INTERIM REPORT JANUARY-SEPTEMBER 2008
MARGINS CONTINUE TO STRENGTHEN
• Operating income rose 13% to SEK 696 million (614)
• The operating profit after depreciation climbed SEK 22 million and amounted to SEK 41 million (19), giving an operating margin of 5.9% (3.0)
• The profit after tax was SEK 26 million (14)
• Earnings per share (EPS) was SEK 1.45 (0.68)
JANUARY - SEPTEMBER
• Operating income rose by 55% to SEK 2,478 million (1,601)
• The operating profit after depreciation climbed SEK 139 million and amounted to SEK 186 million (47), giving an operating margin of 7.5% (4.1)
• The profit after tax was SEK 119 million (45)
• Earnings per share (EPS) was SEK 6.62 (2.53)
INCOME AND RESULTS
Operating income rose by SEK 82 million over the quarter amounting to SEK 696 (614). There was no organic growth. The Informatic and Design & Development business areas saw an organic growth over the quarter of 11% and 6% respectively. The cutbacks made in Automotive R&D have meant negative organic growth of 4%.
During the quarter the operating profit after depreciation climbed SEK 22 million amounting to SEK 41 million (19), giving an operating margin of 5.9% (3.0). The improvement in the operating profit also includes lower pension costs due to a premium discount from Alecta of SEK 10 million.
Effects from Volvo Cars’ rationalization scheme from the summer has burdened the quarter’s results by around SEK 5 million. During the year Volvo Cars’ share of Group sales fell and amounted during Q3 to 15% (21% in 2007).
The profit after net financial items was SEK 37 million (10). Net financial items amounted to SEK -3 million (-8). The improvement in net financial items is due to lower net borrowing and a new credit agreement being signed in Q2, which has meant lower financing costs. The profit after tax was SEK 26 million (14). The EPS was SEK 1.45 (0.68).
JANUARY – SEPTEMBER
Operating income for the period climbed by SEK 877 and amounted to SEK 2,478 million (1,601). Organic growth was 7%.
During the period the operating profit after depreciation rose SEK 139 million amounting to SEK 186 million (47), giving an operating margin of 7.5% (4.1). Last year’s results were burdened with SEK 34 million in one-off costs. A pension premium discount from Alecta amounted to SEK 24 million.
The profit after net financial items was SEK 169 million (34). Net financial items amounted to SEK -17 million (-14). The profit after tax was SEK 119 million (45). The EPS was SEK 6.62 (2.53).
EVENTS DURING THE YEAR
- An extraordinary general meeting on 7 February 2008 decided to:
• appoint Hans-Erik Andersson as Chairman of the Board;
• introduce a long-term share savings scheme for the Group’s employees;
• introduce a convertible-based incentive scheme for a maximum 165 key people at the Semcon Group and in conjunction with this decided to take up a convertible debenture loan of a maximum SEK 50 million.
- With effect from 8 February 2008, Kjell Nilsson is the new president and CEO.
- Semcon signed an agreement to acquire the brand Projektema.
- At the AGM on 24 April Marianne Brismar, Jorma Halonen and Håkan Larsson were elected as new board members.
- Semcon AB’s share capital increased on 2 July 2008 by SEK 330,000 through a new share issue of 330,000 class C shares set aside for the share savings scheme.
- Activities in Germany, Brazil, the UK and India have changed name and are now marketed under the Semcon brand.
There is still a strong need for technical development services. The market’s demand to produce more products, models and versions at an ever-increasing rate benefits the company. With the exception of the announced cut-backs from Volvo Cars, demand remains good. There is still a recruitment need in certain markets and industries.
The outlook is however difficult to predict because of the market turmoil and the expected recession.
At the AGM on 24 April 2008 it was decided that the Chairman of the Board should summon a nominations committee, consisting of one representative from each of the three largest shareholders in terms of voting rights in the company on 30 August 2008. Until the next AGM the nominations committee will consist of: Christer Ericsson, from JCE Group; Erik Sjöström, from Skandia Liv, Kerstin Stenberg, from Swedbank Roburs fonder and the Chairman of the Board Hans-Erik Andersson.