Höganäs reports drop in 2012 annual sales
February 8, 2013
Swedish metal powder producer Höganäs AB has reported that net sales in the year 2012 were down 5% on the previous year at MSEK 6,712 (7,081). Excluding one-off shipments to Hoeganaes Corporation (GKN) in 2011, sales volumes were down 3% year on year. Including these one-off deliveries, sales volumes were down 6%.
Gross profit was reported at MSEK 1,651 (1,778), with operating income of MSEK 903 (1,071) and cash flow from operating activities at MSEK 1,122 (803).
Höganäs noted that sales volumes in Europe made a notable recovery in the first quarter after a poor fourth quarter 2011. But subsequently, sales deteriorated noticeably with each quarter. Sales in Asia featured a general recovery after the tsunami and floods in 2011, with only the Indian market being clearly weak.
Generally unchanged sales volumes were apparent in North America compared to the previous year, adjusted for the one-off volumes to Hoeganaes Corporation. The outlook remains cautiously optimistic, but progress will probably be volatile.
In South America, high inventory levels at the customer level resulted in fairly weak sales in the first half-year. The growth stimulus measures the Brazilian government implemented in the year to safeguard domestic production and jobs in Brazil had a noticeable positive effect in the second half-year.
Commenting on the company’s fourth quarter results, Alrik Danielson, CEO and President stated, “As expected, market conditions were fairly unfavourable in the quarter. Good sales were achieved on most Asian markets apart from Japan and India, but conditions were harsher elsewhere. The staff reductions we announced in our previous Interim Report have been executed. We adapted production and stock levels in the quarter, which affected income negatively, but contributed to record-high cash flow for the full year 2012. This strengthens Höganäs for 2013.”
“Other bright spots in the quarter included our notable success in the surface coating segment, where the sales increase was really positive worldwide. Sales volumes grew significantly in the fourth quarter also on a relatively weak European market, not least thanks to the new business we started with TRW, one of the world’s largest Tier 1 suppliers to the automotive industry. This is another good example of a case where Höganäs’ focus on high-quality products and superior technical support is paying off,” continued Danielson.
Net sales for the fourth quarter 2012 were MSEK 1,489 (1,632), down 9% year on year. Demand conditions were better than in the corresponding period of the previous year in Asia and South America, but worse in Europe and North America. Sales volumes were down 2% year on year. Operating income for the quarter was MSEK 131 (212).
Posted by: Paul Whittaker, Editor ipmd.net, [email protected]
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