Year-end report January - December 2000

YEAR-END REPORT JANUARY - DECEMBER 2000 Income for the Allgon Group is in line with the information published on December 15, 2000. * Allgon will continue as an independent company as REMEC's offer will not be completed. * Net sales rose by 26 percent to SEK 2,696 million (2,136). * Operating income fell by 54 percent to SEK 57 million (124). Income after financial expenses fell by 79 percent to SEK 27 million (127). Operating income includes items affecting comparability of SEK +30 million net (-). * For Allgon Systems, net sales amounted to SEK 1,703 million (1,136), an increase of 50 percent. Operating income for the full-year was SEK 198 million (103), an increase of 92 percent. * Allgon Mobile Communications started serial deliveries of built-in antennas during the fourth quarter. * Wireless Solutions started deliveries of commercial Bluetooth products in December 2000. Market Expansion of the infrastructure of the mobile telephone networks in North America was very rapid during the year. A slow-down was noted in the fourth quarter, partly due to AT&T's announced postponement of its network expansion from the fourth quarter in 2000 to the first quarter in 2001. AT&T also announced that any further expansion of its network will be based on GSM 1900 MHz standards, as opposed to the TDMA systems. Several other TDMA operators are expected to follow AT&T's direction. In South America, investments in infrastructure have been stable. Subscriber growth remains high in Europe. License allocation for 3G has attracted much attention. Continued recovery is taking place in Asia with, above all, strong subscriber development in China. China has approximately 76 million subscribers and is the second largest market after the USA which has approximately 110 million subscribers. Fourth quarter 2000 Allgon's net sales in the fourth quarter of 2000 rose by 13 percent to SEK 710 million (628). Operating income fell to SEK -14 million (32). Operating income includes an item affecting comparability which relates to costs attributable to the offer situation of SEK-28 million. The increased selling expenses reflect an increasingly presence with South and North America and Asia. Allgon Microwave and Wireless Solutions, which have high development costs, affected operating income by SEK -38 million (-12). Income after financial items amounted to SEK -21 million (37), of which income was charged with SEK 28 million. Group net sales and orders received during 2000 During the year, net sales increased by 26 percent to SEK 2,696 million (2,136). Orders received rose by 7 percent to SEK 2,434 million (2,266). Allgon Systems Net sales increased by 50 percent to SEK 1,703million (1,136). The increase was especially high in North and South America as well as in Asia. Sales of antenna systems developed very positively with significant increases in Asia, Europe and North America. In North America there was a slowdown during the fourth quarter. In total, sales nearly doubled during the year. Sales of radio equipment also increased strongly, especially to customers in North America. Sales of repeater networks rose marginally. Operating income rose to SEK 198 million (103), an increase of 92 percent. Income during the fourth quarter was slightly below the latest forecast due to lower sales during December. The new production plant in Wuxi, China, was put into operation during the second quarter and operations developed positively during the year. Allgon Mobile Communications Net sales fell by 12 percent to SEK 870 million (990). If the sale of the vehicle antenna operation is taken into account, the fall was four percent. During the year, Allgon's distribution between retractable, fixed and built-in antennas was 31/64/5 (38/61/1) percent. During the fourth quarter, the product mix was 21/65/14 percent as serial deliveries of built-in antennas started. In total, 95 (96) million antennas were delivered during 2000 which represents a market share of approximately 24 percent (37). Cost saving programs have been implemented and expenses will be reduced by SEK 50 million on an annual basis compared with the level during the first half of 2000. Sales of antennas for satellite telephones amounted to SEK 45 million (19). Operating income fell by 64 percent to SEK 45 million (124). Income for the fourth quarter was higher than announced in the latest forecast. Allgon Microwave Net sales amounted to SEK 112 million (10). Marketing activities directed at Asia and South America were initiated during the year. The unique functionality, to enable handling of Ethernet protocol in the microwave, generated a strong response in the market. Higher purchasing costs of components, partly due to the higher USD rate, and the additional development costs aimed at reducing production costs affected income. Operating income amounted to SEK -45 million (-50) which is in line with the latest forecast. Wireless Solutions Net sales amounted to SEK 11 million (-). During the year, product development continued with a focus on Bluetooth and WLAN products. A number of product launches were made and, during December, serial deliveries of Bluetooth products started. Several projects were overdue as a result of, among other things, delayed component development which led to cancellation of some orders for WLAN products. Operating income amounted to SEK -76 million (-) which is on a par with the latest forecast. Consolidated results Operating income fell by 54 percent to SEK 57 million (124). The losses in Allgon Microwave and Wireless solutions, which area mainly attributable to high development costs, were charged to consolidated income with SEK 121 million (50). The result includes items affecting comparability of SEK 30 million (-) which consist of surplus funds from SPP, SEK 30 million, capital gain on divestment of the Vehicle Antenna operation, SEK 28 million, and costs attributable to the offer situation, SEK 28 million. Net financial income/expenses includes a capital loss of SEK 5 million, which is attributable to the sale of the shares that were received in payment when the Vehicle Antenna operation was divested. Income would have been SEK 57 million higher if Allgon had not had any hedging. The reported high tax rate amounts to 50 (35) percent. This is mainly due to non-deductible goodwill amortization. Financial position At December 31, 2000, the equity ratio amounted to 42 percent (50). Net borrowing amounted to SEK 370 million (162) at the period-end. Capital expenditure During the year, capital expenditure in buildings and land, machinery and equipment amounted to SEK 202 million (281) gross, of which the new construction for Allgon Systems accounted for SEK 34 million (149). Offers from LGP and REMEC On August 22, LGP Telecom Holdings AB made an offer for Allgon. The Allgon Board of Directors, supported by its financial advisers, established that the offer did not reflect the value of Allgon's operations and potential. On October 16, LGP announced that the offer would not be completed as it had acquired only 17 percent of the capital stock. On September 28, REMEC made a bid for Allgon in which the offer period was later extended. On January 12, REMEC announced that the offer had not been accepted by shareholders representing at least two thirds of the capital stock, which was a condition, and the bid would therefore not be completed. Dividend The Board of Directors has decided to propose that the Annual General Meeting decide a dividend of SEK 0.85 (0.85) per share for 2000, equivalent to SEK 24.9 million (24.8) in total. Annual General Meeting The Annual General Meeting will be held on Allgon's premises in Antennvägen 6 in Arninge, Täby, north of Stockholm, on Wednesday May 16, 2001 at 6 pm. Nomination of Board Members Shareholders who wish to submit proposals for Board Members in advance can contact one of the following Members of the Nomination Committee: Gunnar Bark, Chairman of the Board and Chairman of the Nomination Committee, tel +46 8587 206 60 Per Wejke, Board Member, tel +46 8 661 34 36 or +46 708 42 33 73 Future information dates The complete Annual Report for Allgon AB will be available at the beginning of March on Allgon's premises in Antennvägen 6 in Arninge, Täby. It will be distributed to the shareholders at the same time. April 19, 2001 - Three-month Interim Report May 16 , 2001 - Annual General Meeting July 13, 2001 - Six-month Interim Report October 16, 2000 - Nine-month Interim Report Täby, January 18, 2001 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 Anders Fraggstedt Telephone: +46 8-540 822 32 Acting Chief Financial Officer, Allgon AB ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/01/18/20010118BIT00870/bit0001.doc The full Year-end report http://www.bit.se/bitonline/2001/01/18/20010118BIT00870/bit0002.pdf The full Year-end report