Interim report January-June 2016

We are reporting healthy growth and significantly better results than last year
for Q2. It is pleasing to see all our business areas reporting improvements in
results. Business area Engineering Services Nordic noted increased demand from,
among others, the automotive industry, while the energy sector, in Norway
especially, remained weak. Business Area Engineering Services Germany continued
work on the change process that was initiated at the end of last year. With a
new business structure and organisation set, the prerequisites are now in place
for gradually improving results. It is positive to see that business area
Engineering Services International is successively increasing deliveries from
our specialists in Brazil concerning autonomous vehicles for customers in
Europe. We see good growth potential for the entire Group within this area.
Business area Product Information signed two new partnership agreements in Q2
with automotive manufacturers in Sweden and the UK. The projects are being
delivered by our global teams and initially involve 65 employees. The market is
showing great interest in our managed services offers that provide significant
value for customers through higher quality, improved efficiency and lower total
costs. The trend towards more connected products is very clear. Our knowledge
and expertise in product development in several industries is a key element in
helping our customers to create smarter products that make life simpler for the
end-user. Semcon is an attractive and appreciated supplier, but in order to
increase our market share and further strengthen our brand we wish to increase
visibility and be even more distinct in our communication. Consequently, during
the autumn we will launch our new communication strategy.
Second quarter
• The operating income amounted to SEK 700 million (632) and organic growth was
10%
• The operating profit amounted to SEK 31 million (-28), giving an operating
margin of 4.4% (-4.5)
• The profit after tax amounted to SEK 22 million (-22)
• Earnings per share (EPS) after dilution amounted to SEK 1.24 (-1.21)

January-June
• The operating income amounted to SEK 1,366 million (1,309) and organic growth
was 5%
• The operating profit amounted to SEK 54 million (6), giving an operating
margin of 4.0% (0.4)
• The profit after tax amounted to SEK 39 million (3)
• Earnings per share (EPS) after dilution amounted to SEK 2.16 (0.15)
• The equity/assets ratio amounted to 46% (45)

Income and result
Second quarter
The operating income amounted to SEK 700 million (632). Adjusted for currency
effects, acquisitions and divestments, income increased by 10%. The quarter had
more working days compared with last year, which accounted for around 4% of the
increase. The operating profit amounted to SEK 31 million (-28), giving an
operating margin of 4.4% (-4.5). All business areas reported improved operating
profit compared with the previous year. Last year business area Engineering
Services Germany’s operating profit was affected by SEK 20 million in
restructuring costs. Net financial items amounted to SEK -1 million (-1), giving
a profit before tax of SEK 30 million (-30). The tax cost amounted to SEK -8
million (+8). The profit after tax amounted to SEK 22 million (-22) and EPS
after dilution was SEK 1.24 (-1.21).

January-June
The operating income amounted to SEK 1,366 million (1,309). Adjusted for
currency effects, acquisitions and divestments, income increased by 5%. The
period had one extra working day compared with last year, which accounted for
around 1% of the increase. The operating profit amounted to SEK 54 million (6),
giving an operating margin of 4.0% (0.4). All business areas reported improved
operating profit compared with the previous year. Last year the business area
Engineering Services Germany’s operating profit was affected by SEK 20 million
in restructuring costs. Business area Product Information’s operating profit was
positively affected this year by recovered write-downs of accounts receivable of
SEK 7 million. Net financial items amounted to SEK -2 million (-2), giving a
profit before tax of SEK 52 million (4). The tax cost amounted to SEK -13
million (-1). The profit after tax was SEK 39 million (3) and EPS after dilution
was SEK 2.16 (0.15).

Financial position
The operating cash flow from current activities was SEK -40 million (-110). Cash
flow is seasonally weak in the first half of the year. Investments in hardware,
licenses, office supplies and equipment amounted to SEK 26 million (23). The
Group’s liquid assets amounted to SEK 47 million (55) with additional non
-utilised credit of SEK 223 million (177) as at June 30. Shareholders’ equity
amounted to SEK 622 million (613) and the equity/assets ratio was 46% (45).
During Q2 a dividend of SEK 22 million (45) was paid to shareholders. The
Group’s net debt amounted to SEK 170 million (198). Excluding pension
commitments, net debt amounted to SEK 99 million (132). The debt/equity ratio
was 0.3 times (0.3).

Employees
The head count on June 30 was 2,897 (2,886) and the number of employees in
active service was 2,772 (2,775).In the respective business areas the headcount
is as follows: Engineering Services Nordic 1,083 (996), Engineering Services
Germany 874 (997), Engineering Services International 351 (338) och Product
Information 589 (555). Measures taken over the past year in business area
Engineering Services Germany have resulted in a fall in the number of employees.
For more information, contact
Björn Strömberg, CFO Semcon AB, +46 31-721 03 06
www.semcon.com
Semcon is an international technology company within engineering services and
product information. We have around 3,000 employees with extensive experience
from many different industries. We develop technology, products, plant and
information solutions along the entire development chain and also provide many
services and products in areas such as quality control, training and methodology
development. Semcon contribute to our customers’ competitive strength by
providing innovative solutions, design and solid engineering expertise. Work
processes and solutions are adapted to customer requirements, from taking part
in the customer’s teams to in-house development projects. The Group had annual
sales of SEK 2.6 billion in 2015 and activities at more than 40 sites in Sweden,
Germany, the UK, Brazil, China, Hungary, India, Spain and Norway. Some of
Semcon’s biggest customers include: ABB, AB Volvo, Audi, BMW, CEVT, Jaguar Land
Rover, Scania, Volvo Cars and VW. Read more at www.semcon.com.