Strong financial position - dividend of SEK 2 per share
Semcon has had a good year with sales growth and improved profit. Focusing on more markets and more profitable business models has paid off, both for our customers and for Semcon. The financial position was reinforced over the year. Net debt fell by SEK 172 million and the equity/assets ratio was 47% at year-end. It’s also pleasing to have signed another major order in 2012 worth around EUR 15 million with a German auto manufacturer. We have also extended our offer to the German market through the acquisition of the product information company Comet.
Operating income amounted to SEK 671 million (679). Sales in local currencies remained unchanged overall. The drop in demand seen in the third quarter remained in the fourth quarter, especially from certain customers in Design & Development. The quarter also had two fewer working days than the same period last year, equal to around SEK 20 million in income and SEK 16 million in profit. The operating profit was SEK 55 million (57) giving an operating margin of 8.2% (8.4). A lower utilization rate at Design & Development negatively affected results. The action plan carried out by Design & Development negatively affected results by SEK 2 million net. Net financial items totalled SEK -2 million (-3) giving a profit before tax of SEK 53 million (54). Tax costs for the quarter stood at SEK 6 million (-18). The cut in company tax from 2013, from 26.3% to 22.0%, positively affected the fourth quarter’s tax costs by SEK 6 million. The profit after tax was SEK47 million (36) and EPS after dilution was SEK 2.58 (1.98).
Operating income rose by SEK 119 million compared to last year and amounted to SEK 2,571 million (2,452). Sales in local currencies rose by 6%. The sales improvement is mainly attributable to increased demand from Informatic and Automotive R&D compared with last year. The year had three fewer working days compared with 2011. The operating profit rose by SEK 82 million to SEK 193 million (111) giving an operating margin of 7.5% (4.5). The improvement is mainly attributable to increased sales. Last year the result was burdened with one-off costs of SEK 31 million for a reserve for Saab Automobile AB. The business area showed the following operating margins excluding one-off costs: Automotive R&D 6.6% (3.1), Design & Development 6.7% (7.9) and Informatic 11.9% (11.3). Net financial items totalled SEK -7 million (-11) giving a profit before tax of SEK 186 million (100). Tax costs for the quarter stood at SEK 45 million (31). The profit after tax was SEK 141 million (69) and EPS after dilution was SEK 7.80(3.83).
The operating cash flow from current activities was SEK 186 million (88). The Group’s cash and bank balances amounted to SEK 116 million (40) with additional non-utilized credit of SEK 306 million (223) as at 31 December. The Group’s credit agreements consist of an overdraft facility of SEK 150 million (150) and a revolving credit facility of EUR 32.8 million (32.8), which run until July 2013. There is an option available for the company to extend the revolving credit to a three-year loan before the due date. Investments in hardware, licences, office supplies and equipment, amounted to SEK 22 million (17). Shareholders’ equity amounted to SEK 579 million (442) and the equity/assets ratio was 47% (38). The Group’s net debt fell by SEK 172 million to SEK 61 million (233) and the debt/equity ratio was 0.1 times (0.5) with an interest coverage ratio of 26.8 times (8.7).
Staff and organisation
The headcount on 31 December was 3,000 (2,894). The number of employees in active service was 2,887 (2,786). In the business areas the headcount is as follows: Automotive R&D* 1,772 (1,683), Design & Development* 701 (781) and Informatic 527 (430). * 26 employees transferred from Design & Development to Automotive R&D on 1 July.
According to Semcon’s financial objectives a share dividend should be paid to shareholders and be around one third of the profit after tax. From the reported profit for 2012 the Board proposes a share dividend of SEK 2.00 per share (-). The proposed dividend makes up a total of 26% of the company’s profit after tax and amounts to SEK 36.2 million. The record day for the right to a share dividend is proposed as Wednesday, 2 May 2013.
Semcon has seen a drop in demand from some customers since the summer, mainly in the Design & Development business area. The Group is also seeing a drop in demand from the Swedish automotive industry, which has announced a drop in purchase orders of product development services for 2013. This means that Semcon, primarily in Sweden, predicts weaker demand for Q1 2013 compared with Q1 last year. There are also two fewer working days in Q1 2013 compared with last year.The company is, however, looking positively at developments in 2013, as the need for development services remains strong.
Markus Granlund, CEO Semcon AB, +46 31-721 03 11
Björn Strömberg, CFO Semcon AB, +46 31-721 03 05
Anders Atterling, IR Manager Semcon AB, +46 704-47 28 19
Semcon is a global company active in the areas of engineering services and product information. The Group has 3,000 employees with extensive experience from many different industries. We develop technologies, products, plants and information solutions along the entire development chain and also provide many services including quality control, training and methodology development. Semcon boosts customers’ sales and competitive strength by providing them with innovative solutions, design and solid engineering solutions. The Group has sales of SEK 2.6 billion and activities at more than 45 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China, Spain and Russia