Weaker first quarter but new major agreement signed

The lacklustre demand that we have been seeing since the second half of 2012,
mainly in Sweden has, as expected, continued into the first quarter. The quarter
also contained two fewer working days compared with Q1 2012. We have taken
measures that negatively affected results by SEK 6 million. Last year’s results
included major revenue recognition of SEK 5 million. The Informatic business
area is however showing continued healthy sales and earnings trends. It is also
pleasing that we signed a major new agreement with a global German automotive
manufacturer in the quarter, which will engage around 150 individuals. Demand at
Design & Development is expected to gradually improve.
• The operating income was SEK 621 million (685) and organic growth was -7%

• The operating profit was SEK 35 million (72), giving an operating margin of
5.6% (10.5)

• The profit after tax was SEK 25 million (50)

• Earnings per share (EPS) after dilution was SEK 1.38 (2.77)

• The equity/assets ratio was 50% (40)

• Return on shareholders’ equity was 21.4% (21.5)

Income and result
Operating income amounted to SEK 621 m (685) and organic growth was -7%. The
Design & Development and Automotive R&D business areas saw weaker demand over
the quarter, particularly in Sweden. In addition, income fell by SEK 18 million
due to currency effects. The quarter also had two fewer working days, equivalent
to around SEK 20 million in lost income. The operating profit was SEK 35 million
(72), giving an operating margin of 5.6% (10.5). The poorer result is mainly due
to the weaker demand. The two fewer working days negatively impacted results by
around SEK 16 million. Measures have been taken in the form of staff cuts, which
negatively affected results by SEK 6 million. In Q1 2012, which was a strong
quarter, major revenue recognition of SEK 5 million was reported for a project
in the Automotive R&D business area. The business areas reported the following
operating margins: Automotive R&D 3.3% (8.1), Design & Development 4.6% (14.6)
and Informatic 13.8% (11.3). Net financial items totalled SEK -1 million (-1),
giving a profit before tax of SEK 34 million (71). Tax costs for the quarter
stood at SEK -9 million (-21). The profit after tax was SEK 25 million (50) and
EPS after dilution was SEK 1.38 (2.77).

Financial position
The operating cash flow from current activities was SEK -17 million (32). The
Group’s cash and bank balances amounted to SEK 55 million (46) with additional
non-utilized credit of SEK 336 million (245) as at 31 March. The Group’s credit
agreement consists of an overdraft facility of SEK 150 million (150) and a
Revolving credit facility of EUR 32.8 million (32.8), which run until July 2013.
There is an option available for the company to extend the revolving credit to a
three-year loan before the due date. Investments in hardware, licences, office
supplies and equipment, amounted to SEK 4 million (5). Shareholders’ equity
amounted to SEK 599 million (492) and the equity/assets ratio was 50% (40). The
Group’s net debt has fallen by SEK 120 million over the past year and amounted
to SEK 81 million (201) and the debt/equity ratio was 0.1 times (0.4) with an
interest coverage ratio of 24.7 times (11.4).

Staff and organisation
The headcount on 31 March was 2,969 (2,953). The number of employees in active
service was 2,867 (2,842). In the respective business areas the headcount is as
follows: Automotive R&D 1,765  (1,725), Design & Development 680 (780) and
Informatic 524 (448).

Outlook
Semcon has seen a drop in demand from some customers since the second half of
2012, mainly in the Design & Development business area. The Swedish automotive
industry has also shown a drop in purchase orders of product development
services for 2013, while there is good demand from the global automotive
industry. Customers’ need for development services remain high however with
demand expecting to gradually improve, even though the market situation is
difficult to predict.
Markus Granlund, CEO Semcon AB, 46 31 721 03 11
Björn Strömberg, CFO Semcon AB,  46 31 721 03 05
Anders Atterling, IR Manager Semcon AB, 46 704 47 28 19
Semcon is a global company active in the areas of engineering services and
product information. The Group has 3,000 employees with extensive experience
from many different industries. We develop technologies, products, plants and
information solutions along the entire development chain and also provide many
services including quality control, training and methodology development. Semcon
boosts customers’ sales and competitive strength by providing them with
innovative solutions, design and solid engineering solutions. The Group has
sales of SEK 2.6 billion and activities at more than 45 sites in Sweden,
Germany, the UK, Brazil, Hungary, India, China, Spain and Russia