In This Article:
Release Date: February 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Afry AB (FRA:B3Y1) delivered stable performance in 2024 despite a less favorable market environment.
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The company maintained a strong global position in key segments, confirmed by the ENR global ranking.
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The energy division experienced strong growth, driven by large industrial investments in energy transition.
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Afry AB (FRA:B3Y1) increased its order backlog by 4% year over year, mainly driven by the energy division.
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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
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The real estate market and pulp and paper segments faced challenges, impacting sales and profitability.
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Net sales declined slightly in the fourth quarter compared to the same period last year.
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The process industry reported a decline in sales and profitability due to low demand in the pulp and paper segment.
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The utilization rate was impacted by the new Agency Work Act, affecting industrial and digital solutions.
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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 sectorsenergy, industry, and infrastructurewhile 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.