Atle-Interim Report

Interim Report January - March 1999 Consolidated earnings after financial items were SEK 213M (516), of which exit profits SEK 136 M (455) Earnings before taxes of the Business Sectors from current operations increased to SEK 81M (40) In the previous year, 88 % of the Group´s exits profits arose during the first quarter Limited reconstruction of Studsvik's USA plant with increase of capacity. Commercial start in June 1999 The positive trend is expected to continue during 1999 Major events during 1999 Acquisitions 100 % of AKA Tempcold 25 % of Media Technology 24 % of Northern Technologies 11 % of Cellavision 16 % of Neoventa Medical Divestments Hymo V-Kran, converted to 12 % of Hemek The holding in Håells Part of the holding in Mentorgruppen Part of the holding in Zeteco The holding in Sabroe Refrigeration Stockmarket listing of Digital Vision carried out Exit profit on merger between Näckrosbuss and SL Buss During the quarter, net sales amounted to SEK 2,160M (2,012), an increase of 7 per cent. The proportion of net sales outside Sweden was 50 per cent (53). Consolidated earnings after financial items amounted to SEK 213M (516), whereas earnings before taxes were SEK 205M (504). Earnings before taxes of the Business Sectors were SEK 217M (495). Earnings of the Business Sectors include exit results of SEK 136M (455). In the previous year, a large part of the total exit profits during the financial year of SEK 517M were accumulated in the first quarter (Fritidsresor, Karlshamns, KMT), whereas this year they are expected to be more evenly distributed over the year. Earnings of the Business Sectors from current operations increased to SEK 81M (40). Investments and Exits During the first quarter, the Group invested SEK 266M (1,401) in operating companies. The largest investment referred to the acquisition of AKA Tempcold. During the quarter, 7 exits were carried out. The total sales figure amounts to SEK 361M (639) with an exit result of SEK 136M (455). The largest exit profits emerged on the sales relating to Zeteco and Sabroe Refrigeration. In accordance with a previously-published forecast, a major part of the exit profits is expected to arise during the latter part of the year. At end-March, the book value of the Business Sectors' investments in operating companies amounted to SEK 4,418M (4,168). Business Sector operations Consolidated net sales before taxes are shown in the following table. The results of the Business Sectors include exit results which are not distributed evenly over the year. Jan - Mar 1999 Jan - Mar Full-year 1998 1998 Business Sector Net Result Net Resul Net Resul sales sales t sales t Atle Karolin 623 65 858 175 3,216 313 Verkstadsindustri Atle Tjänste & Handel 486 18 500 4 2,179 73 Atle Miljöteknik 245 -2 169 -6 1,008 13 Atle 569 -1 98 36 1,720 52 Informationsteknologi Atle Mergers & 217 133 370 268 1,431 432 Acquisitions Atle Företagskapital 2 4 5 18 43 56 Total Business Sectors 2,142 217 2,000 495 9,597 939 Group adjustments, 18 -12 12 9 79 -67 overheads and the Parent Company's asset management Atle Group 2,160 205 2,012 504 9,676 872 The Parent Company's earnings before taxes amounted to SEK 195M (492). Atle Karolin Verkstadsindustri In the first quarter of this year, the slow-down in order intake during the second half of 1998 levelled out at 11 per cent below the same quarter in the previous year. This also had the effect that net sales were 7 per cent lower. The market fall was most significant for Transmission, whereas Materials Handling and Components were only marginally affected. At end-March, backlog for comparable units was 13 per cent down on the previous year. Earnings of the current operations fell as a result of the volume decrease but are higher than expected. As in previous years, a gradual strengthening of the current earnings is anticipated during the year. Of earnings in the previous year, approximately 70 per cent fell in the second half of the year and 40 per cent during the last quarter. During the period part of the holding in Zeteco, equivalent to 9.1 per cent of capital, was sold to Partek with an exit profit of SEK 70M. In addition, the lifting table manufacturer, Hymo, was sold and the forest crane manufacturer, V-Kran - via a subscription in kind - was incorporated in the Hemek Group in which Atle thereafter has an ownership of 12 per cent. After the end of the period, Partek exercised its option and called for the acquisition of Atle's remaining shares in Zeteco, equivalent to 14.3 per cent of capital. This latter acquisition is subject to approval by the competition authorities. It is expected that the acquisition will be completed during the second quarter and generate an exit profit of an additional SEK 110M. Atle Tjänste & Handel From a general point of view, the year started weakly for the companies in the Business Sector but a recovery is anticipated later in the year. An exception is Gadelius which, despite the weak economic trend in Japan, reports a very strong result. The result includes an exit profit of SEK 17M from Näckrosbuss in connection with the merger with SL Buss. The newly-acquired AKA Tempcold is included from 1 January. Atle Miljöteknik Studsvik's traditional operations are developing positively, both with regard to earnings and order intake. Final full-scale tests with non-radioactive materials were carried out during March and April in the newly-constructed plant in the USA with positive results. In this connection, it was found that a limited reconstruction would increase the capacity of the plant. It is significantly easier to carry out a reconstruction before radioactive materials have been introduced in the equipment. A decision has therefore been made to carry out the reconstruction before the commercial start, which is now expected to take place in June. Centralsug's earnings improved significantly as a result of increased volumes and margins. The products of the newly-acquired company, Optibag, attracted considerable interest and eminently complement the operations of Centralsug and Bala. Atle Informationsteknologi Virtually all the companies in the Business Sector are developing according to plan, with the exception of Martinssongruppen which reported a weak result as a consequence of a volume fall on the PC market during the first two months of the year and to the fact that large structural costs were charged to the result. Dafix is not yet achieving the anticipated result, whereas Sweden On Line is developing better than planned. During the period, a decision was made to merge SPCS and the Norwegian company, PC Systemer. The stockmarket introduction of Digital Vision attracted a great deal of interest. The first listing day was 28 April. Atle's exit profit was SEK 40M and will be reported in the second quarter. After the period-end Atle, via a directed new share issue, acquired 24 per cent of Northern Technologies and an additional 10 per cent of Sourcecom. Atle Mergers & Acquisitions The result during the period was very good. In general, the year started strongly for the Business Sector's subsidiaries and associated companies, especially with regard to sales growth. An especially positive development is noted for Hilding Anders, Nordisk Renting and Divinycell Polimex. A continued positive trend is anticipated for most of the companies during the remainder of the year. During the period the Danish company, Sabroe Refrigeration, was sold to the American company, York. As a result the largest company in the world is being created within industrial refrigeration systems. The acquisition is subject to approval by competition authorities. Atle's ownership generated an exit profit of SEK 59M. The stockmarket introduction of Hörnell International is expected to take place during the second half of the year. Atle Företagskapital The Business Sector's companies are largely developing according to plan. During the quarter the holding in Håells and part of the holding in Mentorgruppen were sold at a sound profit. A 16 per cent holding was acquired in Neoventa Medical (birth monitoring) and 11 per cent in Cellavision (automated microscopy). Together with Atle IT, the outstanding 25 per cent in Backupcentralen was acquired. After the period-end, 25 per cent of Media Technologies (IT support for training operations) was acquired. Financial position, etc At end-March, the Group's liquid resources (excluding unutilised bank overdraft facilities) amounted to SEK 527M (664). The Group's equity ratio was 54 per cent (52) and the Parent Company's equity ratio 81 per cent (85). Adjusted equity was SEK 91.11 per share (97.22) at end-March. In adjusted equity unlisted shares are valued at consolidated book values and listed shares at market value. The majority of Atle's assets consists of unlisted shares. Their book values can differ significantly from the market values which emerge only on exits. As a result of Atle's fiscal status, Atle AB directly owns the majority of all shares in operating companies, whereas operations are reported within the Business Sectors. This has the effect that the Parent Company's Profit and Loss Account contains exit results. Number of shareholders During the period, the number of shareholders increased to 14,602. At 1998 year-end, the number was 13,121 and at the end of 1997 10,313. Key figures 3 months Full-year 990331 980331 98123 97123 96123 1 1 1 Net sales, SEK M 2,160 2,012 9,676 7,616 5,882 Earnings before 205 504 872 712 576 taxes, SEK M Earnings after tax, 148 473 658 579 503 SEK M Total assets, SEK M 9,208 9,149 9,791 7,586 8,448 Equity ratio, % 53.9 51.8 50.8 57.1 46.1 Adjusted equity per 91.11 97.22 90.82 88.78 73.46 share, SEK Market value at 111.00 154.00 105.0 125.5 77.00 period-end, SEK 0 0 Rolling 12 Full-year months 9804- 9704- 1998 1997 1996 9903 9803 Return on 7.4 16.5 15.9 15.5 14.9 shareholders' equity, % Return on capital 11.0 14.9 16.7 14.7 14.1 employed, % Earnings per share, 6.09 12.59 12.06 10.62 9.21 SEK P/E ratio at period- 18.2 8.6 8.7 11.8 8.4 end Prospects for 1999 The positive trend is expected to continue during 1999. The majority of exit profits are expected to arise during the remaining quarters. Stockholm, 5 May 1999 Atle AB (publ) Lars Gårdö President This report ha not the subject of examination by the Company´s Auditors. For further information, please contact:Lars Gårdö, President Gunnar Huss, Executive Vice President Leif Fahrman, Chief Financial Officer Financial information during 1999 Interim Report January-June will be published on 26 August Interim Report January-September will be published on 11 November Summarised Profit and Loss Accounts Amounts in SEK M GROUP PARENT COMPANY 3 3 mon Full- 3 3 Full- 1999 1998 1998 1999 1998 1998 Net sales 2,16 2,012 9,676 - 0 - Cost for sold goods - - -7,121 - - - Gross earnings 594 536 2,555 - 0 - Exit results Exit profits 151 465 591 206 487 541 Exit losses and write-downs -15 -10 -74 -5 - -207 Total exit result 136 455 517 201 487 334 Share of associated companies' 97 31 189 - - - before taxes Other expenses and income Sales, administrative and -576 -493 -2,168 -11 -25 -68 costs Depreciation of goodwill -33 -31 -128 - - - Dissolution of negative 0 1 7 - - - Other operating income and 8 2 32 - 0 - operating epenses Operating earnings 226 501 1,004 190 462 266 Results of financial Dividends from subsidiaries companies - - - 8 0 218 Capital gains in asset - 31 22 - 31 22 Other financial items, net -13 -16 -73 -3 -1 -15 Earnings after financial items 213 516 953 195 492 491 The minority's share of -8 -12 -81 - - - financial items Earnings before taxes 205 504 872 195 492 491 Taxes -57 -31 -214 0 0 -14 Net profit for the period/year 148 473 658 195 492 477 Summarised Balance Sheets Amounts in SEK M GROUP PARENT COMPANY ASSETS 99033 98033 98123 99033 98033 98123 Fixed assets Intangible and tangible fixed 2,637 3,004 3,442 2 2 2 assets Participations in - - - 3,066 2,950 3,160 subsidiaries Participations in associated 1,669 1,681 1,499 1,265 1,416 1,133 companies Other participations 358 382 363 237 212 253 Other financial fixed assets 107 36 72 39 - - Total fixed assets 4,771 5,103 5,376 4,609 4,580 4,548 Current assets Inventories 1,497 1,296 1,439 - - - Current receivables 2,386 2,087 2,312 409 453 172 Other participations 4 10 3 3 10 3 Other short-term investments 109 219 132 - - - Cash and bank 414 434 529 0 1 7 Total current assets 4,410 4,046 4,415 412 464 182 TOTAL ASSETS 9,181 9,149 9,791 5,021 5,044 4,730 SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES GROUP PARENT COMPANY Shareholders' equity 4,510 4,405 4,369 4,059 4,122 3,864 Minority interest 442 332 600 - - - Provisions 507 761 578 62 58 53 Long-term liabilities 1,400 1,433 1,528 484 451 395 Current liabilities 2,322 2,218 2,716 416 413 418 TOTAL SHAREHOLDERS' EQUITY, 9,181 9,149 9,791 5,021 5,044 4,730 PROVISIONS AND LIABILITIES Summarised cash flow analyses Amounts in SEK M GROUP PARENT COMPANY 3 3 Full- 3 3 mon Full- 1999 1998 1998 1999 1998 1998 Cash flow before change in 87 105 713 0 4 155 change in working cap -207 -329 68 -25 -189 77 Cash flow from current -120 -224 781 -25 -185 232 Cash flow from investment -292 -786 -1,263 -87 -783 -902 Cash flow from financing 275 506 -22 105 449 150 Cash flow for the period -137 -504 -504 -7 -519 -520 Liquid resources*) at start 664 1,16 1,168 10 530 530 Liquid resources) at period- 527 664 664 3 11 10 ') Includes Other participations and Other short-term investment ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/05/05/19990505BIT00280/bit0001.doc http://www.bit.se/bitonline/1999/05/05/19990505BIT00280/bit0002.pdf