Interim report January – June 2011
Record earnings and substantially improved sales
* Revenue for the quarter increased 31 per cent at fixed exchange rates and 19 per cent in SEK to the record level of SEK 1,775 M (1,485).
* Operating profit for the second quarter rose 25 per cent to SEK 389 M (311), corresponding to an operating margin of 21.9 per cent (20.9).
* The interim period’s profit after tax was SEK 520 M (358).
* Earnings per share for the quarter were the highest ever posted and amounted to SEK 1.89 (1.46). Earnings per share were 3.57 (2.46) for the six-month period.
* Investments in emerging markets continued during the quarter, including the inauguration of a distribution centre inChina
Comments from the CEO
”Demand remained strong during the second quarter and revenue improved compared with the first quarter, reaching new record levels. All market regions reported strong growth during the quarter compared with the corresponding period year-on-year. The most positive trend was noted in NAFTA and Central andEastern Europe. Emerging markets in Asia andSouth Americaalso continued strong, but at a slightly lower growth rate compared with the corresponding period in the preceding year. Overall, we have not seen any signs of a slowdown in demand and assess the outlook for the coming quarter as continued positive.
Operating profit improved compared with the year-earlier period and was SEK 389 M (311) for the quarter, corresponding to a margin of 21.9 per cent (20.9). This improvement was largely attributable to higher volumes. However, the strong SEK had a negative effect of SEK 79 M on the earnings trend for the quarter compared with the year-earlier period. Earnings per share amounted to SEK 1.89 (1.46), the highest ever reported for a single quarter.
Cash flow from operating activities before changes in working capital remained strong and amounted to SEK 397 M (379) for the quarter. However, the build up of inventory, increased receivables and a raised level of investment had a dampening effect on the cash flow trend during the quarter. In combination with the dividend paid, this meant that the net debt/equity ratio rose to 0.66 (0.52).
Growth initiatives continued during the quarter and these currently focus primarily on market penetration in emerging regions and increased capacity for solution orientation combined with a continuous upgrading of the product portfolio. One example is the new investments inChinain the form of a new sales office and distribution centre,” 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 19 May 2011, 7:45 a.m. CET.
For additional information, please 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.
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