ÅF Pöyry : AF Poyry Q4 2020 presentation

Q4 report Oct-Dec 2020

JONAS GUSTAVSSON, CEO / JUUSO PAJUNEN, CFO / FEBRUARY 5, 2021

Strengthened profitability and continued recovery in Q4

- Improved profitability due to extensive measures

Q4 2020

Net sales: SEK 4,907 million (5,447)

EBITA*: SEK 490 million (516)

EBITA-margin: 10.0% (9.5)

Jan-Dec 2020

• Strengthened balance sheet - increased focus on growth
• Growth impacted by Covid-19(-5.5% excl. FX)
• FX negatively impact of Net sales of approx. 200 MSEK and EBITA approx. 20 MSEK

Net sales: SEK 18,991 million (19,792)

EBITA*: SEK 1,635 million (1,731)

• Stabilisation and cautious recovery within all segments, but still uncertainty

EBITA-margin: 8.6% (8.7)	- Long-term cost savings for full-year of SEK 210
	million (vs SEK 120 million previously announced)
	- The Board of Directors proposes a dividend of SEK
	5.00 per share

2*excl items affecting comparability

2020 an eventful year

• A challenging year where Covid-19 had a big impact, strong measures taken to mitigate the effects
• High delivery capacity to our clients
• Revised strategy launched focused on growth, sustainability and digitalisation
• Successful repositioning of Division Energy and also the automotive segment
• Ramped-upacquisition agenda
• Established our new brand and one of the most attractive employers in Sweden
• New partnerships e.g:
• • 1.5°C Business Playbook for exponential climate action
  • Gapminder Foundation

3 - Science Based Targets' Initiative

Market update

• Continued impact from Covid-19, however recovery and increased optimism
• Overall solid underlying long-term demand driven by sustainability and digitalisation
• In Infrastructure, healthy underlying demand however slower development in real estate
• In Industrial & Digital Solutions continued impact on automotive while strong demand in food & life science
• Strong demand in Process Industries and large projects continue as planned
• Stable demand in Energy, although some project delays in hydro, thermal and renewables
• In Management Consulting, strong demand within energy consulting business

4

Projects to highlight

• Planning of the eastern leg of new tramway line in Vantaa, Finland
• Technical systems design for section of the Swedish West Link for Trafikverket
• Engineering assignment for SCA's new pulp production in
  Ortviken, Sweden
• Engineering assignment for Metsä Fiber for the sawmill in Rauma and bioproduct factory in Kemi, Finland
• Framework agreement with Scania in product development
• Construction of seaweed factory for Volta Greentech in Lysekil, Sweden
• Owner's engineer services assignment for cogeneration power plant project in Thailand

5

Acquired growth in targeted geographies

	Company	Segment	Approx net sales
	ProTak	Digital, Process Industries	MSEK 13*
	Lexter	Lighting, Infrastructure	MSEK 16
	EKOM	Water expertise, Energy	MSEK 5*
	Ramentor	Digital, Energy	MSEK 7
	ITE	Digital, Process Industries	MSEK 40*
	Østerhus

OUR GROWTH AMBITION

• Top position in all countries with focus on transforming segments
• Ramping up recruitment and attracting talents - organic growth
• Ramping up M&A-agenda
• • Bolt-onacquisitions
  • Strategic platforms

*Acquired after the period

6

Net Sales development

Q4 2020

• Total growth: -9.9%
• Growth excl. FX: -5.5%
• Adjusted/underlying organic growth: -6.5%

COMMENTS

• FX-impactapprox. -200 MSEK
• Continued impact from Covid-19, especially in automotive and manufacturing
• Growth also affected by the repositioning of Division Energy and decrease in real estate
• Order backlog in local currency at a stable level
• Stabilisation and cautious recovery within all segments compared with Q3

NET SALES, MSEK

5 500								22 000
5 000								20 000
4 500								18 000
4 000								16 000
3 500								14 000
3 000								12 000
2 500								10 000
2 000								8 000
1 500								6 000
Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
18	19	19	19	19	20	20	20	20
			Quarter		Rolling 12 mths

7

Continued cost savings from indirect expenses

Q3 Change vs. PY, BSEK
0,54
	0,48
	0,18
	0,30
Decrease in	Reduction
revenue	of expenses
8

Q4 Change vs. PY, BSEK
0,54	0,51	Reduced EBITA
		of approx. 0,03 BSEK
	0,16	Direct project expenses:
		Materials, subconsulting and
		other project related
		expenses reduced along
		with the sales
	0,35	Indirect expenses:
		Other expenses such as
		personnel expenses,
		facility, IT etc.
Decrease in	Reduction
revenue	of expenses	*) FX- also reducing both revenue and costs

EBITA development

Q4 2020*

• EBITA amounted to SEK 490 million (516)
• EBITA margin up to 10.0% (9.5)

COMMENTS

• Improved margin in line with our long-term goal of 10 percent, despite revenue decline
• 4 out of 5 divisions showed an improved margin compared with last year
• FX-impactof approx. SEK -20 million
• Strong positive impact from efficiency program and general cost savings

* Excl. items affecting comparability

EBITA, MSEK*

550								2 000
500								1 800
450								1 600
400								1 400
350								1 200
300								1 000
250								800
200								600
150								400
Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
18	19	19	19	19	20	20	20	20
			Quarter		Rolling 12 mths

9

EBITA-bridge

EBITA CHANGE COMPARED TO PREVIOUS YEAR

- Calendar impact approx. 5 hours more, due to timing, limited revenue impact

9.5%
516
8				10.0%
24		11	7	490
	0	3

Q4 2019 Infrastructure Industrial &	Process	Energy Management Common	Q4 2020
Digital	Industries	Consulting
Solutions

• Divisions impacted differently by Covid-19 however impact continue to stabilise in especially automotive and real estate segments
• Operationally Process Industries, Energy and Management Consulting improving, but all impacted by negative translation differences in FX
• Repositioning of Energy providing results, Management Consulting supported by success fees and Covid-19 savings

10

Growth and profitability

INFRASTRUCTURE

• Growth negatively impacted by the real estate segment. Strong development within Water and Environment.

INDUSTRIAL & DIGITAL SOLUTIONS

Q4 ORGANIC GROWTH, % ADJUSTED WITH CALENDAR EFFECTS

15	12.3

10

5.9

5

0

-5		-4.4		-3.5

-10

-15

-14.1

-20

Industrial

& Digital ProcessManagement Infrastructure Solutions Industries Energy consulting

Q4 EBITA, % (previous year)

20,0

17.8 (13.3)

18,0
16,0
14,0			13.3 (13.0)
12,0
				10.0 (8.3)
10,0	9.2 (9.0)
	8.0 (8.5)
8,0
6,0
4,0
2,0
0,0

Industrial	Process		Management
& Digital
Infrastructure Solutions	Industries	Energy	consulting

• Growth and profitability down due to automotive segment. Strong development in Food & Pharma.

PROCESS INDUSTRIES

• Strong development in Sweden, Finland and Latin America. Profitability on a high and stable level.

ENERGY

• Decline in growth due to the repositioning and completion of a large EPC+ project. Improved profitability.

MANAGEMENT CONSULTING

• Strong development with the Energy consulting business.

11

Net debt development - strong liquidity

Net Debt1, MSEK

• Net Debt at SEK 2,756 million, a decrease by SEK 1,668 million compared to Q4 2019
• Solid financial position with Adjusted Net Debt/EBITDA at 1.6 (2.3)
• No signs of delays in customer payments
• Available liquid assets of SEK 1,930 million and unutilised credit lines of SEK 3,050 million
• The Board of Directors proposes a dividend of SEK 5.00 per share

5 000
4 424	4 357
4 000	3 455			3 586	3 523
3 000	2 631										2 756

1. 000

1. 000
   0

	2017	2018	2 019	Q1 2020	Q2 2020	Q3 2020	Q4 2020
Net Debt/EBITDA2
3,0
	2,5	2,3	2,3
2,5
2,2		2,0	2,0
2,0
						1,6
1,5
1,0
0,5

0,0

2017

2018

2 019

Q1 2020

Q2 2020

Q3 2020

Q4 2020

1. Excl. Item affecting comparability and IFRS16

122. Calculated excluding IFRS16 impact, including Pöyry for rolling 12m and excluding items affecting comparability

New strategy focused on growth

WHO WE ARE

OUR VISION

Making Future

OUR AMBITION

A European leader in sustainable engineering, design

HOW WE GET THERE

1 Drive growth in targeted geographies - organic and acquired

OUR MISSION

We accelerate the transition towards a sustainable society

OUR VALUES

Brave

Devoted

Team players

OUR PEOPLE

Inclusive and diverse teams with deep sector knowledge

and advisory with a global reach

2 Target transforming segments that shows secular growth - where we have a strong position in the customer value chains

3 Develop AFRY Digital

• a new strategic growth platform

4	Lead in sustainable solutions to
	drive impact and growth
5	Deliver best in class operations to
	drive growth and scalability

CLEAN ENERGY

BIOINDUSTRY

INFRASTRUCTURE FOOD & LIFE SCIENCE

13

Focus going forward

• Market recovery and increased optimism
• Strengthened balance sheet - focus on growth
• Develop digital growth platform
• Accelerate sustainable transition in line with green recovery
• Starting up 2021 with strong platform and positive momentum

Financial targets unchanged

GROWTHEBITA	NET DEBT / EBITDA
10% 10%	2.5

Digital revenue next 5 years

CURRENT DIGITAL REVENUE OF GROUP REVENUE

3X >20%

Sustainable Cost savings

20192020

218 210

14

Questions

Thank you!