Höganäs Interim report 1 January – 30 June 2010

- Sustained firm demand and new initiative on a unique electric motor

CEO Alrik Danielsson comments on second quarter earnings:

- The market continued to improve across most of our regions in the second quarter. But the demand conditions for the remainder of 2010 remain uncertain, especially in Europe. Höganäs has retained its sharp cost focus over the sales recovery of the past 12 months, which has resulted in gradual income gains, giving us strength for our future.

We are making strategic investments in new development segments, through channels including reinforcing our organization with new resources and competences. Our initiatives to develop applications based on metal powder technology, what we call the “Power of Powder”, resulted in us being able to launch a new generation of electric motors in the quarter, which we have developed ourselves especially for electric bicycles and light vehicles.  These are highly efficient and very compact motors for direct power transmission without gearboxes. We want to demonstrate that we have the technology to support the development of innovative applications for electric motors with this bicycle motor..

Second quarter 2010 (compared to corresponding period of previous year)

• Net sales were MSEK 1,783 (1,098) in the quarter, up 62% year on year. Sales volumes were 55% higher. Demand conditions continued to improve somewhat on the first quarter, largely due to good progress in Asia and South America.
• Operating income was MSEK 333 (54) and income after tax was MSEK 246 (37). Volume expansion and positive effects of cost savings had a favourable effect on income.
• Earnings per share for the quarter were SEK 7.07 (1.05).

Cash flow from operating activities was MSEK 222 (297). Higher sales volumes and escalating metal prices led to increased working capital requirements, which had a negative effect on cash flow in the period.

1 January – 30 June 2010 (compared to corresponding period of previous year)

• Net sales were MSEK 3,331 (2,014) in the period, up 65% year on year. Sales volumes were 72% higher.
• Operating income was MSEK 615 (-57) and income after tax was MSEK 453 (-53).
• Earnings per share for the period were SEK 13.02 (-1.53).
• Cash flow from operating activities was MSEK 316 (439).
• In the period, the net debt/equity ratio multiple reduced to 37% from 43%.
• Overall, the outlook is unchanged compared to the assessment presented in the Interim Report for the first quarter. The market is strong in Asia and South America, while a gradual recovery, albeit at an uncertain rate, is expected in North America. However, Höganäs judges that underlying demand in Europe will remain weak.

Höganäs, Sweden, 20 July 2010

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 20 July 2010.

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 +44 (0)207 162 0125. The presentation is available at www.hoganas.com.

 For more information

Please contact: Alrik Danielson, CEO and President, +46 (0)42 33 80 00
Sven Lindskog, Chief Financial Officer, +46 (0)42 33 80 00

 NB:

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 20 July 2010.

 About Höganäs

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, water and exhaust treatment products of the future in collaboration with its customers. Founded in 1797, the company had sales of MSEK 4,571 in 2009, and is quoted on NASDAQ OMX Stockholm's Mid Cap List.

For more information, visit our website: www.hoganas.com.