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

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

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.