Interim Report January - September 2000

INTERIM REPORT JANUARY - SEPTEMBER 2000 New President & CEO Johnny Alvarsson to take up duties on 1 January 2001 Profit doubled from MSEK 21.4 to 50.3 Operating income up 38 per cent to MSEK 495 (360) Commission-based sales rose to MSEK 814 (288) Earnings per share increased to SEK 6.55 (2.95) Orders received improved from MSEK 349 to 520 Rising growth The first three quarters of the year saw powerful growth in all of ElektronikGruppen's areas of operation. Recent years' focus on adaptation of the product mix to meet new requirements and strategic penetration of anticipated growth markets is now bearing fruit. Additional strategic changes were made during the period, such the implementation of a new organization with subsidiarized business areas and new divisional managers. New President and CEO Johnny Alvarsson will take over as ElektronikGruppen's new President and CEO on 1 January 2001. Alvarsson has 13 years of experience in product design, production and project leadership within the Ericsson Group. He has been President and CEO of the listed company Zeteco for the past 13 years, during which time the company improved its operating income from MSEK 100 to MSEK 2,000 with consistently high profitability. The market The company's traditional activities in distribution and sales of electronic components have shown robust growth and profitability during the year. The strategic investments in telecom and inductive components, primarily for the telecom industry and transmission networks, have also developed favourably with regard to both income and profit. All signs indicate that this trend will continue into the coming year, although growth has been limited by the global component shortage. The order backlog on 30 September was MSEK 136 (77), compared with MSEK 70 at year-end. Operations As previously decided, a new organization with subsidiarized business areas was introduced during the third quarter. The third quarter's results included costs of MSEK 3.5 for the wind-up of the development company Whitehorse Ltd in the U.K. Expenses related to the appointment of a new president were charged to profit in the amount of MSEK 4.7. Profit included allocated surplus funds of MSEK 7.2 from SPP. Business areas EG Electronic Components On 1 October the EG Advanced Components business area changed name to EG Electronic Components (EGEC). The new president of the business area is Ulf Sjunnesson. EGEC's profitability and growth during the first nine months of the year were highly satisfactory. The business area invoiced a total of MSEK 334 (270) and posted a profit of MSEK 35 (21.4). Orders received amounted to MSEK 342 (265). The dramatic improvement in earnings is mainly attributable to higher operating income and efficiency in the sales companies, as well as an increased service content in commission-based sales of MSEK 690 (268). EG Magnetic Technology Components The positive sales and profit trend for EG MTC continued into the third quarter. Invoicing for the first nine months totalled MSEK 54 (20), with a profit of MSEK 2.5 (-4.0). Orders received continued to rise from MSEK 17 to MSEK 57. On 1 September the business area formed a new company in Estonia, EG MTC Estonia Oü, which will manufacture inductive components. EG Communication Esbjörn Nordesjö was appointed as new president of the business area during the third quarter. At the same time EG Communication has carried out organizational changes that are designed to facilitate an anticipated expansion in Denmark, and later also Norway. The business area is growing organically and has shown a healthy profit trend, from MSEK 4.0 to MSEK 12.1. Orders received have nearly doubled to MSEK 121 and invoicing for the first nine months amounted to MSEK 107 (70). The market for national data networks is expected to reach saturation, for which reason the focus is shifting to municipal and access networks. Orders received for fiber optic test and splicing equipment have more than doubled and included a major order from Cisco Systems Sverige. New investments for the purpose of doubling production in Estonia and the Philippines have been planned to satisfy the surge in demand for passive fiber optic products, which has also been noted in Asia and the U.S. Investments The period's net investments in tangible and financial fixed assets totalled MSEK 8.9 (9.8). Equity ratio and liquidity The Group's financial position remains strong. The equity ratio on 30 September was 52 (59) per cent. Liquid assets amounted to MSEK 32 (31), compared with MSEK 32 at year-end. Personnel The number of employees on 30 September was 1,067 (453), of whom 830 work for Magnetron in the Philippines. Financial information Year-end report,19 February 2001 Vällingby, 19 October 2000 ElektronikGruppen BK AB (publ) Bengt-Olof Larsson President & CEO Quarterly data (Group) Operating income Orders 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 2 177 123 110 168 120 103 19.9 6.1 9.5 Quarter 3 187 124 106 165 119 108 18.3 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 MSEK Jan-Sept Jan-Sept Full year 2000 1999 1999 Operating income Net sales 458.2 344.8 476.8 Invoiced services, commission-based sales 20.4 6.2 11.4 Other operating income 16.5 8.8 12.7 495.1 359.8 500.9 Operating expenses Goods for resale, raw materials -319.7 -243.3 - 333.4 and consumables Other external expenses -37.5 -35.5 - 50.6 Personnel costs -78.7 -53.7 - 76.7 Depreciation of tangible and intangible fixed assets -8.3 -6.5 - 9.3 Other operating expenses -1.3 -0.1 - 0.2 Operating profit 49.6 20.7 30.7 Result from financial investments Interest income and similar profit/loss items 4.5 1.3 1.8 Interest expense and similar profit/loss items -3.8 -0.6 - 0.4 Profit after financial items 50.3 21.4 32.1 Tax on net profit for the period -14.1 -5.4 - 10.3 Minority share in profit -0.9 -0.2 - 0.3 Net profit for the period 35.3 15.8 21.5 Balance sheets MSEK 30/09/00 30/09/99 31/12/99 Intangible fixed assets 6.5 7.0 7.3 Tangible and financial fixed assets 37.4 34.5 33.9 Inventories 84.6 54.6 55.9 Accounts receivable 128.0 75.8 81.3 Other current receivables 22.9 5.6 5.9 Cash and bank balances 32.0 30.8 32.4 Total assets 311.4 208.3 216.7 Shareholders' equity 157.6 119.8 126.4 Minority interest 2.0 3.8 2.0 Interest-bearing liabilities 0.0 0.2 0.0 Operating liabilities and provisions 151.8 84.5 88.3 Total shareholders' equity and liabilities 311.4 208.3 216.7 Cash flow statements MSEK Jan-Sept Jan-Sept Full year 2000 1999 1999 Cash flow before change in working capital 46.1 22.6 31.7 Change in working capital -32.9 -14.2 - 18.1 Cash flow from operating activities 13.2 8.4 13.6 Cash flow from investing activities -8.9 -8.3 - 11.0 Cash flow from financing activities -4.7 -7.2 -8.1 Change in liquid assets -0.4 -7.1 -5.5 Three-year summary MSEK Jan- Jan- Jan- Full Full Full Sept Sept Sept year year year 2000 1999 1998 1999 1998 1997 INCOME STATEMENTS Operating income 495.1 359.8 332.5 500.9 456.7 454.3 Operating profit 49.6 20.7 25.5 30.7 33.9 32.6 Profit before tax 50.3 21.4 26.6 32.1 36.1 32.1 Tax -14.1 -5.4 -7.5 -10.3 -10.9 -9.4 Minority share in profit -0.9 -0.2 -1.3 -0.3 -1.4 -0.7 Net profit for the period 35.3 15.8 17.8 21.5 23.8 22.0 ASSETS Fixed assets Intangible fixed assets 6.5 7.0 5.4 7.3 5.2 4.2 Tangible and financial 37.4 34.5 32.0 33.9 33.7 25.0 fixed assets Current assets Liquid assets 32.0 30.8 34.9 32.4 37.9 32.4 Other current assets 235.5 136.0 112.6 143.1 113.6 109.3 Total assets 311.4 208.3 194.9 216.7 190.4 170.9 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 157.6 119.8 102.2 126.4 108.7 88.3 Minority interest 2.0 3.8 3.5 2.0 3.7 1.6 Interest-bearing 0.0 0.2 4.6 0.0 1.7 0.2 liabilities Operating liabilities and 151.8 84.5 84.6 88.3 76.3 80.8 provisions Total shareholders' equity 311.4 208.3 194.9 216.7 190.4 170.9 and liabilities KEY RATIOS Gross margin, % 12.6 7.9 10.0 8.3 9.6 9.3 Operating margin, % 10.8 6.0 7.8 6.4 7.6 7.3 Profit margin, % 11.0 6.2 8.1 6.7 8.0 7.2 Return on equity, % 24.8 13.9 18.7 18.3 24.2 27.4 Return on capital employed, 39.8 19.9 28.5 28.9 38.5 43.3 % Return on total capital, % 20.5 11.1 14.6 16.1 20.3 21.8 Equity ratio, % 51.3 59.4 54.3 59.3 59.1 52.6 Debt/equity ratio, times 0.0 0.0 0.0 0.0 0.0 0.0 Share of risk-weighted 53.9 63.3 57.7 63.1 63.4 56.3 capital, % Interest coverage ratio, 14.3 36.3 151.9 50.7 66.6 24.5 times Earnings per share, SEK 6.55 2.95 3.32 3.99 4.45 4.10 Equity per share, SEK 29.27 22.25 18.98 23.48 20.29 16.48 Net investments in fixed assets - tangible 8.9 2.6 13.0 3.7 15.9 20.2 - financial 0.0 7.2 4.3 7.2 3.6 7.4 Investments as a % of net 1.8 2.7 5.2 2.2 4.3 6.1 sales Examination The interim report has not been examined by the company's auditors. ElektronikGruppen BK AB Grimstagatan 160@Box 39@SE-162 11 Vällingby Tel: +46-8-759 35 00@Fax: +46-8-38 10 35@ info@egruppen.se@www.egruppen.se ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/11/08/20001108BIT00130/bit0001.doc http://www.bit.se/bitonline/2000/11/08/20001108BIT00130/bit0002.pdf