åf leading the way in technical consulting our work focuses on energy and the environment investments in infrastructure and projects for industry our base is in europe but our business and clients
extend right across the globe what makes us unique is our co-workers and the tech-
nical consulting industry’s greatest bank of experience it’s all summed up in our corporate motto åf innovation by experience ”
tel 46 10 505 00 00
www afconsult com
åf
an
n
ual
repo
rt
2010
annual report 2010
th
is
is
åf
op
er
at
io
ns
an
nu
al
re
po
rt
co
rp
or
at
e
go
ve
rn
an
ce
66 administration report
70 consolidated income statement
71 statement of consolidated comprehensive income
72 consolidated balance sheet
74 statement of change in equity for group
75 statement of cash flows for group
76 parent income statement
77 statement of comprehensive income for parent
78 parent balance sheet
80 statement of change in equity for parent
81 statement of cash flows for parent
83 notes
121 audit report
22 energy
28 industry
34 infrastructure
40 technology
46 åf shares
50 sustainability is profitability
51 sustainability report
58 risk management and sensitivity analysis
63 definitions
64 five-year financial summary sek
65 five-year financial summary eur
1 the year at a glance
2 this is åf
4 a message from the president
6 mission vision strategies and objectives
9 olympic green advisor
11 market trends and business review
14 human resources
åf is continuously developing its consulting business
and its capacity to carry out its assignments in the
best possible way the ambition is clear to safe-
guard successful long-term sustainable develop-
ment for åf’s clients and for åf itself page 8
striving for profitability and wanting to make the
world a better place aren’t mutually exclusive quite the opposite in fact a sustainable company
is a long-term venture which lays the foundations
for good profitability over time page 50
in 2010 åf made a number of acquisitions in europe
in line with its strategy of becoming number one or
two in the markets where the company is active page 67
the board works to continuously improve the effec-
tiveness of its routines and working methods in order
to be able to devote as much time as possible to
important strategic discussions page 122
122 corporate governance at åf
123 corporate governance report
128 board of directors
130 senior management
132 annual general meeting
133 åf offices
the english version of the annual report of åf ab is a translation of the swedish original the swedish text is the binding version and shall prevail in the event of any discrepancies å f a n n u a l r e p o r t 2 0 1 0
1 3 3å f o f f i c e s
group head office
åf ab
visitor’s address frösundaleden 2 solna
post address se-169 99 stockholm sweden
tel 46 10 505 00 00
fax senior management 46 8 653 56 13
fax reception 46 10 505 00 10
for further information about addresses please see www afconsult com
sweden
alingsås
arboga
borlänge
borås
enköping
eskilstuna
falun
gällivare
gävle
gothenburg
halmstad
helsingborg
hässleholm
jönköping
kalmar
karlskoga
karlskrona
karlstad
kiruna
kristianstad
linköping
luleå
malmö
mora
norrköping
nynäshamn
oskarshamn
piteå
skara
skellefteå
skövde
sollefteå
stenungsund
stockholm
sundsvall
söderhamn
södertälje
tavelsjö
trollhättan
uddevalla
umeå
uppsala
varberg
västerås
växjö
åmål
örebro
örnsköldsvik
östersund
czech republic
brno
mêlnik
pardubice
plzen
prag
denmark
copenhagen
herlev
randers
kalundborg
estonia
narva
tallinn
viljandi
vöru
finland
tampere
vantaa
germany
hamburg
india
new delhi
indonesia
jakarta
italy
rome
kazakhstan
astana
lithuania
kaunas
vilnius
nigeria
garki abuja
norway
bodö
lilleström
oslo
sandefjord
moss
russia
moscow
st petersburg
yekaterinburg
scotland
edinburgh
south africa
durban
spain
madrid
san sebastian
switzerland
baden
thailand
bangkok
turkey
ankara
turkmenistan
aschabad
ukraine
kremenchuk
vietnam
hanoi
a110418-02
produced by solberg in collaboration with the åf group’s corporate
information and corporate finance departments printed by elanders photos peter bartholdsson and others translation ab språkman a brief historical summary
on 23 february 1895 södra sveriges ångpanneförening was created when a
number of steam generator owners in the south of sweden joined forces with
the aim of preventing accidents and making more efficient use of steam power in the 115 years that have elapsed since then åf has played a key role in the
industrial developments that have revolutionised society the company has guided its clients through four major technology changes steam electricity nuclear power and computerisation and remained at the fore-
front of technology both in the industrial era and in today’s information society ab ångpanneföreningen was first listed on the stockholm stock exchange
in january 1986 on 5 may 2008 ab ångpanneföreningen changed its name to
åf ab and today it is one of europe’s largest technical consulting companies åf offices
1å f a n n u a l r e p o r t 2 0 10
t h i s i s å f t h e y e a r a t a g l a n c e
201020072006 2008 2009
5 000
4 000
3 000
2 000
1 000
0
group operating income excl capital gain in millions of sek msek
500
400
300
200
100
0
12 5
10
7 5
5
2 5
0
msek group operating profit and
operating margin excl capital gain
201020072006 2008 2009
0
1
2
3
4
dividend per share 1 1 a 2 1 share split was implemented on 2 june 2010 comparative figures adjusted 2 proposed dividend sek
2010 2 20072006 2008 2009
financial summary 2010 2009
operating income msek 4 795 9 4 692 0
operating income excl capital gain msek 4 338 0 4 684 2
operating profit msek 805 8 388 3
operating profit excl capital gain msek 317 0 380 5
operating margin percent 16 8 8 3
operating margin excl capital gain percent 7 3 8 1
capacity utilisation percent 71 9 71 3
profit after net financial items msek 798 1 377 0
profit margin percent 16 6 8 0
employees ftes 3 966 4 182
equity per share sek 69 47 53 68
equity assets ratio percent 59 8 51 0
return on equity percent 32 5 15 8
return on equity excl capital gain percent 12 5 15 4
earnings per share before dilution sek 21 02 7 93
dividend per share sek 1 4 00 2 4 00
1 a 2 1 share split was implemented on 2 june 2010 comparative figures adjusted 2 proposed dividend the year at a glance
4 338
operating income excluding
capital gain totalled sek
million 2009 sek 4 684 million 717
profit after tax amounted to sek
million 2009 sek 275 million 317
operating profit excluding
capital gain totalled sek
million 2009 sek 380 million 21 02
earnings per share before dilution sek 2009 sek 7 93 2 t h i s i s å f å f a t a g l a n c e
this is åf
division åf offices
infrastructure
the infrastructure division holds a leading position in the field of consulting
services for infrastructure development in scandinavia industry
the industry division is a leader in consulting services in the fields of process
technology energy efficiency environmental engineering industrial it automation electrical power systems and mechanical engineering energy
the energy division offers technical and financial consulting services for
the energy sector and is a world leader in the field of nuclear power technology
the technology division offers solutions and consulting services in fields
that include telecommunications defence and development å f a n n u a l r e p o r t 2 0 10
3t h i s i s å f å f a t a g l a n c e
clients operating income operating profit employees ftes operating profit
per fte road and rail property sector
msek 1 233
29 20 28 msek 69 0 1 065
sek 65 000 all sectors of industry in scandinavia also energy
and nuclear power
msek 1 340 31 35 32 msek 119 9 1 200 sek 100 000
msek 1 012 msek 83 1 906
sek 92 000
23 25 24 power industry andenergy companies government bodies financial institutions all industries and sectors
msek 719 17 20 16 msek 69 1 616 sek 112 000
å f a n n u a l r e p o r t 2 0 10
total all divisions msek 4 304 msek 341 1 3 787 sek 90 000
other eliminations msek 492 msek 464 7 179 total including eliminations msek 4 796 msek 805 8 3 966 sek 203 000
divisional contributions to group totals for 2010 are shown as a percentage includes the inspection division which was sold in q1 2010 4å f a n n u a l r e p o r t 2 0 10
t h i s i s å f t h e p r e s i d e n t ’ s c o m m e n t s
ceo jonas wiström explains how åf sharpened
its focus in 2010 and what is top of the agenda
over the next few years the key themes are
profitability growth and sustainability so jonas wiström how would you summarise 2010 for åf 2010 was a year of strategic realignment the decision to
sell our inspection division åf kontroll proved a good move for us
and the division’s 500 co-workers but more important still it under-
lined our strategy to become number one or two in our fields of
expertise in our chosen markets the inspection market is domi-
nated by a handful of big global players so the opportunities for us
to expand our operations in this segment were limited moreover åf’s growth particularly in nuclear power was making it increas-
ingly problematical to combine the dual roles of project implementa-
tion and independent inspection under one and the same corporate
banner the decision also meant we had to sell our share in åf-tüv
nord but the income from these divestments helped to fund a
number of strategic acquisitions during the year in our focus areas
of industry energy and infrastructure the acquisitions of energo gatubolaget i göteborg platom and vpc mining in sweden meacont
in the czech republic and mercados in spain added the strengths
of more than 550 highly qualified new co-workers to our core com-
petences this represents a significant reinforcement of our market
position and leaves us very well placed to grow further and to cap-
ture new market share at the start of what we hope is an upturn in
the economy ”
what has been happening in the various divisions as far as market developments in general are concerned the
recovery in 2010 turned out to be slower than we had initially antici-
pated we didn’t witness any real increase in client activity until the
autumn the energy division won several important assignments in
2010 but was also affected by clients deferring their investment
plans and by structural shifts in the market the industry division
reported a continuous improvement in the level of profitability and
earnings were good towards the end of the year growth was good
in the infrastructure division especially in infrastructure planning where the division demonstrated its strengths by securing some
major assignments in connection with the stockholm bypass project however profitability in the division was undermined by the costs of
major restructuring work in norway the technology division devel-
oped in a highly positive direction reporting good capacity utilisation healthy profitability and good growth overall åf increased its market
shares over the course of the year ”
åf is committed to doubling its consulting workforce
and increasing turnover significantly over the next five
years how do you aim to go about achieving that we will achieve our vision through what in the longer term will be
a more or less evenly balanced mix of organic and acquired growth as our strategy is to be a market leader in our chosen areas of exper-
tise most of the initial growth will be in countries and fields where we
have already made a name for ourselves it’s clear to me that our
recent successes have been built on a strong well-known brand and
the ability to consistently exceed our clients’ expectations ”
a more focused åf ready to
serve a stronger market our first-class offers in global growth
areas will produce good results ”
a message from the president
5å f a n n u a l r e p o r t 2 0 10
t h i s i s å f t h e p r e s i d e n t ’ s c o m m e n t s
how do you make sure that rapid growth doesn’t
undermine profitability personally i can’t see why growth and profitability should not be
compatible on the contrary the lines of business that have been
most profitable at åf are those that have grown most rapidly growth creates an entrepreneurial spirit and fosters a corporate
culture whose hallmarks are creativity a willingness to listen and
the ability to deliver our clients benefit from this in the form of in-
telligent solutions that in turn increase demand for our services ” olympic green advisor” is a new concept what does it actually mean as olympic green advisor åf acts as a consultant to the national
olympic committees in finland norway sweden and switzerland
on issues relating to sustainability in sweden for example we have
begun the process of educating leaders and athletes on sustainability
issues we have already carried out a sustainability study for the
swedish olympic committee and in the longer term we hope to be
able to play our part in helping to make the olympic games greener our aim is to make a difference and to influence general opinion by
nudging it in the right direction the broader but related concept of
‘åf green advisor’ places us in a unique position to market a
number of strong offers across our client base ”
tell us about åf’s work with sustainability the world needs new technology creativity and strong political
action to meet the challenges facing humanity we must embrace the
technological solutions that lead to a better more prosperous and
more environmentally sustainable world and it will be engineers
who lead us along this path for åf sustainability is the basis for long-term profitability eco-
nomic environmental and social sustainability are the cornerstones
on which we need to build in order to be able to continue to deliver
the best solutions to clients who want their business operations to
be sustainable successful and profitable for the first time åf is reporting its sustainability performance
over the past year with reference to the guidelines of the global
reporting initiative gri in the autumn åf also launched its own
tough targets for the company’s internal sustainability work these
include halving climate impact by 2015 calculated per individual with 2009 as the baseline year and aiming to ensure that åf always
offers clients an alternative ‘green’ solution to every challenge we
are asked to solve in 2010 we also launched a web-based sustain-
ability training programme for all åf employees ”
where does the focus lie in 2011 after the slowdown in business that followed the financial crisis it’s
now time for us to start to grow again we did capture new shares
of the market during the economic downturn but our sights are now
firmly set on growth in absolute terms where the most important
thing is to grow organically we have first-class offers in global
growth areas and these will produce results ”
what is the best thing about åf the accumulated knowledge and experience of our 4 500 or so
co-workers it’s truly fantastic and i would argue too that our ability
to make systematic use of the knowledge we gain is quite unique it means our clients always have fast-track access to tried-and-
tested methods and techniques ”
and finally the sale of åf-kontroll was an important milestone in our corporate
evolutionary process it has sharpened the focus within åf and given
us the financial resources to grow in our core activities today we
have an organisation that is fully focused on and geared to meeting
our commercial targets i believe the market will improve in 2011 and the åf brand is now stronger than ever add that to åf’s ever
greater appeal as an employer åf was recently voted one of
europe’s top 50 employers in a major survey of engineering stu-
dents and i’m convinced that the outlook for the future is good finally i would like to say thank you to all the co-workers who have
contributed to åf’s suc-
cess i look forward to
continuing to work with
you all in building the
corporate values that
are so important to our
clients shareholders
and other stakeholders ”
stockholm sweden march 2011
jonas wiström
president and ceo
6 t h i s i s å f m i s s i o n v i s i o n s t r a t e g i e s a n d o b j e c t i v e s
mission vision strategies and objectives
mission
åf’s joint pool of expertise and experience
creates solutions that are profitable safe
and sustainable åf contributes to the sustainable development of indus-
try and society as a whole more than 100 years’ experi-
ence in the business has taught us to raise our sights our collective experience places åf firmly in the front
rank of technological progress even so the solution åf
delivers is not necessarily the most technically sophisti-
cated but it’s always the best åf never experiments
with its clients or their businesses especially when their
interests are best served by tried and tested technology our total independence from suppliers and other part-
ners is every client’s guarantee of an optimum solution that’s why åf creates solutions that are profitable safe
and sustainable for its clients åf’s core values great people teamwork indisputable independence
our motto
innovation by experience vision
the best partner for the best clients åf meets every technical challenge åf’s business model outperforms all competitors åf sales will total 1 billion euros by 2015 åf meets every technical challenge
åf has access to more than 100 million hours of engi-
neering experience know-how and solutions that are
documented in one” our unique knowledge database
that is available to every åf employee this means that every åf employee can make use of the full combined strength of åf åf is ready to tackle every technical challenge now and in the future åf’s business model outperforms all
competitors
åf does not charge for its time but for the value it cre-
ates that increases the productivity in our projects and
reduces costs for the clients partnership plays a cen-
tral role in our assignments because it is as a partner
that åf can deliver real value the right quality at the
lowest overall cost å f a n n u a l r e p o r t 2 0 10
7å f a n n u a l r e p o r t 2 0 10
t h i s i s å f m i s s i o n v i s i o n s t r a t e g i e s a n d o b j e c t i v e s
our outstanding co-workers are one step ahead in
terms of technical expertise business acumen and total
independence for our clients and competitors it is clear that here at
åf we demand more of ourselves we have the will to win åf sales will total 1 billion euros by 2015
åf will become europe’s leading technical consultant for us that means becoming the most profitable com-
pany among our biggest competitors in the business our rate of growth will be high we will grow both
organically and through corporate acquisitions but we
will also be careful to ensure that the companies we
acquire make a positive contribution to our profitability
and to the åf culture strategies
operations will be decentralised under one and the same brand with common processes and systems with shared values and a common corporate culture in order
to concert efforts and fully exploit the potential of all the
experience that is represented within the åf group one åf is a huge shared bank of knowledge available to all åf
co-workers that enables åf to improve profitability for its clients
by proposing safe sustainable solutions to a wide variety of
challenges one åf is a common workplace where co-workers are encour-
aged to pursue their career within åf for example in a different
country or with new technical challenges one åf is a joint sales organisation through which clients are
offered the entire range of åf’s services one åf is the firm base for the corporate culture and shared
values of åf acquisitions strategy
åf’s acquisitions policy is based on the above every effort will be
made to develop the business when the right opportunities arise but expansion will not take place at the expense of profitability 8å f a n n u a l r e p o r t 2 0 10
t h i s i s å f m i s s i o n v i s i o n s t r a t e g i e s a n d o b j e c t i v e s
business support and shared processes
åf is continuously developing its consulting business and its
capacity to carry out its assignments in the best possible way the ambition is clear to safeguard successful long-term sus-
tainable development for åf’s clients and for åf itself one example of this is one åf’s recently developed it plat-
form at the same time as it acts as a driving force for collabo-
ration within åf and with clients and subcontracted suppliers one also guarantees a modern approach to working with pro-
cesses projects and knowledge retrieval at åf freeing up time
for development and innovation in client assignments one is a web-based tool mostly in english that is accessible
to employees throughout the åf group one also serves as åf’s business support system a central
operational control system that makes åf’s business operations
considerably more cost-effective while assuring quality and con-
sistency in the company’s approach the system includes tools for shared processes project docu-
mentation and a searchable database of engineering and busi-
ness experience that pinpoints any similarities between the many
assignments undertaken by åf when a client commissions åf to
perform an assignment the chances are great that åf has already
successfully completed a similar assignment elsewhere one enables åf management to control and support opera-
tions and meet the criteria for certification for environmental
and quality management in accordance with iso 14001 2004
and iso 9001 2008 long-term objectives
financial objectives
åf shall be the most profitable company among its closest com-
parable competitors in the industry and achieve an operating
margin ebit of at least 10 percent over a business cycle åf shall have net debt over a period of time but net indebted-
ness shall not exceed 40 percent of equity growth objective
sales of 1 billion euros by 2015 human resources objectives
better balance in the gender ratio an initial target is for at least 25
percent of the company’s consultants and managers to be women staff turnover based on resignations to be 7 13 percent all employees to take part in a personal development inter-
view each year sustainability objectives
in 2010 åf adopted a plan for the company’s sustainability work
for the period up to 2015 and embraced three overarching sus-
tainability objectives by the year 2015 åf aims to have halved its direct climate impact baseline year 2009 calculated per individual include a proposal in every offer or tender that åf submits to enhance the sustainability aspect of the project be perceived as the technical consulting firm that from a
sustainability perspective best solves the technical chal-
lenges that its clients are faced with in 2010 åf began the work of producing a sustainability frame-
work for the entire åf group that comprises a sustainability
policy including revised tools for managing risks the plan is
to launch this sustainability framework in spring 2011 for further details of åf’s work with sustainability issues and
the company’s gri report please refer to pages 51 56 9t h i s i s å f o ly m p i c g r e e n a d v i s o r
olympic green advisor
åf has embarked on an important joint
venture with the olympic committees in
finland norway sweden and switzerland assuming the role of olympic partner and
green advisor to all four of these national
organisations åf provides consulting and advisory services on green issues
and takes an active role in developing olympic sporting activi-
ties from a sustainability perspective sustainability is an issue
that is rapidly growing in importance in the olympic movement particularly when it comes to choosing host cities for future
olympic events the focus is on policies strategies and action
programmes and on the education of staff coaches and the
athletes themselves åf is also a sponsor for the national olympic committees in
finland norway sweden and switzerland a sponsorship agree-
ment has been signed for the period 2010 2014 that will cover
three olympic games the olympic rings and the exclusive title of green advisor
have been integrated into åf’s external communications the
olympic rings and the olympic association are the world’s
strongest and most fiercely protected non-commercial brand world-class managerial conference
among those gathered for the annual åf
managers’ conference were three of the
world’s top names in ice hockey and athletics peter forsberg sanna kallur and andreas
thorkildsen all three took the stage to explain
the importance of focus mental training and
the drive and desire to be best in the world
at what you do å f a n n u a l r e p o r t 2 0 10
1 0
å f a n n u a l r e p o r t 2 0 10
martin jonsson works in
stockholm as a section manager for rock
engineering & measurement technology
in the infrastructure division he likes to
spend his spare time with friends and
enjoys cooking running in the swedish
mountains and long walks in the woods i want a stimulating environment with people
who set me the kind of challenges that help me
to grow as a person i love solving problems the best thing about åf is the positive atmos-
phere and the challenges nothing is impossible
and we set ambitious targets it’s an approach
that runs through the entire organisation ”
1 1
å f a n n u a l r e p o r t 2 0 10
t h i s i s å f m a r k e t t r e n d s a n d b u s i n e s s r e v i e w
åf’s services in brief
åf is a leader in technical consulting our work focuses on
energy and the environment infrastructure and projects for
industry our base is in europe but our business and clients extend
right across the globe what makes us unique is our co-workers
and the technical consulting industry’s greatest bank of collec-
tive experience it’s all summed up in our corporate motto åf innovation by experience ”
åf is made up of four specialist divisions
the energy division focuses on technical and financial consult-
ing for the energy sector from advice on business models to
implementing investments in power plants and the many related
environmental issues the industry division is northern europe’s leading industrial
consultant offering services in process technology automation industrial it electrical power systems and mechanical engineer-
ing in scandinavia the division is also responsible for åf’s
offers to the energy market the infrastructure division is a leader in the consulting industry
for infrastructure development in scandinavia and has clients in
industry the public sector and the property sector the technology division works mostly with assignments in
sweden where it is a leading name in product development and
defence technology the division also enjoys a strong position in
the market for telecommunications and it consulting services clients
each year åf performs more than 30 000 assignments for some
10 000 clients assignments vary in length from just a few hours
to hundreds of thousands åf’s ten largest clients in 2010 together accounted for
approximately 23 percent of total invoiced sales they were
ericsson the swedish defence materiel administration fmv ringhals nuclear power plant the swedish national rail adminis-
tration banverket the stockholm municipal water utility stock-
holm vatten atel gusinoozersk chp the danish road directo-
rate vejdirektoratet stockholm’s regional transport authority sl and siemens market trends and business review
client base sales by sector 2010
public sector private sector
29 71 åf’s operations are
becoming increasingly
international it has
offices in more than 20
countries but conducts
business activities and
attracts clients through-
out the world geographical spread of åf business
number of employees per country december 2010
sweden finland norway denmark switzerland czech republic
russia
rest of world 1 2
å f a n n u a l r e p o r t 2 0 10
t h i s i s å f m a r k e t t r e n d s a n d b u s i n e s s r e v i e w
market
in 2010 the market for åf’s services began to stabilise after the
financial crisis however while demand in the energy and infra-
structure sectors remains high elsewhere the recovery has
been relatively slow as companies continue to be cautious
about major new investments in industrial production capacity in the energy sector the recovery was worldwide enabling
companies to restart many projects that they had previously
suspended in the nordic region demand from process industries and the
energy and nuclear power sectors was generally good during
2010 particularly towards the end of the year and most espe-
cially in sweden demand from industry was chiefly driven by
the need for efficiency improvements in manufacturing plants environmental engineering projects the development of alterna-
tive fuels and conversion to efficient energy management the market for consulting services to the pulp and paper
industry remained weak in europe in 2010 although the situa-
tion was better in south america asia and africa åf has rela-
tively large business interests in chile so it was encouraging to
note signs of a recovery in that market after the major earth-
quake there at the start of the year demand was good throughout 2010 for services to the prop-
erty construction and industrial plant sectors the property
sector in particular really took off during the autumn publicly
financed projects proceeded according to plan with new busi-
ness picking up again after a slight slowdown in the wake of the
financial crisis demand from the defence sector remained steady in 2010 while the market in telecoms and the automotive industry
improved as the year progressed particularly from the second
quarter onwards outlook nordic countries
it appears that growth in the nordic energy market will continue
to be driven mainly by investments in nuclear power in finland preparations for the expansion of nuclear power facilities in
sweden and renewable energy sources in the other nordic
countries alongside major new investments that have already
been approved there is a constant need for a large number of
efficiency improvement projects upgrades capacity increases
and environmental improvements in existing plants in both the
power industry and elsewhere nordic industry will continue to need to significantly improve
the efficiency of its production facilities and to make energy-sav-
ing investments the outlook in the mining petrochemical energy food and pharmaceutical industries is particularly good the engineering sector including the automotive industry is
recovering after several difficult years but growth is coming
from a low level the energy sector is undergoing a period of major adjustment
to new types of energy the need for greater efficiency and in-
creased competition these factors are likely to drive demand
for technical consulting services for many years to come the forest industry is restructuring with several companies
expanding their operations from solely pulp and paper process-
ing to include biofuels and electricity nordic industry leads the way when it comes to incorporating
sustainability into business operations this gives it a competi-
tive edge internationally and generates considerable demand for
technical consulting services in purely geographical terms the öresund region is likely to
undergo considerable growth thanks in part to the very large
ess project an inter-disciplinary research facility for materials
studies there is also good potential for growth in the north where the mining sector is a key driver of business 1 3t h i s i s å f m a r k e t t r e n d s a n d b u s i n e s s r e v i e w
there are many similarities between sweden norway and
denmark when it comes to the market for services that support
public-sector investment in roads and railways these three
countries have strong government finances and their infrastruc-
tures are becoming increasingly integrated with each other at
the same time as investments are being made at a similar rate
and to a similar extent the prospects appear to be very rosy
for all three countries in the construction and property sectors demand for energy
efficiency initiatives is expected to remain high across the region the automotive industry seems to have bottomed out and is
expected to show stable growth albeit from what are histori-
cally very low levels outlook other markets
demand in the energy sector in western and central europe
continues to be driven primarily by the expansion of new nuclear
power and biofuel facilities older coal-fired power stations
urgently need to improve their efficiency and environmental per-
formance in eastern europe and southeast asia the markets
look capable of recovering slightly after the significant downturn
triggered by the financial crisis asia is a strong engine that affects growth in many other mar-
kets which suggests that demand for energy and raw materials
should continue to be good europe also requires vast amounts
of energy which for åf translates into continued demand for
services in both power generation and distribution strong glo-
bal demand for raw materials means that future growth in the
mining sector is also likely to be considerable demand from projects to improve environmental performance
and increase energy efficiency in industry is likely to continue to
be healthy in line with developments in recent years growth in the pulp and paper sector is expected to come
from asia south america and africa europe is tending to invest
more in recycled paper processing and general efficiency gains
than in new production plant increased internationalisation
in recent years åf has expanded through acquisitions and
organic growth becoming increasingly international parallel
with this development a great deal of effort has been made to
standardise the structure of our competence development
work internal databases intranet and brand identity and to
establish an understanding within the organisation of our shared
corporate values and aims each part of åf enjoys considerable
autonomy and this helps secure strong local roots while the
company’s global structure contributes strength and stability in 2010 for the fourth consecutive year åf was involved in the swedish innovation award” together with the swedish
business magazine veckans affärer and vinnova the swedish governmental agency for innovation systems and
almega the employer and trade organisation for the swedish service sector the sek 100 000 prize for 2010 went
to daniel ek the founder of spotify for achieving the impossible by persuading people to pay for music-streaming
services” the music industry is relieved in two years spotify has grown from nothing to a company with 10 million
users worldwide and two million in sweden alone the first in a new category of student innovation awards also worth sek 100 000 went to solarcool the brain-
child of mikael andersson and robert lyngman two students at sweden’s kth royal institute of technology combining
the sun as a source of energy with revolutionary nanotechnology the duo have developed a low-cost refrigerator that
runs entirely on solar power the swedish innovation awards are funded with support from åforsk ångpanneföreningen’s foundation for
research & development innovation means daring to challenge old ideas
å f a n n u a l r e p o r t 2 0 10
1 4 t h i s i s å f h u m a n r e s o u r c e s
human resources
åf has a strong corporate culture and a
brand that is becoming increasingly well
known these are essential attributes for any
company that aims to be an industry leader
in europe and needs to be able to recruit
and retain co-workers of outstanding calibre åf has many years’ experience of solving
technical challenges and both the technical
and commercial aspects of its consultants’
work are continuously being developed every åf co-worker has an important part
to play in consistently conveying the right
image of the company to clients and other
stakeholders corporate culture and core values
the company’s culture values and working methods are described
in the åf blue book 2 0 which is aimed at all co-workers and
serves as a tool for pooling the company’s strengths as one åf” the åf core values great people teamwork and indisputable
independence are the bedrock of the day-to-day work of åf
co-workers and their attitudes to clients and colleagues åf
employees exceed their clients’ expectations in terms of the
solutions they offer and their combination of technical expertise
and business-mindedness but åf employees are also good
communicators good team players and good listeners they
are positive in their outlook deliver on their promises and show
respect in their dealings with clients a workplace where you can feel at home
åf wants employees to take pride in their work and the company to feel confidence in their managers and to enjoy working along-
side their colleagues to meet the demands made on a modern
employer åf adopts a highly focused long-term approach to hr
issues at all levels within the company and conducts regular co-
worker surveys to assess the prevailing mood within the group an increasingly attractive
employer throughout europe åf is an international workplace with offices in more than
20 countries åf currently employs a total of some 4 500 co-workers in 2010 åf co-workers performed projects in more than
70 countries å f a n n u a l r e p o r t 2 0 10
1 5
universum’s career barometer 2010 ranking
ikea 1
google 2
åf 3
abb 4
volvo group 5
ericsson 6
t h i s i s å f h u m a n r e s o u r c e s
to make clear its position on a number of employment-related
issues åf has formulated guidelines in key areas such as human
resources pay equal opportunities and the working environment hr activities differ from country to country but the aim remains
the same to foster a sense of togetherness and create a pleasant
atmosphere at work åf works hard to create a good gender balance an ambition
that is reflected in the company’s recruitment activities the
first step towards a better gender balance is to raise the propor-
tion of female consultants and managers to 25 percent by 2015 whenever a managerial post becomes vacant at least one
woman must be short-listed by the end of 2010 the proportion
of female consultants was 19 percent 2009 17 percent the
proportion of female senior consultants was 17 15 percent while female employees made up 23 21 percent of the total
workforce three of the eight åf directors elected by the annual
general meeting are women this corresponds to a 38 percent
representation on the board åf recruiter fast-tracking candidates
with the right profile
åf has a web-based recruitment tool that enables external and
internal candidates to register their interest in a searchable
database used by åf managers when recruiting new members
to their team the system handles the entire chain of adminis-
trative recruitment procedures from job advert to contract of
employment simple interfaces mean that the tool can be used
both via the åf website and by external recruitment agencies many development opportunities
åf has set itself the target of having approximately 10 000
employees by 2015 but such growth means being able to offer
an attractive working environment with good opportunities for
development working as an åf consultant offers enormous
opportunities to develop for example in different professional
roles through different levels of expertise in a wide range of
locations and through international assignments åf has identified three distinct career paths within the com-
pany as project manager specialist expert and manager each offering a variety of roles levels and development stages whichever path you choose there are plenty of opportunities to
develop within your role or to switch between roles for exam-
ple from project leader to specialist and back again career
paths provide support for setting individual targets and action
plans often as part of the annual personal development inter-
views between managers and their co-workers åf sweden’s favourite technical consultant is more popular than ever in europe
å f a n n u a l r e p o r t 2 0 10
in the 2010 career barometer survey of professional engineers åf was
ranked as sweden’s third most popular employer overall and the number
one choice among technical consulting companies in the european sur-
vey of students at europe’s top universities åf came 48th in the overall
employer rankings the career barometer is an annual attitude survey conducted by
universum communications all respondents are young professionals”
no more than 40 years old with an engineering degree from a university
or college plus two to eight years of working experience in their special-
ist area more than 3 000 engineers took part in the swedish survey while the european survey canvassed 6 000 technology students 1 6
å f a n n u a l r e p o r t 2 0 10
t h i s i s å f h u m a n r e s o u r c e s
åf academy
the åf academy is åf’s own training organisation providing
support for the åf career paths and the development of the con-
sultant’s role this includes comprehensive foundation courses
for new consultants as well as specialised advanced courses
and training tailored to individual requirements lecturers and
facilitators come both from within åf and from external service
providers the 2010 programme included courses in sales
training commercial skills and service all firmly founded on
the åf approach to sound entrepreneurial skills certification
at the åf academy åf project managers undergo training to
obtain certification in accordance with the european accredita-
tion standard ipma at the time of writing åf has 232 certified
project managers at four different levels of certification a b c
and d for project managers involved in international projects the certification process is conducted in english education and training in nuclear power
the åf nuclear academy is a competence development initia-
tive designed to prepare consultants to meet the increasingly
stringent requirements of the nuclear power industry and its
regulatory bodies courses lead to certification at four levels and 16 individuals received certification in 2010 the initiative
has stimulated considerable interest in the industry and gives
individual employees outstanding opportunities for professional
development courses are also open to clients and other industry
stakeholders variable salaries and group bonus
the four åf divisions have adopted different systems for variable
remuneration packages either based on the results of the division
as a whole or on individual performance to underline the relationship between the efforts made by
each individual co-worker and the profitability of the åf group in
the short term and the long term a bonus model has been intro-
duced under the current system part of all profit generated at
group level is shared out in the form of a bonus payment that is
the same for all co-workers in the company other benefits
alongside exciting opportunities for professional development other benefits open to åf employees such as occupational
pensions favourable insurance deals company cars etc vary
from country to country depending on local practice and national
tax regimes all åf group employees are entitled to rent one of the cottages
or apartments that are owned managed or leased by the åf
staff foundation sickness absence
sickness absence among åf employees was 2 1 percent in
2010 2009 2 2 percent å f a n n u a l r e p o r t 2 0 10
elena kozhevnikova business
development manager åf in st petersburg russia it’s exciting to be part of the era of knowledge capital my main
responsibility is developing the organisation in terms of professional
and social skills knowledge accumulation and integration between
our various units the åf group is a fantastic example of rapid yet
balanced growth if we want to stay on top however it’s crucial that
we continue to make use of the experience and expertise we have in
different sectors and geographical areas we need to make the best
possible use of our synergies ”
liisa mäki hr manager åf in vantaa finland one key aspect of our work is to support managers so that we can
create the best possible management culture and safeguard our
good reputation as an employer this will enable us to recruit the
best co-workers from among both experienced engineers and young
people who are just embarking on a career we also invest a lot of
effort in motivational issues to achieve a whole that is greater than
the sum of its parts ”
liselotte trösch hr manager åf-colenco in baden switzerland our biggest challenges are to recruit highly educated and experi-
enced engineers who speak several languages and to sort out the
complexities of international social insurance labour law and tax
issues for our employees working abroad ”
charlotte witt åf’s director
for human resources stockholm sweden our greatest challenge is to focus on efficient processes and
intelligent ways of working we need to be service-oriented knowledgeable and able to work closely with the client successful
growth will require recruiting more co-workers and making sure that
we have managers who set clear targets and aims together with
their teams and this of course will bring in even more interesting
and stimulating projects ”
growing our most important asset
1 7t h i s i s å f h u m a n r e s o u r c e s
å f a n n u a l r e p o r t 2 0 10
dieter müller phd manager of the hydro-
power unit at åf-colenco in switzerland
what has the leadership programme
given you i’ve gained new insights into interesting subjects
that support the long-term strategy for our busi-
ness i liked all the great communication and lead-
ership ideas which are useful in my day-to-day
work but i also appreciated the chance to network
and find out more about åf’s business ”
what would be a typical day at work my working day generally starts with checking my
e-mail if i’m in the office i’ll have internal meetings
with our project managers on decisions relating to
current projects or i’ll discuss various proposals agreements or recruitment matters with other
members of the management group then there
are meetings with or phone calls to clients and
partners during breaks i schedule in brief conver-
sations with my staff about their various chal-
lenges early mornings or late afternoons are
generally spent preparing for meetings or reading
through documents ”
maria åkesson section manager at
telecom east technology division
what has the leadership programme
given you it’s bolstered my business expertise it’s also
developed my leadership skills and given me lots
of good communication skills what’s more i’ve
built up a fantastic network within åf ”
what would be a typical day at work my working days tend to start early that way i
can make sure i have a quiet period before every-
thing really gets going i generally spend this time
on admin such as e-mail and other odds and ends during the day i’ll be involved in a variety of things ranging from meetings with clients lunchtime
meetings with consultants who are working in the
field job interviews and project follow-ups i go
home in the afternoon with my head held high really proud of my consulting team and the work
we do for our clients ”
t h i s i s å f h u m a n r e s o u r c e s
åf’s business executive leadership programme is a joint venture with ifl executive education
that is aimed at selected managers within the åf group training is spread over a 12-month
period during which participants acquire a deeper understanding of åf as a company among
the topics covered are strategic planning international leadership and communication skills january 2011 marked the end of the first programme in which maria åkesson and dieter
müller were two of the 18 participants growth needs good leaders
1 8
1 9
2008 2009 2010
0
1 000
2 000
3 000
4 000
number of employees all forms of employment men women
2008 2009 2010
0
6
12
18
24
staff turnover resignations 30 39 29 40 49 50 59 60 age group
staff turnover based on resignations total 2010 8 9 percent 2009 6 3 percent age distribution
percentage
age group years 2008 2009 2010 29 14 14 14
30 39 30 29 30
40 49 27 27 27
50 59 19 19 19
60 10 11 11
average age 43 1 43 4 43 3
length of employment
percentage
years of employment 2008 2009 2010 2 34 26 22
3 5 21 27 33
6 10 19 19 18
11 20 16 17 16
21 10 11 11
average length of employment 7 8 7 9 7 9
education 2008 2009 2010
postgrad licentiate or ph d studies 3 2 3 6 3 2
university degree 43 8 46 6 53 2
other post-secondary education 13 4 13 7 15 0
secondary 39 6 36 1 28 6
å f a n n u a l r e p o r t 2 0 10
t h i s i s å f h u m a n r e s o u r c e s
2 0
å f a n n u a l r e p o r t 2 0 10
m e d a r b e ta r e å f 2 010
armada sweden’s largest careers fair for
technology students organised by the student union at
the royal institute of technology in
stockholm in november 2010 some 8 000 visitors
came into contact with around 150
companies over two days various peripheral events over a two-week
period include the enova and armada
challenge problem-solving competitions t h i s i s å f h u m a n r e s o u r c e s
10 00 armada opens åf welcomes
students with an informal chat fresh fruit and
a great cup of coffee the day combines lots
of information with opportunities for making
contacts and networking åf is working actively on employer branding to present
itself as a good employer for potential employees and
strengthen its image in general in 2010 åf was the main
sponsor together with ericsson of the armada career
days event at sweden’s royal institute of technology armada is sweden’s largest careers fair for engineering
students here’s how we got on calling all students 11 37 jenny voss an electri-
cal engineer who works in technical
sales at åf’s nynäshamn office meets
sawayos jaynutapong who is studying
for a master’s degree in sustainable
technology she advises him on where
his skills could take him 2 1
å f a n n u a l r e p o r t 2 0 10
t h i s i s å f h u m a n r e s o u r c es
12 18 if you don’t know
where you’re going then you’ll never get
there ” the excitement is palpable when
an åf project management veteran talks
about what it takes to be a successful
project manager åf’s lunchtime presen-
tation is packed with over 200 students
who are totally tuned into this taste of
reality 14 22 i think åf has made a major
impression on the students who’ve come
along to these career days ” says moa moss-
berg right student union project manager
for armada although it is a hectic day she
manages to exchange a few words with zahra
parsa zahra a civil engineering graduate
specialising in geotechnical engineering is
a business developer at åf in borlänge åf employer branding activities a number of external activities are car-
ried out every year at universities both
irl in real life” and via social media this work strengthens åf’s profile not only
among potential employees but also
among future clients and competitors students come away with good contacts
for degree project placements and
careers enquiries in their specialist field åf attaches considerable importance to
meeting students’ needs and putting
them in touch with the right person
quickly 2010 marked the start of the sustain-
ability case tour” an opportunity for stu-
dents from chalmers university of tech-
nology in gothenburg the royal institute
of technology in stockholm and the tech-
nical universities in linköping and lund
to test their problem-solving skills in
infrastructure planning and sustainability åf took part in the new career days”
event in stockholm’s globen arena in
order to meet more practising engineers 22 07 armada 2010 what a fair every company wants to
be there apply to us apply to us come and share your genius ” at the
closing banquet sofia von celsing who is responsible for employer
branding at åf thanked the project
group in verse for all its hard
work 2 2 o p e r at i o n s e n e r g y d i v i s i o n
energy
key figures 2010 2009
operating income in millions of sek 1 012 1 1 192 2
operating profit in millions of sek 83 1 126 5
operating margin 8 2 10 6
contribution to group income 23 27
number of employees ftes 906 841
operating profit per fte in thousands of sek 92 150
the historical figures above have been adjusted proforma to take account of
the corporate restructurings implemented on 1 january and 1 october 2010 contribution to
group sales
23 the energy division offers technical consult-
ing services for the energy sector it has
operations in large parts of the world and is
a market leader in the nordic region switzer-
land and the baltic countries in 2010 enr
magazine engineering news record ranked
åf as the world’s sixth-largest international
energy consultant the offer consulting for the entire investment cycle
the energy division offers technical and financial consulting
services for the energy sector with the emphasis on power gen-
eration and district heating services include everything from
advice on energy markets and their regulations to the imple-
mentation of investments in power plant new-builds already a market leader in finland switzerland and the baltic
countries the division is also enjoying rapid growth in russia
and central europe 2010 brought the acquisition of the czech
consulting company meacont strengthening the division’s mar-
ket position in the czech republic and slovakia at the end of
the year the division acquired mercados energy markets interna-
a catalyst for åf’s
international growth
å f a n n u a l r e p o r t 2 0 10
å f a n n u a l r e p o r t 2 0 10
energy division facts at a glance consulting services for all types of energy global operations 1 100 co-workers in the czech republic estonia finland india lithuania nigeria russia spain switzerland thailand and vietnam contribution to total group sales 23 percent all assignments are conducted outside sweden please see industry division
for energy assignments in scandinavia meet eero auranne
president energy division
what are you happiest about in 2010 we made two strategic acquisitions czech
meacont praha in may and spanish mercados
emi in december the former will strengthen
our business both internationally and in
nuclear power while mercados will bring
a new strategic dimension to the division’s
range through its strong presence in the
international energy markets ”
what’s top of your agenda for 2011 to consolidate our rapid acquired growth
and integrate the new operations so that we
can offer a cohesive international åf range ”
what’s the best thing about åf åf has expanded its international operations
considerably over the last five years at the
same time we have consistently delivered
sound financial results and are now the
world’s sixth-largest international consultant
in power and energy ”
tional a spanish-based consulting company energy has also established
a firm foothold in the growth regions of india and southeast asia the division’s specialist expertise breadth of experience and ability to
take projects from the drawing board to implementation are some of the
key factors behind its success the energy division offers a broad spectrum of services that includes
aspects of technology financing management and energy consulting while assignments are frequently connected to major investment projects the division also takes on projects to increase the efficiency and capacity
of existing plants and offers strategic advice at managerial level on energy
markets and power deals it also carries out environmental and safety
investigations most of energy’s turnover is derived from services relating to invest-
ments in power plants consultants offer support throughout the life cycle
of a project analyses and feasibility studies in the initial stages pre-engi-
neering and engineering once the investment decision has been made and project management during the implementation phase this includes
services such as project steering the basic design of process solutions procurement negotiations manufacturing design and installation inspec-
2 3
2 4
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s e n e r g y d i v i s i o n
energy
tions and functionality testing once the plant is fully opera-
tional the division can also assist with a range of other services from troubleshooting to maintenance planning clients large-scale projects and partnerships
energy’s clients are private and publicly owned energy compa-
nies energy-intensive industries public institutions and financial
institutions these clients’ investments are usually large-scale
and extend over many years as such client relationships are
long-term and often characterised by a sense of partnership thanks to the fact that the division has established a presence
in many different locations geographical proximity to clients is
good the division currently has several hundred clients a large proportion of clients come back with repeat business the ten largest clients account for 39 percent of the division’s
sales clients include alpiq switzerland and central europe fortum nordic countries and russia energo service and remener-
gomontazh russia cez the czech republic and eastern
europe and many national power companies such as eesti
energia latvenergo lietuvos elektrine and electrobras
nuclear brazil market and trends healthy order books and market
recovery
the division began 2010 with major projects on its books which
ensured a satisfactory level of capacity utilisation however economic uncertainty meant that the markets in russia the bal-
tic countries finland and southeast asia suffered a downturn
after the orders had been secured which resulted in reduced
investments in energy and tougher price competition nonethe-
less 2010 brought clear signs of recovery to the investment
markets and many projects that had been put on hold resumed despite the global recovery in the power sector the downturn
in other process industries led to excess capacity and pressure
on prices for some engineering services in finland and the bal-
tic countries furthermore the sharp drop in the value of the
euro relative to the swiss franc caused problems for the swiss
operation despite these short-term difficulties the world still has a fun-
damental need for more energy primarily electricity consump-
tion is increasing in many countries driving a relentless quest
for additional capacity that must be met by both conventional
and renewable forms of energy furthermore existing plant
needs to be made more efficient in order to increase capacity
and improve environmental performance sustainability issues
relating to energy consumption have become a natural part of
companies’ business opportunities in more and more markets the division expects the energy sector to remain a growth
area with considerable potential 2 5
å f a n n u a l r e p o r t 2 0 10
important events in 2010
major expansion in
the czech republic
in may åf acquired meacont a czech tech-
nical consulting company headquartered in
prague while the company’s market focus
is the czech republic and slovakia it also
carries out projects internationally meacont has worked for many years with
åf on various international projects the
acquisition will strengthen åf’s position as
a leading consulting company in the energy
sector especially nuclear power significant energy
project in latvia
in the spring the latvian state energy
company latvenergo appointed åf as
technical consultant for the construction
of a new gas-fired power station in riga scheduled to start operations in the sum-
mer of 2013 åf is responsible for project
management design review commission-
ing services and quality control important energy
projects in northern
finland and lithuania
at the beginning of the year energy won a
major energy contract in finland for design
and project management services for the
new uleåborg energi power station in the
north of the country it is what is known as
a waste-to-energy” unit where electricity
is generated from incinerating household
and industrial waste in lithuania åf won a similar project for
fortum for technical consulting services
and project management for the construc-
tion of a new power station in klaipeda both of these waste-incineration facilities
are the first of their kind in their region expansion in spain
december saw åf’s acquisition of the
international energy and management
consultancy mercados energy markets
international headquartered in madrid spain the company also has offices in
russia the uk turkey india and italy mercados emi has established an inter-
national reputation as a technical consul-
tant with extensive experience in the areas
of energy studies policy design payment
models and energy reforms for govern-
ment agencies and energy companies in
more than 40 countries new power stations
in estonia
in november the energy division signed an
agreement with the estonian state power
company eesti energia as on technical con-
sulting services for the construction of a new
steam turbine plant in narva the project will
draw on the expertise and resources of åf’s
offices in finland sweden estonia and the
czech republic in december eesti energia went on to
appoint åf as lead technical consultant on
the construction of a new waste-to-energy
power station in maardu estonia international hydro-
power projects
during the year åf signed contracts to
work on several international hydropower
projects in countries that included india
and switzerland o p e r at i o n s e n e r g y d i v i s i o n
a v s n i t t å f 2 0102 6
å f a n n u a l r e p o r t 2 0 10
energy
å f a n n u a l r e p o r t 2 0 10
transforming the alps
into storage batteries
2 7
the nant de drance pumped-storage facility
was conceived to exploit the enormous hydro-
electric potential of the swiss alps the plant
is jointly owned by two listed energy utilities
and a railway operator åf-colenco’s engi-
neers were assigned responsibility for all
phases of the project from design engineer-
ing and issues relating to permits to commis-
sioning the new underground facility makes
use of a difference in height of more than 350
metres between two reservoirs connected via
a system of subterranean channels and will
have a capacity of 900 megawatts between
the reservoirs a huge gallery is being exca-
vated to house a power station with six 150-
megawatt pump-turbines when demand for
electricity is low the turbines will pump the
water from the lower to the upper reservoir
in a process similar to that of charging a
battery when demand increases the water
that has previously been pumped up can be
used to produce electricity in all some 14
kilometres of tunnels and chambers need to
be excavated in the mountainside to provide
access and house the logistics we chose an external specialist with the compe-
tence to design plan and assist in all aspects of
the project development and implementation åf-colenco was one of the forerunners throughout
the selection process because of the company’s
previous experience from similar major projects åf-colenco works across a wide spectrum of engi-
neering activities offering specialist expertise in
disciplines such as civil engineering deep mining electromechanics electrical engineering automa-
tion and construction technologies the company
has a proven track record of its ability to deliver
and to act promptly if delays occur everyone knows
what they have to do and how to do it and a strong
team spirit has always been one of the distinguish-
ing characteristics of the company ”
eric wuilloud ceo nant de drance ltd martigny switzerland switzerland
photo jean-luc lugon
2 8
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s i n d u s t r y d i v i s i o n
industry
31 boosting client profitability
throughout the business cycle
the industry division is the leading technical
consultant for industries in the nordic region
and enjoys a unique standing in industrial
automation this is a field in which consulting
services are in demand throughout the busi-
ness cycle as automation provides excellent
opportunities for clients to improve profitabil-
ity and reduce their environmental impact geographical proximity to clients a thorough
understanding of the sectors in which they
work and experience gained from previous
projects pave the way for long-term client
relationships the offer from pre-study to commissioning and more full-service projects
the industry division is the largest independent consultant in its
field in the nordic region with responsibility for energy and
nuclear power assignments in scandinavia where it cooperates
closely with the energy division in all other sectors of industry
the division operates worldwide contribution to
group sales
key figures 2010 2009
operating income in millions of sek 1 340 0 1 386 8
operating profit in millions of sek 119 9 129 9
operating margin 9 0 9 4
contribution to group income 31 32
number of employees ftes 1 200 1 222
operating profit per fte in thousands of sek 100 106
the historical figures above have been adjusted proforma to take account of
the corporate restructurings implemented on 1 january and 1 october 2010 å f a n n u a l r e p o r t 2 0 10
industry division facts at a glance responsible for energy and nuclear power assignments in scandinavia and other
industrial contracts worldwide offers engineering consulting services in all fields and in all sectors of industry 1 300 co-workers in some 50 offices in sweden norway denmark germany spain estonia and south africa contribution to total group sales 31 percent approximately 20 percent of assignments are conducted outside sweden meet per magnusson
president industry division
what were you happiest about in 2010 i’m proud of the fact that despite tough
times for industry and growth that had stag-
nated in absolute terms we succeeded in
winning new assignments and developing
our existing business this meant that we
increased our market share from nine per-
cent to eleven percent ”
what’s top of your agenda for 2011 strong growth i’m convinced there’s a very
great need for our services i’m counting on
the lion’s share of growth in 2011 being organic we will be placing great emphasis on this in
all areas of the division throughout the year ”
what’s the best thing about åf the people who work here they’re outstand-
ing there’s a unique mix of experience and
pioneering spirit at åf that i’ve never encoun-
tered anywhere else when we work together we’re more than a match for every challenge that creates the basis for close relations with
our clients a kind of partnership with vested
interests in one another’s development and
successes ”
the industry division provides experienced process engineers with
skills in most sectors multidisciplinary project leaders for major projects technical specialists and a broad spectrum of engineering expertise to
take care of every link in the chain from feasibility studies to the finished
plant the division’s main focus areas are process technology design
and analysis calculations control technology industrial it automation electrical power systems mechanical engineering piping design and
inspections services are aimed at companies with industrial production facilities consultants can work as an integral part of the client’s own organisation alternatively the division can assume total overall responsibility for the
delivery of a specific function or even an entire project most contracts
involve modernising existing facilities or making them more efficient but
the division is of course also involved in building new industrial plants the division’s long experience and cutting-edge know-how are proving
a valuable combination as various aspects of sustainability become
increasingly important for clients in industry 2 9
3 0
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s i n d u s t r y d i v i s i o n
industry
typical assignments include technology and financial impact
assessments to produce the documentation on which clients
base decisions on future investments control technology for pro-
duction lines the integration of production systems and business
management systems and design engineering projects for bio-
fuel furnaces or nuclear power plants clients a broad cross-section low sensitivity to the
economic cycle
the industry division offers services to all sectors of industry
but enjoys a particularly strong standing in energy nuclear
power mining food technology pharmaceuticals pulp and
paper and other process industries not only does this diverse
client base across a range of industries leave the division rela-
tively unscathed by ups and downs in the business cycle the
division’s offer also remains attractive whatever the health of
the economy industry has a constant need for improvements in
productivity environmental adaptations and measures to save
energy and improve safety the division works in geographical proximity to its clients and
collaborates closely with them the strategy is for around 80 per-
cent of the division’s business to be generated by local clients while the remaining 20 percent derives from joint projects with
other units within the division or with other åf divisions this cre-
ates flexibility within the organisation and the ability to accommo-
date clients’ expansion ambitions consequently relationships
with clients are increasingly assuming the character of partner-
ships where the division shoulders a great deal of responsibility
for the delivery of the projects as a whole the division has approximately 3 400 active clients the ten largest clients account for 30 percent of the division’s
earnings the largest single client accounts for 8 percent of earnings major clients include abb fortum korsnäs lkab novo nor-
disk a s rexcell tissue siemens ssab the municipal water
utility stockholm vatten sweden’s nuclear power plants at
forsmark and ringhals and westinghouse market and trends efficiency improvements and
redeployment of resources
the industry division is a market leader in the nordic region
with a market share of eleven percent the division’s strengths in automation proved invaluable during
the economic downturn with the main emphasis of most new
assignments on making existing operations more efficient indus-
try won new shares of a market that as a whole had more or
less stagnated after a sluggish start to the year by september there were at
last clear signs of a recovery in the business cycle while this was
evident in all sectors demand remained strongest for efficiency
improvements in production plants environmental projects the
development of alternative fuels and energy-efficiency conver-
sions in geographical terms operations are strongest in the min-
ing industry in the north of sweden and in the energy and pharma-
ceutical industries in the south of sweden 3 1
important events in 2010
continued investment
in focus area of
nuclear power
during the autumn åf acquired the tech-
nical consulting company platom ab the
acquisition will strengthen the industry
division’s offer in the field of nuclear
power with high-quality process and
analysis services major investment
in mining
the summer saw the acquisition of the tech-
nical consulting company vpc mining from
vattenfall the company provides high-quality
engineering services for the mining industry
and will enable åf to consolidate its position
as one of pre-eminent technical consulting
companies in the north of sweden the mining
sector grew strongly during the year and åf
coordinates and develops projects through its
mining competence centre åf is involved in a
number of projects including a major prospect-
ing project in pajala for northland resources important project in
energy pulp and paper
in april åf was appointed lead technical
consultant for the investment in a new
block heat power plant on the korsnäs
industrial site in gävle sweden adjacent
to the korsnäs pulp and paper mill the
client is bomhus energi ab which is jointly
owned by forestry group korsnäs and muni-
cipal power company gävle energi this åf
assignment is a multidisciplinary epcm
project that covers all areas of technology
relating to the investment including project
management and administration read
more overleaf strategic investment
in hydropower and
electricity networks
the end of the year brought the acquisition
of energo which has operations in stock-
holm malmö and helsingborg this will
strengthen industry’s position in hydro-
power dam safety windpower electrical
networks and power supply the infrastruc-
ture division and technology division also
stand to benefit from energo’s specialist
expertise stronger position in
swedish energy
at the end of the year åf signed a four-year
contract as an ‘a’ supplier to vattenfall in
doing so åf strengthened its position as a
strategic partner in nuclear power hydro-
power and windpower the agreement re-
lates to the provision of technical consult-
ing services in all disciplines åf intends
to step up its recruitment of personnel
with experience in the energy sector as
a consequence of the agreement o p e r at i o n s i n d u s t r y d i v i s i o n
a v s n i t t å f 2 0103 2
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industry
å f a n n u a l r e p o r t 2 0 10
3 3
gävle sweden
photo andreas björklund
municipality and
industry join forces
on district heating
bomhus energi is a new energy company that
is jointly owned by forestry company korsnäs
ab and municipal power company gävle
energi the two teamed up to build a joint
power plant when korsnäs wanted to make
its energy process more efficient and gävle
energi needed to guarantee a good price for
its district heating åf was assigned to run
the project which involves overall project
management project planning financial
follow-ups hse work and quality follow-ups and process pipe low-voltage and instru-
ment project engineering korsnäs has been working with consultants from
åf for many years on both environmental and pulp
and paper projects that have required expertise in
process engineering and energy in our opinion åf has highly skilled employees they are easy to
work with and can make a quick start on projects
as they know our industry so well we’ve always
been pleased with the work they’ve done for us which is why we’ve gone back to them time and
again åf won the important job of lead consultant
for the construction of the new power plant prima-
rily because of the company’s track record in the
industry and its undisputed ability to deliver ”
mats törnkvist technical director korsnäs ab
3 4
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o p e r at i o n s i n f r a s t r u c t u r e d i v i s i o n
29 infrastructure
market leader with sustainable
solutions for tomorrow’s world
the infrastructure division leads the scandi-
navian market for technical solutions for
infrastructure projects the division’s
strengths include a strong sales organisa-
tion sound commercial skills and a portfolio
of services with a firm focus on sustainabil-
ity the division is continuously enhancing its
market potential by developing innovative
solutions that boost client profitability and
support clients’ target fulfilment aspirations the offer sustainability integral to all services
the infrastructure division comprises five business areas instal-
lations environment rail roads and sound & vibrations installations is the largest of the division’s business areas and
sweden’s number one technical consultant for qualified services
related to the construction and modernisation of commercial industrial and public-sector premises many of its assignments
revolve around improving functionality reducing operating costs
and enhancing environmental performance rail offers everything from surveys and investigations to
more technically oriented installations assignments where the
focus is on track-laying electrical and signalling systems and
contribution to
group sales
key figures 2010 2009
operating income in millions of sek 1 233 1 1 167 6
operating profit in millions of sek 69 0 101 9
operating margin 5 6 8 7
contribution to group income 29 27
number of employees ftes 1 065 994
operating profit per fte in thousands of sek 65 103
the historical figures above have been adjusted proforma to take account of
the corporate restructurings implemented on 1 january and 1 october 2010 å f a n n u a l r e p o r t 2 0 10
infrastructure division facts at a glance clients in the property market construction and industrial plant and the public
sector services include both one-off projects and full-service solutions from initial
conceptualisation to implementation infrastructure planning and energy efficiency are growth areas that are given top
priority approximately 1 400 members of staff in some 40 offices in denmark norway
and sweden individual project activities are carried out all over the world including
russia and china contribution to total group sales 29 percent traffic communications land improvement services and geotechnical
consulting for railway embankments etc come under the remit of the
roads business area sound & vibrations possesses unique cutting-edge expertise in acous-
tics and vibrations to meet needs within industry infrastructure planning property management and product development environment offers services related to environmental impact assess-
ments and licensing procedures to the full spectrum of åf clients roads’ portfolio of services extends from land improvements geotech-
nical and rock engineering assignments to investigations and analyses of
traffic solutions and other infrastructure planning projects in which roads
play an important part clients long-term projects limit sensitivity to the economic
cycle
the infrastructure division has a number of very large clients in the prop-
erty sector which have substantial shares of their respective markets one such client is skanska for whom åf is involved in a major project
engineering assignment for the new karolinska university hospital in solna meet mats påhlsson
president infrastructure division
what were you happiest about in 2010 i’m delighted that thanks to good organic
growth and strategic acquisitions åf has
established such a prominent place for itself
in the field of infrastructure consulting we
have also won some major new assignments
and have a portfolio of many satisfied clients
eager to develop their collaboration with us ”
what’s top of your agenda for 2011 to make sure we remain the number one
choice for clients looking for sustainable solu-
tions by being best in the fields of energy-
efficiency rail traffic and other infrastructure
developments we can take a big share of the
strong growth we expect in these areas ”
what’s the best thing about åf the broad appeal of the åf brand it helps us
attract the best co-workers make good
acquisitions and keep our clients happy ”
3 5
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o p e r at i o n s i n f r a s t r u c t u r e d i v i s i o n
public-sector assignments tend to be major tax-funded invest-
ments over many years this leads to long-term relationships
with clients and a more or less continuous inflow of orders many major infrastructure projects extend beyond the horizon
of a single business cycle thus reducing the division’s sensitiv-
ity to fluctuations in the economy however there is a slowdown
in orders during periods of low economic activity and competi-
tion intensifies as more foreign players enter the arena and
prices come under pressure other factors that mitigate the division’s sensitivity to the eco-
nomic cycle are its broad client base and the fact that many
projects are driven by the need to improve efficiency which
always has a direct impact on clients’ profitability regardless of
the state of the economy the division serves approximately 6 000 clients approximately 30 percent of clients are from the public sector
and approximately 70 percent from the private sector between them the ten largest clients account for just under
one third of the division’s earnings important clients include the danish road directorate the
swedish transport administration skanska statbygg nor-
way stockholm’s regional transport authority sl and local
and regional authorities market and trends strong market and good prospects
the market for infrastructure consulting services remained
good throughout 2010 underpinned by a steady increase in the
number of major investments in new roads and railways funded
by the public purse åf has reported good growth in this sector towards the end of the year the division also saw clear signs
of an upturn in the property sector which had been very badly
affected by the financial crisis this is a sector where many
projects are driven by the need to make energy-efficiency gains as far as the economy is concerned the outlook remains
good we assume continuing keen interest in environmental
investments and energy-efficiency projects and thanks to politi-
cal decisions that have already earmarked funds for long-term
investments in the nordic road and rail network demand from
that sector is also expected to be good for many years to come infrastructure
3 7
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important events in 2010
stronger position
in infrastructure
planning
in the summer of 2010 åf acquired the
consulting operations of the city of gothen-
burg’s highways and traffic management
department göteborgs gatuaktiebolag this municipal consulting company has
approximately 100 employees engagedin
investigations project engineering and
project management of existing and new
infrastructure investments in the rapidly
expanding gothenburg region major stockholm
bypass project
in collaboration with the engineering con-
sultancy scott wilson uk åf was awarded
two of the four contracts from the swedish
transport administration to provide tech-
nical consulting services for the major
stockholm bypass project the project
involves project planning and project
engineering work for the interchanges at
akalla and häggvik and the rock tunnels new organisation
for sharper focus
on growth
on 1 october the former infrastructure
division was split into two new divisions infrastructure and technology market leader in
energy-efficient
properties
the end of the year brought the acquisition
of energo which has operations in stock-
holm malmö and helsingborg this will
strengthen åf’s position as a leader in the
growing swedish market for improving the
energy efficiency of buildings the division
will also gain considerable technical instal-
lation know-how the industry division and
technology division also stand to benefit
from energo’s specialist expertise o p e r at i o n s i n f r a s t r u c t u r e d i v i s i o n
a v s n i t t å f 2 0103 8
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infrastructure
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3 9
fredriksberg castle copenhagen
a nordic castle should
have nordic lighting
denmark’s army officers will all pass through
the royal danish army academy during their
training based at frederiksberg castle the
academy wanted to light up the external
facades so that this national treasure could
be appreciated around the clock åf den-
mark was commissioned to devise a lighting
proposal that exemplified the nordic concept
of light lighting up a dark nordic castle re-
quires a completely different approach from
illuminating a similar building in southern
europe natural simplicity works better in
the nordic countries without theatrical pro-
ductions and clever lighting effects the new
lighting was ready in time for queen mar-
grethe’s birthday in april 2010 frederiksberg
castle is now copenhagen’s only historical
building with lighting that is founded on a
holistic approach providing beautiful and functional external lighting
for old castles isn’t exactly one of the army’s core
skills we were therefore looking for a consultant
that could handle both the technical and formal
aspects of this kind of project we chose åf and
the experience has been positive in every sense for
the academy the consultants were open and pro-
fessional with a ‘can-do’ approach that played a
crucial role for the success of the end result there
were of course a few misgivings along the way but i think that everyone is now more than happy
with the impression the castle gives in the dark ”
lieutenant colonel jan stoltenborg deputy commander at the royal danish
army academy
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o p e r at i o n s t e c h n o l o g y d i v i s i o n
17 technology
green-tech specialists
and high-tech solutions
the technology division is active mainly in
sweden where it is a leading name in prod-
uct development and defence technology a
firm base and a long track record of success
provide stability and give clients peace of
mind the technology division also has
strong offers within its specialist fields relat-
ing to various aspects of sustainability offer high-tech solutions firmly founded on exten-
sive experience
the technology division is active in the fields of telecommunica-
tions defence and product development in telecoms and it the division assists with everything from
coordinating major projects to providing highly specialised ser-
vices supporting clients telecom operators network owners municipal authorities and private sector companies by offer-
ing solutions that are both sustainable and profitable typical
assignments include conducting technical it security analyses procuring and implementing new communication solutions and
planning and project engineering broadband networks contribution to
group sales
key figures 2010 2009
operating income in millions of sek 719 3 636 1
operating profit in millions of sek 69 1 33 7
operating margin 9 6 5 3
contribution to group income 17 14
number of employees ftes 616 604
operating profit per fte in thousands of sek 112 56
the historical figures above have been adjusted proforma to take account of
the corporate restructurings implemented on 1 january and 1 october 2010 å f a n n u a l r e p o r t 2 0 10
division facts at a glance technology clients in the defence sector telecommunications the engineering and automotive
industries medical technology and life sciences assignments include everything from one-off projects to full-service undertakings demand for sustainable solutions is increasing across the board approximately 700 co-workers at 12 offices most in sweden’s expansive metro-
politan regions around stockholm gothenburg and malmö contribution to total group sales 17 percent the defence business area offers services in civil security and mainte-
nance technology to public and private sector clients typically clients
here are looking for an independent consultant to analyse problems to
provide support in the procurement process and in many cases to pro-
ceed with the adaptation of systems examples of projects undertaken
include the development of warning systems for the swedish civil contin-
gencies agency msb an investigation of the effect of offshore wind
farms on radar stations for the swedish defence materiel administration fmv and the installation of mobile command centres also for fmv product development offers services related to product development
and hi-tech it applications that include embedded systems mechanical
engineering programming and product care the division has the skills
needed to follow either a single component or the intended end-product
throughout the entire process from pre-study to serial production its
broad spectrum of activities extends from pacemakers to 3g base sta-
tions and train control systems since the manufacturing process frequently accounts for as much as
80 percent of the total environmental impact of a product making the
right choices at the design stage when a product is still on the drawing
meet johan olsson
president technology division
what were you happiest about in 2010 the fact that our own business developed
positively even in the depths of an economic
downturn is a sign of strength that bodes well
for the future we’ve succeeded in growing our
business while improving profitability and deliv-
ering consistently high quality to our clients ”
what’s top of your agenda for 2011 to make åf even stronger in our chosen
areas of expertise we’ll do that through new
recruitment stronger sales and strategic
acquisitions most of the growth will be in swe-
den’s expansive metropolitan regions around
stockholm gothenburg and malmö ”
what’s the best thing about åf that we’re number one but continue to work
as hard as if we were number two åf is never
content to rest on its laurels we always have a
goal in our sights and never miss a chance to
advance our positions ”
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o p e r at i o n s t e c h n o l o g y d i v i s i o n
board is of paramount importance for this reason interest in
the åf ecodesign center has been steadily rising since the initi-
ative was launched a few years ago here åf offers clients an
eco-friendly product development service aimed at factoring
environmental considerations such as energy efficiency and the
right choice of materials and components into the equation at
every stage from drawing board to finished product experiences
gained in the åf ecodesign center are systematically integrated
into the division’s other product development activities clients partnerships lead to larger undertakings
the technology division is a leading name in product develop-
ment and defence technology with the bulk of its clientele con-
centrated in the light engineering and automotive industries the
defence sector medical technology and life sciences especially
in the defence sector customer relations are without excep-
tion long-term and typically take the form of close collaboration
akin to partnerships clients for the division’s product develop-
ment services include both the r&d departments of large com-
panies and small innovative companies that outsource large
parts of their development activities with no let-up in recent trends towards outsourcing bigger
and bigger assignments and even full-service undertakings it is
clear that procurement activities and the clients’ project evalua-
tions are increasing in complexity this however bodes well for
åf which has the breadth and the experience to be able to offer
clients the right option whatever their needs moreover clients also benefit from åf’s strong appeal in the
labour market which means the technology division has access
to the best consultants in the business at all times the division has around 350 clients the ten largest clients together account for just over 60
percent of sales key clients include bombardier electrolux ericsson the
swedish defence materiel administration fmv kockums saab scania visma and volvo market and trends improved market
and greater demand for green solutions
demand from the defence sector which is traditionally largely
unaffected by the state of the economy remained stable
throughout 2010 demand from the private sector which includes the telecom-
munications and automotive industries picked up during the
second quarter and continued to improve steadily throughout
the year this positive development was chiefly the result of
recovery in our clients’ own markets as the world emerged from
the economic downturn opening up scope for investments in
innovations in both new and existing products and it systems product development and product care activities are on the
whole relatively resistant to fluctuations in the business cycle the needs they meet exist regardless of the general health of
the economy one clear and growing trend is that sustainability is now near
the top of every client’s agenda environmental adaptation has
become an engine for growth technology
4 3
å f a n n u a l r e p o r t 2 0 10
important events in 2010
important new projects
the year’s major orders included new
projects from bombardier electrolux
and kockums growth in the
public sector
in august the swedish legal financial and
administrative services agency selected
åf for a framework agreement for the pro-
vision of it project consulting services to
various government agencies the agree-
ment is to run for two years with the option
of a subsequent two-year extension and
will pave the way for further inroads into
the public sector åf won the contract pri-
marily thanks to its experience of turnkey
deliveries growth potential in
the defence sector
at the end of the year åf signed a frame-
work agreement with the swedish defence
materiel administration fmv relating to
telecommunications åf secured the fram-
ework agreements for seven areas of tech-
nology out of a total of nine radio & antenna
systems satellite communication telecom
exchange systems radar systems tele-war-
fare systems identification systems and fre-
quency planning the contract is to run for
three years with the option of a subsequent
one-year extension expansion in it
and telecoms
the end of the year brought the acquisi-
tion of energo which has operations in
stockholm malmö and helsingborg the
technology division gained a number of
it and telecoms consultants the industry
division and infrastructure division also
stand to benefit from energo’s specialist
expertise investments in client
information project
management and
business skills
the year involved a number of training
courses for consultants in their role as
business professionals and project mana-
gers a new organisational structure was
launched where various experienced pro-
ject managers became key account man-
agers for a selection of key clients o p e r at i o n s t e c h n o l o g y d i v i s i o n
a v s n i t t å f 2 0104 4
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4 5
offshore wind farm u k windpower and radar
surveillance work
together at sea
wind turbines affect the surveillance cap-
ability of radar stations given that there
are plans for huge offshore wind farms the
swedish armed forces needed to look into
the matter more closely to ensure that their
surveillance operations could continue to
work well åf was assigned to carry out a
study of the technical financial and legal
options for setting up a radar station adjacent
to an offshore wind farm this project drew on
a number of different skills within the group radar technology communication systems encryption law and project financing the
result was a proposal for a technical solution
with costings getting radar surveillance to work alongside wind-
power is an exciting challenge that really needs
good solutions åf has the relevant radar expertise good internal quality assurance and the capacity to
understand and interpret our directives åf showed
an impressive commitment to the project and on
many occasions the company took its own initia-
tives when it came to contacting the authorities
and companies involved our working relationship
was positive and good humoured but above all
with plenty of constructive dialogue i like the way
åf presents its opinions it stimulates us to rethink
and come up with new ideas åf carried out this
project by the book ”
kjell-åke eriksson m sc project manager project engineer with the swedish defence
materiel administration fmv
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o p e r at i o n s å f s h a r e s
åf shares
åf’s class b shares have been quoted on the
stockholm stock exchange since january
1986 prior to this åf traded as a coopera-
tive association from 1895 until 1980 and
as a joint-stock company from 1981 åf’s b
shares are traded in stockholm on the nas-
daq omx exchange’s mid cap list under the
‘af b’ ticker symbol at the end of 2009 the
combined market capitalisation of the com-
pany’s shares including class a shares was
sek 4 743 million 2009 sek 3 329 million share movements and turnover
shareholders at the annual general meeting of the company
on 5 may 2010 voted to implement a 2 1 share split as a result
of the split in june 2010 the total number of shares in the com-
pany rose from 17 029 501 to 34 059 002 following the split
the quota value of the åf share is sek 5 åf’s class b shares
increased in value by 42 5 percent during 2010 trading at sek
139 25 at the end of the year this compares with a value of
sek 195 50 per share at the beginning of 2010 which corre-
sponds to sek 97 75 when adjusted to take account of the split during the same period the stockholm omxspi all-share index
rose by 23 1 percent during the year a total of 15 325 671
shares were traded for an aggregate value of sek 2 197 million 2009 12 418 178 shares worth sek 1 770 million turnover
per trading day averaged sek 8 7 million sek 7 1 million the
share was traded on 100 percent of trading days in both 2010
and 2009 dividend policy and dividend
the board has adopted a dividend policy according to which the
dividend corresponds to approximately 50 percent of the con-
solidated profit after tax excluding capital gains for the compa-
ny’s operations during 2010 the board proposes a dividend of
sek 4 00 per share 2009 sek 4 00 per share share buy-backs
åf holds a total of 284 000 of the company’s class b shares
relating to the performance-related share programmes for 2008 2009 and 2010 no further share buy-backs were made in 2010 investor relations
åf’s positive development is reflected in the interest shown in
the åf share the company adopts a long-term approach to its
communication with the capital market in september the year’s
capital market day focused on the åf vision for 2015 and
included an in-depth look at the infrastructure division the
event hosted by åf at its head office in stockholm attracted
around 35 investors analysts and representatives of the media the president ceo cfo and or director of corporate informa-
tion also took part in a number of road shows” to oslo london frankfurt and new york in 2010 that led to approximately 25
meetings with investors in addition a further 40 or so individual
investor meetings were held at the åf head office in stockholm
during the year analysts who regularly monitor the progress of åf johan dahl erik penser bankaktiebolag
daniel djurberg nordea
jan ihrfelt swedbank markets
david jacobsson öhman fondkommission
fredrik lithell carnegie
stefan wård handelsbanken capital markets
å f a n n u a l r e p o r t 2 0 10
2 500
2 000
1 500
1 000
500
0
2006 2007 2008 2009 2010
b share incl dividend six return index 2006 2007 2008 2009 2010 in millions of sek annual turnover in
åf class b shares
total yield − 5 years
20
60
80
100
120
140
160
180 nasdaq omx
40
comparative figures adjusted for share splits in 2006 and 2010 1 000
2 000
3 000
4 000
20
40
60
80
100
120
140
160 nasdaq omx
omx stockholm_pi
number of shares traded in thousands b share
omx small cap stockholm index 2006 2007 2008 2009 2010 2011
sek
comparative figures adjusted for share splits in 2006 and 2010 åf share − 5-year trend åf has earned its leader’s jersey”
david jacobsson is an analyst
at öhman fondkommission he
specialises in companies in the
engineering and it sectors and has
been monitoring åf since 2007 how do you view åf’s performance
over the last few years there are three key factors that have
given åf a boost in recent years firstly åf management has shown a great deal of
resolve when acquiring and disposing of
operations secondly sponsorship activi-
ties have done a great job in strengthening
the brand and helping to stimulate interest
in engineering and last but not least åf has done well to maintain its margins
through the economic downturn that’s a
sign of inner strength and discipline in the
group and means that åf fully deserves
the leader’s jersey in the sector ”
åf’s new vision includes continued
strong growth with good profitability for example sales of eur 1 billion
for 2015 how do you rate åf’s
chances of hitting this target i think they’re very good a strong brand
and good profitability will help åf to grow
organically through recruitment and to
make successful acquisitions ”
who should consider having åf
shares in their portfolio åf shares are suitable for long-term
investors with faith in europe’s ability to
develop infrastructure through investments
in energy transport and the application of
technology in industry ”
prize-winning ir work
for the second consecutive year viktor svensson åf’s
executive vice president corporate information was
voted sweden’s top investor relations manager among
medium-sized listed companies the annual survey con-
ducted by regi research & strategi and the swedish daily
newspaper dagens industri is based on interviews with a
large number of swedish and european financial analysts o p e r a t i o n s å f s h a r e s 4 7
4 8
å f a n n u a l r e p o r t 2 0 10
shareholders in sweden and abroad
31 december 2010 percent of capital
sweden 64 7
other nordic countries 7 7
rest of europe 15 8
usa 11 4
others 0 4
the number of shareholders rose by 609 during 2010 to a total of 6 691 shareholder categories
31 december 2010 percent of capital
foreign owners 35 3
swedish owners 64 7
of which institutions 88 0
private individuals incl close companies 12 0
size of shareholding
31 december 2010
number number of percentage
of shares shareholders of shares 500 4 388 2 3
500 5 000 2 000 9 3 5 000 303 88 4
total 6 691 100 0
historical development of share capital
change in number of shares numbers of shares share total share capital
year quota value change a shares b shares a shares b shares sek ‘000
1984 50 åf issues convertible debentures to employees 727 460 727 460 36 373
1985 50 redesignation 42 600 42 600 684 860 42 600 727 460 36 373
1986 50 new issue and b share floated on a list 300 000 684 860 342 600 1 027 460 51 373
1987 20 bonus issue and split 684 860 1 370 060 1 369 720 1 712 660 3 082 380 61 648
1990 20 conversion of convertible debentures from 1984 269 420 480 580 1 639 140 2 193 240 3 832 380 76 648
1994 20 redesignation 810 475 810 475 828 665 3 003 715 3 832 380 76 648
1996 20 bonus issue 414 332 1 501 857 1 242 997 4 505 572 5 748 569 114 971
1997 20 redesignation 840 778 840 778 402 219 5 346 350 5 748 569 114 971
2004 20 new issue 175 807 402 219 5 522 157 5 924 376 118 488
2005 20 new issue 37 766 402 219 5 559 923 5 962 142 119 243
2006 10 split 2 1 402 219 5 559 923 804 438 11 119 846 11 924 284 119 243
2006 10 new issue 1 121 527 804 438 12 241 373 13 045 811 130 458
2006 10 new issue 3 232 164 804 438 15 473 537 16 277 975 162 780
2007 10 new issue 90 951 804 438 15 564 488 16 368 926 163 689
2007 10 conversion of convertible debentures from 2005 2008 566 307 804 438 16 130 795 16 935 233 169 352
2008 10 conversion of convertible debentures from 2005 2008 94 268 804 438 16 225 063 17 029 501 170 295
2010 5 split 2 1 804 438 16 225 063 1 608 876 32 450 126 34 059 0021 170 295
1 of which 284 000 are held by the company the ten largest owners on 31 december 2010
owner a shares b shares
holding votes ångpanneföreningen’s foundation for
research & development 1 602 876 3 832 576 16 0 40 9
swedbank robur investment funds 0 2 817 619 8 3 5 8
skandinaviska enskilda banken s a nqi 0 1 970 652 5 8 4 1
nordea investment funds 0 1 687 873 5 0 3 5
åfond foundation åf group trust 0 1 335 317 3 9 2 8
afa försäkring 0 967 748 2 8 2 0
ntc various fiduciary capacit 0 866 930 2 6 1 8
ssb cl omnibus ac omo9 30 pct 0 858 626 2 5 1 8
nordea bank s a nominee account 0 709 867 2 1 1 5
handelsbanken investment funds 0 656 683 1 9 1 4
total 10 largest owners 1 602 876 15 703 891 50 8 65 4
total other owners 6 000 16 746 235 49 2 34 6
total 31 dec 2010 1 608 876 32 450 126 100 0 100 0
key ratios per share
sek 2006 2007 2008 2009 20101 share price 31 dec 73 00 84 50 59 50 97 75 139 25
pre-tax profit 5 41 9 63 13 42 10 87 23 34
profit after tax 3 69 6 58 9 54 7 93 21 02
profit after tax after dilution 3 58 6 56 9 54 7 91 20 95
equity excluding non-controlling
interests 33 56 39 41 49 73 53 68 69 47
yield percent 2 1 3 8 5 5 4 1 2 92 dividend 1 50 3 25 3 25 4 00 4 003 annual turnover rate times 95 3 59 7 75 0 76 0 60 1
market capitalisation msek 2 376 6 2 862 1 2 026 5 3 329 3 4 742 7
1 a 2 1 share split was implemented on 2 june 2010 comparative figures adjusted 2 based on proposed dividend
3 proposed dividend o p e r a t i o n s å f s h a r e s
å f a n n u a l r e p o r t 2 0 10
ulrica johansson is a process
consultant with the industry division in
stockholm she spends her free time
dancing singing in a choir wine tasting skiing cycling and motorcycling in my job i am constantly coming into contact
with new people cultures and challenges that
stimulates me and helps me develop i’m able to
organise my own workload and think for myself but i can still turn to all the wise old owls i have
around me when i need to i really appreciate the
fact that no two days are the same ”
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
åf’s chairman ulf dinkelspiel and sustainability manager alice bah kuhnke talk about
sustainability profitability and targets how do you view sustainability in the context of åf ulf dinkelspiel our approach to sustainability incorporates three
different perspectives financial environmental and social our
range of services is designed for other companies which like us want to work as a sustainable long-term operation ”
alice bah kuhnke although the word sustainability is a relatively
new and modern concept the ideas it encompasses have always
played an important role at åf these days we are clearer about
the way we communicate these ideas and we link our sustainability
work more directly to our business targets ”
is sustainability better for the conscience than it is for the
cash-box ulf dinkelspiel striving for profitability and wanting to make the
world a better place aren’t mutually exclusive quite the opposite in fact a sustainable company is a long-term venture which lays
the foundations for good profitability over time ”
alice bah kuhnke åf has clear profitability targets and our sustain-
ability work is an important tool for generating profit both now and
in the future links with the business side of things are very strong ”
you launched what are perhaps the industry’s toughest
internal sustainability targets in 2010 can you tell us more
about this alice bah kuhnke we launched three main targets in march first by 2015 we aim to halve our climate impact from 2009 levels secondly we aim to offer an additional sustainable option in the
tenders that we submit to clients so that they have more solutions
for their challenges and thirdly we want to be perceived as the
very best technical consulting company when it comes to providing
sustainable solutions to the technical challenges our clients face ”
ulf dinkelspiel our vision is to be the most profitable company in
our sector if in addition we are seen as the best in terms of sus-
tainability then we will really have succeeded to this end we’ve
worked hard to make our sustainability targets clear quantifiable
and communicable ”
what can clients expect from their åf consultant alice bah kuhnke clients can expect åf to come up with the very
best technical solution our consultants already take sustainability
into account in their projects but clients will notice that we are
taking things a step further when they are presented with even
more green options and alternative investment calculations that
create profitability over the long term ”
ulf dinkelspiel yes we’re really serious about this and we aim to
practise what we preach that will be evident from our documenta-
tion and the way we achieve our targets ”
sustainability is profitability
5 0
5 1
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
sustainability report
for åf sustainability is a fundamental
concern åf seeks to improve its clients’
operations and make them more efficient
by offering solutions that are sustainable environmentally economically and socially over the long term but that’s not all as a
company and an important corporate member
of society for 115 years åf also understands
that sustainability is the key to its own success
and continuing development åf has set itself tough targets for its internal sustainability work the frequently new and louder calls for sustainability from the
company’s various stakeholders serve as milestones on the road
towards these ambitious targets in the long term investments in
sustainability are investments in profitability which is one reason
why work with sustainability plays such a key role at åf in march 2010 åf launched the åf green advisor plan” a
roadmap for the company’s sustainability work prior to this a pre-study had been undertaken based on what was then the
current situation and a reference group of employees from
åf green advisor report
since communication plays a crucial part in successful
sustainability work 2010 saw the launch of the first two
issues of the åf green advisor report” a journal that
describes some of the assignments undertaken by åf
and the positive effects that these have on communi-
ties around the world different positions in different parts of the company had formu-
lated three sustainability goals aimed at paving the way towards
a more sustainable åf within five years from the 2009 baseline åf will have halved its carbon footprint per co-worker åf will
always give clients a green” alternative in the form of a more
sustainable solution to every assignment and åf will be per-
ceived as the technical consultant that from a sustainability
perspective best addresses the challenges its clients face the greatest positive impact that åf can have on society is
through the assignments it performs for its clients one important aspect of the work preceding the åf green
advisor plan” was to identify the interests of key stakeholders owners directors employees clients the local community and
global society the indicators presented in this sustainability
report follow the materiality principle and have been chosen to
reflect the main objectives of åf’s sustainability work for the
period 2010 2015 the results of the pilot study the dialogue
conducted with stakeholders and the fact that the af group is
an international company with subsidiaries in more than 20
countries and a workforce of more than 100 people in seven of
them the czech republic denmark finland norway russia sweden and switzerland the figures reported by these coun-
tries constitute the current basis for what has been identified as
relevant to the report å f a n n u a l r e p o r t 2 0 10
economic indicators of sustainability
for åf the process of becoming a more sustainable company is
predicated on being a profitable company one of the challenges
of economic sustainability is to make sure that the company’s
profitability is the result of striking a long-term balance between
individual interests the environment and healthy corporate
finances ec 1 direct economic value generated and distributed
the table below shows the economic value generated by åf in
a selected number of areas the information has been compiled
from the audited annual accounts for 2010 which include all
significant financial reporting direct economic value generated in millions of sek stakeholder 2010
revenues clients 4 796
operating costs incl depreciation amortisation suppliers 1 469
employees’ wages and benefits employees 2 529
taxes state 81
economic value retained owners 717
environmental performance indicators
for åf the challenge that environmental sustainability poses
is to make sure that the company contributes to the long-term
conservation of the ecosystem’s production capacity and of
eco-diversity this includes all of earth’s biological environments including the seas and lakes as well as the forests and open
landscapes en 16 and en 17 total direct and indirect greenhouse gas
emissions by weight and other relevant indirect greenhouse
gas emissions by weight see diagrams below en 18 initiatives to reduce ghg emissions and reductions
achieved
in 2010 åf launched a new vehicle policy for its organisation in
sweden building on a dialogue with representatives for åf’s
stakeholders owners employees and organisations represent-
ing the interests of the local and global community the new
policy formulated a clear ambition to achieve a significant reduc-
tion in emissions of greenhouse gases by 2015 this was to be
0
1 000
2 000
4 000
5 000
other relevant emissions tonnes of co2 equivalents
per country denmark finland norway russia switzerland sweden czech rep 3 000 indirect energy use from åf travel transport and consumption of materials 0
1 000
2 000
4 000
5 000
indirect emissions tonnes of co2 equivalentsper country denmark finland norway russia switzerland sweden czech rep 3 000 indirect emissions from åf’s energy consumption as åf neither owns nor controls any sources of greenhouse gas emissions no direct ghg emissions are reported 5 2 o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
å f a n n u a l r e p o r t 2 0 10
5 3o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
achieved by progressively reducing emissions limits per gram
for vehicles leased through the company by åf employees who
need use of a car to carry out their assigned duties the table below shows the reduction in carbon dioxide per
gram that åf has achieved through the new policy’s limits the
average emissions values of all vehicles purchased by åf in 2010
have been compared with the values for vehicles purchased in
2009 en 28 non-compliance with environmental laws and regulations
no fines or penalties have been reported during 2010 for non-
compliance with environmental legislation and regulations social performance indicators
for åf the challenge that social sustainability poses is to make
sure that the company contributes to every human being’s right
to a decent life and to the process of creating societies in which
fundamental human needs and rights are respected 0
155
160
165
175
co2 emissions per new vehicle g km
2009 2010 170
150
145
la 1 total workforce
the total number of employees in åf during 2010 was 4 475 the distribution of employees in the seven countries that form
the basis of this report is shown in the table below la 2 employee turnover
employee turnover resignations and redundancies lay-offs in
the seven countries where åf has the largest numbers of
employees was 10 5 percent in 2010 a total of 413 people 83
women and 330 men left the company employee turnover for
the different geographical regions is shown in the table below 0
1 000
2 000
4 000
5 000
total number of employees 31 dec 2010
denmark finland norway russia switzer- sweden czech other åf total
land rep countries
3 000
0
4
6
10
14
employee turnover by region denmark finland norway russia switzer- sweden czech
land rep 8
12
2
total 7 countries with largest åf workforce
5 4
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
la 7 work-related injuries and sick days
absence due to sickness is very low at åf for 2010 it was
2 1 percent the number of work-related injuries and days lost
through injury are shown in the tables below la 10 average hours of training per employee by employee
category
competence development is crucial for the continued success of
åf training for new employees various types of managerial train-
ing courses and training in new legislation regulations and direc-
tives are conducted continuously during the reporting period each employee received an average of 37 hours’ training la 13 composition of board and senior management
åf is a technical consulting company and therefore most of its
employees are engineers åf’s senior management team comprises 2 women and
8 men 20 percent female representation the åf board of
directors comprises 3 women and 5 men 38 percent female
representation 0
25
50
75
100
days lost through injury
denmark finland norway russia switzer- sweden czech
land rep total 7 countries with largest åf workforce
0
10
20
40
50
number of hours of training per employee
30
denmark finland norway russia switzer- sweden czech
land rep total 7 countries with largest åf workforce
0
4
16
number of work-related injuries
denmark finland norway russia switzer- sweden czech
land rep 8
12
total 7 countries with largest åf workforce
about the sustainability report
c c b b a a ob
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self-
assess-
ment
third-
party decla-
ration
inspected by gri
application level
this is the first year that åf has chosen to report on its sustain-
ability performance as an integral part of the group’s annual
report with reference to the guidelines formulated by the
global reporting initiative gri the report follows the criteria
for gri application level c åf’s ambition is to develop the group’s
sustainability work and to expand the scope of its reporting
over the next few years for further information about gri and
a full explanation of the guidelines and indicators please see
www globalreporting org contact
the contact person for the åf sustainability report is alice
bah kuhnke director of sustainability and csr at åf ab email
alice bah kuhnke@afconsult com or tel 46 10 505 00 00 å f a n n u a l r e p o r t 2 0 10
5 5o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
reporting with reference to gri guidelines must depending on the level chosen be done in accordance with the criteria laid down
for application level c b or a gri index status page
1 0 strategy and analysis
1 1 statement form the ceo strategy vision and key issues ● 4
2 0 organisational profile
2 1 name of the organisation ● 66
2 2 primary brands products services ● 2 11
2 3 operational structure of the organisation ● 66
2 4 location of organisation’s headquarters ● 66
2 5 countries in which the organisation operates ● 133
2 6 ownership structure and legal form ● 66
2 7 markets served ● 11
2 8 size of the company ● 70
2 9 significant changes during the reporting period ● 93
2 10 awards received during the reporting period 3 0 report parameters
3 1 reporting period ● 83
3 2 date of most recent previous report ✱
3 3 reporting cycle ● 55
3 4 contact person for issues relating to the
sustainability report
● 55
3 5 definition of content of report ● 51
3 6 boundary of the report ● 51
3 7 specific limitations on the scope or boundary
of the report
● 51
3 8 principles for reporting that can affect comparability
between organisations and or reporting periods
● 51
3 10
explanation of the effect of any re-statements of
information provided in earlier reports and the
reasons for such re-statement
✱
3 11 significant changes from previous reporting periods
relating to the scope boundary or measurement methods
applied in the report
✱
3 12 gri content index ● 56
✱ this is the company’s first report using gri guidelines status page
4 0 governance commitments and engagement
4 1 governance structure for the company ● 123
4 2 indication of whether the chair of the highest
governance body is also an executive officer and if so an explanation for this arrangement
● 4 3 structure of the board of governance and statement
of its independence from executive management
● 124
4 4 mechanisms for communication between board and
management
● 124
4 14 list of stakeholder groups engaged by the company ● 51
4 15 basis for identification of stakeholders with whom
to engage
● 51
economic sustainability
ec1 direct economic value generated and distributed ● 52
environmental sustainability
en16 total direct and indirect greenhouse gas emissions ● 52
en17 other relevant indirect greenhouse gas emissions ● 52
en18 initiatives to reduce greenhouse gas emissions ● 52
en28 fines and other sanctions for non-compliance with
environmental laws and regulations
● 53
social sustainability
la1 total workforce ● 53
la2 employee turnover ● 53
la7 work-related injuries and days lost to sickness ● 54
la10 hours of training per employee ● 54
la13 composition of board and executive management ● 54
below is a list of all the disclosures that are mandatory for level
c reports and of the relevant performance indicators that åf
has chosen to report the listing also specifies whether the
report is full ● or partial ◗ with reference to the gri guidelines
for each individual indicator and shows where to find this infor-
mation in the annual report
5 6 o p e r at i o n s s u s ta i n a b i l i t y i s p r o f i t a b i l i t y
å f a n n u a l r e p o r t 2 0 10
5 7
å f a n n u a l r e p o r t 2 0 10
jorma vihavainen is a project
manager with the energy division in vantaa finland he devotes much of his spare time
to his two school-age children and their
interests judo is also an important part of
his life he is now a judo coach and referee getting the right work life balance is important
to me the åf group gives me the opportunity to
get involved in lots of interesting and challenging
projects clients appreciate and respect our
advice and recommendations and that is a
constant source of motivation i really admire
the energy and willpower our team shows when
it comes to creating professional and innovative
solutions ”
5 8
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s r i s k m a n a g e m e n t a n d s e n s i t i v i t y a n a ly s i s
risk is inherent in all commercial activity risks that are managed well can open up
business opportunities and increase the
value of a company while those that are
managed badly can lead to losses that
undermine the stability of a business in
recent years åf has worked on making risk
management an integral part both of the
group’s strategic planning processes and
its operational activities risk management at åf seeks not only to minimise risks but
also to make sure that the company makes the best possible
use of the opportunities that present themselves in 2010 åf
started to work with enterprise risk management erm this
integrates risk management into day-to-day activities by linking
it to the strategic and operational objectives that the company
has set up work with risks can be divided into requirements and expecta-
tions identifying and assessing risks managing and monitoring
them and reporting back to executive management committees
and the board of directors what follows is a description of the risks with which åf has to
deal operational risks
business-cycle dependence
the nordic region is åf’s largest market where clients operate
in a number of industries including the energy sector the public
sector industry property and construction this means that åf
is dependent on reasonably stable trends in these areas to
achieve its targets the general economic situation and propen-
sity to invest are also highly significant but åf’s diversification
over a number of markets and in areas that experience different
business cycles reduces any risk to reduce dependence on the
nordic market and take advantage of opportunities for growth åf is expanding outside the nordic region åf’s strategy is to
grow in the segments in which the group is already a nordic
market leader increasing the geographical spread will help to
offset the effect of local business cycles capacity utilisation and hourly rates
a consulting firm’s capacity utilisation rate is a key factor behind
its ability to generate a profit every percentage point difference
in the invoiced-time ratio equates to a rise or fall of around sek
47 million in åf’s annual earnings the hourly rate itself is also of course another essential component for the profitability of a
consulting company increasing the hourly rate by sek 10 would if all other factors remained unchanged improve profits for åf
by some sek 48 million a year various approaches are adopted
to reduce sensitivity including employing sub-consultants increasing the variable component in salaries broadening
expertise and markets and packaging services to increase
competitiveness and reduce client sensitivity to pricing åf is
also increasingly taking over the management of large-scale
projects for its clients and liaising directly with subcontractors
with regard to the detailed project planning services that are
necessary during the various phases of the project fixed-price contracts
fixed-price contracts for carefully specified consulting services
can be beneficial to both parties often consultants are able to
make use of past experience to serve their clients more efficiently
risk management and sensitivity analysis
5 9
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s r i s k m a n a g e m e n t a n d s e n s i t i v i t y a n a ly s i s
and are well placed to make an accurate assessment of the
time and resources required a fixed-price contract may how-
ever involve an increased risk for client and consultant alike if
the time required to complete the assignment is not correctly
estimated in the event that the fixed price is exceeded åf suf-
fers a write-down in its fee training and tuition in factors such as
project management and the formulation of appropriate terms
and conditions are the key to reducing the risks associated with
this kind of agreement continuous monitoring and evaluation of
the amount of work remaining in fixed-price contracts also
reduce this risk major fixed-price assignments may be led only
by assignment managers who have received the requisite training acquisition risks
over the past decade or so the technical consulting sector has
undergone a process of consolidation and this process contin-
ues unabated failure to follow this industry trend could result in
the gradual erosion of competitive strength while åf remains
committed to taking an active part in this process it also recog-
nises that growth and the takeover of other consulting compa-
nies is not risk-free to minimise the risks åf has adopted a systematic approach
to acquisitions with strict criteria for obligatory documentation
and thorough reviews the åf board conducts an annual evalua-
tion of any companies that have been taken over and an acquisi-
tions unit has been set up to ensure a proactive and systematic
approach to corporate acquisitions and expansion into new geo-
graphical markets employees
to achieve the targets that have been set it is crucial that
employees in a consulting company are motivated and possess
the relevant skills and knowledge there is always a risk that
highly competent employees may join competitors or clients or set up their own businesses the risk is exacerbated if these
people are able to use their inside knowledge of the company to
cherry-pick the best of their skilled colleagues a situation like
this could make it difficult for åf to deliver the services it is con-
tracted to supply and lead to extra costs for the company in
order to attract and retain co-workers of the right calibre åf
invests for example via the åf academy in continuous profes-
sional development skills development and management train-
ing it is highly unusual for large numbers of employees in key
positions to leave the åf group and annual co-worker surveys
show that employees are largely happy in their work åf is able
to offer the opportunity to work on large and highly sophisticated
international projects which is attractive to potential employees competition for qualified members of staff at all levels is increas-
ing and with it the pressure on åf to present itself as an attrac-
tive employer for this reason åf invests large sums each year in
recruitment and induction activities competitors
competition in the technical consulting industry comes from a
number of major international companies and various small local
competitors in each individual market competition is fierce both
for projects and for the best personnel and consulting compa-
nies in countries with significantly lower cost structures are also
attracting certain clients however thanks to åf’s breadth and
depth of skills its competitive appeal is steadily increasing business support system
åf has its own business support system one for managing following up controlling and documenting both fixed-price and
open-account assignments one has been certified in accord-
ance with iso 9001 2008 quality and iso 14001 2004 envi-
6 0
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s r i s k m a n a g e m e n t a n d s e n s i t i v i t y a n a ly s i s
ronment one safeguards cost-control for both fixed-price
assignments and those invoiced by the hour environmental risks
under the provisions of current environmental legislation the
åf group does not require any environmental permits nor does
it have any obligations to report on its activities the business’s
environmental risks are restricted to the possible consequences
of contravening existing environmental legislation however sophisticated follow-up procedures have been built into åf’s
business support system to ensure that all units within the group
comply with environmental law åf is not involved in any environ-
mental disputes or incidents legal risks
åf’s business activities do involve a risk of dispute disputes
may arise if åf disagrees with a client about the conditions that
apply to a certain assignment disputes can also arise in con-
junction with takeovers drawing up contracts for all assign-
ments with terms appropriate to the project in hand reduces the
risk when taking over another company’s business operations åf has a tried-and-tested body of rules and regulations that is
used to guide the process for more complex transactions legal advice is always sought insurance
in order to reduce risk in its business activities åf has a high
level of insurance protection that covers åf for the liability
involved in any given project åf is covered for loss of contribu-
tion and for additional costs in the event that its premises are
damaged or its equipment is stolen it risks
the majority of åf’s it support has been outsourced to highly
reputable suppliers although agreement has been reached with
these service providers on response and action times there
can be no cast-iron guarantees that unplanned interruptions will
not lead to loss of income at one or more of the group’s offices financial risks
finance policy
through its operations the åf group is exposed to various types
of financial risk in the form of fluctuations in the company’s earn-
ings and cash flow as a consequence of changes in exchange
rates interest levels and credit risks responsibility for the group’s
financial transactions and risks is handled centrally by the parent
company’s accounting and reporting department in accordance
with policies laid down by the board of directors the overall
goal is to provide cost-effective financing and to minimise the
negative effects of market fluctuations on the group’s earnings seen as a whole the financial risks within the group are rela-
tively low currency risk
currency risk comprises the risk that fluctuations in exchange
rates will have a negative impact on the consolidated income
statement balance sheet and cash flow currency risk can be
split into transaction exposure and translation exposure trans-
action exposure is the net of operating and financial inflows and
outflows in foreign currencies currency risks related to changes
in expected and contracted payment flows are relatively limited
for åf as the majority of sales and expenses are invoiced in
local currencies in accordance with current policy payment
6 1
å f a n n u a l r e p o r t 2 0 10
flows in foreign currencies are hedged only when it is possible
to determine the amount and time of the transaction with a
great degree of certainty in the event of an incoming payment
in foreign currency that involves a net exposure in excess of
100 000 euros the risk is hedged through derivatives the risk
is also hedged through derivatives in the event of an outgoing
payment in foreign currency that involves a net exposure in
excess of 50 000 euros translation exposure comprises foreign
subsidiaries’ net assets and profits losses in foreign currency in line with established policy åf does not hedge translation
exposure interest rate risk
interest rate risk comprises the risk that changes in interest
rates will affect the group’s net interest income expense and or
cash flow the group’s financing expense is affected by changes
in market interest rates for the purpose of reducing the effect
of changes in interest rates on the group’s performance åf’s
policy is that the average fixed-rate period on loans taken out
must be between three and twelve months during 2010 the
fixed-rate period for the company’s borrowing averaged one
month with current borrowing requirements the effect on the
group’s profit loss of a change of 1 percent in interest rates
would be in the region of sek 3 million åf’s policy is for cash
and cash equivalents to be deposited in bank accounts with
local banks credit risks
financial credit risk
åf’s financial transactions give rise to credit risks in relation to
financial counterparties the risk of a counterparty being unable
to fulfil its obligations is reduced through the careful selection of
creditworthy counterparties and the capping of involvement
with each counterparty bad debt risk
this form of credit risk relates to the outstanding accounts
receivable at any given time in other words the credit extended
to åf’s clients this risk is limited through åf’s highly effective
credit policy which specifies how the company’s credit manage-
ment procedures are to be implemented to avoid any uncon-
trolled assumption of risks and prevent any unnecessary bad
debt losses this includes for example rules on advance pay-
ments and advice on how to avoid clients who are likely to have
payment problems historically the group has reported only
very limited credit losses åf’s ten largest clients who account
for a total of 23 percent of the group’s sales are all large listed
companies or publicly owned institutions there are therefore no exceptional credit risks in relation to any one major client o p e r a t i o n s r i s k m a n a g e m e n t a n d s e n s i t i v i t y a n a ly s i s
sensitivity analysis
factor
change all other factors
unchanged effect on earnings
sek share after tax capacity utilisation ±1 ±1 04
hourly rate ±1 ±0 75
payroll costs ±1 ±0 58
overheads ±1 ±0 19
number of co-workers ftes ±1 ±0 06
6 2
my andersson is eco manager
with the technology division in stockholm outside work she enjoys travelling and
spending time with friends but more often
than not you will find her in the stable or
out riding i love challenges i want to have fun at work
and feel that it is fulfilling and has a purpose the best thing about åf is that i get to try out
different things i work with companies that
develop completely different types of product
and help them to reduce their environmental
impact it’s great to be a part of something
bigger ”
6 3
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s d e f i n i t i o n s
operating margin
operating profit loss in relation to operating income profit margin
profit loss after net financial items in relation to operating
income equity ratio
equity including non-controlling interests in relation to the
balance sheet total current ratio
current assets in relation to current liabilities and current
provisions return on equity
profit loss after tax in relation to average shareholders’ equity
including non-controlling interests return on total capital
profit loss after net financial items and restoration of interest
expense in relation to the average balance sheet total return on capital employed
profit loss after net financial items and restoration of interest
expense in relation to the average balance sheet total minus
non-interest-bearing liabilities and net deferred tax interest cover
profit loss after net financial items and restoration of interest
expenses in relation to interest expense earnings per share
earnings attributable to the parent’s shareholders relative
to the average number of shares dividend yield
dividend per share in relation to the year-end share price equity per share
equity attributable to the parent’s shareholders relative
to the total number of shares cash flow per share
cash flow from operating activities in relation to the average
number of shares invoiced-time ratio
the time invoiced to clients as a percentage of the total time
all employees are present at work full-time equivalents ftes number of employees during the year converted to the equiva-
lent number of year-long full-time positions the actual number
of employees is higher owing to part-time employment and the
fact that some employees work only part of the year definitions
6 4
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s f i v e y e a r f i n a n c i a l s u m m a r y s e k
values in millions of sek unless otherwise stated 2010 2009 2008 2007 2006
operating income and profit
operating income 4 796 4 692 4 570 3 862 3 134
operating profit 806 388 479 332 168
operating profit excluding capital gain 317 374 478 331 148
profit after net financial items 798 377 461 322 158
profit for the year 717 275 328 220 108
capital structure
non-current assets 2 016 1 733 1 728 1 320 997
current assets 1 934 1 850 1 882 1 476 1 303
equity including non-controlling interests 2 361 1 827 1 699 1 339 1 091
non-current provisions 177 120 190 90 97
non-current liabilities excluding provisions 8 41 183 186 118
current provisions 14 31 8 10 1
current liabilities excluding provisions 1 392 1 564 1 530 1 171 993
balance sheet total 3 950 3 583 3 610 2 796 2 300
equity average 2 205 1 740 1 482 1 200 820
total capital average 3 678 3 518 3 090 2 487 1 860
capital employed average 2 508 2 192 1 921 1 579 1 161
key figures
operating margin percent 16 8 8 3 10 5 8 6 5 4
operating margin excluding capital gain percent 7 3 8 1 10 5 8 6 4 8
profit margin percent 16 6 8 0 10 1 8 3 5 0
equity ratio percent 59 8 51 0 47 1 47 9 47 5
current ratio times 1 4 1 2 1 2 1 2 1 3
return on equity percent 32 5 15 8 22 1 18 3 13 1
return on total capital percent 22 0 11 1 15 6 13 8 9 7
return on capital employed percent 32 2 17 8 25 2 21 8 15 6
interest cover times 31 1 30 0 21 5 19 9 9 3
åf share 1 earnings per share sek 21 02 7 93 9 54 6 58 3 69
earnings per share after dilution sek 20 95 7 91 9 54 6 56 3 58
yield percent 2 9 4 1 5 5 3 8 2 1
equity per share sek 69 47 53 68 49 73 39 41 33 56
equity per share after dilution sek 69 25 53 53 49 65 39 40 33 86
cash flow from operating activities per share sek 6 0 9 02 9 46 9 47 4 16
cash flow from operating activities per share after dilution sek 5 9 9 00 9 44 9 42 4 02
buying rate 31 december sek 139 25 97 75 59 50 84 50 73 00
market capitalisation 4 743 3 329 2 027 2 862 2 377
ordinary dividend per share sek 4 002 4 00 3 25 3 25 1 50
other
invoiced-time ratio percent 71 9 71 3 74 1 75 1 72 9
investment in equipment excluding leasing 3 40 40 96 54 52
investment in property 3 5 3 38 102 investment in intangible assets 3 434 68 196 253 738
ftes excluding associates 3 966 4 182 3 948 3 623 3 167
1 a 2 1 share split was carried out on 2 june 2010 the comparative figures have been adjusted 2 proposed dividend 3 including acquired businesses five-year financial summary sek
6 5
å f a n n u a l r e p o r t 2 0 10
o p e r at i o n s f i v e y e a r f i n a n c i a l s u m m a r y e u r
values in millions of eur unless otherwise stated 2010 2009 2008 2007 2006
exchange rate at the end of the reporting period 9 00 10 35 10 94 9 47 9 05
average exchange rate 9 54 10 62 9 61 9 25 9 25
operating income and profit
operating income 503 442 476 418 339
operating profit 84 37 50 36 18
operating profit excluding capital gain 33 35 50 36 16
profit after net financial items 84 35 48 35 17
profit for the year 75 26 34 24 12
capital structure
non-current assets 224 167 158 139 110
current assets 215 179 172 156 144
equity including non-controlling interests 262 176 155 141 120
non-current provisions 20 12 17 9 11
non-current liabilities excluding provisions 1 4 17 20 13
current provisions 2 3 1 1 0
current liabilities excluding provisions 155 151 140 124 110
balance sheet total 439 346 330 295 254
equity average 231 164 154 130 89
total capital average 385 331 322 269 201
capital employed average 263 206 200 171 125
key figures
operating margin percent 16 8 8 3 10 5 8 6 5 4
operating margin excluding capital gain percent 7 3 8 1 10 5 8 6 4 8
profit margin percent 16 6 8 0 10 1 8 3 5 0
equity ratio percent 59 8 51 0 47 1 47 9 47 5
current ratio times 1 4 1 2 1 2 1 2 1 3
return on equity percent 32 5 15 8 22 1 18 3 13 1
return on total capital percent 22 0 11 1 15 6 13 8 9 7
return on capital employed percent 32 2 17 8 25 2 21 8 15 6
interest cover times 31 1 30 0 21 5 19 9 9 3
åf share 1 earnings per share eur 2 20 0 75 1 00 0 71 0 40
earnings per share after dilution eur 2 20 0 75 1 00 0 71 0 39
yield percent 2 9 4 1 5 5 3 8 2 1
equity per share eur 7 72 5 19 4 55 4 16 3 71
equity per share after dilution eur 7 69 5 15 4 54 4 16 3 74
cash flow from operating activities per share eur 0 62 0 85 0 99 1 03 0 45
cash flow from operating activities per share after dilution eur 0 62 0 85 0 98 1 02 0 44
buying rate 31 december eur 15 47 9 44 5 44 8 92 8 07
market capitalisation 527 322 185 302 263
ordinary dividend per share eur 0 442 0 39 0 30 0 35 0 17
other
invoiced-time ratio percent 71 9 71 3 74 1 75 1 72 9
investment in equipment excluding leasing 3 4 4 10 6 6
investment in property 3 1 0 4 11 investment in intangible assets 3 45 6 20 27 80
ftes excluding associates 3 966 4 182 3 948 3 623 3 167
1 a 2 1 share split was carried out on 2 june 2010 the comparative figures have been adjusted 2 proposed dividend 3 including acquired businesses five-year financial summary eur
6 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t a d m i n i s t r a t i o n r e p o r t
åf ab publ corporate identity number 556120-6474
the board of directors and the president of åf ab publ herewith submit their annual
report for the year 2010 åf ab which has its registered office in stockholm is the par-
ent company of the åf group group and parent company
åf is a leading company in the technical consulting industry with expertise founded on
more than a century of experience åf offers highly qualified services and solutions in
fields of expertise that include industrial processes infrastructure projects and the
development of products and it systems the group’s operational base is in the nordic
region but its business and clients are found all over the world åf bases its consulting business on the development of systems and products and
on investments maintenance measures and ongoing modification work relating to
industrial plant processes machinery and buildings as well as infrastructure projects the majority of projects originate in swedish and international industrial companies service companies government authorities and the real estate sector sales and earnings
net sales for the year fell by 7 percent organic growth was negative at 2 percent the
structural effect was also negative 4 percent chiefly as a consequence of the sale of
the subsidiary åf-kontroll the strengthening swedish krona resulted in a negative
translation difference of 1 percent operating profit fell by 18 percent first and fore-
most as a consequence of the sale of åf-kontroll and of losses incurred by åf’s nor-
wegian business operations net sales totalled sek 4 334 million 2009 sek 4 678 million operating profit excluding capital gains was sek 317 million sek 380 million the operating margin excluding capital gains was 7 3 percent 8 1 percent the capacity utilisation rate was 71 9 percent 71 3 percent profit after tax was sek 717 million sek 275 million earnings per share before dilution were sek 21 02 sek 7 93 organisational changes
on 1 january 2010 the swedish process and environmental operations were transferred
from the energy division to the industry division parallel with this structural change operations in finland estonia and the czech republic were transferred from the indus-
try division to the energy division on 1 october 2010 the infrastructure division was split into two separate divisions namely infrastructure and technology the purpose was to clearly identify two areas of
long-term commercial opportunity and to increase the focus on profitability and growth
in the years ahead at the same time åf’s engineering division changed its name to the
industry division as a consequence from 1 october 2010 åf comprises four divisions energy industry infrastructure and technology divisional performance
energy
operating income q1 q4 sek 1 012 million 2009 sek 1 192 million operating margin q1 q4 8 2 10 6 the energy division is a leading consultant in the energy sector with ongoing assign-
ments in some 40 countries worldwide the market for energy consulting services remained good throughout 2010 with the
exception of the nuclear power sector where there were postponements to a number of
projects invoiced sales for the energy division dipped partly as a result of shrinking
sales in russia due to reductions in material deliveries to clients and the negative effect
of changes in exchange rates this together with increased pressure on prices in finland dragged down profits orders exceeded expectations as the year drew to a close boosted by a number of
major contracts linked to new hydropower plants in switzerland india and germany the
market for hydropower is expanding across a broad front new orders were also signed
on the back of strong demand for project competence and expertise relating to chp
plants in europe that are fuelled by biomass and waste the highest levels of profitability were reported by our operations in the czech
republic where we now have more than 100 consultants industry
operating income q1 q4 sek 1 340 million 2009 sek 1 387 million operating margin q1 q4 9 0 9 4 the industry division is the leading industrial consultant in northern europe the market for the services of the industry division showed a continued improvement
as the year progressed and the division benefited from the strength of the swedish eco-
nomy and increased production volumes in industry demand continued to be strongest
from the mining steel and energy sectors but brisker demand from the food process-
ing and pharmaceutical industries brought further good news for the division’s opera-
tions in denmark and the south of sweden åf signed a four-year strategic contract as an ‘a’ supplier to vattenfall that will run
from 2011 to the end of 2014 the agreement relates to the provision of technical con-
sulting services in everything from project management analysis and investigations to
technical calculations mechanical construction and design in all areas of technology as a result of the agreement business with vattenfall is expected to expand signifi-
cantly the industry division is planning to step up its recruitment of personnel towards the end of the year the industry division was reinforced with an additional
75 or so consultants following the acquisition of energo a specialist in windpower dam
safety hydropower electrical networks and power supply this line of business makes
the industry division one of sweden’s leading suppliers of all-round consulting services
in hydropower and electrical networks infrastructure
operating income q1 q4 sek 1 233 million 2009 sek 1 168 million operating margin q1 q4 5 6 8 7 the infrastructure division holds a leading position in consulting services for infrastruc-
ture development in scandinavia the market for infrastructure consulting services remained good underpinned by the
steady increase in the number of publicly funded projects for major investments in new
roads and railways profitability for the year as a whole was however unsatisfactory earnings were
pulled down by further delays to åf’s extensive consulting assignments linked to the
stockholm bypass project pending the result of an appeal and by continued losses in
the division’s norwegian operations a new management team has been appointed in
norway and towards the end of the year far-reaching cost-cutting programmes were
implemented and sales and marketing activities were ramped up the aim is for åf
norway to return to profitability with effect from the first quarter of 2011 the strongest performance came from the division’s property consulting operations the installations business area and its swedish operations which now comprise a work-
force of almost 700 consultants following the acquisition of energo the operating mar-
gin for installations approached 15 percent with growth fuelled by strong demand for
consulting services to make properties more energy efficient administration report
6 7
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t a d m i n i s t r a t i o n r e p o r t
technology
operating income q1 q4 sek 719 million 2009 sek 636 million operating margin q1 q4 9 6 5 3 the technology division holds a leading position in sweden in the fields of communication
and software development for technical applications the technology division was created on 1 october 2010 from part of what was previ-
ously the infrastructure division it comprises approximately 700 employees who
together constitute åf’s core competence in the fields of telecommunications advanced product development defence technology and it the division’s consultants
work primarily with software electronics mechanical engineering project management
and systems integration major clients are found in the telecom and defence industries the market for the technology division was good during the year particularly in the
fourth quarter and the division’s capacity utilisation rate rose there were signs of in-
creased needs for investment and consulting services among a large number of clients particularly in the metropolitan regions of stockholm gothenburg and copenhagen malmö several new framework agreements were signed for example with kammar-
kollegiet sweden’s legal financial and administrative services agency with respon-
sibility for more than 20 authorities electrolux fmv the swedish defence materiel
administration ge healthcare scania and visma over the year as a whole organic growth for the division rose to more than 10 percent acquisitions disposals and alliances
the past twelve months have seen some major structural changes in the group in line
with our strategy to become number one or two in the markets where we are active in december 2010 åf acquired the international energy and management consul-
tancy mercados energy markets international the vendor was the company’s senior
management headquartered in madrid spain the company has a total of more than 60
employees in 2010 mercados sales totalled eur 9 million and the operating margin was
approximately 7 percent åf paid eur 4 1 million for 100 percent of the shares in the
company agreement has been reached on an additional consideration to be based on
earnings over the next three years åf estimates that this additional consideration will
amount to eur 3 5 million in november åf acquired the technical consulting company energo ab from bure ab
and bure’s corporate management energo is a well-established consulting company
with extensive expertise and experience in the fields of energy and electrical power sys-
tems technical installations in buildings information technology and telecommunica-
tions the company has almost 300 employees most of them based in stockholm malmö and helsingborg energo’s sales for 2010 totalled just over sek 300 million and
the company had an operating margin of 8 5 percent based on an enterprise value of
sek 300 million åf paid sek 260 million for the shares in october åf acquired the technical consulting company platom ab with 10 employ-
ees in oskarshamn and västerås in sweden platom is a consulting company that offers
qualified process and analysis services to the nuclear power industry in september åf sold its 50 percent stake in åf-tüv nord which provides services
relating to third-party inspections for the nuclear power industry the purchaser was the
other joint owner the german technical inspection company tüv nord the purchase
sum agreed was sek 33 million which resulted in a capital gain for åf equivalent to
sek 31 million in september åf acquired the consulting operations of the city of gothenburg’s high-
ways and traffic management department göteborgs gatuaktiebolag with approximately
100 employees engaged in consulting activities relating to investigations analyses and
the project engineering and project management of existing and new infrastructure invest-
ments in the gothenburg region the purchase price was sek 26 million in july åf acquired the technical consulting company vpc mining i skellefteå with
10 employees from the swedish state-owned energy company vattenfall vpc mining
is a well-established consulting company offering high-level engineering services to the
mining industry in may åf acquired the czech technical consulting company meacont the company which is headquartered in prague has 90 employees and clients who are active in the
energy sector including the nuclear power industry the purchase sum was sek 50 mil-
lion plus an additional consideration of an estimated sek 28 million based on future
earnings meacont sold services for approximately sek 80 million in 2009 and reported
an operating margin of 8 percent for the year in march åf signed an agreement to transfer 100 percent of the shares in the åf
inspection division åf-kontroll and its subsidiaries to dekra ag in germany based
on an enterprise value of sek 610 million dekra paid sek 550 million for the shares in
åf-kontroll the transaction led to a capital gain of sek 458 million in the åf accounts the inspection division was deconsolidated from åf with effect from 25 march 2010 goodwill
when consulting businesses are acquired the payment does not relate only to the carrying
amount of tangible assets in the company but also includes a premium to reflect for exam-
ple the benefit of acquiring relations with new clients and with expert well-qualified and
experienced consultants this premium in the form of human capital which is not recorded
as an asset in the acquired company is recognised primarily as goodwill in the åf group on the acquisition of energo the goodwill item was sek 238 million other acquisi-
tions gave rise to goodwill of sek 159 million while the sale of åf-kontroll reduced the
total amount of goodwill in the åf group by sek 68 million in total åf’s goodwill increased
during the year by sek 288 million to sek 1 626 million with changes in exchange rates
corresponding to sek 32 million for further information about goodwill and other intan-
gible assets please see note 13 research and development
the divisions carry out research and development work in conjunction with universities
and trade organisations but also internationally with eu funding in-house method devel-
opment also forms part of this r&d work for the group as a whole r&d costs during
the year totalled sek 21 million 2009 sek 41 million this item consists mostly of
costs for time spent on r&d projects by åf’s own salaried employees and has fallen fol-
lowing the sale of åf-kontroll cash flow and financial status
cash flow for january december 2010 was sek 10 million 2009 sek 66 million cash
flow for the year was affected by costs for acquisitions and additional considerations
totalling sek 514 million sek 40 million by income amounting to sek 625 million sek 20 million from the sale of subsidiaries and by dividends to shareholders of sek 139 million sek 112 million over the course of the year amortisation of loans to
credit institutions has totalled sek 150 million net sek 33 million the group’s liquid assets totalled sek 328 million sek 345 million the group’s net cash balance at the end of 2010 totalled sek 35 million sek 44 million equity per share was sek 69 47 and the equity assets ratio was 59 8 percent at the beginning of 2010 equity per share was sek 53 68 and the equity assets ratio
was 51 0 percent investment
not taking into account acquisitions gross investment in tangible and intangible assets
for 2010 totalled sek 34 million 2009 sek 58 million parent company
parent company sales for the year totalled sek 330 million 2009 sek 294 million and
relate chiefly to services and rent for premises within the group profit after net financial
items was sek 760 million sek 4 million the parent made a profit of sek 501 million
on the sales of åf-kontroll and åf-tüv nord other income from participations in group
companies totalled sek 281 million sek 4 million cash and cash equivalents on 31
december 2010 totalled sek 54 million sek 4 million and gross investment in machin-
ery and equipment for the year amounted to sek 7 million sek 10 million 6 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t a d m i n i s t r a t i o n r e p o r t
environmental work
together with its stakeholders and society in general åf has an important duty to work
towards more sustainable development in many instances åf is tasked with introduc-
ing new and better technology implementing rationalisation measures and reducing
emissions with more than a century’s experience as an established name in technical
consulting åf adopts a long-term perspective to business and has its sights firmly set
on making a positive contribution to long-term sustainable development åf frequently participates in environmental collaboration between different players
in trade and industry the public sector and the world of research its role as a consult-
ant is to act as a bridge by facilitating understanding and the exchange of knowledge
among those involved åf also acts as an expert resource for iso in the development of international guide-
lines for corporate social responsibility iso 26000 for åf’s sustainability report please see pages 51 56 of the annual report employees
the number of ftes was 3 966 2009 4 182 during the course of 2010 more than 1 000 co-workers left or joined åf as a result
of the process of selling and acquiring companies that reflects the strategy of creating
an organisation with a greater focus on technical consulting and with strong business
divisions each with the potential to be a market leader in its field the total number of
employees at the end of the reporting period was 4 475 4 428 3 148 in sweden and
1 327 outside sweden åf adopts an active long-term perspective to hr work in order to attract and retain
skilled employees this approach involves marketing åf as an employer externally but
also providing clear information about the various career paths and opportunities for
development available at åf and offering all employees the kind of work that develops
them as individuals åf improved its market standing in 2010 particularly in the fields of energy and infra-
structure and maintained its strong appeal as an employer in universum’s annual
career barometer survey of some 3 500 practising engineers åf secured an overall
third place among swedish companies in the ideal employer” rankings åf works hard
with employer branding activities to market itself as a good employer among potential
co-workers and to bolster the company’s image in general during the year a number of
outreach activities were conducted at universities and technical colleges åf also works
to achieve a good gender balance within the company whenever a managerial post
becomes vacant at least one woman must be selected as a possible candidate the
proportion of female consultants was 19 percent at the end of 2010 2009 17 percent the five of five thousand” project has identified and defined three main career
paths within åf specialist expert project manager and manager parallel with this the
internal training organisation åf academy has been established to support the devel-
opment of co-workers in their specific professional role within the company and to assist
managers in this development work all the courses that are offered by this internal
training organisation include modules on entrepreneurial skills for further details about
åf’s work with human resources please see pages 14 21 in the group’s annual report risk management and sensitivity analysis
the capacity utilisation rate is a crucial factor behind a consulting company’s ability to
generate a profit every percentage point change in this figure affects åf’s results by
plus minus approximately sek 47 million the hourly rate of course is also a key com-
ponent in the results of a consulting company an increase in the hourly rate of sek 10
would if all other factors remained unchanged improve profits for åf by around sek 48
million methods of increasing flexibility and reducing sensitivity include the use of sub-
consultants fixed-term employment contracts and increases in the variable salary com-
ponent along with measures to broaden expertise and markets and to productise ser-
vices which involves packaging a number of services to improve competitiveness and
reduce price sensitivity while most åf assignments are carried out on an open-account basis fixed price
contracts are also agreed in a many cases this does of course represent a financial
risk in the form of write-downs if the costs involved in a project are miscalculated care-
ful estimates of costs and follow-ups of fixed-price assignments are carried out to mini-
mise the risk of impairment if the set targets are to be reached it is absolutely crucial for a consulting company
that staff are motivated and possess the relevant skills and expertise there is always a
risk that skilled employees may leave åf to set up their own company or be headhunted
by the competition in order to attract and retain staff åf invests in continual training skills development and leadership development åf’s ambition is to make every
employee perceive some form of added value in working for åf åf’s business activities involve a risk of dispute drawing up contracts for all assign-
ments and specifying in detail the terms of the agreement reduces the risk åf’s ambition is to augment growth by acquiring other consulting companies the
increased risk that this entails is minimised by adopting a systematic approach to acqui-
sitions and insisting on the relevant documentation and reviews an annual evaluation of
recent acquisitions is carried out by the åf board over a period of at least three years
after the acquisition has been made through its operations åf is exposed to various financial risks such as currency
risk interest rate risk financial credit risk and client credit risk responsibility for the
group’s financial transactions and risks is held centrally by the parent company’s
accounting and reporting department in accordance with the policies adopted by the
board the overriding goal is to provide cost-effective financing and to minimise the neg-
ative impact of market fluctuations on the group’s earnings to minimise the currency
risk in contracted payment flows in foreign currencies large contracts are hedged using
derivatives for a more detailed description of risk management and sensitivity analysis please see note 25 and pages 58 61 shares
åf’s b shares have been quoted on nasdaq omx stockholm mid cap since january
1986 prior to that åf traded as a cooperative association ångpanneföreningen from
1895 until 1980 and as a joint-stock company from 1981 åf shares traded at sek 139 25 at the end of 2010 an appreciation of 42 5 percent
in value over the year the stockholm omxspi all-share index rose by 23 1 percent dur-
ing the same period åf’s market capitalisation as at 31 december 2010 was sek 4 743 million 31 dec
2009 sek 3 329 million during the year there was a turnover of 15 325 671 12 418 178 shares valued at a
total of sek 2 197 million sek 1 770 million the average turnover per trading day was
sek 8 7 million sek 7 1 million shares were traded on 100 percent 100 percent of
trading days the total number of åf shares on 31 december 2010 amounted to 34 059 002 of
which 1 608 876 were class a shares and 32 450 126 were class b shares on 31
december 2010 åf ab held 284 000 of its own class b shares a 2 1 share split was
implemented on 2 june 2010 the ten largest shareholders in åf are listed on page 48 of the group’s annual report the largest single shareholder is ångpanneföreningen’s foundation for research &
development which holds 1 602 876 class a shares and 3 832 576 class b shares this
equates to 16 0 percent of the total number of shares and 40 9 percent of the voting
rights in the company on 5 may 2010 the annual general meeting of shareholders authorised the board of
directors to buy back shares so that the company’s own holding amounts to a maximum
of 10 percent of the shares in the company the board was also authorised to issue new
shares that correspond to an increase of a maximum of sek 15 000 000 in the compa-
ny’s share capital the board has not made use of these powers during 2010 there are no limitations neither in law nor in the company’s articles of association relating to the transfer of shares 6 9
å f a n n u a l r e p o r t 2 0 10
performance-related share programme 2010
at the annual general meeting held on 5 may 2010 shareholders in åf ab resolved to
implement a new three-year performance-related share savings programme for up to
119 key individuals in the company including the president ceo participants in the programme were given the opportunity to reserve a sum corre-
sponding to a maximum of 5 percent of their gross salary for the purchase of åf shares
on nasdaq omx stockholm over a 12-month period from the date of implementation of
the programme on expiry of the application period 98 åf employees in key positions
had expressed an interest in purchasing approximately 36 000 shares for the entire
2010 programme in the event that the preset performance targets are met in full some 189 000 shares
will be transferred to these employees throughmatching and free of consideration between
2010 and 2013 this can lead to dilution of a maximum 0 6 percent of earnings per share board of directors
following the recommendation of the nomination committee eight directors without
deputies were elected by the annual general meeting to serve in 2010 ulf dinkelspiel patrik enblad eva-lotta kraft jon risfelt helena skåntorp anders snell and lena tre-
schow torell were re-elected and björn o nilsson was elected to serve a first term as a
director of the company ulf dinkelspiel was re-elected as chairman of the board patrik tillack and fredrik sundin were appointed as employee representatives on the
board at its inaugural meeting following the agm the board elected lena treschow torell
as its deputy chair please turn to pages 128 129 in this annual report for a more detailed presentation
of board members and directors work of the board of directors
during the 2010 financial year the board held nineteen 19 meetings one of which was
the board’s inaugural meeting the work of the board focuses chiefly on strategic
issues business plans financial statements major investments and takeovers and
other decisions which according to the written rules of procedure are to be dealt with
by the board a presentation of developments with regard to the company’s business
operations and financial position is a standing item on the agenda in conjunction with
each ordinary meeting of the board one business area within the company is also scruti-
nised in greater detail at the board meeting in september a strategy seminar was
arranged which included a thorough review of each division other åf employees have participated in board meetings to present reports viktor
svensson åf’s executive vice president corporate information has served as secre-
tary to the board an evaluation of the board’s work during the year has been carried out åf’s corporate governance report is presented separately on pages 123 127 in this
annual report senior management
in 2010 the åf group’s senior management team comprised jonas wiström president
and ceo jonas ågrup cfo viktor svensson executive vice president corporate
information charlotte witt director human resources jacob landén general coun-
sel and the divisional presidents eero auranne per magnusson mats påhlsson and
johan olsson marie edman is the secretary to the senior management group please turn to pages 130 131 for a presentation of the senior executives in the
company guidelines for the remuneration of the senior executives of the company
the 2010 annual general meeting resolved that the principles below relating to remu-
neration and other conditions of employment for senior executives of the company will
apply for contracts of employment signed or amended after the agm by senior execu-
tives of the company” is meant the president ceo and other members of the senior
management group åf group policy is that remuneration should be on competitive market terms as this
will facilitate recruitment and enable the group to retain senior executives with the requi-
site skills and experience åf applies the grandfather principle” according to which
remuneration terms must always be approved by each manager’s immediate superior the remuneration package for senior executives consists of basic salary a variable
salary element pension use of a company car other remuneration and long-term incen-
tive programmes remuneration is based on factors such as duties expertise experience position
and performance the apportionment between basic salary and variable remuneration
is also related to the executive’s position and duties the annual variable element for the
ceo is a maximum of 65 percent of the fixed annual salary and for other executives nor-
mally a maximum of 60 percent of the fixed annual salary the fixed annual salary is the
current monthly salary multiplied by 12 2 the variable remuneration paid is the amount
after the deduction of social security expenses the variable element is based on out-
comes in relation to targets the targets and salary for the ceo are determined by the
board of directors targets and salary for other senior executives are set by the ceo in
consultation with the remuneration committee senior executives have defined-contribution pension plans with market contribu-
tions all pension benefits are vested and are not therefore dependent on future
employment the retirement age for the ceo is 60 and for other senior executives 65 with the exception of contracts signed before 2002 for information regarding previously approved remuneration which has not become
due for payment please refer to note 8 in this annual report the board of directors proposes that the 2011 annual general meeting resolves that
the principles for remuneration and other conditions of employment for senior manage-
ment for 2011 shall be in line with the principles that have been applied during 2010 dividend
the board proposes a dividend for 2010 of sek 4 00 per share 2009 sek 4 00 per share prospects for 2011
the outlook for 2011 appears to be favourable åf has a clear corporate structure and a
strong brand and for the first time since the onset of the financial crisis the trend for
capacity utilisation is positive the inflow of orders exceeded expectations in the fourth
quarter and it is our opinion that the market for åf’s services will become progressively
stronger as the year unfolds most of the signs suggest that 2011 will be a better year
for åf than 2010 proposed appropriation of profits
non-restricted profits of sek 1 996 291 789 are at the disposal of the annual general
meeting the board of directors and ceo propose that these profits be appropriated as
follows to the shareholders a dividend of sek 4 00 per share 135 100 008
to be carried forward 1 861 191 781
total sek 1 996 291 789
the board’s explanation of the proposed appropriation of profits will be posted on the
company’s website www afconsult com it can also be ordered from the company a n n u a l r e p o r t a d m i n i s t r a t i o n r e p o r t
7 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t c o n s o l i d a t e d i n c o m e s tat e m e n t
1 january 31 december in millions of sek note 2010 2009
operating income
net sales 2 4 334 1 4 677 9
other operating income 5 461 8 14 1
4 795 9 4 692 0
operating expenses 6
other external costs 7 26 1 430 5 1 564 2
personnel costs 8 2 528 7 2 671 9
depreciation amortisation and impairment of tangible and intangible assets 13 14 50 8 61 6
other operating expenses 9 13 1 7 6
profit attributable to participation in associates 15 33 1 1 6
operating profit 2 805 8 388 3
result from financial investments
financial income 13 5 12 2
financial expenses 21 3 23 5
net financial items 10 7 7 11 3
profit after financial items 798 1 377 0
tax 22 80 9 101 6
profit for the year 717 2 275 3
attributable to shareholders in the parent 709 9 268 7
non-controlling interest 7 3 6 6
717 2 275 3
earnings per share with regard to profit attributable
to shareholders in the parent 12
before dilution sek 21 02 7 93
after dilution sek 20 95 7 91
consolidated income statement
7 1
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t s ta t e m e n t o f c o n s o l i d a t e d c o m p r e h e n s i v e i n c o m e
1 january 31 december in millions of sek note 2010 2009
change in translation reserve for the year 43 6 56 7
change in value of cash flow hedging 2 1 0 4
pensions actuarial gains and losses 4 4 44 1
tax 0 5 8 7
other comprehensive income 45 4 21 7
profit for the year 717 2 275 3
total comprehensive income for the period 671 8 253 7
attributable to shareholders in the parent 665 9 247 4
non-controlling interest 5 9 6 3
671 8 253 7
statement of consolidated comprehensive income
7 2
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t c o n s o l i d a t e d b a l a n c e s h e e t
as at 31 december in millions of sek note 2010 2009
assets 3 4
intangible assets 13 1 677 0 1 369 8
tangible assets 14 292 7 332 9
participations in associates 15 5 9 12 4
financial investments 16 0 7 1 2
non-current receivables 18 5 5 7
deferred tax asset 22 21 7 10 9
total non-current assets 2 016 4 1 732 9
accounts receivable 24 1 078 3 881 8
revenue generated but not invoiced 370 8 457 1
current tax assets 22 19 0 15 1
other receivables 64 7 92 0
prepaid expenses 17 73 4 59 0
cash and cash equivalents 327 9 344 7
total current assets 1 934 0 1 849 6
total assets 3 950 4 3 582 5
consolidated balance sheet
7 3
å f a n n u a l r e p o r t 2 0 10
as at 31 december in millions of sek note 2010 2009
equity and liabilities
equity 18
share capital 170 3 170 3
other contributed capital 469 8 467 7
reserves 81 9 122 4
retained earnings including profit for the year 1 624 4 1 052 6
equity attributable to shareholders in parent 2 346 3 1 813 0
non-controlling interest 14 4 13 6
total equity 2 360 7 1 826 6
liabilities 3 4
liabilities to credit institutions 19 25 6 5 39 7
provisions for pensions 20 62 8 62 4
other provisions 21 68 0 27 3
deferred tax liabilities 22 45 9 30 0
other liabilities 1 3 1 6
total non-current liabilities 184 5 161 0
liabilities to credit institutions 19 25 224 1 289 4
work invoiced but not yet carried out 252 9 256 6
accounts payable trade 293 5 264 9
current tax liability 22 4 0 31 8
other liabilities 237 8 310 9
accrued expenses and prepaid income 23 379 4 410 6
provisions 21 13 6 30 7
total current liabilities 1 405 2 1 595 0
total liabilities 1 589 7 1 756 0
total equity and liabilities 3 950 4 3 582 5
for information about the group’s pledged assets and contingent liabilities please refer to note 27 consolidated balance sheet continued a n n u a l r e p o r t c o n s o l i d a t e d b a l a n c e s h e e t
7 4
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t s ta t e m e n t o f c h a n g e i n e q u i t y f o r g r o u p
equity attributable to shareholders in the parent
in millions of sek
share
capital
other
contributed
capital reserves
profits brought
forward incl profit for the
year total
non-
controlling
interest total equity
equity brought forward 1 jan 2009 170 3 482 0 179 1 858 6 1 690 1 8 5 1 698 6
other comprehensive income 56 7 35 3 21 4 0 3 21 7
profit for the year 268 7 268 7 6 6 275 3
total comprehensive income for the period 56 7 304 1 247 4 6 3 253 7
dividends 110 2 110 2 1 3 111 5
share buy-backs 16 1 16 1 16 1
share savings programme 1 8 1 8 1 8
equity carried forward 31 dec 2009 170 3 467 7 122 4 1 052 6 1 813 0 13 6 1 826 6
equity brought forward 1 jan 2010 170 3 467 7 122 4 1 052 6 1 813 0 13 6 1 826 6
other comprehensive income 40 6 3 5 44 0 1 3 45 4
profit for the year 709 9 709 9 7 3 717 2
total comprehensive income for the period 40 6 706 4 665 9 5 9 671 8
dividends 135 1 135 1 4 2 139 3
acquisition of non-controlling interest 0 5 0 5 0 9 0 4
share savings programmes 2 0 2 0 2 0
equity carried forward 31 dec 2010 170 3 469 8 81 9 1 624 4 2 346 3 14 4 2 360 7
for supplementary information please see note 18 statement of change in equity for group
7 5
å f a n n u a l r e p o r t 2 0 10
1 january 31 december in millions of sek note 2010 2009
operating activities 31
profit after financial items 798 1 377 0
adjustment for items not included in cash flow and other 456 3 49 0
income tax paid 117 1 150 2
cash flow from operating activities before changes in working capital 224 7 275 8
cash flow from changes in working capital
change in operating receivables 71 2 51 8
change in operating liabilities 47 8 21 7
cash flow from operating activities 201 3 305 8
investing activities
acquisition of tangible assets 27 9 42 6
acquisition of intangible assets 6 4 15 7
acquisition of business operations 4 391 1 2 2
additional considerations paid 122 4 37 8
disposal of business operations 3 624 5 19 9
acquisition of financial assets 0 5 0 8
disposal of financial assets 1 2 cash flow from investing activities 77 4 79 1
financing activities
proceeds from borrowing 0 3 6 8
amortisation of loans 150 0 40 2
dividend paid to parent shareholders and non-controlling shareholders 139 3 111 5
share buy-backs 16 1
cash flow from financing activities 289 0 161 0
cash flow for the year 10 3 65 8
cash and cash equivalents brought forward 344 7 290 3
exchange difference in cash cash equivalents 6 5 11 5
cash and cash equivalents carried forward 327 9 344 7
a n n u a l r e p o r t s ta t e m e n t o f c a s h f l o w s f o r g r o u p
statement of cash flows for group
7 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t p a r e n t i n c o m e s tat e m e n t
1 january 31 december in millions of sek note 2010 2009
operating income
net sales 225 1 207 4
other operating income 5 104 5 86 8
329 6 294 1
operating expenses
other external costs 7 26 159 1 127 0
personnel costs 8 66 2 71 7
depreciation and impairment of tangible and intangible assets 13 14 10 5 9 3
other operating expenses 9 110 5 91 9
operating loss 16 7 5 7
result from financial investments
result from shares in group companies and associates 10 782 2 3 7
interest income and similar profit loss items 10 2 0 8 1
interest expense and similar profit loss items 10 7 2 10 4
777 0 1 4
profit loss after financial items 760 3 4 3
appropriations 11 2 7 13 2
pre-tax profit loss 757 6 17 6
tax 22 6 3 5 5
profit loss for the year 763 9 12 1
parent income statement
7 7
å f a n n u a l r e p o r t 2 0 10
1 january 31 december in millions of sek note 2010 2009
change in value of cash flow hedges 0 6
tax 0 2
other comprehensive income 0 4
profit loss for the year 763 9 12 1
total profit loss for the period 763 9 12 5
a n n u a l r e p o r t s ta t e m e n t o f c o m p r e h e n s i v e i n c o m e f o r p a r e n t
statement of comprehensive income for parent
7 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t p a r e n t b a l a n c e s h e e t
as at 31 december in millions of sek note 2010 2009
assets
non-current assets
intangible assets 13 4 7 3 3
tangible assets 14 55 4 57 5
participations in group companies 29 2 356 8 2 109 5
participations in associates 15 7 3 8 0
receivables from group companies 28 4 5 2 1
non-current receivables 15 2 1 3
total non-current assets 2 443 9 2 181 7
current assets
accounts receivable 3 3 1 9
receivables from group companies 28 271 8 192 7
receivables from associates 28 0 1 0 1
revenue generated but not invoiced 2 7 3 5
current tax assets 22 12 1 13 6
other receivables 15 8 9 4
prepaid expenses 17 41 1 31 5
total current receivables 346 9 252 5
cash and bank balances 53 7 3 9
total current assets 400 6 256 4
total assets 2 844 5 2 438 1
parent balance sheet
7 9
å f a n n u a l r e p o r t 2 0 10
as at 31 december in millions of sek note 2010 2009
equity and liabilities
equity 18
restricted equity
share capital 1 608 876 class a shares and 32 450 126 class b
shares total 34 059 002 shares with a quota value of sek 5 170 3 170 3
statutory reserve 46 9 46 9
non-restricted equity
share premium reserve 441 0 441 0
profit brought forward 791 4 746 9
profit loss for the year 763 9 12 1
total equity 2 213 5 1 393 1
untaxed reserves 30 28 4 25 8
provisions
provisions for pensions and similar obligations 20 26 2 27 1
other provisions 21 69 8 24 4
total provisions 96 0 51 5
non-current liabilities
liabilities to group companies 28 0 2 0 2
total non-current liabilities 0 2 0 2
current liabilities
liabilities to credit institutions 19 25 100 0 211 6
accounts payable trade 69 0 53 8
liabilities to group companies 28 311 2 555 6
other liabilities 2 2 122 5
accrued expenses and prepaid income 23 24 0 24 1
total current liabilities 506 4 967 6
total equity and liabilities 2 844 5 2 438 1
pledged assets and contingent liabilities for the parent
pledged assets 27 none none
contingent liabilities 27 114 9 237 6
parent balance sheet continued a n n u a l r e p o r t p a r e n t b a l a n c e s h e e t
8 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t s ta t e m e n t o f c h a n g e i n e q u i t y f o r p a r e n t
restricted equity non-restricted equity
in millions of sek share capital
statutory
reserve
fair value
reserve
share
premium
reserve
profit
brought
forward
profit for
the year total equity
equity brought fwd 1 january 2009 170 3 46 9 0 4 457 2 681 3 1 356 2
other total loss 0 4 0 4
loss for the year 12 1 12 1
total loss for the period 0 4 12 1 12 5
dividends 110 2 110 2
group contribution 236 0 236 0
tax attributable to group contribution 62 1 62 1
share buy-back 16 1 16 1
share savings programme 1 8 1 8
equity carried fwd 31 december 2009 170 3 46 9 441 0 746 9 12 1 1 393 1
equity brought fwd 1 january 2010 170 3 46 9 441 0 734 8 1 393 1
profit for the year 763 9 763 9
total profit for the period 763 9 763 9
dividends 135 1 135 1
group contribution 255 0 255 0
tax attributable to group contribution 67 1 67 1
share savings programmes 3 7 3 7
equity carried fwd 31 december 2010 170 3 46 9 441 0 791 4 763 9 2 213 5
for supplementary information please see note 18 statement of change in equity for parent
8 1
å f a n n u a l r e p o r t 2 0 10
1 january 31 december in millions of sek note 2010 2009
operating activities 31
profit loss after financial items 760 3 4 3
adjustment for items not included in the cash flow and other 360 2 6 7
income tax paid 59 3 120 5
cash flow from operating activities before changes in working capital 340 8 131 5
cash flow from changes in working capital
change in operating receivables 44 1 818 1
change in operating liabilities 46 1 367 9
cash flow from operating activities 338 8 1 054 4
investing activities
acquisition of tangible assets 6 7 9 9
acquisition of intangible assets 3 1 3 7
acquisition of financial assets 607 8 885 3
disposal of financial assets 575 3 cash flow from investing activities 42 3 898 9
financing activities
amortisation of loans 111 6 29 2
dividends paid 135 1 110 2
share buy-backs 16 1
cash flow from financing activities 246 7 155 5
cash flow for the year 49 8 0 0
cash and cash equivalents brought forward 3 9 3 9
cash and cash equivalents carried forward 53 7 3 9
a n n u a l r e p o r t s ta t e m e n t o f c a s h f l o w s f o r p a r e n t
statement of cash flows for parent
8 2
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t
page
note 1 accounting principles 83
note 2 segment reporting 92
note 3 sale of business operations 93
note 4 business combinations 93
note 5 other operating income 94
note 6 research and development 94
note 7 fees and remuneration of auditors 94
note 8 employees and personnel costs 94
note 9 other operating expenses 97
note 10 net financial income expense 97
note 11 appropriations 98
note 12 earnings per share 98
note 13 intangible assets 99
note 14 tangible assets 101
note 15 participations in associates 102
note 16 financial investments 103
note 17 prepaid expenses 103
note 18 equity 104
note 19 liabilities to credit institutions 105
note 20 retirement benefit obligations 106
note 21 provisions 108
note 22 taxes 109
note 23 accrued expenses and prepaid income 111
note 24 financial assets and liabilities 112
note 25 financial risks and financial policy 114
note 26 operating leases 115
note 27 pledged assets contingent liabilities
and contingent assets 115
note 28 transactions with related parties 115
note 29 group subsidiaries 116
note 30 untaxed reserves 118
note 31 statement of cash flows 119
note 32 events after the end of the reporting period 119
note 33 critical estimates and assumptions 119
note 34 information about the parent 119
table of notes
8 3
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
financial values in the tables of accounts are in millions of sek unless other-
wise stated 1 accounting principles
1 1 compliance with standards and legislation
the consolidated financial statements have been prepared in accordance with
international financial reporting standards ifrs issued by the international
accounting standards board iasb and interpretations published by the inter-
national financial reporting interpretations committee ifric approved by the
european commission for application in the eu in addition the swedish finan-
cial reporting board’s recommendation rfr 1 supplementary accounting
rules for groups has been applied the parent applies the same accounting policies as the group except as
stated below in the section parent accounting policies” the differences
between the accounting policies of the parent and the group are due to limi-
tations in the parent’s scope to apply ifrs imposed by the swedish annual
accounts act and the pension obligations vesting act tryggandelagen and
in some cases to tax reasons 1 2 basis of preparation of the parent and consolidated financial
statements
the parent’s functional currency is the swedish krona sek which is also the
reporting currency for the parent and the group this means that the financial
statements are presented in sek assets and liabilities are reported at historical cost with the exception of
various financial assets and liabilities which are carried at fair value the finan-
cial assets and liabilities which are carried at fair value are derivative instru-
ments and financial assets classified as available for sale non-current assets
held for sale are carried at the lower of previous carrying amount and fair
value less costs to sell the preparation of financial statements in accordance with ifrs requires
management to make judgements and estimates and to make assumptions
which affect the application of the accounting policies and the carrying
amounts of assets liabilities income and expenses these estimates and
assumptions are based on historical experience and a number of other factors
deemed reasonable under the circumstances the results of these estimates
and assumptions are then used to judge the carrying amounts of assets and
liabilities where these are not clear from other sources the actual outcome
may differ from these estimates and judgements estimates and assumptions are reviewed regularly changes in estimates
are recognised in the period in which the change is made if the change affects
only that period or in both the period in which the change is made and future
periods if the change affects both the current and future periods judgements made by management in applying ifrs which have a significant
effect on the financial statements and estimates made which could result in
material adjustments in subsequent years’ financial statements are described
in more detail in note 33 the following accounting policies for the group have been applied consist-
ently to all periods presented in the group’s financial statements unless other-
wise stated below the group’s accounting policies have been applied consist-
ently in the reporting and consolidation of the parent subsidiaries and the
inclusion of associates in the consolidated accounts the annual report and consolidated financial statements were approved for
release by the board of directors on 11 march 2011 the consolidated income
statement and balance sheet and the parent income statement and balance
sheet will be put forward for adoption at the annual general meeting on 2 may
2011 1 3 amended accounting policies and disclosure requirements
1 3 1 amended and new accounting policies for the year
ifrs 3r business combinations and ias 27r consolidated and separate
financial statements
ifrs 3r introduces a number of changes in the treatment of business combi-
nations which affect the size of recognised goodwill the profit loss in the
period in which the acquisition was completed and future profit loss ias 27r requires that changes in ownership structure in a subsidiary in
which the majority shareholder does not lose control are recognised as equity
transactions this means that such transactions no longer give rise to goodwill
or generate gains or losses in addition ias 27r alters the treatment of losses
which arise in a partially-owned subsidiary and the accounting where control-
ling influence over a subsidiary is lost during 2010 the changes to ifrs 3 have affected the consolidated
accounting of transaction costs and additional considerations notes with accounting principles and comments
8 4
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
1 3 2 future changes in accounting policies
no new accounting policies will come into force in 2011 that will affect the con-
solidated financial statements for 2011 1 4 segment reporting
segment reporting is based on operating segments which consist of the
group’s four divisions this corresponds to the structure for the senior man-
agement team’s monitoring and management of operations 1 5 classification etc in the financial statements for both the parent and the åf group non-current
assets and non-current liabilities consist essentially of amounts expected to
be recovered or settled more than 12 months after the end of the reporting
period current assets and liabilities consist essentially of amounts expected
to be recovered or settled within 12 months of the end of the reporting period 1 6 basis of consolidation
1 6 1 subsidiaries
subsidiaries are companies over which åf ab has a controlling influence a
controlling influence means directly or indirectly the power to govern a com-
pany’s financial and operating policies with a view to deriving economic bene-
fits potential voting rights which are currently exercisable or convertible are
taken into account when assessing whether a controlling influence is held subsidiaries are accounted for using the acquisition method this means
that the acquisition of a subsidiary is treated as a transaction where the group
indirectly acquires the subsidiary’s assets and assumes its liabilities and con-
tingent liabilities the consolidated cost is determined by means of an analysis
undertaken in connection with the acquisition of a business the analysis
determines the acquisition value of participations or businesses the fair value
of acquired identifiable assets and assumed liabilities contingent liabilities
and equity instruments issued as consideration for the net assets acquired the difference between the cost of the shares in the subsidiary and the fair
value of the assets acquired on the one hand and liabilities and contingent lia-
bilities assumed on the other is treated as goodwill subsidiaries’ financial statements are consolidated from the date of acquisi-
tion until such time as the controlling influence is relinquished 1 6 2 associates
associates are companies over whose operational and financial management
the group exercises a significant but not controlling influence generally
through a holding of 20 50 percent of the votes investments in associates
are accounted for in the consolidated financial statements using the equity
method from the time significant influence is obtained this means that the
carrying amount of the shares in the associate recognised in the consolidated
financial statements consists of the group’s share of the associate’s equity
plus goodwill and any other remaining fair value adjustments the group’s
share of the associate’s profit loss after tax and non-controlling interests adjusted for any amortisation impairment or reversal of fair value adjust-
ments is recognised in the consolidated income statement under share of
associates’ profit loss” any dividends received from the associate reduce the
carrying amount of the investment any difference at the time of acquisition between the cost of the investment
and the investor’s interest in the net fair value of the associate’s identifiable
assets liabilities and contingent liabilities is recognised in accordance with
ifrs 3 business combinations” if the group’s interest in the recognised losses of an associate exceeds the
carrying amount of the shares in the consolidated balance sheet the carrying
amount of the shares is reduced to zero losses are also allocated against
unsecured non-current financial balances which effectively form part of the
investor’s net investment in the associate further losses are not recognised
unless the group has issued guarantees to cover losses arising at the associ-
ate the equity method is applied until such time as significant influence is
relinquished 1 6 3 transactions eliminated on consolidation
intra-group receivables liabilities income and expenses and unrealised gains
and losses arising on transactions between group companies are eliminated
in their entirety when preparing the consolidated financial statements unrealised gains arising on transactions with associates and joint ventures
are eliminated in proportion to the group’s interests in the company unreal-
ised losses are eliminated in the same way as unrealised gains but only to the
extent that there is no indication of impairment note 1 cont’d
8 5
å f a n n u a l r e p o r t 2 0 10
1 7 foreign currency
1 7 1 transactions in foreign currency
transactions in foreign currency are translated into the functional currency at
the exchange rate ruling on the transaction date monetary assets and liabilities
in foreign currency are translated into the functional currency at the exchange
rate ruling at the end of the reporting period exchange differences arising on
translation are recognised in profit or loss non-monetary assets and liabilities
carried at historical cost are translated at the exchange rate ruling on the
transaction date non-monetary assets and liabilities carried at fair value are
translated into the functional currency at the exchange rate ruling when their
fair value was determined and changes in exchange rates are then recognised
in the same way as other changes in the value of the asset or liability the functional currency is the currency of the primary economic environ-
ments in which the companies in the åf group operate the parent’s functional
currency and reporting currency is the swedish krona sek the åf group’s
reporting currency is sek 1 7 2 financial statements of foreign operations
the assets and liabilities of foreign operations including goodwill and other
fair value adjustments are translated into sek at the exchange rate ruling at
the end of the reporting period the income and expenses of foreign opera-
tions are translated into sek at an average exchange rate which approximates
the exchange rates on the various transaction dates translation differences arising on the translation of net investments in foreign
operations are recognised in other comprehensive income when a foreign oper-
ation is sold the accumulated translation differences attributable to the oper-
ation are realised net of any currency hedging in the consolidated balance sheet 1 8 revenue
revenue from services rendered is recognised in accordance with ias 18 the
percentage of completion method is applied to all assignments whose outcome
can be measured reliably the majority of assignments are performed on an
open-account basis according to which income is entered into the accounts
when the work is performed and clients are normally invoiced one month after
the work is carried out where assignments are carried out on a fixed-price
basis revenue is recognised in profit or loss on the basis of the stage of com-
pletion at the end of the reporting period the stage of completion of an assign-
ment is determined by comparing the expenditure at the end of the reporting
period with estimated total expenditure if it is probable that the total assign-
ment expenditure will exceed the total assignment revenue the anticipated
loss is immediately recognised as an expense in its entirety revenue is not
recognised if it is probable that the economic benefits will not flow to the
group in the event of significant uncertainty about payment or associated
expenses no revenue is recognised 1 9 operating expenses and financial income and expenses
1 9 1 operating lease agreements
payments under operating leases are recognised in profit or loss on a straight-
line basis over the lease term benefits received in connection with signing a
lease are reported as part of the total lease cost in the income statement contingent rents are recognised in the periods in which they arise 1 9 2 finance lease agreements
minimum lease payments are apportioned between a finance charge and a
reduction of the outstanding liability the finance charge is spread over the
lease term so that the amount charged in each reporting period corresponds
to a fixed rate of interest on the liability recognised in that period contingent
rents are recognised in the periods in which they arise 1 9 3 financial income and expenses
financial income and expenses consist of interest receivable on bank balances
and receivables interest payable on loans dividend income and exchange dif-
ferences on loans interest receivable on receivables and interest payable on liabilities are
calculated using the effective interest rate method the effective interest rate
is the rate of interest that makes the present value of all future inflows and out-
flows over the life of the receivable or liability equal to its carrying amount the
interest component of finance lease payments is recognised in profit or loss by
applying the effective interest rate method interest receivable includes accrued
transaction costs and any discounts premiums or other differences between
the original value of the receivable and the amount received at maturity dividend income is recognised when the right to receive payment has been
ascertained 1 10 financial instruments
financial instruments recognised on the asset side of the balance sheet
include cash and cash equivalents trade receivables shares and other equity
instruments and derivatives included in equity and liabilities are trade pay-
ables issued debt and equity instruments borrowings and derivatives a financial asset or financial liability is recognised in the balance sheet when
the company becomes a party to the contractual terms of the instrument trade receivables are recognised in the balance sheet when an invoice has
been sent liabilities are recognised once the counterparty has performed
and there is a contractual obligation to pay even if an invoice has not yet been
received trade payables are recognised when an invoice has been received note 1 cont’d
a n n u a l r e p o r t n o t e s
8 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
a financial asset is derecognised from the balance sheet when the rights in
the contract are transferred or expire or the company loses control over them the same applies to parts of a financial asset a financial liability is derecog-
nised when the obligation in the contract is discharged or in some other way
extinguished the same applies to parts of a financial liability acquisitions and disposals of financial assets are recognised on the trade
date which is the day when the company makes a binding commitment to buy
or sell the asset the fair value of quoted financial assets is the asset’s quoted bid price at
the end of the reporting period for further information see note 24 1 10 1 classification and valuation
financial instruments that are not derivatives are recognised initially at an
acquisition value equivalent to the fair value of the instrument with the addition
of transaction costs for all financial instruments except those in the financial
assets category which are recognised at fair value excluding transaction
costs a financial instrument is classified on initial recognition on the basis of
the purpose for which the instrument was acquired the classification deter-
mines how the financial instrument is to be valued after initial recognition as
described below derivative instruments are recognised initially at fair value indicating that
transaction costs are charged to profit or loss for the period subsequent to
the initial recognition derivative instruments are recognised in the manner
described below if a derivative instrument is used for hedging to the extent
that this is effective changes in value of the derivative instrument are recog-
nised on the same line in the income statement as the hedged item even if
hedge accounting is not applied increases or decreases in the value of the
derivative are recognised as income or expense in the operating profit loss or
in net financial income expense depending on the intention behind the use of
the derivative and whether the use relates to an operating item or a financial
item with hedge accounting the ineffective part of the hedge is recognised in
the same way as changes in the value of a derivative which is not used for
hedge accounting 1 10 2 loans and receivables
loans and receivables are non-derivative financial assets with fixed or deter-
minable payments and that are not quoted in an active market these assets
are valued at amortised cost amortised cost is determined on the basis of the
effective interest rate calculated on the date of acquisition assets with a short
term are not discounted accounts receivable are recognised at the amount which it is estimated will
be received i e after the deduction of bad debts and as the result of individual
evaluation impairments of accounts receivable are recognised in operating
expense other receivables are classified as non-current receivables if the holding
period exceeds one year and if it is shorter than other receivables cash and cash equivalents consist of cash immediately accessible deposits
with banks and similar institutions and short-term liquid investments with a
maturity of less than three months from the date of purchase which are subject
to only an insignificant risk of changes in value 1 10 3 available-for-sale financial assets
the category of assets described as available-for-sale financial assets” in-
cludes financial assets that are not classified in any other category or financial
assets that the company initially chose to designate in this category holdings
of shares and participations that are not recognised as subsidiaries associ-
ates or joint ventures are recognised here assets in this category are valued
at fair value with changes in value recognised in other comprehensive income except for those due to impairment interest on debt instruments and dividend
income as well as exchange differences on monetary items which are recog-
nised in profit or loss on derecognition of the asset accumulated gains losses
previously recognised in other comprehensive income are recognised in profit
or loss financial investments constitute depending on the intention with which they
are held either non-current assets if the holding period is longer than one year
or current assets if the holding period is less than one year 1 10 4 other financial liabilities
loans and other financial liabilities e g accounts payable are included in this
category the liabilities are valued at amortised acquisition value accounts
payable have a short expected term and are valued without discounting at
their nominal amount non-current liabilities have an expected term longer than one year while
current liabilities have a term shorter than one year convertible debentures can be converted into shares by the counterparty
exercising an option to convert the instrument into shares convertible deben-
tures are recognised as a compound financial instrument comprising a liability
component and an equity component the fair value of the liability is calcu-
lated by discounting future cash flows using the current market interest rate
for an equivalent liability without a conversion right the value of the equity
instrument is calculated as the difference between the issue proceeds when
the convertible debenture was issued and the fair value of the financial liability
at the time of issue any deferred tax attributable to the liability on the date of
issue is deducted from the recognised value of the equity instrument the
transaction costs relating to the issue of a compound financial instrument are
apportioned between the liability component and the equity component in the
same proportions as the issue proceeds the interest cost is recognised in
profit or loss and calculated using the effective interest rate method note 1 cont’d
8 7
å f a n n u a l r e p o r t 2 0 10
1 11 derivative instruments and hedging
åf makes only limited use of derivatives to hedge future flows in foreign cur-
rencies derivatives used for hedging future cash flows are recognised in the
balance sheet at fair value the changes in value are recognised in other com-
prehensive income until such time as the hedged flow affects profit or loss upon which the accumulated changes in value of the hedging instrument are
recycled into profit or loss simultaneously with the profit or loss effects of the
hedged transaction flows from both contracted and forecast transactions
can be hedged to meet the requirements for hedge accounting under ias 39 there must
be an unequivocal link to the hedged item in addition the hedging of the item
must be effective hedging documentation must have been prepared and it must
be possible for effectiveness to be measured gains and losses on hedging
are recognised in profit or loss on the same date as gains and losses on the
hedged items are recognised 1 12 tangible assets
1 12 1 owned assets
tangible assets are recognised as assets in the balance sheet if it is probable
that future economic benefits will flow to the company and that the cost of the
item can be measured reliably tangible assets are recognised in the consoli-
dated financial statements at cost less accumulated depreciation and any
impairment losses cost is defined as the purchase price plus any additional
expenses directly attributable to bringing the asset to the location and condi-
tion necessary for it to be capable of operating in the intended manner exam-
ples of directly attributable additional expenses included in cost are the costs
of delivery and handling installation title deeds consulting services and legal
services the accounting policies for impairment are set out below tangible assets which consist of parts with different useful lives are treated
as separate components of tangible assets the carrying amount of an asset is derecognised from the balance sheet on
retirement or disposal or when no future economic benefits are expected to
flow from the use or retirement disposal of the asset the gain or loss arising
on the disposal or retirement of an asset is the difference between the disposal
proceeds and the carrying amount less direct costs to sell the gain or loss is
recognised under other operating income expenses future expenditure
future expenditure is added to the acquisition value only if it is probable that
future economic benefits that are attributable to the asset will flow to the com-
pany and the acquisition value can be measured reliably all other future
expenditure is recognised as an expense in the period in which it arises in
determining when an additional expenditure is to be added to the acquisition
value the decisive factor is whether the expenditure relates to the replace-
ment of identified components or parts of such components in which case
the expenditure is capitalised in instances where a new component has been
created the expenditure is also added to the acquisition value any undepreci-
ated carrying amount on replaced components or parts of components is
retired and recognised as an expense when the replacement is carried out repairs are recognised as an expense as they are carried out depreciation principles
linear depreciation is applied over the estimated useful life of the asset land
is not depreciated the åf group applies component depreciation which means
that the estimated useful life of the components forms the basis for depreciation 1 12 2 leased assets
leased assets are accounted for in accordance with ias 17 leases are classi-
fied as either finance leases or operating leases in the consolidated financial
statements a lease is classified as a finance lease if it transfers substantially
all the risks and rewards incidental to ownership to the lessee otherwise it is
classified as an operating lease assets held under finance leases are recognised as assets in the consoli-
dated balance sheet the liability to make future lease payments is recognised
under non-current and current liabilities the leased assets are depreciated on
a straight-line basis while the lease payments are recognised as a finance
charge and a reduction in the liability with operating leases the lease payments are recognised as expense over
the lease term on a straight-line basis 1 12 3 depreciation
depreciation is charged on a straight-line basis over the estimated useful life
of an asset estimated useful lives are it equipment 3 years
vehicles 5 years
office equipment 5 years
office furnishings 10 years
buildings business premises 40 100 years
business premises consist of a number of components with different useful
lives the primary division is between buildings and land no depreciation is
applied to the land component which is regarded as having an unlimited useful
life the buildings however consist of many components with varying useful
lives the useful lives of these components have been assessed as varying
between 40 and 100 years the following main groups of components have been identified which form
the basis for depreciation of buildings structure and foundations 100 years
outer surface finish facades roofs etc 67 years
floors doors and electrical installations 67 years
installations heating water sanitation ventilation lifts etc 40 years
the residual value and useful life of an asset are reviewed annually note 1 cont’d
a n n u a l r e p o r t n o t e s
8 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
1 13 intangible assets
1 13 1 goodwill
goodwill is the difference between the cost of a business combination i e cor-
porate acquisition takeover etc and the fair value of the assets acquired and
liabilities and contingent liabilities assumed when it comes to goodwill arising on business combinations before 1 janu-
ary 2004 the group has not applied ifrs retroactively instead the carrying
amount on that date will continue to be the historical cost of acquisition in the
consolidated financial statements net of impairment losses goodwill is apportioned between cash-generating units and groups of cash-
generating units and is instead tested annually for impairment see §1 14
below thus goodwill is carried at cost less accumulated impairment losses goodwill arising on the acquisition of associates is included in the carrying
amount of the investment in the associate where the cost of a business combination is less than the net fair value of
the assets acquired and liabilities and contingent liabilities assumed the dif-
ference is recognised immediately in the income statement 1 13 2 research and development
expenditure on research aimed at obtaining new scientific or technical knowl-
edge is recognised as an expense as it is incurred expenditure on development where research results or other knowledge is
applied to achieve new or improved products or processes is recognised as an
asset in the balance sheet if the product or process is technically and commer-
cially feasible and the company has sufficient resources to complete its devel-
opment and then use or sell the intangible asset the carrying amount includes
the cost of materials direct payroll costs and indirect costs which can reason-
ably and consistently be attributed to the asset other development expendi-
ture is recognised in profit or loss as expense as it is incurred development
expenditure recognised in the balance sheet is carried at cost less accumu-
lated amortisation and impairment losses 1 13 3 other intangible assets
other intangible assets acquired by the group are recognised at cost less
accumulated amortisation see below and impairment losses see §1 14
below costs incurred in respect of internally-generated goodwill and internally-
generated trademarks are recognised in profit or loss as they are incurred 1 13 4 subsequent expenditure
subsequent expenditure on capitalised intangible assets is recognised as an
asset in the balance sheet only if it increases the future economic benefits
from the specific asset to which it relates all other expenditure is recognised
as an expense as it is incurred 1 13 5 amortisation
amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful life of the asset unless its useful life is indefinite goodwill
and intangible assets with an indefinite life are tested for impairment annually
or as soon as there are indications that the asset in question has diminished in
value amortisable intangible assets are amortised from the date they become
available for use the estimated useful lives are as follows capitalised development expenditure 1 3 years
acquired intangible assets 1 10 years
1 14 impairment
the carrying amounts of the group’s assets with the exception of assets
held for sale recognised in accordance with ifrs 5 and deferred tax assets are tested at the end of each reporting period to assess whether there is any
indication of impairment if there is any such indication the asset’s recoverable
amount is determined the carrying amounts of the exceptions stated above
are tested in accordance with the relevant standard 1 14 1 impairment tests for tangible and intangible assets and participations
in subsidiaries and associates
the recoverable amount is the higher of fair value less costs to sell and value
in use when calculating value in use future cash flows are discounted at a dis-
count rate which reflects the risk-free rate of interest and the risk associated
with the specific asset for an asset which does not generate cash flows that
are essentially independent of other assets the value in use is calculated for
the cash-generating unit to which the asset belongs the impairment loss is
the amount by which the asset’s carrying amount exceeds its recoverable
amount impairment losses in respect of cash-generating units are allocated in
the first instance to goodwill and then to the other assets included in the unit
on a pro rata basis in the case of goodwill other intangible assets with an indefinite life and
intangible assets not yet ready for use the recoverable amount is calculated
annually 1 14 2 impairment tests for financial assets
at the end of each reporting period the company assesses whether there is
objective evidence that a financial asset or group of assets requires impair-
ment objective evidence consists both of observable circumstances that
have arisen and which have a negative effect on the ability to recover the
acquisition cost and of significant and long-lasting reductions in the fair value
of an investment in an available-for-sale financial asset on the impairment of an equity instrument designated as an available-for-
sale financial asset accumulated losses already recognised in equity are
reversed through profit or loss note 1 cont’d
8 9
å f a n n u a l r e p o r t 2 0 10
the recoverable amount of assets in the loans and receivables category
which are recognised at amortised cost is measured as the present value of
the future cash flow discounted at the effective interest rate current on the
date on which the asset was first recognised assets with a short term are not
discounted impairment is charged to profit or loss 1 14 3 reversal of an impairment loss
an impairment loss is reversed if there are indications that the impairment
requirement no longer exists and there has been a change in the assumptions
which formed the basis for the measurement of the recoverable amount impairment of goodwill is never reversed a reversal is made only to the extent
that the carrying amount due to reversal should not be more than the depreci-
ated historical cost would have been if the impairment had not been recognised impairment of loans and receivables that has been recognised at amortised
cost is reversed if a subsequent increase in the recoverable amount can be
attributed objectively to an event occurring after the impairment had beenmade impairment losses on equity instruments designated as available-for-sale
financial assets that have already been recognised in profit or loss may not
subsequently be reversed via profit or loss the impaired value is the value
from which subsequent revaluations are made and these are recognised in
other comprehensive income impairment losses on interest-bearing instru-
ments designated as available-for-sale financial assets are reversed in profit
or loss if the fair value increases and the increase can be attributed objectively
to an event occurring after the impairment had been made 1 15 dividends
dividends are recognised as a liability once they have been approved by the
general meeting 1 16 employee benefits
1 16 1 defined-contribution retirement benefit plans
obligations to contribute to defined-contribution plans are recognised as an
expense in the income statement as they arise 1 16 2 defined-benefit retirement benefit plans
the åf group’s obligations under defined-benefit plans are calculated sepa-
rately for each plan by estimating the future benefits earned by employees
through their employment in both the current and prior periods these benefits
are discounted to present value the discount rate is the market yield at the end
of the reporting period on a first-class corporate bond with a maturity corre-
sponding to that of the group’s retirement benefit obligations where there is
no active market for such corporate bonds the market yield on government
bonds with a corresponding maturity is used instead the calculations are per-
formed by a qualified actuary using the projected unit credit method actuarial assumptions represent the company’s best assessment of the dif-
ferent variables which determine the costs involved in providing the benefits since actuarial assumptions are used the actual outcome may differ from the
estimated outcome and the actuarial assumptions may change from one
period to another these differences constitute actuarial gains and losses they may be caused for example by a change in expected lifespans changes
in salaries changes in the discount rate and differences between actual and
estimated returns on plan assets actuarial gains and losses are recognised in
other comprehensive income for the period in which they arise the group’s
net liability as shown in the balance sheet for each defined-benefit plan is the
present value of the obligations minus the fair value of the plan assets if the
value of the plan assets exceeds the amount of the obligations a surplus
arises which is recorded as an asset under other non-current receivables when the benefits in a plan are improved the proportion of the increased
benefits attributable to the employees’ service in previous periods is recog-
nised as an expense in profit or loss allocated on a straight-line basis over the
average period until the benefits are fully vested if the benefits are fully vested the expense is recognised immediately in profit or loss when there is a difference between how retirement benefit costs are deter-
mined in the group and in its constituent companies a provision or receivable
is recognised in respect of special employer’s contribution to reflect this dif-
ference the provision or receivable is not discounted to present value 1 16 3 share-related remuneration
under the share savings programme adopted by the agm employees are
eligible to receive performance-related matching shares for shares which they
have themselves purchased under the programme the total number of match-
ing shares issued for each share purchased is dependent on the employee
remaining with the group for three years after the investment date the shares
concerned not being sold and the achievement of other parameters stipulated
in advance for these share programmes salary expenses for matching shares
are recognised during the vesting period 3 years based on the fair value of
the shares on the date on which the employee purchased shares under the pro-
gramme when the shares are matched social security contributions will be
paid in certain countries on the value of the benefit to the employee during the
vesting period provisions are made for these estimated social security contri-
butions the buy-back of shares to meet obligations under outstanding share
programmes is recognised in equity 1 16 4 termination benefits
a provision is made for termination benefits only when the company is demon-
strably committed to terminating employment before the normal date or
when the benefits are the result of an offer made in order to encourage volun-
tary redundancy in the event that the company is obliged to lay off members
of staff a detailed plan is drawn up specifying as a minimum the location func-
tion and approximate number of employees involved the benefits for each job
classification or function and the time at which the plan will be implemented note 1 cont’d
a n n u a l r e p o r t n o t e s
9 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
1 17 provisions
a provision is recognised in the balance sheet when the group has a present
legal or constructive obligation as a result of a past event and when it is prob-
able that an outflow of economic resources will be required to meet this obliga-
tion and a reliable estimate of the amount of the obligation can be made where the effect of the point in time when payment takes place is significant provisions are calculated by discounting expected future cash flows at a rate
of interest before tax that reflects current market assessments of the time
value of money and where appropriate the risks associated with the liability provisions for restructuring are recognised once the group has adopted a
detailed and formal restructuring plan and the work of restructuring has
either begun or been publicly announced no provisions are made for future
operating expenses 1 18 tax
income taxes comprise current tax and deferred tax income taxes are recog-
nised in profit or loss except where the underlying transaction is recognised in
other comprehensive income in which case the associated tax effect is also
recognised in other comprehensive income current tax is the tax payable or recoverable in respect of the current year based on the tax rates enacted or substantively enacted as at the end of the
reporting period including adjustments of current tax in respect of prior periods deferred tax is calculated using the liability method on the basis of tempo-
rary differences between the carrying amount and tax base of assets and lia-
bilities the following temporary differences are disregarded temporary dif-
ferences arising on the initial recognition of goodwill the initial recognition of
assets and liabilities which do not constitute business combinations and affect
neither recognised nor taxable income at the time of the transaction and tem-
porary differences attributable to investments in subsidiaries and associates in cases where the parent investor or joint owner can exert some influence
over the point in time when the temporary differences will be reversed and
when it is not anticipated that this reversal will take place in the foreseeable
future the valuation of deferred tax is based on how the carrying amounts of
assets and liabilities are expected to be realised or adjusted deferred tax is
calculated using the tax rates and tax rules enacted or substantively enacted
as at the end of the reporting period deferred tax assets in respect of deductible temporary differences and
unused tax losses are recognised only to the extent that it is probable that they
can be utilised the value of deferred tax assets is reduced when it is no longer
deemed probable that they can be utilised any additional income tax arising on the payment of dividends is recognised
at the same time as the dividend is recognised as a liability 1 19 non-current assets held for sale
a non-current asset is classified as held for sale if its carrying amount will be
recovered primarily through sale and not through use when first classified as held for sale non-current assets are recognised at
the lower of carrying amount and fair value less costs to sell 1 20 contingent liabilities
a contingent liability is reported when there is a potential obligation relating to
past events whose existence will be confirmed only by one or more uncertain
future events or when there is an obligation which is not recognised as a liability
or provision because it is not probable that an outflow of resources will be
required or the amount cannot be measured reliably 1 21 earnings per share
the calculation of earnings per share is based on the consolidated profit or
loss attributable to the parent’s shareholders and on the weighted average
number of shares outstanding during the year in calculating earnings per
share after dilution the profit or loss and the weighted average number of
shares are adjusted to take account of the effects of potential diluting ordinary
shares which derive during the reporting period from matching shares in the
savings programme 1 22 parent accounting policies
the parent has prepared its annual report in accordance with the swedish
annual accounts act 1995 1554 and the swedish financial reporting board’s
recommendation rfr 2 accounting for legal entities rfr 2 requires that the
parent’s annual report applies all ifrs standards and interpretations approved
by the eu as far as is possible within the constraints of the annual accounts
act and the pension obligations vesting act tryggandelagen and while taking
into account the relationship between reporting and taxation the recommen-
dation specifies which exceptions and supplements are to be made with respect
to ifrs the differences between the accounting policies of the group and
parent are presented below the accounting principles outlined below have been applied consistently
to all periods presented in the parent’s financial statements note 1 cont’d
9 1
å f a n n u a l r e p o r t 2 0 10
note 1 cont’d
differences between accounting policies for the group and the parent
1 22 1 subsidiaries and associates
shares in subsidiaries and associates are recognised in the parent using the
acquisition method dividends received are recognised as income 1 22 2 tangible non-current assets
leased assets
the parent reports all leases on the basis of the rules for operating leases 1 22 3 intangible assets
research and development
the parent recognises all development expenditure as an expense in the
income statement 1 22 4 non-current assets held for sale
the parent applies ifrs 5 with the exceptions set out in rfr 2 8 9 under
the provisions of ifrs 5 assets held for sale are recognised separately in the
balance sheet and discontinued operations are recognised separately in the
income statement this does not however correspond to the layout in the
swedish annual accounts act the information referred to along with other
information which must be disclosed under ifrs 5 is therefore presented in
the form of notes in addition the rules in ifrs 5 which prescribe that non-cur-
rent assets held for sale are not to be depreciated are not applied deprecia-
tion is calculated in accordance with the swedish annual accounts act 1 22 5 financial guarantees
the parent’s financial guarantee contracts consist primarily of guarantees for
the benefit of subsidiaries and associates financial guarantees mean that the
company has an obligation to recompense the holder of a debt instrument for
losses incurred due to the failure of a specified debtor to make full payment on
the due date in accordance with the terms of the contract for the recognition
of financial guarantee contracts the parent applies rfr 2 72 which involves a
relief compared with the provisions of ias 39 in respect of financial guarantee
contracts issued for the benefit of subsidiaries and associates the parent rec-
ognises financial guarantee contracts as a provision in the balance sheet when
the company has an obligation for which payment will probably be required to
settle the obligation 1 22 6 employee benefits
defined-benefit retirement benefit plans
the parent applies a different basis for the calculation of defined-benefit plans
to that set out in ias 19 the parent complies instead with the provisions of the
pension obligations vesting act tryggandelagen and the regulations of finans-
inspektionen the swedish financial supervisory authority as this is a require-
ment for tax deductibility the most important differences relative to the pro-
visions of ias 19 are the way in which the discount rate is determined the
calculation of defined-benefit obligations on the basis of current salary levels
without making assumptions about future wage growth and the recognition of
all actuarial gains and losses in the income statement as they arise 1 22 7 taxes
the parent reports untaxed reserves inclusive of deferred tax liabilities in the
consolidated financial statements untaxed reserves are apportioned between
a deferred tax liability and equity 1 22 8 group contributions and shareholder contributions for legal entities
the company reports group contributions and shareholder contributions in
accordance with the statement issued by the swedish financial reporting
board shareholder contributions are recognised by the recipient in equity and
capitalised under shares and participations by the contributor net of impair-
ment losses group contributions are reported on a substance over form basis this
means that group contributions paid in order to minimise the group’s overall
tax liability are recognised in retained earnings net of their current tax effect group contributions comparable with dividends are treated as dividends this
means that group contributions received and their current tax effect are rec-
ognised in profit or loss group contributions paid and their current tax effect
are recognised in retained earnings group contributions comparable with
shareholder contributions are recognised by the recipient in retained earnings
taking account of the current tax effect the contributor reports the group
contribution and its current tax effect as investment in participations in group
companies to the extent that impairment is not required a n n u a l r e p o r t n o t e s
9 2
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
sweden outside sweden total
by geographical area 2010 2009 2010 2009 2010 2009
sales to external clients 2 928 3 069 1 406 1 609 4 334 4 678
assets 2 170 2 440 1 780 1 143 3 950 3 583
operating segments
the group’s operating structure and internal reporting to senior management
and the board is based on accounting by divisions the aim is to classify the
divisions on the basis of their clients and their own expertise intra-group sales
between segments are based on an internal market price calculated on an
arms-length basis i e as between parties who are mutually independent well-informed and with an interest in completing the transactions all of the group’s operating assets and liabilities have been placed directly
in divisions or allocated by division the accounting policies governing operating
segments are the same as those applied in the group in general there are no
individual clients whose sales amount to 10 percent or more of the group’s
total sales 2 segment reporting
energy industry infrastructure technology inspection others & elim group
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
income
sales to external clients 1 000 1 179 1 297 1 346 1 210 1 128 715 617 89 402 24 7 4 334 4 678
other operating income 2 2 1 2 0 9 0 0 0 0 458 462 14
sales between segments 11 11 41 39 23 31 4 19 0 5 80 105 total income 1 012 1 192 1 340 1 387 1 233 1 168 719 636 89 407 402 98 4 796 4 692
operating expenses 913 1 051 1 215 1 251 1 155 1 056 648 600 86 368 78 83 3 939 4 242
depreciation and impairment of intangible
assets 4 4 1 2 1 1 1 1 0 2 2 0 10 10
depreciation and impairment of tangible
assets 12 11 4 4 8 9 2 2 2 9 14 18 41 52
operating profit loss 83 127 120 130 69 102 69 34 0 29 465 32 806 388
operating margin 8 2 10 6 9 0 9 4 5 6 8 7 9 6 5 3 0 0 7 0 16 8 8 3
assets and liabilities
intangible assets 664 566 579 506 330 139 99 72 84 5 3 1 677 1 370
tangible assets 177 173 12 12 27 17 10 9 32 67 91 293 333
other assets 713 1 153 575 400 566 497 371 279 113 244 562 1 981 1 880
total assets 1 553 1 892 1 166 918 923 653 481 360 228 173 468 3 950 3 583
equity 96 537 71 509 175 322 191 112 90 1 827 257 2 361 1 827
total liabilities 1 457 1 355 1 096 409 747 331 289 248 139 2 000 726 1 590 1 756
the historical figures above are adjusted proforma to reflect the organisational changes implemented on 1 january and 1 october 2010 9 3
å f a n n u a l r e p o r t 2 0 10
3 sale of business operations
net assets of companies disposed of on date of disposal
2010 2009
intangible assets 15 9 tangible assets 30 3 1 0
financial assets 4 1 accounts receivable and other receivables 85 5 11 1
cash and cash equivalents 10 8 1 9
accounts payable and other liabilities 60 7 6 6
net identifiable assets and liabilities 85 9 7 4
consolidated goodwill 68 1 9 7
adjustment for capital gain or loss 488 9 7 3
adjustment for realised translation differences 0 4 0 9
selling price 642 5 23 4
deduct cash balance disposed 10 8 1 9
selling expenses 7 2 1 6
net cash inflow 624 5 19 9
disposals in 2010 refer to åf-kontroll ab and åf-tüv nord ab disposals in 2009 refer to åf-brekke & strand akustikk as and itp-infra
trans project ltd 4 business combinations
acquisitions 2010
in 2010 åf acquired fasttech meacont s r o vvs energi i borås ab vpc min-
ing i skellefteå gatubolaget konsult i göteborg platom ab energo ab and
mercados emi s a the total number of employees in the companies business
operations acquired was 555 for further details about the business opera-
tions of the companies acquired please see page 67 the acquisitions of fasttech vpc mining i skellefteå and gatubolaget kon-
sult i göteborg took the form of acquisitions of business operations in the
other companies all shares were acquired effects of acquisitions
the table below shows the effect of the acquisitions on the consolidated
assets and liabilities the acquisition analyses are provisional since the assets
of the acquired companies have not yet been finally analysed the consideration on reported acquisitions was greater than the carrying
amount of the assets in the acquired companies as a result of which the acqui-
sition analysis gave rise to intangible assets on the acquisition of a consulting
firm the primary acquisition is in fact human capital in the expertise of the
staff for which reason the majority of the assets of the acquired company are
attributable to goodwill the other intangible assets identified in the acquisi-
tion consist mainly of orders on hand and customer relationships net assets of energo as per acquisition date
identifiable
assets and
liabilities
fair
adjustment
value
fair value
recognised
in group
intangible assets 1 0 27 0 28 0
tangible assets 9 3 9 3
accounts receivable and other receivables 79 4 79 4
cash and cash equivalents 3 9 3 9
non-current provisions 4 5 7 1 11 6
interest-bearing liabilities 44 2 44 2
accounts payable and other liabilities 43 0 43 0
net identifiable assets and liabilities 1 9 19 9 21 8
consolidated goodwill 237 8
consideration paid cash 259 6
deduct cash acquired 3 9
net cash outflow 255 7
net assets of other acquired companies as per acquisition date
identifiable
assets and
liabilities
fair
adjustment
value
fair value
recognised
in group
intangible assets 2 1 8 9 11 0
tangible assets 7 9 7 9
accounts receivable and other receivables 58 7 58 7
cash and cash equivalents 10 7 10 7
non-current provisions 0 1 1 6 1 7
interest-bearing liabilities 19 9 19 9
accounts payable and other liabilities 32 4 32 4
net identifiable assets and liabilities 27 0 7 3 34 3
consolidated goodwill 158 8
acquisition cost including estimated
consideration 193 1
deduct cash acquired 10 7
estimated additional consideration 62 2
additional part of additional consideration
allocated as blocked funds 15 2
net cash outflow 135 4
a n n u a l r e p o r t n o t e s
9 4
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
8 employees and personnel costs
total remuneration is included in profit or loss under the heading personnel
costs” average number of employees by gender
2010 2009
women men women men
parent
sweden 50 20 50 22
subsidiaries
sweden 459 2 268 457 2 488
finland 33 181 41 190
norway 28 101 28 112
denmark 13 89 13 74
switzerland 49 158 44 155
czech republic 10 89 10 79
russia 163 121 145 115
estonia 6 28 7 29
lithuania 9 23 12 32
india 4 36 3 35
others 5 24 11 30
group total 829 3 137 821 3 361
total average number of employees 3 966 4 182
total for associates 38 54
total average number of
employees including associates 4 004 4 236
5 other operating income
group 2010 2009
gain on disposal of business operations 457 9 7 8
other 3 9 6 3
461 8 14 1
other operating income of sek 104 5 million in the parent relates to the invoic-
ing of rental charges to subsidiaries 6 research and development
the åf group’s costs for research and development totalled sek 20 7 million 2009 sek 41 5 million the amount comprises mostly costs for time spent
on research and development projects by åf’s own salaried employees note 4 cont’d
total of net assets of acquired companies as per acquisition date
identifiable
assets and
liabilities
fair
adjustment
value
fair value
recognised
in group
intangible assets 3 1 35 9 39 0
tangible assets 17 2 17 2
accounts receivable and other receivables 138 1 138 1
cash and cash equivalents 14 6 14 6
non-current provisions 4 6 8 7 13 3
interest-bearing liabilities 64 1 64 1
accounts payable and other liabilities 75 4 75 4
net identifiable assets and liabilities 28 9 27 2 56 1
consolidated goodwill 396 6
acquisition cost including estimated
consideration 452 7
deduct cash acquired 14 6
estimated additional consideration 1 62 2
additional part of additional consideration
allocated as blocked funds 15 2
net cash outflow 391 1
1 the agreed additional consideration in the acquired companies relates to the perform-
ance of the respective companies over the next two to three years the total additional
consideration for the acquired companies will not exceed sek 83 million if the above acquisitions had been completed on 1 january 2010 consolidated
income would have been sek 5 243 million and operating profit sek 831 million
as at 31 december 2010 acquisitions 2009
through business acquisitions during 2009 åf acquired industrial consulting
operations in gothenburg from industrikonsult i göteborg ab as well as engi-
neering operations in malmö from etteplan industry ab the total acquisition
cost was sek 2 2 million 7 fees and remuneration of auditors
group parent
2010 2009 2010 2009
accountants
ernst & young
audit assignments 3 1 3 6 0 7 0 7
tax advice 0 1 0 3 0 1 0 2
other assignments 0 8 1 4 0 6 0 1
4 1 5 3 1 4 0 9
other accounting companies
audit assignments 0 3 0 6 tax advice 0 1 0 4 0 1 0 1
other assignments 0 3 0 3 0 7 1 3 0 1 0 1 audit assignments” refer to the auditing of the annual report the accounting
records and the administration by the board of directors and the managing
director other duties which it is incumbent upon the company’s auditors to
carry out as well as advice and other assistance stemming from observations
made during such audits or the execution of such other duties 9 5
å f a n n u a l r e p o r t 2 0 10
gender distribution directors and senior management
women group 2010 2009
directors 38 38
senior management 20 20
salaries other remuneration and payroll overheads
2010 2009
salaries
and remun-
erations
social
costs
salaries
and remun-
erations
social
costs
parent
board of directors and senior
executives 22 0 12 7 23 8 12 0 of which annual variable
remuneration 3 8 5 6 of which pension expenses 1 5 7 4 6
other employees 1 779 2 644 0 1 872 6 693 4 of which annual variable
remuneration 53 7 49 5 of which pension expenses 1 228 2 238 0
1 801 2 656 7 1 896 4 705 4
1 including statutory charges other personnel costs total sek 70 8 million 2009 sek 70 2 million 2010 2009
salaries
and remun-
erations
social
costs
salaries
and remun-
erations
social
costs
parent
board of directors and
president ceo 7 2 4 0 7 6 3 5 of which annual variable
remuneration 1 3 2 5 of which pension expenses 1 1 7 1 1
other employees 32 8 16 9 35 5 19 0 of which annual variable
remuneration 2 2 3 4 of which pension expenses 1 7 6 8 8
40 0 20 9 43 1 22 5
1 including statutory charges note 8 cont’d
in addition it was resolved to pay fees for committee work of sek 35 000
to each committee member who is not employed in the group and that a fee
of sek 75 000 be paid to the chair of the audit committee and a fee of sek
50 000 to be paid to the chair of the remuneration committee the total remu-
neration payable to the board is thus sek 1 890 000 of which sek 1 625 000
is for the ordinary work of the board and sek 265 000 for committee work remuneration to the board in 2010
remuneration to the board is payable quarterly this means that the remuner-
ation to the board was at the rate determined by the agm in 2009 for the first
two quarters and at the rate determined by the agm in 2010 for the remaining
two quarters of the year during 2010 a total of sek 1 802 500 2009 sek 1 715 000 was recog-
nised as an expense for remuneration to the board in the parent accounts in addition the employee representatives on the board received a total of
sek 40 000 sek 40 000 no agreements have been signed concerning future pensions or severance
pay for the chairman or other members of the board information relating to remuneration to members of the board in 2010
remuneration in sek
director board committee total
ulf dinkelspiel 400 000 85 000 485 000
patrik enblad 175 000 175 000
eva-lotta kraft 175 000 35 000 210 000
björn o nilsson 87 500 87 500
jon risfelt 175 000 35 000 210 000
helena skåntorp 175 000 75 000 250 000
anders snell 175 000 175 000
lena treschow torell 175 000 35 000 210 000
total 1 537 500 265 000 1 802 500
information relating to remuneration to members of the board in 2009
remuneration in sek
director board committee total
ulf dinkelspiel 400 000 85 000 485 000
patrik enblad 175 000 175 000
eva-lotta kraft 175 000 35 000 210 000
jon risfelt 175 000 17 500 192 500
helena skåntorp 175 000 75 000 250 000
anders snell 87 500 87 500
lena treschow torell 175 000 35 000 210 000
magnus grill 87 500 17 500 105 000
total 1 450 000 265 000 1 715 000
president ceo
annual variable remuneration is based on the group’s results as well as a number
of preset targets and may amount to a maximum of 65 percent of fixed basic
salary the fixed basic salary of the president ceo for 2010 was sek 3 9 million 2009 sek 3 3 million the president ceo also has the use of a company car remuneration to senior executives
see page 69 for guidelines for remuneration of senior executives remuneration to the board approved by the 2010 agm
the agm on 5 may 2010 approved remuneration totalling sek 1 625 000 for
the work of the board in 2010 the chairman received sek 400 000 and mem-
bers of the board not employed in the group received sek 175 000 each a n n u a l r e p o r t n o t e s
9 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
note 8 cont’d
for members of the senior management team the period of notice from the
company’s side is normally 12months full salary continues to be payable during
theperiod of notice from the individual’s side a period of sixmonths’ notice applies one of the members of the åf group’s senior management team has retire-
ment benefit conditions in line with the itp occupational pension plan others
have defined-contribution retirement benefits towards which an amount equi-
valent to 27 5 to 30 percent of basic salary is allocated annually determination of remuneration
the level of remuneration paid to the president ceo for financial year 2010
was set by the board of directors following a proposal drafted by the board’s
remuneration committee remuneration paid to other senior executives was
set by the president ceo in consultation with the remuneration committee annual variable remuneration
within åf’s divisions there are different systems of variable remuneration for
co-workers remuneration may either be based on the division’s performance
or linked directly to individual performance to demonstrate clearly the crucial importance of the efforts of co-workers
to the group’s results in both the long and the short term a group bonus has
been introduced the model is based on part of profit that is generated at
group level being shared out in the form of bonus payments that are the same
for co-workers in all parts of the group non-current variable remuneration
performance-related share savings programme
general conditions
performance-related share savings programmes were introduced for key
members of staff in 2008 2009 and 2010 the aim of the three programmes is to encourage continued loyalty and
excellent performance and also to make the åf group even more attractive as
an employer to participate in the programmes employees must invest their own money employees who participate in the performance-related share savings pro-
grammes for 2008 2009 and 2010 may save an amount equivalent to a maxi-
mum of 5 percent of their fixed salaries senior managers including the senior
management team have been selected and allocated four five or six shares matching shares for every share they buy under the programme to qualify
for performance matching the individual concerned must also have been
employed during the entire three-year period from the beginning of the respec-
tive programme a condition for performance matching is that åf’s average annual percent-
age increase in earnings per share meets certain targets see the table for
each share savings programme the base value for the calculation of the
increase in earnings per share is the total of earnings per share for the four
quarters immediately preceding the implementation of a new share savings
programmes before the number of performance shares for matching is finally deter-
mined the board of directors will consider whether performance matching is
reasonable with regard to the company’s financial performance and position and the situation on the stock market and in general should the board con-
clude that full matching is not appropriate it may reduce the number of per-
formance shares to a number it deems appropriate the performance targets may not be revised after the end of the three-year
period if the minimum performance has not been achieved no performance
matching shares will be issued the expense is arrived at by periodising a straight-line estimated expense
over three years specific conditions
2008 and 2009
the terms for performance matching are also based on the company’s operat-
ing margin before extraordinary items in relation to a basket of comparable
companies 2010
in addition to performance matching employees will be allocated a number of
class b shares free of charge equivalent to the number saved the period of notice for the president ceo of the parent is two years from
the company’s side from the president ceo’s side a period of six months’
notice applies the retirement age for the president ceo is 60 the presi-
dent ceo’s retirement benefit plan is defined-contribution and an annual pro-
vision equivalent to 35 percent of the year’s basic salary is made for this full
salary continues to be payable during the period of notice an obligation to
work during the period of notice may apply for a maximum of one year åf group senior management excluding the president ceo
the åf group senior management team consists of nine 2009 nine individuals
excluding the president ceo annual variable remuneration may amount to a maximum of 60 percent of
fixed basic salary members of the åf group senior management team have
the use of company cars cost of remuneration of the president ceo and other senior management
2010 2009
president ceo
other senior
management total president ceo
other senior
management total
salaries 3 9 12 0 15 9 3 3 11 8 15 1
provisions for annual variable remuneration earned
during the current year 1 3 2 5 3 8 2 5 3 1 5 6
provisions for non-current variable remuneration 0 1 0 4 0 5 0 1 1 3 1 4
pension expenses 1 1 7 4 0 5 7 1 1 3 5 4 6
other social security expenses 1 7 4 7 6 4 1 8 5 0 6 9
total 8 7 23 5 32 3 8 8 24 6 33 5
1 including statutory charges 9 7
å f a n n u a l r e p o r t 2 0 10
9 other operating expenses
group 2010 2009
exchange losses 13 1 7 6
13 1 7 6
other operating expenses of sek 110 5 million in the parent relate to rental
charges 10 net financial income expense
group 2010 2009
interest income 1 11 0 4 8
profit on sale of investments in securities etc 0 0
exchange gains 2 5 7 4
financial income 13 5 12 2
interest expense 1 10 3 13 8
net loss on the disposal of financial assets
held for sale 0 1
exchange losses 11 0 9 7
financial expense 21 3 23 5
net financial expense 7 7 11 3
parent 2010 2009
interest income group companies 0 1 7 7
interest income 1 5 0 1
gain on disposals of group companies and associates 500 8 exchange gains 0 4 0 4
dividends from group companies and associates 413 0 3 7
financial income 915 8 11 9
interest expense group companies 0 6 2 5
interest expense 1 5 6 6 6
impairment of shares in group companies 131 6 exchange losses 1 0 1 4
financial expense 138 8 10 4
net financial income 777 0 1 4
1 includes interest on pension provisions note 8 cont’d
absence from work due to sickness parent
figures in percent 2010 2009
total sick leave as a percentage of ordinary
working time 2 9 2 3
portion of total sick leave comprising absences
of 60 consecutive days or more 1 2 0 7
sick leave as a percentage of total ordinary
working time for each of the following groups by gender men 0 9 0 6
women 3 7 3 1
by age 29 years old or below 1 0 0 7
30 49 years 1 2 3 0
50 years or above 6 0 2 0
a n n u a l r e p o r t n o t e s
share savings programme psp 2008 2009 2010 total
base value earnings per share sek 1 8 41 8 70 7 08
target for annual average
increase in earnings per share 5 30 5 15 5 15
number of participants in the
allocation 100 110 98
allocation of matching shares number 2 0 4 0 4 0 4
0 5 0 5 0 5
0 6 0 6 0 6
allocation of number of free
shares per share saved 1
maximum number of matching
shares 204 000 138 000 189 000 531 000
maximum dilution of earnings per
share 0 6 0 4 0 6 1 6
provision for the year msek 2 1 0 8 4 5 3 2
accumulated provision msek 0 2 4 4 5 6 9
minimum cost msek 0 0 5 4 5 4
maximum cost msek 21 4 19 7 28 3 69 4
savings period july 2008 june 2009
july 2009 june 2010
july 2010 june 2011
1 total for four quarters up to 30 june of the plan year 2 senior managers may have the right to performance matching of up to four shares the
group management team up to five shares and the president ceo up to six shares for
each share purchased 9 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
12 earnings per share
before dilution after dilution
sek 2010 2009 2010 2009
earnings per share 21 02 7 93 20 95 7 91
the calculation of the numerators and denominators used in the above calcula-
tions of earnings per share is explained below a 2 1 share split was implemented on 2 june 2010 the comparative figures
have been adjusted earnings per share before dilution
the calculation of earnings per share for 2010 is based on the profit for the year
attributable to the parent’s ordinary shareholders amounting to sek 709 9 mil-
lion 2009 sek 268 7 million and on a weighted average number of outstanding
shares that amounted to 33 775 002 during 2010 2009 33 898 072 weighted average number of outstanding ordinary shares before dilution
2010 2009
total number of ordinary shares 1 january 33 775 002 33 985 002
effect of share buy-backs in 2009 86 930
weighted average number of ordinary
shares during the year before dilution 33 775 002 33 898 072
earnings per share after dilution
in calculating earnings per share after dilution the weighted number of out-
standing ordinary shares is adjusted for the dilution effect of all outstanding
potential ordinary shares when calculating earnings per share after dilution outstanding ordinary shares have been adjusted for a potential dilution effect
for shares in the outstanding share savings programme profit attributable to the parent’s ordinary shareholders after dilution
2010 2009
profit attributable to the parent’s
ordinary shareholders 709 9 268 7
profit attributable to the parent’s
ordinary shareholders after dilution 709 9 268 7
weighted average number of outstanding ordinary shares after dilution
2010 2009
weighted average number of ordinary
shares during the year before dilution 33 775 002 33 898 072
effect of outstanding share savings
programme 106 701 94 286
weighted average number of ordinary
shares during the year after dilution 33 881 703 33 992 358
11 appropriations
parent 2010 2009
difference between recognised depreciation amortisation and depreciation amortisation
according to plan 2 7 13 2 2 7 13 2
9 9
å f a n n u a l r e p o r t 2 0 10
13 intangible assets
group goodwill
development
expenditure
other intangible
assets total
accumulated acquisition cost
balance brought fwd 1 jan 2009 1 331 9 16 1 54 0 1 402 0
corporate acquisitions 2 2 2 2
additional consideration 50 2 50 2
acquisitions 4 1 4 1
assets developed in-house 11 5 11 5
disposals and retirements 9 4 3 1 2 8 15 4
exchange differences for the year 34 5 0 5 1 9 36 9
balance carried forward 31 dec 2009 1 340 4 24 0 53 4 1 417 8
balance brought fwd 1 jan 2010 1 340 4 24 0 53 4 1 417 8
corporate acquisitions 396 6 2 4 41 5 440 5
additional consideration 8 4 8 4
acquisitions 0 4 4 4 4 8
assets developed in-house 1 6 1 6
disposals and retirements 68 1 14 4 8 5 91 1
exchange differences for the year 31 8 1 4 3 3 36 5
balance carried fwd 31 dec 2010 1 628 7 12 6 87 4 1 728 7
accumulated amortisation and impairment
balance brought fwd 1 jan 2009 2 6 14 4 27 9 45 0
corporate acquisitions depreciation during the year 0 3 9 6 9 9
disposals and retirements 0 1 3 1 2 3 5 3
exchange differences for the year 0 5 1 0 1 6
balance carried fwd 31 dec 2009 2 7 11 1 34 2 48 0
balance brought fwd 1 jan 2010 2 7 11 1 34 2 48 0
corporate acquisitions 0 3 4 4 4 7
amortisation during the year 0 4 9 6 10 0
disposals and retirements 0 6 6 4 7 1
exchange differences for the year 1 3 2 7 4 0
balance carried fwd 31 dec 2010 2 7 9 9 39 1 51 7
carrying amounts
per 1 jan 2009 1 329 3 1 7 26 1 1 357 1
per 31 dec 2009 1 337 7 12 9 19 2 1 369 8
per 1 jan 2010 1 337 7 12 9 19 2 1 369 8
per 31 dec 2010 1 626 0 2 7 48 3 1 677 0
a n n u a l r e p o r t n o t e s
1 0 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
note 13 cont’d
parent intangible assets
accumulated acquisition cost
balance brought fwd 1 jan 2009 acquisitions 3 7
balance carried fwd 31 dec 2009 3 7
balance brought fwd 1 jan 2010 3 7
acquisitions 3 1
balance carried fwd 31 dec 2010 6 8
accumulated amortisation and impairment
balance brought fwd 1 jan 2009 amortisation during the year 0 4
balance carried fwd 31 dec 2009 0 4
balance brought fwd 1 jan 2010 0 4
amortisation during the year 1 7
balance carried fwd 31 dec 2010 2 1
carrying amounts
per 1 jan 2009 per 31 dec 2009 3 3
per 1 jan 2010 3 3
per 31 dec 2010 4 7
the carrying amount of goodwill is allocated as follows division 2010
proforma
2009
energy 649 8 556 6
industry 571 0 504 0
infrastructure 320 5 137 0
technology 84 7 71 1
inspection åf-kontroll 69 0
total 1 626 0 1 337 7
group
the group’s intangible assets arise primarily from business combinations these acquired intangible assets consist largely of goodwill since the main
value of consulting companies lies in their human capital the expertise of their
co-workers other intangible assets identified in connection with the acquisi-
tions include the outstanding orders customer lists and reference projects the useful life of these other intangible assets is 1 to 10 years goodwill and other intangible assets have been allocated to the lowest
identifiable cash-generating unit which corresponds to company-specific
investments in the appropriate division impairment tests on goodwill and
other intangible assets are carried out annually during q4 or when there are
indications that an impairment need has arisen by discounting the anticipated
future cash flow by a weighted average cost of capital per cash-generating
unit the present value of the cash flows the value in use is compared with the
carrying amount including goodwill and other intangible assets in calculating the value in use of the cash-generating units a number of
assumptions on future circumstances and estimates of parameters have been
made changes in these assumptions and estimates would affect the carrying
amount of goodwill the forecasts of future cash flows used are based on the forecast made by
senior management for the next year supplemented by an individual assess-
ment of a further four years from that point onwards the calculation is based
on an annual growth rate of 2 percent the weighted average cost of capital is based on assumptions about aver-
age interest rates on 10-year government bonds as well as company-specific
risk factors and beta values the group’s average cost of capital the discount
rate for 2010 has been calculated at 13 percent 2009 11 percent before tax
and 10 percent 8 percent after tax the forecast cash flows have been dis-
counted to present value the test concluded that no impairment need has
arisen since the value in use exceeds the carrying amount including goodwill
and other intangible assets it is the opinion of the company management that
no reasonably likely changes in important assumptions for cash-generating
units would lead to an impairment need the discount rate varies between cash-generating units as shown in the
following table country
discount rate
before tax discount rate
after tax long-term
annual
growth baltic countries 14 0 10 5 2
denmark 13 0 9 8 2
finland 13 0 9 8 2
norway 13 0 9 8 2
russia 16 0 12 0 2
switzerland 13 0 9 8 2
sweden 12 7 9 5 2
czech republic 14 0 10 5 2
germany 13 0 9 8 2
at the end of 2010 goodwill amounted to sek 1 626 0 million 2009 sek
1 337 7 million 1 0 1
å f a n n u a l r e p o r t 2 0 10
14 tangible assets
group
equipment tools fixtures
and fittings
land and
buildings total
acquisition costs
balance brought fwd 1 jan 2009 339 8 177 2 517 0
corporate acquisitions acquisitions 64 3 2 7 67 0
disposals and retirements 49 2 49 2
exchange differences 2 4 9 4 11 9
balance carried fwd
31 dec 2009 352 4 170 5 523 0
balance brought fwd 1 jan 2010 352 4 170 5 523 0
corporate acquisitions 32 1 6 6 38 7
acquisitions 34 7 0 1 34 8
disposals and retirements 212 4 6 3 218 6
exchange differences 8 0 6 4 1 6
balance carried fwd
31 dec 2010 198 8 177 4 376 2
depreciation and impairment
balance brought fwd 1 jan 2009 172 0 6 4 178 4
corporate acquisitions depreciation during the year 47 4 4 3 51 7
disposals and retirements 38 2 38 2
exchange differences 1 5 0 4 1 9
balance carried fwd
31 dec 2009 179 7 10 3 190 0
balance brought fwd 1 jan 2010 179 7 10 3 190 0
corporate acquisitions 19 8 1 6 21 4
depreciation during the year 36 5 4 2 40 8
disposals and retirements 161 3 1 3 162 6
exchange differences 6 6 0 5 6 1
balance carried fwd
31 dec 2010 68 1 15 4 83 5
carrying amounts
per 1 jan 2009 167 8 170 8 338 6
per 31 dec 2009 172 8 160 2 332 9
per 1 jan 2010 172 8 160 2 332 9
per 31 dec 2010 130 7 162 0 292 7
group
finance leases
equipment held under finance leasing agreements is included in the group at
the carrying amount of sek 11 0 million 2009 sek 33 2 million the differ-
ence between the years is attributable chiefly to the sale of åf-kontroll current and non-current liabilities in the consolidated balance sheet include
future payments in respect of leasing obligations entered as liabilities see
also note 19 liabilities to credit institutions” parent
equipment tools fixtures and fittings
acquisition costs
balance brought fwd 1 jan 2009 88 2
acquisitions 9 9
disposals and retirements balance carried fwd 31 dec 2009 98 1
balance brought fwd 1 jan 2010 98 1
acquisitions 6 8
disposals and retirements balance carried fwd 31 dec 2010 104 9
depreciation
balance brought fwd 1 jan 2009 31 7
depreciation during the year 8 9
disposals and retirements balance carried fwd 31 dec 2009 40 6
balance brought fwd 1 jan 2010 40 6
depreciation during the year 8 9
disposals and retirements
balance carried fwd 31 dec 2010 49 5
carrying amounts
per 1 jan 2009 56 5
per 31 dec 2009 57 5
per 1 jan 2010 57 5
per 31 dec 2010 55 4
a n n u a l r e p o r t n o t e s
1 0 2
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
the total earnings profit assets and liabilities of associates are specified in the tables below
associates 2010 country earnings profit assets liabilities equity ownership åf-incepal s a spain 25 4 0 1 27 5 15 5 12 0 47
associates 2009 country earnings profit assets liabilities equity ownership åf-tüv nord ab sweden 42 3 3 9 15 0 7 6 7 4 50
åf-incepal s a spain 29 5 0 2 36 8 21 8 15 1 47
ndt training center ab sweden 15 5 0 8 7 9 3 6 4 2 33
87 4 4 9 59 7 33 0 26 7
15 participations in associates
group parent
2010 2009 2010 2009
carrying amount at start of year 12 4 13 4 8 0 0 6
acquisition of associates 7 3
sale of associates 3 4 0 4 0 6 participations in the results of associates after tax 1 2 1 1 6 dividend received 4 2 1 9 translation difference 1 1 0 3 carrying amount at end of year 5 9 12 4 7 3 8 0
1 the gain as a result of the sale of åf-tüv nord totalled sek 31 0 million the overall result with regard to associates was sek 33 1 million 2009 sek 1 6 million 1 0 3
å f a n n u a l r e p o r t 2 0 10
16 financial investments
group 2010 2009
financial assets that are non-current assets
unlisted shares and participations 0 7 0 8
tenant-owner property holdings 0 4
0 7 1 2
specification of changes in carrying amounts for the year
group 2010 2009
carrying amount brought forward 1 2 1 3
disposals impairments 0 4 0 1
translation difference 0 1 0 0
carrying amount carried forward 0 7 1 2
17 prepaid expenses
group parent
2010 2009 2010 2009
rent 33 4 25 9 26 4 22 0
support and maintenance
contracts 2 5 4 3 0 6 0 7
other 37 5 28 8 14 1 8 8
73 4 59 0 41 1 31 5
a n n u a l r e p o r t n o t e s
1 0 4
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
group
the total number of shares as at 31 december 2010 comprised 1 608 876
class a shares 10 votes per share and 32 450 126 class b shares 1 vote per
share holders of ordinary shares are entitled to dividends which are deter-
mined in due course all shares have the same right to the company’s remain-
ing net assets as a result of the share buy-back authorised by the annual gen-
eral meeting åf ab held 284 000 of the company’s own class b shares on 31
december 2010 these shares do not participate in dividends the dividends
paid out during 2010 and 2009 totalled sek 135 1 million sek 4 00 per share and sek 110 2 million sek 3 25 per share respectively at the annual general
meeting on 2 may 2011 a dividend in respect of financial year 2010 of sek
4 00 per share will be proposed equivalent to a total pay-out of sek 135 1 mil-
lion the proposed dividend has not been recognised in these financial reports the quota value of the share for 2010 is sek 5 2009 sek 5 a 2 1 share split
was implemented in june 2010 the comparative figures have been adjusted reserves
group
translation
reserve
hedging
reserve
total
reserves
balance brought forward as at 1 jan 2009 178 9 0 3 179 1
exchange differences for the year 56 4 56 4
cash flow hedges 0 4 0 4
tax 0 1 0 1
balance carried forward as at 31 dec 2009 122 4 122 4
balance brought forward as at 1 jan 2010 122 4 122 4
exchange differences for the year 42 2 42 2
cash flow hedges 2 1 2 1
tax 0 4 0 4
balance carried forward as at 31 dec 2010 80 2 1 7 81 9
other contributed capital
this refers to equity which has been contributed by the shareholders it includes
premium reserve transferred to statutory reserve as at 31 december 2005 transfers to the premium reserve on and after 1 january 2006 are also recog-
nised as contributed capital translation reserve
the translation reserve includes all exchange differences arising on the transla-
tion of financial reports from foreign operations with a functional currency other
than the group’s presentation currency the presentation currency for both the
parent and the group is the swedish krona sek hedging reserve
the hedging reserve includes the effective portion of the accumulated net
changes of fair value of a cash-flow hedging instrument attributable to hedging
transactions which have not yet taken place pensions
pensions include actuarial gains and losses and the employer’s contribution on
these which are recognised in other comprehensive income profits brought forward including net profit for the year
profits brought forward including net profit for the year include profits earned
by the parent and its subsidiaries and associates previous transfers to the
statutory reserve excluding premium reserve transferred are included in this
equity item parent
restricted reserves
restricted reserves must not be reduced through dividends statutory reserve
the purpose of the statutory reserve is to block a portion of net profits which
are not to be used to cover losses brought forward with effect from 2006 it
is no longer obligatory to make transfers to the statutory reserve non-restricted equity
fair value reserve
the fair value reserve includes the effective proportion of the accumulated net
changes in fair value of a cash-flow hedging instrument attributable to hedging
transactions which have not yet been entered into premium reserve
when shares are issued at a premium i e when shareholders pay more than
the quota value of the shares an amount equivalent to the amount received in
excess of the quota value of the shares is transferred to the premium reserve premium reserves attributable to transactions before 1 january 2006 have
been transferred to the statutory reserve premium reserves which arise after
that date are recognised as non-restricted equity profits brought forward
these constitute non-restricted equity from previous years after any transfer
to reserves and after the payment of any dividends along with net profit for
the year and any reserve for fair value these constitute total non-restricted
equity i e the amount available for dividends to shareholders 18 equity
1 0 5
å f a n n u a l r e p o r t 2 0 10
19 liabilities to credit institutions
the note includes information on the company’s contractual terms in respect
of interest-bearing liabilities conditions and amortisation periods
group interest rate nom amount
in original
currency
carrying
amount due year fair value
long-term bank loans
spain eur variable interest 3 4 0 1 0 6 2013 0 6
0 6 0 6
short-term bank loans
norway nok variable interest 4 5 0 5 0 5 2011 0 5
switzerland chf fixed interest 3 3 2 0 14 5 2011 14 4
switzerland chf variable interest 0 9 4 0 28 9 2011 28 9
switzerland chf variable interest 0 6 3 0 21 7 2011 21 7
spain eur variable interest 2 9 1 1 10 3 2011 10 3
sweden sek variable interest 3 1 41 8 41 8 2011 41 8
sweden sek variable interest 1 9 50 0 50 0 2011 50 0
sweden sek variable interest 1 9 50 0 50 0 2011 50 0
czech republic czk fixed interest 13 2 0 6 0 1 2011 0 1
czech republic czk fixed interest 15 1 0 4 0 1 2011 0 1
218 0 217 9
for bank loans taken out by the parent in all sek 100 million the following specific obligations apply net debt equity ratio may not exceed 4 5 times the interest coverage ratio may not fall below 2 5 times the equity assets ratio may not fall below 25 percent finance leasing liabilities
finance leasing liabilities fall due for payment as shown in the table below 2010 2009
group
minimum
leasing fees interest
principal
amount
minimum
leasing fees interest
principal
amount
within 1 year 6 3 0 2 6 1 9 7 0 4 9 3
1 5 years 6 0 0 1 5 9 26 1 0 3 25 8
12 3 0 3 12 0 35 8 0 6 35 1
for more information on the company’s interest rate risk and exchange rate
risk please refer to note 25 group
non-current liabilities 2010 2009
bank loans 0 6 13 9
finance leasing liabilities 5 9 25 8
6 5 39 7
current liabilities
short-term bank loans 218 0 280 1
current portion of finance leasing liabilities 6 1 9 3
224 1 289 4
parent
non-current liabilities 2010 2009
bank loans 1 100 0 211 6
100 0 211 6
1 current liabilities have a maturity of between 3 and 12 months from the end of the
reporting period åf ab has credit facilities totalling sek 950 million a n n u a l r e p o r t n o t e s
1 0 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
20 retirement benefit obligations
group
defined-benefit plans 2010 2009
present value of funded obligations 713 9 678 2
fair value of plan assets 713 1 681 2
0 8 3 0
present value of unfunded obligations 62 0 62 4
net recognised in respect of
defined-benefit plans 62 8 59 4
recognised as assets 3 0
recognised as liabilities 62 8 62 4
net 62 8 59 4
defined-benefit plans exist in sweden switzerland and finland changes in the fair value of plan assets
during the year 2010 2009
at start of year 681 2 333 4
assets acquired 227 6
expected return 23 7 13 1
payments made 36 5 97 4
payments disbursed 67 1 20 3
actuarial gains and losses recognised in other comprehensive income 12 2 48 4
exchange differences 26 6 18 5
at close of year 713 1 681 2
changes in present value of obligations
during the year 2010 2009
at start of year 740 6 437 2
liabilities assumed 227 6
payments made 22 9 84 3
payments disbursed 70 3 23 2
actuarial gains and losses recognised in other comprehensive income 16 5 4 2
cost recognised in profit or loss 38 9 30 7
exchange differences 27 3 20 4
at close of year 775 9 740 6
actuarial gains and losses recognised
in other comprehensive income 2010 2009
recognised in other comprehensive income
as at 1 january 4 7 50 6
recognised during the year 4 3 44 2
exchange differences 0 0 1 7
recognised in other comprehensive
income as at 31 december 9 0 4 7
expenses in equity 2010 2009
outcome-based adjustments to pension liability 0 7 0 2
outcome-based adjustments to plan assets 12 2 48 4
effects of changes in actuarial assumptions 15 8 4 0
actuarial gains and losses for the year net 4 3 44 2
special employer’s contribution in respect of
actuarial gains and losses 0 1 0 1
total cost income for defined-benefit
payments recognised in equity 4 4 44 1
cost recognised in profit or loss 2010 2009
current service cost 15 5 15 3
expected yield 23 7 13 1
interest expense for the obligation 23 4 15 4
total net cost in the income statement 15 2 17 6
the current service cost is included in the income statement under the heading
personnel costs anticipated returns and interest expense on the obligation is
recognised under net financial items the cost of defined-benefit plans for 2011
is expected to be on a par with the cost recognised in 2010 å f a n n u a l r e p o r t 2 0 10
1 0 7
note 20 cont’d
assumptions for defined-benefit obligations
the most significant actuarial assumptions as at the end of the reporting
period sweden 2010 2009
discount rate as at 31 december 3 9 4 0
future increase in retirement benefits 2 0 2 0
annual increase in paid-up policies 2 0 2 0
anticipated remaining period of service in years switzerland 2010 2009
discount rate as at 31 december 2 80 3 25
expected return on plan assets 4 84 3 66
future increase in retirement benefits 0 0 0 0
future increases in salaries 1 0 1 0
expected remaining period of service years 8 6 8 7
for some of the group’s employees the obligations in respect of retirement
pension and family pension for salaried staff in sweden are secured through
insurance with alecta according to a statement from the swedish financial
reporting board ufr 3 this is a defined-benefit multi-employer plan for finan-
cial year 2010 the company has not had access to the information required to
recognise this plan as a defined-benefit plan the itp supplementary pensions
plan for salaried employees’ retirement benefits that is secured through insur-
ance with alecta is therefore recognised as a defined-contribution plan contributions during the year for retirement benefit insurance with alecta
amounted to sek 103 3 million 2009 sek 103 3 million alecta’s surplus
may be allocated to the insurance policy holder and or the insured at the
close of 2010 alecta’s surplus in the form of the collective funding ratio was
146 percent 2009 141 percent the collective funding ratio is the market
value of alecta’s assets as a percentage of the insurance obligations calcu-
lated in accordance with alecta’s actuarial calculation assumptions which are
not in conformity with ias 19 parent
defined-benefit plans 2010 2009
present value of unfunded obligations 1 26 2 27 1
net recognised in respect of defined-benefit
plans 26 2 27 1
of which covered by a credit insurance through
fpg pri 26 2 27 1
1 in accordance with swedish principles for calculating pensions obligations change in obligations during the year 2010 2009
net present value of pension obligations
at start of year 27 1 27 2
cost excluding interest expense charged to profit 0 2 0 7
interest expense 1 3 1 1
pensions paid 2 0 1 8
net present value of pension obligations
at end of year 26 2 27 1
expense recognised in profit or loss 2010 2009
revaluation of bonus supplement 0 8
other 0 2 0 2
interest expense on obligations 1 3 1 1
total net expense in the income statement 1 1 1 7
the discount rate for the parent’s pension obligations in 2010 is 3 8 percent 2009 3 8 percent defined-contribution plans
the group has defined-contribution plans in sweden and abroad contributions
to these plans are made continuously in accordance with the regulations for
each plan group parent
2010 2009 2010 2009
cost of defined-
contribution plans 218 3 227 3 9 5 9 3
of the group’s total expense for defined-contribution plans sek 103 3 million 2009 sek 103 3 million refers to the itp plan financed through alecta see above a n n u a l r e p o r t n o t e s
1 0 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
21 provisions
group
provisions which are non-current liabilities 2010 2009
provision for additional consideration 65 3 25 3
other 2 7 2 0
total 68 0 27 3
provisions which are current liabilities
restructuring costs 1 4 0 2
provision for additional consideration 11 9 9 7
other 0 3 20 9
total 13 6 30 7
total provisions 81 6 58 1
restructuring
carrying amount at start of period 0 2 4 0
transfers during reporting period 1 4 amount used during period 0 2 3 8
carrying amount at end of period 1 4 0 2
additional consideration
carrying amount at start of period 35 0 45 1
transfers during reporting period 64 1 6 0
released during the period 2 1 amount used during period 9 5 16 1
amount reversed in the income statement 2 3 disposals during the period 8 0 carrying amount at the end of the period 77 2 35 0
removal costs
carrying amount at start of period 0 5
amount used during period 0 5
carrying amount at end of period other provisions
carrying amount at start of period 22 9 25 0
transfers during reporting period 1 4 6 0
amount used during period 19 4 0 7
amount reversed in the income statement 1 8 7 4
disposals during the period 0 1 carrying amount at end of period 3 0 22 9
group’s total provisions 2010 2009
total carrying amount at start of period 58 1 74 6
transfers during reporting period 66 9 12 0
released during the period 2 1 amount used during period 29 1 21 1
amount reversed in the income statement 4 1 7 4
disposals during the period 8 1 total carrying amount at the end of the period 81 6 58 1
parent
provisions 2010 2009
provisions for additional consideration 69 4 22 5
other 0 4 1 9
total 69 8 24 4
change in provisions
carrying amount at start of period 24 4 17 1
internally acquired additional consideration 16 5
transfers during reporting period 61 1 6 7
released during the period 4 4 amount used during period 10 9 0 5
amount reversed in the income statement 0 4 15 4
carrying amount at end of period 69 8 24 4
during the period 2007 to 2010 provisions were made for incentive programmes see also note 8 it is anticipated that non-current provisions will be settled within the next
three years 1 0 9
å f a n n u a l r e p o r t 2 0 10
22 taxes
recognised in the income statement
group
current tax 2010 2009
tax expense for the period 91 2 93 2
adjustment of tax attributable to previous years 3 2 2 8
deferred tax
deferred tax expense 7 0 5 6
total recognised tax expense in the group 80 9 101 6
parent
current tax 2010 2009
tax expense for the period 60 7 51 8
adjustment of tax attributable to previous years 0 1 tax in respect of group contributions paid received 67 1 62 1
deferred tax
deferred tax in respect of temporary differences 4 8
total recognised tax receipt expense in the
parent 6 3 5 5
reconciliation of effective tax
group 2010 2010 2009 2009
profit before tax 798 1 377 0
tax in accordance with current
tax rate for parent 26 30 209 9 26 30 99 1
effect of other tax rates for
foreign subsidiaries 0 45 3 6 1 73 6 5
non-deductible expenses 0 72 5 7 1 30 4 9
non-taxable income on sale of
business operations 16 11 128 6 0 54 2 0
non-taxable income other 0 06 0 5 0 10 0 4
effects of loss carry-forward
without corresponding capital-
isation of deferred tax 0 06 0 5 0 53 2 0
tax attributable to previous
years 0 41 3 2 0 74 2 8
other 0 09 0 8 0 46 1 8
recognised effective tax 10 14 80 9 26 96 101 6
reconciliation of effective tax
parent 2010 2010 2009 2009
profit loss before tax 757 6 17 6
tax in accordance with current
tax rate for the parent 26 30 199 2 26 30 4 6
non-deductible expenses 4 61 34 9 1 76 0 3
non-taxable income on sale of
group companies and associates 17 39 131 7 non-taxable income other 14 36 108 8 6 74 1 2
tax attributable to previous
years 0 01 0 1 recognised effective tax 0 83 6 3 31 28 5 5
recognised in the balance sheet
current tax assets net for the group amounted to sek 15 0 million net liability
of sek 16 7 million for 2009 the current tax asset for the parent was sek 12 1
million sek 13 6 million a n n u a l r e p o r t n o t e s
1 1 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
unrecognised deferred tax assets
deductible temporary differences and loss carry-forwards for tax purposes
for which deferred tax assets have not been recognised in the income state-
ment and balance sheets group 2010 2009
loss for tax purposes 25 4 21 5
25 4 21 5
deferred tax assets have not been recognised in respect of these losses for
tax purposes since it has not yet been deemed likely that the group will be
able to utilise them against future taxable profits the losses are attributable
to parts of the group’s norwegian german and russian operations deferred tax assets and tax liabilities
recognised deferred tax assets and tax liabilities
deferred tax assets and tax liabilities relate to the following deferred tax assets deferred tax liability net
group 2010 2009 2010 2009 2010 2009
non-current assets 0 2 0 4 22 3 16 5 22 0 16 1
current receivables and liabilities 4 6 3 0 4 7 0 2 0 1 2 9
provisions 6 4 6 2 4 6 7 2 1 9 0 9
untaxed reserves 15 5 10 7 15 5 10 7
loss carry-forwards 11 6 5 7 11 6 5 7
tax assets tax liabilities 22 8 15 4 47 0 34 4 24 2 19 0
set-off 1 1 4 5 1 1 4 5 tax assets tax liabilities net 21 7 10 9 45 9 30 0 24 2 19 0
note 22 cont’d
1 1 1
å f a n n u a l r e p o r t 2 0 10
23 accrued expenses and prepaid income
group parent
2010 2009 2010 2009
personnel-related liabilities 326 4 344 4 13 8 16 1
accrued expenses sub-consultants 24 1 19 8 0 2 other 28 9 46 4 10 0 8 0
379 4 410 6 24 0 24 1
change in deferred tax on temporary differences and loss carry-forwards
group
balance
1 january 2010
recognised in the
income statement
recognised in other
comprehensive income
acquisition disposal of
business operations
balance
31 december 2010
non-current assets 16 1 2 5 0 2 8 3 22 0
current receivables and liabilities 2 9 2 2 0 7 0 1
provisions 0 9 1 5 0 6 0 7 1 9
untaxed reserves 10 7 1 3 0 1 3 6 15 5
utilisation of loss carry-forwards 5 7 6 6 1 2 0 5 11 6 19 0 7 0 1 4 10 8 24 2
note 22 cont’d
a n n u a l r e p o r t n o t e s
1 1 2
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
24 financial assets and liabilities
fair value and carrying amount are reported in the balance sheet below group 2010 group 2009
derivatives
used in
hedge
accounting
financial
assets valued
at fair value
via income
statement
accounts
receivable
and loan
receivables
financial
liabilities
total
carrying
amount fair value
derivatives
used in
hedge
accounting
financial
assets valued
at fair value
via income
statement
accounts
receivable
and loan
receivables
financial
liabilities
total
carrying
amount fair value
financial investments 0 7 0 7 0 7 1 2 1 2 1 2
non-current receivables 18 5 18 5 18 5 2 7 2 7 2 7
accounts receivable 1 078 3 1 078 3 1 078 3 881 8 881 8 881 8
income generated but not invoiced 370 8 370 8 370 8 457 1 457 1 457 1
currency derivatives level 2 2 2 2 2 2 2 cash and cash equivalents 327 9 327 9 327 9 344 7 344 7 344 7
total 2 2 0 7 1 795 4 1 798 4 1 798 4 1 2 1 686 2 1 687 3 1 687 3
non-current liability to credit
institution 6 5 6 5 6 5 39 7 39 7 39 3
other non-current liabilities 1 3 1 3 1 3 1 6 1 6 1 6
current liability to credit institution 224 1 224 1 224 0 289 4 289 4 289 2
accounts payable trade 293 5 293 5 293 5 264 9 264 9 264 9
accrued liabilities subcontractors 24 1 24 1 24 1 19 8 19 8 19 8
total 549 5 549 5 549 4 615 5 615 5 614 9
parent 2010 parent 2009
derivatives
used in
hedge
accounting
financial
assets valued
at fair value
via income
statement
accounts
receivable
and loan
receivables
financial
liabilities
total
carrying
amount fair value
derivatives
used in
hedge
accounting
financial
assets valued
at fair value
via income
statement
accounts
receivable
and loan
receivables
financial
liabilities
total
carrying
amount fair value
accounts receivable 48 5 48 5 48 5 34 3 34 3 34 3
cash and bank 53 7 53 7 53 7 3 9 3 9 3 9
total 102 2 102 2 102 2 38 2 38 2 38 2
current liability to credit institution 100 0 100 0 100 0 211 6 211 6 211 6
accounts payable trade 72 3 72 3 72 3 56 4 56 4 56 4
total 172 3 172 3 172 3 267 9 267 9 267 9
1 1 3
å f a n n u a l r e p o r t 2 0 10
ageing analysis of receivables overdue but not impaired
group parent
2010 2009 2010 2009 30 days 66 4 68 3 30 90 days 16 5 54 6 0 1
91 180 days 14 6 31 0 0 1 0 1 180 days 46 2 52 1 0 2 total 143 6 205 9 0 3 0 2
the group has well established routines for keeping tied-up capital and credit risks within appropriate limits change in doubtful receivables
group parent
provision for doubtful receivables 2010 2009 2010 2009
provision at start of year 15 6 20 0 provision for probable losses 6 9 8 5 realised losses 4 7 10 3 recovered losses 3 8 3 0 disposals of business operations 0 8 exchange rate differences 0 6 0 4 provision at end of year 12 7 15 6 derivative instruments
forward contracts are valued at recoverable amount in accordance with level
2 i e fair value determined using directly observable market inputs either
direct such as price or indirect derived from price and which are not
included in level 1 fair value determined on the basis of quoted prices for
similar instruments on active markets non-current liabilities
non-current liabilities are valued by adding to the loan the discounted interest
rate difference between the agreed loan interest rate and the market rate up
to maturity for equivalent loans calculation of fair value
fair value agrees in all essentials with recognised value except in the case of
certain fixed-interest non-current liabilities to credit institutions see note 19 the following provides a summary of the main methods and assumptions
used to determine the fair value of the group’s financial instruments securities
fair value is based on the quoted market price at the end of the reporting
period less transaction costs note 24 cont’d
a n n u a l r e p o r t n o t e s
1 1 4
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
25 financial risks and financial policy
the group’s overall risk management policy is intended to reduce financial
risks to a level which is reasonable for åf ab the aim is to ensure cost-effec-
tive financing while minimising the negative effects of market fluctuations on
the group’s earnings derivative instruments are used to hedge some risk
exposure the group’s risk management is handled centrally by the parent’s account-
ing and reporting department on the basis of policies adopted by the board of
directors the accounting and reporting department identifies evaluates and
hedges financial risks in close collaboration with the group’s operating units the group is exposed to many different kinds of financial risk through its
operations including exchange rate risk interest rate risk credit risk and
financing risk exchange rate risk
exchange rate risk covers future business transactions recognised assets
and liabilities in foreign currency and net investments in foreign operations exchange rate risk is relatively limited in the åf group loans are raised and investments made in the functional currency translation exposure
translation exposure consists of the net assets and profit loss of foreign sub-
sidiaries in foreign currency in line with group policy åf does not hedge trans-
lation exposure transaction exposure
exchange rate risks are relatively limited as most payments are made in the
functional currency where this is not the case any large sums are hedged
using derivatives the group classifies the forward contracts used for hedging
forecast transactions as cash flow hedges the fair value of such forward
contracts amounted to sek 2 2 million 2009 sek 0 and is reported in the
balance sheet under the heading other receivables 2010 2009
receivables
carrying
amount
fair
value
carrying
amount
fair
value
foreign exchange contract eur 2 2 2 2 total 2 2 2 2 interest rate risk
in accordance with åf policy the group’s cash and cash equivalents are
deposited in bank accounts at local banks there are no other material inter-
est-bearing assets and so income and cash flows from operating activities
are essentially independent of changes in market interest rates liabilities to credit institutions consist largely of bank loans at floating inter-
est rates but since indebtedness is not very great the exposure to changes in
market interest rates is not significant information about the terms of the
loans annual rates and maturity structure is provided in note 19 credit risk
credit risk is a result of the company having at all times a substantial number
of outstanding trade receivables as well as fees earned but not invoiced in
other words the credit granted to clients this risk is limited through the
group’s well-established principles for ensuring that sales are made to clients
with an appropriate payment history and through advance payments åf’s ten
largest clients who together account for 23 percent of the group’s invoiced
sales are all large listed companies with good credit ratings or government
institutions there is therefore not deemed to be any significant credit risk
with regard to any single major client counterparties for derivative contracts
and cash transactions are limited to financial institutions with a high credit rat-
ing historically åf has suffered only very limited credit losses financing risk
financing risk is the risk of not being able to obtain financing at all or only at a
greatly inflated price for åf prudent management of financing risk means
having adequate cash and cash equivalents and committed credit lines åf ab
has credit facilities totalling sek 950 million sensitivity analysis
interest rate
93 percent of the group’s total borrowings at the close of the reporting period
comprise loans at floating interest rates a change of 1 percent in the
annual average interest rate on these loans affects interest expense by sek 2 0 million foreign currency
26 percent of the group’s earnings arise from foreign units with 8 percent deriv-
ing from units which have the euro eur as their functional currency and 5 per-
cent with the swiss franc chf as the local currency a change of sek 0 25
in the average exchange rate for the euro in 2010 would have affected pre-tax
earnings by sek 0 6 million and a change of sek 0 25 in the average
exchange rate for chf in 2009 would have affected pre-tax earnings by sek
0 5 million 1 1 5
å f a n n u a l r e p o r t 2 0 10
26 operating leases
leasing agreements where the company is the lessee
operating leases cover rental agreements for properties leasing agreements
for vehicles under which employees assume all the financial risks and benefits
associated with the vehicles and the lease of certain items of office equip-
ment vehicles are generally leased for three years the outstanding leasing stock is worth approximately sek 44 million 2009 sek 36 million non-revocable leasing payments
group parent
2010 2009 2010 2009
within one year 207 2 129 3 132 2 92 1
1 5 years 560 0 403 1 414 7 298 9
more than 5 years 421 4 438 6 406 2 430 4
total 1 188 5 970 9 953 1 821 4
leasing payments during the year
group parent
2010 2009 2010 2009
premises 143 1 120 8 105 0 87 0
other 21 5 20 4 0 2 0 3
total 164 6 141 2 105 2 87 4
27 pledged assets contingent liabilities and
contingent assets
group parent
2010 2009 2010 2009
pledged assets
in the form of pledged assets
for the group’s own liabilities
and provisions
property mortgages 71 1 69 3 floating charges 55 6 42 1 blocked bank accounts 0 2 pledged assets other 259 6 0 2 total pledged assets 386 3 111 7 contingent liabilities
guarantees fpg pri 1 1 1 1 0 5 0 5
sureties given for the benefit
of subsidiaries 70 1 145 9
sureties given 117 6 353 0 44 3 91 2
total contingent liabilities 118 6 354 0 114 9 237 6
28 transactions with related parties
the parent has a related party relationship with its subsidiaries see note 29 summary of related party transactions
group
the term related parties” in the group refers to ångpanneföreningen’s foun-
dation for research & development and associates transactions with these
parties have taken place on market terms related party relationships
year
sale of
services
to related
parties
purchase
of services
from related
parties
liabilities
to related
parties 31 dec receivables
from related
parties 31 dec
associates 2010 4 1 0 5 associates 2009 12 7 3 7 ångpanneföreningen’s
foundation for r&d 2010 0 5 ångpanneföreningen’s
foundation for r&d 2009 0 5 during 2010 in addition to the above the group received grants from ångpanne-
föreningen’s foundation for research & development amounting to sek 3 7
million 2009 sek 3 9 million these grants were for projects administered
by the group for details of remuneration to senior executives please see note 8 a n n u a l r e p o r t n o t e s
note 27 cont’d
pledged assets other refers primarily to shares in subsidiaries which have been
pledged for one of the companies acquired by åf the pledge was restored at
the beginning of 2011 when the loan covered by the pledge was paid off sureties refer primarily to performance guarantees for tenders and the
completion of projects contingent assets
the group does not anticipate that any contingent assets will arise parent
related party relationships
year
sale of
services
to related
parties
purchase
of services
from related
parties
liabilities
to related
parties 31 dec receivables
from related
parties 31 dec
subsidiaries 2010 298 4 16 1 311 4 276 3
subsidiaries 2009 287 2 8 6 555 8 194 8
associates 2010 1 3 0 1
associates 2009 1 1 0 1
ångpanneföreningen’s
foundation for r&d 2010 0 1 ångpanneföreningen’s
foundation for r&d 2009 0 2 1 1 6
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
29 group subsidiaries
companies owned directly by the parent 2010 2009
corporate id reg’d office
number of
shares
interest percent 1 carrying
amount
interest percent 1 carrying
amount
ab ångpanneföreningen 556158-1249 stockholm 2 000 100 0 2 100 0 2
energo ab 556551-7355 stockholm 1 000 100 259 7 af-meacont s r o 453 06 605 prague 2 100 78 2 mercados energy markets international investments sl b-854 82 883 madrid 12 763 100 69 4 åf-consult ab 556101-7384 stockholm 50 000 100 39 8 100 171 4
åf-industry ab 556224-8012 stockholm 2 000 100 544 2 100 516 2
åf-funktionspartner ab 556099-8071 malmö 4 000 100 0 6 100 0 6
åf-infrastructure ab 556185-2103 stockholm 1 000 100 318 5 100 303 5
åf-kontroll ab 556033-5977 stockholm 100 73 9
åf-technology ab 556092-4044 stockholm 60 000 100 71 5 100 71 5
åf-teknik & miljö ab 556534-7423 stockholm 3 076 100 10 5 100 10 5
åf-brasil consultoria em processos industrias ltda 08 164 752 0001-08 curitiba 1 0 0
åf a s 21 007 994 copenhagen 99 300 100 37 6 100 37 6
åf-hansen & henneberg a s 13 59 08 85 copenhagen 533 300 80 32 2 80 32 2
åf-automatikka oü 11 297 301 tallinn 1 100 8 9 100 8 9
åf-consult oy fi18001896 vantaa 1 000 000 100 264 6 100 264 6
åf-engineering oy fi07255030 tampere 30 100 26 5 100 26 5
åf norge as 955 021 037 oslo 20 000 100 37 7 100 28 5
åf norge holding as 995 567 768 oslo 2 000 100 2 4 åf-engineering as 936 097 367 oslo 136 615 100 36 1 100 30 4
af-colenco ag ch-400 3 924 101-4 baden 6 000 100 418 7 100 431 5
åf-engineering s r o 263 66 550 plzen 20 000 100 10 6 100 10 6
åf-qualitest s r o 474 72 448 prague 10 0 0
zao af lonas 1 089 847 318 923 st petersburg 100 100 88 9 100 91 0
2 356 8 2 109 5
1 participating interest refers to both the voting share and the proportion of the total number of shares specification of the change in carrying amounts during the year parent
2010 2009
carrying amount brought forward 2 109 5 1 018 5
acquisitions 411 1 964 4
sales 73 9 0 0
revaluations 411 4
impairment 1 131 6 411 4
correction of additional consideration 16 2 shareholders’ contributions 57 9 126 7
value carried forward 2 356 8 2 109 5
1 impairment relates to shares in åf-consult ab the shares have been valued at net worth after the company transferred its
business operation to other companies within the group and paid a dividend of sek 325 million to åf ab 1 1 7
å f a n n u a l r e p o r t 2 0 10
note 29 cont’d
comprehensive list of group subsidiaries 2010 2009
corporate id reg’d office
number of
shares
interest percent 1 carrying
amount
interest percent 1 carrying
amount
ab ångpanneföreningen 556158-1249 sweden 2 000 100 0 2 100 0 2
energo ab 556551-7355 sweden 1 000 100 259 7 energo installation mitt ab 556277-0684 sweden 100 energo installation syd ab 556215-2024 sweden 100 energo konsult ab 556536-7918 sweden 100 af-meacont s r o 453 06 605 czech rep 2 100 78 2 af-regula a s 264 20 961 czech rep 100 todo spol s r o 470 51 604 czech rep 100 mercados energy markets international investments sl b-854 82 883 spain 12 763 100 69 4 mercados energy markets international s a a-82316902 spain 100 mercados energy markets international europe s r l 066222200967 italy 100 mercados epu danismanlik ltd 6160390509 turkey 100 mercados energy markets india private limited aafcm5128dst001 india 100 åf-teknik & miljö ab 556534-7423 sweden 3 076 100 10 5 100 10 5
åf brasil consultoria em processos industrias ltda 08 164 752 0001-08 brazil 1 0 0
åf-qualitest s r o 474 72 448 czech rep 10 0 0
åf-consult ab 556101-7384 sweden 50 000 100 39 8 100 171 4
åf brasil consultoria em processos industrias ltda 08 164 752 0001-08 brazil 99 åf-process gmbh 218 403 818 germany 100 90 åf-process b v 9157996 netherlands 100 zao af lonas 1 089 847 318 923 russia 100 100 88 9 100 91 0
zao lonas technologia 1 037 808 021 228 russia 75 75 llc lonas technologia ukraine 15 851 020 000 006 500 ukraine 100 100 too af lonas technologia kazakhstan 620200351121 kazakhstan 100 xo af lonas technologia turkmenistan 102621002900 turkmenistan 100 af-colenco ag ch-400 3 924 101-4 switzerland 6 000 100 418 7 100 431 5
international power design ltd ch-400 3 025 445-4 switzerland 100 100 colenco engineering s r l 17669779 romania 51 51 af-colenco italia s r l mi-1808529 italy 100 100 af-colenco thailand ltd 3011879733 thailand 100 100 af-consult india pvt ltd u74140dl2009ftc197507 india 100 åf-consult oy fi18001896 finland 1 000 000 100 264 6 100 264 6
llc af-enprima 1037800096641 russia 100 100 af-estivo as 10 449 422 estonia 100 100 uab af-enprima 300 544 325 lithuania 100 100 uab af-tsp 135 744 077 lithuania 100 100 elron oy fi21206454 finland 50 50 elron eastern europe oy fi21856262 finland 75 75 enprima engineering oy fi04779402 finland 100 100 enprima engineering gmbh 24 388 00843 germany 100 fortum engineering s r l r10224145 romania 100 1 participating interest refers to both the voting share and the proportion of the total number of shares a n n u a l r e p o r t n o t e s
1 1 8
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t n o t e s
note 29 cont’d
30 untaxed reserves
parent
accumulated depreciation in excess of plan 2010 2009
opening balance 1 january 25 8 12 5
depreciation during the year equipment & fittings 2 7 13 2
closing balance 31 december 28 4 25 8
comprehensive list of group subsidiaries 2010 2009
corporate id reg’d office
number of
shares
interest percent 1 carrying
amount
interest percent 1 carrying
amount
åf-industry ab 556224-8012 sweden 2 000 100 544 2 100 516 2
platom ab 556575-2101 sweden 100 orbitec ab 556470-7015 sweden 100 100 åf a s 21 007 994 denmark 99 300 100 37 6 100 37 6
åf-automaatika oü 11 297 301 estonia 1 100 8 9 100 8 9
åf-engineering as 936 097 367 norway 136 615 100 36 1 100 30 4
åf-engineering oy fi07255030 finland 30 100 26 5 100 26 5
åf-engineering s r o 263 66 550 czech rep 20 000 100 10 6 100 10 6
åf-funktionspartner ab 556099-8071 sweden 4 000 100 0 6 100 0 6
åf-infrastructure ab 556185-2103 sweden 1 000 100 318 5 100 303 5
nordblads vvs-konstruktioner ab 556460-5797 sweden 100 åf-berg bygg konsult röshoff ab 556471-5976 sweden 100 vvs energi i borås ab 556449-1842 sweden 100 ingakvib ab 556067-5067 sweden 100 100 åf norge as 955 021 037 norway 20 000 100 37 7 100 28 5
åf norge holding as 995 567 768 norway 2 000 100 2 4 åf-hansen & henneberg a s 13 59 08 85 denmark 533 300 80 32 2 80 32 2
åf-technology ab 556092-4044 sweden 60 000 100 71 5 100 71 5
åf-kontroll ab 556033-5977 sweden 100 73 9
åf-kontroll as 994 141 457 norway 100 åf-qualitest s r o 474 72 448 czech rep 90 uab af-inspection 301 845 573 lithuania 100 2 356 8 2 109 5
1 participating interest refers to both the voting share and the proportion of the total number of shares 1 1 9
å f a n n u a l r e p o r t 2 0 10
33 critical estimates and assumptions
key sources of estimation uncertainty
the group makes estimates and assumptions about the future by definition the resulting accounting estimates will rarely correspond to the actual out-
come estimates and judgements are reviewed regularly and are based on his-
torical experience and other factors including the expected outcomes of
future events that are considered reasonable under the circumstances estimates and assumptions which if they prove to be incorrect can result
in material adjustments to the carrying amounts of assets and liabilities during
the coming financial year are presented below 34 information about the parent
åf ab is registered in sweden as a joint-stock company the parent’s shares are
listed on the nasdaq omx stock exchange in stockholm the postal address to
the company’s head office is åf ab se-169 99 stockholm sweden the group consolidated accounts for the financial year 2010 comprise the
accounts for the parent and its subsidiaries which together form the group” the group also includes participations in associates 31 statement of cash flows
interest paid and dividends received
group parent
2010 2009 2010 2009
dividends received 415 0 1 7
interest received 5 5 4 1 1 6 7 8
interest paid 10 1 14 7 6 2 11 0 4 5 10 7 410 5 1 5
adjustment for items not included in cash flow
group parent
2010 2009 2010 2009
depreciation amortisation 50 8 61 6 10 5 9 3
impairment retirements 1 4 1 9 131 6 loss on disposal of business
operations 488 9 7 3 500 8 other 19 6 7 3 1 6 15 9 456 3 49 0 360 2 6 7
acquisition of financial assets in the parent sek 608 million 2009 sek 885 million refers to the consideration and additional consideration paid
for shares in group companies and associates as well as shareholders’ con-
tribution disposal of financial assets in the parent sek 575 million 0 refers
to the sale of åf-kontroll ab and åf-tüv nord ab 32 events after the end of the reporting period
no significant events have occurred since the end of the reporting period impairment of goodwill
when calculating the recoverable amount of cash-generating units a number
of assumptions about future circumstances and estimates of parameters have
been made changes to these assumptions and estimates could have an effect
on the carrying amount of goodwill see note 13 forecasts used in respect of future cash flows are based on the forecast
made by senior management for the next year supplemented by an individual
assessment of a further four years from that point onwards the calculation is
based on an annual growth rate of 2 percent the forecast cash flows have
been discounted to present value at an average discount rate of 13 percent 2009 11 percent before tax the impairment test for the year did not give rise to any impairment a lower assumed rate of growth would result in a lower recoverable amount the reverse applies if the calculation of the recoverable amount is based on a
higher assumed growth rate were future cash flows to be discounted at a
higher rate of interest the recoverable amount would be lower conversely the recoverable amount would be higher with a lower discount rate retirement benefit obligations
the group’s net obligations under defined-benefit plans are calculated sepa-
rately for each plan by estimating the future benefits earned by employees
through their employment in prior periods these benefits are discounted to
present value the calculation of the size of the group’s total retirement benefit
obligations is based on a number of assumptions see note 20 the discount
rate is the market yield at the end of the reporting period on government bonds
with a maturity corresponding to that of the group’s estimated average retire-
ment benefit obligations the discount rate used is 3 9 percent in sweden and
2 8 percent in switzerland the calculations have been performed by a qualified
actuary using the projected unit credit method were a lower discount rate to be
used the obligations would increase and have a negative effect on the group’s
equity the reverse applies if a higher discount rate is used determination of final cost forecast and stage of completion of contracts
the percentage of completion method is applied to all assignments whose out-
come can be measured reliably the majority of assignments are performed on
an open-account basis and clients are normally invoiced the month after the
work is carried out where assignments are carried out on a fixed-price basis revenue is recognised in profit or loss on the basis of the stage of completion at
the end of the reporting period the stage of completion is determined by having
an assignment manager make an assessment of the amount of work that has
been completed in relation to the amount of work still remaining in the event of
significant uncertainty about its value no revenue is recognised note 33 cont’d
a n n u a l r e p o r t n o t e s
1 2 0
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t
the undersigned declare that the consolidated accounts and annual report have been drawn up in accordance
with ifrs as approved by the eu and with generally accepted accounting practice to give a faithful representation of the position
and performance of the group and the company and that the group administration report and the administration report
give a faithful review of the progress of the group’s and the company’s operations position and performance as well as
describing the material risks and uncertainty factors to which the companies that are members of the group are exposed stockholm sweden 11 march 2011
ulf dinkelspiel jonas wiström patrik enblad
chairman of the board president ceo director
eva-lotta kraft björn o nilsson jon risfelt
director director director
helena skåntorp anders snell lena treschow torell
director director deputy chair
fredrik sundin patrik tillack
employee representative employee representative
our audit report was presented on 11 march 2011
ernst & young ab
lars träff
authorised public accountant
1 2 1
å f a n n u a l r e p o r t 2 0 10
a n n u a l r e p o r t
stockholm sweden 11 march 2011
ernst & young ab
lars träff
authorised public accountant
to the annual meeting of the shareholders of åf ab
corporate identity number 556120-6474
we have audited the annual accounts the consolidated accounts the
accounting records and the administration of the board of directors
and the managing director of åf ab for the financial year 2010 the
annual accounts and the consolidated accounts of the company are
included in the printed version of this document on pages 66 120 the board of directors and the managing director are responsible for
these accounts and the administration of the company as well as for
the application of the swedish annual accounts act when preparing
the annual accounts and the application of international financial
reporting standards ifrss as adopted by the eu and the swedish
annual accounts act when preparing the consolidated accounts our responsibility is to express an opinion on the annual accounts the consolidated accounts and the administration based on our audit we conducted our audit in accordance with generally accepted
auditing standards in sweden those standards require that we plan
and perform the audit to obtain reasonable assurance that the annual
accounts and the consolidated accounts are free of material mis-
statement an audit includes examining on a test basis evidence
supporting the amounts and disclosures in the accounts an audit
also includes assessing the accounting principles used and their
application by the board of directors and the managing director and
significant estimates made by the board of directors and the manag-
ing director when preparing the annual accounts and consolidated
accounts as well as evaluating the overall presentation of information
in the annual accounts and the consolidated accounts as a basis for
our opinion concerning discharge from liability we examined signifi-
cant decisions actions taken and circumstances of the company in
order to be able to determine the liability if any to the company of
any board member or the managing director we also examined
whether any board member or the managing director has in any other
way acted in contravention of the swedish companies act the swed-
ish annual accounts act or the articles of association we believe that
our audit provides a reasonable basis for our opinion set out below the annual accounts have been prepared in accordance with the
swedish annual accounts act and give a true and fair view of the
company’s financial position and results of operations in accordance
with generally accepted accounting principles in sweden the con-
solidated accounts have been prepared in accordance with the inter-
national financial reporting standards ifrss as adopted by the eu and
the swedish annual accounts act and give a true and fair view of the
group’s financial position and results of operations the statutory
administration report is consistent with the other parts of the annual
accounts and the consolidated accounts we recommend to the annual meeting of shareholders that the
income statements and balance sheets of the parent company and
the income statement and balance sheets for the group be adopted that the profit of the parent company be dealt with in accordance with
the proposal in the administration report and that the members of
the board of directors and the managing director be discharged from
liability for the financial year audit report
å f a n n u a l r e p o r t 2 0 10
c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e at å f
ulf dinkelspiel chairman of the board of åf shares his views on corporate governance
and on some of the important issues facing
the board in the near future can you outline how corporate governance works at åf the bigger a company is the more important corporate governance
becomes it’s about creating the right kind of interaction between the
board executive management middle managers and staff in gen-
eral the tasks of the board are to formulate a corporate strategy to
check that the company is meeting its targets and to make sure that
the organisation as a whole works well as a team with well-defined
decision processes a clear division of responsibility and effective
control mechanisms and all this has to be done without getting
bogged down in the details the work of the board is governed by the rules for listed companies
in sweden but also by åf’s own internal regulatory framework and
the guidelines for growth and profitability that have been drawn up
for the current five-year period in practice the board works hard to continuously improve the
effectiveness of its routines and working methods in order to be able
to devote as much time as possible to important strategic discus-
sions the decision to delegate certain tasks to the audit and remu-
neration committees is part of this process the relationship between the board and the president is funda-
mental to the success of these efforts so i always attach great
importance to giving priority to issues that the president is currently
dealing with a board of directors should function both as a control-
ling body and as a sounding board for ideas that come from within
the organisation ”
what are the main issues facing the board in 2011 we need to support management and the organisation as a whole so that åf can capitalise on the upswing in the economy that began
towards the end of 2010 and that we hope will continue we also need
to make sure that the organisation is flexible enough to react to any
unexpected turn of events growth is another key issue we have ambitious expansion plans
and over time åf must grow organically as much as it does by taking
over other companies that means that issues relating to acquisi-
tions will continue to have a prominent place in the work of the board
in 2011 another issue that is the focus of great interest from the board is
sustainability in its widest possible sense åf has set itself tough tar-
gets for sustainable performance that affect not only the company’s
own actions but even more so the services and consulting advice
that we offer our clients these are issues that are directly linked to
åf’s long-term profitability and value creation for shareholders and
clients alike ”
ulf dinkelspiel
chairman of the board of directors
corporate governance at åf
1 2 2
1 2 3
corporate governance report
corporate governance
åf ab is a swedish public company with its registered office in stock-
holm the company’s class b shares are listed on the nasdaq omx
stockholm exchange åf is governed in accordance with the com-
pany’s articles of association the swedish companies act the swedish
annual accounts act the listing rules for the nasdaq omx stockholm the swedish code of corporate governance and other relevant docu-
ments åf did not depart from the swedish code of corporate govern-
ance in 2010 this corporate governance report has been reviewed by
the company’s auditor governance management and control are divided between the share-
holders at the agm the board of directors and the president ceo the articles of association adopted by the agm are the most impor-
tant instrument for the company’s internal governance followed by the
board’s formal work plan and the board’s instructions for the president ceo åf has regularly introduced and developed other processes and
control systems to ensure effective and profitable growth åf’s major shareholders
ångpanneföreningen’s foundation for research & development holds
shares that correspond to a total of 40 9 percent of the total number of
votes for all shares in the company for further information on share-
holders and the åf share please see pages 46 48 and the åf website åf’s annual general meeting for 2010
the agm for 2010 was held at the åf group’s head office in solna swe-
den on 5 may it was attended by 138 shareholders representing 48 2
percent of the share capital and 63 6 percent of the total number of votes resolutions
the agm resolved among other things to pay a dividend for 2009 of sek 4 00 per share adjusted for the
share split that took place during the year in accordance with the
proposal of the board of directors to pay fees totalling sek 1 625 000 to the board with the chairman
to receive sek 400 000 and members of the board not employed by
the group to receive sek 175 000 each moreover it was resolved
that fees shall be paid for work in the audit committee with the
chair of the committee receiving sek 75 000 and other members of
the committee who are not employed by the group receiving sek
35 000 each and also that fees shall be paid for work in the remu-
neration committee with the chair of the committee receiving sek
50 000 and other members of the committee receiving sek 35 000
each auditors’ fees are payable against invoices to elect a board of eight directors ulf dinkelspiel patrik enblad eva-lotta kraft jon risfelt helena skåntorp anders snell and lena
treschow torell were re-elected while björn o nilsson was elected
as a new member ulf dinkelspiel was appointed chairman president ceo
group functions and processes
internal control
industry
division
energy
division
board of directors
shareholders
through general meeting
audit committee
remuneration committee
infrastructure
division
technology
division
senior management
nomination
committee
auditors
the principal external regulatory framework that shapes the governance of åf the swedish companies act accounting legislation ifrs the swedish bookkeeping act and the swedish annual
accounts act nasdaq omx stockholm rules & regulations swedish code of corporate governance
examples of internal documents that shape the governance of åf articles of association instructions rules of procedure policies and guidelines process descriptions for each business area
shareholders
the shareholders’ right to decide in matters relating to the company is exercised at the
general meeting of shareholders which is the highest decision-making body in åf the
general meeting ratifies the company’s articles of association votes on the appointment
of the directors of the company and the chairman of the board and elects auditors c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e r e p o r t
1 2 4
å f a n n u a l r e p o r t 2 0 10
c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e r e p o r t to adopt the performance-related share programme for 2010 in
accordance with the proposal of the board of directors to implement a share split in accordance with the proposal made
by the board so that one share be replaced by two shares to authorise the board to buy back shares so that the company’s
own holding amounts to a maximum of 10 percent of the shares in
the company to authorise the board to decide on the issue of new shares that
correspond to an increase of a maximum of sek 15 000 000 in the
company’s share capital the minutes of the agm are available in both swedish and english on
the åf website nomination committee
in accordance with a resolution passed at the agm on 5 may 2010 the
nomination committee shall up until the time of the 2011 agm consist
of the chairman of the board together with representatives for at least
three and at most five of the shareholders with the largest number of
votes in the company the names of the members of the committee
shall be announced no later than six months before the 2011 agm the nomination committee appointed on 25 october 2010 com-
prised staffan westlin chair representing ångpanneföreningen’s
foundation for research & development ulf dinkelspiel chairman of
the board of åf åsa nisell appointed by swedbank robur and peter
rudman appointed by nordea fonder in january the nomination com-
mittee was extended to include a further member conny karlsson who was appointed by capman public market fund the duties of the nomination committee
the nomination committee submits proposals prior to the agm on
the number of board members the composition and remuneration of
the board and any fees payable for committee work the committee
shall also submit proposals on who is to chair the board of directors
and the agm and on auditors and their fees in accordance with its
remit the committee shall also carry out those duties assigned to it
under the swedish code of corporate governance the work of the nomination committee
in the period up to and including february 2011 the committee has
held six minuted meetings and maintained contact between meetings to assess how well the present board of directors meets the demands
that will be placed on the board in consequence of the company’s posi-
tion and future focus the committee has discussed the size and com-
position of the board in relation to for example experience in the
industry and specialist expertise as a basis for the committee’s work the chairman of the board has informed the committee about the work
of the board during the year and of the work undertaken by the audit
committee and the remuneration committee the nomination com-
mittee has also familiarised itself with the results of the evaluation of the
board and its work and interviewed individual members of the board no remuneration has been paid for work on the committee all shareholders are entitled to approach the committee with sug-
gestions for board members the committee’s proposals the report
on the committee’s work prior to the 2011 agm and supplementary
information on the proposed members of the board will be published in
connection with the notice convening the 2011 agm and will be pre-
sented at the meeting board of directors
the board of directors of åf shall consist of a minimum of six and a
maximum of ten members with a maximum of five deputies appointed
by the agm the 2010 agm appointed eight directors with no deputies the president ceo of åf is not a member of the board the company’s
employees are however represented on the board björn o nilsson was elected as a new director of the company in
2010 tor ericsson did not seek re-election ulf dinkelspiel patrik
enblad eva-lotta kraft jon risfelt helena skåntorp anders snell and
lena treschow torell were re-elected ulf dinkelspiel was elected by
the agm to serve as chairman of the board up until the next agm the
board elected lena treschow torell as its deputy chair the president ceo of åf jonas wiström is not a member but participates in board
meetings to present reports the group’s cfo jonas ågrup also par-
ticipates to present reports viktor svensson executive vice president corporate information serves as secretary to the board for more
information on the board of directors please refer to pages 128 129 independence of members of the board
the composition of the board of åf meets the requirements for inde-
pendent directors laid down by the rules of the nasdaq omx stockholm
and the swedish code of corporate governance directors björn o nilsson and anders snell hold positions of dependence with regard
to the largest shareholder ångpanneföreningen’s foundation for
research & development work of the board of directors
each year the board produces a written formal work plan which sets
out the responsibilities of the board and which governs the allocation
of duties among board members the rules for decision-making dates
and times of board meetings notification agenda and minutes for board
meetings and the board’s work with accounting and auditing matters the åf board holds an inaugural meeting immediately after the agm after which it is required to meet at least four times per calendar year every ordinary board meeting follows the agenda set out in the board’s
formal work plan which includes a report from the president ceo financial reports and various strategic matters the board has opted to appoint a remuneration committee and an
audit committee 1 2 5
å f a n n u a l r e p o r t 2 0 10
work during the year
because of a high level of activity in the company relating to acquisi-
tions in 2010 the work of the board has been unusually intensive with
more board meetings than what is normal during the year in addition
to the inaugural meeting the board held 18 meetings in 2010 of which
one was a per capsulam meeting and six were telephone meetings for
which the relevant documentation was sent out in advance four of the
meetings were held in connection with the publication of the com-
pany’s interim reports in connection with the board meeting in sep-
tember a visit was made to åf’s subsidiary in oslo the work of the board revolves mostly around strategic issues busi-
ness plans budgeting accounts and acquisitions in addition to other
decisions which under the company’s rules for decision-making are
dealt with by the board reports on the progress of the company’s oper-
ational activities and finances are a standing item on the agenda a strat-
egy seminar was held at the meeting in september and included a
thorough review of each division at every ordinary board meeting there is a more in-depth presentation of one of åf’s lines of business
or divisions on one occasion each year the board discusses issues related to
succession planning for senior executives within the company attendance at board committee meetings in 2010
function board
remuner-
ation-
cttee
audit
cttee
number of meetings 19 2 4
ulf dinkelspiel c 19 2 4
patrik enblad m 19
tor ericson m 8
eva-lotta kraft m 19 3
björn o nilsson m 12
jon risfelt m 19 2
helena skåntorp m 18 4
anders snell m 18
lena treschow torell m 16 2
employee representatives fredrik sundin m 17
patrik tillack m 19
patrik kerttu d 1
anders toll d 2 elected to the board on 5 may 2010 resigned from the board on 5 may 2010 employee representatives’ deputies normally attend
only the inaugural meeting of the board
c = chair m = board member d = deputy
evaluation of the board of directors and president ceo
once a year the chairman of the board initiates an evaluation of the
work of the board by issuing each director with a detailed question-
naire which is answered anonymously the questionnaire covers areas
such as the climate of cooperation the breadth of expertise available
and the manner in which the work of the board has been carried out the object of the evaluation is to obtain an understanding of the direc-
tors’ opinions on how the work of the board has been carried out and
what measures may be taken to improve the efficiency of this work the results of the questionnaire are discussed by the board and com-
municated to the nomination committee the board of directors evaluates the work of the president ceo on
an ongoing basis by monitoring the progress of the business against
the targets that have been set a formal evaluation is carried out once
a year and the results are discussed with the president ceo remuneration committee
the remuneration committee is tasked with considering and making
recommendations on salaries other terms of employment and incen-
tive programmes for the president ceo and other senior executives in
the company the committee also deals with matters relating to overall
conditions of employment and remuneration packages for all of the
company’s employees the committee reports to the board prior to
the 2011 agm the committee has met on two occasions the commit-
tee consists of ulf dinkelspiel chair jon risfelt and lena treschow
torell the president ceo attends as a co-opted member as does the
cfo and åf’s director for human resources remuneration has been
paid for work on the committee audit committee
the audit committee is a vital communications link between the board
and the company’s auditors supporting the work of the board by safe-
guarding the quality of financial reports and following up the results of
the reviews and audits carried out by the external auditors the com-
pany’s internal audit staff support the committee in its work since the
2010 agm the committee has consisted of helena skåntorp chair ulf dinkelspiel and eva-lotta kraft all members are independent of
the owners and the company’s management the committee held four
minuted meetings in 2010 the company’s auditor has attended all
meetings of the committee the president ceo attends as a co-opted
member as does the cfo and the manager responsible for the åf
group’s financial reporting the company’s internal auditor has attended
two meetings during the year remuneration has been paid for work on
the committee c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e r e p o r t
1 2 6
å f a n n u a l r e p o r t 2 0 10
auditors
the nomination committee is tasked with proposing auditors to the
agm the auditors work for and on behalf of the shareholders to audit
the company’s accounting records the annual accounts and the admin-
istration of the board of directors and the president ceo the 2007
agm appointed the accounting firm ernst & young ab represented by
lars träff as auditor in charge as the company’s auditors to serve to
the end of the agm in 2011 ernst & young carries out the audit of åf ab and major units within
the åf group the auditors carry out a hard close” after the nine-month
report for the period january september and a full audit of the annual
accounts at the same time an audit of internal routines and control
systems is carried out together with an examination of the group’s cor-
porate governance report and of the compliance with the guidelines
approved by the agm relating to remuneration to senior executives ceo and senior management
the board of directors has delegated operational responsibility for the
administration of the company and the group to the company’s ceo the ceo leads operations within the framework laid down by the board the board has adopted instructions for the division of responsibility be-
tween the board and the ceo which are updated and approved each year the ceo has appointed a senior management group with day-to-day
responsibility for various aspects of the group’s operation during 2010
åf’s senior management group consisted of the ceo the divisional
presidents the cfo the director for human resources the general
counsel the executive vice president for corporate information and
the pa to the president who serves as secretary to the senior manage-
ment group for further information about the members of the senior
management group please see pages 130 131 åf’s senior management group normally meets once a month to
discuss matters such as the group’s financial performance acquisi-
tions group-wide development projects succession planning and
competence development together with various other strategic
issues eleven minuted meetings were held during 2010 once a month the ceo and the cfo discuss each division’s income
statement balance sheet and key figures with the relevant divisional
management team and conduct a status review of any major projects the board’s description of internal controls
the board’s responsibility for internal controls is regulated in the swe-
dish companies act and the swedish code of corporate governance which set out requirements for annual external disclosures on how
internal controls over financial reporting are organised board members must keep themselves informed about the state of
affairs in the company and evaluate the internal control system on a
regular basis internal controls at åf are designed to ensure that the company’s
operations are efficient and fit for purpose that financial reporting is
reliable and that applicable laws and regulations are complied with åf divides its internal controls over financial reporting into the fol-
lowing components control environment risk assessment control
activities information and communication and follow-up control environment
the control environment constitutes the basis for internal controls
over financial reporting one important aspect of the control environ-
ment is that decision paths authority and responsibility are clearly
defined and communicated between different levels of the organisa-
tion and that there are guidance documents in the form of policies guidelines and manuals the term control environment” describes the
organisation decision paths authority and responsibility for financial
reporting a description of åf’s internal control system is included in the com-
pany’s process-orientated business management system one used
for managing and supporting day-to-day business operations this
sets out the organisational structure together with the authority and
responsibility vested in the various roles in the business the process
orientation of the one management system guides users to the rele-
vant routines and appropriate tools for the particular task in question thus providing a sound basis for compliance with requirements and
expectations the management system is available to all employees
via the åf intranet risk assessment
åf’s risk assessment in respect of financial reporting aims to identify
and evaluate the key risks affecting financial reporting in the af group’s
companies business areas divisions and processes risk assessment
results in control targets that help to ensure that the fundamental
requirements of external financial reporting are met and provide a
basis for managing risk through a variety of control structures the
risks are considered assessed and reported by åf centrally together
with the divisions risks are also considered in specific constellations for example risks associated with fixed-price projects and acquisitions control activities
in order to ensure that the business is run efficiently and that the
scheduled financial reports consistently provide a true and fair view of
the situation each process has a number of built-in control activities these involve all levels of the organisation from the board and man-
agement to other employees control activities aim to prevent detect
and rectify any errors and non-conformance risks are accepted reduced or eliminated at åf these control activities comprise two
elements an organisation with clearly defined roles that facilitate an
c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e r e p o r t
1 2 7
å f a n n u a l r e p o r t 2 0 10
effective and from an internal control perspective appropriate divi-
sion of responsibility and specific activities that aim to identify or
prevent the risk of reporting errors for all åf units including those
outside sweden result analysis and other control activities take place
continuously through the finance functions of the various divisions and
åf ab’s group accounting and reporting department all accounting
and reporting activities for åf’s swedish operations are centralised
under åf business services åbs in solna where the processes have
been standardised and are continuously being made more robust control activities at åbs include profit analyses and other controls
in respect of revenue and receivables payments non-current assets work in progress wages and salaries vat tax book-keeping con-
solidation and reporting as well as the maintenance of databases information & communication
information about and communication relating to policies process
descriptions routines and tools applicable to financial reports are con-
tained in the management system that is available to the relevant per-
sonnel via the åf intranet updates are carried out in the event of any
changes in internal or external requirements or expectations with regard
to financial reports the åf group uses a process where divisional
management confirms compliance with group policies each year communication with internal and external parties is governed by a
communication and ir policy which sets out guidelines for the form
this should take the policy aims to ensure that all disclosure obliga-
tions are met properly and in full internal communication aims to
ensure that every employee understands åf’s values and business
activities information is actively communicated on an ongoing basis
through the group’s intranet in order to keep employees informed follow-up
compliance and the efficacy of internal controls are followed up on
an ongoing basis by both the board and management to guarantee the
quality of the processes the company’s financial situation and strat-
egy in respect of its financial position are considered at every board
meeting the board also receives detailed monthly reports on the
company’s financial position and the development of the business the audit committee fulfils an important function by guaranteeing
control activities for key risk areas in the financial reporting process the audit committee management and the internal audit function
regularly follow up any reported non-conformances åf’s system for financial management and control paves the way for
effective financial follow-ups throughout åf monthly reports are sub-
mitted for each profit centre and the reports on the financial perform-
ance of assignments reflect the highest standards of reliability and
detail any errors that are identified and any measures that are taken
are reported to the next level up in the line organisation åf’s internal
audit function carries out independent audits to monitor whether the
internal control and management systems live up to åf’s internal ambi-
tions and external requirements and expectations priority areas for
åf’s internal audits are the åf brand åf’s values and ethics processes
and systems as well as the assignments that åf has undertaken to
perform reports are submitted to the president ceo and the board’s
audit committee sustainable business development
åf is working strategically over the long term towards becoming a more
sustainable business a sustainability strategy forms an integral part
of the corporate governance environment and is followed up by both
the board of directors and by senior management a plan for åf’s
sustainability activities forms the basis for the company’s work in this
area the sustainability plan and the objectives that this plan lays down
are conceived to be profitable and otherwise beneficial from an environ-
mental social and economic perspective for further details about the
work that åf is engaged in with regard to sustainability please see
pages 51 56 stockholm sweden 11 march 2011
board of directors of åf ab
auditor’s report on the corporate governance report
to the annual general meeting of åf ab corporate identity number
556120-6474
it is the board of directors that is responsible for the corporate gov-
ernance report for the year 2010 and for ensuring that it has been
prepared in accordance with the swedish annual accounts act as a basis for our opinion that the corporate governance report
has been prepared and is consistent with the annual accounts and
the consolidated accounts we have read the report and assessed
its statutory content based on our knowledge of the company a corporate governance statement has been prepared and its
statutory content is consistent with the annual accounts and the
consolidated accounts stockholm sweden 11 march 2011
ernst & young ab
lars träff
authorised public accountant
c o r p o r at e g o v e r n a n c e c o r p o r at e g o v e r n a n c e r e p o r t
å f a n n u a l r e p o r t 2 0 10
board of directors
eva-lotta kraft
director of åf since 2002
born 1951
current position various directorships and other
positions
other directorships director of biotage ab boule diagnostics ab nibe industrier ab samhall
ab and siemens ab
professional experience strategy & marketing
manager at the swedish defence research agency foi divisional manager and vice president of
siemens-elema ab regional manager for alfa
laval ab
education m sc chemical engineering royal
swedish institute of technology kth mba
international entrepreneurship uppsala university
committee work member of åf audit committee
shares in åf 6 000
björn o nilsson
director of åf since 2010
born 1956
current position
professor president and member of the royal
swedish academy of engineering sciences iva associate professor at royal swedish institute of
technology kth other directorships deputy chair of åforsk director of bioinvent ab
professional experience
r&d manager amersham pharmacia biotech vice
president karo bio director for business and
technical development at biacore international
ab business development manager at biovitrum
education doctor of technology
shares in åf 0
jon risfelt
director of åf since 2007
born 1961
current position
various directorships and consultant advisor
other directorships chairman of the board of
ortivus ab c3 technologies ab and mawell oy director of bilia ab karobio ab teliasonera ab braganza as vanna ab ticket travel group ab ticket leisure travel ab and ticket business
travel ab
professional experience former leading mana-
gerial positions with ericsson sas american
express card & travel divisions nyman & schultz president europolitan and vodafone sweden president and gambro renal president education m sc chemical engineering royal
swedish institute of technology kth shares in åf 3 250
ulf dinkelspiel
chairman of the board since 2007
director of åf since 2004
born 1939
current position ambassador e öhman j or ab
other directorships chairman of the board
of landshypotek ab sveriges allmänna
hypoteksbank springtime ab the sweden in
europe foundation the association for swedes
worldwide and icc sverige director of nordnet
ab premiefinans ab and bockholmen hav och
restaurang ab member of the royal swedish
academy of engineering sciences iva
professional experience swedish ministry
for foreign affairs minister for europe minister for trade president swedish trade
council
education graduate business administrator stockholm school of economics
committee work chair of åf remuneration
committee member of åf audit committee
shares in åf 60 000
patrik enblad
director of åf since 2007
born 1966
current position ceo of newsec ab
other directorships director of orc
software neonet securities and the royal
swedish yacht club ksss professional experience president hq bank active in finance since 1986
education economics studies not completed at stockholm university
shares in åf 6 000
1 2 8 c o r p o r at e g o v e r n a n c e b o a r d o f d i r e c t o r s
å f a n n u a l r e p o r t 2 0 10
helena skåntorp
director of åf since 2002
born 1960
other directorships director of
mekonomen ab lernia ab and 2e group ab
professional experience president ceo of
sbc president ceo of jarowskij television
ab cfo of arla ab authorised public
accountant
education economics programme stockholm university
committee work chair of åf audit
committee
shares in åf 0
anders snell
director of åf since 2009
born 1950
current position active within billerud ab
other directorships chairman of the board
of åforsk director of wibax ab and the
swedish forest industries federation professional experience plant manager of
billerud gruvön and billerud skärblacka technical director with billerud ab and
assidomän ab
education m sc chemistry royal swedish
institute of technology kth shares in åf 0
lena treschow torell
director of åf since 2006
born 1946
current position professor at chalmers
university of technology chair of the
presiding committee of the royal swedish
academy of engineering sciences iva
other directorships chair of the foundation
for strategic environmental research mistra chair of euro-case an umbrella
organisation for europe’s national academies
of science and technology director of saab
ab micronic laser systems ab investor ab skf ab dagens industri ab and chalmers
university of technology foundation member
of the swedish government’s globalisation
council and the european commission’s
research advisory board erab
committee work member åf remuneration
committee
education ph d in physics university of
gothenburg research fellowship in physics chalmers university of technology
shares in åf 4 000
fredrik sundin
employee representative since 2009
born 1972
current position employed in åf’s
infrastructure division
professional experience signal processing
consultant wireless ticketing systems and
project management
education m sc engineering physics uppsala university
shares in åf 1 200
patrik tillack
employee representative since 2008
born 1967
current position employed in åf’s industry
division
professional experience electrical engi-
neer electrical design engineer and con-
tract project manager in industry and public
administration
education upper secondary school engi-
neering studies electrical engineering telecommunications shares in åf 32
1 2 9c o r p o r at e g o v e r n a n c e b o a r d o f d i r e c t o r s
1 3 0
å f a n n u a l r e p o r t 2 0 10
jacob landén
general counsel since 2008
member of senior management team since 2009
employed by åf since 2008 born 1965
professional experience legal profession
education ll b uppsala university
shares in åf 989
johan olsson
president technology division since 2005
member of senior management team since
2005
employed by åf since 2005 born 1956
directorships director of the swedish
federation of consulting engineers and
architects std professional experience president of hiq
skåne ab r&d manager for ericsson canada
education m sc royal swedish institute of
technology kth shares in åf 12 511
jonas wiström
president and ceo since 2002
employed by åf since 2002
born 1960
directorships etc director of procure it right
ab member of the royal swedish academy of
engineering sciences iva professional experience philips saab-scania
combitech ab president sun microsystems
sweden managing director northern europe silicon graphics president ceo prevas ab
education m sc royal swedish institute of
technology kth shares in åf 24 287
mats påhlsson
president infrastructure division since 2010
member of senior management team since 2010
employed by åf since 2009 born 1954
professional experience manager at skanska managing director of sweco vbb viak and sweco
vbb business area manager for åf infrastructure
planning
education m sc civil engineering luleå university of
technology
shares in åf 1 049
senior
management
eero auranne
president energy division since 2006
member of senior management team since 2006
employed by åf since 2006 born 1959
professional experience president fortum
service vice president fortum power and heat oy
education m sc helsinki university of technology
shares in åf 3 629
c o r p o r at e g o v e r n a n c e
1 3 1
å f a n n u a l r e p o r t 2 0 10
jonas ågrup
cfo since 2007
member of senior management team since 2007
employed by åf since 2007
born 1960
professional experience vice president finance
atlas copco tools & assembly systems cfo cardo
industrial doors vice president wm-data sweden
education graduate business administrator stockholm university
shares in åf 4 349
charlotte witt
director human resources since 2001
member of senior management team since 2009
employed by åf since 2001 born 1964
professional experience chief negotiator for almega the employer and trade organisation for the swedish
service sector ombudsman for jusek the swedish trade
union for graduates in the legal profession business
administration and economics education b a in economics örebro university
shares in åf 1 397
marie edman
pa to the president since 2010
member of senior management team since 2010
employed by åf since 2010 born 1953
professional experience pa to the president at proffice electrolux cleaning appliances and skandex
education managerial secretary studies at fridhemsplan
upper secondary school stockholm university pr &
business communication ihm business school
shares in åf 600
viktor svensson
executive vice president corporate information
since 2003
member of senior management team since 2003
employed by åf since 2003 born 1975
professional experience stock market reporter
with finanstidningen
education graduate business administrator karlskrona ronneby university college
shares in åf 7 307
per magnusson
president industry division since 2006
member of senior management team since 2006
employed by åf since 2006 born 1954
professional experience plant engineer at asea ab consultant rejlers ingenjörer ab consulting manager
j&w ab sigma ab managing director of benima ab
education electrical power engineering polhem
technical upper secondary school and advanced sup-
plementary courses in economics marketing and busi-
ness development kth executive school
shares in åf 2 575
1 3 2
å f a n n u a l r e p o r t 2 0 10
entitlement to attend
shareholders who wish to participate in the annual general meeting
must have their names entered in the shareholders’ register maintained
by euroclear sweden ab by tuesday 26 april 2011 at the latest and confirm their intention to participate to the company’s head office
by 16 00 4 00 pm on wednesday 27 april 2011 at the latest shareholders who have elected to use a nominee for their sharehold-
ing must temporarily re-register their shares in their own name if they
wish to exercise the right to participate in the annual general meet-
ing shareholders who wish to do this must inform their nominee of
their intention in good time before 26 april registration
notice of an intention to participate in the annual general meeting
may be made to åf ab
legal
se-169 99 stockholm sweden
or via the åf group website www afconsult com agm2011
please specify your name personal or corporate identity number address phone number and your registered shareholding the notifi-
cation of attendance must be accompanied by documentary proof of
entitlement to attend the meeting power of attorney registration
certificate etc the official call to attend the agm is published on the åf group
website www afconsult com
dividend
the board of directors proposes a dividend to shareholders of sek
4 00 per share it is proposed that thursday 5 may 2011 be made the
record day for the right to receive this dividend it is anticipated that
payment will be made via euroclear sweden on tuesday 10 may financial reporting schedule for 2011
interim report 3 months 2 may
interim report 6 months 14 july
interim report 9 months 17 october
åf’s annual capital market day will be held in september the annual report is published in a swedish and an english version
and sent to all shareholders who request a printed copy orders can
be placed via the website www afconsult com or over the phone downloadable pdf versions of the annual report and other financial
reports are available on the group’s website shareholders in åf ab publ are invited to the annual general meeting that will commence at
17 00 5 00 pm on monday 2 may 2011 at the company’s head office address frösundaleden 2 solna sweden annual general meeting
c o r p o r at e g o v e r n a n c e a n n u a l g e n e r a l m e e t i n g
th
is
is
åf
op
er
at
io
ns
an
nu
al
re
po
rt
co
rp
or
at
e
go
ve
rn
an
ce
66 administration report
70 consolidated income statement
71 statement of consolidated comprehensive income
72 consolidated balance sheet
74 statement of change in equity for group
75 statement of cash flows for group
76 parent income statement
77 statement of comprehensive income for parent
78 parent balance sheet
80 statement of change in equity for parent
81 statement of cash flows for parent
83 notes
121 audit report
22 energy
28 industry
34 infrastructure
40 technology
46 åf shares
50 sustainability is profitability
51 sustainability report
58 risk management and sensitivity analysis
63 definitions
64 five-year financial summary sek
65 five-year financial summary eur
1 the year at a glance
2 this is åf
4 a message from the president
6 mission vision strategies and objectives
9 olympic green advisor
11 market trends and business review
14 human resources
åf is continuously developing its consulting business
and its capacity to carry out its assignments in the
best possible way the ambition is clear to safe-
guard successful long-term sustainable develop-
ment for åf’s clients and for åf itself page 8
striving for profitability and wanting to make the
world a better place aren’t mutually exclusive quite the opposite in fact a sustainable company
is a long-term venture which lays the foundations
for good profitability over time page 50
in 2010 åf made a number of acquisitions in europe
in line with its strategy of becoming number one or
two in the markets where the company is active page 67
the board works to continuously improve the effec-
tiveness of its routines and working methods in order
to be able to devote as much time as possible to
important strategic discussions page 122
122 corporate governance at åf
123 corporate governance report
128 board of directors
130 senior management
132 annual general meeting
133 åf offices
the english version of the annual report of åf ab is a translation of the swedish original the swedish text is the binding version and shall prevail in the event of any discrepancies å f a n n u a l r e p o r t 2 0 1 0
1 3 3å f o f f i c e s
group head office
åf ab
visitor’s address frösundaleden 2 solna
post address se-169 99 stockholm sweden
tel 46 10 505 00 00
fax senior management 46 8 653 56 13
fax reception 46 10 505 00 10
for further information about addresses please see www afconsult com
sweden
alingsås
arboga
borlänge
borås
enköping
eskilstuna
falun
gällivare
gävle
gothenburg
halmstad
helsingborg
hässleholm
jönköping
kalmar
karlskoga
karlskrona
karlstad
kiruna
kristianstad
linköping
luleå
malmö
mora
norrköping
nynäshamn
oskarshamn
piteå
skara
skellefteå
skövde
sollefteå
stenungsund
stockholm
sundsvall
söderhamn
södertälje
tavelsjö
trollhättan
uddevalla
umeå
uppsala
varberg
västerås
växjö
åmål
örebro
örnsköldsvik
östersund
czech republic
brno
mêlnik
pardubice
plzen
prag
denmark
copenhagen
herlev
randers
kalundborg
estonia
narva
tallinn
viljandi
vöru
finland
tampere
vantaa
germany
hamburg
india
new delhi
indonesia
jakarta
italy
rome
kazakhstan
astana
lithuania
kaunas
vilnius
nigeria
garki abuja
norway
bodö
lilleström
oslo
sandefjord
moss
russia
moscow
st petersburg
yekaterinburg
scotland
edinburgh
south africa
durban
spain
madrid
san sebastian
switzerland
baden
thailand
bangkok
turkey
ankara
turkmenistan
aschabad
ukraine
kremenchuk
vietnam
hanoi
a110418-02
produced by solberg in collaboration with the åf group’s corporate
information and corporate finance departments printed by elanders photos peter bartholdsson and others translation ab språkman a brief historical summary
on 23 february 1895 södra sveriges ångpanneförening was created when a
number of steam generator owners in the south of sweden joined forces with
the aim of preventing accidents and making more efficient use of steam power in the 115 years that have elapsed since then åf has played a key role in the
industrial developments that have revolutionised society the company has guided its clients through four major technology changes steam electricity nuclear power and computerisation and remained at the fore-
front of technology both in the industrial era and in today’s information society ab ångpanneföreningen was first listed on the stockholm stock exchange
in january 1986 on 5 may 2008 ab ångpanneföreningen changed its name to
åf ab and today it is one of europe’s largest technical consulting companies åf offices
åf leading the way in technical consulting our work focuses on energy and the environment investments in infrastructure and projects for industry our base is in europe but our business and clients
extend right across the globe what makes us unique is our co-workers and the tech-
nical consulting industry’s greatest bank of experience it’s all summed up in our corporate motto åf innovation by experience ”
tel 46 10 505 00 00
www afconsult com
åf
an
n
ual
repo
rt
2010
annual report 2010