INTERIM REPORT 1 January – 31 March 2011
-A robust start to 2011 and sustained high investment in research and development
CEO Alrik Danielsson comments on first quarter earnings:
-After a record 2010, Höganäs began 2011 with robust growth despite strong comparables from the first quarter 2010. 2010 came to a very strong conclusion on growth markets, while more mature markets were less robust. Consequently it is pleasing to note that Europe and North America largely led volume growth in the first quarter.
Operating margin improved compared to the fourth quarter 2010 and was very strong. Although the margin was even better in the corresponding period of the previous year, we benefitted from a significantly weaker Swedish krona at that time. Metal price inflation also dilutes our margin in percentage terms, even if it only has a limited impact on income in absolute terms.
The start to 2011 is also characterised by Höganäs’ sustained high investments in research and development, mainly in component solutions for new electromagnetic applications and in powder-based gear-wheels for gear boxes.
First quarter 2011 (compared to corresponding period of previous year)
- Net sales were MSEK 1,770 (1,548) in the quarter, up 14% year on year. Sales volumes were 11% higher. Demand conditions were better than in the corresponding period of the previous year in all regions and the sequential volume increase (compared to the preceding quarter) in Europe and America was very positive.
- Operating income was MSEK 282 (282) and income after tax was MSEK 208 (207). Higher sales volumes had a positive effect on income while a stronger SEK had a negative effect.
- Earnings per share before and after dilution for the quarter were SEK 5.97 (5.94).
- Cash flow from operating activities was MSEK 16 (94). Higher sales volumes led to an increased requirement for working capital and the positive income figure for 2010 implied a higher supplementary tax payment.
- The net debt/equity ratio was 24% at the end of the period, unchanged compared to the beginning of the financial year.
- The market is expected to remain strong in Asia and South America, while a gradual recovery is expected in North America. European market conditions remain hard to assess. In some countries, such as Germany, industry stands to make short-term gains from good economic growth and exports, while austerity measures are expected to hold back consumption in heavily indebted European nations.
Höganäs, Sweden, 27 April 2011
Höganäs AB (publ)
Streamed press conference
Alrik Danielson, CEO, and Sven Lindskog, CFO, will present the Interim Report in a conference call at 10:30 a.m. on 27 April 2011.
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 27 April 2011.
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 6,671 in 2010, and is quoted on NASDAQ OMX Stockholm's Mid Cap List.
For more information, visit our website: www.hoganas.com