SEMCON: Strong end to the year with stable sales growth and improved profits

Regulatory News:

Semcon (STO:SEMC)

2011 was characterized by stable demand, increased sales and improved profits in all business areas. Over the year we received major orders from the automotive industry within powertrain, safety and product information. We continue with our positive outlook for future developments in 2012, even though uncertainty has grown due to the poorer economic outlook.

Q4 report

• Operating income was SEK 679 million (583) and organic growth was 17% 

• The operating profit was SEK 57 million (35), giving an operating margin of 8.4% (6.0) 

• The profit after tax was SEK 36 million (23)  

• Earnings per share (EPS) after dilution was SEK 1.98 (1.26)  

January-December

• Operating income was SEK 2,452 million (2,091) and organic growth was 20% 

• The operating profit was SEK 111 million (3), giving an operating margin of 4.5% (0.1) 

• Results were negatively affected by costs of a one-off nature of SEK 31 million (-15) 

• The profit after tax was SEK 69 million (-5) 

• EPS after dilution was SEK 3.83 (-0.29)

• Return on average capital employed excluding one-off items rose to 19.7% (2.7)

• The equity/assets ratio was 38% (33) 

Income and result

Q4

Operating income rose by SEK 96 million and amounted to SEK 679 million (583).  The sales in local currencies rose by 17%.The sales growth is a result of a better state of the market with the utilization rate up and 222 more employees than the same time last year. 

The operating profit improved by SEK 22 million and amounted to SEK 57 million (35), giving an operating margin of 8.4% (6.0). The improvement is mainly attributable to increased sales. The operating profit last year was hit by one-of costs of SEK 4 million. 

The business areas show the following operating margins, excluding one-off costs:  Automotive R&D 5.7% (4.7), Design & Development 9.4% (6.1) and Informatic 16.3% (14.5). 

Net financial items amounted to SEK -3 million (-2), giving a profit before tax of SEK 54 million (33). Tax costs for the quarter amounted to SEK -18 million (-10). The profit after tax was SEK 36 million (23) and the earnings per share after dilution was SEK 1.98 (1.26). 

January-December

The operating income rose by SEK 361 million compared to last year and amounted to SEK 2,452 million (2,091). Sales in local currencies rose by 20%. The sales growth is a result of a better market situation.

The operating profit improved by SEK 108 million and amounted to SEK 111 million (3), giving an operating margin of 4.5% (0.1). The improvement is mainly attributable to increased sales with an increased utilization rate. A reserve of SEK 31 million was made in Q2 mainly for outstanding accounts receivable from Saab Automobile AB. The same period last year was hit by one-off costs of SEK 15 million. The operating profit, excluding these items, was SEK 142 million (18) with an operating margin of 5.8% (0.9). 

The business areas show the following operating margins, excluding one-off costs:  Automotive R&D 3.1 % (-3.2), Design & Development 7.9 % (3.5) and Informatic 11.3 % (8.9). 

Net financial items amounted to SEK -11 (-9), giving a profit before tax of SEK 100 million (-6). Tax costs for the year stood at SEK -31 (1). The profit after tax was SEK 69 million (-5) and the earnings per share after dilution was SEK 3.83 (-0.29). 

Financial position

The operating cash flow from current activities was SEK 88 million (-55). The Group’s cash and bank balances amounted to SEK 40 million (42) with additional non-utilized credit of SEK 223 million as at 31 December. A new credit agreement was signed at the beginning of Q3. The new credit agreement consists of an overdraft facility of SEK 150 million (100) and a revolving credit facility of EUR 32.8 million (32.8), which runs until July 2012. There is an option available for the company, before the due date, to extend the revolving credit to a three-year loan.

Investments in hardware, licences, office supplies and equipment, amounted to SEK 17 million (14). Shareholders’ equity amounted to SEK 442 million (373) and the equity/assets ratio was 38% (33). The Group’s net debt fell by SEK 72 million to SEK 233 million (305) and the debt/equity ratio was 0.5 times (0.8). 

Staff and organization

The headcount on 31 December was 2,925 (2,703) of which 1,462 (1,432) in Sweden and 1,463 (1,271) abroad. The number of employees in active service was 2,800 (2,558). The average number of employees was 2,727 (2,474). In the respective business areas the number of employees is as follows: Automotive R&D 1,714 (1,565), Design & Development 781 (753) and Informatic 430 (385).

Dividends 

In accordance with Semcon’s dividend policy, consideration is given to the company’s financial position and capital requirements for continued expansion. Due to the current uncertain macro-economic situation in the world and that the company wants to strengthen its financial position ahead of future expansion the Board proposes that no dividend be paid for 2011 (-). 

Outlook

2011 was characterized by good demand with increased sales and improved results in all business areas. Semcon continues to have a positive outlook for future developments for 2012, even though uncertainty has increased due to the poorer economic outlook.

Semcon is a global company active in the areas of engineering services and product information. The Group has nearly 3,000 employees with extensive experience from many different industries. We develop technologies, products, plants and information solutions along the entire development chain and also provide many services including quality control, training and methodology development. Semcon boosts customers’ sales and competitive strength by providing them with innovative solutions, design and solid engineering solutions. The Group has sales of SEK 2.5 billion and activities at more than 45 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China, Spain and Russia

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