SEMCON YEAR-END REPORT 2018

Strong improvement in operating profit for the year

Comment from CEO Markus Granlund:
Thanks to outstanding contributions from my dedicated colleagues, we have accomplished a good year with a strong finish in the fourth quarter. In 2018, our focus on continual improvement in all dimensions has resulted in a 26 per cent rise in operating profit and increased earnings per share of 31 per cent compared with 2017.

In the fourth quarter, we increased operating profit and improved operating margin to 8.4 per cent compared with 7.7 per cent for the corresponding year-earlier period. At year-end, the Group’s financial position is healthy and net cash amounted to SEK 44 million. Cash flow, before acquisitions and financial items, was SEK 102 million. In light of this and the positive earnings trend, the Board of Directors is proposing an increase in the regular dividend to SEK 3.00 per share, which is in line with our dividend policy.

Our digital offering, in combination with our profound expertise in product development, production optimisation and product information, has experienced favourable demand. The development of Semcon’s digital offering har continued in 2018 in areas such as AI, autonomous solutions and electrification — innovative product development that is less cyclical. The distribution between the different industries is now more balanced and over the past three years we have substantially increased the proportion of our sales to, for example, the manufacturing industry, energy, life science and telecom. At the same time as we have developed our offering to the automotive industry in strategically important areas that require sustained investment regardless of the economic climate.

The development of our digital offering and continued high productivity has been a strong contributing factor to the positive performance of the Engineering Services business area, which improved its operating profit by almost 50 per cent compared with last year. The Product Information business area is continuing to recover to its former profit levels with an operating margin of 11.4 per cent and organic growth of 5 per cent in the fourth quarter. Digitisation was also a contributing factor here, with its strong offering to our customers’ aftermarket business. This positive trend is expected to continue in 2019.

The Group has undertaken a series of structural efficiency enhancements during the year to move even closer to the customer — work that will continue in 2019. These have already produced results with greater collaboration between business areas, markets and industry specialists. We finished 2018 on a positive note and move into 2019 with a strong commitment to make a difference, for both customers and end users.

Fourth quarter

• The operating income amounted to SEK 490 Million (473) and the organic growth was 1% 
• The operating profit amounted to SEK 41 Million (37), yielding an operating margin of 8.4% (7.7) 
• The profit after tax amounted to SEK 34 Million (28) 
• Earnings per share (EPS) after dilution amounted to SEK 1.92 (1.55)

January-December

• The operating income amounted to SEK 1,842 Million (1,762) and the organic growth was 2% 
• The operating profit amounted to SEK 120 Million (95), yielding an operating margin of 6.5% (5.4) 
• The profit after tax amounted to SEK 94 Million (72) 
• Earnings per share (EPS) after dilution amounted to SEK 5.25 (4.00) 
• Return on capital employed was 21% (14)
• The Board of Directors proposes a regular share dividend of SEK 3.00 (2.50) per share.

This information is information that Semcon AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication at 08.00 (CET) on 7 February 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 2000 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

Tags: