Höganäs Interim Report 1 January-30 September 2012
Höganäs AB (STO:HOGAB):
Tougher times, we are safeguarding cash flow
CEO Alrik Danielson comments om third quarter earnings:
“Market conditions are deteriorating. There are some bright spots in the quarter, such as South America and Russia, but generally we are seeing clear deterioration, with Europe at the forefront. This outlook means that first and foremost, we are now safeguarding our cash flow. We are adapting production and inventory levels, which will affect income negatively in the short term, and preparing to take further measures if necessary.
Simultaneously, we have to think long term. Our acquisition of Fcubic AB in the additive manufacturing or “3D printing” segment, and the creation of the Digital Metal® product segment are strategically important. Additive manufacturing will strengthen the metal powder market because it is expected to be a key technology for component and system manufacture in the future. Digital Metal® will create substantial values for customers, who require superior performance, minimal development lead-times and customer-tailored components produced on a large scale. And in this transaction, Höganäs is acquiring the best available technology in the segment.”
Third quarter 2012 (compared to corresponding period of previous year)
- Net sales were MSEK 1,602 (1,810), down 11% year on year. Demand conditions were worse than in the corresponding period of the previous year in all regions apart from South America. Excluding the one-off deliveries to Hoeganaes Corporation (GKN) in the third quarter 2011, sales volumes were down 5% year on year. Including these one-off deliveries, sales volumes were down 9%.
- Operating income was MSEK 205 (275) and income after tax was MSEK 148 (185). Lower sales volumes, reduced production volumes and a stronger Swedish krona had a negative impact on income, while price increases and savings measures had a positive effect.
- Earnings per share before and after dilution for the quarter were SEK 4.24 (5.32).
- Cash flow from operating activities was MSEK 272 (273).
1 January – 30 September 2012 (compared to corresponding period of previous year)
- Net sales were MSEK 5,223 (5,449), down 4% year on year. Excluding the one-off deliveries to Hoeganaes Corporation (GKN) in 2011, sales volumes were down 3% year on year. Including these one-off deliveries, sales volumes were down 7%.
- Operating income was MSEK 772 (859) and income after tax was MSEK 553 (610).
- Earnings per share before and after dilution for the period were SEK 15.88 (17.53).
- Cash flow from operating activities was MSEK 802 (536).
- The net debt/equity ratio was 19% at the end of the period, compared to 25% at the beginning of the financial year.
- The short-term outlook has deteriorated compared to the assessment made in the Second-quarter Interim Report. The market was weaker than expected in the third quarter. Further inventory adjustments by customers and generally poor demand conditions are expected in the fourth quarter. Staff downsizing affecting 115 people is being implemented to adapt production capacity and organisational resources to weakening demand. Work on identifying further savings for 2013 has begun.
Höganäs, Sweden, 24 October 2012
Höganäs AB (publ)
Streamed press conference
Alrik Danielson, CEO and President, and Sven Lindskog, Chief Financial Officer, will present this Report in a conference call at 10:30 a.m. on 24 October 2012.
The press conference will be streamed at: www.hoganas.com / Investor Relations / Conference Call.
It is open to journalists, analysts and investors.
Participants are welcome to call on +46 (0)8 506 85759, +44 (0)207 108 6303 or +1 8666 765 870.
The presentation is available at www.hoganas.com
NB: The information in this Report is mandatory for Höganäs AB (publ) to publish pursuant to the Swedish Securities Markets Act. This Report has been subject to review by the company's auditors. The information was submitted for publication at 9:00 a.m. on 24 October 2012.
HÖGANÄS IN BRIEF
Höganäs AB (publ) is the world's leading producer of iron and metal powders. Building on its clear vision of the possibilities of powder to improve efficiency, the consumption of resources and environmental impact across a raft of segments, the company has developed in-depth application skills. Thus Höganäs can help create the automotive components, white goods, water and exhaust treatment products of the future in collaboration with its customers. Founded in 1797, the company had sales of MSEK 7,081 in 2011, and is quoted on NASDAQ OMX Stockholm's Mid Cap List. For more information, visit our website: www.hoganas.com.
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Alrik Danielson, CEO and President
+46 (0)42 33 80 00
Sven Lindskog, Chief Financial Officer
+46 (0)42 33 80 00