Interim report January - June, 1999

BT Industries AB (publ) Interim report January - June 1999 Orders received SEK 4,823 m. (SEK 4,391 m.), up 10% Invoiced sales rose 16% to SEK 4,770 m. (SEK 4,121 m.) Income after net financial items +21%, SEK 298 m. (SEK 247 m.) Acquisition of 51% of SOUEL in Greece Financial summary January - June Amounts in SEK m. 1999 1998 Full year 1998 Orders received 4,823 4,391 8,924 Net sales 4,770 4,121 8,838 EBITDA 1) 490 425 956 Operating income 288 251 576 Income after net financial 298 247 544 items 1) EBITDA = Earnings Before Interest, Tax, Depreciation and Amortization of intangible assets Market development The world market for warehouse trucks has developed positively. In North America, demand has been strong. In Western Europe, demand has also remained good, with an increase primarily in Southern Europe. In emerging markets - i.e. outside Western Europe and North America - total volume is relatively stable. Development remains weak in parts of Eastern Europe, while signes of recovery in demand can be noted in South-East Asia and Latin America. Acquisitions On July 1, following the conclusion of the report period, BT acquired 51% of the shares in SOUEL Warehousing S.A. in Greece. For a number of years SOUEL has been BT's distributor of warehouse trucks in the Greek market, which to date has been limited in volume but is now quickly growing. SOUEL, with approx. SEK 30 m. in net sales, will be consolidated as a subsidiary as of July 1 of this year. In March BT acquired 45% of the shares in CESAB Carrelli Elevatori S.p.A. - Italy's second largest manufacturer of counterbalanced trucks. The additional products added under the BT name have been well received by the market. Delivery of BT-customized products have started in Europe. The profit impact is however marginal. CESAB is consolidated as an associated company of BT Industries as of March 1999. Orders and sales The Group's orders received during the first six months of 1999 amounted to SEK 4,823 m. (SEK 4,391 m.), an increase of approximately 10% compared with the corresponding period last year. Net sales amounted to SEK 4,770 m.(SEK 4,121m.), an increase of 16% compared with the first six months of 1998. The order backlog has risen somewhat since the beginning of the year. Net sales for the first six months of 1999 and 1998 by product area were as follows: January-June Change 1 (8 ) BT Industries AB (publ) Interim report January - June 1999 Amounts in SEK m. 1999 1998 % Warehouse trucks 2,485 2,236 + 11% Counterbalanced trucks 436 225 + 94% Manual trucks 214 203 + 5% Total, trucks 3,135 2,664 + 18% - % of total 66% 65% Spare parts 696 619 + 12% Service 506 467 + 8% Short-term rentals 222 182 + 22% Other areas 211 189 + 12% Total, service market 1.635 1,457 + 12% - % of total 34% 35% Net sales 4,770 4,121 + 16% Income The service market account for approximately 35% of consolidated net sales and is an important factor for the Group´s stability in earning capacity. Out of gross income, totalling SEK 1,392 m., the service market accounted for roughly 50%. The Group's EBITDA rose by 15% to SEK 490 m. (SEK 425 m.). Net financial items amounted to SEK 10 m. (SEK -4 m.) and include a positive interest margin on long-term rentals/leasing of SEK 66 m. (SEK 54 m.). Lower interest rates on borrowings have positively impacted net financial items. Income after net financial items amounted to SEK 298 m. (SEK 247 m.), an increase of 21%. Net income, after taxes, amounted to SEK 174 m. (SEK 144 m.). Earnings per share amounted to SEK 6.20, against SEK 5.15 in the corresponding period last year. Capital expenditures The Group's total net capital expenditures for tangible fixed assets amounted to SEK 138 m., compared with SEK 191 m. in the previous year. Of the total expenditures, approximately 30% were for trucks for short-term rentals. Financing and liquidity The Group's total assets rose to SEK 8,526 m., against SEK 8,128 m. at the beginning of the year, while net borrowings amounted to SEK 2,009 m., compared with SEK 2,119 m. at year-end 1998. The net gearing ratio thus improved to 92%, against 104% at the end of last year. The equity ratio amounted to 25.5%, against 25.0% at the beginning of the year. Operating cash flow amounted to SEK 158 m. (SEK -303 m.). The positive cash flow trend is the result of programs initiated in 1998 to free up capital and to raise capital efficiency. The new financing for leasing of trucks in the U.S was introduced earlier during the year. This will have a positive effect compared with the previous financing solution and gradually free up capital during the years to come. Personnel The number of employees was 7,148, compared with 6,975 at the end of last 2 (8 ) BT Industries AB (publ) Interim report January - June 1999 year. BT's business areas BT's operations are organized into three business areas. In addition, BT has central, Group-wide resources for, among other things, management, accounting, finance, IT and information. BT EUROPE business area BT EUROPE business area Covering primarily Western Europe January-June Full year SEK m. 1999 1998 1998 Orders 2,550 2,479 4,846 received Net sales 2,444 2,262 4,845 Income 1) 204 209 445 Operating 8.4% 9.3% 9.2% margin, % 2) No. of 3,885 3,691 3,799 employees Demand for warehouse trucks has risen during the first six months of the year. Market growth has been higher in Southern- than in Northern Europe. Orders received gradually increased during the first six months. Sales rose by 8% compared with the corresponding period last year. Operating margin fell approximately one percentage unit as a result of slightly lower gross margins and higher overhead due to the introduction of a new business support system in the European organisation as well as investments into improved market coverage. BT RAYMOND business area BT RAYMOND business area Covering primarily North America January-June Full year SEK m. 1999 1998 1998 Orders 2,225 1,970 4,031 received Net sales 2,262 1,904 3,914 Income 1) 216 160 322 Operating 9.5% 8.4% 8.2% margin, % 2) No. of 2,913 2,795 2,861 employees Demand in North America developed strongly during the first half of 1999. At the same time BT RAYMOND further strengthened its position and increased its market shares. Business area sales rose by 19% to SEK 2,262 m. Income rose by 35% to SEK 216 m. from the previous year. The increase in operating margin compared with the corresponding 1998 period is related to volume growth as well as productivity gains. BT INTERNATIONAL business area BT INTERNATIONAL business area Markets outside North America and Western Europe January-June Full year SEK m. 1999 1998 1998 Orders 279 203 584 received Net sales 319 185 569 Income 1) 7 12 29 Operating 2.3% 6.3% 5.1% margin, % 2) 3 (8 ) BT Industries AB (publ) Interim report January - June 1999 No. of 304 237 274 employees Markets outside Western Europe and North America are showing some growth, although at a considerably lower level than is expected long-term. Sales rose by 72%, primarily due to the acquisition of MHC in May 1998. The income trend has been unsatisfactory mainly owing to the business climate in Eastern Europe. Income = operating income + income from long-term rentals/leasing. Amortisation of goodwill is not charged against individual business areas. For definition see note 2 on page 7. Year 2000 A Y2K analysis of existing internal production and IT systems as well as BT's own products and the status of its suppliers was completed in 1998. The need for certain modifications of internal production systems was identified. These modifications were essentially complete as of mid-year. Some modifications remain, however, and are expected to be complete during the third quarter. A new business support system is being implemented in 13 European companies. The project continues according to plan and implementation in the three remaining companies will be completed during the autumn. Parent Company - BT Industries AB The Parent Company's net sales during the period amounted to SEK 12 m. (SEK 12 m.) and relate primarily to rental income from Group companies. Income after net financial items amounted to SEK 103 m. (SEK 177 m.) and includes dividends from subsidiaries of SEK 158 m. (SEK 192 m.). Net capital expenditures for fixed assets amounted to SEK 12 m. (SEK 1m.) and relate primarily to property renovations in Mjölby and IT-related investments. Total assets amounted to SEK 5,858 m., against SEK 5,187 m. at the beginning of the year. The Parent Company's net borrowings declined by SEK 288 m. during the first half of the year, while shareholders' equity amounted to SEK 1,851 m. During the second quarter a dividend was paid to the shareholders in the amount of SEK 91 m., (SEK 77 m.), corresponding to SEK 3.25 per share (SEK 2.75). The number of employees at the end of the period was 46 (54). NEXT INTERIM REPORT FROM BT INDUSTRIES AB Interim report January-September 1999October 19 Information can be obtained from BT Industries AB, Information, telephone +46- 142-86 000. www.bt-industries.comMjölby, July 20, 1999 Carl-Erik Ridderstråle President and CEO For further information, please contact: 4 (8 ) BT Industries AB (publ) Interim report January - June 1999 Carl-Erik Ridderstråle, CEO Per Zaunders, CFO Telephone: +46-142-86 000 Auditors' report We have reviewed this interim report and in doing so followed the recommendation of the Swedish Institute of Authorized Public Accountants. A review as such is considerably limited in comparison with an audit. Nothing has come to our attention that would indicate that the report does not meet the requirements of the Swedish acts governing securities exchanges and annual accounts. Mjölby, July 20, 1999 Öhrlings Coopers & Lybrand AB Robert Barnden Håkan Thörnholm Authorized Public AccountantAuthorized Public AccountantIncome statements January-June Full-year Amounts in SEK m. 1999 1998 1998 Net sales 4,770 4,121 8,838 Cost of sales -3,378 -2,911 -6,270 Gross income 1,392 1,210 2,568 Product development -87 -77 -174 Marketing and sales -626 -548 -1,156 Administration -354 -297 -623 Amortisation of goodwill -50 -46 -95 Other operating income 37 29 103 Other operating expenses -34 -25 -59 Income in associated 10 5 12 companies Operating income 288 251 576 Income from financial investments Income from long-term 66 54 112 rentals/leasing Interest income and 25 24 42 other financial income Interest expenses and other financial expenses -81 -82 -186 Income after net 298 247 544 financial items Income tax -123 -104 -234 Minority interests -1 1 0 Net income 174 144 310 Average number of 28,000 28,000 28,000 shares, thousands Earnings per share after 6.20 5.15 11.35 standard tax, SEK - - 11.10 Earnings per share after full tax, SEK Total depreciation -202 -174 -380 according to plan Balance sheets June 30 Dec. 31 Amounts in SEK m. 1999 1998 1998 ASSETS Fixed assets Goodwill 1,7691,7391,749 Other intangible assets 17 24 20 Tangible assets 1,3521,2241,334 Financial fixed assets 1,4961,2151,332 Total fixed assets 4,6344,2024,435 5 (8 ) BT Industries AB (publ) Interim report January - June 1999 Current assets Inventories 1,094 9321,015 Current receivables 2,5632,2572,478 Cash and banks 235 171 200 Total current assets 3,8923,3603,693 TOTAL ASSETS 8,5267,5628,128 EQUITY AND LIABILITIES Equity 2,1681,8472,027 Minority share 5 5 2 Provisions 591 528 563 Liabilities Long-term liabilities 3,5243,2823,072 Short-term liabilities 2,2381,9002,464 TOTAL EQUITY AND 8,5267,5628,128 LIABILITIES [REMOVED GRAPHICS] *) 12 months rolling values [REMOVED GRAPHICS] *) 12 months rolling values [REMOVED GRAPHICS] Statements of cash flows Full-year January - June Amounts in SEK m. 1999 1998 1998 From operations Operating income 288 251 576 Non cash flow related items - Depreciations and 202 174 380 amortisations - Other 19 -19 -45 Non cash flow related 221 155 335 items Income from long-term 66 54 112 rentals/leasing Other financial items, -46 -58 -125 net Paid taxes -97 -147 -259 Cash flow from operations before 432 255 639 changes in working capital Changes in working -72 -208 -210 capital Cash flow from 360 47 429 operations From investments Net investments in financial -64 -159 -261 fixed assets Net investments in -138 -191 -409 tangible fixed assets Cash flow from -202 -350 -670 investments OPERATING CASH FLOW 158 -303 -241 6 (8 ) BT Industries AB (publ) Interim report January - June 1999 Acquisitions of -59 -218 -218 companies From financial activities Changes in interest- 27 483 446 bearing liabilities Dividend to -91 -77 -77 shareholders Cash flow from financial -64 406 369 activities Change in cash and banks 35 -115 -90 Cash brought forward 200 285 285 Translation 0 1 5 differences, cash and banks Cash and banks carried 235 171 200 forward Net borrowings June 30 Dec. 31 Amounts in SEK m. 1999 1998 1998 Interest-bearing assets 2,0881,6391,789 Interest-bearing 4,0973,8833,908 liabilities NET BORROWINGS 2,0092,2442,119 *) 12 months rolling values Quarterly development [REMOVED GRAPHICS] Key ratios January - Full-year June 1999 1998 1998 EBITDA margin, % 1) 11.7% 11.6% 12.1% Operating margin, % 2) 7.4% 7.4% 7.8% Profit margin, % 3) 6.2% 6.0% 6.2% Interest coverage, 4) 4.7 4.0 4.2 multiple Return on capital 5) - - 15.3% employed, % Return on equity, % 6) - - 16.3% Net gearing ratio, % 7) 92% 121% 104% Equity ratio, % 8) 25.5% 24.5% 25.0% Per share data Full-year January - June 1999 1998 1998 Earnings per share, 9) - - 11.10 full tax, SEK Earnings per share, 10) 6.20 5.15 11.35 standard tax, SEK EBITDA per share, SEK 11) 19.85 17.10 38.15 7 (8 ) BT Industries AB (publ) Interim report January - June 1999 Operating cash flow per 12) 5.65 -10.80 -8.60 share, SEK Equity per share, SEK 13) 77.40 65.95 72.40 Number of shares (000) at the end of 28,000 28,000 28,000 the period Average number of 28,000 28,000 28,000 shares (000) Number of shareholders at the 6,307 4,678 4,936 end of the period DEFINITIONS Operating income plus depreciation, amortisation and the income from long-term rentals/leasing in relation to net sales. 2)Operating income plus the income from long-term rentals/leasing in relation to net sales. 3)Income after net financial items in relation to net sales. Operating income plus interest income including the income from long-term rentals/leasing divided by interest expenses. Operating income plus interest income including the income from long-term rentals/leasing in relation to average capital employed at the opening and closing of each period. Net income for the period in relation to average equity at the opening and closing of each period. 7)Net borrowings in relation to equity and the minority share at the closing of each period. 8)Equity including the minority share in relation to total assets at the closing of each period. 9)Net income divided by the average number of shares outstanding during the period. Income after net financial items charged with standard tax of 35 per cent on income before tax and non-tax deductable amortisations divided by the average number of shares outstanding during the period. Operating income plus depreciation, amortisation and the income from long- term rentals/leasing divided by the average number of shares outstanding during the period. Operating cash flow according to the statement of cash flows divided by the average number of shares outstanding. Equity divided by the number of shares at the end of the period. Five-year summary Amounts in SEK m. 1998 1997 1996 1995 1994 Income statements Net sales 8,838 5,956 3,999 3,918 3,354 Gross income 2,568 1,754 1,256 1,289 1,102 Income before 956 656 455 483 365 depreciation (EBITDA) Operating income 576 389 293 321 227 8 (8 ) BT Industries AB (publ) Interim report January - June 1999 Income after net 544 370 311 311 202 financial items Net income 310 168 202 213 142 Total depreciation -380 -267 -162 -162 -138 according to plan Balance sheets Fixed assets 4,435 3,906 767 731 734 Current assets 3,693 3,155 1,456 1,355 1,373 Total assets 8,128 7,061 2,223 2,086 2,107 Equity 2,027 1,774 850 696 512 Minority share 2 34 - - - Liabilities and 6,099 5,253 1,373 1,390 1,595 provisions Total liabilities and 8,128 7,061 2,223 2,086 2,107 equity Net borrowings Interest-bearing 1,789 1,578 170 53 185 assets Interest-bearing 3,908 3,361 429 470 724 liabilities Net borrowings 2,119 1,783 259 417 539 Cash flows Cash flow from 429 352 418 296 424 operations Cash flow from -670 -390 -194 -179 -118 investments 1) Operating cash flow -241 -38 224 117 306 Key ratios EBITDA margin, % 12.1% 12.2% 12.3% 13.2% 11.8% Operating margin, % 7.8% 7.7% 8.3% 9.1% 7.7% Profit margin, % 6.2% 6.2% 7.8% 7.9% 6.0% Return on capital 15.3% 16.7% 27.5% 30.1% 20.8% employed, % Return on equity, % 16.3% 12.8% 26.1% 35.3% 32.1% Capital turnover rate, 1.9 2.1 3.3 3.3 2.7 multiple Interest coverage, 4.2 4.9 10.8 6.4 4.3 multiple Net gearing ratio, % 104% 99% 30% 60% 105% Equity ratio, % 25.0% 25.6% 38.2% 33.4% 24.3% Personnel Number of employees at 6,975 6,444 3,688 3,566 3,303 year-end 1) Excluding acquisitions of companies For definitions, see page 7. 9 (8 ) ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/07/20/19990720BIT00130/bit0001.pdf