Q2 report Apr-Jun 2020 JONAS GUSTAVSSON, CEO / JUUSO PAJUNEN, CFO / - - PowerPoint PPT Presentation

Q2 report

Apr-Jun 2020

JONAS GUSTAVSSON, CEO / JUUSO PAJUNEN, CFO / JULY 14, 2020

— Sales affected mainly by the automotive segment, where volume decreased by ca 40% — Stable results due to extensive cost mitigation activities and good development within Infrastructure, Process Industries and Energy — Strong cash flow — Repositioning of automotive segment initiated to provide more value-adding services — Slight recovery and stabilisation in demand end of quarter, still with uncertainty how market will develop in remaining 2020

*Excl Items affecting comparability

Stable results in a challenging quarter

Q2 2020 Net sales: SEK 4,808 million (5,393) EBITA*: SEK 383 million (481) EBITA-margin*: 8.0% (8.9) Jan-Jun 2020 Net sales: SEK 10,063 million (9,782) EBITA*: SEK 858 million (870) EBITA-margin*: 8.5% (8.9)

• 11%

+2.9%

Extensive measures in response to Covid-19

— Remote work and digital collaborations as well as other safety precautions — Ca 1,900 employees on short term work and permanent layoff of about 200 employees, mainly within automotive — Reduction of all cost spending — Increased pace of ongoing efficiency program of SEK 120 million but still focus on mitigating market turmoil — Total costs reduced by approx. SEK 500 million in Q2, mix of short-term and permanent savings — State subsidies to support our employees of approx. SEK 87 million

Reduction of sales mitigated in cost structure

Direct project expenses:

Materials, subconsulting and other project related expenses reduced along with the sales

Indirect expenses:

Other expenses such as personnel expenses, facility, IT etc.

Change vs. PY, BSEK

0,59 0,25 0,24

Reduction

• f Revenue

Reduction

• f

Expenses

0,49

Reduced EBITA of appr. 0,1 BSEK

• 11%

Market update

— Major impact of Covid-19 in the automotive segment and varied effect on other industry segments and markets — In Infrastructure, demand strong in the Nordics while Central Europe more impacted — In Industrial & Digital Solutions significantly lower volumes in automotive and related supply chain. Strong demand in food & pharma — Solid demand in Process Industries, however shift in client behaviour and longer decision-making processes — Stable demand in Energy and increased activity in the market noted end of Q2 — In Management Consulting, strong demand in energy

• consulting. Continued impact on transaction-related

services

Industry segment portfolio

21% 18% 16% 16% 7% 6% 4% 3% 4%2% 3% Infrastructure Energy and Power Process Industry Real Estate Automotive and Vehicles Life Science, Food & Pharma Telecom and ICT Manufacturing Industry Management Consulting Defence Other (20%)

Net sales by segment Jan-Jun 2020*

— During Q2 increased share in Infrastructure and Process Industries due to a stable and favourable situation in the Nordic public sector as well as the continued stable bioeconomy sector — Two major repositioning areas; Automotive and Energy — AFRY-portfolio geared towards Infrastructure, Process Industries as well as fast growing segments such as Food & Pharma

(9%) (19%) (14%) (15%)

*Numbers in brackets refer to FY 2019

— Owner’s engineering services assignment for 6 gas-fired cogeneration power plant projects in Thailand — Assignment for Vistin Pharma to double the production capacity of diabetes medicine — Process solutions for TINE in Norway — Contract for consultancy services for Daimer Basha dam project, Pakistan — New contract with Largo Resources in Brazil — Digitalisation of Lund with integration platform — Production line for Oatly in Singapore

New projects

Growth mainly impacted by the automotive segment

REPORTED NET SALES, MSEK Q2 2020

— Total growth: -10.9% — Organic growth: -9.2% — Adjusted/underlying organic growth: -9.8%

COMMENTS

— Growth affected by a vast reduction in demand in automotive, the repositioning of Division Energy and the completion of a large EPC+ project — Volume down 40% in the automotive segment — Continued limited growth in some segments in Q3 is expected

1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 22000 Quarter Rolling 12 month

Stable results despite decline in volume

Q2 2020* —

EBITA amounted to SEK 383 million (481) — EBITA margin down to 8.0% (8.9)

COMMENTS

— Negative impact mainly from the challenging situation within automotive — Strong positive impact from efficiency program and general cost savings — SEK 500 million in cost savings in the quarter — Solid development within Infrastructure, Process Industries and Energy

REPORTED EBITA, MSEK

• excl. items affecting comparability

* Excl. items affecting comparability

150 200 250 300 350 400 450 500 550 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 200 400 600 800 1000 1200 1400 1600 1800 2000 Quarter Rolling 12 month

Division performance Q2

PROFITABILITY MIXED AMONG DIVISIONS EBITA CHANGE COMPARED TO PREVIOUS YEAR

— Minor calendar effects; approx. 3 hours more vs. 2019 — Negative impact in divisions by Covid-19 but scale of impact mixed — Repositioning of Energy providing results

18 69 2

Common Infrastructure Q2 2019 Management Consulting Industrial & Digital Solutions Process Industries

4 4

Energy

9

Q2 2020

481 383 8.9% 8.0%

Growth and profitability

Infrastructure Industrial & Digital Solutions Process Industries Energy Management consulting

Q2 ORGANIC GROWTH, % ADJUSTED WITH CALENDAR EFFECTS Q2 EBITA % (previous year)

• 1.6
• 18.5

1.3

• 11.5

8.9

• 20
• 15
• 10
• 5

5 10 15 5.0 (8.8) 9.4 (9.6) 9.2 (7.3) 10.3 (15.3) 0,0 2,0 4,0 6,0 8,0 10,0 12,0 8.7 (9.6)

Infrastructure Industrial & Digital Solutions Process Industries Energy Management consulting

INFRASTRUCTURE

— Results negatively impacted by the real estate segment and business in Central Europe. Strong transport infrastructure in the Nordics.

INDUSTRIAL & DIGITAL SOLUTIONS

— Growth and profitability down due to a sharp drop in volumes in automotive segment. Strong development in Food & Pharma.

PROCESS INDUSTRIES

— Strong development in China, Brazil and North America. Growth impacted mainly in the Nordics OPEX business.

ENERGY

— Decline in growth due the completion of a large EPC+ project, improved profitability due to the repositioning and cost savings.

MANAGEMENT CONSULTING

— Profitability impacted negatively by lack of success fees.

— Strong operating cash flow in Q2 pushing adjusted Net Debt/EBITDA to 2.0 (reported at 2.3) — Driven by reduction in net working capital — Net Debt position improved from SEK 4,357 million to SEK 3,586 million — No signs of delays in customer payments — Available liquid assets of SEK 1,367 milion and unutilised credit lines of SEK 2,852 million

Net debt development – strong liquidity

Net Debt/EBITDA*

• excl. items affecting comparability and IFRS16

Net Debt, MSEK

• excl. items affecting comparability and IFRS16

* Calculated excluding IFRS16 impact, including Pöyry for rolling 12m and excluding items affecting comparability 2.5 2.5 2.5 2.5 2.8 2.2 2.2 2.3 2,0 1 1 2 2 3 3 4 4 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2 019 2 631 3 455 7 144 5 154 5 112 4 424 4 424 4357 3 586 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 2017 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2 019 Q1 2020 Q2 2020 Q1 2020 Q2 2020

Focus moving forward

React & adjust

(Q1/Q2)

— React to Covid-19 crisis - distance work using digital platforms — Cost savings across all areas including short term allowances — Focus on operational efficiency and adjusting investments

Sustain & lean

(Q2/Q3)

Win in new normal

(Q3/Q4)

— Based on 120 MSEK cost program, and short-term savings in Q2, setting lean

• perational structure:
• Increased efficiency
• Increased flexibility

— Review of strategy and scenario planning: Where to play and how to win in new normal — Repositioning of Energy and Automotive — Leverage from lean and flexible structure with strong position in key segments and regions. — Growth, M&A, brand- building and attractive employer — Execution of strategy with focus on:

• Sustainability
• Digitalisation

Thank you!

Save the date: Capital Markets Day on November 24