Interim report, January – March, 2011

Record sales and substantially improved result

* Revenue for the quarter was the highest ever posted by Seco Tools and amounted to SEK 1,721 M (1,370).

* At fixed exchange rates, revenues increased 36 per cent and in SEK by 26 per cent.

* Operating profit was SEK 352 M (220), corresponding to an operating margin of 20.5 per cent (16.1).

* Launches of new products continued at a high rate.

* Profit after tax was SEK 245 M (145).

* Earnings per share for the three-month period were SEK 1.68 (1.00). 

Comments from the CEO
“Demand continued to improve in virtually all of Seco Tools’ markets during the quarter.  Sales remained very strong in the emerging markets and particularly strong growth was recorded in Central and Eastern Europe. In addition, it was gratifying to note healthy growth in many major mature markets including Germany and the US. All in all, we have seen no indications of any levelling off in demand and assess the prospects for the next few quarters as being healthy.

We were pleased to note that our employees and facilities escaped unscathed from the disasters in Japan and that no negative impact was observed in level of demand or delivery reliability. We expect no major impact during the next few quarters, but the situation is difficult to assess and uncertain at present.

Operating profit improved significantly compared to the same period in the previous year and amounted to SEK 352 M (220) for the quarter, corresponding to an operating margin of 20.5 per cent (16.1). The improvement was essentially attributable to increased volumes. However, the strength of the SEK had a dampening effect on the earnings trend in an amount of SEK 71 M for the quarter compared to the same period in the previous year.

Cash flow from operating activities before changes in working capital continued to be strong during the quarter and amounted to SEK 343 M (260). However, the stockpiling of inventory, increased trade receivables and a raised level of investment dampened the cash flow trend during the quarter. The net debt/equity ratio declined and was at the end of the period 0.40 (0.72).

The growth initiatives contained in the programme “Positioning for Growth” continue. These are currently focused on market penetration in emerging regions and increased capacity for solution orientation combined with a continuous upgrading of the product portfolio. An example of the latter would be the new milling tool, the Minimaster® plus.” says Lars Bergström, President and CEO.

The information contained herein is subject to the disclosure requirements of Seco Tools AB under the Swedish Securities Exchange and Clearing Operations Act and/or the Financial Instruments Trading Act. This information was submitted for publication on 3 May 2011, 10:00 a.m. CET.

For additional information contact Per-Lennart Berg, Director group Communication, (Tel +46 223-403 20), Lars Bergström, President and CEO (Tel: +46 223-401 10) or Patrik Johnson, CFO (Tel +46 223-401 20). E-mail can be sent to investor.relations@secotools.com

Previously published financial information can be found under "About Seco/Investor Relations" on the Seco Tools website (www.secotools.com). Seco Tools AB’s corporate registration number is 556071-1060 and the company’s address is Seco Tools AB, SE-737 82 Fagersta, Sweden. The telephone number to the Group’s head office is +46 223-400 00.