ÿF - Interim report January to September 2009
(Thomson Reuters ONE) - For further information, please contact:Jonas Wiström, President/CEO +46 (0)70-608 12 20Jonas ÿgrup, CFO +46 (0)70-333 04 95Viktor Svensson, Director, Corporate +46 (0)70-657 20 26Information Third quarter 2009 * Operating income totalled SEK 997 million (Q3 2008: SEK 987 million) * Operating profit was SEK 72 million (SEK 81 million) * Operating margin was 7.2 percent (8.2 percent) * Earnings per share, before dilution: SEK 2.73 (SEK 3.46)January-September 2009 * Operating income totalled SEK 3,404 million (SEK 3,224 million) * Operating profit was SEK 278 million (SEK 332 million) * Operating margin was 8.2 percent (10.3 percent) * Earnings per share, before dilution: SEK 11.25 (SEK 13.67)A few words from the President, Jonas Wiström:While the economy has remained weak throughout the third quarter,there are indications that things have begun to bottom out. There hasbeen a slight increase in activity in the market since the summer andÿF is currently involved in more investment discussions with clientsthan was the case six to nine months ago.After the appropriate adjustments have been made to account for thereduction in Alecta's pension premiums in 2008, third quarteroperating profit for ÿF in 2009 was slightly higher than during thecorresponding period last year. The operating margin was 7.2 percentfor the quarter, bringing the overall figure for the first ninemonths of the year to 8.2 percent. The lower capacity utilisationrate has been outweighed by reduced costs and a more profitableportfolio of services. Assignments related to energy and environmentprojects worldwide currently account for more than 40 percent of ÿFsales.Growth for the first three quarters was 6 percent. Organic growth wasnegative.For ÿF the most important objective is to continue to report levelsof profitability that put us among the best performers in ourindustry. At the same time, however, ÿF also has its sights set onhigher growth. Our long-term objective is to grow by 15 percent ayear. Financially the company is in a strong position to make furtheracquisitions in our main growth areas of Energy, Energy Efficiencyand Infrastructure Planning. There are also good opportunities fororganic growth in Sweden and abroad. On 15 October ÿF secured secondplace among Sweden's most attractive employers in Universum's2009/2010 survey of 6,000 professional engineers.Important events during Q3 2009 and after the reporting dateThrough its Swiss subsidiary, ÿF-Colenco, ÿF was appointed principalconsultant for a new hydro-electric power plant in Switzerland. Theclient is NdD SA, a joint venture between Switzerland's largestenergy producer, Alpiq, and Swiss Federal Railways SBB together withthe regional electricity company FMV. ÿF is responsible for all theproject management and construction services in an order that isworth 27 million euros for the company.ÿF was appointed principal supplier of technical consulting servicesfor the construction of a new 1,000 MW gas-fired power plant inIndia. The client and owner of the plant is Tuff Energy, an Indianindustrial conglomerate. The order is worth 1 million euros for ÿF.Sales and earnings, Q3 2009Operating income totalled SEK 997 million, a 1 percent increase onthe figure of SEK 987 million for the corresponding period in 2008.Operating profit amounted to SEK 72 million (Q3 2008: SEK 81million). The operating margin was 7.2 percent (8.2 percent).However, the profit for Q3 2008 was affected by a pension premiumreduction from Alecta, which had a positive impact on earnings of SEK9.5 million.Capacity utilisation was 72 percent (74 percent).Profit after net financial items amounted to SEK 67 million (SEK 80million). The profit margin was 6.7 percent (8.1 percent).Earnings per share, before dilution, were SEK 2.73 (SEK 3.46).Sales and earnings, January-September 2009Operating income totalled SEK 3,404 million, a 6 percent increase onthe figure of SEK 3,224 million for the first three quarters of 2008.Operating profit amounted to SEK 278 million (Q1-Q3 2008: SEK 332million). The operating margin was 8.2 percent (10.3 percent).However, the profit for the first nine months of 2008 was affected bya pension premium reduction from Alecta, which had a positive impacton earnings of SEK 28.5 million.Capacity utilisation was 72 percent (75 percent).Profit after net financial items amounted to SEK 267 million (SEK 320million). The profit margin was 7.8 percent (9.9 percent).Earnings per share, before dilution, were SEK 11.25 (SEK 13.67).InvestmentsGross investment in property, plant and equipment for the periodJanuary to September 2009 totalled SEK 28 million (Q1-Q3 2008: SEK 65million). In 2008 SEK 33 million were invested in land and buildingsto meet the growth in business for ÿF's Swiss subsidiary ÿF Colenco.Cash flow and financial positionOperating cash flow for the third quarter was negative, SEK -39million, as opposed to a positive figure of SEK 6 million for thecorresponding period in 2008. Total cash flow for the period was alsonegative at SEK -8 million (Q3 2008: SEK +15 million).Operating cash flow for the period January-September 2009 was SEK 155million (SEK 165 million). Total cash flow for the first nine monthswas negative, SEK -23 million (SEK +12 million). Acquisitionscompleted and additional considerations paid amounted to a total ofSEK 37 million (SEK 95 million).The Group's liquid assets at the end of the reporting period totalledSEK 253 million (SEK 334 million).Equity per share was SEK 99.86 and the equity/assets ratio was 50.1percent. At the beginning of 2009, equity per share was SEK 99.46 andthe equity/assets ratio was 47.1 percent. The Group's net loan debttotalled SEK 209 million (SEK 183 million) at the end of thereporting period.Number of employeesThe total number of employees at the end of the reporting period was4,319 (Q3 2008: 4,113): 3,109 in Sweden and 1,210 outside Sweden.Translated into full-time equivalents, this corresponds to 4,185employees (3,840).Divisional performance, third quarter 2009Energy Division Operating income Q3, SEK 293 million (SEK 224 m) Operating margin Q3: 8.1% (12.7%) Operating income Q1-Q3, SEK 908 million (SEK 668 m) Operating margin Q1-Q3: 8.5% (11.4%)The Energy Division is a front-rank international energy consultantand a world leader in nuclear power consulting.The market for energy consulting has picked up slightly since thesummer, as witnessed by an increase in outstanding quotations andtenders at the same time as incoming orders for the Energy Division'sservices have exceeded expectations.The quarter's highest levels of profitability were reported by theunits in Switzerland and Finland, both of which are involved in majorinternational project control assignments primarily in Europe andAsia. In the short term the substantial organic expansion that iscurrently taking place in the Energy and Environment business areasof the division's Swedish operations is having a detrimental impacton profitability.Growth in the division is attributable chiefly to the acquisition ofLonas in Russia (in October 2008). Following a recovery in theRussian financial system, the energy market in Russia is graduallypicking up strength once more. Lonas won two relatively large ordersin September, one for the construction of a coal-fired power plantand one for a gas-fired plant. The company reported satisfactoryprofits for the third quarter.The Energy Division's expansion in India is also worthy of mention.In the third quarter ÿF won four medium-sized consulting assignmentsfor clients in the sub-continent's thermal power generation industry.The division has been active in India for several years, workingprimarily with hydro-electric power and dam projects. ÿF has anoffice in Delhi with a workforce of around 40.Engineering Operating income Q3, SEK 284 million (SEK 300 m) Operating income margin Q3: 9.3% (6.5%) Operating income Q1-Q3, SEK 971 million (SEK 1,061 m) Operating margin Q1-Q3: 10.0% (9.8%)The Engineering Division is Northern Europe's leading technicalconsultant for industry.Engineering noted some signs of a stabilisation in the industrialeconomy towards the end of the third quarter. For the first time inmore than 12 months, orders from the mining and steel industry wereup, as were those from clients in the pulp and paper industry. Demandalso remained good from the food processing, pharmaceutical, energyand nuclear power sectors.The improvement in the division's earnings is thanks primarily to amore profitable portfolio of services, better control overfixed-price projects and continuing downward movements as far as costare concerned.During the course of 2009 the Engineering Division has laid off some50 employees in sectors where demand for services has been low, whichexplains the reduction in sales. At the end of the third quarter,however, the division once again moved into positive territory interms of organic growth.Engineering won a major hydropower assignment in northern Swedenduring the third quarter, in line with its strategy of expanding inthis segment.Infrastructure Operating income Q3, SEK 351 million (SEK 404 m) Operating margin Q3: 4.2% (5.7%) Operating income Q1-Q3, SEK 1,290 million (SEK 1,343 m) Operating margin Q1-Q3: 7.3% (9.6%)The Infrastructure Division holds a leading position in consultingservices for infrastructure development in Scandinavia. It hasclients in the public sector, the defence sector, industry and theproperty market.The market for the services of the Infrastructure Division dippedduring the first half of the year and has continued to remain at thislower level in all but two market areas, Infrastructure Planning andEnergy Efficiency in the property sector.For the division's largest business area, Installations, whichemploys a total of 650 consultants in Sweden and Norway,profitability has fallen as the market for construction-relatedservices both for industry and among private construction andproperty companies has contracted. One area of the market that isstill growing rapidly, even in the midst of the current economicdownturn, is the need for measures to improve energy efficiency inall types of properties and premises.The business area that has seen the strongest development in thethird quarter is Infrastructure Planning. In a market that continuesto be driven by large-scale investments in Sweden's road and railnetworks, operations here showed strong organic growth and improvedprofits.Demand for the services of the Product Development business area hasimproved slightly after the summer.Inspection Operating income Q3, SEK 98 million (SEK 88 m) Operating margin Q3: 12.1% (13.4%) Operating income Q1-Q3, SEK 300 million (SEK 252 m) Operating margin Q1-Q3: 9.3% (12.1%)The Inspection Division works with technical inspections, chiefly inthe form of periodic inspections, testing and certification. Theengineering and nuclear power industries are among the division'smajor clients.The market for technical inspections developed positively during thethird quarter. Demand rose in all the division's areas of expertise,most significantly for services related to testing. Demand was onceagain strongest from the nuclear power industry.Profits were reduced by investment in equipment and specialist skillsfor the nuclear power industry, with costs exceeding the resourcesearmarked for this in the budget. Measures will be taken, however, toreduce development costs and increase income.Growth for the reporting period is attributable both the acquisitionof the Czech company Qualitest (in September 2008) and to organicgrowth in Swedish business operations. In the third quarter the Czechunit continued to report better than anticipated results.Parent companyParent company operating income, primarily for various intra-groupservices, totalled SEK 218 million for the period January-September(Jan-Sept. 2008: SEK 185 million).The parent company reported a loss of SEK 19 million (SEK -25million) after net financial items. Cash and cash equivalentstotalled SEK 2 million (SEK 2 million), and gross investment inmachinery and equipment for the period amounted to SEK 3 million (SEK9 million).The parent company has increased its participation in Group andassociated companies to SEK 1,903 million (SEK 999 million), due tointernal restructurings of the shareholdings.Accounting principlesThis interim report has been prepared in accordance with IAS 34("Interim Financial Reporting"). The report conforms withInternational Financial Reporting Standards (IFRS), as well as withstatements on interpretation from the International FinancialReporting Interpretations Committee (IFRIC) as approved by theEuropean Commission for use in the EU, and with the relevantreferences to Chapter 9 of the Swedish Annual Accounts Act. Thereport has been drawn up using the same accounting principles andmethods of calculation as those in the Annual Report for 2008 (seeNote 1, page 83). The parent company has implemented the SwedishFinancial Reporting Board's Recommendation RFR 2.1 ("Accounting forLegal Entities"), which means that the parent company in the legalentity shall apply all the IFRS and related statements approved bythe EU as far as this is possible, while continuing to apply theSwedish Annual Accounts Act in the preparation of the legal entity'saccounts.Risks and uncertainty factorsThe significant risks and uncertainty factors to which the ÿF Groupis exposed include business risks linked to the general economicsituation and the propensity of various markets to invest, theability to recruit and retain qualified co-workers, and the effect ofpolitical decisions. In addition, the Group is exposed to a number offinancial risks, including currency risks, interest-rate risks andcredit risks. The risks to which the Group is exposed are describedin detail on pages 56-60 of ÿF's Annual Report for 2008. Nosignificant risks are considered to have arisen since the publicationof the annual report.ÿF sharesThe ÿF share price at the end of the reporting period was SEK 172,which represents a rise in value of 45 percent since the beginning ofthe year. During the same period the Stockholm Stock Exchangeall-share index (OMXSPI index) rose by 37 percent.Share savings schemeAt the Annual General Meeting of shareholders in ÿF held on 5 May2009 a resolution was approved to implement a performance-relatedshare programme aimed at up to 160 key individuals in the ÿF Group,including the CEO. Participants in the scheme may, during a 12-monthperiod from the implementation of the programme, save an amountequivalent to a maximum of 5 percent of their gross salary for thepurchase of ÿF shares on the OMX Nordic Exchange in Stockholm. At theend of the registration period 110 senior executives had registeredtheir interest in purchasing approximately 23,400 shares for theentire 2009 programme. This means that, provided that the performancetargets are met in full, a total of approximately 99,000 shares willbe transferred without consideration to participants during 2012 and2013. This corresponds to a maximum of 0.6 percent in terms of thedilution of earnings per share.During the first quarter of 2009 a total of 45,000 ÿF shares wereacquired by the company. The purpose of these buy-backs was tosafeguard the company's obligations with regard to the 2008performance-related share programme.Next financial reportThe summary of ÿF's annual report for 2009 will be published on 17February 2010.Stockholm, Sweden - 21 October 2009,ÿF AB (publ)Jonas Wiström, President & CEOThe information in this interim report is that which ÿF AB isrequired to disclose under Sweden's Securities Market Act and/or theFinancial Instruments Trading Act. The information was released forpublication at 08.30 C.E.T. on 21 October 2009. ÿF AB (publ) Corporate identity number 556120-6474 Frösundaleden 2, SE-169 99 Stockholm, Sweden Telephone +46 (0)10 505 00 00 Telefax +46 (0)8 653 56 13 E-mail: info(at)afconsult.com www.afconsult.comThe full report including tables can be downloaded from the followinglink:http://hugin.info/1253/R/1348795/324730.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 21.10.2009 - 08:30 Uhr
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