Some improvement in demand
We have noticed an improvement in market conditions since Q1, where demand was relatively weak. The Informatic business area is continuing to report good sales and earnings trends. Demand in the Design & Development business area has gradually improved and a new business area manager will start in September. The Automotive R&D business area has been hit by delays in a number of major projects. The project with the global German automotive manufacturer, signed for in Q1, engaged close to 100 individuals at the end of the quarter.
Second quarter
• The operating income was SEK 620 million (642) and organic growth was 0%
• The operating profit was SEK 31 million (31) giving an operating margin of 5.0% (4.8)
• The profit after tax was SEK 21 million (21)
• Earnings per share (EPS) after dilution was SEK 1.18 (1.14)
January-June
• The operating income was SEK 1,242 million (1,327) and organic growth was -4%
• The operating profit was SEK 66 million (103) giving an operating margin of 5.3% (7.8)
• The profit after tax was SEK 46 million (71)
• EPS after dilution was SEK 2.56 (3.92)
• The equity/assets ratio was 46% (41)
• Return on average equity was 21% (27)
Comment from CEO Markus Granlund
“We have noticed an improvement in market conditions since Q1, where demand was relatively weak. The Informatic business area is continuing to report good sales and earnings trends. Demand in the Design & Development business area has gradually improved and a new business area manager will start in September. The Automotive R&D business area has been hit by delays in a number of major projects. The project with the global German automotive manufacturer, signed for in Q1, engaged close to 100 individuals at the end of the quarter.”
Income and results
Second quarter
Operating income fell by SEK 22 million compared to last year and amounted to SEK 620 million (642). Adjusted for currency effects, acquisitions and divestments, income was unchanged. The Design & Development business area also reported weak demand from some industrial customers in the second quarter. The quarter had one extra working day compared with last year.
The operating profit was SEK 31 million (31), giving an operating margin of 5.0% (4.8). Net financial items totalled SEK -2 million (-2), giving a profit before tax of SEK 29 million (29). Tax costs for the quarter stood at SEK 8 million (8). The profit after tax was SEK 21 million (21) and EPS after dilution was SEK 1.18 (1.14).
January-June
Operating income amounted to SEK 1,242 million (1,327) with organic growth of 4%. The period contained one less working day compared to last year. The operating profit fell by SEK 37 million and amounted to SEK 66 million (103), giving an operating margin of 5.3% (7.8). The poorer result is mainly due to weaker demand at the start of the year and staff cuts in the first quarter, which negatively affected results by SEK 6 million. Last year, major revenue recognition of SEK 5 million was reported for a project in the Automotive R&D business area. The business areas reported the following operating margins: Automotive R&D 3.7% (5.9), Design & Development 4.2% (9.9) and Informatic 11.5% (10.3).
Net financial items totalled SEK -3 million (-3), giving a profit before tax of SEK 63 million (100). Tax costs for the year stood at SEK 16 million (29). The profit after tax was SEK 46 million (71) and EPS after dilution was SEK 2.56 (3.92).
Staff and organisation
The headcount on 30 June was 2,989 (2,987). The number of employees in active service was 2,871 (2,883). In the respective business areas the headcount is as follows: Automotive R&D 1,781 (1,742), Design & Development 669 (777) and Informatic 539 (468).
Outlook
Customers’ need for development services remain high however, with demand expecting to gradually improve, 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. The business is divided into three business areas: Automotive R&D, Design & Development and Informatic. The Group had sales of SEK 2.6 billion in 2012 with activities at more than 45 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China and Spain.
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