ANNUAL REPORT 2014 a Message from the CEO 2 Our Unique Breadth of Expertise Gains Relevance
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ÅF’S OFFERING Contents The year at a glance 1 A message from the CEO 2 Vision, mission, objectives, strategy 4 Branding 6 Human resources 8 Offering 12 Market trends and business review 16 Industry Division 20 Infrastructure Division 24 International Division 28 Technology Division 32 Sustainability report 37 Administration report 47 Risks and risk management 50 Consolidated income statement 53 Statement of consolidated comprehensive income 53 Consolidated balance sheet 54 Statement of change in consolidated equity 56 Statement of consolidated cash flows 57 Parent income statement 58 12 Parent balance sheet 59 Statement of change in parent equity 61 Statement of cash flows for parent 62 Notes 63 11 Annual Auditor’s report 89 Chairman’s report 90 Corporate governance report 91 Board of Directors 96 Group management 98 EMMA CLAESSON, VICE PRESIDENT, HUMAN RESOURCES & COMMUNICATIONS Report The share 100 ÅF Offshore Race 103 SOLUTIONS FOR A Five-year financial summary 104 BETTER FUTURE Definitions 106 2014 Events and reports 107 14 ÅF is an engineering and consulting company for the energy, industrial and infrastructure markets, creating progress for our clients since 1895. By connecting technologies we provide profitable, innovative and sustainable solutions to shape the future and improve people’s lives. Building on our strong base in Europe, our business and clients are found all over the world. ÅF – Innovation by experience. 12 Cover: ÅF and Charlotte Kalla reached an agreement on a four-year partnership. The partnership consists of a traditional sponsorship and an educational component designed to prepare Charlotte for life after her sporting career. Find out more on page 6. This is ÅF Progress since 1895 Many believe ÅF is all about technology. But steam power, from which we have derived we think our story is mainly about people – our name and trademark, ÅF. bold engineers, business experts, visionary Our driving force is powered by the leaders and other professionals working curiosity and knowledge of our forward- together so new insights and ideas can thinking employees. This places high grow into smart solutions that move society demands on our ability to lead and empower forward. people in exploring new opportunities Every day we strive to improve people’s beyond conventional solutions, and support lives, by developing energy-efficient them in continuing to build on established solutions, investments in infrastructure, know ledge and experience in a creative way. assignments within various types of energy, At the heart of our culture, we’re a projects for industry and much more. We company where people are allowed to grow connect cities, countries and cultures as individuals and as a team. A company with bridges, competence networks and that believes equality will make us stronger, mobile solutions. We generate jobs through more productive and successful. A company technology that make companies grow and that works hard to make a difference – prosper. because tomorrow will always be a result of As an engineering and consulting what we achieve today. company operating across the globe, we connect technologies to create progress for ÅF – our clients. This is something we have done Innovation by experience successfully for more than one hundred years. We started in 1895 as Ångpanne- föreningen, an association focusing on ÅF has offices and projects ÅF has carried out projects Sectors Our 10 largest clients Proportion of employees per country AB Volvo Swedish Defence Materiel Sweden EON Administration (FMV) Denmark ENERGY INDUSTRY INFRASTRUCTURE Ericsson Swedish Transport Finland ÅF is one of the world’s leading ÅF offers engineering services in ÅF is one of the leading names in Helse SørØst Administration Norway engineering and consulting all technologies and in all sectors Scandinavia in sustainable tech- Oslo Lufthavn Vattenfall Switzerland companies within energy. of industry. nical solutions for buildings and Scania Volvo Cars Czech Republic infrastructure. Other Industries Industries • Hydropower • Automotive Industries History • Nuclear power • Defence and security • Property Renewable energy Engineering Roads and railways • • • ÅF has been part of 1895 Ångpanneföreningen – the 1986 The company is listed on the Thermal power Food processing and • • four major technological Southern Swedish Steam Gen- Stockholm Stock Exchange. • Transmission and distribution pharmaceuticals revolutions: steam erator Association – is founded New strategy and consolidation. Forestry 2003 • power, electricity, by the owners of steam genera- Mining 2008 Ångpanneföreningen changes • nuclear power and tors and other pressure vessels Oil and gas name to ÅF. • digitalisation. to prevent accidents through • Telecommunications regular inspections. 2010 Inspection business is sold to DEKRA Industrial. 1976 Inspection activities are nation- alised. ÅF continues to provide 2012 ÅF acquires Epsilon and Advan- related consulting services. sia, taking it from 5,000 to 7,000 employees in 20 coun- 22 % 44 % 34 % tries. 1 THE YEAR at A GLANCE The year at a glance Net sales Operating profit Operating margin 8,805 756 8.6 SEK m (8,337) SEK m (722) PERCENT (8.7) Earnings per share Proposed dividend Number of employees 7.16 1) 3.50 7,117 SEK (6.70) SEK (3.25) (7,043) Group net sales, SEK m Group operating profit Dividend per share, SEK and operating margin, excl. non-recurring items, SEK m 10,000 800 3.50 700 3.00 8,000 600 2.50 6,000 500 2.00 400 8.7 8.5 8.3 8.3 1.50 4,000 300 1.00 200 2,000 7.3 0.50 100 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 20122011 20132012 20142013 2009Legend2010 till de svarta staplarna Legend till de svart staplarna Legend till den lila stapeln Legend till den lila stapeln Legend till linjen Financial summary Group net sales by division Financial summary 2014 2013 Net sales, SEK m 8,805.0 8,337.0 Industry Infrastructure Operating profit, SEK m 756.3 722.5 Division Division Operating margin, % 8.6 8.7 Capacity utilisation, % 76.1 75.1 Profit after net financial items, SEK m 720.1 677.3 Number of employees 7,117 7,043 29% 30% Equity per share, SEK 51.17 47.33 International Technology Division Division Equity ratio, % 54.1 51.9 Return on equity, % 14.5 15.0 Basic earnings per share, SEK 7.16 6.70 Dividend per share, SEK 3.502) 3.25 12% 29% 1) Basic. 2) Proposed dividend. Comparative figures adjusted for share split in 2014. ÅF ANNUAL REPORT 2014 A MessaGE froM THE CEO 2 Our unique breadth of expertise gains relevance With primarily organic growth and the best annual profit to date, the outcome for 2014 was satisfactory, despite uncertain economic conditions in most markets. The major long-term trends, globalisation and urbanisation, as well as sustainability, mean we are well-positioned with our technical expertise to be able to meet clients’ future needs for profitable, innovative and sustainable solutions. 2014 was something of a year of consoli- The International Division has seen dation for ÅF, with growth of just under positive development in our core coun- six percent. A slowdown was noted in tries Switzerland and the Czech Repub- several of our markets, mainly in the sec- lic, while restructuring initiatives have ond half of the year. We did not make been carried out in Spain. Work on any large acquisitions during the year, developing new markets outside Europe which means that growth was gener- has proved successful, as has our ambi- ated almost exclusively organically and tion of being an international bridge- through a large number of new appoint- head for other divisions, which resulted ments. This growth also compensated for example in an assignment for the for the sale of the Russian business Technology Division in Brazil. Lonas, with 350 employees. In the Technology Division, the busi- Annual profit was ÅF’s best to date ness area IT Solutions accounted for the and we displayed the highest level of highest growth, however Embedded Sys- profitability in 2014 among compara- tems also displayed healthy growth and ble companies, which is consistent with profitability. Several significant con- our financial objectives. Our strong cash tracts were signed during the year with flows were also encouraging, as it means the defence industry, along with a num- we have a firm basis from which to con- ber of framework agreements with pub- tinue to grow. lic sector clients. Our divisions achieved a satisfac- tory level of growth and profitability, Factors for sustainable growth despite increasing price competition and Two major trends are fundamental to our a noticeable weakening in some market clients, and therefore also to ÅF’s abil- segments. The Industry Division signed ity to retain a competitive edge and grow. a number of significant agreements dur- The first is globalisation, and the second is ing the year, including within the for- urbanisation. Both trends are expected to estry, mining and automotive industries, persist for the foreseeable future and have which further consolidated the division’s a global impact on both social and indus- position as the leading project supplier trial development, with sustainability as within the Nordic region’s process and the common denominator. manufacturing industry. In the three sectors in which ÅF The Infrastructure Division displayed chiefly operates, energy, industry and healthy growth, especially within the infrastructure, the need for solutions area of roads and railways. One par- that are more sustainable is a consist- ticularly satisfying new assignment was ent theme throughout essentially all cli- the East Link, the first stage of the high- ent assignments and projects. More eco- speed East Link railway that is to be friendly electricity production and a constructed in Sweden, and which ÅF, lower proportion of fossil energy sources together with Tyréns, won on expertise is a strong trend in the energy sector.