Interim report January - September 2011

Interim report January - September 2011

Improved sales and higher earnings

*  Revenue for the quarter increased 24 per cent at fixed exchange rates
and 19 per cent in SEK amounting to SEK 1,696 M (1,426).
*  Operating profit for the third quarter rose 21 per cent to SEK 297 M
(245), corresponding to an operating margin of 17.5 per cent (17.2).
*  The interim period's profit after tax was SEK 718 M (522).
*  Earnings per share for the interim period amounted to SEK 4.94
(3.59).
*  Record-large product launches in conjunction with EMO trade fair in
Germany, including the unveiling of the new milling tool Minimaster®
Plus.

 
Comments from the CEO

“In seasonal terms, demand was lower in the third quarter but was
otherwise on a par with the second quarter. All market regions continued
to report growth during the quarter compared with the year-earlier
period. The most positive trend was noted in Central and Eastern
Europeas well as NAFTA. Growth in Asian markets during the quarter was
lower than previously; a development that was primarily driven by the
weaker performance of the Chinese market. Overall, the sales trend has
levelled-off and the uncertainty regarding the future demand scenario
has increased. As a result of these developments and escalating
uncertainty in the market, activities aimed at reducing production rates
and staffing levels were initiated during the quarter.

Operating profit improved compared with the year-earlier period and
amounted to SEK 297 M (245) for the quarter, corresponding to a margin
of 17.5 per cent (17.2). This improvement was largely attributable to
higher volumes and a favourable price trend. Higher costs for sales and
marketing activities within the framework of the Group's expansion
programme were the main reasons for the dampening effect on earnings.
Earnings for the quarter were also impacted by adjusted cost accruals
relating to the first six months of the year and temporarily by slightly
higher production costs, primarily due to the historically large number
of product launches. Overall, this meant that the underlying operating
margin for the quarter was closer to 20 per cent.

Cash flow from operating activities before changes in working capital
and investments remained strong and amounted to SEK 307 M (269) for the
quarter. However, the continued build-up of inventory - primarily driven
by high raw material prices - and a raised level of investment had a
dampening effect on the cash flow trend during the quarter. As a
consequence of the favourable cash flow, the net debt/equity ratio
declined during the quarter from 0.66 to 0.56 (0.41 preceding year).

For Seco Tools, the EMO trade fair in Germany in September, which in
global terms is the largest of its kind for the industry, was a real
success. We launched a raft of new exciting products at the fair as part
of the largest-ever update of our product portfolio. The commitment and
energy shown by all employees in meetings with customers during this
launch was hugely impressive!” says Lars Bergström, President and CEO.
  
 
 
The information contained herein is subject to the disclosure
requirements of Seco Tools AB under the Swedish Securities Exchange and
Clearing Operations Act and/or the Financial Instruments Trading Act.
This information was submitted for publication on 1 November 2011, 7:45
a.m. CET.

For additional information, please contact Per-Lennart Berg, Director
Group Communication, (tel +46 223-403 20), Lars Bergström, President and
CEO (tel: +46 223-401 10) or Patrik Johnson, CFO (tel +46 223-401 20).
E-mail can be sent to investor.relations@secotools.com

Previously published financial information can be found under “About
Seco/Investor Relations” on the Seco Tools website (www.secotools.com).
Seco Tools AB's Corporate Registration Number is 556071-1060 and the
company's address is Seco Tools AB, SE-737 82 Fagersta, Sweden. The
telephone number to the Group's head office is +46 223-400 00.