Interim Report January 1- June 30 2001

INTERIM REPORT JANUARY 1- JUNE 30 2001 · Net sales decreased to SEK 1,038M (1,314). The fall is mainly attributable to lower sales of mobile telephone antennas. · Operating income fell to SEK -80M (55). · The capital gain on the sale of Wireless Solutions amounted to SEK 109M. · Costs of a one-off nature amounted to SEK 64M in the second quarter. · Continued success for Allgon's repeaters and coverage solutions. · Launch of antennas and repeaters for UMTS during the second quarter. · Production unit for mobile telephone antennas being set up in China. Market Following a very strong growth of the infrastructure market for mobile telephony in 2000, the first six months of 2001 were characterized by a global slow-down. The previous year's expansion has created a capacity in many networks which has been sufficient to cover a large proportion of the growth in subscribers. Sales of mobile telephones in 2001 are estimated at just under 400 million telephones, i.e. slightly less than last year. Considering the build-up of inventories, which took place before the turn of the year, Allgon's assessment is that the production of mobile telephones is significantly below the number of sold telephones. As previous evaluations of the market were in the range of 550 million telephones, there is a significant overcapacity in the sector. Second quarter 2001 During the second quarter, Allgon's net sales amounted to SEK 519M (632) which was on a par with the first quarter. Operating income amounted to SEK -6M (33) and income after financial items to SEK -13M (14). The divestment of Wireless Solutions generated a capital gain of SEK 109M. Costs of a one-off nature amount to SEK 64M, of which SEK 45M is attributed to write-down of inventories. The write-down is mainly caused by a changed product mix and falling demand. Other costs of a one-off nature are mainly attributable to the decision to move the manufacturing of mobile telephone antennas in the USA to Sweden. During the second quarter of 2000, items affecting comparability amounted to SEK 44M. Group net sales and orders received Net sales during the first half of the year fell to SEK 1,038M (1,314) and orders received to SEK 1,043M (1,276). Allgon Systems Net sales fell to SEK 695M (765) and operating income to SEK -79 (67). Operating income includes costs of a one-off nature of SEK 51 (-), of which SEK 45M related to write-down of inventories. The market in North America has been weak whereas Asia and, especially, China has developed positively during the second quarter. The success of repeaters and coverage solutions has continued and a number of large orders were received. During the second quarter, Allgon Systems launched antennas and repeaters for UMTS and additional UMTS products will be launched during the second half of the year. A cost savings program, implemented in the first half of the year, started to make an impact in the second quarter. Allgon Mobile Communications Net sales fell to SEK 286M (501) and operating income to SEK -36M (58). SEK 31M of the decrease in net sales is attributable to operations which were divested during 2000. Operating income includes one-off costs of SEK -29M (29), of which the majority is attributable to the decision to move the production in the USA to Sweden during the summer. In the first six months of the year, the sales volume amounted to 34 million antennas, of which 30 (1) percent consisted of built-in antennas. During the remainder of the year, the proportion of built-in antennas is expected to increase significantly. In the first quarter, an additional program was implemented aimed at reducing the business area's fixed expenses. This made an impact during the second quarter. A production unit is under construction in China and will be in operation at the beginning of 2002. Allgon Microwave Net sales fell to SEK 36M (46) and operating income to SEK -33M (-24). The marketing activities were focused on European UMTS operators. Allgon Microwave is currently involved in negotiations with a number of these operators. In addition to the mobile operator segment, negotiations are underway with customers, both in Europe and Asia, relating to microwave based data communication solutions to public companies and public administration. The projects within this segment have increased recently and this is expected to generate results during the second half of the year. Allgon Microwave has a strong product portfolio which is well- adapted for the above mentioned segments. Wireless Solutions Net sales increased to SEK 21M (2) and operating income improved to SEK -19M (-28). The business area was divested during the second quarter and has been consolidated until May inclusive. Consolidated results Allgon's gross margin fell despite the stronger USD. This is mainly due to the declining market and overcapacity. In addition, the gross margin is charged with one-off costs in connection with production rationalization and the write-down of inventories. Allgon's operating income fell to SEK -80M (55) and operating income after financial items to SEK -92M (30). The result includes costs of a one-off nature totaling SEK - 83M (0). Income after financial items includes, as an item affecting comparability, the sale of Wireless Solutions with SEK 109M (44). Income after financial items would have been SEK 77M (19) higher if Allgon had not had any currency-hedging. At the period-end, there were forward contracts, which have not yet expired, amounting to USD 15M subscribed at an average call rate of SEK 9.94. Financial position At June 30, 2001, the equity ratio amounted to 39 percent (December 31, 2000: 42 percent). Net borrowing amounted to SEK 215M at the period-end (December 31, 2000: SEK 370M). Capital expenditure During the period, capital expenditure in buildings and land, and machinery and equipment amounted to SEK 71M (136) gross, of which the completion of the building in Täby, Sweden, accounted for SEK 64M during the first half of the year 2000. Parent company Operations in the parent company, Allgon AB (publ) consist exclusively of Group co-ordination tasks and assets consist mainly of shares in subsidiaries. Accounting and valuation principles The same accounting principles and calculation methods have been applied as in the latest Annual Report. This Interim Report has not been the subject of special examination by Allgon's Auditors. Future information dates October 16, 2001 Nine-month Interim Report Täby, July 13, 2001 Allgon AB (publ) Jeff Bork President and CEO For further information, please contact: Jeff Bork President and CEO, Allgon AB Telephone: +46 8-540 822 31 Mobile: +46 709 58 22 31 Tomas Kihlstrand CFO, Allgon AB Telephone: +46 8-540 822 32 Mobile: +46 733 90 04 70 Condensed Consolidated 2001 2000 Jul 2000 2000 - Statement of Income (SEK million) Jan-Jun Jan-Jun Jun Jan-Dec 2001 Net sales 1,038 1,314 2,420 2,696 Cost of goods sold -799 -879 -1,734 -1,814 Gross income 239 435 686 882 Selling expenses -131 -149 -280 -298 Administrative expenses -62 -84 -145 -167 Research and development costs -187 -182 -381 -376 Other operating income/expenses -48 -9 -53 -14 Items affecting comparability 109 44 95 30 Operating income -80 55 -78 57 Net financial income/expenses -12 -25 -17 -30 Income after financial items -92 30 -95 27 Taxes 12 -10 8 -14 Minority interests of net income -2 -2 -3 -3 for the period Net income for the period -82 18 -90 10 Earnings per share (SEK) -2.82 0.63 -3.10 0.35 Number of shares at period-end 29,266 29,183 29,266 29,266 (000) Average number of shares (000) 29,266 29,129 29,255 29,192 Condensed Consolidated 2001 2000 Jul 2000 2000 - Balance Sheet (SEK million) Jun 30 Jun 30 Jun Dec 31 2001 Assets Fixed assets 502 553 502 570 Current assets 1,150 906 1,150 1,096 Total assets 1,652 1,459 1,652 1,666 Equity and liabilities Shareholders´ equity 633 687 633 693 Minority interests 6 4 6 4 Provisions 144 60 144 76 Long-term liabilities 226 207 226 214 Current liabilities 643 501 643 679 Total equity and liabilities 1,652 1,459 1,652 1,666 2001 2000 Jul 2000 2000 - Cash flow analysis (SEK million) Jan-Jun Jan-Jun Jun Jan-Dec 2001 Cash flow from current operations -113 84 -101 96 Change in working capital 72 -21 -40 -133 Capital expenditure, net 1) 162 -124 186 -100 Cash flow after investments 121 -61 45 -137 Financing -57 49 44 150 Change in liquid funds 64 -12 89 13 1) SEK 227 M relate to the divestment of Wireless Solutions Sweden AB 2001 2000 Jul 2000 2000 - Key figures Jan-Jun Jan-Jun Jun Jan- 2001 Dec Orders received (SEK million) 1,043 1,276 2,201 2,434 Operating margin (%) -8 4 -3 2 Profit margin (%) -8 2 -4 0 Return on operating capital -17 12 -9 6 (%) Return on capital employed (%) -8 16 -4 10 Return on shareholders´ equity -25 5 -14 1 (%) Equity ratio (%) 39 47 39 42 Interest-bearing liability 376 291 376 440 (SEK million) Average number of full-time 1,209 1,233 1,275 1,268 employees Capital expenditures for: - buildings and land (SEK 1 66 -29 36 million) - machinery and equipment 70 70 166 166 (SEK million) Depreciation/Amortization (SEK -60 -56 -126 -122 million) Equity per share (SEK) 22 24 22 24 Net sales distributed by 2001 2000 Jul 2000 2000 - geographical markets (SEK Jan-Jun Jan-Jun Jun Jan- million) 2001 Dec Europe 246 320 552 626 North & South America 603 751 1,399 1,547 Rest of world 189 243 469 523 Total 1,038 1,314 2,420 2,696 Net sales distributed by 2001 2000 Jul 2000 2000 - Business Areas (SEK million) Jan-Jun Jan-Jun Jun Jan- 2001 Dec Systems 695 765 1,633 1,703 Mobile Communications 286 501 655 870 Microwave 36 46 102 112 Wireless Solutions 21 2 30 11 Total 1,038 1,314 2,420 2,696 Operating income distributed 2001 2000 Jul 2000 by 2000 - Business Areas (SEK million) Jan-Jun Jan-Jun Jun Jan- 2001 Dec Systems -79 67 52 198 Mobile Communications -36 58 -49 45 1) Microwave -33 -24 -54 -45 Wireless Solutions -19 -28 -67 -76 Total -167 73 -118 122 Common Group items 94 4) 53 -52 2),3) -11 Goodwill amortization -7 -7 -13 -13 Operating income -80 55 -78 57 1) Includes capital gain on divestment of the vehicle antenna operation of SEK 28 M 2) Includes surplus funds from SPP of SEK 30 M 3) Includes costs attributable to the offer situation of SEK -28 M 4) Includes capital gain on divestment of the business area Wireless Solutions of SEK 109 M QUARTERLY FIGURES Condensed Consolidated 2001 2001 2000 2000 2000 2000 Statement of Income (SEK Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan- million) Sep Jun Mar Net sales 519 519 710 672 632 682 Cost of goods sold -424 -375 -466 -469 -427 -452 Gross income 95 144 244 203 205 230 Selling expenses -64 -67 -83 -66 -74 -75 Administrative expenses -25 -37 -45 -38 -48 -36 Research and development -87 -100 -104 -90 -91 -91 costs Other operating -34 -14 3 -8 -3 -6 income/expenses Items affecting 109 - -29 15 44 - comparability Operating income -6 -74 -14 16 33 22 Net financial -7 -5 -7 2 -19 -6 income/expenses Income after financial items -13 -79 -21 18 14 16 Taxes 16 -4 0 -4 -5 -5 Minority interests of net -2 -1 -1 0 -1 -1 income for the quarter Net income for the quarter 1 -84 -22 14 8 10 Earnings per share (SEK) 0.05 -2.86 -0.73 0.45 0.29 0.34 Number of shares at period- 29,266 29,266 29,266 29,266 29,183 29,183 end (000) Average number of shares 29,266 29,266 29,266 29,245 29,183 29,088 (000) Condensed Consolidated Balance Sheet (SEK million) 2001 2001 2000 2000 2000 2000 Assets Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Fixed assets 502 596 570 598 553 558 Current assets 1,150 1,040 1,096 1,018 906 946 Total assets 1,652 1,636 1,666 1,616 1,459 1,504 Equity and liabilities Shareholders´ equity 633 616 693 712 687 678 Minority interests 6 5 4 3 4 3 Provisions 144 83 76 55 60 58 Long-term liabilities 226 221 214 213 207 208 Current liabilities 643 711 679 630 501 557 Total equity and liabilities 1,652 1,636 1,666 1,616 1,459 1,504 2001 2001 2000 2000 2000 2000 Key figures Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan- Sep Jun Mar Orders received (SEK 479 564 547 611 675 601 million) Operating margin (%) -1 -14 -2 2 5 3 Profit margin (%) 0 -16 -3 2 1 2 Equity ratio (%) 39 38 42 44 47 45 Interest-bearing liability 376 448 440 359 291 335 (SEK million) Average number of full-time 1,159 1,259 1,277 1,329 1,267 1,199 employees Capital expenditures for: - buildings and land (SEK 1 - -31 0 11 55 million) - machinery and equipment 23 47 57 40 31 39 (SEK million) Depreciation/Amortization -28 -32 -33 -33 -28 -28 (SEK million) Equity per share (SEK) 22 21 24 24 24 23 Net sales distributed by 2001 2001 2000 2000 2000 2000 geographical markets (SEK Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan- million) Sep Jun Mar Europe 104 142 157 149 151 169 North & South America 305 298 390 406 363 388 Rest of world 110 79 163 117 118 125 Total 519 519 710 672 632 682 Net sales distributed by 2001 2001 2000 2000 2000 2000 Business Areas (SEK million) Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan- Sep Jun Mar Systems 370 325 476 462 384 381 Mobile Communications 133 153 196 173 224 277 Microwave 14 22 32 34 22 24 Wireless Solutions 2 19 6 3 -2 - Total 519 519 710 672 632 682 Operating income distributed 2001 2001 2000 2000 2000 2000 by Business Areas (SEK million) Apr-Jun Jan-Mar Oct-Dec Jul- Apr- Jan- Sep Jun Mar Systems -60 -19 56 75 35 32 Mobile Communications -21 -15 16 -29 31 27 Microwave -18 -15 -12 -9 -12 -12 Wireless Solutions -8 -11 -26 -22 -17 -11 Total -107 -60 34 15 37 36 Common Group items 104 -10 -45 4 0 -11 Goodwill amortization -3 -4 -3 -3 -4 -3 Operating income -6 -74 -14 16 33 22 Notes 2001 2000 Change in equity (SEK Jan-Jun Jan-Jun million) Opening balance as per 693 694 December 31 Change in translation 22 0 difference Dividend - -25 Net income for the quarter -82 18 Closing balance according to balance sheet as per June 30 633 687 Taxes A deferred tax receivable relating to estimated deductible losses in Sweden has been accounted for from the second quarter of 2001. The receivable amounts to SEK 20 M. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.bit.se/bitonline/2001/07/13/20010713BIT00210/bit0001.doc http://www.bit.se/bitonline/2001/07/13/20010713BIT00210/bit0001.pdf