Strong sales, but investments in growth and shrinking gross margins reduce Allgon

Strong sales, but investments in growth and shrinking gross margins reduce Allgon's second quarter income Allgon's net sales and order intake remain very satisfactory. Net sales for April-June are expected to amount to SEK 630-650 million (April-June 1999: 528) and order intake to SEK 660-700 million (520). Allgon is expected to reach a break-even result after financial items (23) for the second quarter. This result includes a positive one-off effect of approximately SEK 20 million from the divestment of the vehicle antenna operations. In Allgon Mobile Communications, sales of terminal antennas have been weaker than anticipated as our market has developed rapidly towards fixed and built-in antennas at the expense of retractable antennas. This has resulted in overcapacity in production and has had an unfavorable effect on Allgon Mobile Communication's income. Continued investments in new antenna solutions are underway and a number of new product families are being launched. Allgon System's sales and order intake continue to develop positively. Market growth for this Business Area is currently favorable, especially in North America. Investments in the new growth areas, Wireless Solutions and Allgon Microwave, will be charged to income by approximately SEK 35 million (13) in the second quarter and by around SEK 60 million (26) in the first six months of the year. The market prospects for these operations look positive. An extensive program will be implemented to improve profitability. 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/2000/06/19/20000619BIT01380/bit0001.doc http://www.bit.se/bitonline/2000/06/19/20000619BIT01380/bit0002.pdf