AFRY AB: Navigating Market Challenges with Strategic Focus on Core Sectors

AFRY AB (FRA:B3Y1), a Sweden-based consulting, engineering, and design company, has demonstrated remarkable resilience in the face of market challenges. Despite a less favorable market environment in 2024, the company delivered improved profitability and sales in line with the previous year. This achievement can be attributed to AFRY's strategic focus on core sectors, particularly energy, industry, and infrastructure.

AFRY's strong position in the energy sector has been a significant driver of its growth. The energy division experienced strong growth, driven by large industrial investments in energy transition. This is evident in the quarterly EBITA margin improvement from 7.8% in Q4 2023 to 8.3% in Q4 2024, despite a lower margin in Process Industries. Some specific initiatives and projects that have contributed to this growth include the design of pumped storage projects in India, the lifetime extension of nuclear power plants, and the fossil-free steel project.



AFRY's approach to focusing on its core business and streamlining operational structures has also had a positive impact on its profitability and financial position. The company has made significant progress in improving its profitability despite facing a less favorable market. In 2024, AFRY delivered improved profitability and sales in line with the previous year, with an EBITA margin of 7.8 percent, reflecting its efforts to improve profitability despite the challenging market conditions.

One of the key factors contributing to AFRY's improved profitability is its strong position in the energy sector. The company has leveraged its expertise in this area to capture high demand, while adjusting capacity to meet the challenges in other segments such as real estate and pulp and paper. This strategic focus has allowed AFRY to maintain a strong financial position, with a solid operating cash flow of SEK 1,304 million in the fourth quarter of 2024, which further strengthened its financial position.

Additionally, AFRY has made progress in its ongoing improvement program in Infrastructure, which has contributed to the profitability improvement. The company has also made structural improvements to streamline operational structures, which has helped to strengthen profitability and support its core business.

In conclusion, AFRY AB's strategic focus on core sectors, particularly energy, industry, and infrastructure, has enabled the company to maintain its financial performance and resilience in the face of market challenges. By leveraging its strong position in the energy sector, adapting capacity in challenging markets, improving operational efficiency, and securing large-scale projects, AFRY has demonstrated its ability to navigate market headwinds effectively. As the company continues to focus on its core business and streamline operational structures, it is well-positioned to capitalize on long-term growth opportunities in its core sectors.