Höganäs Interim Report 1 January – 31 March 2013

Some recovery after weak conclusion to 2012 - continued cost focus and ongoing R&D initiatives

CEO’s comments - first quarter:

“The market remained fairly weak in Europe and several other regions in the first quarter, although good growth was reported from China. But comparisons of 2013 with the previous year across much of Asia are negatively affected by the recovery effects that favoured year-2012 sales after a 2011 that suffered from the tsunami and flooding. In the sequential recovery from the poor fourth quarter of 2012, we are endeavouring to safeguard our operating margins, and continuing to invest in our priority R&D segments.

The outlook is essentially unchanged compared to the assessment made in the Year-end Report of 6 February. We have a fundamentally positive view of South America and Asia. However, sales growth numbers in Asia in 2013 will be negatively affected by the recovery effect in 2012. In addition, the Indian economy is fairly weak, and Asian exporters will be affected by weak market conditions in Europe. We expect demand to improve in North America, but the rate of recovery may remain volatile. European market conditions were poor in the first quarter of 2013 due to declining domestic demand, and we do not think we see the prospects of this recovering rapidly.”

First quarter 2013 (compared to corresponding period of previous year)

  • Net sales were MSEK 1,577 (1,813), down 13% year on year. Sales volumes were 3% lower. Demand conditions were worse than the corresponding period of the previous year in most markets, apart from China and South America. But sequential volume expansion (compared to the preceding quarter) was good in Europe and the Americas, where the downturn was noticeable in the fourth quarter of 2012.
  • Operating income was MSEK 250 (283), and income after tax was MSEK 186 (204). Lower sales volumes had a negative impact on income, while savings measures and a continued focus on cost efficiency had a positive effect. Operating margin was 15.9% (15.6).
  • Earnings per share before and after dilution for the quarter were SEK 5.34 (5.86).
  • Cash flow from operating activities was MSEK 182 (324). Cash flow remained satisfactory, but due to very low sales in December and low inventory levels at the beginning of the year, there was some build-up of working capital in the quarter, which did not occur in the corresponding period of the previous year.
  • The net debt/equity ratio at the end of the period was 12%, against 16% at the beginning of the financial year.
  • Through jointly held company H Intressenter AB, Lindéngruppen AB and Foundation Asset Management Sweden AB (FAM) made a cash offering to shareholders to transfer all shares of Höganäs AB (publ) to
    H Intressenter AB at a price of SEK 320 per share, including dividend for the year. For more information, see page 7.

Alrik Danielson
CEO and President

Höganäs AB (publ)

Höganäs, Sweden, 24 April 2013

The information in this Report is mandatory for Höganäs AB (publ) to publish pursuant to the Swedish Securities Markets Act. This Report has not been reviewed by the company’s auditors. The information was submitted for publication at 9:00 a.m. on 24 April 2013.

For more information, please contact:

Alrik Danielson, CEO and President, +46 (0)42 33 80 00
Sven Lindskog, Chief Financial Officer, +46 (0)42 33 80 00

Streamed press conference

Alrik Danielson, CEO and President, and Sven Lindskog, Chief Financial Officer, will present this Report in a conference call at 10:30 a.m. on 24 April 2013.
The press conference will be streamed at: www.hoganas.com / Investor Relations / Conference Call. It is open to journalists, analysts and investors. Participants are welcome to call on +46 (0)8 519 99351, +44 (0)203 364 5373 or +1 8777 889 023.

Höganäs AB (publ) is the world’s leading producer of iron and metal powders. Building on its clear vision of the possibilities of powder to improve efficiency, the consumption of resources and environmental impact across a raft of segments, the company has developed in-depth application skills. Thus Höganäs can help create the automotive components, white goods, water and exhaust treatment products of the future in collaboration with its customers. Founded in 1797, the company had sales of MSEK 6,700 in 2012, and is quoted on NASDAQ OMX Stockholm’s Mid Cap List.
For more information, please visit our website: www.hoganas.com .

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