Preliminary Accounts Report 1999

Group In 1999, Bure was characterised by high growth within the focused Business Areas with a large number of major acquisitions and increasing organic growth. Consolidated net sales rose to SEK 15,444M (13,886). Growth was high within Bure Health Care which carried out several major acquisitions and enjoyed high organic growth. Within Bure IT, several companies reported strong development and carried out a number of supplementary acquisitions. Bure Training and Education, which was established in November 1998, also developed rapidly and had reached an annual growth rate of approximately SEK 1,200M in January 2000. Consolidated profit after financial items amounted to SEK 447M (832). Only a few major divestments were carried out during 1999, which had the effect that capital gains fell by SEK 62M net compared with 1998. In addition, SEK 198M was charged to the year's profit for losses and depreciation/write-downs in Chematur Engineering. Profitability in the Business Areas developed mainly positively. The focusing that started in 1998, with the aim of concentrating Bure wholly on the advanced service sector and reduce the proportion of other investments, continued during 1999. Within the framework of Bure Investments, the remaining holdings in Svolder and Troponor were divested. In addition, Åre Vemdalen was sold in October to Sälenstjärnan which thus formed one of the largest groups in Europe for winter tourism. Capital gains totalled SEK 86M. Substantial capital gains were also made within the framework of Bure InfoMedia in which parts of the holding in MediaMetrix were divested after the company had been listed on NASDAQ and through sale of the document-handling company, Pennon. In total, these sales generated capital gains amounting to SEK 97M. Bure InfoMedia reported total capital gains of SEK 132M. In August, Simonsen was transferred to Bure Investments from Bure Health Care in order to focus operations on One-Stop and e-commerce. Simonsen is one of Sweden's leading supplier-neutral distribution companies of consumable supplies to the health care sector. Asset Management reported a yield of 63 per cent during the period. Capital gains within Asset Management amounted to SEK 209M net (126). Bure's net asset value, (excluding dividend) increased by 49 per cent to SEK 65 per share. In the reporting of the net asset value, all unlisted holdings, which amount to approximately 50 per cent of Bure's invested capital, are entered at their acquisition values. Bure Preliminary Accounts Report 1999 External valuation was carried out of five unlisted subsidiaries during February. The valuation shows a surplus value in these holdings of totalling SEK 12 per share The Group's interest-bearing net liability amounted to SEK 3,760M (1,901). The equity ratio amounted to 36 per cent (39) on 31 December. The insurance company, SPP, has decided on a refund to its customer companies. According to information from SPP, Bure's share of this amounts to SEK 310M, of which SEK 197M is attributable to Bure Health Care. This has not been entered as an asset in the Balance Sheet. The average number of employees in the Bure Group amounted to 6,813 (6,320) in 1999. The managements of the different Business Areas, with the exception of Bure Health Care, are employed in the Parent Company which had 34 employees at the year-end. Distribution of Bure Health Care At the Annual General Meeting on 4 April, the Board of Directors will propose a distribution of all shares in Bure Hälsa och Sjukvård AB to the shareholders. The date of the actual distribution is planned for September 2000. Thereafter, it is intended that Bure Hälsa och Sjukvård AB be quoted on the O list of the OM Stockholm Exchange. Investment AB Bure's book value will, on the date of distribution, be settled against Parent Company Bure's non- restricted funds. A separate so-called split document will be drawn up ahead of the distribution of Bure Hälsa och Sjukvård AB. It will contain an account of the effects of the distribution for both Investment AB Bure and Bure Hälsa och Sjukvård AB. The split document will be sent to the shareholders around 24 March. Buy-back of own shares Bure's Board of Directors is positive to a buy-back of the Company's own shares and will consider this opportunity on a continuous basis. However, in connection with the distribution of Bure Health Care and cash dividend SEK 1,787M of the Group's total non-restricted funds of SEK 1,931M will be utilised. Operating profit Bure's four Net sales before goodwill Business Areas, SEK depreciation M 1999 1998 +/- 1999 1998 +/- 1 Bure Health Care 2 267 1 662 36% 123 31 297% Bure IT 1 607 1 068 50% 92 103 -11% Bure InfoMedia 1 307 1 053 24% 267 106 152% Bure Training and 727 - - 46 - - Education 1 exclusive of Bure Preliminary Accounts Report 1999 Simonsen Bure's future orientation Right from the start, Bure's strategy has been to identify and invest in sectors which are characterised by strong growth and a fragmented structure which makes it possible to rapidly achieve leading positions. Up to 1999, Bure has created leading positions within all its Business Areas: Health Care IT, InfoMedia and Training and Education. In the future, Bure's focus will be on investments in unlisted companies within IT, infomedia and the new economy. The concentration means that the operations will be more transaction-oriented than before and will lead to a partly new organisation. Bure Preliminary Accounts Report 1999 The new orientation creates a clearer management focus and should lead to a simpler and more accurate valuation of the Bure share. IT and InfoMedia have steadily grown to become our predominant operations and in this segment Bure already possesses long sector experience. Bure's vision for the future is to be perceived as one of the leading and most profitable investors within IT and infomedia. Bure is to be a sought-after owner and a prioritised partner for growth companies and at the same time be perceived as an attractive employer. The target is to generate an annual return of more than 20 per cent on invested capital. Investments within IT and infomedia Bure IT Bure InfoMedia SEK M 1999 1998 1999 199 1 1 8 Net sales 1 1 1 1 607 068 307 053 Operating expenses -1 -1 -1 - 547 004 168 943 Business Area management and new -10 -11 -4 -4 projects Exit result 47 39 132 - Shares in results of associated -5 11 - - companies Operating profit before goodwill 92 103 267 106 depreciation Parent Company, invested capital 839 589 621 584 Share of Bure's net asset value, 24% 18% 29% 15% 1 Pro forma The orientation for all of Bure's IT and infomedia companies is to function as independent companies. Maintained ownership by entrepreneurs and management as well as creation of networks between the companies has been successful. This has created clear added values in the companies. The intention is that several companies will be listed on the stockmarket in the current or in future years. In 1999, Cygate was formed through the merger of the network integration companies, Salcom and Santa Monica Software, and the acquisition of the Danish company, Westerberg. Through the merger, the Group became the leading company within Bure Preliminary Accounts Report 1999 network integration in the Nordic countries which also has significant operations in the Baltic States. Dimension is Sweden's leading company within infrastructure solutions for business-critical systems, i.e. systems with high demands on accessibility, scalability and security. During 1999, the market on which Dimension operated developed very positively, mainly due to the rapid development within the Internet, intranet, e-commerce and mobile networks. Dimension's net sales rose by 67 per cent to SEK 770M (461) with strong profitability development. Growth is organic and no acquisition was made. A stockmarket listing is planned in 2000 or 2001. In the consulting company, Systeam, which has fast-growing and profitable operations within business-critical systems, 30 per cent of the shares were acquired in July as well as an option for additional acquisition of shares. Udac develops the health care administrative system, Alfa, which among other things has been sold to Bure Health Care. The company has grown within consulting services with high profitability and enjoys especially strong growth within outsourcing of operation of large systems. The profit is reduced by the costs for the development of Alfa whose first installation in an updated form will be made during the year 2000. CR&T is one of Sweden's leading companies within datalogy and computer technology. The company, which has a very high level of expertise, is continuously involved with identifying and exploring concepts with the aim of commercialising them thereafter. The holdings in Spotfire, Appgate and Gatespace developed very positively. Citat strengthened its position still further and captured market shares within several segments. During autumn, Citat acquired the Internet consulting company, Da Capo, which has more than 80 employees and sales of approximately SEK 55M. The plan is that Citat will be listed on the stockmarket during the year 2000. Bure Preliminary Accounts Report 1999 In December, Sifo Group acquired the British Romeike Group which has sales of approximately SEK 350M and nearly 500 employees. Through the acquisition, Sifo Group's division, Observer Media Intelligence, becomes the world's largest company within media and contemporary social and environmental research. At the beginning of 1999, Bure made an e-commerce investment in Buyonet which sells downloadable software direct via the Internet. At the turn of the year, Bure's direct ownership amounted to 19 per cent. The consulting company, Erda, was sold to Guide Konsult in July. The sale generated a capital gain of SEK 14M. During 1999, more than half of the holding in the American NASDAQ listed company, Media Metrix, was sold with a capital gain of SEK 80M. At the year-end, Bure's remaining holding had a market value of SEK 61M. The document-handling company, Pennon, was sold with a capital gain of SEK 17M. During 1999 and the beginning of the year 2000, Bure's holding in Guide was sold in full with a capital gain of SEK 1,036M, of which SEK 33M in 1999. Bure IT Profit before Bure Net sales goodwill Invested 1 InfoMedia, depreciation capital Ownership 1 SEK M % Included 1999 1998 1999 1998 companies Axnet 153 198 1 12 38 98 Citat 206 170 7 13 32 76 CR&T 30 28 6 8 8 49 2 Cygate 571 - -18 - 292 61 Dimension 770 461 75 41 158 69 Sifo Group 1 894 134 97 512 50 096 3 Systeam 624 464 82 51 214 30 Udac 97 99 -2 3 33 100 1 Book value at period-end and ownership of capital 2 Formed in May through merger of Salcom and Santa Monica Software 3 Acquired in April 1999, included in the result from June 1999 Bure Training and Education 1 SEK M 1999 1998 Net sales 727 Operating expenses -671 Business Area management and new projects -10 Exit result - Operating profit before goodwill depreciation 46 Bure Preliminary Accounts Report 1999 Cash flow in operations 68 Operating margin 6% Parent Company, invested capital 374 Share of Bure's net asset value 5% 1 Established in November 1998 Bure Training and Education was formed at the end of 1998. Already in its first financial year, net sales amounted to SEK 727M. Corporate Training enjoyed positive development during the year, carried out a number of acquisitions and accounts for approximately 90 per cent of Bure Training and Education's sales. The annual sales rate for the whole Business Area amounted to approximately SEK 1,200M in February 2000. Bure training and Education follows the expansion plan which will make possible a stockmarket listing or major structural transactions within two years. Operating profit before goodwill depreciation for the whole Business Area amounted to SEK 46M. Particularly Mercuri and Vittra developed very positively. During the second half of the year, the result of Informator Training Group was affected by low demand for IT training ahead of the turn of the Millennium. Operations consist of the two main Sectors, Corporate Training and Schools. Corporate Training offers skill development within sales and leadership as well as IT via the companies, Mercuri International and Informator Training Group. Within Schools, Vittra forms the hub for continued expansion. Bure Preliminary Accounts Report 1999 During 1999, Mercuri International, which from the beginning consisted of different national companies, was gathered in a Group with a new structure and management. Mercuri now has around 30 units, mainly in Europe, with a common product programme which is able to meet the need of large companies for skill development within sales and leadership development. During the year, Informator Training Group was created through acquisitions and mergers of a number of companies. The Company, which now has common management and marketing, is the leading IT training group in Sweden. The extensive product supply, a strong brandname and satisfied customers makes Informator Training Group well-positioned for continued growth. During the year 2000, Bure Training and Education's resources will extensively be focused on developing further training methods, concepts and new forms of distribution. In addition to these investments, the focus will be on adapted skill development and consulting activities rather than open training programmes. Bure's involvement in the school sector will in the future be concentrated on Vittra which will develop more independently than the other sectors within Bure Training and Education. Bure Health Care SEK M 1999 1998 Net sales 2 267 1 662 Operating expenses -2 -1 110 603 Business Area management and new projects -36 -29 Exit result 0 - Shares in results of associated companies 2 1 Operating profit before goodwill depreciation 123 31 Cash flow in operations 56 -36 Operating margin 5% 2% Parent Company, invested capital 1 378 659 Share of Bure's net asset value 19% 14% During 1999, Bure Health Care took a number of important steps towards the planned stockmarket listing. Operations during the year continued to grow and reached a critical business volume with rising operating margins. With the acquisition of the emergency hospital, S:t Göran's Hospital in Stockholm, and the psychiatric hospitals within Charter Medical of England in Great Britain and SA de la Métairie in Switzerland, Bure Health Care has achieved a strong position both with regard to volume and breadth in the operations. The acquisition of S:t Göran's Hospital means that Bure Health Care has gained access to expertise within considerably more advanced health care than before. Bure Preliminary Accounts Report 1999 Net sales rose by 36 per cent to SEK 2,267M (1,662) in 1999. Organic growth was 10 per cent. Growth was especially strong within Specialist Care in which the acquisitions of the units outside Sweden contributed significantly to the increase. S:t Göran's Hospital was not consolidated until 1 December. At 1999 year-end, the sales rate was SEK 3,200M on an annual basis. Operating profit before goodwill depreciation amounted to SEK 123M (31). The operating margin rose to 5.4 per cent (1.9). All Business Sectors reported improved results in 1999 compared with the previous year, including the effect of carried-out acquisitions. Specialist Care developed positively within the majority of its operations. The exception is the Norwegian operations in which the result development has recovered but not yet returned to a satisfactory level. The psychiatry segment developed positively and the first clinic was opened in Sweden. The take-over of S:t Göran's Hospital did not take place until December and thus influenced the result only to a very small extent. Occupational Health Care improved its profit through increased sales of more sophisticated services which led to a larger inflow of customers. During the year, the Kurant Access concept was launched in which expertise and resources from both non institutional Specialist Care and Occupational Health Care are utilised and co-ordinated. Diagnostic's net sales rose by 31 per cent in 1999 to SEK 631M. The radiology operations expanded Bure Preliminary Accounts Report 1999 both organically and via acquisition. Within laboratory services, the trend also remained positive. During the year, successful implementation of a common IT system was also carried out. Geriatric Care reported net sales amounting to SEK 223M, which is an increase of 56 per cent. A new facility with more than 100 apartments was opened in Fiskebäck in Gothenburg, based on Bure's own concept for integrated care and guaranteed long-term accommodation. Bure Health Care is developing increasingly towards an independent group which is strongly positioned for continued growth. A large proportion of this growth will be based on concepts of its own development in which, among other things, IT support and web technology constitute important components. Acquisition-based growth is expected to be slightly lower during 2000 compared with 1999. This will be compensated by continued organic growth from the 1999 level of 10 per cent. The international ambitions also increase. Bure Health Operating profit before Care, Net sales goodwill depreciation SEK M Business Q4- Q3- Q2- Q1- Q4- Q4- Q3- Q2- Q1- Q4- Sectors 99 99 99 99 98 99 99 99 99 98 Specialist 299 190 218 152 148 11 7 17 8 8 Care Geriatric 60 58 55 50 49 4 7 6 3 2 Care Occupational 163 116 147 126 131 17 5 8 -5 -13 Health Care Diagnostics 181 142 156 152 148 25 10 23 14 17 Business Area -1 4 -1 - - -13 -9 -7 -7 -9 management and new projects Total 702 510 575 480 476 43 20 47 13 5 Operating 6.1 4.0 8.1 2.7 1.1 margin, % Other Investments SEK M 1999 1998 Net sales 9 553 10 126 Operating expenses -9 -9 625 779 Bure Preliminary Accounts Report 1999 Business Area Management and new projects -18 -17 Exit result 95 233 Shares in results of associated companies 80 75 1 Operating profit before goodwill depreciation 85 638 Parent Company, invested capital 2 145 2 013 Share of Bure's net asset value 32% 45% 1 1998 is inclusive of items affecting comparison of SEK 168M net Nobel Biocare, following its acquisition of the American company, Steri-Oss, is the world's leading company within dental implants. The company is also the market leader within industrial production of ceramic prosthetics with the brandname, Procera, which reports rapid growth. In 1999, Nobel Biocare's operating profit rose by 91 per cent to SEK 233M. During the year, measures were implemented in Chematur Engineering aimed at dimensioning the company to actual demand at the same time as very large write-downs were made on existing projects. This, in combination with low capacity utilisation, meant the operating result - including write- downs of SEK 85M - deteriorated very considerably and amounted to SEK -166M (7). During the year, a new management team was appointed and an extensive action programme initiated which is aimed at a phasing-out of Bure's involvement. Gunnebo consists of Gunnebo Engineering and Gunnebo Security. Gunnebo Security a leading manufacturer of products within area protection and value protection. During the year, the company acquired the French security company, Fichet Bauche, whose lock operation was sold. Gunnebo Security is now well-positioned as the leading company in Europe within its segments with a market share of around 35 per cent. Gunnebo Engineering came to an agreement about the sale of Gnosjögruppen. Net sales rose by 39 per cent and amounted to SEK 5,264M. Operating profit increased by 39 per cent to SEK 324M. Simonsen is a leading supplier-neutral distribution company of consumable supplies to the health care sector. In 1999, net sales amounted to SEK 642M (564). The company has grown rapidly via acquisition. During the year, costs were charged for restructuring the operations into three divisions and at the same time investments were made within IT, e-commerce and the One-Stop concept. Result after financial income and expenses fell to SEK -13M (15). Scribona is the leading distributor in the Nordic countries of computer products and high-tech office equipment. Operating profit before items affecting comparability amounted to SEK 100M (147). During the year, a new Group ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/29/20000229BIT01260/bit0001.doc http://www.bit.se/bitonline/2000/02/29/20000229BIT01260/bit0002.pdf