Interim Report January - September 1998

Interim Report January - September 1998 Semcon AB (publ) * Sales increased by 51.3 percent to SEK 491.1 million (324.5) * Profit before financial items amounted to SEK 52.0 million (34.2) an increase of 52 percent * Profit after financial items amounted SEK 55.2 million (35.1), an increase of 57.2 percent * A branch-office was set up in Kalmar with training as its initial activity. A new training department was also set up in Helsingborg. * Semcon was appointed primary supplier to Scania * An agreement was concluded with Internet Certification Institute International (ICII) regarding internet training Developments in sales and profits Group sales amounted to SEK 491.1 million (324.5), an increase of 51.3 percent over the same period for 1997. Profits before financial items amounted to SEK 52.0 million (34.2), an increase of 52 percent. The operating margin amounted to 10.6 percent (10.5). Profits after financial items were SEK 55.2 million (35.1). (Comparative figures refer to the 1997 pro forma accounts.) Business The period was characterised by good demand, high utilisation rates and continued good order intake. All business areas improved their profits as compared with the same period last year. Improvements were especially great within the business area Competence and process development. The business area Product and production development Demand was good and the utilisation rate high. Semcon strengthened its position within the areas electrical and electronic engineering especially in the Gothenburg and Stockholm regions. Semcon made a number of advances with new, interesting customers, such as Kværner in Karlstad and Pharmacia & Upjohn in Helsingborg. Semcon was appointed primary supplier to Scania, where Semcon works on engine development. Semcon's test lab showed weaker development than planned. Market concentration and organisational changes have therefore been carried out. Semcon built up a design business in Gothenburg to meet increasing demand within the area. During the period increased demand was also noted from sub-contractors to the automotive industry. The business area Industrial information technology Demand on the business area's services was good. A partnership agreement with ABB Flexible Automation was signed during the period. Some of the newly started departments showed weaker development than planned. Commitments within telecommunications were strengthened with further commissions for companies such as Tateco and Telia. Several staff with special skills were recruited and a PDM group was formed to develop and deepen out concentration within the 1 area. Semcon Data was the first Swedish company to have five Y2k -certificated employees. Svenska Revisorsamfundet [The Swedish Association of Auditors] chose Semcon as their Y2k-partner. New customers acquired during the period included Volvo Articulated Haulers and ESV. The business area Competence and process development The strong growth within the business area continued. During August a new office was set up in Kalmar. On the 1 September a new department was started at existing office in Helsingborg. The proportion of IT-related training courses increased during the period. Project management training courses were initiated at Saab Automobile in Trollhättan and a design engineering course for Saab in Linköping. A five-year agreement was concluded with Internet Certification Institute International (ICII) which gives Semcon sole right to 1 Y2k=knowledge in the millienium problems certify people to Certified Internet Webmaster (CIW) on the Swedish market. This is the first international independent certification programme within internet studies. The agreement provides access to approximately seventy high- quality courses within information technology. Staff and organisation Organic growth continued and the total number of employees amounted to 1053 (817) at the end of the period. Continued concentration on internal training within programming, electronics, CAD, project management and personal development were carried through. Financial items and investment Group investment during the period amounted to SEK 24.5 million. Liquid assets at the end of the period amounted to SEK 9.7 million. The equity ratio was 39.8 percent, (31.0). Shareholders' equity amounted to SEK 80.3 million (41.4). Prospects for the whole year The market and demand are expected to continue strong during the whole of 1998. The original assessment holds good that sales and profits would continue to grow strongly, and that they will exceed 1997 levels. Other information This report has not been scrutinised by the company's auditors. Next report: Statement of accounts for January - December 1998 will be published on the 1 February, 1999. For further information please contact: Hans Johansson, MD, Tel: +46-31-703 28 66, mobile +46-70-591 43 34, or Bengt Nilsson, Finance Manager, Tel: +46-31- 703 28 68, mobile +46-70-582 82 96. Gothenburg, the 21 October 1998 Semcon AB (publ) The Board of Directors Semcon AB Group's accounts in summary Semcon AB was registered in March 1997. The business activity carried on within the Semcon Förvaltnings AB Group for the first months of the year was acquired by Semcon AB as of the 14 April, 1997. For this reason the financial information is presented in the form of pro forma accounts. These pro forma accounts cover activity within the Semcon Förvaltnings AB Group for the period January to April, 1997. Adjustments have been made which mean that interest payments and goodwill depreciation as a consequence of restructuring in May 1997 have been excluded. For definitions of key ratios, see Annual Report 1997. Pro forma Pro forma PROFIT AND LOSS ACCOUNTS (SEK thousand) Jan-sept Jan-sept 1997 Full year 1997 1998 Net sales 491 061 324 534 495 613 Costs and expenses - 427 271 - 279 719 - 424 707 Operating profit before depreciation 63 790 44 815 70 906 Depreciation of machinery and - 11 763 - 10 608 - 13 745 equipment Operating profit after depreciation 52 027 34 207 57 161 Net interest profit - 333 923 849 Income from option scheme 3 522 - - Profit after financial items 55 216 35 130 58 010 Taxes - 16 565 - 10 539 - 17 961 Net profit 38 651 24 591 40 049 BALANCE SHEETS (SEK thousand) Pro forma Pro forma 30/09/98 30/09/97 31/12/97 Assets Fixed assets 34 583 20 364 20 441 Current assets 167 046 113 119 162 716 Total assets 201 629 133 483 183 157 Shareholders' equity and liabilities Shareholders' equity 80 279 41 375 56 833 Provisions 17 710 11 140 21 776 Long-term liabilities 5 355 5 355 5 355 Current liabilities 98 285 75 613 99 193 Total shareholders' equity and 201 629 133 483 183 157 liabilities KEY RATIOS Pro forma Pro forma 30/09/98 30/09/97 31/12/97 Operating margin, (%) 10.6 10.5 11.5 Return on average shareholders' 63.5 - 90.7 equity, (%) Equity ratio, (%) 39.8 31.0 31.0 Risk capital ratio, (%) 48.6 39.3 42.9 Earnings per share, (SEK) 2.23 1.42 2.31 Earnings per share including 764 300 2.14 1.36 2.21 options, (SEK) Shareholders' equity per share, (SEK) 4.63 2.39 3.28 Shareholders' equity per share incl. 4.43 2.29 3.14 764 300 options, (SEK) Average number of employees 898 635 695 Value added per employee, (SEK 378 362 494 thousand) Profit after financial items per 61.5 54.9 83.5 employee, (SEK thousand) ------------------------------------------------------------ http://www.bit.se/bitonline/1998/10/21/19981021BIT00480/9 mån -98 eng.doc