HÖGANÄS' YEAR-END REPORT 2008: VERY WEAK MARKET IN THE FOURTH QUARTER - NEW R&D INITIATIVES

HÖGANÄS' YEAR-END REPORT 2008: VERY WEAK MARKET IN THE FOURTH QUARTER - NEW R&D
INITIATIVES 

Höganäs' sales volumes were down 28% in the fourth quarter due to a very weak
market. Combined with reported costs for redundancies and contracted pensions
related to personnel reduction, this resulted in an operating loss for the
fourth quarter. The market is expected to remain weak for the short term.
However, in the longer term, the outlook is positive. Current low production
rates through the component industry have triggered greater interest in
developing new metal powder applications. There are also major research and
development initiatives in new applications. In December, Höganäs received
research support from Vinnova (the Swedish Governmental Agency for Innovation
Systems) to develop a new type of fuel cell.

Höganäs AB is publishing its Year-end Report for 2008 today. In the fourth
quarter, the company's net sales reduced from MSEK 1 418 to 
MSEK 1 353, or by -4.6%. Sales volumes contracted by 28% on the fourth quarter
2007. Volumes fell sharply across all regions, including Asia and South America,
where sales remained good in the third quarter. The automotive industry's sharp
downturn after the summer accentuated further in the fourth quarter. Moreover,
tightening credit conditions and manufacturing concerns caused inventory
adjustments and a significant reduction in consumption across most other
sectors. This resulted in an unprecedented demand downturn for Höganäs products
in November and December.

Operating income for the fourth quarter was a loss of MSEK -32 (132), with this
negative variation primarily caused by a volume reduction. The latter also
caused significant metal inventory losses and write-downs, because it was
coincident with sharp price downturns on iron scrap and some alloy metals,
particularly molybdenum. Where there are functional hedging markets, such as
nickel and copper, the inventory losses were offset by metal hedge gains. For
iron scrap and metals like molybdenum and cobalt, there are no functional
hedges, implying that significant inventory losses could not be offset. The
negative variation was partly offset by lower costs for steel scrap. Positive
currency differences resulting from a weaker Swedish krona were cancelled by a
currency hedging loss.

Net sales for the full year were MSEK 6 103 (5 838), a 4.5% increase mainly due
to price increases and higher metal price surcharges. Volume growth for the full
year was negative at -3.3%. Excluding sales to Kobelco's customers, the sales
increase was 3.4%, while the volume reduction was -4.7%. Net income for the full
year was MSEK 393 (431), a 9% reduction. The Board of Directors is proposing a
cash dividend of SEK 3.00 per share (6.25).

Commenting, Höganäs' President Alrik Danielson said: 
“The first half-year 2009 will feature a persistent very weak market. Against
this background, we're acting by cutting costs, deferring investments and
keeping a firm grip on our cash flow. Meanwhile I'm pleased that alongside
partners, Höganäs is receiving research support in a very promising segment like
fuel cells. This demonstrates that Höganäs' R&D initiatives in metal powder and
powder production technology are important, and that it is building a platform
for a commercial operation in the forward-looking segment of environmental
energy systems.”


For more information, please contact:

HÖGANÄS AB
Alrik Danielson
CEO & President
Tel. +46 (0)42 33 80 00

Sven Lindskog
CFO
Tel. +46 (0)42 33 80 00

Höganäs, Sweden, 5 February 2009

This is information that Höganäs AB (publ) is obligated to make public according
to the Swedish Securities Exchange and Clearing Operations Act and/or the
Financial Instruments Trading Act. The information was submitted for publication
at 09.00 on 5 February 2009.

Höganäs was founded in 1797 and is today a leader within the iron and metal
powder industry. End products are mainly used by the automotive industry and
home appliances, lawn and garden and hand-tools. In 2007 the turnover was MSEK 5
838 (5 123) and income before tax MSEK 562 (525). Höganäs is listed on the OMX
Nordic Exchange Stockholm's Mid Cap list. 
For further information please visit our website www.hoganas.com