Seco Tools Group Q2-2009

Investor Relations – 2009 Q2

Seco Tools GroupQ2-2009


Highlights Q2

• Revenue growth was -40% in fixed currencies and -30% in SEK

• Stabilization on low level

• We continue to win market-share

• EBIT-margin for Q2 was 3,4% vs. 22,3% last year

• Margin decrease driven by the dramatic drop in volume

• Stable prices

• Savings and currency gains partly offsets volume decline

• Ongoing saving programs increased and ahead of time plan

• Initiated programs increased with 100 MSEK – annual savings now estimated to be around 600 MSEK whereof 500 will impact 2009

• Workforce reduction now estimated to be approx 850

• Q2 restructuring costs was 24 MSEK. Around 10 MSEK in additional restructuring costs for the already started programs are estimated for H2

• We stay the course!

• Maintain strategic direction

• Launches of several new competitive products - Square 6 released in Q2

• Uncertain 2009

• Stock reductions at end customers impact current demand situation

• No sign of a near upturn


Growth Analysis Q2

CEE excl. ALG: -38%

Fixed currency - 41 %Acquisition + 1 %Currency +10 %

SEK total - 30 %

Seco Tools Group

I nvoicing in local currency

-43% -44%

-34%

-39%

-31%

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

WesternEurope

NAFTA EasternEurope

Asia SouthAmerica


Western Europe - Revenues(Fixed Currency)

0

200 000

400 000

600 000

800 000

1 000 000

1 200 0001

99

9

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

SE

K 0

00

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

% Y

-O-Y

Y-o-Y:2008 + 4%2009:Q1 - 30%Q2 - 43%2009 - 37%

Financial keydata


Seco revenues in fixed currencies.Macro data up to 30/04/2009.

Financial keydata

EU12 Economic Indicators & Seco Western Europe 3M Average InvoicingY-o-Y % Change

Local Currencies

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Indic

ato

rs

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Seco

Tools

EU12 Industrial Production EU12 Basic and Fabricated Metals

EU12 Machinery & Equipment


NAFTA - Revenues(Fixed Currency)

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

SE

K 0

00

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

% Y

-O-Y

Y-o-Y:2008 + 3%2009:Q1 - 28%Q2 - 44%2009 - 36%

Financial keydata


Seco revenues in fixed currencies.Macro data up to 31/05/2009.

Financial keydata

US Economic Indicators & Seco NAFTA 3M Average Invoicing

Y-o-Y % ChangeLocal Currencies

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Indic

ato

rs

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Seco

Tools

US Industrial Production Primary metals Fabricated Metals Machinery


Central and Eastern Europe - Revenues(Fixed Currency)

0

50 000

100 000

150 000

200 000

250 000

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

SE

K 0

00

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

% Y

-O-Y

Y-o-Y:2008 +17%2009:Q1 - 22%Q2 - 34%2009 - 28%

Financial keydata

YTD -33% excl ALG


Asia - Revenues(Fixed Currency)

0

50 000

100 000

150 000

200 000

250 000

300 000

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

SE

K 0

00

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

% Y

-O-Y

Y-o-Y:2008 + 5%2009:Q1 - 28%Q2 - 31%2009 - 30%

Financial keydata


Seco Tools Revenues, SEK M(Fixed currencies)

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Roll

ing 4

Q

0

500

1 000

1 500

2 000

2 500

Qu

art

er

Quarter 4Q Rolling

Financial keydata


Seco Tools RevenuesYear-on-Year Change %

(Fixed currencies)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Roll

ing 4

Q

Quarter 4Q rolling

Financial keydata


The decline in historical perspective

Revenue fixed currency, quarterlyY-o-Y % Change

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


• Total savings

– In order to compensate for somewhat lower volumes larger savings activities have been initiated

– Annual cost level will be reduced by 600 MSEK (previously 500 MSEK) relating to both direct and fixed costs

– Impact on 2009 result is approx. 500 MSEK (previously 400 MSEK)

• Total workforce will be reduced by approx 900 people (previously 800), whereof approx 200 are staff. Reductions include time- and salary reductions corresponding to around 220 full time equivalents

Cost adjustment measures


Personnel reduction plan

0

100

200

300

400

500

600

700

800

900

1000

2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4

Workers Staff Temporaries *

* Not reported temporaries

• Reductions ahead of time plan• Total reductions approx 50 people higher


Accumulated market growth- goal: 0,2 percentage unit per year

Target Seco

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

2005 2006 2007 2008 2009 2010

referens

We are taking market share!


Square 6

•A new family of square shoulder milling products

•Six cutting edges per insert gives optimal economy without compromising performance

•Product very well received since launch in Q2


– Customer intimacy and understanding the customer’s manufacturing process

– Solutions orientation

– High performance products and services

– Global competence and support structures

– Distributors

Customer Intimacy and Solution Orientation

Strategic Direction

We stay the course!


Positioning for Growth

Number of employees

40% field sales and technicans close to customers 2005 till 2008

Capital expenditure(excl acquisitions)

0%

2%

4%

6%

8%

10%

12%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

% o

f re

ven

ues

Time for payback and consolidation


• Invoicing, SEK M 1,180 1,697

• EBIT margin 3,4% 22,3%

• EBIT, SEK M 40 378

• Earnings per share (SEK) 0,10 1,76

• ROCE (Roll 12 mths) 16,9% 38,2%

• Net debt / equity ratio 1,04 0,99

Q2-2009 Q2-2008

Financial keydata


-200

-100

0

100

200

300

4002

00

8 Q

2

20

09

Q2

EB

IT (

MS

EK

)Result development Q2-2009

Rev. / EBIT

Rev. / EBIT

1 180 /

1 180 /

3,4%3,4%

Volu

me a

nd

oth

er

Restr

uctu

rin

g

Cu

rren

cy

Savin

gs


Seco Tools Revenues and EBIT %(Fixed currencies)

0%

5%

10%

15%

20%

25%

30%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EB

IT %

0

500

1 000

1 500

2 000

2 500

REV

EN

UES

, S

EK

M

Revenues Q EBIT % EBIT % Rolling 4Q

Financial keydata

Financial target


- Cash Flow higher than EBIT- Reduced level of working capital- Lower investment level

0

50

100

150

200

250

300

350

400

Q1

00

Q2

00

Q3

00

Q4

00

Q1

01

Q2

01

Q3

01

Q4

01

Q1

02

Q2

02

Q3

02

Q4

02

Q1

03

Q2

03

Q3

03

Q4

03

Q1

04

Q2

04

Q3

04

Q4

04

Q1

05

Q2

05

Q3

05

Q4

05

Q1

06

Q2

06

Q3

06

Q4

06

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

Q2

09

MS

EK

Operational CF EBIT

Operational Cash Flow

Operating cash flow includes changes in working capital but excludes acquisitions

Financial keydata


Working Capital

0

500

1 000

1 500

2 000

2 500

3 000

9803

9809

9903

9909

0003

0009

0103

0109

0203

0209

0303

0309

0403

0409

0503

0509

0603

0609

0703

0709

0803

0809

0903

15%

20%

25%

30%

35%

40%

45%

Working capital (MSEK) Working capital (% roll 12 mths)

Financial keydata

Working capital includes trade receivables, inventories and trade payables


Working Capital

15%

20%

25%

30%

35%

40%

45%

50%

55%

9803

9809

9903

9909

0003

0009

0103

0109

0203

0209

0303

0309

0403

0409

0503

0509

0603

0609

0703

0709

0803

0809

0903

15%

20%

25%

30%

35%

40%

45%

50%

Quarter Rolling

Financial keydata

Working capital includes trade receivables, inventories and trade payables


Inventory

8%

11%

14%

17%

20%

23%

26%

29%

32%

35%

9803

9809

9903

9909

0003

0009

0103

0109

0203

0209

0303

0309

0403

0409

0503

0509

0603

0609

0703

0709

0803

0809

0903

8%

11%

14%

17%

20%

23%

26%

29%

32%

35%

Quarter Rolling

Financial keydata


Trade Receivables

10%

12%

14%

16%

18%

20%

22%

24%

9803

9809

9903

9909

0003

0009

0103

0109

0203

0209

0303

0309

0403

0409

0503

0509

0603

0609

0703

0709

0803

0809

0903

10%

12%

14%

16%

18%

20%

22%

24%

Quarter Rolling

Financial keydata


Shareholder Value4Q Rolling

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

2002

2003

2004

2005

2006

2007

2008

2009

0%

10%

20%

30%

40%

50%

60%

Return on Equity EPS

Financial keydata


Seco Tools Group Q2-2009

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