Interim report january 1 - march 31, 2000

INTERIM REPORT JANUARY 1 - MARCH 31, 2000 * Net sales rose by 57 percent to SEK 682 million (435) * Order intake increased by 13 percent to SEK 601 million (531) * Operating income fell by 3 percent to SEK 22 million (23). Income after financial items fell by 41 percent to SEK 16 million (27) * Allgon Microwave and Wireless Solutions influenced operating income with SEK -26 million (13). * Distribution agreement signed within Bluetooth with RFI Elektronik GmbH Market Allgon estimates that the global sales of mobile telephones will amount to 400 million during the year 2000. Expansion of the infrastructure of the mobile telephone networks in North America remained strong. Several American operators have offers which stimulate market growth. The development in South America was positive. Subscriber growth in Europe remained at a high level. At end-February this year, there were approximately 167 million subscribers in Europe, an increase of 8 percent since the turn of the year. GSM completely dominates the market in Europe with a share of 97 percent. Many operators are testing GPRS systems which are expected to be in operations towards the end of the year 2000. The market in Asia is developing slowly even if a recovery can be noted in South-East Asia. Group net sales and orders received Net sales rose by 57 percent to SEK 682 million (435). Orders received increased by 13 percent to SEK 601 million (531). Our important OEM customers increasingly call of orders as per forecasts which means shorter delivery times. On Allgon's part this means that, relatively seen, the backlog shrinks. Allgon Systems Net sales rose by 73 percent to SEK 381 million (220). Sales increased in North and South America whereas they fell in Europe and Asia. Sales of repeater networks fell slightly in Europe and in Asia. During the quarter the largest order so far was received for repeater solutions. The order refers to the subway in Moscow and the first order amount is for million 18 SEK. Sales of radio equipment and antenna systems developed very strongly, particularly in North America. In March, Allgon Systems moved into new premises in Täby, North of Stockholm. Allgon Microwave Net sales amounted to SEK 24 million (0). In addition to Europe, sales activities now include South America and Asia. During the quarter, the customer base increased with, among other things, UpGrade Communication, which is included in the Doro Group and distributes wireless networks and microwave links in the Nordic countries. The agreement refers to Ethernet microwave links for delivery throughout the Nordic countries and the Baltic States. The first order amounts to SEK 11 million. Allgon Mobile Communications Net sales rose by 29 percent to SEK 277 million (215). The product mix for terminal antennas was relatively stable and distribution between retractable, fixed and built-in antennas 41/59/0 (40/60/0) percent. Sales of antennas for satellite telephones amounted to SEK 15 million (0). The operation has been adapted to the lower market prospects and will be moved from Gothenburg to Åkersberga during the third quarter. At end-March 2000, an agreeement was made for the sale of the vehicle antennas operation to Smarteq AB which takes over the operation from May 1, 2000. The transfer is expected to bring about a loss in sales of SEK 70-80 million in the year 2000. Wireless Solutions During the quarter, a strategic distribution agreement was signed with RFI Elektronik GmbH, the largest distributor of portable computers in Germany. The agreement means that all RFI products in the Bluetooth, in the first place will be delivered by Wireless Solutions. The company's product portfolio has attracted considerable interest on the market.. The intention is to double the number of staff during the year to enable the company to rapidly commercialize the ongoing development projects. Deliveries will start during the second half of the year 2000. Income Allgon's operating income fell by 3 percent to SEK 22 million (23). Income after financial items fell by 41 percent to SEK 16 million (27). Operating income was affected by: * Wireless Solutions and Allgon Microwave by SEK -26 million (-13) * Costs in connection with Allgon Systems' move into new premises * Costs in connection with start-up of production in China and Brazil. The transfer of the vehicle antenna operations to Smarteq is expected to affect income after financial items positively by approximately SEK 33 million on a full-year basis, mainly through the capital gain arising on the sale of the operation. This capital gain has not yet influenced income. Income after financial items would have been SEK 12 million higher if Allgon had not had any hedging. Financial position At March 31, 2000, the equity ratio amounted to 45 percent (50 percent at December 31, 1999). Net borrowing amounted to SEK 278 million at the period-end (SEK 162 million at December 31, 1999). Capital expenditure During the period, capital expenditure in buildings and land, machinery and equipment amounted to SEK 94 million (52) gross, of which the new construction for Allgon Systems accounted for SEK 55 million (22). Upcoming information dates July 13, 2000 Six-Month Interim Report October 17, 2000 Nine-Month Interim Report January 18, 2001 Year-end Report 2000 Täby, April 13, 2000 Allgon AB (publ) Jan Edhäll President and CEO For further information, please contact: Jan Edhäll Telephone: +46 8-540 822 31 President and CEO, Allgon AB Claes Silfverstolpe Telephone: +46 8-540 822 32 Chief Financial Officer, Allgon AB ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/04/13/20000413BIT00840/bit0001.doc The full report http://www.bit.se/bitonline/2000/04/13/20000413BIT00840/bit0002.pdf The full report