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Stable results in a recovering market
"Despite a decline in net sales due to the Covid-19-pandemic, we are delivering solid results. We have successfully navigated through an uncertain period together with our clients, who require sustainable solutions. We are continuing to strengthen our balance sheet and increase our focus on growth", said
Third quarter 2020
- Net sales amounted to
- EBITA, excl. items affecting comparability, was
- EBITA margin, excl. items affecting comparability, was 7.2 percent (7.6)
- EBITA totalled
- EBITA margin was 6.7 percent (6.8)
- EBIT (operating profit) amounted to
- Basic earnings per share:
January-
- Net sales amounted to
- EBITA, excl. items affecting comparability, was
- EBITA margin, excl. items affecting comparability, was 8.1 percent (8.5)
- EBITA totalled
- EBITA margin was 7.9 percent (7.3)
- EBIT (operating profit) amounted to
- Basic earnings per share:
COMMENTS BY THE CEO
In the third quarter, we continued to feel the impact of the ongoing Covid-19-pandemic. Towards the end of the quarter we noted a recovery in most of our key segments and markets. Despite a decline in net sales, we can report solid results and cash flow. This enables us to continue strengthening our balance sheet and increase our focus on growth. We have maintained a high capacity for delivering to our clients, in parallel with a focus on cost optimisation and increased flexibility in the organisation.
Performance in the third quarter
Net sales amounted to
Extensive measures focusing on efficiency and cost reductions, combined with a slight recovery in September, contributed to a stable result. EBITA excluding items affecting comparability was
Our financial position has strengthened, with a net debt/EBITDA ratio excluding the effect of IFRS 16 and items affecting comparability of 2.0x (2.7), and
Extensive measures
We were quick to implement strong measures to mitigate the effects of the pandemic. In the second quarter, 1,900 employees were under various short-term work schemes, which dropped to around 800 by the end of the third quarter. The plan is for these schemes to essentially cease by the end of November.
The previously announced efficiency programme of
Based on the cost-effective structure we have established, our focus is on pursuing growth in those segments where we are seeing long-term stable demand. As a result, our portfolio has shifted towards strategically important growth segments such as infrastructure and the process industry, as well as food and pharma. A healthy trend in the Nordic public sector, the persistently stable bioeconomy sector, where AFRY holds a world-leading position and the favourable trend in the food and pharma industry are all contributing factors.
Performance in the divisions
The Infrastructure Division was affected by a weak trend in the real estate segment in Scandinavia and
The Industrial & Digital Solutions Division was impacted by the negative trend in the automotive industry, where clients have had a low rate of development and went through internal restructuring. A gradual recovery was noted during the quarter, albeit from low levels. Based on the situation, we have begun repositioning our offer to the automotive industry with the aim of delivering even more high value adding services. Meanwhile, we have noted a strong growth in Food & Life Science.
The Process Industries Division experienced a robust trend in our core markets, and major projects are progressing as planned. However, the division was to some extent affected by the Covid-19-pandemic with longer decision-making processes for new business.
The Energy Division's ongoing repositioning is proceeding as planned, which has helped maintain healthy results. Several projects have been postponed due to the ongoing pandemic, particularly within hydro, thermal and renewable sectors, which may impact sales in the coming quarter.
In the Management Consulting Division, energy consulting operations continued to perform strongly and clear indications of increased activity within the bio-industry sector were noted towards the end of the quarter.
We have delivered exciting projects for our clients during the quarter and I would particularly like to highlight our continued partnership with Metsä Fibre at the new bioproduction facility in Kemi,
An attractive employer
I am delighted to see that AFRY has achieved top ratings in Academic Work and
A long-term, sustainable recovery driven by digitalisation
The need for a societal green recovery after the Covid-19-pandemic has boosted the need for digital and sustainable solutions. AFRY is well positioned to contribute to this development: we have a business that is increasingly focused on transformative segments with long-term growth, in-depth sector knowledge and a strong digitalisation offer.
Outlook
We noted a slight recovery and stabilisation at the end of the quarter, but there is still considerable uncertainty as the pandemic continues globally. Although the challenges are far from over, we are optimistic about coming through this stronger than before. We hold a market-leading position in sustainable solutions, and we have broad exposure to many industries and markets. Our focus is to drive growth, maintain flexibility, and optimise costs to take AFRY to the next level.
Our employees have made a fantastic contribution and I would like to thank everyone for their considerable commitment, flexibility and strong client focus.
I would also like to welcome you to our virtual capital markets day on 24 November, at which we will present our strategy going forward.
ÅF Pöyry AB (publ), SE-169 99
Visitors' address: Frösundaleden 2, 169 70 Solna,
Tel. +46 10 505 00 00 Fax +46 10 505 00 10
www.afry.com / info@afry.com
Corporate ID number 556120-6474
This report has 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
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.
This is a translation of the Swedish original. The Swedish text is the binding version and shall prevail in the event of any discrepancies.
The full report including tables (pdf) is available for download.
Link to press-images
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https://news.cision.com/afry/r/interim-report-january-september-2020,c3221455
https://mb.cision.com/Main/15400/3221455/1322969.pdf
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