ADDTECH AB: ADDTECH GROUP INTERIM REPORT APRIL 1 TO DECEMBER 31 2002
* Continued robust business situation for the Group´s businesses focused on electromechanical and electronic component solutions.
* Net revenues amounted to MSEK 1 674 (1 793)
* Operating income not including items affecting comparability amounted to MSEK 67 (73).
* During the third quarter (October - December) operating income not including items affecting comparability improved to MSEK 20 (6) and net revenues amounted to MSEK 577 (595).
* Cost containment measures implemented during the past year have lowered overall costs by about MSEK 35 during the period April - December.
* Cash flow from current operations amounted to MSEK 128 (74) and net financial indebtedness decreased during the period by MSEK 48 to MSEK 26.
* Net revenues amounted to MSEK 1 674 (1 793)
* Operating income not including items affecting comparability amounted to MSEK 67 (73).
* During the third quarter (October - December) operating income not including items affecting comparability improved to MSEK 20 (6) and net revenues amounted to MSEK 577 (595).
* Cost containment measures implemented during the past year have lowered overall costs by about MSEK 35 during the period April - December.
* Cash flow from current operations amounted to MSEK 128 (74) and net financial indebtedness decreased during the period by MSEK 48 to MSEK 26.
NET REVENUES AND RESULT
Nine months April - December 2002
Net revenues of the Addtech Group for the first nine months of the financial year amounted to MSEK 1 674
(1 793). The drop is attributable primarily to lower sales of investment-type products.
Operating income not including items affecting comparability amounted to MSEK 67 (73) and income after financial items was MSEK 63 (70).
Foreign currency effects affected revenues negatively by MSEK 12 and operating income by MSEK 0.
Not included in operating income are net items affecting comparability of MSEK 3 (-3) pertaining to the sale of real property for a capital gain of MSEK 12 and costs for restructuring of the Group´s telecom-oriented business in an amount of MSEK 9. During the preceding year there were costs affecting comparability in an amount of MSEK 3 pertaining to the listing of Addtech on the O-list of the Stockholm Stock Exchange.
Cost containment measures implemented during the past year have lowered overall costs by about MSEK 35 during the period April - December compared to the corresponding year-ago period.
Income before taxes amounted to MSEK 45 (45), or SEK 1.69 per share (1.60). For the most recent 12-month period income after taxes amounted to MSEK 53 and SEK 2.02 per share, respectively, which can be compared to MSEK 53 and SEK 1.92 for the preceding operating year.
Third quarter 2002 (October - December)
Net revenues amounted to MSEK 577 during the third quarter (595). The primary reason for the decline is a continued weak market for the Group´s investment product-oriented businesses. The previously stable market situation for mechanical components weakened slightly during the period, which had a negative effect on business area Transmission Systems. The business climate for customer-specific electromechanical and electronic component solutions remains strong.
Operating income increased to MSEK 20 (6) and income after financial items was MSEK 20 (6). The primary reason behind the earnings improvement is lower costs.
Income after taxes amounted to MSEK 15 (3), or SEK 0.56 per share (0.10).
BUSINESSA AREAS
Component Systems
develops and markets niche electro-mechanical and electronic component solutions for the manufacturing industry and the after-market.
(For tables, refer to attached file)
Net revenues increased by five percent to MSEK 720 (686). Incremental revenue from newly acquired units amounted to MSEK 44. Operating income increased to MSEK 50 (48).
The strong market situation for the business area continued during the financial year. Demand for components for special vehicles and trucks, as well as applications for medical electronics, was strong. Sales of batteries and energy components also showed a good development.
Production Systems
provides systems solutions primarily for production processes in the electronics, engineering and automotive industries.
(For tables, refer to attached file)
Net revenues declined by 29 percent to MSEK 322 (452). The operating result was MSEK -12 (-7).
Weak demand for production equipment, previously linked primarily to the telecom sector, has become slightly more widespread lately.
Sales by the business area´s operations with sales of consumables continued to develop well.
The result was positively affected during the period by the cost containment measures implemented last year. Overhead during the April to December period was more than MSEK 30 lower than during the corresponding period one year ago.
Transmission Systems
markets transmission components, machine parts 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.
(For tables, refer to attached file)
Net revenues declined by three percent to MSEK 634 (657). Operating income was MSEK 31 (33).
The latter part of the third quarter was marked by a certain weakening of demand for some of the business area´s products, especially in the Finnish market. Demand for hydraulic components from the truck industry and for special vehicles continued to be stable.
PROFITABILITY
The return on capital employed was 15 percent (15) and the return on equity was 13 percent (12).
FINANCIAL POSITION AND CASH FLOW
The equity ratio at the end of the period stood at 45 percent, as compared with 41 percent at the beginning of the financial year. Shareholders´ equity per share amounted to SEK 16.30 (15.70).
The Group´s net financial indebtedness amounted to MSEK 26 at the end of the period, which is a decline of MSEK 48 since the beginning of the year.
Cash flow from current operations amounted to MSEK 128 (74). The improvement over the preceding year is attributable to freed-up working capital.
Investments in businesses and fixed assets amounted to MSEK 41 and MSEK 20, respectively, and disposals of fixed assets amounted to MSEK 22.
CORPORATE ACQUISITIONS
R&K Gruppen is consolidated from November 1, 2002 with annual revenues of MSEK 100. This company strengthens the Group´s offer in medical electronics. The interest of the minority in Austrian subsidiary FB Ketten HmbH was acquired during the third quarter. Addtech also took possession of Bergström Instrument during the financial year, with annual sales of MSEK 30.
EMPLOYEES
The number of employees was 1 066 at the end of the period, which can be compared to 1 100 at the beginning of the period.
DISTRIBUTION OF SHARES
The share capital at the end of the period was MSEK 55.7. Since the previous interim report, 50 000 additional shares have been purchased. The number of shares held in treasury now stands at 1 381 400. This represents 5.0 percent of all shares outstanding, and 3.6 percent of the votes. The distribution on classes of shares is as follows:
(For tables, refer to attached file)
FUTURE PROSPECTS
The weak and in some ways uncertain business climate requires a high level of activity to adjust operations.
Addtech stands well prepared to meet an increased demand for the Group´s products and services. The financial position is strong, which makes for good opportunities for future growth.
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with recommendation RR 20 of the Swedish Financial Accounting Standards Council. With the exception of the new recommendations from 2002 of the Swedish Financial Accounting Standards Council, which have no effect on the Group´s reported results or financial position, the same accounting principles have been applied as in the Annual report for the 2001/2002 financial year.
PARENT COMPANY
The Parent Company´s net revenues amounted to MSEK 20 (20) and the result after financial items was MSEK 1
(-3), of which MSEK 0 (-3) in items affecting comparability. Net investments in fixed assets were made in the amount of MSEK 0 (0). The Parent Company´s net financial assets amounted to MSEK 39 at the end of the period, compared to a net financial liability of MSEK 14 at the beginning of the financial year.
Stockholm, February 3, 2003
Roger Bergqvist
President
This report has not been subject to review by the Company´s auditors.
A financial report for the financial year April 1, 2002 - March 31, 2003 will be published May 12, 2003.
Nine months April - December 2002
Net revenues of the Addtech Group for the first nine months of the financial year amounted to MSEK 1 674
(1 793). The drop is attributable primarily to lower sales of investment-type products.
Operating income not including items affecting comparability amounted to MSEK 67 (73) and income after financial items was MSEK 63 (70).
Foreign currency effects affected revenues negatively by MSEK 12 and operating income by MSEK 0.
Not included in operating income are net items affecting comparability of MSEK 3 (-3) pertaining to the sale of real property for a capital gain of MSEK 12 and costs for restructuring of the Group´s telecom-oriented business in an amount of MSEK 9. During the preceding year there were costs affecting comparability in an amount of MSEK 3 pertaining to the listing of Addtech on the O-list of the Stockholm Stock Exchange.
Cost containment measures implemented during the past year have lowered overall costs by about MSEK 35 during the period April - December compared to the corresponding year-ago period.
Income before taxes amounted to MSEK 45 (45), or SEK 1.69 per share (1.60). For the most recent 12-month period income after taxes amounted to MSEK 53 and SEK 2.02 per share, respectively, which can be compared to MSEK 53 and SEK 1.92 for the preceding operating year.
Third quarter 2002 (October - December)
Net revenues amounted to MSEK 577 during the third quarter (595). The primary reason for the decline is a continued weak market for the Group´s investment product-oriented businesses. The previously stable market situation for mechanical components weakened slightly during the period, which had a negative effect on business area Transmission Systems. The business climate for customer-specific electromechanical and electronic component solutions remains strong.
Operating income increased to MSEK 20 (6) and income after financial items was MSEK 20 (6). The primary reason behind the earnings improvement is lower costs.
Income after taxes amounted to MSEK 15 (3), or SEK 0.56 per share (0.10).
BUSINESSA AREAS
Component Systems
develops and markets niche electro-mechanical and electronic component solutions for the manufacturing industry and the after-market.
(For tables, refer to attached file)
Net revenues increased by five percent to MSEK 720 (686). Incremental revenue from newly acquired units amounted to MSEK 44. Operating income increased to MSEK 50 (48).
The strong market situation for the business area continued during the financial year. Demand for components for special vehicles and trucks, as well as applications for medical electronics, was strong. Sales of batteries and energy components also showed a good development.
Production Systems
provides systems solutions primarily for production processes in the electronics, engineering and automotive industries.
(For tables, refer to attached file)
Net revenues declined by 29 percent to MSEK 322 (452). The operating result was MSEK -12 (-7).
Weak demand for production equipment, previously linked primarily to the telecom sector, has become slightly more widespread lately.
Sales by the business area´s operations with sales of consumables continued to develop well.
The result was positively affected during the period by the cost containment measures implemented last year. Overhead during the April to December period was more than MSEK 30 lower than during the corresponding period one year ago.
Transmission Systems
markets transmission components, machine parts 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.
(For tables, refer to attached file)
Net revenues declined by three percent to MSEK 634 (657). Operating income was MSEK 31 (33).
The latter part of the third quarter was marked by a certain weakening of demand for some of the business area´s products, especially in the Finnish market. Demand for hydraulic components from the truck industry and for special vehicles continued to be stable.
PROFITABILITY
The return on capital employed was 15 percent (15) and the return on equity was 13 percent (12).
FINANCIAL POSITION AND CASH FLOW
The equity ratio at the end of the period stood at 45 percent, as compared with 41 percent at the beginning of the financial year. Shareholders´ equity per share amounted to SEK 16.30 (15.70).
The Group´s net financial indebtedness amounted to MSEK 26 at the end of the period, which is a decline of MSEK 48 since the beginning of the year.
Cash flow from current operations amounted to MSEK 128 (74). The improvement over the preceding year is attributable to freed-up working capital.
Investments in businesses and fixed assets amounted to MSEK 41 and MSEK 20, respectively, and disposals of fixed assets amounted to MSEK 22.
CORPORATE ACQUISITIONS
R&K Gruppen is consolidated from November 1, 2002 with annual revenues of MSEK 100. This company strengthens the Group´s offer in medical electronics. The interest of the minority in Austrian subsidiary FB Ketten HmbH was acquired during the third quarter. Addtech also took possession of Bergström Instrument during the financial year, with annual sales of MSEK 30.
EMPLOYEES
The number of employees was 1 066 at the end of the period, which can be compared to 1 100 at the beginning of the period.
DISTRIBUTION OF SHARES
The share capital at the end of the period was MSEK 55.7. Since the previous interim report, 50 000 additional shares have been purchased. The number of shares held in treasury now stands at 1 381 400. This represents 5.0 percent of all shares outstanding, and 3.6 percent of the votes. The distribution on classes of shares is as follows:
(For tables, refer to attached file)
FUTURE PROSPECTS
The weak and in some ways uncertain business climate requires a high level of activity to adjust operations.
Addtech stands well prepared to meet an increased demand for the Group´s products and services. The financial position is strong, which makes for good opportunities for future growth.
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with recommendation RR 20 of the Swedish Financial Accounting Standards Council. With the exception of the new recommendations from 2002 of the Swedish Financial Accounting Standards Council, which have no effect on the Group´s reported results or financial position, the same accounting principles have been applied as in the Annual report for the 2001/2002 financial year.
PARENT COMPANY
The Parent Company´s net revenues amounted to MSEK 20 (20) and the result after financial items was MSEK 1
(-3), of which MSEK 0 (-3) in items affecting comparability. Net investments in fixed assets were made in the amount of MSEK 0 (0). The Parent Company´s net financial assets amounted to MSEK 39 at the end of the period, compared to a net financial liability of MSEK 14 at the beginning of the financial year.
Stockholm, February 3, 2003
Roger Bergqvist
President
This report has not been subject to review by the Company´s auditors.
A financial report for the financial year April 1, 2002 - March 31, 2003 will be published May 12, 2003.