Preliminary accounts report, 1 january - 31 december 1999

PRELIMINARY ACCOUNTS REPORT, 1 January- 31 December 1999 1999 1998 Change Order intake, SEK M 2,608 2,384 + 9 % Invoicing, SEK M 2,594 2,401 + 8 % Operating 237 205 + 16 % earnings, SEK M - as a percentage 9.1 8.5 - of invoicing Earnings before 231 198 + 17 % taxes, SEK M - as a percentage 8.9 8.2 - of invoicing Earnings per 5.78 4.95 + 17% share, SEK Dividend (1999: 1.80 1.50 + 20 % proposal) * Strong fourth quarter and uninterrupted growth over 24 quarters * Invoicing increased by 8 per cent to SEK 2,594M * Operating earnings improved by 16 per cent to SEK 237M * Strong growth in MCS and HumiCool * Acquisition of Euroemme SpA, Italy * Earnings per share rose by 17 per cent to SEK 5.78 * Proposal for dividend of SEK 1.80 (1.50) MUNTERS' OPERATIONS Munters is the world leader in moisture control with products and services for dehumidification, humidification and cooling of air within selected niches. Munters' business concept is to be a global customer-oriented and problem-solving niche company within air treatment, with a base within dehumidification and humidification. Operations are divided into three geographic regions - Europe, the Americas and Asia. In each region, operations are subdivided into the Product Areas: Dehumidification, Moisture Control Services (MCS), HumiCool and Mist Elimination & Water Treatment. Manufacturing and sales are carried out via the Group's own companies in 25 countries. The Group had 2,146 employees at year-end. MARKET DEVELOPMENT During the year, the market in Europe, except within Mist Elimination & Water Treatment, developed positively. Demand in the MCS operations was high throughout the year. The market in America showed high growth in Product Area HumiCool and in Product Area MCS. The market in Asia improved during the year. Demand in China, South East Asia and Australia was high. In addition, Japan shows a trend towards improvement. Demand for the Group's products and services has a seasonal pattern which has the effect that invoicing in the second half of the year is generally higher than in the first half of the year. FOURTH QUARTER 1999 Munters' order intake improved by 12 per cent in the fourth quarter to SEK 691M (622). Invoicing rose by 11 per cent to SEK 731M (656). Adjusted for currency fluctuations, the increase in both order intake and invoicing was 12 per cent compared with the fourth quarter of 1998. Operating earnings rose by 14 per cent to SEK 83M (73). At the end of December, Munters acquired Euroemme SpA, Italy, which is a leading manufacturer of climate systems for chicken farms and greenhouses. Euroemme, with invoicing of SEK 160 M, is included in the balance sheet at 31 December 1999 and included in the income statement from 1 January 2000. The acquisition involves goodwill of approximately SEK 160M which will be amortised over 20 years, with a start in the year 2000. GROUP ORDER INTAKE, INVOICING AND EARNINGS FOR 1999 During the year order intake increased by 9 per cent to SEK 2,608M (2,384) and backlog rose by SEK 13M to SEK 357M (344). Invoicing of the Munters Group rose by 8 per cent to SEK 2,594M (2,401). Adjusted for currency fluctuations, the increase was 5 per cent. Distributed by region, invoicing increased by 6 per cent in Europe, 10 per cent in the Americas and 17 per cent in Asia. Consolidated operating earnings amounted to SEK 237M (205), an increase of 16 per cent. Operating earnings were positively affected by exchange rates fluctuations, by approximately SEK 7M. Consolidated earnings before taxes increased by 17 per cent to SEK 231M (198). Net earnings for the year rose by 17 per cent to SEK 144M (124) after an effective tax rate of just over 37 per cent (38). Earnings per share increased to SEK 5.78 (4.95). The earnings improvement is due to the increased invoicing and implemented rationalisation. Invoicing increased thanks to the launch of new products and improved value added. The rationalisation measures meant, among other things, that in Region Americas staff were reduced by 50 within Product Area Dehumidification and by 10 in Europe within Product Area Mist Elimination & Water Treatment. However, within Product Area MCS, in which growth was high, the number of employees was increased by 132. FINANCIAL POSITION At the year-end, the equity ratio amounted to 38.8 per cent (43.6). Had the effects of the acquisition of Euroemme been excluded, the equity ratio would have been 46.7 per cent. Liquid funds were SEK 121M (82) and interest-bearing liabilities (including PRI pensions) were SEK 351M (218). During the year, the net debt, excluding the acquisition of Euroemme, decreased by SEK 85M to SEK 50M. Including the acquisition of Euroemme, the net debt increased by SEK 95M to SEK 230M. The Group has unutilised loan facilities of approximately SEK 125M. CAPITAL EXPENDITURE The Group's total capital expenditure amounted to SEK 114M (109). The majority of the investments refer to investments in production machinery and IT equipment. An expansion of the production capacity in Tobo, Sweden, was carried out during 1998 and the first six months of 1999. Fine tuning of the production plant was carried out during the third quarter and full-scale production of HumiCool products started during this quarter. Total capital expenditure relating to this expansion amounted to SEK 44M, of which SEK 17M during 1999. PERSONNEL At year-end the number of staff was 2,146, an increase of 167 during the year. Of the increase, Euroemme represents 74. Within product Area MCS, staff were increased by 132 and within HumiCool, excluding Euroemme, by 40. The other product Areas reported a net decrease. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/22/20000222BIT00500/bit0001.doc http://www.bit.se/bitonline/2000/02/22/20000222BIT00500/bit0002.pdf

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Munters sells products and services for controlling humidity of the air.

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