Interim Report January - March 1998

Interim Report January - March 1998 Consolidated profit after financial items increased by 50 per cent and amounted to SEK 501M (333). Profit per share increased to SEK 6.60 (5.50) Bure Health Care strong growth in invoicing, +81 per cent, and significantly-improved operating profit before goodwill depreciation SEK 26M (8). Bure IT/InfoMedia strong volume increase and profit improvement. Stockmarket introduction of Guide Konsult in May provides an increase in value of SEK 160M. Sifo Group to be listed during 1998. Chematur makes strategically-important acquisition of Plinke, Germany. Stockmarket listing planned during first half of 1999. Bure's business concept Bure, as an active owner and investor, is to contribute capital and expertise with the objective of creating high growth in value for the shareholders. This will be achieved by Bure contributing to define industrial values and to implement structural change. H ealth Care @ Medical Bure's operations Service consist of three @ Health Care Business Sectors: Health Services Care, IT/InfoMedia and Investments. IT/InfoMedia @ IT Services Asset management is an @ Information integrated part of the Services Parent Company. @ Scribona Bure Investments @ Wholly-owned companies @ Partly-owned companies @ Funds Summary of Consolidated profit after financial items operations increased to SEK 501M (333). The result includes results by the Group's consolidated companies at SEK 271M, of which SEK 168M is attributable to Scribona's divestment of Svanströms. The Business Areas, Bure Health Care and Bure IT/InfoMedia developed strongly while significant capital gains were generated in Bure Investments at the same time. Consolidated sales increased to SEK 3,128M (1,338). The increase is especially due to the high growth in the operations in Business Area Health Care and the consolidation of Scribona from 1 March 1997. Profit per share amounted to SEK 6.60 for the first three months which provides for a profit of SEK 12.15 for the latest twelve-month period. The Group invested a total of SEK 355M, of which SEK 163M in shares and participations. The interest-bearing net debt has increased to SEK 108M (22) since the turn of the year. At the end of the reporting period, the equity ratio in the Group amounted to 52 per cent compared with 46 per cent at the turn of the year. The transaction rate in the Group was high during the quarter. Acquisitions were carried out of, among others, Bergen Medisinske Senter, Smärtkliniken Kronan (remaining 50 per cent), Dimension (55 per cent), Norlab and, via Nordic Capital, 14 per cent of Mölnlycke Health Care. In Nordic Capital's third fund, which was started in February, Bure is participating with an investment commitment of SEK 300M. Capital gains in the Parent Company's asset management amounted to SEK 47M. The yield of the stock portfolio including dividends received amounted to 20 per cent. January-March 31 Mar 31 Dec Income Statement, 1998 1997Balance Sheet, SEK 1998 1997 SEK M M Net sales 3 128.0 1 337.5Assets Operating expenses -2 877.3-1 288.4 Fixed assets 4 445.6 4 323.0 Results of 4.9 14.2 Current assets 3 883.8 4 202.6 associated companies Operating profit 255.6 63.3Total assets 8 329.5 8 525.6 Dividend 0.6 11.4 Capital gains, net 246.3 239.9Equity and liabilities Interest income 9.2 19.5 Equity 4 298.8 3 937.3 Interest expense -14.0 -3.1 Minority interest 793.5 659.8 Other financial 3.8 2.1 Provisions 202.5 201.5 items Profit after 501.5 333.2 Long-term 448.6 398.0 financial items liabilities Minority interest -109.0 -23.3 Current 2 568.0 3 329.0 liabilities Taxes -31.6 -10.5Total equity Net profit 360.9 299.4and liabilities 8 329.5 8 525.6 Summary of During the period, Bure's net asset value operations increased from SEK 88 to SEK 99 per share. Approximately one third of the investments are unlisted holdings which have been valued at book value. Guide Konsult, with a book value of SEK 104M, will in line with current plans be listed on the stockmarket at the end of May. In addition to dividend received of SEK 12M, a growth in value of approximately SEK 150M, at the decided selling price, will be made visible, altogether an increase in net asset value equivalent to SEK 3 per share. During the period, a reconstruction was carried out of the sawmill equipment manufacturer, Troponor, which was charged to consolidated profit at SEK 33M. The Bure share The share developend very strongly until 25 March when an all-time-high of SEK 134 was registered. On 27 March, the share was quoted excluding right to dividend of SEK 5.50 per share. Net asset value amounted to SEK 95 per share on 28 April. The number of shareholders has increased strongly during the year, from 7,700 to more than 10,000 at end-March. Key figures per 310398 311297 311296 share Net profit*, group 12,15 11,00 7,55 SEK Equity, group SEK 78,80 72,20 66,00 Net asset value, 99 88 81 mother comp. SEK Market price, SEK 121,00 104,50 81,00 Dividend, SEK 5,50 5,00 Total yield*, % 29 35 91 Share data Number of shares, 54 550 54 550 54 550 000 Number of owners 10 100 7 700 4 500 * latest twelve months Price development of the Bure share compared with the General Index [REMOVED GRAPHICS] Q1 -98 Q1 -97 1997 Net sales 544 300 1 488 Operating expenses -518 -292 -1 423 Operating earnings before goodwill 26 8 65 depreciation Management & new -7 -4 -26 projects Goodwill -7 -4 -19 depreciation Capital gains 2 2 7 Operating profit 14 3 27 Health Care The period was characterised by continued profit improvement and high activity in The Business Area is all Business Units. Invoiced sales to be the player on increased by more than 80 per cent to SEK the health care 544M (300). Operating earnings before market which best goodwill depreciation and managemant and meets the demands new projects for the Business Area placed by patients improved significantly and amounted to and the principals SEK 26M (8). Operating earnings after of the health care goodwill depreciation amounted to SEK 14M sector (3). Health Care Services Specialist Care's operating earnigs before goodwill depreciation increased to SEK 14M (3). Invoiced sales amounted to SEK 144M (43). The period was characterised by continued strong inflow of patients which enhances further organic expansion. The improvement in sales and earnings can mainly be attributed to Volvat Medisinske Senter in Norway and Cityklinikerna with operations in Southern Sweden. During the period, Volvat acquired all the shares in Bergen Medisinske Senter. In February, the option was exercised to acquire the remaining 50 per cent of Smärtkliniken Kronan which is now a wholly-owned subsidiary. Geriatric Care reported operating earnings before goodwill depreciation of SEK 3M (2). Invoiced sales amounted to SEK 28M (17). The operations in MiaMedica and Oxie Vårdhem were merged with Bure Vård och Omsorg at the beginning of the year. The increased invoiced sales can mainly be attributed to the acquisition of MiaMedica and the increased contract volume. Occupational Health Care reported operating earnings before goodwill depreciation of SEK 0M (1). Invoiced sales were SEK 126M (122). Profit is affected by seasonal variation with normally weaker sales during the start of the year. Operations developed according to plan. Invoiced sales Operating profit before goodwill Q1-98 Q4-97 Q3-97 Q2-97 Q1-97 Q1-98 Q4-97 Q3-97 Q2-97 Q1-97 Specialist 144 137 101 43 44 14 12 6 2 3 Care Geriatric 28 31 21 26 23 3 2 5 3 1 Care Occupational 126 152 108 118 126 0 14 -1 2 1 Health Care Diagnostics 114 90 72 78 76 4 4 2 3 2 Materials 141 133 69 33 31 6 -1 2 1 1 Supply Adjustments -8 -23 -8 7 12 - -2 1 2 - Total 544 520 363 305 300 26 29 15 13 8 Operating 4,8 5,6 4,1 4,3 2,7 margin, % Medical Service Diagnostic's operating earnings before goodwill depreciation amounted to more than SEK 4M (2). Invoiced sales increased to SEK 114M (75). Within the operations a number of effectivisation programmes are being implemented. During the period, a further step was taken in the international expansion through the acquisition of MediLab in Copenhagen and Norlab in Oslo. Earnings were negatively effected by further expansion in Poland. Materials Supply signed new contracts with municipalities, county councils and hotels. The merger into a Nordic organisation is proceeding according to plan. The One-Stop concept which contains, among other things, Internet- based trading is under implementation. Operating earnings before goodwill depreciation for the first quarter amounted to SEK 6M (1). Invoiced sales increased to SEK 141M (31). Bure Managed Care Development projects which are financed by Bure's Parent Company, Bure Managed Care, were characterised by increased activity. Picker Europe, which is a joint venture between Bure and the Picker Institute in Boston, had a high rate of activity and carried out studies in both Sweden and Switzerland. In addition, an extensive pilot project relating to diabetes was commenced in Gothenburg. IT/InfoMedia Scribona's streamlining and focusing of its operations continued following the The Business Areas divestment of Svanströms and following vision is to create the resolution by the Annual General the leading network Meeting to distribute Sifo Group to of companies within Scribona's shareholders. Following the IT and information distribution of the shares, Sifo will services in the form a strong unit in the Business Nordic countries. Sector's Information Services. The fast- growing media production company, Citat, is also included in Information Services. Work aimed at a listing of Guide Konsult is now in its final phase with planned quotation on the O-List in the end of May. The selling price is established at SEK 87.50 per share which provides Bure with a growth in value of approximately SEK 150M. In addition, Bure received a dividend of SEK 12M, which is equivalent to a total increase in value of approximately SEK 3 per Bure share. Bure's holding of slightly more than 46 per cent will be reduced to approximately 34 per cent through selling of shares and through a new share issue. In January the acquisition was completed of 55 per cent of Dimension, the operations of which will become an important complement in the Business Sector's network of IT companies. Dimension's business concept is to build complex IT systems based on, among other things, Unix solutions. IT Services Total invoicing within IT Services increased to SEK 339M. The companies' combined profit after financial items amounted to SEK 19M, of which Bure's share before write-offs of goodwill amounted to SEK 13M. Guide Konsult continued to develop positively, earnings after financial items increased to SEK 10M. The company has high capacity utilisation and a sound inflow of orders. Salcom Communication increased its sales by 25 per cent to SEK 100M. In the first quarter, costs were taken for the establishmentt of the new Business Area, System Management. Dimension's operations continue to grow with rising demand for the company's products and services. Invoiced sales Profit after Invested Owner- financial net Q1 -98 Q1 97 1997 Q1 -98 Q1 97 1997 capital* ship* Guide 131 101 430 10 9 26 104 46 Konsult CR&T 4 - 15 1 - 2 8 45 Salcom 100 80 328 1 1 5 57 52 Dimension 83 - - 8 - - 100 55 Udac 23 7 54 -2 0 -6 33 100 Citat 43 16 83 4 2 5 31 85 Scribona 2 140 1 963 8 474 216 54 185 1 231 51 * Bure book value at period-end and ownership of capital Udac and Adapt have now been merged into one company under the name of Udac. Invoiced sales amounted to SEK 23M. However, sales have not yet reached a satisfactory level. The losses are attributable in full to the operations of the former Adapt. Information Services Citat increased invoiced sales significantly to SEK 43M (16). Profit after financial items doubled to SEK 4M (2). The positive development can be attributed to all parts of the operations. During the period, Citat also established operations in Stockholm following the acquisition Reptil Grafiska and is as a result strengthening its position as one of Sweden's leading media production companies in its segments. Scribona Invoiced sales of the Scribona Group amounted to SEK 2,140M (1,963), an increase of 22 per cent for comparable units. Profit after financial income and expense amounted to SEK 216M (54) which includes the capital gain on the sale of Svanströms of SEK 168M that was carried out at the beginning of the year. Business Area Computer Products increased its sales by 21 per cent to SEK 1,652M (1,364) with an operating profit of SEK 17M (15). In March, the Business Area in collaboration with IBM and retailers received its largest order ever, Volvo is offering all its peronnel in Sweden an opportunity to lease a PC package. In Business Area Office Machines, sales amounted to SEK 310M (321) which however is an increase of 11 per cent for comparable units. Operating profit amounted to SEK 18 M (4). Business Area Information Services with Sifo Group increased its sales to SEK 182M (150) with an operating profit of SEK 15M (14). The sales increase is attributable to Observer. Investments During the period, the holding in Fritidsresor was sold which generated a The Business Sector capital gain of SEK 128M. Divestment was will in the short to also carried out of the remaining holding medium term create in Karlshamns, which generated a capital growth in value and gain of SEK 82M. Total capital gains in dividend capacity as Investments amounted to SEK 196M net. a complement to the other Business Via Nordic Capital, Bure has invested SEK Areas. 96M in Mölnlycke Health Care which is equivalent to an ownership of 14 per cent. The ownership in Troponor decreased from 66 to 40 per cent following the reconstruction which was carried out and which also meant that the company got a new principal owner. The reconstruction involved charging Bure's consolidated profit with SEK 33M, of which SEK 21M refers to capital loss on sale of shares. Wholly-owned companies Chematur Engineering's result after financial items amounted to SEK -16M. The income of the operations is controlled by the duration of the projects and profit arises as the projects are processed (gradual income recognition). The backlog amounts to approximately SEK 1 billion. Åre Vemdalen's profit amounted to SEK 62M (69) after financial items. The fall can be especially attributed to lower sales due to bad weather and that Easter this year fell in April. In January, decisions were made regarding significant efforts in the form of investments in lifts, service and snow production equipment. Invoiced sales Result after Invested Owner- financial net 3 3 Q1 -98 Q1 97 1997 Q1 -98 Q1 97 1997 capital ship Chematur 48 111 447 -16 -7 20 125 100 Åre 133 138 195 62 69 29 143 100 1 Vemdalen Gunnebo 807 612 3 086 28 12 155 215 35 2 Svolder - - - 30 57 277 105 25 Troponor 87 80 462 -11 -18 -59 49 40 Citykurorte 7 - 10 -4 - -23 5 100 r 1 Proforma for 1997 values 2 Refers to the period, 1 Dec-28 Feb. 3 Bure book value at the period-end and ownership of capital. Partly-owned companies Gunnebo's profit after financial items more than doubled during the period to SEK 28M (12). Invoiced sales increased by 32 per cent and amounted to SEK 807M (612). Profit improved as a result of increased volume and previously- implemented structural measures. Business activity is high and all Business Areas report increased inflow of orders. Svolder has a split financial year with 31 August as closing date. Profit after tax in the latest six-month period amounted to SEK 80M (100). During the same period, net asset value increased whith 13 per cent including given dividend. On the 27 March net asset value amounted to SEK 153 per share or SEK 979M in total. Troponor reports a result after financial items of SEK -11M (-18). The result has not yet been influenced in full by the restructuring work which is now being implemented. Funds During the period, Nordic Capital's investors, in addition to Mölnlycke Health Care, also acquired Essex. Bure's investment of SEK 15M gives a share which amounts to slightly more than 7 per cent. Essex is a contract manufacturer of electonics products with an emphasis on medical technology, telecom and industrial process control. Essex is the first investment in Nordic Capital's newly-established third fund. Asset management, 1998 1997 1996 1995 1994 SEK M Shares 977 836 713 593 1 182 Interest-bearing 247 431 1 033 864 1 014 investments Total 1 224 1 267 1 746 1 457 2 196 Capital gains, 47 318 79 185 361 net Yield of stock 19,7 26,4 54,5 17,4 9,8 portfolio, % Parent Company The Parent Company's profit after tax amounted to SEK 233M (238). Since the turn of the year, Bure's net asset value has increased by 13 per cent and amounted to SEK 99 per share on 31 March. Asset management is included as an integrated part in the Parent Company's operations. The stock portfolio generated a yield of 20 per cent compared with the Findata Yield Index of 19 per cent. During the period, the surplus value in the stock portfolio rose from SEK 15M to SEK 139M while the net result of the sales amounted to SEK 45M at the same time. Capital gains in the interest- bearing portfolio amounted to SEK 2M. The profit for the period was charged with SEK 7M in provisions for increase in value in the synthetic options issued by the Company. During the period, the Parent Company invested SEK 241M. The Parent Company's equity ratio amounted to 94 per cent (88). Personnel The average number of employees amounted to till 6,052 (5,628) in the Group and to 26 in the Parent Company, of whom 8 belong to the Business Sector managements in IT/InfoMedia and Investments. After the end of the Scribona's Annual General Meeting in reporting period April decided that Sifo Group will be distributed to the shareholders. Sifo will thereafter be listed on the Stockholm Stock Exchange. At the beginning of May, Bure's Parent Company will receive a dividend of approximately SEK 180M from Scribona, equivalent to SEK 10.50 per share, of which SEK 7.50 represents bonus dividend In April, Chematur Engineering acquired the German engineering company, Plinke. Plinke operates in the segments recovery, treatment and concentration of acids. Following the acquisition, Chematur will now also have a leading position in the treatment and concentration of acids segments. The merged Chematur and Plinke is expected to have sales of more than SEK 600M during 1998 with profit after financial items of at least SEK 40M and good prospects for 1999. Asset managements' interest-bearing investments were phased-out at the beginning of April. Roger Holtback Managing Director and CEO Gothenburg, 29 April 1998 Investment AB Bure (publ) Consolidated Income Q1 -98 Q4 -97 Q3 -97 Q2 -97 Q1 -97 Statement, SEK M Net sales 3 128.0 3 423.4 2 306.1 2 796.6 1 337.5 Operating expenses -2 877.3 -3 393.7 -2 341.5 -2 789.3 -1 288.4 Results of associated 4.9 16.2 40.7 26.4 14.2 companies Operating profit 255.6 45.9 5.3 33.7 63.3 Dividend 0.6 0.8 0.3 17.2 11.4 Capital gains, net 246.3 37.8 170.0 109.4 239.9 Interest income 9.2 11.3 14.1 20.8 19.5 Interest expense -14.0 -14.1 -4.8 -9.4 -3.1 Other financial items 3.8 6.3 -5.7 8.9 2.1 Profit after financial 501.5 88.0 179.2 180.6 333.2 items Minority interest -109.0 -12.8 -14.4 -34.8 -23.3 Taxes -31.6 -56.8 8.1 -18.9 -10.5 Net profit 360.9 18.4 156.7 126.9 299.4 Net asset value Parent Q1 -98 Q4 -97 Q3 -97 Q2 -97 Q1 -97 Company, SEK M Health Care 517 501 480 396 318 IT/InfoMedia: 1 813 1 575 1 434 1 437 1 526 Scribona Other 333 233 228 196 196 companies Investments: 632 485 603 501 499 Gunnebo Svolder 246 264 293 245 212 Nobel 210 227 - - - Biocare Åre 143 143 143 117 108 Vemdalen Chematur 125 125 125 125 125 Troponor 49 59 94 94 94 Karlshamns - 99 81 73 19 Nordic 160 71 55 55 55 Capital Spira - - - 183 278 Other 54 54 39 55 36 companies Asset management:Shares 977 836 999 778 777 Interest- 247 431 403 453 767 bearing Other 144 85 58 43 54 Total assets 5 650 5 188 5 035 4 751 5 064 Liabilities -231 -370 -20 -18 -26 Net asset value 5 419 4 818 5 015 4 733 5 038 Per share, SEK 99 88 92 87 92 Calculation of Bure's net asset value The net asset value is defined as the difference between the Parent Company's assets and liabilities where the market-listed assets have been valued at market value. The calculation of Bure's net asset value is made on the basis of the Parent Company's Balance Sheet and consists of visible equity, including profits during the period and surplus values in market-listed assets. Listed securities are valued at current market price without taking into account any value-added in contol holdings. Bure's holdings of money market instruments are valued at a price calculated at current market interest. Bure's holdings of shares in unlisted companies are entered at book values. This Report has not been the subject of examination by the Company's Auditors. For further information, please contact Roger Holtback, Managing Director, +46 31-335 76 35 Hans Ljungkvist, Chief Financial Officer, + 46 31-335 76 35 Fredrik Sanell, Head of Investor Relations, +46 31-335 76 51 Information is also available on: www.bure.se Future Reports: Interim Report January-June will be published on 27 August 1998 Interim Report January-September will be published on 5 November 1998 Preliminary Accounts Report will be published in February 1999