SECO TOOLS AB Year-end report 2011 and interim report for

SECO TOOLS AB Year-end report 2011 and interim report for the fourth quarter

Improved sales and higher earnings

  · Revenue for the quarter increased 19 per cent at fixed exchange rates and 17
per cent in SEK and amounted to SEK 1,850 M (1,577).
  · Operating profit for the fourth quarter rose 15 per cent to SEK 370 M (322),
corresponding to an operating margin of 20.0 per cent (20.4).
  · Revenue for the full year increased 27 per cent at fixed exchange rates and
amounted to SEK 7,043 M (5,858).
  · Operating profit totalled SEK 1,408 M (1,098), corresponding to an operating
margin of 20.0 per cent (18.7).
  · Profit after tax for the full year was SEK 954 M (742). Earnings per share
for the full year amounted to SEK 6.56 (5.10).
  · The new facility for cemented carbide powder in Fagersta has now been
completed and is ready to go onstream.
  · As a result of the public offer from Sandvik to acquire all remaining shares
in Seco Tools, Sandvik controlled about 98.7 per cent of the shares and 99.6 per
cent of the votes in Seco Tools on 16 January 2012. 

Comments from the CEO

“Demand during the quarter remained strong and revenue for the full year
exceeded SEK 7 billion. All market regions continued to demonstrate year-on-year
growth during the quarter. While the most positive trend was noted in NAFTA,
growth was also strong in Eastern Europe. Generally speaking, growth in other
markets was somewhat weaker and the sales trend levelled off.

As a result of these developments and a general sense of uncertainty regarding
the economic situation, production rates and staffing levels were reduced
slightly during the quarter.

Operating profit improved compared with the year-earlier period and amounted to
SEK 370 M (322) for the quarter, corresponding to a margin of 20.0 per cent
(20.4). This improvement was largely attributable to higher volumes and a
favourable price trend. Higher costs for sales and marketing activities within
the framework of the Group’s expansion programme were the main reasons for the
dampening effect on earnings. Earnings for the quarter were also impacted by
increased costs for raw materials and again by slightly higher production costs,
primarily due to the historically large number of product launches, as well as
negative currency effects.

Cash flow from operating activities before changes in working capital and
investments remained strong and amounted to SEK 434 M (297) for the quarter.
However, the continued increase in tied-up working capital and a higher level of
investment had a dampening effect on the cash flow trend during the quarter. The
net debt/equity ratio declined during the quarter from 0.56 to 0.52 (0.42 in
preceding year).

During the quarter, the new production facility in Fagersta for cemented carbide
powder was completed. It will go onstream in gradual steps during 2012. The
total value of the investment is approximately SEK 140 M over three years in
property and equipment. The investment increases the Group’s production capacity
and enables further steps to be made in terms of product quality and
efficiency,” says Lars Bergström, President and CEO.

 

Fagersta, 1 February 2012

SECO TOOLS AB (publ)

BOARD OF DIRECTORS

 

The information contained herein is subject to the disclosure requirements of
Seco Tools AB under the Swedish Securities Exchange and Clearing Operations Act
and/or the Financial Instruments Trading Act. This information was submitted for
publication on 1 February 2012, 7:45 a.m. CET.

For additional information, please contact Per-Lennart Berg, Director Group
Communication, (tel +46 223-403 20), Lars Bergström, President and CEO (tel: +46
223-401 10) or Patrik Johnson, CFO (tel +46 223-401 20). E-mail can be sent to
investor.relations@secotools.com

Previously published financial information can be found under “About
Seco/Investor Relations” on the Seco Tools website (www.secotools.com). Seco
Tools AB’s Corporate Registration Number is 556071-1060 and the company’s
address is Seco Tools AB, SE-737 82 Fagersta, Sweden. The telephone number to
the Group’s head office is +46 223-400 00.
SECO TOOLS AB Year-end report 2011 and interim report for the fourth quarter

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