Interim report January - March 2007
SUCCESSFUL START TO THE YEAR
• Sales rose by 17.3% via organic growth to reach SEK 469.8 million (400.3 m)
• The profit after tax was SEK 31.5 million (25.8 m)
• The EPS was SEK 1.62 (1.48)
• The operating profit after depreciation (EBIT) improved by 23.8% to SEK 45.2 million (36.5 m), providing an operating margin of 9.6% (9.1)
• Semcon underpinned its international presence with the acquisition of IVM Automotive in Germany on 1 April
SUMMARY
Sales reached record levels and results are our best ever. We have continued to take market shares and improved our profitability. Behind the good results is a period of strong demand. Among others, the Zpider business area showed a major sales hike of over 50%.
We are following the plan of our strategic positioning. Semcon carried out its biggest acquisition so far during the period with the acquisition of IVM and started a partnership with Jaguar/Land Rover in the UK for developing aftermarket information.
Further establishment on new markets occurred with Semcon opening offices in Finland and the US. Zystems, which works with system integration, has seen success in the US with its first customers using the Baseline concept. In addition, our interactive firm Zooma received a lot of attention in the US when it received four awards at the American Web Marketing Association’s annual IAC Awards (Internet Advertising Awards) for best online campaigns.
Through the acquisition of the German technology firm IVM Automotive we have gained a strong, supplementary international customer base with major growth potential. We also become one of the three biggest European suppliers of development services to the automotive industry.
This international expansion is in line with Semcon’s future plans. While we are meeting demands for an international presence we are also working towards profitable growth. The automotive industry is currently facing extensive development projects with huge demands for new models and platforms. We now have greater opportunities to take advantage of the major development assignments that companies are outsourcing to partners.
Semcon is continuing to streamline its business, including dividing up the Design & Development business area into Automotive R&D and Design & Development. This gives the businesses greater opportunities to focus on their respective customer groups and industries.
FUTURE PROSPECTS
Semcon’s plans for the future are unchanged. We will continue to focus on profitable growth, internationalisation and greater efficiency. A lot of energy will be spent in the near future on integrating IVM, with the spotlight on business and expansion opportunities. IVM will show lower margins in 2007 than Semcon, before the acquisition. No affects on profits are expected for the Group’s EBIT level in 2007.
2007 has started very positively and we expect the market’s good business cycle to remain unchanged. The full effects of the acquisition of IVM and Informatic’s partnership with Jaguar/Land Rover plus the GM order to our business partner ESG will only first be seen in 2008.