Year-end Report 2017

We ended 2017 with a positive quarter in terms of earnings. Profitability improved despite a negative calendar effect, with one fewer working day compared with the year-earlier period. The improvement in the results is due to our efforts to increase productivity of the business and a positive development regarding sales of Semcon’s concept offers.

Several new projects were started in the fourth quarter in the field of connected products and factories. Semcon’s broad and profound knowledge, gained from projects in a number of industries and through collaborations with research institutes, offers us both strategic depth and knowledge excellence moving forwards. During the fourth quarter, project start-ups included a collaboration with Volvo Bil to develop a concept for an automated logistics chain using autonomous vehicles.

We have an attractive position in the industry through a combination of Semcon’s extensive experience of product development and its cutting-edge digital offering. This also has positive knock-on effects for Semcon as an employer, together with a number of brand-building measures to increase our attractiveness. At the end of January this year, Semcon received the Brand Journey of the Year award in Sweden. Work will continue with the aim of attracting the best employees in our industry.

It is positive that the measures to increase margins in the Engineering Services business areas has started to yield results, as it reaches a 9 percent operating margin in the fourth quarter. Business Area Product Information ended the year with lower earnings compared with the fourth quarter previous year. Despite initiating several new partnerships, not least in digital information solutions, these could not fully compensate for lower volumes in ongoing customer assignments. The first quarter of 2018 contains one fewer working day compared with the corresponding period last year, when production volumes in the business area were also at a high level.

Our ability to create excellent customer experience through the use of smart technology provides a good foundation for both sought-after offerings and as an attractive workplace. The stronger margin at the end of last year means we head into the new year with a positive momentum. A number of measures have been made to achieve positive earnings in 2018, which in the first quarter has one less working day compared to 2017. Demand for Semcon’s services is healthy and our work with constant improvements is continuing in respect of business development, productivity and cost efficiency to enhance our profitability.

Against the background of the Group’s strong financial position, the Board of Directors has proposed an increased dividend of SEK 2.50 per share and an extra dividend of SEK 1.00 per share. The proposal means the stable financial position will be retained at the same time as there is scope for growth through acquisitions.

Fourth quarter

• The operating income amounted to SEK 473 Million (467) and the organic growth was 1% 
• The operating profit amounted to SEK 37 Million (32), yielding an operating margin of 7.7% (6.9) 
• The profit after tax amounted to SEK 28 Million (21) 
• Earnings per share (EPS) after dilution amounted to SEK 1.55 (1.16)

January-December

• The operating income amounted to SEK 1,762 Million (1,756) and the organic growth was 0% 
• The operating profit amounted to SEK 95 Million (95), yielding an operating margin of 5.4% (5.4) 
• The profit after tax amounted to SEK 72 Million (68) 
• Earnings per share (EPS) after dilution amounted to SEK 4.00 (3.75) 
• The equity/assets ratio amounted to 61% (45)
• Return on capital employed was 14% (13)
• The Board of Directors proposes a share dividend of SEK 2.50 (2.25) per share and an extra dividend of SEK 1.00 (-) per share, a total of SEK 3.50 (2.25) per share.

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 2017, the Group reported annual sales of SEK 1.8 billion. Read more on semcon.com

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