Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Afry AB (FRA:B3Y1, Financial) delivered stable performance in 2024 despite a less favorable market environment.
- The company maintained a strong global position in key segments, confirmed by the ENR global ranking.
- The energy division experienced strong growth, driven by large industrial investments in energy transition.
- Afry AB (FRA:B3Y1) increased its order backlog by 4% year over year, mainly driven by the energy division.
- The company ended the year with a strong operating cash flow of 1.3 billion in the fourth quarter, strengthening its financial position.
Negative Points
- The real estate market and pulp and paper segments faced challenges, impacting sales and profitability.
- Net sales declined slightly in the fourth quarter compared to the same period last year.
- The process industry reported a decline in sales and profitability due to low demand in the pulp and paper segment.
- The utilization rate was impacted by the new Agency Work Act, affecting industrial and digital solutions.
- The company faces operational complexities due to a broad portfolio, which it aims to streamline for improved efficiency.
Q & A Highlights
Q: As the new CEO, what initial strategic thoughts can you share, especially given your background in the energy division?
A: Linda Paulson, CEO: We plan to build a strong and resilient backlog with a mix of CapEx and rehabilitation projects, similar to the energy division's approach. This strategy will be implemented immediately to enhance our backlog.
Q: Regarding the pulp and paper segment, does the recent large project indicate market stabilization or recovery?
A: Linda Paulson, CEO: We see persistent weakness in the European market, but there are signs of slow recovery in Latin America, as evidenced by the Arauco Pulp Mill project.
Q: Can you elaborate on the cost structure and utilization rate improvements?
A: Bo Sandstrom, CFO: Utilization dipped due to challenges in industrial and digital solutions, but we expect this to fade. We aim to improve utilization through market stability and a fit-for-purpose operational structure.
Q: What are the strategic focuses in the upcoming review?
A: Linda Paulson, CEO: We will focus on our core sectors—energy, industry, and infrastructure—while leveraging our strong global position. The strategy involves enhancing client value and streamlining operations.
Q: How do you view the profitability expectations for the process industries segment in 2025?
A: Bo Sandstrom, CFO: The market remains challenging, and while the order backlog has improved, maintaining current profitability levels will depend on market developments and project execution.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
