Höganäs Interim Report 1 January – 30 June 2013

Improved market but uncertainty ahead of the autumn

CEO’s comments—second quarter:

“Global market progress presents a divided picture. We are satisfied to see the progress of our volumes in North America and China, while demand conditions were sluggish on some other emerging markets in the spring. In Europe, we saw a marginal sales increase, thanks to Eastern Europe. Thus, Höganäs’ broad geographical diversity meant that sales volumes for the first half-year were fairly good overall. However, to reduce the risk of holding excessive inventories in the autumn, we decided to run lower production volumes than the previous year in the spring, as reflected in our improved cash flow.

Prospects are basically unchanged compared to the assessment made in the Interim Report of 24 April. We have a fundamentally positive view of South America and Asia, even if uncertainty has increased in the short term. Sales growth numbers in Asia in 2013 will also be negatively affected by the recovery effect in 2012, post-tsunami and flooding. In addition, the Indian economy is fairly weak, and Asian exporters will be affected by weak market conditions in Europe. We expect demand to improve in North America, but the rate of recovery will probably remain volatile. In historical terms, European market conditions were also poor in the first half-year 2013, and we still do not see the prospects of this recovering rapidly.”

Second quarter 2013 (compared to corresponding period of previous year)

• Net sales were MSEK 1,652 (1,808), down 9% year on year. Sales volumes were up 2%. Demand conditions were better, primarily in North America and China. Sales volumes in Europe were somewhat better than the corresponding period of the previous year, and up marginally on the first quarter of 2013.
• Operating income was MSEK 262 (286), and income after tax was MSEK 193 (203). Higher sales volumes and savings measures had a positive impact on income, while lower production rates in plants compared to the corresponding period of the previous year had a negative effect. The operating margin was 15.9% (15.8).
• Earnings per share before and after dilution for the quarter were SEK 5.56 (5.84).
• Cash flow from operating activities was MSEK 321 (206).

1 January – 30 June 2013 (compared to corresponding period of previous year)

• Net sales were MSEK 3,229 (3,621), down 11% year on year. Sales volumes were down 0.3%.
• Operating income was MSEK 512 (569), and income after tax was MSEK 379 (407).
• Earnings per share before and after dilution for the period were SEK 10.90 (11.70).
• Cash flow from operating activities was MSEK 503 (530).
• The net debt/equity ratio at the end of the period was 16%, unchanged on the beginning of the financial year.
• The cash offer to shareholders that Lindéngruppen AB and Foundation Asset Management Sweden AB (FAM) made through jointly held company H Intressenter AB in February 2013, to transfer all the shares of Höganäs AB (publ) to H Intressenter AB, has been extended to 16 August 2013, and increased to a price of SEK 325 per share. Höganäs’ Board of Directors has recommended that all Höganäs shareholders accept H Intressenter’s revised offer. For more information, see page 8.

Höganäs, Sweden, 18 July 2013

Höganäs AB (publ)

Streamed press conference

Alrik Danielson, CEO and President, and Sven Lindskog, Chief Financial Officer, will present this Report in a conference call at 10:30 a.m. on 18 July 2013.
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 +46 (0)8 519 990 30, +44 (0)203 364 5373 or +1 8777 889 023.

NB:

The information in this Report is mandatory for Höganäs AB (publ) to publish pursuant to the Swedish Securities Markets Act. This Report has not been subject to review by the company’s auditors. The information was submitted for publication at 9:00 a.m. on 18 July 2013.

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

Höganäs AB (publ) 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 6,700 in 2012, and is quoted on NASDAQ OMX Stockholm’s Mid Cap List.
For more information, please visit our website: www.hoganas.com.