun 2019 | 31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible non-current assets | 13,236 | 13,469 | 13,355 |
| Property, plant and equipment | 580 | 592 | 587 |
| Other non-current assets | 2,725 | 2,792 | 2,929 |
| Total non-current assets | 16,540 | 16,853 | 16,872 |
| Current assets | |||
| Current receivables | 6,004 | 6,718 | 6,505 |
| Cash and cash equivalents | 1,367 | 630 | 997 |
| Total current assets | 7,371 | 7,348 | 7,502 |
| Total assets | 23,912 | 24,201 | 24,375 |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Attributable to shareholders in parent company | 9,774 | 9,200 | 9,367 |
| Attributable to non-controlling interest | 1 | 17 | 1 |
| Total equity | 9,775 | 9,217 | 9,369 |
| Non-current liabilities | |||
| Provisions | 954 | 941 | 1,032 |
| Non-current liabilities | 6,250 | 7,656 | 7,207 |
| Total non-current liabilities | 7,203 | 8,597 | 8,240 |
| Current liabilities | |||
| Provisions | 105 | 57 | 101 |
| Current liabilities | 6,829 | 6,331 | 6,666 |
| Total current liabilities | 6,934 | 6,388 | 6,767 |
| Total equity and liabilities | 23,912 | 24,201 | 24,375 |
| SEK MILLION | 30 Jun 2020 | 30 Jun 2019 | 31 Dec 2019 |
|---|---|---|---|
| Equity at start of period | 9,369 | 5,465 | 5,465 |
| Comprehensive income for the period | 376 | 649 | 837 |
| Dividends | – | -560 | -560 |
| Private placement | – | 3,967 | 3,967 |
| Conversion of convertible bonds into shares | 30 | 27 | 147 |
| Value of conversion right | – | – | 8 |
| Share buy-backs/sales | – | – | -164 |
| Repayment of hybrid bond | – | -331 | -331 |
| Equity at end of period | 9,775 | 9,217 | 9,369 |
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Profit after financial items | 264 | 336 | 627 | 578 | 1,039 |
| Adjustment for items not included in cash flow and other | 194 | 98 | 398 | 197 | 880 |
| Income tax paid | -71 | -95 | -145 | -176 | -284 |
| Cash flow from operating activities before change in working capital | 386 | 338 | 880 | 598 | 1,635 |
| Cash flow from change in working capital | 521 | -288 | 397 | -255 | 358 |
| Cash flow from operating activities | 908 | 51 | 1,277 | 343 | 1,993 |
| Cash flow from investing activities | -118 | -252 | -244 | -5,042 | -5,290 |
| Cash flow from financing activities | -311 | -179 | -666 | 5,095 | 4,066 |
| Cash flow for the period | 479 | -381 | 367 | 396 | 769 |
| Opening cash and cash equivalents | 887 | 1,013 | 997 | 239 | 239 |
| Exchange difference in cash and cash equivalents | -1 | -2 | 2 | -5 | -11 |
| Closing cash and cash equivalents | 1,367 | 630 | 1,367 | 630 | 997 |
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Opening balance | 4,357 | 7,144 | 4,424 | 3,455 | 3,455 |
| Cash flow from operating activities | -799 | -51 | -1,048 | -343 | -1,473 |
| Investments | 40 | 61 | 98 | 103 | 197 |
| Acquisitions and contingent considerations | 79 | 191 | 127 | 5,037 | 5,201 |
| Rights issue | – | -2,757 | – | -3,967 | -3,967 |
| Dividend | – | 560 | – | 560 | 560 |
| Share buy-backs/sales | – | – | – | – | 164 |
| Repayment of hybrid bond | – | 5 | – | 331 | 331 |
| Other | -91 | 1 | -15 | -21 | -44 |
| Closing balance | 3,586 | 5,154 | 3,586 | 5,154 | 4,424 |
| SEK MILLION | 30 Jun 2020 | 30 Jun 2019 | 31 Dec 2019 |
|---|---|---|---|
| Loans and credit facilities | 4,564 | 5,483 | 5,034 |
| Net pension liability | 390 | 302 | 387 |
| Cash and cash equivalents | -1,367 | -630 | -997 |
| Group | 3,586 | 5,154 | 4,424 |
| SEK MILLION | 30 Jun 2020 | 30 Jun 2019 | 31 Dec 2019 |
|---|---|---|---|
| Loans and credit facilities | 7,144 | 8,057 | 7,813 |
| Net pension liability | 390 | 302 | 387 |
| Cash and cash equivalents | -1,367 | -630 | -997 |
| Group | 6,166 | 7,728 | 7,203 |
| SEK MILLION | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|
| Return on equity, % | 9.0 | 13.4 | 10.6 |
| Return on capital employed, % | 6.4 | 9.8 | 8.3 |
| Equity ratio, % | 40.9 | 41.0 | 38.4 |
| Equity per share, SEK | 86.92 | 98.71 | 83.51 |
| Interest-bearing liabilities, SEK m | 7,534 | 8,359 | 8,201 |
| Average number of full-time employees (FTEs) | 15,445 | 13,771 | 14,680 |
1) Including IFRS 16 Leases
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Transaction costs, Pöyry | – | – | – | -44 | -44 |
| Integration costs, Pöyry | – | -76 | – | -94 | -215 |
| Restructuring costs, Energy Division | – | – | – | – | -105 |
| Restructuring costs, Industrial & Digital Solutions Division | -23 | – | -23 | – | – |
| Total | -23 | -76 | -23 | -138 | -364 |
1) Items affecting comparability are recognised as personnel costs and other costs.
Net sales for Jan–Jun 2020 according to business model
| SEK MILLION | Infrastructure | Industrial & Digital Solutions |
Process Industries |
Energy | Management Consulting |
Group-wide/ eliminations |
Total Group |
|---|---|---|---|---|---|---|---|
| Project Business | 3,930 | 872 | 1,145 | 1,173 | 356 | -211 | 7,265 |
| Professional Services | 140 | 1,827 | 662 | 245 | 53 | -130 | 2,797 |
| Total | 4,070 | 2,699 | 1,807 | 1,418 | 409 | -341 | 10,063 |
The Group applies the new accounting standard IFRS 15 Revenue from Contracts with Customers as from 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-toend 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.
| 2018 | 2019 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Net sales, SEK million | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 |
| Infrastructure | 1,537 | 1,280 | 1,680 | 1,808 | 2,020 | 1,738 | 2,105 | 2,084 | 1,986 |
| Industrial & Digital Solutions | 1,472 | 1,229 | 1,628 | 1,578 | 1,483 | 1,204 | 1,540 | 1,450 | 1,249 |
| Process Industries | 213 | 170 | 223 | 447 | 914 | 770 | 917 | 918 | 889 |
| Energy | 406 | 363 | 430 | 539 | 830 | 761 | 871 | 711 | 707 |
| Management Consulting | – | – | – | 74 | 197 | 185 | 211 | 203 | 206 |
| Other/eliminations | -20 | -48 | -5 | -56 | -50 | -96 | -197 | -112 | -229 |
| Group | 3,608 | 2,995 | 3,957 | 4,389 | 5,393 | 4,562 | 5,447 | 5,255 | 4,808 |
| 2018 | 2019 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| EBITA, SEK million | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 |
| Infrastructure | 174 | 113 | 185 | 182 | 195 | 118 | 191 | 189 | 173 |
| Industrial & Digital Solutions | 144 | 94 | 150 | 145 | 131 | 80 | 131 | 111 | 62 |
| Process Industries | 24 | 16 | 33 | 42 | 88 | 73 | 119 | 99 | 84 |
| Energy | 29 | 15 | 13 | 30 | 61 | 51 | 73 | 66 | 65 |
| Management Consulting | – | – | – | 13 | 30 | 20 | 28 | 21 | 21 |
| Other/eliminations1) | -5 | -18 | -49 | -86 | -100 | -33 | -214 | -11 | -45 |
| Group | 366 | 220 | 332 | 327 | 405 | 309 | 327 | 474 | 360 |
| 2018 | 2019 | 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| EBITA margin, % | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 |
| Infrastructure | 11.4 | 8.8 | 11.0 | 10.1 | 9.6 | 6.8 | 9.0 | 9.1 | 8.7 |
| Industrial & Digital Solutions | 9.8 | 7.7 | 9.2 | 9.2 | 8.8 | 6.6 | 8.5 | 7.6 | 5.0 |
| Process Industries | 11.4 | 9.2 | 14.7 | 9.5 | 9.6 | 9.5 | 13.0 | 10.8 | 9.4 |
| Energy | 7.1 | 4.2 | 3.1 | 5.7 | 7.3 | 6.7 | 8.3 | 9.3 | 9.2 |
| Management Consulting | – | – | – | 18.1 | 15.3 | 10.7 | 13.3 | 10.1 | 10.3 |
| Group | 10.2 | 7.4 | 8.4 | 7.5 | 7.5 | 6.8 | 6.0 | 9.0 | 7.5 |
| 2018 | 2019 | 2020 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Average number of full-time employees (FTEs) |
Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
| Infrastructure | 4,395 | 4,465 | 4,660 | 5,098 | 5,954 | 5,916 | 5,962 | 5,935 | 6,013 | |
| Industrial & Digital Solutions | 3,732 | 3,782 | 3,863 | 3,845 | 3,825 | 3,738 | 3,797 | 3,748 | 3,632 | |
| Process Industries | 668 | 672 | 747 | 1,471 | 3,021 | 3,170 | 3,075 | 3,195 | 3,220 | |
| Energy | 993 | 960 | 1,015 | 1,326 | 2,146 | 2,059 | 2,016 | 1,809 | 1,793 | |
| Management Consulting | – | – | – | 112 | 348 | 389 | 362 | 415 | 422 | |
| Group functions | 165 | 184 | 161 | 228 | 267 | 269 | 363 | 314 | 396 | |
| Group | 9,954 | 10,063 | 10,445 | 12,081 | 15,562 | 15,540 | 15,575 | 15,416 | 15,476 | |
| 2018 | 2019 | 2020 | ||||||||
| Number of working days | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
| Sweden only | 60 | 65 | 62 | 63 | 59 | 66 | 61 | 63 | 60 | |
| All countries | 60 | 65 | 62 | 63 | 60 | 65 | 62 | 63 | 60 |
1) Including IFRS 16 Leases as from 2019, which are recognised under the Group-wide item.
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.
| SEK million | Company | Country | Division | Annual net sales |
Average no. of employees |
|---|---|---|---|---|---|
| Period | |||||
| Jan–jun | One World AS | Norway | Infrastructure | 15 | 8 |
| Total | 15 | 8 | |||
| SEK million | Jan–Jun 2020 |
|---|---|
| Intangible non-current assets | – |
| Property, plant and equipment | 0 |
| Right-of-use assets | – |
| Financial assets | 0 |
| Accounts receivable and other receivables | 2 |
| Cash and cash equivalents | 4 |
| Accounts payable, loans and other liabilities | -3 |
| Net identifiable assets and liabilities | 5 |
| Non-controlling interest | – |
| Goodwill | 17 |
| Fair value adjustment, intangible assets | 1 |
| Fair value adjustment, non-current provisions | 0 |
| Purchase consideration including estimated contingent consideration |
23 |
| Transaction costs | 0 |
| Deduct: | |
| Cash (acquired) | 4 |
| Estimated contingent consideration | 7 |
| Estimated minority buyout | 0 |
| Net cash outflow | 11 |
The acquisition analysis is preliminary since the assets of the acquired company have not been definitively analysed. The purchase consideration for the acquisition for the year was larger than the book assets of the acquired company, and the acquisition analysis resulted in intangible assets. The acquisition of a consulting business essentially involves the acquisition of human capital, and most of the intangible assets in the companies acquired are thus attributable to goodwill.
Total undiscounted contingent consideration for the company acquired during the year is a maximum of SEK 7 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 customer 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 0.4 million.
The acquired company is expected to contribute to sales of approximately SEK 15 million and operating profit of approximately SEK 2 million for the full year 2020.
In 2019, ÅF Pöyry took over all the shares in Pöyry PLC, along with other acquisitions that are not individually significant based on net sales and number of employees. The details and effects of completed acquisitions can be found in Note 3 of ÅF Pöyry's published 2019 Annual Report.
| SEK million | 30 Jun 2020 |
|---|---|
| Opening balance 1 January 2020 | 358 |
| Acquisitions for the year | 7 |
| Payments | -55 |
| Changes in value recognised in income statement | -20 |
| Adjustment of preliminary acquisition analysis | 0 |
| Discounting | 5 |
| Translation differences | 4 |
| Closing balance | 299 |
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 over the next two to three years for the acquired companies. The change in the balance sheet items is recognised in the above 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 | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Amortisation and impairment of intangible non-current assets | -41 | -60 | -102 | -88 | -211 |
| Revaluation of contingent considerations | 13 | 48 | 20 | 61 | 119 |
| Divestment of operations | – | – | -10 | – | 1 |
| Total | -28 | -13 | -92 | -27 | -91 |
| SEK MILLION | Apr–Jun 2020 | Apr–Jun 2019 | Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 |
|---|---|---|---|---|---|
| Net sales | 245 | 197 | 494 | 359 | 701 |
| Other operating income | 79 | 67 | 153 | 133 | 271 |
| Operating income | 324 | 264 | 646 | 492 | 972 |
| Personnel costs | -47 | -76 | -89 | -134 | -225 |
| Other costs | -277 | -213 | -537 | -409 | -853 |
| Depreciation/amortisation | -10 | -8 | -20 | -17 | -34 |
| Operating profit/loss | -10 | -34 | 1 | -68 | -140 |
| Net financial items | 0 | 14 | -43 | -32 | 440 |
| Profit after financial items | -10 | -20 | -43 | -100 | 300 |
| Appropriations | – | – | – | – | 248 |
| Pre-tax profit/loss | -10 | -20 | -43 | -100 | 548 |
| Tax | 4 | 12 | 2 | 28 | 2 |
| Profit for the period | -6 | -8 | -41 | -71 | 549 |
| Other comprehensive income | -5 | -11 | -12 | -8 | 9 |
| Comprehensive income for the period | -11 | -19 | -52 | -80 | 558 |
| SEK MILLION | 30 Jun 2020 | 30 Jun 2019 | 31 Dec 2019 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible non-current assets | 110 | 23 | 61 |
| Property, plant and equipment | 151 | 151 | 155 |
| Financial assets | 13,222 | 12,572 | 13,267 |
| Total non-current assets | 13,482 | 12,746 | 13,483 |
| Current assets | |||
| Current receivables | 2,617 | 2,907 | 2,875 |
| Cash and bank balances | 602 | 29 | 133 |
| Total current assets | 3,219 | 2,936 | 3,007 |
| Total assets | 16,701 | 15,682 | 16,490 |
| EQUITY AND LIABILITIES | |||
| Equity | 8,973 | 8,396 | 8,997 |
| Untaxed reserves | 82 57 |
82 | |
| Provisions | 84 158 |
100 | |
| Non-current liabilities | 4,218 | 5,278 | 4,803 |
| Current liabilities | 3,344 | 1,793 | 2,508 |
| Total equity and liabilities | 16,701 | 15,682 | 16,490 |
| Jan–Jun 2020 | Jan–Jun 2019 | Full year 2019 | |
|---|---|---|---|
| Net sales, SEK million | |||
| Infrastructure | 4,070 | 4,076 | 7,917 |
| Industrial & Digital Solutions | 2,699 | 3,060 | 5,805 |
| Process Industries | 1,807 | 1,758 | 3,442 |
| Energy | 1,418 | 1,652 | 3,284 |
| Management Consulting | 409 | 390 | 785 |
| Group-wide/eliminations | -341 | -112 | -405 |
| Group | 10,063 | 10,824 | 20,827 |
| EBITA excl. items affecting comparability, SEK million | |||
| Infrastructure | 362 | 394 | 702 |
| Industrial & Digital Solutions | 173 | 276 | 486 |
| Process Industries | 183 | 178 | 371 |
| Energy | 131 | 115 | 238 |
| Management Consulting | 42 | 55 | 103 |
| Group-wide/eliminations1 | -33 | -70 | -91 |
| Group | 858 | 948 | 1,809 |
| EBITA margin excl. items affecting comparability, % | |||
| Infrastructure | 8.9 | 9.7 | 8.9 |
| Industrial & Digital Solutions | 6.4 | 9.0 | 8.4 |
| Process Industries | 10.1 | 10.2 | 10.8 |
| Energy | 9.2 | 7.0 | 7.3 |
| Management Consulting | 10.2 | 14.1 | 13.1 |
| Group | 8.5 | 8.8 | 8.7 |
1) Including IFRS 16 Leases, which are recognised under the Group-wide items.
The Board of Directors and Chief Executive Officer provide assurance that this interim report for the January– June 2020 period gives an accurate overview of the
company and Group's operations, financial position and earnings, and describes significant risks and uncertainties to which the company and companies included in the Group are exposed.
Stockholm, Sweden – 14 July 2020
Anders Narvinger Chairman of the Board
Henrik Ehrnrooth Director
Jonas Gustavsson President and CEO
Salla Pöyry Director
Jonas Abrahamsson Director
Joakim Rubin Director
Kristina Schauman Director
Gunilla Berg Director
Anders Snell Director
Ulf Södergren Director
Tomas Ekvall Director, employee representative
Stefan Löfqvist Director, employee representative
24 Interim report January–June 2020
AFRY is an international company that works with technology, design and consulting. We help our customers 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, Sweden – 14 July 2020
ÅF Pöyry AB (publ) Jonas Gustavsson President and CEO
This report has not been reviewed 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 14 July 2020, at 08.00 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: | 14 July at 10.00 CET |
|---|---|
| Webcast: | https://afry.com/sv/investor-relations/finansiella rapporter |
| Via telephone: | code 35008393# |
| Sweden: | +46 (0) 856 642 651 |
| UK: | +44 (0) 3333 000804 |
| USA: | +1 631 913 1422 |
| Calendar | |
| Q3 2020 | 23 October 2020 | |
|---|---|---|
| Q4 2020 | 5 February 2021 | |
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