INTERIM REPORT JANUARY–SEPTEMBER 2017
As previously communicated, the third quarter is weak in terms of earnings due to the vacation period and moreover one fewer working day compared with last year. During the quarter, we continued our move towards a more value-based offering and international deliveries, which provides Semcon with a favourable market position.
Our offering providing digital strategies and developing the next generation of smart, connected products has generated strong interest. During the year, Semcon has been entrusted to deliver digitisation strategies to new and existing customers in various industries that will result in products that are more attractive and user-friendly. The combination of our strategic excellence and long experience in product development, which we have obtained through collaboration with thousands of customers in a number of industries and countries, makes us an attractive and strategic partner.
Product information is essential for the user experience of a product and for our customers’ aftermarket. During the quarter, we expanded collaboration with a customer in the telecom industry that clearly sees the benefit of enhancing the quality, increasing digital distribution and streamlining the production of its product information. We are proud to see that we are a leading international
player in respect of optimising our customers’ aftermarket business.
Our user-focused product development is continuing to win awards and in August Semcon won the NES Award 2017. The campaign film for smart, connected products was also voted Sweden’s second best advertising film of 2017, won the Swedish Design Award and received international acclaim. In September, we also hosted the Born to Drive research project, which shows how cars can be driverlessly transported through the logistics chain. The project is a collaboration between technology companies, authorities, component manufacturers and Volvo Cars. Our customers also demonstrated their appreciation of Semcon as a supplier when Semcon was awarded the Stora Leverantörspriset in October.
Our main aim is to further strengthen margins by becoming an even more attractive employer, by improving productivity and cost-efficiency irrespective of business model and by accelerating our strategic shift with increased sales of Semcon’s concept offerings. Even though the fourth quarter also has one fewer working day, compared with last year, we expect a strong finish of 2017 in terms of earnings.
• Operating income amounted to SEK 367 million (383) and organic growth was -4 per cent
• Operating profit amounted to SEK 9 million (16), yielding an operating margin of 2.4 per cent (4.2)
• Profit after tax amounted to SEK 6 million (12)
• Earnings per share after dilution was SEK 0.35 (0.67)
• Operating income amounted to SEK 1,289 million (1,289) and organic growth was 0 per cent
• Operating profit amounted to SEK 59 million (63), yielding an operating margin of 4.5 per cent (4.9)
• Profit after tax amounted to SEK 44 million (47)
• Earnings per share after dilution was SEK 2.45 (2.59)
• The equity/assets ratio was 61 per cent (51)
Income and result
Operating income amounted to SEK 368 million (383). Adjusted for currency effects, acquisitions and divestments, income fell by 4 per cent. The quarter included one fewer working day compared with last year, accounting for around 2 per cent of the fall in income. Operating profit amounted to SEK 9 million (16), yielding an operating margin of 2.4 per cent (4.2). The calendar effect had a negative impact on earnings of about SEK 6 million compared with last year. Net financial items amounted to SEK - million (-), yielding profit before tax of SEK 9 million (16). Tax expense for the quarter amounted to SEK -2 million (-4). Profit after tax amounted to SEK 6 million (12) and earnings per share after dilution totalled SEK 0.35 (0.67).
Operating income amounted to SEK 1,289 million (1,289) and organic growth was 0 per cent. The period included one fewer working day compared with last year. New business in Product Information, to sectors such as telecommunications, has not been able to fully offset the reduced scope of the partnership with Jaguar Land Rover in the UK. Operating profit amounted to SEK 59 million (63), yielding an operating margin of 4.5 per cent (4.9). The calendar effect for the period had a negative impact on earnings of about SEK 6 million compared with last year. Engineering Services reported improved earnings while Product Information noted a deterioration. The preceding year included positive non-recurring items of SEK 7 million in Product Information’s earnings. Net financial items amounted to SEK -1 million (-1), yielding profit before tax of SEK 58 million (62). The tax expense for the period amounted to SEK -14 million (-15). Profit after tax amounted to SEK 44 million (47) and earnings per share after dilution totalled SEK 2.45 (2.59).
Operating cash flow from current activities was SEK 42 million (8). Investments in hardware, licenses, office supplies and equipment amounted to SEK 7 million (30). The Group’s cash and cash equivalents amounted to SEK 88 million (56), In addition, the Group had non-utilised credit of SEK 369 million (257) as of 30 September. Shareholders’ equity amounted to SEK 528 million (638) and the equity/assets ratio was 61 per cent (51). During the second quarter, a dividend of SEK 40 million (22) was paid to shareholders. The Group’s net cash (net debt) amounted to SEK 84 million (-133).
The head count on 30 September was 2,082 (2,036) and the number of employees in active service was 2,017 (1,914) In the respective business areas, the head count is as follows: Engineering Services 1,451 (1,455) and Product Information 631 (581).
This information is information that Semcon AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication at 13.00 CET on 27 October 2017.
Björn Strömberg, CFO, Semcon AB, +46 31-721 03 06
Semcon is an international technology company that develops products based on human needs and behaviours. We strengthen our customers’ competitiveness by always starting from the end user, because the person who knows most about the user’s needs creates the best products and the clearest benefits to humans. Semcon collaborates mainly with companies in the automotive, industry, energy and life science sectors. With more than 2000 specialised employees, Semcon has the ability to take care of the entire product development cycle, from strategy and technology development to design and product information. Semcon was founded in Sweden in 1980 and has offices in over 30 locations in eight different countries. In 2016, the Group reported annual sales of SEK 1.8 billion. Read more on semcon.com