Höganäs Year-End Report 2011
Focus on cash flow and continued initiatives in the value chain through the launch of inductors
CEO Alrik Danielsson comments on fourth quarter earnings:
“Just as in 2010, in 2011 we achieved our long-term objectives for growth, operating margin and returns. During the autumn we were negatively affected by inventory adjustments made by our customers, which also caused us to reduce our inventories and cut our production rates. We did this to protect our strong cash flow, even if it is having a negative effect on earnings in the quarter.
The prospects for 2012 are uncertain, and Höganäs is being affected by fluctuations in the global economy, although as a company, we are in a strong position for our future. We are now launching inductors under the Höganäs brand Inductit™, which is another big step in Höganäs’ work in the value chain. These products are really promising, not least because of increased demand for environmentally friendly energy sources.”
Fourth quarter 2011 (compared to corresponding period of previous year)
- Net sales were MSEK 1,632 (1,612) in the quarter, up 1% year on year. Sales volumes were 3% lower. Demand conditions were better than in the corresponding period of the previous year in North America, but worse in most parts of the rest of the world. This is an effect of lower production rates and destocking by many customers. The negative effect of floods in Thailand is estimated at some 1,500 tons, or a 1.4% volume decrease for the group.
- Operating income was MSEK 212 (238) and income after tax was MSEK 152 (162) due to lower volumes and lower currency hedging earnings.
- Earnings per share before and after dilution for the quarter were SEK 4.37 (4.66).
- Cash flow from operating activities was MSEK 267 (193). Destocking enabled improved cash flow, despite somewhat lower operating income.
1 January – 31 December 2011 (compared to corresponding period of previous year)
- Net sales were MSEK 7,081 (6,671), 6% up on the previous year, with positive progress in all regions. Sales volumes were also 6% higher.
- Operating income was MSEK 1,071 (1,114) and income after tax MSEK 762 (804).
- Earnings per share before and after dilution were SEK 21.90 (23.11).
- Cash flow from operating activities was MSEK 803 (698).
- The Net debt/Equity ratio was at year-end 25% (24%).
- The Board of Directors proposes a cash dividend of SEK 10.00 per share (10.00).
- Prospects are unchanged since the assessment made in the Third-quarter Interim Report. Uncertainty regarding the immediate future is significant. It is uncertain how much the world's debt crisis will affect global industrial activity in 2012. However, underlying long-term demand conditions appear favourable, apart from southern Europe.
Höganäs, Sweden, 9 February 2012
Höganäs AB (publ)
Streamed press conference
Alrik Danielson, CEO and President, and Sven Lindskog, CFO, will present the Interim Report in a conference call at 10:30 a.m. on 9 February 2012.
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)8 505 598 12, +44 (0)207 108 6303 or +1 8666 765 870.
The presentation is available at www.hoganas.com.
This information is mandatory for Höganäs to publish pursuant to the Swedish Securities Markets Act. The information was submitted for publication at 9 a.m. on 9 February 2012.
For more information
Alrik Danielson, CEO and President, +46 (0)42 33 80 00
Sven Lindskog, Chief Financial Officer, +46 (0)42 33 80 00
Höganäs AB 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, and products for water and exhaust treatment products of the future in collaboration with its customers. Founded in 1797, the company had sales of MSEK 7,081 in 2011, and is quoted on NASDAQ OMX Stockholm's Mid Cap List.
For more information, visit our website: www.hoganas.com.