Interim report january 1- september 30, 2001

INTERIM REPORT JANUARY 1-SEPTEMBER 30, 2001 * Net sales amounted to SEK 1,516M (1,986). * Operating income amounted to SEK -89M (71). * All the business areas improved their operating income during the third quarter compared with the previous quarter. * Mobile Communications reported a profit in the third quarter. * During the third quarter, a number of strategically important orders were received. * Significant interest in Allgon's 3G products. THIRD QUARTER 2001 During the third quarter, Allgon's net sales amounted to SEK 478M (672). Operating income amounted to SEK -9M (16) and income after financial items to SEK -20M (18). Reduced sales and overcapacity resulted in significantly lower gross profit for Allgon. Operating income, excluding items affecting comparability, fell by SEK 11M compared with the previous year. The implemented savings programs have thus significantly contained the negative effect of the fall in sales for the period. JANUARY-SEPTEMBER 2001 Market Following strong growth during 2000, the market for Allgon's products is now back at the 1999 level. Allgon expects the market to remain at this level until 3G investment speeds up. Allgon is currently involved in a large number of negotiations relating to 3G contacts and expects that these will be completed over the next six months. At the present time, it is difficult to judge when deliveries will start, but Allgon does not expect any volume deliveries to be made until 2003. The market for coverage solutions (repeaters) has developed favorably and Allgon is strongly positioned in this sector. Activities relating to demand for coverage solutions for subways and multi-operator solutions for public buildings are especially strong. The market in China continues to grow, whereas the markets in Europe, North America and South America remain weak. Group net sales and orders received Net sales fell to SEK 1,516M (1,986) and orders received to SEK 1,542M (1,887). Allgon Systems Net sales fell to SEK 1,024M (1,227) and operating income to SEK -82M (142). Operating income includes costs of a one-off nature of SEK 51M (- ). Sales of antennas and repeaters developed positively, whereas sales of base station products were weak. A large number of contracts for UMTS (3G) networks are under final negotiation. The contracts relate to deliveries of antennas, tower top amplifiers and filter panels. China continues to develop positively, especially due to deliveries to the new CDMA network which is currently under construction. During the third quarter, significant orders were received in the USA (GSM antennas, SEK 137), China (repeaters, SEK 192M) and Russia (repeaters SEK 60M). Allgon Mobile Communications Net sales fell to SEK 418M (674) and operating income to SEK -25M (29). Operating income includes one-off items of SEK -29M (28). The business area's operations have now been adapted to the current invoicing level and report positive results from July. The production unit in the USA has been closed and the production moved to Sweden. During the third quarter, additional measures were implemented to reduce the business area's costs. The establishment of the production unit in China continues according to plan and production will start at the beginning of 2002. The proportion of built-in antennas delivered during the third quarter was approximately 40 (4) percent. Allgon Microwave Net sales fell to SEK 53M (80) and operating income to SEK -47M (-33). Allgon Microwave is in the final phase of negotiations with a number of UMTS operators who have significant needs for microwave products. The decision-making process relating to the selection of suppliers has dragged on but is expected to be resolved during the fourth quarter. Wireless Solutions Net sales amounted to SEK 21M (5) and operating income to SEK -19M (- 50). The business area was divested during the second quarter and has been consolidated until May inclusive. Consolidated results Allgon's operating income fell to SEK -89M (71) and operating income after financial items to SEK -112M (48). The fall is mainly due to the downturn in the market and overcapacity. The results include one-off costs totaling SEK 83M (-). Also included, as an item affecting comparability, is the sale of Wireless Solutions with SEK 109M (53). Income after financial items would have been SEK 79M (59) higher if Allgon had not had any hedging. At the period end, there are forward contracts, which have not yet been taken up as income, amounting to USD 6M subscribed at an average call rate of SEK 10.71. Financial position At September 30, 2001, the equity ratio amounted to 42 percent (December 31, 2000: 42 percent). Net borrowing amounted to SEK 221M 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 94M (176) gross, of which the completion of the building in Täby, Sweden, accounted for SEK 64M during the corresponding period in 2000. Parent company Operations in the parent company, Allgon AB (publ), consist 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 in the Interim Report as in the latest Annual Report. This Interim Report has not been the subject of special examination by Allgon's Auditors. Future information dates January 22, 2002 Year-end Report Täby, October 16, 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 Tomas Kihlstrand Chief Financial Officer, Allgon AB Telephone: +46 8-540 822 32 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00600/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/10/16/20011016BIT00600/bit0001.pdf The full report