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Seco Tools Interim report January – June 2010

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  • Revenue for the second quarter rose by 32 per cent at fixed exchange rates, and by 26 per cent in Swedish kronor (SEK), to SEK 1,485 M (1,180).
  • Operating profit for the quarter was SEK 311 M (40), equal to an operating margin of 20.9 per cent (3.4).
  • Higher sales and better capacity utilisation led to strong growth in operating profit.
  • Profit after tax for the six-month period was SEK 358 M (68).
  • Earnings per share for the six-month period were SEK 2.46 (0.47).
  • Acquisition of French company specialised in diamond tools, among other things for the aircraft industry.

Comments from the CEO
Strong quarter and an operating margin in line with financial target.

“Demand continued to improve successively in virtually all of Seco Tools’ markets during the quarter. As earlier, the most significant growth is taking place in South America and the emerging markets of Asia, together with the USA. It is also encouraging to see good development in the large German market.

It can be noted that the level of sales in both Asia and South America during the second quarter was well above the level of 2008. Sales in Central and Eastern have recovered to roughly the same level as in 2008, while sales in Western Europe and the USA remain below this.

With the exception of a normal seasonal downturn in the third quarter, the prospects for continued positive development are deemed favourable.

In response to improved demand, Seco Tools further increased its production rates during the quarter, which contributed to lower unit costs and better cost coverage than in the previous year.

Operating margin for the second quarter strengthened considerably to a level on par with the financial target and reached 20.9 per cent (3.4). The improvement is mainly attributable to higher sales and better capacity utilisation.

Seco Tools has advanced its position in the strategically important aircraft industry through the acquisition of the French tool company AOB, with annual revenue of approximately EUR 4 million. AOB has a strong offering of Poly Crystalline Diamond (PCD) cutting tools and in-depth expertise in areas like machining of composite materials (CFRP), which is expected to show very rapid growth. The combination of AOB’s product and application knowhow and Seco Tools’ customer relationships will create excellent conditions for strong future growth and a closer partnership with the aircraft industry,” says Kai Wärn, President and CEO.

For additional information contact Kai Wärn, 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

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