Seco Tools Year-end Report 2009

Seco Tools Year-end Report 2009

Year-end report 2009 and interim report for the fourth quarter

- Fourth quarter revenue fell by 22 per cent at fixed exchange rates and 24 per
cent in Swedish kronor to SEK 1,231 M (1,625). Operating profit was SEK 121 M
(233), equal to an operating margin of 9.8 per cent (14.3).

- The cost-cutting programmes had a positive effect on earnings.

- Revenue for the full year declined by 31 per cent at fixed exchange rates and
amounted to SEK 4,889 M (6,536). Operating profit was SEK 307 M (1,332), equal
to an operating margin of 6.3 per cent (20.4).

- Profit after tax for the full year was SEK 161 M (890). Earnings per share for
the full year were SEK 1.11 (6.12).

- Strong cash flow of SEK 861 M (851) for the full year.

- Decision to invest 130 MSEK in the production of cemented carbide powder. 

- The Board proposes that no dividend be paid (SEK 3.20 per share). 

Comments from the CEO
“Demand in virtually all of Seco Tools' markets improved slightly in the fourth
quarter compared to the sales rate at the end of the third quarter. It is
particularly notable that several emerging economies in Asia, such as China and
India, are also showing growth relative to the previous year.

“The cost-cutting programmes continued to have a very positive impact during the
quarter and have strengthened earnings for the full year by approximately SEK
560 M. The cost-cutting programmes will reduce the Group's annual cost level by
a total of around SEK 600 M. At most, these measures included some 850 positions
including the working hours reduction programme equal to a total of 200
full-time positions. However, in the final quarter a large share of the
employees with reduced working hours returned to full time work in order to
enable faster production rates.

“Operating margin for the fourth quarter was stronger than in the earlier
quarters of the year, at 9.8 per cent (14.3). The decrease compared to last year
is attributable to lower volumes and somewhat less favourable exchange rates. 
The period's negative earnings growth has been partly offset by the gains
realised through the implemented cost-cutting programmes. Continued reductions
in working capital during the quarter, together with a lower level of
investment, contributed to a sustained strong cash flow of SEK 861 M (851) for
the year.

“Despite turbulent market conditions, 2009 was a successful year for Seco Tools
when the company increased its market shares and made a number of important
product launches,” says Kai Wärn, President and CEO of Seco Tools.

For additional information contact Kai Wärn, 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