SEMCON INTERIM REPORT JANUARY-JUNE 2018

Comment from CEO Markus Granlund:
I am impressed by the great commitment shown by my employees, who together with our customers make a difference for people around the world – every day. The value and benefits we provide to our customers and end users are also reflected in our financial results. We concluded the first six months of the year with a good second quarter during which we more than doubled our operating profit compared with the corresponding quarter in 2017.

More and more customers are discovering the potential to reduce their total costs and increase their competitiveness by establishing deeper partnerships with Semcon. We have signed a number of new framework agreements with customers during the quarter, including SKF, the Swedish Transport Administration, Siemens Industrial Turbomachinery, Essity, Stockholm County Council and Getinge, which provides us with a good position for the future.

The Engineering Services business area continued to significantly improve its profit. The earnings improvement is the result of higher productivity and cost efficiency at the same time as we have refined our offering and streamlined our work model. Demand for our services is healthy and it is pleasing that we are capturing new business with a focus on digitalisation in several different sectors, such as autonomous vehicles, industry 4.0 and energy. In these fields, we can cross-functionally leverage our expertise in artificial intelligence [AI] and user experiences (UX), for example. In Norway, we are also maintaining a high pace of activity with extensive competence in connected products where new, major partnerships have been launched and profitability is improving.

To date this year, earnings for the Product Information business area are down on the year-earlier period. This was mainly due to lower volumes as a result of two major customers relocating production of their aftermarket information concerning the Asian market. Although this was not fully offset by new business, we expect a gradual earnings improvement in the second half of the year in line with information presented previously. We recently signed a new partnership agreement with a global machinery manufacturer and have expanded partnerships in the telecom sector with a focus on Managed Service deliveries. The acquisition of Haas-Publikation in Germany is positioning us well towards the rail industry, where we have identified a large number of business opportunities.

In summary, the Group reported a financially strong second quarter compared with the year-earlier period and we believe that the earnings trend will remain positive in the next six months, despite a seasonally weak third quarter. Measures to improve our margins are continuing. As are our efforts to always prioritise the creation of an inspiring and attractive workplace for our enthusiastic and committed colleagues.

Second quarter

• The operating income amounted to SEK 479 Million (447) and the organic growth was 5% 
• The operating profit amounted to SEK 21 Million (10), yielding an operating margin of 4.3% (2.1) 
• The profit after tax amounted to SEK 16 Million (8) 
• Earnings per share (EPS) after dilution amounted to SEK 0.87 (0.42) 

January-June

• The operating income amounted to SEK 948 Million (922) and the organic growth was 2% 
• The operating profit amounted to SEK 61 Million (50), yielding an operating margin of 6.4% (5.4) 
• The profit after tax amounted to SEK 46 Million (38) 
• Earnings per share (EPS) after dilution amounted to SEK 2.55 (2.09) 
• The equity/assets ratio amounted to 57% (55)

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 08.00 (CEST) on July 17, 2018.

For more information, please contact:

Björn Strömberg, CFO, Semcon
Tel: +46 (0) 70-835 44 80 Email: bjorn.stromberg@semcon.com

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 2017, the Group reported annual sales of SEK 1.8 billion. Read more on semcon.com

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