Year-end report January - December 2006

Continued restructuring and earnings growth

• Net sales for the full year 2006 rose by 11 per cent to SEK 1,985 (1,782) million. Fourth quarter sales were up by 11 per cent to SEK 523 (470) million. Acquired units accounted for most of the sales growth.
• Adjusted profit before tax 1) for the full year improved to SEK 52 (42) million. Profit before tax was SEK 2 (34) million. For the fourth quarter, adjusted profit before tax was SEK 14 (14) million and profit before tax was SEK 9 (14) million.
• Earnings per share after dilution were SEK 2.38 *) (1.99).
• The previously announced closure of the Group’s factory in Ireland was started in the fourth quarter. A total of 35 employees were given notice and will leave their positions in the first quarter of 2007. The annual savings will amount to approximately SEK 13 million. One-time closure costs of SEK 21 million were charged to profit for the fourth quarter at the same time that the sale of the Irish property provided a capital gain of SEK 16 million.
• The previously announced restructuring measures in Germany, Finland and Belgium are proceeding according to plan and will result in a reduction of 125 positions over a two-year period. On completion, the annual savings are estimated at SEK 48 million.
• Prices for fine paper were raised on three occasions in 2006 and Bong has subsequently raised its prices to customers, in certain cases with a slight delay. The assessment is that the price hikes that took place in the fourth quarter of 2006 will be fully compensated by price increases in the first quarter of 2007.
• The underlying cash flow remained strong in 2006 and amounted to SEK 84 million. After acquisitions for a total of SEK -42 million, restructuring charges of SEK -77 million and proceeds of SEK 28 million on the sale of properties, cash flow after financing activities was SEK -7 (106). Cash flow for the fourth quarter was SEK 33 (36) million.
• The Board proposes a dividend of SEK 1 (0) per share for 2006.