Interim report for the period April 1 December 31, 2001 (9 months)

Transcription

1 Addtech Group Interim report for the period April 1 December 31, (9 months) Net revenues amounted to MSEK (1 784). Operating income, not including items affecting comparability, amounted to MSEK 73 (149). Operating income is being charged with current costs for structural measures. Cash flow from operations amounted to MSEK 74. Continued weak market performance for operations dep on the telecom and electronics sectors and capital investment goods. Previously initiated action programs are now being implemented according to plan and in certain units additional action has been taken. Overall cost savings will amount to MSEK 40. Stronger financial position despite repurchases of own shares equivalent to just short of 5 percent of the capital. 3 months 9 months 12 months March 31, Net revenues Operating income* in percent of net revenues Income after financial items * in percent of net revenues Earnings per share, SEK* * Not including items affecting comparability of MSEK 3 during Q2 of the current year and MSEK 13 during Q2 of the preceding year. NET REVENUES AND RESULT Nine months April December Net revenues of the Addtech Group were at the same level during the first nine months of the financial year as during the preceding year, MSEK (1 784). MSEK 255 thereof was business volume added by units acquired during the preceding operating year. Operating income not including items affecting comparability amounted to MSEK 73 (149) and income after financial items amounted to MSEK 70 (146). Costs affecting comparability amounted to MSEK 3, attributable to the listing of Addtech on the O-list of the Stockholm Stock Exchange. In the preceding year there was revenue of MSEK 13 affecting comparability in the form of SPP refunds. Income after taxes amounted to MSEK 45 (115), or SEK 1.60 per share (4.11). For the most recent 12-month period income after taxes was MSEK 79 and SEK 2.85 per share, respectively, which can be compared with MSEK 149 and SEK 5.36, respectively for the preceding operating year. Third quarter (October December) Net revenues declined during the third quarter by 13 percent to MSEK 595 (683). The business volume added by newly acquired units was MSEK 63. The market situation for units with business in the telecom and electronic sectors continued to be weak and no improvement compared to what was reported in the preceding quarterly report has been observed. Demand for machinery and equipment of an investment character was very weak during the period. The month of December was marked by a generally weak market situation, which had a further negative effect on the quarter when compared with prior periods and the preceding year. In order to counteract the effects of continued weakness in the business outlook and to adapt the organization to a lower business volume, the previously initiated action program will be carried out according to plan. Further action has been taken in certain units. The effects of action taken will be that the number of employees will be reduced by about 100 from the level at the end of June of the current year when the action program was initiated. This constitutes a decrease of 8 percent. The operating result is charged for current costs of personnel reductions and other structural measures. The overall effect of action taken will be that aggregate costs will be reduced by approximately MSEK 40 on an annual basis (the previous estimate was about MSEK 30). Operating income amounted to MSEK 6 (57). The earnings drop is explained primarily by a negative reesult in Production Systems. In units acquired during the preceding Interim Report Addtech April 1 December 31, Page 1 (6)

2 year, measures have been instituted to raise earnings to a satisfactory level and in several of the other companies measures to increase efficiency are being taken to adapt the organization to the lower business volume. Income after financial items dropped to MSEK 6 (56). Net financial items amounted to MSEK 0 for the period ( 1). BUSINESS AREAS Income figures in the comments to the Group s business areas do not include items affecting comparability. Production Systems provides systems solutions primarily for production processes in the electronics, engineering and automotive industries. 3 months 9 months 12 months Net revenues Operating income in percent of net revenues Net revenues declined by 22 percent to MSEK 452 (578). The business volume added by newly acquired units amounted to MSEK 31. Operating income declined to MSEK -7 (42). Production Systems, where production equipment for the electronics and telecom sectors make up a substantial proportion of operations, is the unit of the Group most severely affected by the economic downturn. Lower demand from the telecom industry is also due to a structural change, which has created uncertainty in investment decisions among customers. The business situation is considerably weaker than during the corresponding period one year ago. During the third quarter, new orders were at the same level as invoicing, however. The negative result for the third quarter is due primarily to the fact that the organization was dimensioned for a higher business volume. In addition, certain project-oriented operations aimed at environmental solutions had a considerable negative effect on earnings. Action has been taken to minimize future negative effect on earnings. Action being taken to offset the negative effects of a weak economic situation will not have a noticeable effect on costs until during the fourth quarter of the financial year. Transmission Systems markets transmission components, machine parts, hydraulic and automation systems for the manufacturing industry and after-market. In-house manufacturing is conducted primarily in the case of chains, gaskets and machine parts. 3 months 9 months 12 months Dec. Mar. Net revenues Operating income in percent of net revenues Net revenues increased by 32 percent to MSEK 657 (497). The business volume added by newly acquired units amounted to MSEK 153. After a weak third quarter, operating income amounted to MSEK 33 (40). The lower operating result is explained to a significant degree by a negative result in a manufacturing unit with elements of contract production. In-house production of chains, transmissions and machine elements continues to show a positive development and good capacity utilization. The market situation for sales of components to producing customers in mechanical industry and aftermarket was marked by a good market situation, even though a downturn was noted during the latter part of the period. Component Systems develops and markets niche electro-mechanical and electronic component solutions for the manufacturing industry and the after-market. 3 months 9 months 12 months Dec. Mar. Net revenues Operating income in percent of net revenues Net revenues decreased by three percent to MSEK 686 (711). The business volume added by newly acquired units amounted to MSEK 71. Operating income decreased to MSEK 48 (69). The market situation was affected primarily by a weakening within the telecom sector, with lower demand for components as a consequence. A continued stable sales volume was recorded in sales to the machine and automotive industries. This was true for components as well as systems solutions for trucks and forest machinery. Interim Report Addtech April 1 December 31, Page 2 (6)

3 PROFITABILITY The return on capital employed for the most recent 12- month period was 21 percent, as compared with 38 percent for the preceding financial year. The corresponding data for return on equity were 18 percent and 36 percent, respectively. FINANCIAL POSITION AND CASH FLOW The equity ratio at the end of the period was 39 percent, as compared with 34 percent at the beginning of the financial year. Shareholders equity per share amounted to SEK 16.00, as compared with SEK at the beginning of the financial year. The Group s net financial indebtedness amounted to MSEK 40 at the end of the period, which is an increase by MSEK 24 compared to the situation at the beginning of the financial year. Cash flow from current operations amounted to MSEK 74 during the period. Capital expenditures in fixed assets amounted to MSEK 16 and disposals amounted to MSEK 7. Financing operations were affected by repurchases of own shares in an amount of MSEK 46. Summary statement of cash flow Oct. Dec., Apr. Dec., Full year /01 MSEK Income after financial items Adjustment for items not included in cash flow Current taxes Change in working capital Cash flow from current operations Net investments in fixed assets Acquisitions and disposals Repurchase of own shares Other financing operations 5 20 * Period s cash flow Liquid funds at beginning of period * Translation differences in liquid funds 2 2 * Liquid funds at the end of the period *The Addtech Group was capitalized March 31,, so certain data have been omitted. **The preceding year s items affecting comparability, primarily attributable to SPP funds, are reported as part of Adjustment for items not included in cash flow. CORPORATE ACQUISITIONS An agreement was concluded during the third quarter to acquire the business in Alligator International Trading AB with the aim of increasing the Group s growth in the vehicle segment. Alligator is active primarily in the areas of vehicular climate control and cooling of electronics. In addition to net revenues of MSEK 30, there is commission business of about MSEK 300. EMPLOYEES The number of employees was at the end of the period, which can be compared to at the beginning of the financial year. The action program being implemented will have the effect of reducing the number of employees at the end of the year to about 1 100, which is equivalent to a reduction of 8 percent from the level prevailing when the program was initiated. DISTRIBUTION OF SHARES The share capital at the end of the period was MSEK The distribution on classes of shares is as follows: Classes of shares Shares outstanding Class A shares Class B shares Total number of shares outstanding before repurchase Repurchased shares Total number of shares outstanding after repurchase REPURCHASE OF OWN SHARES The Board of Directors decided to propose to an extra general meeting of shareholders held December 17, to resolve a mandate for the Board of Directors to repurchase own shares up to 10 percent of outstanding votes and shares. The purpose of repurchases is to give the Board of Directors greater freedom of action in its work with the Company s capital structure and to secure the Company s undertaking in connection with the incentive program. The Mandate for the Board of Directors is also proposed to include the eventuality of using repurchased shares as payment in corporate acquisitions. On December 18 Addtech closed the share swap agreement entered into with Svenska Handelsbanken during the fall with respect to a planned incentive program. In connection with the closing of the share swap agreement, Addtech repurchased of its own class B shares, which constitutes the Company s total holding of own shares held in treasury. These shares represent 4.8 percent of the shares outstanding and 3.5 of the votes. The closing of the share swap agreement and the repurchase of own shares mean that the shares have been purchased for an average net price of SEK per share. With this repurchase, Addtech has secured the Company s undertaking according to the option program for members of senior management resolved at the Annual General Meeting held December 17,. INCENTIVE PROGRAM The Board of Directors has awarded so-called personnel options to 56 members of senior management in the Group. To make this possible, the extra general meeting of shareholders held December 17, resolved that the Company will surrender up to class B shares in the Company in connection with any redemption of these personnel options. The redemption price has been set at SEK 44.80, equivalent to 110 percent of the average price for the Addtech share during the period December 3 7,. If the personnel options are exercised, the number of shares outstanding will rise by 2.6 percent (1.9 percent of votes). FUTURE PROSPECTS The weaker economy and extensive restructuring in the telecom industry has had a negative impact on the Group s business. In order to counter the effects of the weaker business climate, the action program to raise efficiency has been Interim Report Addtech April 1 December 31, Page 3 (6)

4 strengthened further. This is expected to yield cost savings of MSEK 40 on an annual basis. The cost of these measures is charged to current income. Addtech s long-term growth and profitability goals stand firm. With a cost level adjusted to a weak economic climate and given its strong financial position, Addtech has excellent opportunities for positive earnings performance, both in current operations and through acquisitions. ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with recommendation RR20 Interim Reporting of the Swedish Financial Accounting Standards Council. Recommendation RR9 Income Taxes has also been applied. In all other respects the same accounting principles and bases for forming judgments as presented in Addtech s listing prospectus have been used. PARENT COMPANY The Parent Company s net revenues amounted to MSEK 20 ( ) and income after financial items was MSEK 5 ( ). This result includes items affecting comparability in an amount of MSEK 3. BUSINESS AREAS All comparative data in this interim report are pro forma in accordance with the assumptions presented in Addtech s listing prospectus. Comparative data for prior years have been adjusted for the effect of applying recommendation RR9 Income taxes of the Swedish Financial Accounting Standards Council. Net revenues by business area 3 months 9 months 12 months MSEK Mar. 31, Production Systems Transmission Systems Component Systems Parent Company and consolidation eliminations Addtech Group Net revenues by business area /02 /01 MSEK (quarterly data) Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Production Systems Transmission Systems Component Systems Parent Company and consolidation eliminations Addtech Group Income by business area 3 months 9 months 12 months MSEK Mar. 31, Production Systems Transmission Systems Component Systems Parent Company and consolidation eliminations Operating income in % of net revenues Financial income and expense Income after financial items in % of net revenues Income figures do not include items affecting comparability. Income by business area /02 /01 MSEK (quarterly data) Q 3 Q 2 Q 1 Q 4 Q 3 Q 2 Q 1 Production Systems Transmission Systems Component Systems Parent Company and consolidation eliminations Operating income in % of net revenues Financial income and expense Income after financial items in % of net revenues Income figures do not include items affecting comparability. Interim Report Addtech April 1 December 31, Page 4 (6)

5 GROUP SUMMARY STATEMENT OF INCOME 3 months 9 months 12 months MSEK Mar. 31, Net revenues Operating expenses Of which depreciation and amortization Items affecting comparability Operating income in % of net revenues Financial income and expense Income after financial items in % of net revenues Taxes Minority interest Income for the period Earnings per share, SEK Earnings per share not including items affecting comparability, SEK Average number of shares outstanding after the period s repurchases (thousand) Number of shares outstanding end of period after period s repurchases (thousand) BALANCE SHEET, MSEK Mar. 31, Intangible fixed assets 3 tangible fixed assets Financial assets 8 7 Inventories Short-term receivables Liquid funds Total assets Shareholders equity Minority interest 7 6 Interest-bearing liabilities and provisions Non-interest-bearing liabilities and provisions Total shareholders equity, provisions and liabilities KEY FIGURES 9 months 12 months Mar. 31, Return on capital employed, % Same not including items affecting comparability Return on shareholders equity, % Same not including items affecting comparability Average number of employees during the period Number of employees at end of period Mar. 31, Shareholders equity per share, SEK Debt equity ratio Equity ratio, % All measurements of return computed based on average equity since March 31,. The Addtech Group was capitalized March 31,, so certain values dep on the capitalization have been omitted for periods and points in time before March 31,. Interim Report Addtech April 1 December 31, Page 5 (6)

6 Change in equity Effect of change in accounting principle RR 9 MSEK April December MSEK Pro forma /01 Adjustment Adjusted pro forma Amount at beginning of period 400 Income after financial items Effect of change in accounting principle 15 Taxes Opening balance adjusted for new principle 415 Net income for the period Period s translation difference 10 Repurchase of own shares -46 Fixed assets Net income for the period 45 Current assets Amount at the end of the period 424 Total assets Shareholders equity Liabilities and provisions Total shareholders equity, provisions and liabilities Acquisitions and disposals since April 1, Date Acquisition (disposal) Business area Revenues (MSEK)* Number of employees* /02 Q 4 Alligator Component Systems 30 8 /02 Q 2 Companies with sales of special Component Systems 10 2 components /01 Q 4 Tufvassons Transformator AB Component Systems /01 Q 4 Nordic Battery Power AB Component Systems 25 4 /01 Q 4 Harring Industri A/S Component Systems /01 Q 3 FB Industri Holding AB Transmission Systems /01 Q 2 ESD-Center AB Production Systems /01 Q 2 Vilokan Sweden AB Production Systems /01 Q 1 KMC Ytbehandling AB Production Systems * Annual revenues and number of employees at time of acquisition. Stockholm, February 5, 2002 Roger Bergqvist President This report has not been subject to review by the Company s auditors. Financial report for the year March 31, 2002 will be presented May 14, Addtech AB (publ) Box 508 Parkvägen 2 A SE Solna, Sweden Telephone Fax info@addtech.com Organization number Value Adding Tech Provider Addtech is a technology trading group where the business acumen is combined with competence at the cutting edge. Based on high-technology industrial components and systems, Addtech together with its customers and suppliers creates solutions that lead to better products as well as optimized production processes. Addtech provides technical as well as economic added value to the customer. Interim Report Addtech April 1 December 31, Page 6 (6)