Financial Report 1 April, 2001- 31 March, 2002

Addtech Group Financial report for the period April 1, 2001 - March 31, 2002 Net revenues amounted to MSEK 2 360 (2 502). Operating income not including items affecting comparability amounted to MSEK 85 (201). Operating income was charged with costs for structural measures on a current basis during the year, resulting in cost savings of about MSEK 40 on an annual basis. The market situation for businesses aimed at the telecom and electronics sectors was weak during the year. Cash flow from current operations, excluding taxes paid attributable to last year's result, amounted to MSEK 91 (173). The equity ratio increased to 41 percent despite repurchase of shares equivalent to just short of 5 percent of total capital. A cash dividend of SEK 1.20 is proposed. 3 months to 12 months to March March 31, March March 31, 2002 2001 31, 2002 31, 2001 Net revenues 567 718 2 360 2 502 Operating income* 12 52 85 201 - in percent of net 2.2 7.3 3.6 8.0 revenues Income after financial 10 48 80 194 items* - in percent of net 1.9 6.7 3.4 7.8 revenues Earnings per share, 0.22 1.23 1.91 5.02 SEK* * Not including items affecting comparability NET REVENUES AND INCOME Financial year April 1, 2001 - March 31, 2002 Revenues of the Addtech Group during the financial year amounted to MSEK 2 360 (2 502). MSEK 273 hereof was additional business volume generated by newly acquired units. Currency effects affected revenues by MSEK 84 in a positive direction. The year was marked by a pronounced slowdown for the Group's telecom and electronics-related businesses, especially for investment type products. The drop in demand was seen early during the year and no discernible improvement has occurred. In spite of the overall economic slowdown, most units - with the exception of those related to telecom - were able to maintain sales at a satisfactory level. Units focused on niche production of transmission products and machine parts had a positive development during the year and good capacity utilization. Sales of components and sub-systems from the Group's sharply niched units to the machinery and vehicle industries were also stable. In order to counter a weaker business climate, a forceful action program was launched. On an annual basis this program is expected to reduce costs by about MSEK 40. Action taken involved some 100 employees, equivalent to a reduction of close to 10 percent from the level at the end of June when the action program was initiated. Operating income was affected on a current basis by costs for personnel reductions and other structural measures. Operating income, not including items affecting comparability, amounted to MSEK 85 (201) and income after financial items was MSEK 80 (194). Added to this result are income affecting comparability of MSEK 4, as a result of sales of real estate, and costs affecting comparability of MSEK 3, attributable to listing Addtech on the O- list of the Stockholm Stock Exchange. For the preceding year there was income affecting comparability of MSEK 13 as a consequence of repaid SPP funds. Income after taxes amounted to MSEK 53 (149), or SEK 1.92 per share (5.36). The effective tax rate was 32 percent (28). Fourth quarter 2001/02 (January - March) Net revenues during the fourth quarter amounted to MSEK 567 (718). Revenues added by newly acquired units were MSEK 18. The market situation for units doing business with the telecom and electronics industries continued to be weak and no improvement compared to what was reported in the previous quarterly report has been registered. Demand for machinery and equipment of a capital investment type was extremely weak. For the other areas of operation the market situation was at the same level as in prior periods of the financial year. In Transmission Systems, however, some weakness was noted in sales of components. Operating income amounted to MSEK 12 (52). The lower result is explained by a negative result in Production Systems, but the other two business areas also registered lower results than for the corresponding period one year ago. Income was burdened by shutdown and restructuring costs of MSEK 12 during the quarter. Income after financial items amounted to MSEK 10 (48). The period's net of financial items was MSEK -2 (-4). BUSINESS AREAS Production Systems provides systems solutions primarily for production processes in the electronics, engineering and automotive industries. 3 months 12 months to to March Marc Marc Mar 31, h h ch 2002 31, 31, 31, 2001 2002 200 1 Net 118 227 570 805 revenues Operating -9 18 -16 60 income - in percent -7.5 8.4 -2.8 7.5 of net revenues Net revenues declined by 29 percent to MSEK 570 (805). Revenue added by newly acquired units amounted to MSEK 31. Operating income amounted to MSEK -16 (60). The sharp economic downturn in the telecom industry caused sales to drop significantly during the financial year. The uncertainty with respect to investment decisions brought on by structural changes in telecom and the industry's overall low propensity to invest were also negatives. The decline in results compared to the year before was due to lower sales in combination with an organization that was dimensioned for a higher business volume. In addition hereto, certain project-related business aimed at environmental solutions had a negative impact on earnings. Adjustments to cope with a lower volume of business continued during the last quarter of the financial year. A balance has had to be struck between on the one hand a short-term need to cut back to remedy an unsatisfactory earnings situation and a longer term need to keep talent for a rebound in the basically interesting telecom market. The action program includes a reduction in the number of employees by about 30 percent. Income was burdened during the fourth quarter by shutdown and restructuring costs in the amount of MSEK 7. Transmission Systems markets transmission components, machine parts, hydraulic systems 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 12 to months to Mar Mar Mar Mar ch ch ch ch 31, 31, 31, 31, 200 200 200 200 2 1 2 1 Net 212 232 869 729 revenues Operating 7 13 40 53 profit - in percent of 3.2 5.4 4.5 7.3 net revenues Net revenues increased by 19 percent to MSEK 869 (729). Revenue added by newly acquired units amounted to MSEK 153. Operating income amounted to MSEK 40 (53). The business area's combination of sales of components to producing customers and their aftermarket provided for an overall stable market situation during the year. Niche production of transmission products and machine parts grew during the year and capacity utilization was good. Several new contracts were won in these areas. The volume increase added by the acquisition of the FB Group had only a marginal impact on income for the year. The lower operating income is explained largely by a negative result in a manufacturing unit with elements of contract production. Cost reductions implemented led to a situation where further negative impact was limited during the last quarter. Demand was stable for the producing units during the fourth quarter, while component sales were slightly lower. Income was burdened during the fourth quarter by certain shutdown and restructuring costs in the amount of MSEK 4. Component Systems develops and markets niche electromechanical and electronic component solutions for the manufacturing industry and the after- market. 3 months 12 to months to Mar Mar Mar Mar ch ch ch ch 31, 31, 31, 31, 200 200 200 200 2 1 2 1 Net 237 260 923 971 revenues Operating 13 22 61 91 income - in percent of 5.4 8.3 6.6 9.4 net revenues Net revenues increased by five percent to MSEK 923 (971). Revenue added by newly acquired units amounted to MSEK 89. Operating income amounted to MSEK 61 (91). The market situation was affected primarily by the weak trend in the telecom industry and to some degree also by weakness in the overall economy, with lower demand for components and systems as a result. Sales of components and sub-systems for machinery and special vehicles were stable. The market situation was unchanged during the fourth quarter compared to earlier periods during the year. PROFITABILITY The return on capital employed was 15 percent during the financial year (38) and return on equity was 12 percent (36). FINANCIAL POSITION CASH FLOW The equity ratio stood at 41 percent at the end of the financial year (34). Shareholders' equity per share amounted to SEK 15.70 (14.90). The Group's financial indebtedness amounted to MSEK 74 at year-end. This is an increase by MSEK 58 since the beginning of the year. Cash flow from current operations amounted to MSEK 41. Excluding taxes paid of MSEK 50 attributable to last year's result, cash flow from current operations amounted to MSEK 91 (173). Investments in fixed assets amounted to MSEK 21. Disposals amounted to MSEK 25. Financing operations were affected by repurchase of own shares in an amount of MSEK 46. Summary statement of cash flow Jan.- Full year Mar., 2002 2001/ 2000/ 2001 MSEK 2002 Income after 13 80 207 financial items Adjustment for items not included 10 41 30 in cash flow Taxes paid -48 -87 -7 Change in working -8 7 -7 capital Cash flow from -33 41 223 current operations Net investments in 13 4 -25 fixed assets Corporate -10 -13 -195 acquisitions and disposals Repurchase of own 0 -46 - shares Other financing -24 -44 -* operations Cash flow for the -54 -58 3 period Liquid funds at 149 151 -* beginning of period Exchange rate -3 -1 -* difference in liquid funds Liquid funds at end 92 92 151 of period *The Addtech Group was capitalized March 31, 2001. Certain data has therefore been omitted. **Last year's items affecting comparability, primarily relating to SPP funds, are reported among Adjustments for items not included in cash flow. CORPORATE ACQUISITIONS Addtech acquired two companies during the financial year with aggregate sales of MSEK 40. In addition, an agreement was concluded to acquire an additional company, possession to be taken in May 2002. EMPLOYEES At the end of the financial year the number of employees was 1 100, which can be compared with 1 162 at the beginning of the year. The number of employees increased by 10 during the year due to acquisitions. The average number of employees was 1 155 (940). DISTRIBUTION OF SHARES The share capital amounted to MSEK 55.7 at the end of the period. The distribution among classes of shares was as follows: Classes of share Shares outstanding Class A shares 1 113 478 Class B shares 26 750 754 Total number of shares 27 outstanding before 864 repurchases 232 Shares repurchased 1 331 400 Total number of shares 26 outstanding after 532 repurchases 832 REPURCHASE OF OWN SHARES An extra General meeting of shareholders in Addtech AB held December 17, 2001 resolved a mandate for the Board of Directors to repurchase own shares equivalent to a maximum of 10 percent of all outstanding shares. The purpose of the buyback is to give the Board of Directors increased freedom of action in its work with the Company's capital structure and to fulfill the Company's obligation under the incentive program decided by the Board of Directors. The mandate to the Board of Directors also includes an opportunity to sell repurchased shares in connection with corporate acquisitions. At the end of December Addtech repurchased 1 331 400 of its own class B shares, which is also the Company's total number of shares held in treasury. These shares are equivalent to 4.8 percent of all shares issued and 3.5 percent of the votes. The shares were repurchased at an average price of SEK 34.84. With this purchase, Addtech has fulfilled the Company's obligation under the option program for members of senior management resolved by the extra general meeting of shareholders held December 17, 2001. The Board of Directors has decided to propose to the regularly scheduled Annual General Meeting a renewed mandate for repurchase of own shares. The proposal includes a mandate for the Board of Directors - to remain in effect until the next following regularly scheduled Annual general Meeting - to acquire shares up to 10 percent of all outstanding shares in the Company. Purchases shall be made over the Stockholm Stock Exchange. The mandate is also proposed to include an opportunity to use repurchased shares for payment in connection with acquisitions or to sell repurchased shares in ways other than over the Stockholm Stock Exchange as a way of refinancing acquisitions. INCENTIVE PROGRAM In December 2001 the Board of Directors awarded 700 000 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, 2001, resolved that the Company will convey up to 700 000 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 of the Addtech share during the period December 3 - 7, 2001. These shares have been repurchased at an average price of SEK 34.84. If the personnel options are exercised, the number of shares outstanding will increase by 2.6 percent (1.9 percent of the votes). FUTURE PROSPECTS The weaker economy and the extensive restructuring in the telecom industry have had a negative effect on the Company's operations. In order to meet the effects of the weaker business climate, a program to increase efficiency has been implemented, whereby the cost level has been lowered by MSEK 40 on an annual basis. The costs for this program has been charged on last year's result. Additional measures are being taken in a few additional areas of operation, but most of the Group's operations have been adapted to the current demand situation. Addtech's long-term growth and profitability goals remain unchanged. With a cost level adapted to a weak economy and a strong financial position, Addtech has excellent opportunities for positive earnings performance, in existing operations as well as through acquisitions. ACCOUNTING PRINCIPLES This financial report has been compiled in accordance with recommendation RR20 Interim reporting of the Swedish Financial Accounting Standards Council. Recommendation RR9 Income taxes of the Swedish Financial Accounting Standards Council has been applied starting this year. In all other respects the same accounting principles and computation methods as presented in Addtech's listing prospectus have been used. PARENT COMPANY The Parent Company's net revenues amounted to MSEK 27 (-) and income after financial items was MSEK 321 (-). This result includes items affecting comparability in the amount of MSEK-3 and dividends and group contributions from subsidiaries in an amount of MSEK 320 (-). DIVIDEND The Board of Directors proposes a dividend of SEK 1.20 per share. The total dividend payment amounts to MSEK 32. The Group's dividend policy states that 30 to 50 percent of the Group's average income after taxes should be paid as dividends to the shareholders. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/05/14/20020514BIT01140/wkr0001.doc The Full Report http://www.waymaker.net/bitonline/2002/05/14/20020514BIT01140/wkr0002.pdf The Full Report