Poor demand continues with an uncertain market situation
The weak economic climate in Europe means that Semcon’s important Swedish export industry is adopting a wait-and-see attitude to new investments, which is having a negative impact on demand and results. Some offices in Germany are still reporting poor results. The relatively poor profitability has meant an overhaul is necessary to further improve activities’ efficiency and customize offers on these markets. We acquired the activities of ibruk AS in Norway in Q3. This means we now have a good platform on which to boost sales in Norway and I’m looking forward to the new opportunities that this will bring. We estimate that customers’ development needs will remain strong, even though the market situation is difficult to predict
Third quarter
Operating income amounted to SEK 612 million (592). Adjusted for currency fluctuations organic growth was -1%. Activities in Sweden reported poorer sales, partly due to more holiday entitlement taken out compared with last year. The operating profit amounted to SEK 32 million (37), giving an operating margin of 5.2% (6.3). The poorer result is mainly due to weak utilization rates and more holiday entitlement being taken out. Net financial items amounted to SEK -1 million (-2), giving a profit before tax of SEK 31 million (35). Tax costs for the quarter stood at SEK -8 million (-9). The profit after tax was SEK 23 million (26) and EPS after dilution was SEK 1.26 (1.43).
January-September
Operating income rose by SEK 141 million and amounted to SEK 1,995 million (1,854), giving organic growth of 5%. Sales growth is mainly from increased purchase of goods and services in certain projects. The operating profit amounted to SEK 76 million (103), giving an operating margin of 3.8% (5.5). The poorer operating profit is partly attributable to poorer utilization rates as a result of completion of a major project, purchase stoppages by one customer in Q2 and also one less workday compared with the same period in 2013. Net financial items totalled SEK -4 million (-5), giving a profit before tax of SEK 72 million (98). Tax costs for the period stood at SEK -19 million (-25). The profit after tax was SEK 53 million (72) and EPS after dilution was SEK 2.93 (3.99).
Staff and organisation
The headcount on 30 September was 3,050 (3,011). The number of employees in active service was 2,940 (2,895). In the respective business areas the headcount is as follows: Engineering Services Nordic 1,071 (1,076), Engineering Services Germany 1,069 (1 086), Engineering Services International 359 (318) and Product Information 551 (531).
Outlook
Semcon estimate that customers’ development needs will remain strong, even though the market situation is difficult to predict.
Semcon is a global company active in the areas of engineering services and product information. The Group has around 3,000 employees with extensive experience from many different industries. Semcon develops products, plants and information solutions along the entire development chain and also provides many other products and services including quality control, training and methodology development. Semcon increases customers’ sales and competitive strength by providing them with innovative and solid engineering solutions. From 2014 the business will be run in four business areas: Engineering Services Nordic, Engineering Services Germany, Engineering Services International and Product Information. The Group had sales of SEK 2.5 billion in 2013 with activities at more than 45 sites in Sweden, Germany, the UK, Brazil, China, Hungary, India, Norway, Spain and Norway.
Tags: