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Afry Ab
10/22/2026
Good morning and a warm welcome to AFRI's presentation of our Q3 results. I am Linda Palsson, president and CEO, and I will, together with Bo Sandstrom, present our numbers. And after the presentation, we will open up for Q&As. AFRI delivered stable results for the third quarter with improvement in several of our key metrics. The order backlog remained strong and amounted to 22.1 billion SEK. Total sales growth was 1.9% with positive contribution from the company AMC that we acquired in the second quarter. Organic sales declined 1.5%, marking a lower rate of decline that we have seen in recent quarters. We continue to build on the operational improvements we have achieved over the past year. Our EBITDA margin improved to 6.8%, supported by the utilization rate, which increased to 72.9%. And as we said in Q2, our focus has shifted to organic growth across the organization. And this will be key to translating the improvements into a sustainable profitability uplift. So let me now walk through the performance of each global division, starting with energy. Here we continue to see strong demand across all segments. Long-term market trends are favorable. They're supported by electrification, grid expansion, and fossil-free energy production. And in August, A3 Management Consulting was recognized by Forbes as one of the world's best management consulting firms. And that was for the fifth year in a row. And increasing the share of advisory services remains a key priority in our Unlocking A3 strategy. Our strong reputation and position in the market is an important enabler for continued growth in this area. So energy reports solid sales growth in the quarter, driven by strong demand across our segments and was supported by a high level of material sales. With stronger order backlog, we see good opportunities for growth in this division. Moving over to industry. In the industrial sector, market conditions remained mixed with strong growth opportunities in some areas and softer demands in others. In the life science segment, we continue to strengthen our position. In Germany, which is one of our growth markets, we have established a local team and hired dedicated senior leadership within the life science sector. Because Germany is one of Europe's largest life science markets and we see strong growth opportunities driven by the need for modernization, capacity expansion and a more sustainable and digitalized production. And by strengthening our local presence, we can better leverage AFRI's broad engineering capabilities to support clients across the full lifecycle and capture this market potential. During the quarter, total sales growth was 5.5% for the division, while organic growth was slightly negative. The EBITDA margin was higher than last year and the AMC acquisition and the project closings contributing positively to both sales and profitability in the quarter. And from that, moving on to transportation and places. Here, the market for transportation was stable. At the same time, opportunities within the real estate market were mainly driven by defense-related investments, healthcare, and data centers. During the quarter, we also established architecture as a separate segment in the division. This builds on the launch of AFRE Architects that we did in the beginning of the year, which brought our architecture and design expertise together under one brand. It strengthened our ability to engage early in projects, to support clients across the full lifecycle, and to simplify collaboration across segments. If we look at the results for the quarter, the performance in the transportation business was solid. This was however offset by continued weak results in the real estate business. Turning to some of our new client projects in the quarter. All these assignments reflect long-term trends that underpinned our strategy and drive demand for our services, including electrification, the energy transition, and modernization of critical infrastructure. In Switzerland, we have been awarded a contract by Swissgrid to support the modernization of the transmission grid. This type of project is an example of the strong investment activity we see in power network and grid resilience across Europe, areas where we have a leading expertise. A second example is North Star H2, where we have been selected by Uniper to lead engineering for one of Sweden's most promising Power2X projects. This project aligns closely with our focus on supporting the energy transition while also strengthening Europe's domestic e-fuel production. And finally, the ongoing need to modernize and maintain critical infrastructure remains an important driver in our transportation and places business. And in Stockholm, we will deliver detailed design for the renovation of the Liljeholmen bridges, a vital transport link in the city. Recruitment is a key priority as we focus on driving organic growth. Our effort spans engineering, advisory and project management disciplines aligned with areas where we see strong growth opportunities. And in addition to growing capacity in core markets, we are also scaling capacity in our global delivery centers to further improve access to skilled resources. We also have dedicated programs for onboarding and capacity development. Examples include our Future Energy program for recent graduates and our Nuclear Academy, enabling employees to develop expertise in a growing sector. We are also harmonizing our employer brand to create a more consistent presence globally in our markets. and building on our strong employer reputation evidenced by external rankings. This makes us well positioned to continue to attract and retain talent. Together these efforts support our growth ambitions and long-term capability needs. So let me give you a brief update on our work with AI. As shown before, these pictures summarize our approach to AI at a high level. We are gradually building the capabilities, tools and governance needed to integrate AI in both internal process and in client deliveries. In this work, we prioritize use cases with the potential to create value across multiple segments. And to bring this a bit more to life, I would like to share a practical example with you. So we have started applying AI in conceptual design. This is the early stage where engineers develop and shape solutions. In this case, the AI-powered solution reviews contents as we create it, checking hundreds of documents and flag questions for our engineers to address early in the process. Deep sector expertise and judgment remains critical, but AI can significantly reduce the time spent on manual reviews. So this opportunity goes beyond productivity gains, because by freeing up time, it enables our engineers to explore more alternatives, to develop new ideas, and to solve client challenges that goes beyond today's project scope. This example comes from our life science segment. It's a good example of a scalable AI solution developed by our own teams that has the potential to create value across AFRI. And with that introduction, I would like to hand over to Bo for the financials.
Thank you, Linda, and good morning, everyone. I will, as usual, cover the financials for Q3 2026. Quarter 3 showed net sales of 5.8 billion and EBITDA, including ISE, of 392 million. Adjusted organic growth remains in negative territory at minus 1.5%, but a step less negative than seen in previous quarters. With positive total growth in Q3, we are now on rolling 12 months at 25.3 billion on net sales. And with the quarterly EBITDA higher than last year, rolling 12-month EBITDA margin increased marginally to 7.4%. The order backlog continued to develop favorably and is reported at 22.1 billion, an improvement of 8% to last year, the same level of improvement as reported in Q2. As in last quarter, all divisions improved their respective backlog year-over-year, with relatively small movements sequentially. In Q3, with a net sales of 5.8 billion, we report total growth of plus 1.9% and adjusted organic growth of negative 1.5%. Whereas the organic growth continues to be pressured by the restructuring agenda from past quarters, we see a first step of improvement in the quarter. Total growth that turned the trend already last quarter has now moved into positive territory, mainly driven by the AMC acquisition. The market price pressure in some segments seen since the latter part of 2025 is still visible in Q3. This is particularly evident for some segments within industry and transportation and places. Structural effects in Q3 relate largely to the acquisition of AMC completed in Q2 2026. In combination with two months related to the acquisition of Reta in Q3 2025, net of smaller non-core divestments completed in the beginning of this year. The negative adjusted organic growth in Q3 was the least negative since Q1 2025, with positive sequential movements in Global Division's energy and industry. Global Division Energy improved the organic growth step by step from the low levels during the end of last year. The organic growth in Q3 was supported by a high level of material sales. Global division industry that since the beginning of last year has been in significant negative growth stepped up materially in Q3, supported by continued positive trending on utilization and several positive project closings. As the effects of the restructuring efforts will completely phase out in the beginning of next year, we aim at moving into positive territory for the division. Transportation and places remained at a similar level as in Q2 as a consequence of capacity adjustments in the end of 2025 combined with the continued weak real estate market. As seen throughout this year, we will face pre-restructuring comparisons also in the fourth quarter. We report a utilization of 72.9% for Q3, as in last quarter, close to a percentage point higher than last year. And again, we see improved year-over-year utilizations for all divisions. This is the fourth consecutive quarter where we report an improvement to last year, and it is a continued important step for our strategic efforts to improve operational efficiency in AFRI. We will continue our focus on improving this metric to be one of the main drivers of profitability improvement over time. Since the low mark of 72% of rolling 12 a year ago, we're now close to 73% and well on our way to 74% being the set ambition in the 2028 roadmap. EBITDA is reported at 392 million with only marginal positive calendar effects and no items affecting comparability. The EBITDA margin was at 6.8%, an increase of 0.4 percentage points to last year, also when considering calendar effects. Group costs were in line with last year as we are continuing to balance driving a large change agenda with driving efficiency gains related to support functions. Continuing with EBITDA margin development by Global Division. Global Division Energy, supported by improved utilization and a positive backlog development, continue to report a strong EBITDA margin at around 10%. Industry has a strong quarter and a margin more than a percentage point better than last year. The margin uplift is supported by the high margin AMC acquisition, but also by positive project closings in the quarter. The margin in transportation and places remain pressured from restructuring effects and a soft real estate market. The year-over-year decline remains, but clearly a smaller decline than we saw in Q1. Following a very strong operational cash flow in Q2, the third quarter showed a more modest operational cash flow. While Q2 was 500 million better than last year, Q3 was 350 million lower than last year. Part of it related to phasing effects from last quarter, while the remainder was related to a lower level of advance payments. Available liquidity decreased to 3.9 billion and net debt increased to 4.8 billion. As stated last quarter, we remained on leverage at three times for Q3. And we continue to expect to close the year at or below our financial target of 2.5 times at end of year, as significant restructuring costs are phased out of the EBITDA component in Q4. And with that, I leave back to Linda.
Thank you so much, Bo. So to summarize the quarter, we delivered stable results with improvement in key metrics. And looking ahead, our priorities are clear. We will drive profitable growth by continuing to win new projects, Build a strong order backlog and most importantly deliver to our clients every day. So to support delivery and organic growth, we will increase recruitment and scale capacity in our global delivery centers while maintaining our cost discipline and strong focus on efficiency. We will also continue to advance our digital and AI initiatives. And with a strong platform for growth in place, these priorities support our ambition to deliver profitable growth to achieve our targets for 2028. And with that, I would like to open up for Q&A.
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