Scribona New Organization And Higher Financial Goals

Scribona - new organization and higher financial goals Scribona - the Nordic countries' leading player in the market for IT products - will reorganize its operations in order to better exploit new market oppor- tunities. In conjunction with the change, the Group has set new financial go- als that were announced at Scribona's Capital Market Day event today. Operations have been organized in three focused business areas * Scribona Solutions - value added distribution of IT infrastructure * Scribona Distribution - effective volume distribution of IT products * Scribona Brand Alliance - exclusive agent for leading brand names A competence center - Scribona Business Innovation - has been established for development of business opportunities in e-commerce. Financial goals * Annual sales growth of approx. 15 percent * An operating margin of 2.5 - 3.0 percent by the year 2002 * Annual growth of at least 25 percent in earnings per share Negotiations are underway in the Scribona Solutions business area for the acquisition of operations in value added distribution. The market for IT products and services is changing fast. New products, new buying patterns, higher demands on infrastructure and efficiency are fuelling the rapid growth of IT products and related services. The various players in the market - manufacturers, distributors and resellers - are also taking on new roles. In response to this Scribona has reorganized its operations and will henceforth conduct operations in three focused business areas united un- der a clear and uniform brand name. "Scribona employs an aggressive focus on growth areas and we are now reorga- nizing in order to exploit the many business opportunities we see," explained Örjan Håkanson, President & CEO of Scribona AB, at Scribona's Capital Market Day event today. "The new structure will provide a platform for profitable growth and effective development and use of the Group's infrastructure. We will continue to focus on e-services and strengthen our leading position in this segment. Furthermore, the new organization will provide a clear and transparent picture of Scribona's operations, creating potential for good fi- nancial information." Business concept and offer Scribona's business concept is to create efficient commerce with the help of IT products. This will be achieved by offering cutting-edge knowledge about products and customer needs, the industry's leading e-commerce systems, optimal product availability and a wide range of complementary services. Three business areas As of year-end, Scribona's operations will be organized in three business are- as. Scribona Solutions Scribona Solutions will be the leading player in value added distribution of IT infrastructure by offering access to the top range of servers, operating systems, networking and data warehousing products and cutting-edge knowledge about the products and how they enhance customer functionality. The business area has turnover of approx. SEK 1.1 billion. Operations are focused on the Nordic countries and the business area has a network of some 300 resellers. Scribona Solutions' objective is to attain and secure a leading position in the above product areas. The business area is focused on rapid growth, both organic and via acquisitions, and negotiations for a number of possible acqui- sitions are underway. The goal for Scribona Solutions is to achieve annual or- ganic growth of 15 percent combined with annual growth via acquisitions of 20- 30 percent and an operating margin of at least 4 percent. Scribona Distribution Scribona Distribution will be the leading computer distributor, with a focus on creating efficient volume distribution of IT products. This will be achie- ved by offering the best availability of leading PC servers, PCs, Handheld De- vices, printers, software, peripheral equipment and consumables, as well as e- commerce based infrastructure for the market's best product information, order administration and configuration tools. The business area's turnover amounts to approx. SEK 5.8 billion. Operations are focused on the Nordic countries and the business area has a network of around 6,000 resellers. Of the business area's turnover, around 30 percent is already generated through e-commerce and this share is rising fast. The ambition is for Scribona Distribution to achieve annual organic growth of 10 percent and an operating margin of at least 1.2 - 1.5 percent. Scribona Brand Alliance As an exclusive agent, Scribona Brand Alliance will ensure that the leading brand names are utilized, managed and developed in an optimal manner. This will be achieved by promoting and marketing the brands, building up an effec- tive distribution network and providing the necessary product and technical support. The business area's turnover amounts to approx. SEK 2.4 billion and its opera- tions are focused on the Nordic countries. The business area's activities are conducted in three divisions; Toshiba Digital Media, Toshiba Document Solu- tions and Carl Lamm. The goal for Scribona Brand Alliance is to achieve annual organic growth of 15-20 percent and an operating margin of around 4 percent. Scribona Business Innovation Scribona has established a competence center, Scribona Business Innovation, in order to exploit and develop new business opportunities mainly in the field of in e-commerce. Scribona is already a Nordic leader in e-business, with around 25% of its turnover attributable to e-commerce solutions. Scribona Business Innovation is also the base for Scribona's stake in the Danish Internet con- sulting firm Proventum, with 35 consultants and turnover of MSEK 20. Proventum is making a significant contribution to development of Scribona's e-commerce operations. Including convertible shares, Scribona has a 49-percent holding in the company with a book value of less than MSEK 10. Managerial appointments In conjunction with reorganization, the Board of Scribona has appointed Lars Palm and Lennart Bernard, CFO, as Executive Vice Presidents of the Group. Financial information At Capital Market Day, the following financial information was provided based on the rolling 12-month trend for October 1998 - September 1999: Business area Sales Operating income Operating margin MSEK MSEK Percent 1 Scribona Solutions 1,100 41 4.4 Scribona Distribution 5,770 38 0.7 Scribona Brand Alliance 2,440 92 3.8 Joint-Group -640 -33 Total 8,680 138 1.6 The above information concerning Operating income/margin differs from the published interim reports for the first nine months of the year in that re- structuring costs of MSEK 20 in Finland have been excluded. Financial goals In addition to the goals previously established by the Board of Scribona for return on shareholders' equity, equity ratio and dividend policy, Scribona has presented the following financial goals. The ambition is to achieve these by 2002 at the latest. Oct 1998-Sept 1999 Key ratios Rolling 12 months Goal for 2002 Sales, MSEK 8,680 Annual growth of approx. 15% 2 Operating margin 1.6% 2.5 - 3.0 percent 2 Earnings per share , SEK 2.82 Annual growth of at least 25% Regular dividend per share, SEK 1.50 1/3 of net income for the year Equity ratio 28.7% approx. 25% Return on equity 12.3% approx. 15% Rate of capital turnover 8.8 >10 Inventory turnover rate 10.8 >12 1 before goodwill amortization 2 before/excluding items affecting comparability For additional information, please contact: Örjan Håkanson, President & CEO of Scribona AB, phone: +46-8-734 35 76 Lars Palm, Executive Vice President of Scribona AB, phone: +46-8-734 37 10 Lennart Bernard, Executive Vice President and CFO of Scribona AB, phone: +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/1999/12/02/19991202BIT00530/bit0001.doc http://www.bit.se/bitonline/1999/12/02/19991202BIT00530/bit0002.pdf