Report on operations, 1999

Report on operations, 1999 New Group structure provides a platform for enhanced competitiveness and growth. * Sales amounted to MSEK 8,278 (8.880), a decrease of 7% compared with 1998. * Operating income before items affecting comparability totaled MSEK 100 (147). * Income before tax was MSEK 76 (325). The year's income was charged with costs of MSEK 34 for the sale and wind-up of operations, while income for the preceding year included a gain on units sold of MSEK 156. * The Board has decided to propose to the Annual General Meeting an unchanged regular dividend of SEK 1.50 per share. PRESIDENT'S COMMENTS After the strong earnings trend for Scribona in 1998, 1999 was a transitional year. This applies particularly to distribution operations in the Scribona Distribution business area, which suffered both a drop in sales and lower earnings. There are several reasons for this development. Demand for PC products in 1999 was adversely affected by the market's increasing hesitancy to invest in new IT equipment prior to the millennium shift. The personnel PC boom in Sweden during 1998 also led to a severe slump in Swedish demand for PCs during 1999 and subsequently also weaker demand for peripheral equipment and PC accessories. The number of PCs delivered in Sweden during 1999 was almost 30% lower than in the preceding year. There are additional explanations for Scribona Distribution's earnings trend. Restructuring of the business area's operations in Finland during the autumn exerted considerable strain on the year's result. Furthermore, the persistently weak Baltic market led to sizeable losses there and a decision has therefore been made to wind up Scribona Distribution's commitments in the Baltic region. The Y2K problem also had an impact on demand in Scribona's other two business areas. Despite this, sales growth was achieved and operating income in both Scribona Solutions and Scribona Brand Alliance was on par with the previous year. The deployment of our new business system was completed during the year, facilitating continuous improvements in functionality and productivity. During 1999, our co-owned Danish Internet company Proventum more than doubled its business. Proventum is an Internet consulting agency with a focus on e-business. The company has 50 employees and is expected to undergo powerful growth. Scribona's 40% holding and 9% convertible participation are reported at MSEK 6. Although demand stagnated temporarily during 1999, we see favorable prospects for development in the market for IT products during 2000 and the next few years. Today there is a need for new and replacement investments in IT products, and technology and product innovations will continue to generate vigorous growth in the industry. New buying patterns, largely based on e-commerce, and changing roles in the supply chain are spawning new business opportunities for Scribona. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/10/20000210BIT01060/bit0001.doc The full report http://www.bit.se/bitonline/2000/02/10/20000210BIT01060/bit0002.pdf The full report