Interim Report January - March 2000

Interim Report January - March 2000 * Sales up 4 percent to MSEK 2,203 (2,119). * Income before tax increased to MSEK 38 (24). Operating income of MSEK 7 (21). * Five-year collaboration agreement signed with Alfaskop to take over all product supply to Alfaskop's customers with effect from May. * The full year forecast indicates improvement in both operating income before items affecting comparability and income before tax. The market During the first quarter of the year Scribona's market areas showed weak demand, particularly the market for computer products. After a very sluggish market in January, demand strengthened somewhat in February but did not improve appreciably until March. The obvious explanation is that IT investments, particularly in large companies and organizations, have not yet picked up after the millennium shift. First quarter development in the Nordic market followed the same pattern as in the rest of Europe. Continued growth demand is predicted for the rest of 2000, above all in the second half of the year. According to preliminary statistics the Nordic PC market declined 6 percent during the first quarter, measured in the number of units delivered, compared with the same period of last year. The decrease is entirely attributable to lower demand for desktop models, whereas laptop PCs increased by a full 26 percent. Sweden showed the sharpest decrease in the total number of PCs, by 21 percent, while the Finnish market showed the strongest growth, by 9 percent. The market for file management products stabilized after the preceding year's downturn. The number of delivered copiers is rising in Sweden, although a slight decreased is noted in the other Nordic countries. Sales and income The Group's sales amounted to MSEK 2,203 (2,119), an increase of 4 percent. The increase for comparable units was 6 percent. Weaker demand for computer products was the main factor behind the quarter's low sales growth. Operating income totaled MSEK 7 (21). The decrease relative to the preceding year is attributable to distribution operations in the Scribona Solutions and Scribona Distribution business areas, while Scribona Brand Alliance posted significant earnings growth. Net financial items amounted to MSEK 31 (3), including a capital gain of MSEK 33 on the sale of the shares in the Norwegian companies Super Office and Office Systems in February. Income before tax was MSEK 38 (24). Cash flow and financial position The Scribona Group's cash flow for the first quarter of 2000 was MSEK -40 (-180). Consolidated net investments totaled MSEK 4 (16). Net financial capital as per 31 March was MSEK -151 (-179). Key ratios Earnings per share for the first quarter amounted to SEK 0.73 (0.53). Earnings per share for the past 12-month period, excluding items affecting comparability, totaled SEK 2.31 (2.13 for the full year 1999). Shareholders' equity per share at the end of the period was SEK 21.64 (25.47). Return on shareholders' equity for the past 12-month period amounted to 6.6 percent (5.3 percent for the full year 1999) and to 11.0 per cent excluding items affecting comparability (9.7 percent for the full year 1999). Return on capital employed for the past 12-month period was 5.3 percent (6.5 percent for the full year 1999) and 9.1 percent excluding items affecting comparability (10.2 percent for the full year 1999). The equity ratio as per 31 March was 27.9 percent (32.4). Development by business area Scribona Solutions The business area's operations were strongly affected by low IT investments during the first quarter. Although sales improved significantly in March, the increase could not compensate for the weak demand in January and February. Sales during the quarter amounted to MSEK 295 (314). Operating income amounted to MSEK - 3 (6), with Finland accounting for the largest decrease. Scribona Distribution The weak market for PC products had a negative impact on the business area's sales, which amounted to MSEK 1,385 (1.353), an increase of 2 percent. The increase for comparable units was 6 percent. Operations in Sweden showed a decrease of 6 percent, while the other markets noted some improvement. The most significant growth was achieved in Finland. During the quarter, a five-year agreement was signed with Alfaskop to take over all product supply to Alfaskop's customers in Sweden. The preparations have been completed and operations commenced in May. Operating income amounted to MSEK -8 (3). Finnish operations showed an improvement in earnings compared with the corresponding period of last year. The largest negative decrease was reported in the Swedish operations, due to a very weak PC market at the beginning of the year. Scribona Brand Alliance Agency operations in this business area enjoyed a strong quarter, particularly with regard to sales of Toshiba laptop PC in the Toshiba Digital Media division. At present, the laptop market is developing very positively and Toshiba's highly competitive product range is contributing to excellent sales. The sales volume in March reached an all time high for this product group. The two divisions for file management products, Toshiba Document Solutions and Carl Lamm, also enjoyed strong development. The business area's sales amounted to MSEK 728 (599), with the most substantial increase in Toshiba Digital Media. Operating income improved to MSEK 29 (17). Toshiba Digital Media noted the largest increase. Personnel The number of employees on 31 March was 1,382 (1,405). Full year forecast The full year forecast indicates improvement in both operating income before items affecting comparability and income before tax. This report has not been examined by the company's auditors. Örjan Håkanson President and CEO Facts about Scribona AB Scribona is the leading Nordic player in the market for IT products, offering the customers cutting-edge product expertise, the industry's leading e-commerce systems, optimized product availability and a wide range of complementary services. Scribona's operations are organized in three business areas: * Scribona Solutions - value added distribution of IT infrastructure * Scribona Distribution - effective volume distribution of IT products * Scribona Brand Alliance - exclusive agency for leading brands For additional information, please contact: Lennart Svantesson, Incoming President, tel: +46-8-734 35 76 Lennart Bernard, Chief Financial Officer, tel: +46-8-734 36 91 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/05/05/20000505BIT01140/bit0001.doc The full report http://www.bit.se/bitonline/2000/05/05/20000505BIT01140/bit0002.pdf The full report