Review of the 2009 Annual General Meeting

In his address to the Annual General Meeting of Seco Tools AB on 28 April 2009, Kai Wärn, President and CEO, commented on significant events of 2008 and the company’s performance in the first quarter of 2009. He began by stating that overall development in the past year was good from a historical perspective, with the Group posting its highest revenue ever and second highest operating profit. In local currency and on a like-for-like basis, growth for the full year 2008 was 5 per cent. Positive acquisition effects and foreign exchange gains contributed to total revenue growth of 8 per cent in SEK.

He then described the two very distinct parts of the year. This first consisted of three quarters of strong growth, equal to 10 per cent in local currency and on a like-for-like basis. During these quarters Seco Tools achieved very high capacity utilisation in the Fagersta factory, among others, and was focused on capacity expansion and the creation of a partly new global production structure. In the fourth quarter this picture changed drastically and the previously dynamic growth was replaced by general slowing across virtually all of the Group’s markets.

Operating margin for 2008 amounted to 21.3 per cent excluding one-time costs, and thus exceeded the communicated financial target of 20 per cent. Including one-time costs of SEK 60 million for workforce reductions, the margin was 20.4 per cent. Consolidated operating profit for the year was charged with costs connected to the expansion of production capacity primarily in the Czech Republic. In the fourth quarter, however, the targeted capacity was reached and the related costs were eliminated.

Kai Wärn then looked at the trend for earnings per share and dividends since 2003 and concluded that the Group has shown very positive development. During the market boom years, dividends including extra dividends were essentially on par with earnings per share. However, in order to ensure a sustained strong balance sheet and provide scope to handle the uncertain market situation, the Board of Directors proposes that the dividend for 2008 be lowered to SEK 3.20 per share, which is consistent with the financial target of at least 50 per cent of net profit.

Kai Wärn went on to comment on a number of key events and areas from the past year, such as the Group’s impressive growth in market shares, the acquisition of ALG, new product launches, the formulation and establishment of Seco Tools’ corporate values and the opening of a new regional office for North America.

Kai Wärn ended by presenting results for the first quarter of 2009, including a summary of implemented cost-cutting measures. As a result of the rapid market deterioration, revenue at fixed exchange rates fell by 28 per cent during the quarter. Foreign exchange gains of 11 per cent helped to offset part of the drop in revenue. There are no indications of improved demand. Operating margin for the first quarter weakened relative to the year-earlier quarter and amounted to 9 per cent excluding one-time costs of SEK 29 million. Including one-time costs, the margin was 7 per cent. The entire decrease in profit can be attributed to the period’s lower revenue and production volume. The effects of the cost-cutting programme and positive foreign exchange effects compensated somewhat.

The cost-cutting programmes announced in November and February include workforce reductions by a total of 800 positions and will generate estimated annual savings of SEK 500 M. The programmes are proceeding according to plan and are expected to be completed in the third quarter.

In conclusion, the CEO pointed out that the Group’s chosen strategy based on customer closeness, solution orientation, product innovation and global networking stands firm and that the soundness of this strategy is confirmed by Seco Tools’ strong development relative to the market in recent years. He also stated his conviction that in times of recession and crisis, it is even more important to stick to the charted course and thereby maximize the focus on the customers.

Jonas Jordberg, Senior Vice President Group Technology, then presented major product launches at the end of last year and beginning of 2009. These include the new Square 6 milling concept, Jetstream Tooling which effectively creates short chips and contributes to a robust manufacturing process, the Steadyline series of vibration-dampening toolholders and additional new product launches based on the Duratomic technology.

The AGM resolved in favour of the Board’s proposed regular dividend for 2008 of SEK 3.20 per share, amounting to a total of SEK 465 M (SEK 6.20 per share including an extra dividend for 2007, for a total of SEK 902 M). The AGM adopted 4 May 2008 as the record date for entitlement to receive dividends, which means that dividends are expected to be disbursed on 7 May 2008.

In connection with presentation of its proposals, the Nominating Committee reported on its work.

The AGM re-elected sitting Board members Annika Bäremo, Stefan Erneholm, Jan-Erik Forsgren, Anders Ilstam, Staffan Jufors, Peter Larson, Carl-Erik Ridderstråle and Kai Wärn.

Anders Ilstam was re-elected as the Chairman of the Board.

The AGM approved total Board fees of SEK 1,800,000, of which SEK 450,000 will be paid to the Chairman and SEK 225,000 to each Board member not employed by the company. Total fees to the members of the Audit Committee were approved in an amount of SEK 220,000, of which SEK 100,000 will be paid to the chairman of the Audit Committee and SEK 60,000 to each of the other members. Fees to the auditors will continue to be paid according to current account.

The Board’s proposed principles for remuneration and other terms of employment for the executive management were approved.

The AGM approved the submitted proposal that the Nominating Committee to serve until the end of the next AGM consist of the Board Chairman and one representative for each of the four largest shareholders in terms of voting power, of whom none may be Board members of the company. The composition of the Nominating Committee ahead of the 2010 AGM shall be published as soon as it has been established, but no later than six months prior to the AGM. No fees shall be paid to the members of the Nominating Committee. The Nominating Committee shall make recommendations regarding matters such as election of a chairman of the AGM, the number of Board members, compensation to Board members and auditors and election of Board members and the Board Chairman.

At the statutory meeting following the AGM, Annika Bäremo, Stefan Erneholm and Carl-Erik Ridderstråle were appointed to the Audit Committee. Peter Larson, Carl-Erik Ridderstråle and Anders Ilstam were appointed to the Remuneration Committee. Patrik Johnson, who is Senior Vice President and Chief Financial Officer of Seco Tools and not a member of the Board, was appointed as Board Secretary.

Fagersta, 28 April 2009

SECO TOOLS AB (publ)

THE BOARD OF DIRECTORS