Year-end report for the fourth quarter and full year 2001

Year-end report for the fourth quarter and full year 2001 Scribona ended the year with a continued strong cash flow and fourth quarter operating income of MSEK 46. · Sales in the fourth quarter reached MSEK 3,819 (2,983). Operating income before items affecting comparability in the fourth quarter amounted to MSEK 46 (61) and income after tax was MSEK 12 (42). · The positive cash flow trend that started in the third quarter continued in the fourth and amounted to MSEK 340 (167). As a result, Scribona had a positive cash flow of MSEK 567 (196) in the second half of the year. · The full year was adversely affected by a weak market, accounts receivable losses (MSEK 50) and goodwill amortization (MSEK 50). Sales amounted to MSEK 11,872 (9,479). The sale of PC LAN was consolidated during the period April-December. Operating income before items affecting comparability totaled MSEK -43 (105) and income after tax was MSEK -120 (129). · PC LAN was acquired and integrated during the year, providing scope for cost reductions totaling at more than MSEK 150 at year-end. · The Board proposes that no dividend be paid to the stockholders (previous year SEK 0.50). · CEO's comments The fourth quarter provided ample proof that the integration of PC LAN was carried out successfully. Both the Solutions and Distribution business areas, which were directly affected by the merger, managed to increase their sales, strengthen their market shares and achieve satisfactory operating income despite unfavorable market conditions. Of total operating income, Solutions accounted for MSEK 31 and Distribution for MSEK 11. At the same time, determined efforts led to further improvement in the Group's cash flow, which reached MSEK 340 in the fourth quarter. On the whole, 2001 was a dramatic and decisive year for Scribona. After the strategically important acquisition of PC LAN ASA, Scribona is now the market-leader for both the Nordic region and each individual market in the main fields of activity. Furthermore, the acquisition has created a platform for positive development of the Distribution and Solutions business areas. In a sluggish market, the merged group succeeded in increasing its market shares relative to the two companies' combined shares in 2000. Through the consistent integration of all similar operations in each market, the merged group's cost level was reduced by more than MSEK 150 on a yearly basis. These cost cuts did not reach full effect until the end of 2001 and in a weak market with heavy accounts receivable losses and amortization of goodwill it was not possible to avoid a net loss for the year. The market The fourth quarter also saw generally weak demand in Scribona's market areas. Nordic PC sales fell by 7%, which affected laptop and desktop computers in equal proportions. In other words, the anticipated upswing primarily for laptop PCs has still not arrived. On the other hand, sales of PC servers rose by 3% and the market for other IT infrastructure is assessed to have been unchanged. The market for document handling products also remained feeble and shrank by around 10% compared with 2000 For the year as a whole, the market was a general disappointment for the industry. PC volumes dropped by 5%, which is a steeper decrease than in the preceding year. Of this total, desktop computers accounted for 7% while the laptop segment fell by only 1%. Sales of PC servers rose by 7% while the market for IT infrastructure products was roughly on par with the previous year. The market for document handling products contracted by around 10%. Sales and income The Group's fourth quarter sales reached MSEK 3,819 (2,983), including PC LAN. Fourth quarter sales amounted to MSEK 775 (409) in the Solutions business area and MSEK 2,610 (1,956) in Distribution. As earlier, Brand Alliance noted the largest drop in sales, 26%, mainly due to declining sales of laptop computers in the Toshiba Digital Media division. The business area's sales amounted to MSEK 642 (863) Fourth quarter operating income before items affecting comparability amounted to MSEK 46 (61). Both Solutions with MSEK 31 (21) and Distribution with MSEK 11 (31) reported strong growth in earnings towards the end of 2001 compared with earlier in the year. Operating income in Brand Alliance was MSEK 3 (35). Sales for the full year amounted to MSEK 11,872 (9.479). PC LAN's sales were consolidated for the period April-December. In relation to 2000, sales for comparable units decreased in 2001. For the full year, Solutions reported sales of MSEK 2,485 (1,073) and Distribution of MSEK 7,762 (6,292), both including PC LAN. Brand Alliance reported sales of MSEK 2,353 (2,966). Operating income for the full year before items affecting comparability was MSEK -43 (105). Solutions' operating income of MSEK 39 (9) includes a net amount of MSEK 14 attributable to a capital gain of the sale of an agency operation in Denmark and cost provisions in connection with a minor acquisition. Distribution with MSEK -49 (38) and Brand Alliance with MSEK -3 (110) achieved lower full-year earnings than in the preceding year. Income in Distribution was charged with accounts receivable losses of more than MSEK 50, while income in Brand Alliance was primarily affected by declining sales of Toshiba's laptop PCs. The entire remaining goodwill item that arose in connection with Scribona's acquisition of Alfaskop´s hardware business was amortized during the third quarter. The write-down amounted to MSEK 50 and is reported among items affecting comparability. Net financial items for the full year totaled MSEK -49 (6), including an MSEK 17 write-down of receivables in the partly-owned web development company Proventum. Income before tax for the full year was MSEK -140 (180). The year- earlier figure included items affecting comparability in the form of a refund of MSEK 56 from Alecta and a capital gain of MSEK 33 on the sale of sharesreported as financial income. Restructuring costs Total costs for the integration of PC LAN have amounted to MSEK 65. These costs have been deducted against the negative goodwill of MSEK 70 that arose in connection with the acquisition. No additional significant restructuring costs are anticipated. Cash flow and financial position The Group's cash flow improved substantially during the year and amounted to MSEK 340 (171) in the fourth quarter. Cash flow for the full year totaled MSEK 190 (-137). Excluding acquired financial debts in PC LAN, cash flow was MSEK 465. The Group's net investments for the full year reached MSEK -36 (111). Net financial capital at the end of the year totaled MSEK -58 (-248). Key ratios Earnings per share for the full year 2001 amounted to SEK -2.56 (3.77). Earnings per share excluding items affecting comparability totaled SEK - 1.82 (2.32). Equity per share at the end of the period was SEK 18.82 (23.95). The equity ratio on 31 December was 21% (22%). Development by business area Scribona Solutions Scribona Solutions ended the year on a high note. Fourth quarter sales amounted to MSEK 775 (409), presumably raising the market share. This growth in sales was attributable to a stronger market for IT infrastructure in general and heavy servers in particular during the quarter, in combination with Solutions' integrated range of products and competencies. Operating income was MSEK 31 (21). Sales for the full year amounted to MSEK 2,485 (1,073), including accretive sales from PC LAN. For comparable units, sales are estimated to have decreased by around 10%. Operating income totaled MSEK 39 (9). Income in Solutions includes a profit of MSEK 18 on the sale of an agency operation in Denmark and a provision of MSEK 4 in connection with a minor acquisition. Scribona Distribution In the fourth quarter's extremely sluggish PC market, the effects of cost rationalizations and the now coordinated product offering in the new Scribona started to produce results. Sales showed a distinct upswing during the period and amounted to MSEK 2,610 (1,956). Fourth quarter operating income before items affecting comparability was MSEK 11 (31). The full year was strongly affected by the flagging market, which led to both lower sales and abnormally high accounts receivable losses during the first three quarters. At the same time, intensive efforts to coordinate operations in PC LAN and Scribona led to substantial cost rationalizations and staff reductions. Sales for the full year amounted to MSEK 7,762 (6,292), including PC LAN. Operating income before items affecting comparability totaled MSEK -49 (38), including accounts receivable losses of over MSEK 50. Scribona Brand Alliance The Brand Alliance business area reported a further drop in sales during the fourth quarter, a decrease that was mainly attributable to the laptop computers in the Toshiba Digital Media division. Toshiba, which has been affected by the declining laptop market, launched a whole new generation of laptop computers during the quarter, albeit not in time to boost fourth quarter sales. The market for document handling products remained weak, which mainly affected the Toshiba Document Solutions division. Fourth quarter sales amounted to MSEK 642 (863) and operating income was MSEK 3 (35). The full year was also strongly impacted by the market recession and declining market shares for Toshibas laptop computers. Sales for the full year amounted to MSEK 2,353 (2,966) and operating income was MSEK - 3 (110). Personnel The number of employees on December 31 was 1,539 (1,337). The combined number of employees in Scribona and PC LAN on December 31, 2000, was 1,649. Accounting principles In 2001 the accounts were adjusted to the Swedish Financial Accounting Standards Council's recommendation no. 9, Income taxes, whereby deferred tax receivables attributable to certain loss carryforwards have been reported. The effects of this are shown in the specification of changes in shareholders' equity. In all other respects, the same accounting and valuation principles have been applied as in the most recent annual report. This year-end report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation no. 20, Interim reporting. Dividend The Board proposes that no dividend be paid to the shareholders. No change will be made in the dividend policy, which states that approximately one third of income after tax is to be distributed to the shareholders over time. Annual report The annual report is expected to be published in mid-April at which time it will be posted on Scribona's web site. The report can also be ordered from Scribona AB, Box 1374, SE-171 27 Solna, telephone +46 8 734 34 00. Annual General Meeting The Annual General Meeting will be held at 3:00 p.m. on May 7, 2002, at Scribona's head office in Solna. Financial calendar Interim report for January - March 2002 May 7, 2002 Interim report for January - June 2002 August 20, 2002 Interim report for January - September 2002 November 5, 2002 Scribona AB Board of Directors Facts about Scribona AB Scribona is the Nordic market's leading provider of IT products and solutions, offering customers cutting-edge product expertise, the industry's leading e-commerce system, optimized product availability and a broad range of complementary services. Scribona's operations are organized in three business areas: · Scribona Solutions - value adding distribution of IT infrastructure · Scribona Distribution - effective volume distribution of IT products · Scribona Brand Alliance - exclusive agent for leading brand suppliers For additional information, please contact: Lennart Svantesson, President & CEO, telephone: +46 8 734 35 76 Lars Palm, Executive Vice President, telephone +46 8 734 37 10 Anders Bley, Executive Vice President, telephone +46 8 734 35 55 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/08/20020208BIT01280/bit0001.doc Full Year-End Report http://www.waymaker.net/bitonline/2002/02/08/20020208BIT01280/bit0001.pdf Full Year-End Report