Interim Report January - June 2000

ElektronikGruppen BK AB (publ) INTERIM REPORT JANUARY - JUNE 2000 Profit after net financial items improved to MSEK 32.0 (12.9) Operating income totalled MSEK 308 (236) Commission sales improved to MSEK 468 (159) Earnings per share for half-year amounted to SEK 4.18 (1.76) Order bookings increased to MSEK 376 (234) All time high General The first 6 months of the year were characterized by powerful growth in all of the Group's business areas. ElektronikGruppen has shown sales and earnings growth well in line with the market. This is the result of a determined focus on our customers and product mix with respect to growth, delivery reliability and technical expertise. According to notice from SPP, the company will be refunded surplus pension funds of MSEK 7.5. These funds have not been reported in the half-year result. The Market Our main market segments components trading, the telecom industry, show a strong growth. The strategic investments in transmission network and inductive components are starting to bear fruit and the trend is expected to remain positive throughout the year. The order backlog on 30 June 2000 was MSEK 152(75), compared with MSEK 70 at year-end. Operations The new organization with incorporated subsidiaries will go into effect on 1 August and is intended to better adapt operations to market dynamics by shortening decision-making paths and clarifying responsibility in the Group. The Advanced Components (EGAC) business area's focus on extended cooperation with a number of strategic suppliers, in order to homogenize the product portfolio has been decisive in guaranteeing component availability to our key customers. Invoicing amounted to more than MSEK 211 (170) and orders received in the first half of the year reached MSEK 246 (180). The positive trend is expected to last out the year. The dramatic rise in earnings of MSEK 23 (13) is attributable to increased sales/efficiency in the sales companies, as well as a higher share of invoiced services in commission- based sales of over MSEK 468 (159). The period saw a number of breakthroughs for ElektronikGruppen's own products in the Nordic telecom market. At the end of the second quarter, a letter of intent was signed to acquire a controlling interest in the associated company MI Europe in the U.K., which will be one of the Group's future platforms for marketing of own products in western Europe. The MTC (Magnetic Technology Components) business area reported a positive profit for second quarter while undergoing powerful expansion. Invoicing in the first half of the year totalled MSEK 28 (14) with a profit of MSEK -0.5 (-3.6). Orders received of MSEK 40 (13) are continuing to increase. The Communication business area has consolidated its leading position as a supplier of broadband networks to regional and municipal network operators. EG Comtech in Uppsala was selected as supplier of equipment and services to Vattenfall's and the National Rail Administration's fiber optic infrastructures, an acknowledgement of our expertise and ability to carry out comprehensive telecom projects. The first sections of Regnet's Stockholm-Sundsvall grid were installed in the last weeks of June. The extended collaboration with ECI Telecom, which was formalized through the signing of a new 3-year agreement, will create scope for EG to expand its telecom ventures outside Sweden. At the end of June, EG Comtech was registered in both Denmark and Norway and recruitment of personnel was started immediately. Since 1 July the development company Whitehorse Ltd in the U.K. is part of the business area, with responsibility for development and design of new telecom products. Invoicing in the first six months of the year amounted to MSEK 69 (48) and orders received totalled MSEK 90 (45). The business area is growing organically with a healthy profit of MSEK 9.6 (2.0). Continued strong development is anticipated throughout the year. Investments The period's net investments in tangible and financial fixed assets totalled MSEK 7.1 (10.0). Equity ratio and liquidity The Group's financial position remains strong. The equity ratio on 30 June 2000 was 53 (61) percent. Liquid assets (cash and bank balances) amounted to MSEK 38 (23) compared with MSEK 32 at year-end. Personnel The number of employees in the Group on 30 June 2000 was 963 (437) of which 736 is attributable to Magnetron in the Philippines. Financial calendar Interim report as per 30 September, 19 October. Vällingby, 17 July 2000 ElektronikGruppen BK AB (publ) Tsviatko Ganev President and CEO Quarterly data (Group) Operating income Orderd received Profit after net financial items (MSEK) 00 99 98 00 99 98 00 99 98 Quarter 1 131 113 116 187 110 117 12.1 6.8 10.1 Quarter 2 172 123 110 168 120 103 19.9 6.1 9.5 Quarter 3 124 106 119 108 8.5 7.0 Quarter 4 141 125 119 111 10.6 9.5 501 457 468 439 32.0 36.1 The Group in summary Income statements Jan- Jan- Full Jun Jun year MSEK 2000 1999 1999 Operating income Net sales 287.9 226.8 476.8 Commissionbased sales 14.1 3.6 11.4 Other operating income 6.4 5.8 12.7 308.4 236.2 500.9 Operating expenses Goods for resale, raw -201.7 -163.9 - materials and consumables 333.4 Other external costs -23.9 -18.7 - 50.6 Personnel costs -47.6 32.0 - 76.7 Depreciation of tangible and Intangible fixed assets -5.2 -4.4 - 9.3 Other operating expenses -0.2 -5.1 - 0.2 Operating profit 29.8 12.1 30.7 Result from financial investments Interest income and similar 2.3 1.3 1.8 profit/loss items Interest expense and similar -0.1 -0.5 - 0.4 profit/loss items Profit after financial items 32.0 12.9 32.1 Tax on net profit for the -9.0 -3.2 - period 10.3 Minority share in profit -0.5 -0.2 - 0.3 Net profit for the period 22.5 9.5 21.5 Balance sheets MSEK 30/06/ 30/06/ 31/12 00 99 /99 Intangible fixed assets 6.8 7.2 7.3 Tangible and financial fixed 38.2 36.7 33.9 assets Inventories 68.0 47.5 55.9 Accounts receivable 102.4 73.3 81.3 Other current receivables 20.1 5.6 5.9 Cash and bank balances 38.3 23.3 32.4 Total assets 273.8 193.6 216.7 Shareholders' equity 142.3 113.8 126.4 Minority interest 1.6 3.8 2.0 Interest-bearing liabilities 0 0.4 0.0 Operating liabilities and 129.9 75.6 88.3 provisions Total shareholders' equity 273.8 193.6 216.7 and liabilities Cash flow statements MSEK Jan- Jan- Full Jun Jun year 2000 1999 1999 Cash flow before change in 28.2 14.0 31.7 working capital Change in working capital -10.0 -13.5 - 18.1 Cash flow from operating 18.2 0.5 13.6 activities Cash flow from investing -7.1 -8.5 - activities 11.0 Cash flow from financing -5.2 -6.5 -8.1 activities Change in liquid assets 5.9 -14.5 -5.5 Three-year summary MSEK Jan- Jan- Jan- Full Full Full Jun Jun Jun year year year 2000 1999 1998 1999 1998 1997 INCOME STATEMENTS Operating income 308.4 236.2 226.3 500.9 456.7 454.3 Operating profit 29.8 12.1 19.2 30.7 33.9 32.6 Profit before tax 32.0 12.9 19.6 32.1 36.1 32.1 Tax -9.0 -3.2 -5.5 -10.3 -10.9 -9.4 Minority share in -0.5 0.2 0.9 -0.3 -1.4 -0.7 profit Net profit for the 22.5 9.5 13.2 21.5 23.8 22.0 period ASSETS Fixed assets Intangible fixed 6.8 7.2 4.9 7.3 5.2 4.2 assets Tangible and 38.2 36.7 30.7 33.9 33.7 25.0 financial fixed assets Current assets Liquid assets 38.3 23.3 27.7 32.4 37.9 32.4 Other current assets 190.5 126.4 112.2 143.1 113.6 109.3 Total assets 273.8 193.6 175.5 216.7 190.4 170.9 SHAREHOLDERS'EQUITY AND LIABILITIES Shareholders' equity 142.3 113.8 97.2 126.4 108.7 88.3 Minority interest 1.6 3.8 3.2 2.0 3.7 1.6 Interest-bearing 0 0.4 4.4 0.0 1.7 0.2 liabilities Operating liabilities 129.9 75.6 70.7 88.3 76.3 80.8 and provisions Total shareholders' 273.8 193.6 175.5 216.7 190.4 170.9 equity and liabilities KEY RATIOS Gross margin, % 12.2 7.3 10.9 8.3 9.6 9.3 Operating margin, % 10.3 5.3 8.7 6.4 7.6 7.3 Profit margin, % 11.1 5.7 8.8 6.7 8.0 7.2 Return on equity, % 16.7 9.0 14.2 18.3 24.2 27.4 Return on capital 25.1 12.4 21.9 28.9 38.5 43.3 employed, % Return on total 13.1 7.0 11.5 16.1 20.3 21.8 capital, % Equity ratio, % 52.6 60.8 57.2 59.3 59.1 52.6 Debt/equity, times 0 0.0 0.0 0.0 0.0 0.0 Share of risk- 55.6 65.0 61.0 63.1 63.4 56.3 weighted capital, % Interest coverage 241.6 26.0 59.2 50.7 66.6 24.5 ratio, times Earnings per share, 4.18 1.76 2.45 3.99 4.45 4.10 SEK Equity per share, SEK 26.42 21.14 18.06 23.48 20.29 16.48 Net investments in fixed assets - tangible 7.1 2.8 9.6 3.7 15.9 20.2 - financial 0 7.2 3.7 7.2 3.6 7.4 Investments as a % of 2.3 4.2 5.9 2.2 4.3 6.1 net sales Auditors' report We have conducted an examination of this interim report in accordance with the recommendations of the Swedish Institute of Authorized Public Accountants (FAR). An examination is substantially limited in relation to an audit. We have not found anything to indicate that the interim report does not fulfil the requirements in the Act on Trading and Clearing Activites or the Annual Accounts Act. 12 July 2000 Svante Nylén Björn Fernström Authorized Public Accountant Authorized Public Accountant L ElektronikGruppen BK AB Grimstagatan 160Box 39162 11 Vällingby tel 08-759 35 00fax 08-38 10 35 infoegruppen.sewww.egruppen.se ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.bit.se/bitonline/2001/06/27/20010627BIT00480/bit0001.doc http://www.bit.se/bitonline/2001/06/27/20010627BIT00480/bit0001.pdf