Höganäs reports deteriorating market conditions
October 24, 2012
Swedish metal powder producer Höganäs AB has reported a drop in sales for the third quarter 2012. Net sales were down some 11%, when compared to corresponding quarter of previous year, to MSEK 1,602 (MSEK 1,810 in Q3 2011).
Excluding the one-off deliveries to Hoeganaes Corporation (GKN) in the third quarter 2011, the company reports 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.
Net sales during the first nine months of 2012 (1 January – 30 September) were also reported lower than for the corresponding period of 2011. 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%.
Job cuts
Höganäs states that the short-term outlook has deteriorated compared to the assessment made in the Second-quarter Interim Report, with the market 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.
CEO Alrik Danielson stated that, “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,” added Danielson.
Posted by: Paul Whittaker, Editor ipmd.net, [email protected]
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