INTERIM REPORT JAN-MAR 2008 STRONG START OF THE YEAR OPERATING PROFIT DOUBLES FIRST QUARTER • Sales rose by 126% to SEK 881 million (389 m). Organic growth reached 11% • The profit after depreciation climbed by SEK 40 million to SEK 75 million (35 m), providing an operating margin of 8.5% (9.0) • The profit after tax was SEK 46 million (31) • Earnings per share (EPS) after dilution was SEK 2.58 (1.62) SALES AND EARNINGS ANALYSIS Sales during the quarter rose by SEK 492 million to SEK 881 million (389 m). Organic growth reached 11%. All business areas reported good sales growth despite three fewer workdays in the first quarter of 2008 compared with 2007 because of the timing of the Easter holidays. The operating profit after depreciation for the period increased by 114% to SEK 75 million (35 m), providing an operating margin of 8.5% (9.0). The acquisition of Caran and the cost savings scheme carried out in the second half of 2007 has had a positive effect on earnings. This includes a discount from Alecta for pension premiums of SEK 6 million. The total ITP premiums to Alecta will be cut by around 40% in 2008. Earnings have also been affected by measures implemented in 2007 in the Design & Development and Informatic business areas. The German business is reporting operatively slow increasing results but with a negative impact on the operating margin. Excluding the German business the operating margin for the Group was 10.8% (9.0). The profit after net financial items was SEK 65 million (35 m). Net financial items amounted to SEK -10 million (0). The increase is due to the acquisitions implemented in 2007. The profit after tax was SEK 46 million (31). The EPS after dilution was SEK 2.58 (1.62). KEY EVENTS DURING THE QUARTER • At the Extraordinary General Meeting on 7 February 2008 it was decided to: - appoint Hans-Erik Andersson as the Chairman of the Board - introduce a long-term share savings scheme for Group employees. The share savings scheme means in brief that participants in the scheme will pay part of their salary for a 12-month period to buy shares in the company. After a period of three years each share saved will entitle the holder, providing that he or she is still employed by the Semcon Group, to one matching share. The schemecomprises a maximum of 330,000 shares, of which 250,000 will be matching shares and 80,000 shares mainly to cover social security expenses. - implement a convertible-based incentive scheme for a maximum of 165 key employees in the Semcon Group and to take up a convertible subordinate debenture of no more than SEK 50 million. The convertibles will run from 20 March 2008 and have an interest rate of 3%. The scheme will provide a maximum dilution of 3.3 per cent of the current number of shares. • Kjell Nilsson has been appointed as the new President and CEO from 8 February 2008. • Semcon signed an agreement to acquire the Projektema brand. In addition to the acquisition of rights to the brand Semcon will receive an additional five employees from April. STAFF AND ORGANISATION The headcount at the period's end was 3,722 (1,561), of which 2,538 in Sweden and 1,184 abroad. The average number of employees was 3,717 (1 546). The number of employees in the respective business areas at the period's end was: Automotive R&D 2,419 (622), Design & Development 907 (607) and Informatics 396 (332). OUTLOOK Demand is expected to remain good and a continued healthy earnings trend is expected throughout 2008 on the back of the savings and integration schemes. THE NEW SEMCON Two major acquisitions and one divestment of a branch of the business took place in 2007. IVM Automotive in Germany was acquired on 1 April and Caran was acquired on 31 August. The Zpider business area's companies were sold on 31 December. Pro forma sales for the Group in 2007 amounted to SEK 3.3 billion with a headcount of around 3,600. The new Group is active in the areas of product development and technical information and is one of the world's largest suppliers of technical development services to the automotive industry, both for cars and trucks. The acquisition of Caran also means a greater range of services to the engineering industry where we have become one of the largest in Northern Europe..
INTERIM REPORT JAN-MAR 2008
| Source: Semcon AB
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