Seco Tools Interim report January – September 2010

Interim report for the nine months ended 30 September 2010 

* Revenue for the third quarter rose by 32 per cent at fixed exchange rates, and by 27 per cent in Swedish kronor (SEK), to SEK 1,426 M (1,126).

* Higher sales and better capacity utilisation led to strong growth in operating profit.

* Operating profit for the quarter was SEK 245 M (51), equal to an operating margin of 17.2 per cent (4.5).

* Profit after tax for the nine-month period was SEK 522 M (83).

* Earnings per share for the nine-month period were SEK 3.59 (0.57).

* Acquisition of AOB in France completed.
 

Comments from the CEO

Sustained revenue growth and strong result improvement

“Demand continued to improve during the quarter and all market regions reported higher revenue growth than in the previous quarter with the exception of the seasonal downturn during the summer.

 The most significant growth is still being seen in South America. Of the mature markets, the USA is showing particularly strong development. All in all, the prospects for continued rising demand are deemed favourable.

Operating result for the third quarter strengthened considerably compared to the previous year and reached SEK 245 M (51). The improvement is primarily attributable to higher sales and better capacity utilisation.

The weaker operating margin compared to quarter two is explained mainly by negative foreign exchange effects and a seasonally lower volume.

Growth initiatives within the “Positioning for Growth” programme are continuing and are now focused primarily on market penetration in growth regions and increased capability for a solution-oriented approach. With regard to new product launches, we introduced an important upgrade of Seco Tools’ Turbo family of square shoulder mills and a further addition to the Duratomic family, now in the grooving and parting-off area.

The acquisition of the French tool manufacturer AOB was completed according to plan during the quarter. AOB has a strong offering of Poly Crystalline Diamond (PCD) cutting tools and in-depth expertise in areas like machining of composite materials (CFRP) in the aircraft industry. Use of these materials is expected to increase significantly in the future,” says Kai Wärn, President and CEO.