Seco Tools Interim report January - September 2010

Seco Tools Interim report January - September 2010

Interim report for the nine months ended 30 September 2010 

* Revenue for the third quarter rose by 32 per cent at fixed exchange
rates, and by 27 per cent in Swedish kronor (SEK), to SEK 1,426 M
(1,126).

* Higher sales and better capacity utilisation led to strong growth in
operating profit.

* Operating profit for the quarter was SEK 245 M (51), equal to an
operating margin of 17.2 per cent (4.5).

* Profit after tax for the nine-month period was SEK 522 M (83).

* Earnings per share for the nine-month period were SEK 3.59 (0.57).

* Acquisition of AOB in France completed.
 

Comments from the CEO

Sustained revenue growth and strong result improvement

“Demand continued to improve during the quarter and all market regions
reported higher revenue growth than in the previous quarter with the
exception of the seasonal downturn during the summer.

 The most significant growth is still being seen in South America. Of
the mature markets, the USA is showing particularly strong development.
All in all, the prospects for continued rising demand are deemed
favourable.

Operating result for the third quarter strengthened considerably
compared to the previous year and reached SEK 245 M (51). The
improvement is primarily attributable to higher sales and better
capacity utilisation.

The weaker operating margin compared to quarter two is explained mainly
by negative foreign exchange effects and a seasonally lower volume.

Growth initiatives within the “Positioning for Growth” programme are
continuing and are now focused primarily on market penetration in growth
regions and increased capability for a solution-oriented approach. With
regard to new product launches, we introduced an important upgrade of
Seco Tools' Turbo family of square shoulder mills and a further addition
to the Duratomic family, now in the grooving and parting-off area.

The acquisition of the French tool manufacturer AOB was completed
according to plan during the quarter. AOB has a strong offering of Poly
Crystalline Diamond (PCD) cutting tools and in-depth expertise in areas
like machining of composite materials (CFRP) in the aircraft industry.
Use of these materials is expected to increase significantly in the
future,” says Kai Wärn, President and CEO.