AFRY (AFRY) CMD 2025 summary

Strategic direction and transformation

• Launched the 'Unlocking AFRY' strategy, focusing on profitable growth, global expansion, and prioritizing segments with large transformation needs, replacing previous targets and structures.

• Portfolio review narrowed focus to core segments, phasing out non-core activities and reducing the long tail of small customers, targeting 10% of 2024 revenues for repositioning or divestment.

• Shift from a decentralized, complex organization to a leaner, segment-driven, harmonized operating model with unified global delivery and streamlined costs.

• Emphasis on building recurring projects, leveraging sector expertise, expanding lifecycle offerings, and deepening partnerships with leading clients.

• Strategy execution is phased: initial focus on margin improvement and organic growth, followed by increased M&A and global scaling.

Financial targets and guidance

• 2028 targets: SEK 35 billion net sales, 10% EBITDA/EBITA margin, SEK 30 billion order backlog, 74% utilization rate, and net debt/EBITDA of 2.5x.

• Replaces prior targets of 10% annual sales growth and 10% EBITA margin over a business cycle.

• Supporting KPIs include improving order backlog quality and resource management.

• Selective, focused M&A to complement organic growth, with strict criteria, full integration, and a disciplined capital allocation policy.

• Restructuring costs of SEK 200–300 million are expected, mainly related to redundancies, with payback anticipated within a year.

Business model and operational improvements

• Transitioning to a project-based delivery model, increasing advisory and project management services, and leveraging AI and digitalization for efficiency.

• Streamlining support structures, optimizing fixed costs (IT and facilities), and harmonizing incentive and performance management systems.

• No material increase in CapEx expected for system and process improvements; investments to remain at historical levels.

• Non-core business (10% of 2024 revenues) being phased out or repositioned, with a focus on reskilling and redeploying resources.

• Technology and AI are integrated into both client delivery and internal operations, supporting efficiency and margin expansion.