AFRY Q1 2026 Results: Strong Backlog Supports Recovery Despite Revenue Decline

AFRY AB reported a mixed first quarter of 2026, with lower sales and profit compared with last year, but a stronger order backlog and improved utilization offered signs that the Swedish engineering and consulting group is moving through its restructuring phase with more stability.

The company said its order backlog rose to SEK 21.5 billion at the end of the quarter, up from SEK 20.2 billion a year earlier. Net sales fell 6.3% to SEK 6.33 billion, while organic growth adjusted for calendar effects was negative 4.3%.

Profitability Improves on an Adjusted Margin Basis

AFRY’s adjusted EBITA came in at SEK 473 million, compared with SEK 490 million in the same period last year. Even though the amount declined, the adjusted EBITA margin improved to 7.5% from 7.3%, helped by better internal efficiency and a higher utilization rate.

Reported EBITA was SEK 426 million, down from SEK 459 million, with a margin of 6.7%. EBIT declined to SEK 391 million, while earnings per share slipped to SEK 2.12 from SEK 2.21.

Management Points to Efficiency Gains

During the earnings call, CEO Linda Pålsson said AFRY continued to execute its strategy and was approaching the end of a major restructuring phase. She highlighted the stronger backlog, improved utilization, and ongoing efficiency measures as important steps toward profitable growth.

The utilization rate improved to 72.2%, compared with 71.1% a year earlier. This means AFRY was able to make better use of its available workforce, an important factor for consulting and engineering firms where employee productivity directly affects margins.

Sales Pressure Remains a Key Challenge

Despite margin improvement, AFRY still faced pressure on revenue. The company said net sales were affected by negative currency effects, weaker market conditions in some segments, and capacity adjustments made during the past year.

Management also noted that global uncertainty remained high at the start of 2026. This continued to affect investment decisions among some clients, especially in markets where demand has been slower to recover.

Segment Performance Was Uneven

AFRY reported stronger performance in its Global division and in Energy & Industry, while Transportation and Places delivered weaker results. This shows that demand remains uneven across the company’s portfolio, with some areas benefiting from long-term industrial and energy-transition trends while others face softer market conditions.

Analyst Expectations Were Higher

Market data showed that AFRY’s adjusted EBITA missed analyst expectations. According to Marketscreener, adjusted EBITA of SEK 473 million was below the Bloomberg consensus estimate of SEK 504 million, while sales were also slightly below expectations.

Even so, the stronger order backlog may help support future revenue if projects convert as expected. For investors, the main question is whether AFRY can turn its backlog strength into faster sales growth while keeping margins on an improving path.

Outlook: Cautious but Constructive

AFRY’s Q1 2026 report suggests a company still facing market headwinds but making progress internally. Lower revenue and profit show that the recovery is not complete. However, the improved margin, stronger utilization, and larger backlog point to better operational control.

The company’s leadership remains confident that AFRY’s capabilities in engineering, project management, and advisory services position it well for future demand, especially in energy transition, industrial development, and resilient infrastructure.

Overall, AFRY’s first-quarter results were not a clear growth story, but they did show steady progress. The company is still dealing with weaker demand in some business areas, yet its efficiency measures and growing backlog give management a stronger base for the rest of 2026.

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