Seco Tools Interim Report January – June 2008

SECO TOOLS AB

Interim report for the six months ended 30 June 2008

- Second quarter revenue rose 15 per cent at fixed exchange rates compared to the previous year.

- Operating profit reached SEK 378 M (381) and operating margin for the quarter was 22.3 per cent (25,3). The decrease in operating margin was mainly due to currency losses and increased costs for production and market efforts.

- The acquisition of Russian carbide tool maker ALG was completed during the quarter.

- Revenue for the six-month period rose by 11 per cent at fixed exchange rates and amounted to SEK 3,329 M (3 017).

- Profit after tax for the six-month period was SEK 531 M (530).

- Earnings per share for the six-month period were SEK 3.65 (3.64).


Comments from the CEO

“Seco Tools achieved continued strong revenue growth in the second quarter of 2008, also taking into account the increased number of working days and positive impact from acquisitions corresponding totally 3-4 per cent.

The European region enjoyed stable growth and our operations in the NAFTA region continued to perform well despite macro-economic unrest. Development remains brisk in the emerging economies of Asia and Central and Eastern Europe, where growth in China stands out as particularly strong.

We are also very pleased to have completed the acquisition of ALG during the quarter, thereby significantly strengthening our position in the important Russian market.

The operating margin in the quarter decreased despite positive impacts from price and mix changes. Main reasons are foreign exchange losses, rising costs for production and market efforts. The increased production costs relates to the build up of capacity and a partly new global production structure. The rearrangement costs in production are expected to remain throughout the year. Our extensive market efforts, including increase of the sales force, are progressing according to plan and will support positioning us for continued growth. Operating margin for the first half of 2008 was 23.5 per cent and return on both total assets and equity held steady at high levels.”