Report on operations for the nine months ended September 30, 2001
Strong improvement in operating cash flow in the third quarter
· Cash flow from operations was SEK 374 million (38) in the third
· Debt reduction of SEK 224 million due to lower inventories.
· Operating income in the third quarter was SEK 57 million (56)
despite weakening markets.
"It is very satisfying to see the results of our hard work on inventory
reduction in the form of a substantially better operating cash flow. We
have also been able to improve our operating income excluding
restructuring costs somewhat for the nine months compared to last year.
However, due to the worsened economic climate, the operating income for
the fourth quarter is expected to be lower than last year." comments
Anders Igel, President and CEO.
Results for the third quarter
Sales for the third quarter were SEK 2,663 million (2,645), an increase
of 0.7%. Change in sales for comparable exchange rates and units was -
8.2% compared to the third quarter last year. The main reason for the
large difference between these two percentage figures is the general
weakening of the Swedish krona.
For seasonality reasons, third quarter sales tend to be weaker for
Esselte. However, given the adverse market situation, sales held up
slightly better than expected in the third quarter.
The integration of Curtis into Esselte Americas is almost completed and
will be finished before the end of the year 2001.
DYMO was the best performing product category with sales in the third
quarter of SEK 370 million (315).
The gross margin was 27.2% (26.2%) in the third quarter.
Operating income for the quarter was SEK 57 million compared to SEK 56
million last year, an increase of 1.8 %. The company is able to show
this result, despite a weak market, primarily due to earlier initiated
cost reduction programs.
The net financial expense was SEK -46 million compared with SEK -51
million last year. The improvement is due to falling interest rates and
reduction of debt.