Navigating the Waters of Change: A Look at AFRY's Q1 2025 Performance
April 24, 2025, 4:50 pm
The first quarter of 2025 has been a turbulent sea for AFRY, a prominent engineering and advisory firm. The latest interim report reveals a slight decline in net sales, signaling the need for a strategic overhaul. As the company grapples with market challenges, it is clear that change is on the horizon.
AFRY's net sales dipped by 2.1 percent, landing at SEK 6,749 million, down from SEK 6,891 million in the previous year. This decline, while modest, reflects broader economic currents. Organic growth, adjusted for calendar effects, showed a negative trend of -0.9 percent. Calendar effects alone impacted net sales by SEK -46 million and EBITA by SEK -37 million.
Profitability took a hit as well. EBITA, excluding items affecting comparability, fell to SEK 490 million, down from SEK 590 million. The EBITA margin also shrank, now at 7.3 percent compared to 8.6 percent last year. Overall EBIT, or operating profit, decreased to SEK 416 million from SEK 541 million. Earnings per share mirrored this downward trend, dropping to SEK 2.21 from SEK 3.13.
The CEO, Linda Pålsson, acknowledged the challenges faced during this quarter. The company maintained a solid order backlog, but the slow ramp-up at the beginning of the quarter weighed heavily on performance. The macroeconomic environment remains uncertain, influenced by global tariffs. While these tariffs have limited direct impact on AFRY, the company is vigilant, monitoring the situation closely.
In response to these challenges, AFRY is not sitting idle. A new Group structure is set to take effect on July 1, 2025. This restructuring aims to simplify operations and enhance client focus. The company will be divided into three global divisions: Energy, Industry, and Transportation & Places. Each division addresses sectors with a clear need for transition, where AFRY holds a competitive edge.
This strategic pivot is designed to streamline operations and improve profitability over time. The new Executive Team is already in place, ready to steer the company through these choppy waters. With these initial steps, AFRY is poised to unveil an updated strategy in the latter half of 2025.
AFRY's commitment to creating profitable growth is unwavering. The company is focusing on its core business while defining an operational structure that aligns with its goals. The upcoming changes are not just cosmetic; they represent a fundamental shift in how AFRY approaches its market.
The engineering and advisory landscape is evolving. Companies must adapt or risk being left behind. AFRY's proactive measures indicate a recognition of this reality. The new structure aims to address cost bases and enhance profitability, ensuring the company remains competitive in a challenging environment.
As the world grapples with sustainability and energy transition, AFRY is well-positioned to play a pivotal role. With 18,000 experts in various sectors, the company is dedicated to creating a sustainable future. Its Nordic roots and global reach provide a unique advantage in navigating the complexities of the modern market.
The upcoming presentation of AFRY's Q1 report will provide further insights into the company's performance and strategic direction. Stakeholders will be keen to hear how the new Executive Team plans to tackle the challenges ahead. The live webcast will offer a platform for analysts and media to engage with the leadership team, fostering transparency and dialogue.
In conclusion, AFRY's first quarter of 2025 has been marked by challenges and opportunities. The decline in net sales and profitability underscores the need for structural changes. However, the company's commitment to a new operational framework and focus on core business areas signals a determined effort to navigate these turbulent waters. As AFRY prepares to unveil its updated strategy, the industry will be watching closely. The path ahead may be fraught with uncertainty, but with a clear vision and a dedicated team, AFRY is ready to chart a course toward a more profitable future.
AFRY's net sales dipped by 2.1 percent, landing at SEK 6,749 million, down from SEK 6,891 million in the previous year. This decline, while modest, reflects broader economic currents. Organic growth, adjusted for calendar effects, showed a negative trend of -0.9 percent. Calendar effects alone impacted net sales by SEK -46 million and EBITA by SEK -37 million.
Profitability took a hit as well. EBITA, excluding items affecting comparability, fell to SEK 490 million, down from SEK 590 million. The EBITA margin also shrank, now at 7.3 percent compared to 8.6 percent last year. Overall EBIT, or operating profit, decreased to SEK 416 million from SEK 541 million. Earnings per share mirrored this downward trend, dropping to SEK 2.21 from SEK 3.13.
The CEO, Linda Pålsson, acknowledged the challenges faced during this quarter. The company maintained a solid order backlog, but the slow ramp-up at the beginning of the quarter weighed heavily on performance. The macroeconomic environment remains uncertain, influenced by global tariffs. While these tariffs have limited direct impact on AFRY, the company is vigilant, monitoring the situation closely.
In response to these challenges, AFRY is not sitting idle. A new Group structure is set to take effect on July 1, 2025. This restructuring aims to simplify operations and enhance client focus. The company will be divided into three global divisions: Energy, Industry, and Transportation & Places. Each division addresses sectors with a clear need for transition, where AFRY holds a competitive edge.
This strategic pivot is designed to streamline operations and improve profitability over time. The new Executive Team is already in place, ready to steer the company through these choppy waters. With these initial steps, AFRY is poised to unveil an updated strategy in the latter half of 2025.
AFRY's commitment to creating profitable growth is unwavering. The company is focusing on its core business while defining an operational structure that aligns with its goals. The upcoming changes are not just cosmetic; they represent a fundamental shift in how AFRY approaches its market.
The engineering and advisory landscape is evolving. Companies must adapt or risk being left behind. AFRY's proactive measures indicate a recognition of this reality. The new structure aims to address cost bases and enhance profitability, ensuring the company remains competitive in a challenging environment.
As the world grapples with sustainability and energy transition, AFRY is well-positioned to play a pivotal role. With 18,000 experts in various sectors, the company is dedicated to creating a sustainable future. Its Nordic roots and global reach provide a unique advantage in navigating the complexities of the modern market.
The upcoming presentation of AFRY's Q1 report will provide further insights into the company's performance and strategic direction. Stakeholders will be keen to hear how the new Executive Team plans to tackle the challenges ahead. The live webcast will offer a platform for analysts and media to engage with the leadership team, fostering transparency and dialogue.
In conclusion, AFRY's first quarter of 2025 has been marked by challenges and opportunities. The decline in net sales and profitability underscores the need for structural changes. However, the company's commitment to a new operational framework and focus on core business areas signals a determined effort to navigate these turbulent waters. As AFRY prepares to unveil its updated strategy, the industry will be watching closely. The path ahead may be fraught with uncertainty, but with a clear vision and a dedicated team, AFRY is ready to chart a course toward a more profitable future.