KYRO?S PROFIT IMPROVED IN 2002
Kyro Corporation STOCK EXCHANGE RELEASE 05.02.03 at 08.30 a.m.
KYROS PROFIT IMPROVED IN 2002
- Net sales EUR 144.3 (147.0) million
- Operating profit EUR 18.7 (17.2) million at 13.0% (11.7) of net
sales, aided by an excellent last quarter
- Profit before extraordinary items EUR 18.1 (16.3) million (growth
of 11.4%)
- Profit per share EUR 0.31 (0.27) (growth of 14.8%)
- Dividend proposal by the board of directors EUR 0.15 per share
- Kyros glass technology business area has been developed through
acquisitions which expand the glass processing machines and glass
processing businesses
- In January 2003 Kyro acquired all shares of Z. Bavelloni and Glasto
as well as a 70% share in Suomen Lämpölasi
Due to the demerger of Kyro that took place on 31.3.2001, the 2001
comparison figures in the financial statements are presented pro
forma and without figures for the Tecnomen Group. Business areas
within the Kyro Group in 2002 are Safety Glass Technology and Energy.
The Safety Glass Technology business area consists of the Tamglass
Group and Uniglass Engineering Oy. The Energy business area consists
of Kyro Power Oy.
Kyro Corporation acquired all shares of Uniglass Engineering Oy on
19.4.2002, and Tamglass Ltd. Oy acquired a 70% share in Finton
Parvekejärjestelmät Oy on 5.11.2002. Figures for Uniglass Engineering
have been consolidated with the Kyro Group since 1.5.2002, and those
of Finton Parvekejärjestelmät since 1.11.02. The effect of these
acquisitions on consolidated figures in 2002 is small.
Kyro on 20.2.2003 acquired all shares of Z. Bavelloni Immobiliare
S.p.A. and Glasto Holding B.V.. Additionally, on 7.1.2003 Tamglass
acquired a 70% share in Suomen Lämpölasi Oy. Figures for these
companies are consolidated with the Kyro Group from 1.1.2003, at
which point the Safety Glass Technology business area is expanded
into the Glass and Stone Technology business area under the name of
Glaston Technologies. Key 2002 comparison figures for the business
area will be disclosed in connection with 1/2003 interim reporting.
GROUP STRATEGY
Kyro aims to achieve market leadership -based good profitability and
long-term growth exceeding that of the market. The Groups strategy
is to primarily focus on growing its glass processing machine
business organically and through acquisitions.
Organic growth is pursued through extensive regional presence in main
market areas, strong investments in product development and overall
glass processing know how, as well as continuous improvement of
operations. Organic growth is supported by developing the entire
glass industry through the Glass Processing Days expert conference by
Tamglass and the Glassfiles.com Internet service.
Acquisitions aim at expanding Kyros leadership in safety glass
technology to cover technology for the entire glass processing chain,
as well as at strengthening overall expertise in glass processing.
Carefully considered acquisitions are used to seek sales and customer
synergies from complementary products and networks. Acquisitions and
organic growth are intended to strengthen one another.
NET SALES AND PROFIT
Kyro Group net sales in 2002 amounted to EUR 144.3 (147.0) million
(change of 1.8%). Group operating profit was EUR 18.7 (17.2) million
and 13.0% (11.7) of net sales. The operating profit was improved by
exceptionally good results in both business areas during the last
quarter.
Net financial items were EUR 0.6 (-0.9) million. This includes
interest and dividend income and exchange value gains from securities
worth EUR 3.1 (4.4) million, as well as interest expenses and
exchange value losses from securities worth EUR 3.7 (5.3) million.
Profit before taxes and minority interest grew by 11.4% to EUR 18.1
(16.3) million and 12.5% (11.1) of net sales. Profit for the fiscal
year grew by 9.0% to EUR 11.7 (10.8) million. Return on invested
capital was 13.6% (11.8). Earnings per share grew by 14.8% to EUR
0.31 (0.27). Equity per share amounted to EUR 3.36 (3.43).
Business activities of the parent company Kyro Corporation consist
mainly of financing and investing as well as group administration
services. Net sales of the parent company was EUR 0.7 (0.7) million
and operating result EUR -1.4 (-2.7) million for the fiscal year.
Picture 1. Net sales, operating profit and order book of Kyro
business areas in 2002 and 2001
Net sales Operating profit Order book
EUR millions 2002 2001 2002 2001 2002 2001
Safety Glass Technology 117.8 120.9 15.4 15.2 45.2 47.6
Kyro Power 26.3 25.7 5.5 5.2 22.2 24.1
Parent company, other
operations & eliminations 0.2 0.4 -2.2 -3.2
Group total 144.3 147.0 18.7 17.2 67.4 71.7
FINANCING
The financial standing of the Group is strong. Equity ratio on
31.12.2002 was 77.1% (79.7). Cash flow from operations during the
year under review was EUR 14.6 (20.2) million. The Groups liquid
cash assets and securities on 31.12.2002 amounted to EUR 55.6 (63.8)
million. Interest-bearing liabilities amounted to EUR 3.7 (4.5)
million. Net gearing was -40.5% (-45.0).
INVESTMENTS
Group investments totalled EUR 6.8 (3.5) million. Booked investments
included the acquisition cost of shares in Uniglass Engineering Oy
and Finton Parvekejärjestelmät Oy as well as replacement investments.
RESEARCH AND PRODUCT DEVELOPMENT EXPENSES
Research and product development expenses booked during the fiscal
period were EUR 6.6 (7.4) million.
PERSONNEL
At the end of the fiscal period, Kyro Group had 562 (460) employees,
of whom 161 (158) worked abroad. During the fiscal period, the group
employed 536 (471) people on average.
The number of personnel has increased from the previous year by the
personnel in Uniglass Engineering Oy and Finton Parvekejärjestelmät
Oy together with recruitment at Tamglass factories in China and
Brazil as well as resource additions in Tamglass maintenance
activities.
Number of personnel on 31.12.
2002 2001
Safety Glass Technology 528 427
Kyro Power 24 21
Kyro Corporation 10 12
Kyro Group 562 460
SHARES AND SHARE PRICE DEVELOPMENT
During 2002, a total of 3,084,189 Kyro Corporation shares were traded
at the Helsinki Exchanges, which equals 7.8% of the total number of
shares. The highest trading price for a Kyro Corporation share was
EUR 7.35, and the lowest EUR 5.00. The average price during the year
was EUR 6.25.
ACQUISITION AND CONVEYANCE OF OWN SHARES
The Annual General Meeting of 20.3.2002 authorised the Board of
Directors to acquire the company's own shares for the purpose of
using them as consideration in possible business acquisitions, to
finance investments, or in other industrial arrangements or to be
conveyed in other ways or to be invalidated. According to the
authorisation the Board of Directors may acquire the company's own
shares using assets available for distribution of profits, provided
that the combined nominal value of the acquired shares together with
shares already in the possession of the company corresponds to a
maximum of 5% of share capital.
The Annual General Meeting also authorised the Board of Directors to
decide on the conveyance of the company's own shares which have been
previously acquired based on the authorisation accorded in 2001. The
own shares may be used as consideration in possible business
acquisitions, to finance investments and in other industrial
arrangements in a way and scope determined by the Board of Directors.
The Board of Directors of Kyro Corporation decided on 14.8.2002
to acquire a maximum amount of 1,983,750 own shares through
public trading in the Helsinki Exchanges at the current value at the
time of acquisition. No own shares were acquired based on this
decision in 2002.
Kyro Corporation acquired own shares at the Helsinki Exchanges in
January 2002 based on the authorisation granted to the Board of
Directors by the Annual General Meeting in 2001. An amount of 1,600
shares were acquired at the average price of EUR 5.70 and an
acquisition value of EUR 9,138.24.
Based on the authorisation given by the Annual General meeting to the
Board of Directors, Kyro Corporation conveyed its own shares as
partial consideration in an acquisition on 19.4.2002, where Kyro
Corporation purchased all shares of Uniglass Engineering Oy. A total
of 103,570 shares were conveyed at a unit price of EUR 6.47 amounting
to 0.3% of all shares of Kyro Corporation.
On 31.12.2002 Kyro Corporation held 1,483,830 own shares in total
with an acquisition value of EUR 8,547,691 and an average unit value
of EUR 5.76. The shares constitute 3.7 % of all votes and shares.
CONVEYANCE OF OWN SHARES IN JANUARY 2003
After the end of the fiscal period, in January 2003, Kyro Corporation
conveyed a total of 1,235,538 own shares as partial consideration in
the acquisitions of Z. Bavelloni Immobiliare S.p.A and Suomen
Lämpölasi Oy.
In the acquisition of Z. Bavelloni Immobiliare S.p.A., a total of
1,172,533 own shares amounting to 3.0% of all Kyro shares were
conveyed at a unit price of EUR 5.97 based on their market price on
12.12.2002 in accordance with the acquisition agreement.
In the acquisition of Suomen Lämpölasi Oy, a total of 63,005 own
shares amounting to 0.2% of all Kyro shares were conveyed at a unit
price of EUR 6.35 based on their average market price during
18.12.2002-3.1.2003 in accordance with the acquisition agreement.
Kyro Corporation held a total of 248,292 own shares on 5.2.2003.
OPTION SCHEME
An extraordinary general meeting of Tamglass Ltd. Oy on 20.12.2002
approved a new option programme which may be applied to Tamglass key
personnel and Kyro management. The option programme consists of
35,000 A-options with an exercise period of 1.5.2005-31.5.2009 and
35,000 B-options with an exercise period of 1.5.2007-31.5.2009. The
price for share subscription with an option is EUR 140, and a total
of 70,000 Tamglass Ltd. Oy shares may be subscribed, corresponding to
8.0% of shares in the company.
In accordance with limitations in the option programme, share
subscription with options is possible only by permission of Kyro
Corporation, but the options may be sold to Kyro Corporation during
their exercise period at a price which is defined as the difference
between the calculated value of the share and the subscription price.
Two thirds of the calculated value of the share is based on the
results of the Tamglass and one third on the price development of the
Kyro share.
BOARD OF DIRECTORS AND AUDITORS
Members of the current Board of Directors of Kyro Corporation are:
Lauri Fontell, Lars Hammarén, Carl-Olaf Homén, Barbro Koljonen, Carl-
Johan Numelin, Carl-Johan Rosenbröijer, Christer Sumelius and Gerhard
Wendt. The term of office for the board members is 2001-2004.
When convened on 20.3.2002, the Board elected Carl-Johan Numelin as
Chairman and Christer Sumelius as Deputy Chairman. The Annual General
Meeting on 20.3.2002 unanimously elected KPMG Wideri Oy Ab as auditor
with KHT Sixten Nyman as the responsible auditor.
THE BOARDS DIVIDEND PROPOSAL FOR THE FISCAL YEAR 2002
The Board of Kyro Corporation proposes that a dividend of EUR 0.15
per share be distributed for the fiscal year 2002, amounting to EUR
5.9 million in total. Shares entitling to dividends numbered
39,426,708 on 5.2.2003.
The dividend is paid to a shareholder listed on the ownership list of
the Finnish Central Securities Depository Ltd on the date of record,
which is 24.3.2002. Accordance to the proposal by the Board, the
dividend will be paid on 31.03.2003.
ACQUISITIONS
Kyro Corporation acquired all shares of Uniglass Engineering Oy on
19.4.2002. Uniglass Engineering manufactures and sells tempering
ovens for flat glass and complements thus the product range of the
Safety Glass Technology business area.
Tamglass Ltd. Oy acquired a 70% share in Finton Parvekejärjestelmät
Oy on 5.11.2002. The company supplies glazings for balconies and
building exteriors.
ACQUISITIONS IN JANUARY 2003
Kyro Corporation acquired on 20.1.2003 all shares of Z. Bavelloni
Immobiliare S.p.A. and Glasto Holding B.V.. Z. Bavelloni manufactures
machines and tools for the glass and stone processing industries. The
company has a market share of 30% in its main product categories.
Glasto is an international group of sales and service companies with
Bavelloni machines and tools as its main products.
By way of these acquisitions, the Glass and Stone Technology business
area of Kyro has grown to become the largest machine and equipment
supplier to the glass processing industry. The Groups business
activities have also expanded to machines for the stone industry. The
Glass and Stone Technology business area of Kyro goes by the name of
Glaston Technologies.
Additionally, Tamglass Ltd. Oy acquired on 7.1.2003 a 70% share in
Suomen Lämpölasi Oy, a producer of insulated glass elements. The
glass processing company Tamglass Safety Glass Ltd., already
previously part of the Tamglass Group, together with two of the above
mentioned companies now known as Tamglass Finton and Tamglass
Lämpölasi form the Tamglass Glass Processing business with the
important function of deepening and expanding the overall glass
processing and market expertise, which is important to the machine
businesses of Tamglass and Z. Bavelloni.
SAFETY GLASS TECHNOLOGY
Net Sales, Operating Profit and Order Book
Net sales for the Safety Glass Technology business area was EUR 117.7
(120.9) million. Operating profit was EUR 15.4 (15.2) million
amounting to 13.1 (12.5) % of net sales. The operating profit during
the last quarter was excellent at 18.8 (10.6) % of net sales due to
the profitability of factories in Finland, Brazil and China.
Profitability was improved by manufacturing cost savings and new
products among other things.
The order book on 31.12.2002 was, despite high delivery volumes at
the end of the year, good at EUR 45.2 (47.6) million and grew to EUR
53.2 (50.1) million by 31.1.2003. The Safety Glass Technology
business area received new orders worth approximately EUR 30 million
during December and January.
Markets and sales
Demand for safety glass and safety glass machines continues along its
long-term growth trend. The use of safety glass increases as glass
architecture and value-added glass products are becoming more common,
and regulations and rules for safety glass develop. The increase in
glass surfaces for vehicles and the increased variety of shapes also
increase the demand for safety glass machines.
Uncertainty in the world economy slowed down investment decisions
during 2002, mainly in Europe and the United States. The demand for
safety glass machines in the United States however turned to new
growth at the end of the year. Demand in Asia grew clearly from the
previous year. The demand for safety glass machines in Tamglasss
areas of focus, Brazil and China, is good.
The volume of new orders received by the Safety Glass Technology
business area grew slightly from the previous year. Orders received
for architectural glass machines were at last years level. The sales
volume of machines for vehicle glass grew.
The most significant fair for the glass industry during 2002 was
Glasstec, held in Düsseldorf in October. During the fair, the Safety
Glass Technology business area made a new record in receiving
approximately EUR 15 million worth of new machine orders for delivery
during 2003.
Production and new products
The production capacity of the factories of the Safety Glass
Technology business area was in good use in Finland, Brazil and
China. Production capacity and personnel at the machine factory in
the U.S.A. was adapted to correspond to the low demand at the
beginning of the year. By the end of the year the capacity of the US
factory was also in good use.
Uniglass Engineering operations were reorganized following its
acquisition. The company focuses on the manufacturing and selling of
UGF and UGC flat tempering machines for selected markets. The new
management and organisation of Uniglass Engineering have succeeded in
making the operations more effective, and the company has a
strengthened position in its own product categories.
The ProConvection furnace launched by Tamglass has exceeded market
expectations and enables an increasingly efficient tempering of
coated glass. The new machine has become the companys success
product with 15 orders received during 2002.
Another main new product is ProBend, created for the bending of large
glass surfaces and enabling the production of large, bent glass in
various lot sizes. The new bending and tempering machine creates
completely new possibilities for architects in the use of arched
glass shapes in buildings. Several orders were also received for
ProBend.
Maintenance
The high degree of capacity utilisation by glass processors
emphasises the importance of preventive maintenance and increases
demand for maintenance services and spare parts.
The number of maintenance agreements for both companies in the Safety
Glass Technology business area is growing, as customers of both
Tamglass and Uniglass Engineering most often make maintenance and
service agreements upon purchasing a machine.
The sale of maintenance services, accessories and used machines as
part of Tamglasss maintenance operations increased significantly
from the previous year. Personnel resources in maintenance services
were increased during the year.
ENERGY
Net Sales, Operating Profit and Order Book
Kyro Power net sales amounted to EUR 26.3 (25.7) million. Operating
profit improved from last year to EUR 5.5 (5.2) million and 20.9
(20.2) % of net sales.
Profitability was exceptionally good during the last quarter of the
fiscal year due to a brisk rise in the market price for electricity
at the end of the year.
The order book of Kyro Power on 31.12.2002 (12 months) was EUR 22.2
(24.1) million.
Development of the energy markets
Fluctuations in the market price for electricity have been large
during 2002. The dry weather prevalent in the Nordic countries since
Summer reduced the volume of hydro-electric power generation and in
conjunction with cold weather strongly raised the market price for
electricity from October onwards. The exceptionally cold autumn and
early winter also increased the sales of heat by Kyro Power towards
the end of the year.
Long-term energy delivery contracts guarantee that Kyro Powers
customers receive a more stable price even while the market price for
electricity fluctuates wildly.
The power plants operated without interruption in 2002. However,
limited water resources restricted the capacity utilization of the
hydropower plant.
FUTURE OUTLOOK
The starting point of Kyro Group and its business areas for the year
2003 is good. The long-term growth in the market for glass processing
machinery is estimated to continue. The Glass and Stone Technology
business area of Kyro, Glaston Technologies, is the world market
leader in its field.
Kyro Powers net sales and operating profit in 2003 are estimated to
be roughly at the preceding years levels.
Kyro net sales will increase strongly due to the the already made
acquisitions. Currency exchange rates developments, investments in
acquired companies, and the current economic cycle may decrease the
relative profitability of the Group in the short term, but the cash
flow from operations is expected to grow.
Unless the general economic situation weakens, the profitability of
the Kyro group is estimated to be at a good level in 2003.
TIMETABLE FOR FINANCIAL REPORTING
The company will publish three interim reports during 2003.
Interim report 1/2003 (1.1.-31.3.03) will be published 07.05.03
Interim report 2/2003 (1.1.-30.6.03) will be published 14.08.03
Interim report 3/2003 (1.1.-30.9.03) will be published 05.11.03
Key comparison figures for Kyros Glass and Stone Technology business
area in 2002 will be published in connection with the first interim
report.
A printed version of the annual report will be mailed to all
shareholders during week 11, at which time the electronic version
will also be published at the Internet address www.kyro.fi.
Kyros Annual General Meeting will be held on 19.03.2003.
Helsinki 05.02.2003
Board of Directors
Additional information about the financial statements of the Kyro
Group is given by President and CEO Pentti Yliheljo and Chief
Financial Officer Veli Kronqvist, tel. 03-372 3111.
Investor Kyro Corporation, Mr. Mika Nevalainen, VP,
relations: Corporate Communications, tel. +358-400-882 024,
IR pages at the Internet address www.kyro.fi
Distribution: Helsinki Stock Exchanges
Key media
KYRO CORPORATION 1-12/2002, INCOME STATEMENT AND BALANCE SHEET
Consolidated Income Statement, EUR million
1-12/02 1-12/01 4-12/01
Pf* official**
Net Sales 144.3 147.0 110.9
Other operating income 0.9 0.1 0.1
Expenses 121.1 124.8 94.0
Depreciation 5.4 5.1 3.9
Operating profit 18.7 17.2 13.1
% of net sales 13.0 11.7 11.8
Financial income and expenses 0.6 -0.9 1.1
Profit before extraordinary
Items 18.1 16.3 14.2
Income tax -5.7 -4.3 -3.7
Minority interest -0.6 -1.2 -1.1
Profit for the fiscal year 11.7 10.8 9.5
Pf = Pro forma figures
Official** = The first official fiscal year of the new Kyro, after
the demerger in 2001, was 9 months.
Group balance sheet, EUR million
2002 2001
Fixed assets 73.6 71.9
Current assets
Inventories 15.7 15.7
Deferred tax receivable 6,1 4,0
Financial assets 91.7 99.7
Assets 187.1 191.4
Equity 137.1 139.7
Minority interest 0.7 3.4
Liabilities
Interest-bearing liabilities 3.7 4.5
Non-interest-bearing liabilities 38.7 36.7
Deferred tax receivable 6.9 7.1
Liabilities and equity 187.1 191.4
Key Indicators 1-12/02 1-12/01* 9 months/01**
Return on capital invested, %13.6 11.8 14.1
Return on equity, % 9.4 8.6 10.5
Equoity ratio, % 77.1 79.7 79.7
Debt/equity ratio, % -40.5 -45.0 -45.0
Investments, EUR million 6.7 3.5 2.6
% of net sales 4.7 2.4 2.3
Research and product development,
EUR million 6.6 7.4 6.3
Personnel on average 536 471 464
Personnel at period end 531 460 460
of which in Finland 370 302 302
Order book, EUR million 67.4 71.7 71.7
Key Indicators 1-12/02 1-12/01* 9 months/01**
per share
Profit/share, EUR 0.31 0.27 0.24
Equity/share, EUR 3.13 3.43 3.43
Share amount, 1000 39.675 39.675 39.675
-of which outside on 31.12 38 191 38 089 38 089
Average number of shares 38 160 39 367 39 266
Share price trend
Average price 6.25 5.18
Lowest 5.00 3.60
Highest 7.35 5.95
Share price at year end 6.34 5.58
Market capitalisation
at the end of the fiscal year
251.5 221.4
Turnover, No. 3, 084, 189 13, 271, 674
Turnover, % of total 7,8 33,5
Turnover, EUR million 19.3 68.8
Dividend/share, EUR 0.15 0.35
Dividend/earnings, % 48.9 129.6 145.8
Effective dividend yield,% 2.4 6.3
P/ E ratio 20.5 20.7 23.3
*Comparative key figures
2002 2001
Contingent liabilities, EUR million
Business mortgages 0.7
Other liabilities 7.6 5.1
Derivative contracts
Value of underlying security
Currency forward contracts 18.4 29.2
Current value
Currency forward contracts 17.5 28.8
NET SALES, OPERATING PROFIT AND ORDER BOOK PER QUARTER
Net sales
1-3/01 4-6/01 7-9/01 10-12/01 1-3/02 4-6/02 7-9/02 9-12/02
Me Me Me Me Me Me Me Me
Safety glass
technology 28.7 34.1 27.2 30.9 25.0 34.3 23.0 35,4
Energy 7.3 6.4 5.8 6.2 6.5 5.7 6.0 8,2
Parent company, other
operat. elim. 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0,0
Group total 36.1 40.6 33.1 37.2 31.6 40.0 29.0 43,6
Operating profit
1-3/01 4-6/01 7-9/01 10-12/01 1-3/02 4-6/02 7-9/02 9-12/02
Me Me Me Me Me Me Me Me
Safety glass
technology 3.5 4.8 3.6 3.3 2.5 3.9 2.4 6,7
Operating profit %
12.2 14.1 13.1 10.6 9.9 11.5 10.2 18,8
Energy 1.6 1.5 1.0 1.1 1.3 1.1 1.1 2.0
Oper. prof.% 22.2 22.9 16.7 18.3 20.6 18.5 19.1 24.3
Parent company, other
Operat. elim.-1,0 -1,2 0,3 -0,6 -0,5 -0,7 -0,6 -0,4
Group total 4,1 5,1 4,2 3,8 3,3 4,3 2,9 8,2
Oper. prof.% 11.4 12.5 12.8 10.1 10.6 10.6 9.9 18.9
Order book
3/01 6/01 9/01 12/01 3/02 6/02 09/02 12/02
Me Me Me Me Me Me Me Me
Safety glass
technology 61.2 55.3 47.0 47.6 49.5 49.7 42.1 45.2
Energy 23.9 24.6 24.4 24.1 23.6 23.0 23.0 22.2
Group tot. 85.1 79.9 71.4 71.7 73.1 72.7 65.1 67.4
