Release Date: July 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Afry AB (FRA:B3Y1, Financial) successfully implemented a new group structure aimed at improving efficiency and setting the foundation for profitable growth.
- The company reported a strong order backlog, which increased both sequentially and year over year, indicating a competitive market position.
- The Energy division continued to perform well, with high demand across segments and a strong position in the Nuclear sector.
- Afry AB secured significant project wins, including a framework agreement with BAE Systems Hägglunds and a contract with the Norwegian Nuclear Decommissioning Agency.
- The acquisition of Reta Engenharia in Brazil is expected to strengthen Afry's operations in the Americas and unlock new growth opportunities.
Negative Points
- Net sales declined by 7.2% compared to the previous year, impacted by a weak calendar and significant currency effects.
- The EBITA margin was affected by negative calendar effects and currency impacts, with a reported margin of 6.6%.
- The Pulp and Paper segment continued to face challenges with low demand for new investment projects.
- The Real Estate sector remained weak, contributing to overall market uncertainty.
- Restructuring costs of SEK91 million were reported, with further costs of SEK200 million to SEK300 million expected over the next 12 months.
Q & A Highlights
Q: Can you elaborate on the SEK200 to SEK300 million restructuring costs and their expected impact?
A: Bo Sandstrom, CFO, explained that the restructuring costs are expected to result in a run rate uplift equivalent to the restructuring amount, with a payback time of one year. The restructuring efforts are primarily personnel-related, aiming to improve efficiency and cost structure across the organization.
Q: How has the quality of the order book changed with the new initiatives?
A: Linda Palsson, CEO, stated that improving the order book's quality has been a priority. Structures have been put in place to approve new projects with better margins, and while some low-margin projects remain, the overall quality and margin of the order book are improving.
Q: What is the composition of the restructuring initiatives, and how do you balance potential demand recovery with scaling down?
A: Linda Palsson, CEO, confirmed that the restructuring is mainly personnel-related, focusing on organizational efficiency. Despite scaling down, Afry is well-positioned to quickly scale up if demand recovers, thanks to its strong brand and recruitment capabilities.
Q: Can you provide more details on the increased activity in Latin America, particularly in the pulp and paper sector?
A: Linda Palsson, CEO, noted that while the pulp and paper sector has been challenging globally, there are promising signs in Latin America, with more early-phase studies and projects emerging, indicating a potential recovery in the region.
Q: How are customer discussions progressing in the Industrial and Digital Solutions (IDS) segment, and what trends are you observing?
A: Linda Palsson, CEO, mentioned a mixed outlook, with slow movement in the automotive industry due to tariffs, but positive signs in the defense sector. The market for food, pharma, and other elements remains stable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
