CEO’s comment on interim report January-June 2019:
During the second quarter, we continued work to strengthen the competitiveness of our customers and Semcon through value-creating product development, production optimisation and product information. We have successfully carried out the necessary measures to further strengthen profitability. The measures taken in the first half of the year are expected to have a marginal positive impact on full-year 2019 and reduce the Group’s costs by about SEK 15 million, with full effect in 2020.
The financial result for the period was favourable compared with the preceding year, adjusted for restructuring costs and the calendar effect in the quarter. The measures to enhance profitability in the Engineering & Digital Services business area were charged to quarterly earnings in an amount of approximately SEK 6 million and the calendar effect, with one fewer working day, further impacted consolidated earnings by approximately SEK 6 million compared with the year-earlier period.
It is gratifying to see that our strategy to diversify our industry presence has continued to yield results. In Life Science, sales in the first half of the year increased 18 per cent compared with the year-earlier period. At the same time, there is significant potential for a sharp rise in our income in this segment moving forward. During the quarter, we also secured a three-year contract with the Swedish Transport Administration to future-proof energy supply in the installations that provide electricity to train services in Sweden.
The restructuring of the Engineering & Digital Services business area is proceeding as planned and is creating opportunities for greater focus on our digital offering. In line with our strategy, we are further strengthening our software expertise and the Digital Services division reported growth of 11 per cent in the first half of 2019. Demand for digital solutions is strong.
The Product Information business area reported a significant improvement in both income and profit compared with the year-earlier period. Semcon’s global and strategic partnership with AGCO (one of the world’s largest manufacturers of agricultural equipment) is a prime example of how we can create the right conditions for continued growth. Through our efficient and digital solutions, the quality of our customers’ product information increases and the competitiveness is strengthened not least in terms of their service business.
On the basis of the profitability-enhancing measures we have taken in the first half-year and a positive calendar effect in the second half-year, we are well positioned to report sustained earnings improvements in 2019.