Positive cash flow despite negative results

Positive cash flow despite negative results

Short version Financial Statement 2009

Fourth quarter
•	Operating income was SEK 539 million (820)  
•	The operating loss was SEK 91 million (-36), giving an operating margin of
-16.9 % (-4.4)
•	One-off items affected earnings by SEK -101 million (-90), of which the
write-down of goodwill and shares in associated companies was SEK 78 million (-)
 
•	The loss after tax was SEK -90 million (-26) 
•	Earnings per share (EPS) was SEK -4.97 (-1.45) 
•	The operating cash flow from current activities was SEK 3 million (33) 

January - December
•	Operating income was SEK 2,281 million (3,299) 
•	The operating loss was SEK 241 million (150), giving an operating margin of
-10.6 % (4.5)
•	One-off items affected earnings by SEK -171 million (-66), of which the
write-down of goodwill and shares in associated companies was SEK 78 million (-)
•	The loss after tax was SEK 209 million (92) 
•	Earnings per share (EPS) was SEK -11.52 (5.14)
•	The operating cash flow from current activities was SEK 107 million (138) 
•	The equity/assets ratio was 30.5% (33.6)  

“2009 was a year where the recession hit the company very hard, resulting in
significantly lower business volumes, a low utilization ratio and greater price
pressure. The cash flow was positive however as a result of less tied up working
capital and the Group's equity/assets ratio is in line with the financial
objectives. Orders are expected to steadily improve throughout 2010, with
increased market activity and more offer enquiries from the automotive, energy
and industry sectors.”  

Kjell Nilsson, President & CEO

 
Fourth quarter
Operating income in the fourth quarter fell by SEK 281 million to SEK 539
million (820) and organic growth of -34%. Income from Swedish automotive
customers fell by SEK 205 million. 
The operating loss was SEK 91 million (-36), giving an operating margin of
-16.9% (-4.4). Continued reduced business volumes with a low utilization ratio,
price pressure and costs for measures taken, had a negative impact on results.
The lower business volumes meant that staff cuts were necessary in the fourth
quarter, affecting 65 people in Sweden and 10 in Germany. In addition, 70
employees in Brazil were employed by a customer. 
 The operating loss includes costs of SEK 23 million for staff cuts, SEK 72
million for write-down of goodwill and SEK 6 million for write-down of shares in
associated companies. The results in total were affected by one-off items of SEK
101 million (-90). The operating loss, excluding these items was SEK 10 million
(54), giving an operating margin of 1.9% (6.6). 
Net financial items amounted to SEK -5 million (-5). The loss before tax was SEK
96 million (-41) with the loss after tax of SEK 90 million (-26). EPS was SEK
-4.97 (-1.45).  

January - December
The operating income over the year was SEK 2,281 million (3,299) with an organic
growth of -33%. The fall in sales was due to a reduction in business volumes as
a result of the recession, of which revenues from Swedish automotive customers
alone fell by SEK 710 million. The headcount fell by 708 over the year, compared
with 2008, meaning cost cuts by around SEK 400 million per year.

The operating loss was SEK 241 million (150), giving an operating margin of
-10.6% (4.5). Around 520 people have been made redundant, of which 440 in
Sweden, 10 in Germany and 70 in Brazil, which had a negative impact of SEK 82
million on earnings. The operating loss was also negatively affected by SEK 11
million for the reserve for bad debts and the depreciation of inventories, by
SEK 72 million for the write-down of goodwill and by SEK 6 million for the
write-down of shares in associated companies. The operating loss, excluding
one-off items, was SEK 70 million (216), giving an operating margin of -3.1%
(6.5).  
Net financial items amounted to SEK -16 million (-22). The loss before tax was
SEK 257 million (128). The tax revenue for the year was SEK 48 million,
equivalent to 19% of the loss before tax. Non-deductible write-downs of goodwill
and shares in associated companies of SEK 78 million affected the effective tax
rate. The loss after tax was SEK 209 million (92) and the EPS was SEK -11.52
(5.14).  

Events during the year so far
•	The number of Semcon AB's ordinary shares increased on 12 January by 330,000
through the conversion of the company's class C shares. After the conversion
there are 18,112,534 ordinary shares. 
•	Semcon streamlined the business and made 440 employees redundant in Sweden, 10
in Germany and 70 in Brazil. 
• 	Semcon Project Management acquired a small German company in the spring of
2009 and strengthened its range of project management services in Europe. 
•	JCE Group announced on 5 March 2009 that following the acquisition of 115,583
shares in Semcon, it now has a share capital in Semcon equivalent to 30.0% and
that the limit for the Mandatory Bid Rule had been passed. JCE was willing to
pay SEK 14 in cash for each of the Semcon shares. A total of 92,510 shares were
acquired under the offer and JCE now owns 30.5% of the shares in Semcon.  
•	Semcon is investing in the offshore industry and opened a new office in
Lidköping. Fifteen specialists have been employed with extensive experience of
international offshore projects and expertise in developing accommodation
modules on oilrigs. 
• Semcon has signed an order worth SEK 50 million for a German concept car with
extreme requirements.  	
• Semcon is working closely with Volvo Cars, Vattenfall, ETC and the Swedish
Energy agency to develop plug-in hybrids. 

Staff and organization
The headcount on 31 December was 2,602 (3,310) of whom 1,523 (2,050) in Sweden
and 1,079 (1,260) abroad. The number of employees in work was 2,441 (3,113). The
average number of employees was 2,791 (3,630). The number of employees in the
respective business areas was: Automotive R&D 1,468 (2,025), Design &
Development 784 (869) and Informatic 350 (416). 

Share dividend
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 major instability currently affecting the market the Board
proposes that no dividend be paid for 2009 (0).

Outlook
The long-term trend where the market's demand to produce more products, models
and versions at an ever-increasing rate is continuing, meaning increasing
business opportunities for the Group. Order numbers are expected to gradually
improve throughout 2010 as we see increased activity on the market with the
number of enquiries steadily climbing from the automotive, energy and industry
sectors. 


For more information please contact:
Anders Atterling, IR & PR manager, Semcon AB, +46 704 472 819