Quarterly Report • Oct 21, 2010
Quarterly Report
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Third quarter 2010
*) A structural effect of SEK -98 million as a consequence of the sale of the subsidiary ÅF-Kontroll.
ÅF's market share has stabilised after the financial crisis, but the road to recovery will be a long one. While demand remains good in the energy and infrastructure sectors, there is still a cautious approach to any major new investments in industrial production capacity.
Operating profit for the third quarter was in line with last year's third-quarter earnings, bearing in mind that ÅF-Kontroll (the Group's former Inspection Division, since sold) contributed profits of SEK 12 million during the corresponding period in 2009.
Profitability has suffered from the continued expansion in the Infrastructure Planning business area and as a result of delays to the starting date for ÅF's involvement in the Stockholm Bypass Project after an appeal was lodged. ÅF has made a strategic decision to take a leading position in this market, where the prospects for sustained, long-term expansion are very good. At the time of writing, there are almost 500 ÅF employees working on infrastructure planning, which is twice the number we had 12 months ago.
ÅF is positive about the immediate future. Not only do we believe that the market will continue to improve, but interest in ÅF as an employer has never been greater. Recently ÅF was ranked as Sweden's third most attractive employer, according to a survey of some 6,000 engineers conducted by Universum.
ÅF has a strong balance sheet which means that ÅF can continue to play an active role in the process of consolidation that is currently taking place in the technical consulting industry, taking advantage of opportunities for growth through acquisitions in both existing and new markets in Europe.
Our overall objective remains, however, to ensure that ÅF continues to generate levels of profitability that place us among the best performers in our industry, while increasing our growth rate in the years to come.
Net sales for the third quarter totalled SEK 910 million (Q3 2009: SEK 996 million). Organic growth was 0%. The sale of the subsidiary ÅF-Kontroll on 25 March 2010 contributed to a negative structural effect of SEK 98 million, equivalent to -10%.
Operating profit was SEK 91 million (SEK 72 million). Operating profit excluding the sale of shares in ÅF TÜV Nord was SEK 60 million (SEK 72 million). The third quarter contained 66 working days, which is the same as the third quarter of last year. The operating margin was 9.9 percent (7.2 percent), or 6.6 percent (7.2 percent) excluding the capital gain.
The capacity utilisation rate was 71.7 percent (72.2 percent).
Profit after net financial items was SEK 86 million (SEK 67 million). Net financial items showed a SEK 0.9 million improvement to end the period on a figure of SEK -4.3 million. The profit margin was 9.5 percent (6.7 percent).
Profit after tax was SEK 72 million (SEK 48 million). Earnings per share before dilution were SEK 2.09 (SEK 1.36).
Net sales for the first nine months totalled SEK 3,057 million (Q1– Q3 2009: SEK 3,391 million). Organic growth was negative at -3%. The structural effect was also negative, -6%, chiefly as a consequence of the sale of the subsidiary, ÅF-Kontroll.
Operating profit was SEK 711 million (SEK 278 million). The operating margin was 20.2 percent (8.2 percent). Operating profit excluding the capital gain of SEK 488 million from the sale of ÅF-Kontroll and ÅF TÜV Nord was SEK 223 million (SEK 271 million). The operating margin, excluding capital gains, was 7.3 percent (8.0 percent). The period totalled 189 working days, which is one more than the corresponding period last year.
The capacity utilisation rate was 71.2 percent (71.5 percent).
Profit after net financial items was SEK 701 million (SEK 267 million). The profit margin was 19.9 percent (7.8 percent). Partly as a result of the weaker euro, exchange rate differences have had a negative effect of SEK 7 million on net financial items over the first nine months.
Profit after tax was SEK 647 million (SEK 195 million). Earnings per share before dilution were SEK 19.00 (SEK 5.63).
| KEY RATIOS | Q3 2010 |
Q3 2009 |
Q1-Q3 2010 |
Q1-Q3 2009 |
Full year 2009 |
|---|---|---|---|---|---|
| Net sales, MSEK | 910.2 | 996.3 | 3,056.7 | 3,391.1 | 4,677.9 |
| Operating income, MSEK | 911.2 | 997.0 | 3,517.7 | 3,404.0 | 4,692.0 |
| Operating profit, MSEK | 90.5 | 72.1 | 711.3 | 278.4 | 388.3 |
| Operating profit excl capital gain, MSEK | 59.8 | 72.1 | 223.0 | 270.6 | 380.5 |
| Operating profit, % | 9.9 | 7.2 | 20.2 | 8.2 | 8.3 |
| Operating margin excl capital gain, % | 6.6 | 7.2 | 7.3 | 8.0 | 8.1 |
| Profit after financial items, MSEK | 86.2 | 66.9 | 701.3 | 267.0 | 377.0 |
| Profit margin, % | 9.5 | 6.7 | 19.9 | 7.8 | 8.0 |
| Profit after tax, MSEK | 72.0 | 48.0 | 647.3 | 195.1 | 275.3 |
| Earnings per share, SEK | 2.09 | 1.36 | 19.00 | 5.63 | 7.93 |
| Return on equity, % | 35.1 | 17.3 | 15.8 | ||
| Return on capital employed, % | 34.1 | 19.7 | 17.8 | ||
| Number of employees, FTEs | 3,824 | 4,099 | 3,921 | 4,185 | 4,182 |
| Capacity utilisation rate, % | 71.7 | 72.2 | 71.2 | 71.5 | 71.3 |
Sweden's Legal, Financial and Administrative Services Agency (Kammarkollegiet) included ÅF when allocating the framework agreements for government authority contracts. The agreement awarded to ÅF relates to ad hoc IT consulting services and is valid for an initial two years with the option of a further two-year extension. It is anticipated that the agreement will lead to assignments worth a total of SEK 400 million a year to the seven consulting companies selected.
ÅF announced a structural reorganisation which saw the Infrastructure Division split into two divisions on 1 October. The purpose was to clearly identify two areas of long-term commercial opportunity and to increase the focus on profitability and growth in the years ahead. The new divisions will be known as Infrastructure and Technology respectively. Parallel with these changes, ÅF's Engineering Division changed its name to the Industry Division. As a consequence, from 1 October 2010, ÅF comprises four divisions: Energy, Industry, Infrastructure and Technology.
In September ÅF reached agreement on the sale of its 50 percent stake in ÅF-TÜV Nord, which provides services relating to third-party inspections for the nuclear power industry. The purchaser was the other joint owner, the German technical inspection company, TÜV Nord. The purchase sum agreed was SEK 32.5 million, which resulted in a capital gain for ÅF equivalent to SEK 30 million in the third quarter.
In July ÅF acquired the technical consulting company VPC Mechanical Design from the Swedish state-owned energy company, Vattenfall. Based in Skellefteå, VPC is a well-established consulting company, with 10 employees offering high-level engineering services to the mining industry. The company's biggest clients are LKAB and Boliden.
In October ÅF took over the technical consulting company Platom AB with 10 employees in Oskarshamn and Västerås. Platom is a well-established consulting company providing advanced process and analysis services to the nuclear power sector. The company's clients are Sweden's nuclear power plants in Oskarshamn, Forsmark and Ringhals, as well as the Swedish Nuclear Fuel and Waste Management Company (SKB) and suppliers such as Westinghouse.
Cash flow from operating activities for the third quarter was SEK 0 million (SEK -39 million). Total cash flow for
the period was SEK 4 million (SEK -8 million). Cash flow from the change in working capital was negative, SEK -45 million (SEK -75 million), primarily as a result of holiday entitlements. Acquisitions of subsidiaries/lines of business totalled SEK 31 million (SEK 0 million), while the sale of business operations resulted in a positive cash flow of SEK 32 million (SEK 0 million).
Cash flow for the period January–September was SEK 192 million (SEK -23 million). The sale of ÅF-Kontroll and ÅF-TÜV Nord resulted in a positive cash flow of SEK 624 million. An additional consideration of SEK 106 million has been paid to the former owners of ÅF's Swiss subsidiary, ÅF-Colenco. Other corporate acquisitions and additional considerations paid amounted to a total of SEK 109 million (SEK 37 million). Dividends to shareholders totalled SEK 135 million (SEK 110 million) and the net of borrowing and amortisation of loans had a negative effect on cash flow of SEK 114 million (SEK -3 million).
The Group's cash and cash equivalents totalled SEK 528 million (SEK 253 million) at the end of the first nine months. The Group's net cash balance totalled SEK 278 million (SEK -209 million).
Equity per share was SEK 66.96 (SEK 49.93), and the equity/assets ratio was 64.4 percent. At the beginning of 2010, equity per share was SEK 53.68 and the equity/ assets ratio was 51.0 percent. Equity as at 30 September 2010 totalled SEK 2,275 million.
The number of full-time equivalents was 3,921 (4,185). The total number of employees at the end of the reporting period was 4,156 (4,319); 2,896 in Sweden and 1,260 outside Sweden. ÅF-Kontroll, which was sold on 25 March, had 512 employees.
Parent company operating income totalled SEK 243 million (SEK 218 million) for the period January–September. Profit after net financial items was SEK 896 million (SEK -19 million).
The parent company made a profit of SEK 500 million on the sale of ÅF-Kontroll and ÅF-TÜV Nord. Dividends from subsidiaries and associated companies totalled SEK 408 million (SEK 1 million). Cash and cash equivalents totalled SEK 303 million (SEK 2 million), and gross investment in machinery and equipment amounted to SEK 3 million (SEK 3 million).
The market for energy consulting services remained good in the third quarter. Invoiced sales for the Energy Division dipped, however, as a result of a change in the project mix in Russia and the negative effect of changes in exchange rates. These two factors, compounded by increased pressure on prices, especially in Finland, led to a reduction in profitability for the third quarter.
Third-quarter sales for ÅF Russia were SEK 30 million down on the figure for the corresponding period last year, primarily due to a significant reduction in "full-service undertakings", which include material deliveries.
The Swedish krona and the Swiss franc strengthened against the euro in the third quarter, which led to a reduction in sales of approximately SEK 20 million in comparison to the corresponding period in 2009. The Swiss subsidiary ÅF-Colenco accounts for approximately one third of the division's sales.
Operations in the Czech Republic reported good levels of profitability in the third quarter, as did those in Russia – despite a drop in sales.
The division's order books remain strong and the level of activity in the international energy market continues to be high. For example, the third quarter saw the Energy Division sign two major agreements for the construction of new hydropower plants in Vietnam and Switzerland. Other new orders were signed on the back of strong demand for project competence and expertise relating to CHP plants in Europe fuelled by biomass and waste.
The Energy Division offers technical consulting services for the energy sector. It has operations in many areas of the world, and is a market leader in the Nordic region, Switzerland and the Baltic countries. It enjoys a strong standing in various fields of expertise, particularly nuclear power, where it is a world leader among independent consulting companies.
| Key ratios - Energy | Q3 2010 |
Q3 2009 |
Q1-Q3 2010 |
Q1-Q3 2009 |
|---|---|---|---|---|
| Operating income, MSEK | 225.6 | 293.2 | 691.8 | 908.2 |
| Operating profit, MSEK | 15.0 | 23.7 | 61.7 | 77.3 |
| Operating margin, % | 6.7 | 8.1 | 8.9 | 8.5 |
| Number of employees, FTEs | 929 | 841 | 886 | 878 |
The market for the services of the Engineering Division varied greatly in the third quarter, depending on factors such as sector and geographical location. Demand continued to be strongest from the mining, steel and energy sectors, while a broader-based recovery for industry as a whole is proving to be a much slower process in the wake of the financial crisis and is starting from a low level.
The division's capacity utilisation rate is essentially unchanged compared with the previous year.
The process of winding up consistently underperforming operations is now more or less complete. The focus is now switching to recruitment and growth, especially in the energy and nuclear power sectors on the Swedish market. The Engineering Division enjoys a leading position as a supplier of technical consulting services to the Swedish nuclear power industry.
Two acquisitions have been made to add to the division's strengths: first, the takeover of VPC Mining in Skellefteå
from Vattenfall midway through the third quarter, and then, the acquisition of Platom AB, effective from 1 October. These two acquisitions bring new specialist competence to the division in the areas of mining and nuclear power and add a further 20+ employees to the workforce.
The third quarter also marked the end of a major project for Engineering: together with ABB, the division's consultants completed the task of refurbishing Rexcell's factory in Dalsland, which had been severely damaged in a fire in the spring.
The Engineering Division is the leading industrial consultant in the Nordic countries. Its mission is clear: to improve profitability for its clients. Experience from previous projects guarantees stability, competitive strength and peace of mind for clients. Geographical proximity to clients and a thorough understanding of the sectors in which they work are the most important foundations for long-term client relations.
| Key ratios - Engineering | Q3 2010 |
Q3 2009 |
Q1-Q3 2010 |
Q1-Q3 2009 |
|---|---|---|---|---|
| Operating income, MSEK | 296.4 | 283.6 | 971.8 | 970.5 |
| Operating profit, MSEK | 22.5 | 26.4 | 70.1 | 97.3 |
| Operating margin, % | 7.6 | 9.3 | 7.2 | 10.0 |
| Number of employees, FTEs | 1,199 | 1,188 | 1,224 | 1,209 |
The market for infrastructure consulting services remained good during the third quarter, underpinned as it is by the constant increase in the number of publicly funded projects for major investments in new roads and railways.
The profitability of the Infrastructure Planning business area was eroded by the costs of high organic and acquisitiondriven growth. The third quarter saw the integration of business in the recently acquired Gatubolaget Konsult i Göteborg, which relocated to ÅF's existing premises in the city and migrated its IT operations. The starting date for ÅF's consulting assignment for the Swedish Transport Administration's Stockholm Bypass Project has been delayed following an appeal, and this, too, has had an effect on the division's profitability for the quarter.
Infrastructure's operations in Norway continue to underperform. However, a new management team took over in the second quarter and a vigorous action plan to improve profitability has recently been launched.
The third quarter's strongest performance comes from operations in Communications and Defence. In recent years ÅF has steadily developed into a major supplier of high-tech consulting services to the Swedish defence industry. The division's operations in Product Development and IT also reported satisfactory results for the third quarter.
The Infrastructure Division enjoys a leading position in the Scandinavian market for technical solutions for infrastructure projects. The division's strengths include a strong sales organisation, sound commercial skills and a portfolio of services that offers clients sustainable, hi-tech solutions. Through its ability to develop innovative solutions that boost client profitability and target fulfilment, the division is continuously enhancing its market potential.
| Key ratios - Infrastructure | Q3 2010 |
Q3 2009 |
Q1-Q3 2010 |
Q1-Q3 2009 |
|---|---|---|---|---|
| Operating income, MSEK | 394.6 | 350.6 | 1,347.6 | 1,289.6 |
| Operating profit, MSEK | 23.1 | 14.6 | 103.8 | 93.8 |
| Operating margin, % | 5.9 | 4.2 | 7.7 | 7.3 |
| Number of employees, FTEs | 1,624 | 1,535 | 1,598 | 1,582 |
The significant risks and uncertainty factors to which the ÅF Group is exposed include business risks linked to the general economic situation and the propensity of various markets to invest, the ability to recruit and retain qualified co-workers, and the potential impact of political decisions. In addition, the Group is exposed to a number of financial risks, including currency risks, interest-rate risks and credit risks. The risks to which the Group is exposed are described in detail in ÅF's Annual Report for 2009. No significant risks are considered to have arisen since the publication of the annual report.
This interim report has been prepared in accordance with IAS 34 ("Interim Financial Reporting"). The report conforms with International Financial Reporting Standards (IFRS), as well as with statements on interpretation from the International Financial Reporting Interpretations Committee (IFRIC) as approved by the European Commission for use in the EU, and with the relevant references to Chapter 9 of the Swedish Annual Accounts Act. The report has been drawn up using the same accounting principles and methods of calculation as those in the Annual Report for 2009 (see Note 1, page 79). With effect from 1 January 2010, IFRS 3 ("Business Combinations" (revised)) and IAS 27 ("Consolidated and Separate Financial Statements" (revised)) have been applied. The parent company has implemented the Swedish Financial Reporting Board's Recommendation RFR 2.3, which means that the parent company in the legal entity shall apply all the IFRS and related statements approved by the EU 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 in the preparation of the legal entity's annual accounts.
ÅF's share price at the end of the reporting period was SEK 124.50 – a rise in value of 27 percent since the start of the year. During the same period the Stockholm Stock Exchange's OMXSPI index rose by 14 percent.
Shareholders at ÅF AB's Annual General Meeting on 5 May 2010 approved a proposal to introduce a performance-related share programme aimed at up to ÅF 100 employees in key positions, including the President/CEO. Employees who participate in the programme may, during a 12-month period from the implementation of the programme, save
an amount equivalent to a maximum of 5 percent of their gross salary for the purchase of ÅF shares on the OMX Nordic Exchange Stockholm stock exchange. By the end of the subscription period 98 ÅF employees had expressed an interest in purchasing approximately 36,000 shares for the entire 2010 programme. Provided that the performance targets set are achieved, some 247,000 shares will be transferred to the participants without consideration during 2013 and 2014. The maximum potential dilution of earnings per share is 0.6%.
Stockholm, Sweden – 21 October 2010
Jonas Wiström President and CEO ÅF AB (PUBL)
The Annual General Meeting will take place at 17:00 on 2 May 2011 at ÅF's head office.
President and CEO, Jonas Wiström, +46 (0)70-608 12 20 CFO, Jonas Ågrup, +46 (0)70-333 04 95 Director, Corporate Information, Viktor Svensson, +46 (0)70-657 20 26
Group Head Office:
ÅF AB, SE-169 99 Stockholm, Sweden Visitor's address: Frösundaleden 2, 169 70 Solna, Sweden Tel. +46 (0)10-505 00 00 Fax +46 (0)10-505 00 10 www.afconsult.com / [email protected] Corporate ID number 556120-6474
The information in this interim report fulfils ÅF AB's disclosure requirements under the provisions of the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was released for publication at 08:30 CET on 21 October 2010.
All assumptions about the future that are made in this report are based on the best information available to the company at the time the report was written. As is the case with all assessments of the future, such assumptions are subject to risks and uncertainties, which may mean that the actual outcome differs from the anticipated result.
8 (15)
To the Board of Directors of ÅF AB (publ) Corporate identity number 556120-6474
We have performed a review of the condensed interim financial statements for ÅF AB at 30 September 2010 and the ninemonth period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of these Interim financial statements in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express an opinion on the condensed interim financial statements based on our review.
We have conducted our review in accordance with the Standard on Review Engagements, SÖG 2410, "Review of Interim Financial Statements Performed by the Independent Auditor of the Entity", issued by the Swedish Federation of Authorized Public Accountants. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different purpose and a substantially less scope than an audit conducted in accordance with the Standards on Auditing in Sweden (RS) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain such a level of assurance that would make us aware of all significant matters that might be identified in an audit. Accordingly, an opinion based on a review does not constitute the same level of assurance as an opinion based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material aspects, for the group in accordance with IAS 34 and the Swedish Annual Accounts Act and for the parent company in accordance with the Swedish Annual Accounts Act.
Stockholm October 21, 2010
Ernst & Young AB
Lars Träff Authorized Public Accountant
| 10 (15) | ||||||
|---|---|---|---|---|---|---|
| CONSOLIDATED INCOME | July-Sept | July-Sept | Jan-Sept | Jan-Sept | Full year | Oct 2009- |
| STATEMENT (in millions of SEK) | 2010 | 2009 | 2010 | 2009 | 2009 | Sept 2010 |
| Net sales | 910.2 | 996.3 | 3,056.7 | 3,391.1 | 4,677.9 | 4,343.5 |
| Other operating income | 1.1 | 0.7 | 461.0 | 12.9 | 14.1 | 462.2 |
| Operating income | 911.2 | 997.0 | 3,517.7 | 3,404.0 | 4,692.0 | 4,805.8 |
| Personnel costs | -527.0 | -571.9 | -1,836.0 | -1,970.4 | -2,671.9 | -2,537.5 |
| Other costs | -312.9 | -337.9 | -964.8 | -1,111.1 | -1,571.8 | -1,425.5 |
| Depreciation | -11.9 | -15.4 | -38.3 | -45.9 | -61.6 | -54.0 |
| Share of associated companies' profit/loss | 31.1 | 0.3 | 32.7 | 2.0 | 1.6 | 32.4 |
| Operating profit | 90.5 | 72.1 | 711.3 | 278.4 | 388.3 | 821.2 |
| Net financial items | -4.3 | -5.2 | -10.1 | -11.4 | -11.3 | -9.9 |
| Profit after net financial items | 86.2 | 66.9 | 701.3 | 267.0 | 377.0 | 811.2 |
| Tax | -14.2 | -18.9 | -54.0 | -71.9 | -101.6 | -83.7 |
| Profit after tax | 72.0 | 48.0 | 647.3 | 195.1 | 275.3 | 727.5 |
| Attributable to: | ||||||
| Shareholders in parent company | 70.6 | 46.2 | 641.6 | 190.8 | 268.7 | 719.6 |
| Non-controlling interest | 1.3 | 1.8 | 5.6 | 4.3 | 6.6 | 8.0 |
| Profit after tax | 72.0 | 48.0 | 647.3 | 195.1 | 275.3 | 727.5 |
| Operating margin, % | 9.9 | 7.2 | 20.2 | 8.2 | 8.3 | 17.1 |
| Profit margin, % | 9.5 | 6.7 | 19.9 | 7.8 | 8.0 | 16.9 |
| Operating margin excl capital gain, % | 6.6 | 7.2 | 7.3 | 8.0 | 8.1 | 7.7 |
| Profit margin excl capital gain, % | 6.1 | 6.7 | 7.0 | 7.6 | 7.9 | 7.4 |
| Capacity utilisation rate (invoiced time ratio), % | 71.7 | 72.2 | 71.2 | 71.5 | 71.3 | 71.1 |
| Earnings per share before dilution, SEK 1) | 2.09 | 1.36 | 19.00 | 5.63 | 7.93 | |
| Earnings per share after dilution, SEK 1) | 2.08 | 1.36 | 18.94 | 5.61 | 7.91 | |
| Number of shares outstanding 1) | 33,775,002 | 33,895,002 | 33,775,002 | 33,895,002 | 33,775,002 | |
| Average number of outst. shares before dilution 1) | 33,775,002 | 33,895,002 | 33,775,002 | 33,919,408 | 33,898,072 | |
| Average number of outstanding shares after dilution 1) | 33,890,494 | 34,009,180 | 33,879,127 | 34,006,460 | 33,992,358 | |
1) A share split 2:1 was made on 2 June 2010. Comparative figures are adjusted.
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
July-Sept 2010 |
July-Sept 2009 |
Jan-Sept 2010 |
Jan-Sept 2009 |
Full year 2009 |
|
|---|---|---|---|---|---|---|
| (in millions of SEK) | ||||||
| Change in translation reserve for the period | -46.8 | -55.2 | -60.7 | -76.1 | -56.7 | |
| Cash flow hedging | -0.1 | 0.1 | -0.1 | -0.3 | -0.4 | |
| Pensions | - | - | - | - | 44.1 | |
| Tax | - | 0.0 | - | 0.1 | -8.7 | |
| Total other comprehensive income for the period | -46.9 | -55.2 | -60.8 | -76.3 | -21.7 | |
| Profit for the period | 72.0 | 48.0 | 647.3 | 195.1 | 275.3 | |
| Total comprehensive income for the period | 25.0 | -7.2 | 586.5 | 118.8 | 253.7 | |
| Total comprehensive income attributable to: | ||||||
| Shareholders in parent company | 25.2 | -8.8 | 581.9 | 114.9 | 247.4 | |
| Non-controlling interest | -0.1 | 1.6 | 4.6 | 3.9 | 6.3 | |
| Total | 25.0 | -7.2 | 586.5 | 118.8 | 253.7 |
| CONSOLIDATED BALANCE SHEET | 30 Sept | 30 Sept | 31 Dec |
|---|---|---|---|
| (in millions of SEK) | 2010 | 2009 | 2009 |
| Assets | |||
| Non-current assets | |||
| Intangible assets | 1,330.1 | 1,350.2 | 1,369.8 |
| Tangible assets | 271.8 | 326.4 | 332.9 |
| Other non-current assets | 43.5 | 26.4 | 30.2 |
| Total non-current assets | 1,645.5 | 1,703.0 | 1,732.9 |
| Current assets | |||
| Current receivables | 1,358.5 | 1,443.6 | 1,505.0 |
| Cash equivalents | 528.1 | 253.4 | 344.7 |
| Total current assets | 1,886.6 | 1,697.0 | 1,849.6 |
| Total assets | 3,532.1 | 3,400.0 | 3,582.5 |
| Equity and liabilities | |||
| Equity | |||
| Attributable to shareholders in parent company | 2,261.7 | 1,692.4 | 1,813.0 |
| Attributable to non-controlling interest | 13.4 | 11.4 | 13.6 |
| Total equity | 2,275.1 | 1,703.7 | 1,826.6 |
| Non-current liabilities | |||
| Provisions | 131.6 | 152.1 | 119.6 |
| Non-current liabilities | 26.8 | 95.5 | 41.4 |
| Total non-current liabilities | 158.4 | 247.6 | 161.0 |
| Current liabilities | |||
| Provisions | 9.6 | 27.0 | 30.7 |
| Current liabilities | 1,089.0 | 1,421.6 | 1,564.2 |
| Total current liabilities | 1,098.6 | 1,448.6 | 1,595.0 |
| Total equity and liabilities | 3,532.1 | 3,400.0 | 3,582.5 |
Pledged assets and Contingent liabilities are essentially the same as in the annual accounts for 2009.
| CHANGES IN EQUITY | 30 Sept | 30 Sept | 31 Dec | |
|---|---|---|---|---|
| (in millions of SEK) | 2010 | 2009 | 2009 | |
| Equity at start of period | 1,826.6 | 1,698.6 | 1,698.6 | |
| Total comprehensive inocme for the period | 586.5 | 118.8 | 253.7 | |
| Dividends | -139.4 | -111.2 | -111.5 | |
| Acquisition of non-controlling interest | -0.2 | - | - | |
| Share buy-back | - | -4.9 | -16.1 | |
| Share savings scheme 2008/2009/2010 | 1.6 | 2.5 | 1.8 | |
| Equity at end of period | 2,275.1 | 1,703.7 | 1,826.6 | |
| Attributable to: | ||||
| Shareholders in the parent company | 2,261.7 | 1,692.4 | 1,813.0 | |
| Non-controlling interest | 13.4 | 11.4 | 13.6 | |
| Total | 2,275.1 | 1,703.7 | 1,826.6 |
| CASH FLOW ANALYSIS | July-Sept | July-Sept | Jan-Sept | Jan-Sept | Full year |
|---|---|---|---|---|---|
| (in millions of SEK) | 2010 | 2009 | 2010 | 2009 | 2009 |
| Profit after financial items | 86.2 | 66.9 | 701.3 | 267.0 | 377.0 |
| Adjustment for items not included in cash flow | -17.3 | 15.9 | -470.1 | 34.1 | 49.0 |
| Income tax paid | -23.4 | -46.4 | -96.6 | -107.4 | -150.2 |
| Cash flow from operating activities before change | |||||
| in working capital | 45.5 | 36.4 | 134.6 | 193.7 | 275.8 |
| Cash flow from change in working capital | -45.4 | -75.2 | -77.9 | -38.3 | 30.1 |
| Cash flow from operating activities | 0.0 | -38.8 | 56.7 | 155.4 | 305.8 |
| Cash flow from investing activities | -3.8 | -13.4 | 386.3 | -59.4 | -79.1 |
| Cash flow from financing activities | 7.8 | 44.6 | -251.0 | -119.0 | -161.0 |
| Cash flow for the period | 4.0 | -7.6 | 192.0 | -23.0 | 65.8 |
| Cash and cash equivalents brought forward | 529.8 | 270.2 | 344.7 | 290.3 | 290.3 |
| Exchange rate difference in cash/cash equivalents | -5.6 | -9.3 | -8.6 | -13.9 | -11.5 |
| Cash and cash equivalents carried forward | 528.1 | 253.4 | 528.1 | 253.4 | 344.7 |
| Jan-Sept | Jan-Sept | Full year | |
|---|---|---|---|
| KEY RATIOS | 2010 | 2009 | 2009 |
| Return on equity, % | 35.1 | 17.3 | 15.8 |
| Return on equity excl capital gain, % | 13,3 | - | - |
| Return on capital employed, % | 34.1 | 19.7 | 17.8 |
| Return on capital employed excl capital gain, % | 15.6 | - | - |
| Equity ratio, % | 64.4 | 50.1 | 51.0 |
| Equity per share, SEK | 66.96 | 49.93 | 53.68 |
| Net cash/debt, MSEK | 277.8 | -208.6 | -43.8 |
| Interest-bearing liabilities, MSEK | 253.7 | 462.0 | 391.5 |
| Employees (FTEs) excl associated companies | 3,921 | 4,185 | 4,182 |
| Operating income | 2008 | 2009 | 2010 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions of SEK) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Energy | 206.9 | 237.0 | 224.3 | 397.6 | 312.7 | 302.4 | 293.2 | 381.3 | 236.1 | 230.0 | 225.6 | |
| Engineering | 368.5 | 392.1 | 300.0 | 376.1 | 344.0 | 343.0 | 283.6 | 345.6 | 336.8 | 338.6 | 296.4 | |
| Infrastructure | 450.8 | 488.6 | 404.0 | 515.2 | 496.7 | 442.3 | 350.6 | 484.6 | 466.8 | 486.2 | 394.6 | |
| Inspection | 68.7 | 95.9 | 87.9 | 108.9 | 94.0 | 108.0 | 98.0 | 107.1 | 89.2 | - | - | |
| Other/Eliminations | -30.6 | -40.0 | -29.6 | -52.5 | -39.4 | 3.3 | -28.3 | -30.6 | -21.9 | -13.1 | -5.5 | |
| Sale of ÅF-Kontroll (Inspection) | - | - | - | - | - | - | - | - | 457.7 | - | 0.2 | |
| Total | 1,064.3 | 1,173.6 | 986.5 | 1,345.3 | 1,207.9 | 1,199.0 | 997.0 | 1,288.2 | 1,564.7 | 1,041.8 | 911.2 | |
| Operating profit/loss | 2008 | 2009 | 2010 | |||||||||
| (in millions of SEK) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Energy | 19.1 | 31.6 | 28.5 | 50.5 | 24.8 | 28.8 | 23.7 | 47.1 | 25.0 | 21.6 | 15.0 | |
| Engineering | 42.8 | 45.2 | 19.5 | 48.7 | 36.7 | 34.2 | 26.4 | 29.1 | 22.9 | 24.7 | 22.5 | |
| Infrastructure | 56.5 | 59.8 | 22.9 | 52.1 | 45.9 | 33.4 | 14.6 | 47.4 | 40.3 | 40.4 | 23.1 | |
| Inspection | 5.2 | 14.8 | 11.8 | 11.3 | 6.9 | 9.0 | 11.9 | 0.7 | -1.3 | - | 0.7 | |
| Other/Eliminations | -7.1 | -16.7 | -1.6 | -16.3 | -8.2 | -5.2 | -4.4 | -14.5 | -4.0 | -6.5 | -1.5 | |
| Sale of ÅF-Kontroll and ÅF-TÜV | - | - | - | - | - | - | - | - | 457.7 | - | 30.7 | |
| Nord (Inspection) | ||||||||||||
| Total | 116.5 | 134.7 | 81.0 | 146.4 | 106.1 | 100.3 | 72.1 | 109.8 | 540.6 | 80.2 | 90.5 | |
| 2008 | 2009 | 2010 | ||||||||||
| Operating margin (%) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Energy | 9.2 | 13.3 | 12.7 | 12.7 | 7.9 | 9.5 | 8.1 | 12.4 | 10.6 | 9.4 | 6.7 | |
| Engineering | 11.6 | 11.5 | 6.5 | 13.0 | 10.7 | 10.0 | 9.3 | 8.4 | 6.8 | 7.3 | 7.6 | |
| Infrastructure | 12.5 | 12.2 | 5.7 | 10.1 | 9.2 | 7.5 | 4.2 | 9.8 | 8.6 | 8.3 | 5.9 | |
| Inspection | 7.6 | 15.4 | 13.4 | 10.4 | 7.4 | 8.4 | 12.1 | 0.6 | -1.4 | - | - | |
| Total | 10.9 | 11.5 | 8.2 | 10.9 | 8.8 | 8.4 | 7.2 | 8.5 | 34.6 | 7.7 | 9.9 | |
| 2008 | 2009 | 2010 | ||||||||||
| Employees (FTEs) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Energy | 626 | 685 | 630 | 914 | 909 | 889 | 841 | 882 | 821 | 901 | 929 | |
| Engineering | 1,274 | 1,246 | 1,264 | 1,244 | 1,226 | 1,214 | 1,188 | 1,214 | 1,250 | 1,226 | 1,199 | |
| Infrastructure | 1,508 | 1,559 | 1,562 | 1,632 | 1,627 | 1,585 | 1,535 | 1,546 | 1,571 | 1,597 | 1,624 | |
| Inspection | 282 | 335 | 365 | 422 | 417 | 452 | 462 | 460 | 439 | - | - | |
| ÅF AB | 57 | 60 | 63 | 64 | 70 | 75 | 73 | 70 | 69 | 70 | 72 | |
| Total | 3,747 | 3,885 | 3,884 | 4,276 | 4,249 | 4,215 | 4,099 | 4,172 | 4,150 | 3,794 | 3,824 | |
| 2008 | 2009 | 2010 | ||||||||||
| Number of working days | Q1 62 |
Q2 62 |
Q3 66 |
Q4 62 |
Q1 62 |
Q2 60 |
Q3 66 |
Q4 63 |
Q1 62 |
Q2 61 |
Q3 66 |
Q4 64 |
| Jan-Sept | |
|---|---|
| Date of acquisition | 2010 |
| Intangible non-current assets | 0.1 |
| Tangible non-current assets | 3.7 |
| Accounts receivable and other receivables | 25.8 |
| Cash equivalents | 3.4 |
| Accounts payable and other liabilities | -16.8 |
| Net identifiable assets and liabilities | 16.2 |
| Goodwill | 89.4 |
| Fair value adjustment intangible assets | 4.8 |
| Fair value adjustment non-current provisions | -0.6 |
| Acquisition cost incl estimated additional purchase price | 109.8 |
| Deduct: | |
| Cash (acquired) | 3.4 |
| Estimated additional purchase price | 28.5 |
| Add: | |
| Part of the additional purchase price to blocked account | 15.2 |
| Net outflow of cash | 93.1 |
Acquisition analyses are preliminary as the assets in the companies acquired have not been definitively analysed. In the case of the above acquisitions, the purchase price has been greater than the assets recognised in the compnies acquired: as a result, the acquisition analysis has created intangible assets. The acquisition of a consulting business involves in the first instance the acquisition of human capital in the form of the skills and expertise of the workforce: thus, the greater part of the intangible assets in the companies acquired is attributable to goodwill. The acquisitions refer to Meacont s.r.o, Regula a.s., Todo s.r.o., VVS Energi i Borås AB, VPC Mechanical Design (business acquisition) and Gatubolaget Konsult i Göteborg (business acquisition).
| Div Inspection | ÅF-TÜV Nord | ||
|---|---|---|---|
| Date of disposal | 25/03/2010 | 27/09/2010 | Total |
| Intangible non-current assets | 15.9 | 15.9 | |
| Tangible non-current assets | 30.3 | 30.3 | |
| Financial non-current assets | 2.6 | 1.5 | 4.1 |
| Accounts receivable and other receivables | 85.5 | 85.5 | |
| Cash equivalents | 10.8 | 10.8 | |
| Accounts payable and other liabilities | -60.7 | 0.5 | -60.2 |
| Net identifiable assets and liabilities | 84.4 | 2.0 | 86.4 |
| Goodwill | 68.1 | 68.1 | |
| Adjustment capital gain | 457.9 | 30.5 | 488.4 |
| Adjustment realised exchange difference | -0.4 | -0.4 | |
| Sales price | 610.0 | 32.5 | 642.5 |
| Deduct: | |||
| Cash (disposal) | 10.8 | 10.8 | |
| Selling expenses | 7.2 | 0.5 | 7.7 |
| Net inflow of cash | 592.0 | 32.0 | 624.0 |
| INCOME STATEMENT PARENT | July-Sept | July-Sept | Jan-Sept | Jan-Sept | Full year |
|---|---|---|---|---|---|
| COMPANY (in millions of SEK) | 2010 | 2009 | 2010 | 2009 | 2009 |
| Net sales | 51.6 | 52.8 | 167.1 | 154.4 | 207.3 |
| Other operating income | 29.7 | 21.7 | 76.4 | 63.8 | 86.8 |
| Operating income | 81.3 | 74.5 | 243.4 | 218.2 | 294.1 |
| Personnel costs | -14.6 | -18.0 | -49.8 | -56.3 | -71.7 |
| Other costs | -63.6 | -59.1 | -194.2 | -173.2 | -219.0 |
| Depreciation | -2.6 | -2.3 | -7.8 | -6.9 | -9.3 |
| Operating profit/loss | 0.5 | -4.9 | -8.3 | -18.2 | -5.7 |
| Net financial items | 383.7 | -0.4 | 904.2 | -0.4 | 1.4 |
| Profit/loss after net financial items | 384.2 | -5.3 | 895.9 | -18.6 | -4.3 |
| Appropriations | - | - | - | - | -13.2 |
| Pre-tax profit/loss | 384.2 | -5.3 | 895.9 | -18.6 | -17.6 |
| Tax | 0.2 | 1.7 | 3.3 | 5.2 | 5.5 |
| Profit/loss after tax | 384.4 | -3.6 | 899.2 | -13.4 | -12.1 |
| BALANCE SHEET PARENT COMPANY | 30 Sept | 30 Sept | 31 Dec |
|---|---|---|---|
| (in millions of SEK) | 2010 | 2009 | 2009 |
| Assets | |||
| Non-current assets | |||
| Participations in Group and Associated companies | 2,110.9 | 1,902.8 | 2,117.5 |
| Intangible assets | 4.7 | 1.4 | 3.3 |
| Tangible assets | 53.9 | 53.3 | 57.5 |
| Financial assets | 18.3 | 7.5 | 3.4 |
| Total non-current assets | 2,187.8 | 1,964.9 | 2,181.7 |
| Current assets | |||
| Current receivables | 169.8 | 245.4 | 252.5 |
| Cash equivalents | 302.9 | 1.9 | 3.9 |
| Total current assets | 472.8 | 247.3 | 256.4 |
| Total assets | 2,660.6 | 2,212.2 | 2,438.1 |
| Equity and liabilities | |||
| Equity | |||
| Share Capital | 170.3 | 170.3 | 170.3 |
| Statutory reserve | 46.9 | 46.9 | 46.9 |
| Non-restricted equity | 1,038.8 | 1,025.9 | 1,187.9 |
| Profit/loss for the period | 899.2 | -13.4 | -12.1 |
| Total equity | 2,155.2 | 1,229.8 | 1,393.1 |
| Untaxed reserves | 25.8 | 12.5 | 25.8 |
| Non-current liabilities | |||
| Provisions | 60.6 | 28.4 | 40.0 |
| Non-current liabilities | 0.2 | 0.2 | 0.2 |
| Total non-current liabilities | 60.8 | 28.5 | 40.2 |
| Current liabilities | |||
| Provisions | 6.5 | 20.5 | 11.5 |
| Current liabilities | 412.3 | 920.9 | 967.6 |
| Total current liabilities | 418.8 | 941.4 | 979.0 |
| Total equity and liabilities | 2,660.6 | 2,212.2 | 2,438.1 |
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