SEMCON INTERIM REPORT JANUARY-JUNE 2019
Comment from CEO Markus Granlund:
During the second quarter, we continued work to strengthen the competitiveness of our customers and Semcon through value-creating product development, production optimisation and product information. We have successfully carried out the necessary measures to further strengthen profitability. The measures taken in the first half of the year are expected to have a marginal positive impact on full-year 2019 and reduce the Group’s costs by about SEK 15 million, with full effect in 2020.
The financial result for the period was favourable compared with the preceding year, adjusted for restructuring costs and the calendar effect in the quarter. The measures to enhance profitability in the Engineering & Digital Services business area were charged to quarterly earnings in an amount of approximately SEK 6 million and the calendar effect, with one fewer working day, further impacted consolidated earnings by approximately SEK 6 million compared with the year-earlier period.
It is gratifying to see that our strategy to diversify our industry presence has continued to yield results. In Life Science, sales in the first half of the year increased 18 per cent compared with the year-earlier period. At the same time, there is significant potential for a sharp rise in our income in this segment moving forward. During the quarter, we also secured a three-year contract with the Swedish Transport Administration to future-proof energy supply in the installations that provide electricity to train services in Sweden.
The restructuring of the Engineering & Digital Services business area is proceeding as planned and is creating opportunities for greater focus on our digital offering. In line with our strategy, we are further strengthening our software expertise and the Digital Services division reported growth of 11 per cent in the first half of 2019. Demand for digital solutions is strong.
The Product Information business area reported a significant improvement in both income and profit compared with the year-earlier period. Semcon’s global and strategic partnership with AGCO (one of the world’s largest manufacturers of agricultural equipment) is a prime example of how we can create the right conditions for continued growth. Through our efficient and digital solutions, the quality of our customers’ product information increases and the competitiveness is strengthened not least in terms of their service business.
On the basis of the profitability-enhancing measures we have taken in the first half-year and a positive calendar effect in the second half-year, we are well positioned to report sustained earnings improvements in 2019.
Second quarter
• The operating income amounted to SEK 476 million (479) and the organic growth was -0.4%.
The quarter included one fewer working day compared with last year
• The operating profit amounted to SEK 17 million (21), yielding an operating margin of 3.6% (4.3).
Restructuring costs of approximately SEK -6 million (–) burdened operating profit and one fewer
working day has affected the result with approximately SEK -6 million
• The profit after tax amounted to SEK 12 million (16)
• Earnings per share (EPS) after dilution amounted to SEK 0.69 (0.87)
January-June
• The operating income amounted to SEK 959 million (948) and the organic growth was 0.1%.
The period included one fewer working day compared with last year
• The operating profit amounted to SEK 61 million (61), yielding an operating margin of 6.4% (6.4).
Restructuring costs of approximately SEK -8 million (–) burdened operating profit and one fewer
working day has affected the result with approximately SEK -6 million
• The profit after tax amounted to SEK 45 million (46)
• Earnings per share (EPS) after dilution amounted to SEK 2.52 (2.55)
This information is such information as Semcon AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.00 a.m. CET on 16 July 2019.
For more information, please contact:
Björn Strömberg, CFO, Semcon
Tel: +46 (0) 70-835 44 80 Email: bjorn.stromberg@semcon.com
Semcon is an international technology company that develops products based on human needs and behaviours. We strengthen our customers’ competitiveness by always starting from the end user, because the person who knows most about the user’s needs creates the best products and the clearest benefits to humans. Semcon collaborates mainly with companies in the automotive, industry, energy and life science sectors. With more than 2,100 specialised employees, Semcon has the ability to take care of the entire product development cycle, from strategy and technology development to design and product information. Semcon was founded in Sweden in 1980 and has offices in over 30 locations in eight different countries. In 2018, the Group reported annual sales of SEK 1.8 billion. Read more at semcon.com
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