Share of projects and partnership deals increase

Following the first quarter, where demand was relatively weak, we have seen a
degree of improvement in the market over the second and third quarters, although
demand has not really taken off. It is positive that we have increased the
number of projects and partnership deals, which is part of our long-term
strategy. We have also bolstered our offer in the energy and mining sectors by
establishing the company in Luleå during the third quarter. Customers’ need for
development services remain high with demand expecting to gradually improve,
even though the market situation is difficult to predict.
Third quarter
• The operating income was SEK 573 million (573) and the organic growth was 0%
• The operating profit was SEK 37 million (35) giving an operating margin of
6.5% (6.1)
• The profit after tax was SEK 26 million (23)
• Earnings per share (EPS) after dilution as SEK 1.43 (1.30)
January-September
• The operating income was SEK 1,814 million (1,900) and organic growth was -3%
• The operating profit was SEK 103 million (138) giving an operating margin of
5.7% (7.3)
• The profit after tax was SEK 72 million (94)
• EPS after dilution was SEK 3.99 (5.21)
• The equity/assets ratio was 49% (44)
• Return on average equity was 20% (27)

Income and results
Third quarter
Operating income amounted to SEK 573 million (573). There was also lacklustre
demand from some industrial customers in Q3, although improvement was reported
at the end of the quarter. The quarter had one extra working day than the same
period last year. The operating profit was SEK 37 million (35) giving an
operating margin of 6.5% (6.1). Net financial items totalled SEK -2 million (-2)
giving a profit before tax of SEK 35 million (33). Tax costs for the quarter
stood at SEK -9 million (-10). The profit after tax was SEK 26 million (23) and
EPS after dilution was SEK 1.43 (1.30).

January-September
Operating income amounted to SEK 1,814 million (1,900), resulting in organic
growth of -3%. It is mainly the result of the relatively weak demand at the
start of the year which affected sales. The operating profit fell by SEK 35
million to SEK 103 million (138) giving an operating margin of 5.7% (7.3). The
decline is attributable to lower sales at the start of the year and staff cuts
in Q1, which negatively affected results by SEK 6 million. Last year we reported
major revenue recognition of SEK 5 million from a project in the Automotive R&D
business area. The business areas report the following operating margins:
Automotive R&D 4.5% (5.7), Design & Development 3.9% (7.9) and Informatic 11.7%
(11.5). Net financial items totalled SEK -5 million (-5) giving a profit before
tax of SEK 98 million (133). Tax costs for the period stood at SEK -25 million (
-39). The profit after tax was SEK 72 million (94) and EPS after dilution was
SEK 3.99 (5.21).

Financial position
The operating cash flow from current activities was SEK 43 million (78). The
Group’s cash and bank balances amounted to SEK 80 million (49) with additional
non-utilized credit of SEK 245 million (270) as at 30 September. A new credit
agreement was signed at the beginning of Q3.The new credit agreement consists of
a three year revolving credit facility of EUR 22.8 million (32.8), which will
run until July 2016. In addition the company has an existing overdraft facility
of SEK 150 million (150). Investments in hardware, licenses, office supplies and
equipment, amounted to SEK 20 million (16). Shareholders’ equity amounted to SEK
616 (528) and the equity/assets ratio was 49% (44). A share dividend of SEK 36
million (-) was paid in Q2. The Group’s net debt has fallen by SEK 84 million
over the past year, amounting to SEK 74 million (158) and the debt/equity ratio
was 0.1 times (0.3). The interest cover ratio was 28.4 times (21.8).

Staff and organisation
The headcount on 30 September was 3,011 (3,010). The number of employees active
in service was 2,895 (2,895). In the business areas the headcount is as follows:
Automotive R&D 1,813 (1,767), Design & Development 667 (744) and Informatic 531
(499).

Outlook
Customers’ need for development services remain high with demand expecting to
gradually improve, even though the market situation is difficult to predict.
Semcon is a global company active in the areas of engineering services and
product information. The Group has around 3,000 employees with extensive
experience from many different industries. Semcon develops products, plants and
information solutions along the entire development chain and also provides many
other products and services including quality control, training and methodology
development. Semcon increases customers’ sales and competitive strength by
providing them with innovative and solid engineering solutions. The business is
divided into three business areas: Automotive R&D, Design & Development and
Informatic. The Group had sales of SEK 2.6 billion in 2012 with activities at
more than 45 sites in Sweden, Germany, the UK, Brazil, Hungary, India, China and
Spain.