NET SALES AND OPERATING PROFIT FOR JANUA
Kyro Corporation STOCK EXCHANGE RELEASE 7 May 2003, 8:30
NET SALES AND OPERATING PROFIT FOR JANUARY-MARCH GREW STRONGLY
- Net sales grew with acquisitions by 72% to EUR 54.4 (31.6) million
- Operating profit before amortisation of goodwill grew by 55% to
EUR 5.2 (3.4) million
- Profit for the period totalled EUR 2.1 (2.6) million
- Earnings/share EUR 0.05 (0.07), equity/share EUR 3.33 (3.15)
- Financial position good, equity ratio 31.3.2003 at 54.7% (70.7%)
- Order book 31.3.2003 at a good level of EUR 85.6 (73.1) million
- Acquisitions made Kyro the worlds leading supplier of glass
processing machinery and equipment
- Tamglass and Z. Bavelloni began close cooperation and synergy
utilisation
GROUP STRUCTURE AND COMPARISON FIGURES
Kyros Safety Glass Technology business area expanded through
acquisitions and became the Glass and Stone Technology business area,
known by the name of Glaston Technologies. While Kyro already
previously was the technology and market leader in safety glass
machinery, it now is also the biggest supplier of machinery and
equipment for the glass processing industry as a whole.
Kyros second business area is Energy, which consists of the energy
supplier Kyro Power Oy.
Kyro Corporation has purchased all shares of Uniglass Engineering Oy
in April 2002, a 70% stake in Finton Parvekejärjestelmät Oy in
November 2002, as well as the Z. Bavelloni and Glasto groups in full
and a 70% interest in Suomen Lämpölasi Oy in January 2003.
Consolidated Kyro Group figures include Uniglass Engineering Oy as of
1 May 2002, Finton Parvekejärjestelmät Oy as of 1 November 2002, and
Z. Bavelloni, Glasto and Suomen Lämpölasi Oy as of 1 January 2003.
GROUP STRATEGY
Kyro aims at good profitability based on market leadership and faster
long-term growth than the market. The company focuses primarily on
growing its glass processing machinery business both organically and
through acquisitions.
Organic growth is sought through a comprehensive regional presence in
the main market areas, substantial investments in product development
and overall glass processing expertise, and the continuous improvement
of operations.
Carefully selected acquisitions are pursued to make use of marketing
and customer synergies provided by complementary products and
networks. Acquisitions and organic growth are intended to support one
another.
NET SALES AND PROFIT
Kyro Group net sales grew with acquisitions by 72% to EUR 54.4 (31.6)
million. The Groups operating profit before amortisation of goodwill
grew by 55% to EUR 5.2 (3.4) million, representing 9.6% (10.6%) of net
sales. The amortisation of goodwill totalled EUR 0.8 (0.02) million.
Unamortised goodwill on 31.3.2003 amounted to EUR 58.4 million.
Operating profit after the amortisation of goodwill grew by 32% to EUR
4.4 (3.3) million.
Net financing income amounted to EUR 0.6 (1.1) million. This includes
interest, dividend and other financing income of EUR 0.9 (1.4) million
and interest and other financing expenses of EUR 1.5 (0.3) million.
These financing expenses were made up of EUR 0.1 (0.0) million in
interest expenses, EUR 0.5 (0.1) million in foreign exchange losses,
EUR 0.8 (0.2) million in securities valuation losses, and EUR 0.1
(0.0) million in other financing expenses.
Income before taxes totalled EUR 3.7 (4.4) million. Profit for the
period after taxes and minority interest was EUR 2.1 (2.6) million.
Earnings per share were EUR 0.05 (0.07).
Kyro Groups total order book stood at EUR 85.6 million on 31.3.2003
(EUR 67.4 million on 31.12.2002). The total order book was boosted by
increased orders at Tamglass and by the order books of the new Group
companies.
Figure 1. Net sales, operating profit before amortisation of goodwill,
and order book of Kyro Group business areas, EUR million
Net Sales EBITA** Order Book
1-3/03 1-3/02 1-3/03 1-3/02 3/03 3/02
Glass and Stone Technology* 46.4 25.0 4.3 2.5 63.6 49.5
Energy 8.0 6.5 1.7 1.3 22.0 23.6
Parent company, other
operations and elimnations 0.0 0.1 -0.8 -0.5
Group total 54.4 31.6 5.2 3.4 85.6 73.1
* 1-3/2002 figures for the Glass and Stone Technology business area
exclude companies acquired subsequent to 31.3.2002.
** Operating profit before amortisation of consolidation goodwill.
FINANCING
The Groups financial position is good. The equity ratio on 31.3.2003
stood at 54.7% (70.7%). Liquid cash assets and securities totalled EUR
32.4 million at the end of the period (EUR 55.7 million on
31.12.2002).
The first part of the Bavelloni and Glasto purchase price was paid in
January 2003. A total of EUR 5.9 million was paid as dividends on
31.3.2003.
Equity per share stood at EUR 3.33 (3.15) on 31.3.2003. Net interest-
bearing liabilities totalled EUR 11.1 (-60.6) million. Net debt to
equity (gearing) stood at 8.4% (48.9%).
INVESTMENTS
The Groups investment totalled EUR 60.8 (0.3) million. The major part
of the investments consists of the acquisition cost of Bavelloni,
Glasto and Suomen Lämpölasi Oy shares.
PERSONNEL
Kyro Group had a total of 1,147 (478) employees at the end of the
period under review. The increase in the employee count is due to the
personnel of the acquired companies as well as growth primarily in
Tamglass Brazilian and Chinese units. The employee count of the
acquired companies on 31.3.2003 was 653.
Breakdown of personnel by business area
31.3.2003 31.3.2002
Glass and Stone Technology 1,113 446
Energy 24 23
Kyro Corporation 10 9
Kyro Group 1,147 478
SHARES AND SHARE PRICE DEVELOPMENT
A total of 565,214 Kyro Corporation shares were traded at the Helsinki
Exchanges during January-March 2003, which equals 1.4% of the total
number of shares. The highest price quoted on the Helsinki Exchanges
was EUR 6.84 and the lowest EUR 5.40. The average price for the period
was EUR 6.42.
ANNUAL GENERAL MEETING
Kyro Corporations Annual General Meeting held on 19.3.2003 decided on
the matters required under §14 of the companys Articles of
Association. The annual General Meeting adopted the companys
financial statements for 2002 and released Kyros board of directors
and President from liability for the fiscal year.
The Annual General Meeting adopted the board of directors dividend
proposal of EUR 0.15 per share, or a total of EUR 5.9 million. The
dividend was paid on 31.3.2003 to shareholders of record as of
24.3.2003, as reflected in the companys shareholder register
maintained by the Finnish Central Securities Depository Ltd.
Lauri Fontell notified the company on 10.3.2003 that he wished to
leave Kyro Corporations board of directors before the end of his
term. In his place for the remaining term was elected Heikki
Mairinoja, M.Sc.(Eng) and M.Sc.(Econ) by unanimous vote. Kyro
Corporations other board members are Lars Hammarén, Carl-Olaf Homén,
Barbro Koljonen, Carl-Johan Numelin, Carl-Johan Rosenbröijer, Christer
Sumelius and Gerhard Wendt. They were all elected by the 22.11.2000
Annual General Meeting. The current boards term of office runs from
2001 to 2004.
The Annual General Meeting gave the board of directors new
authorisations to repurchase and convey own shares for use as
consideration in possible acquisitions, funding of investments and
other corporate transactions, as well as to otherwise convey or cancel
them. The combined amount of the purchased shares together with shares
already in possession of the company may correspond to a maximum of 5%
of the companys share capital. These authorisations are valid for one
year.
REPURCHASE AND CONVEYANCE OF OWN SHARES
Based on the authorisation given to it by the Annual General Meeting,
Kyro Corporations board of directors decided on 21.3.2003 to
repurchase a maximum of 1,983,750 shares through public trading in the
Helsinki Exchanges at the going market value. It was decided that the
repurchase of shares would start no earlier than 31.3.2003 and end no
later than 19.3.2004. As of 7 May 2003, Kyro Corporation had not made
use of this authorisation.
A total of 1,172,533 previously acquired own shares, or 3.0% of total
share capital, were conveyed under the Z. Bavelloni acquisition
agreement at a unit price of EUR 5.97 corresponding to the market
price on the agreement date of 12.12.2002.
A total of 63,005 previously acquired own shares, or 0.2% of total
share capital, were conveyed under the Suomen Lämpölasi acquisition
agreement at a unit price of EUR 6.35 corresponding to the average
market price during 18.12.2002-3.1.2003.
Kyro Corporation held 248,292 own shares amounting to 0.6% of its
share capital on 31.3.2003.
BOARD OF DIRECTORS AND AUDITORS
The companys board of directors elected Carl-Johan Numelin as its
Chairman and Christer Sumelius as Deputy Chairman at a meeting held on
19.3.2003. The Annual General Meeting held on 19.3.2003 elected KPMG
Wideri Oy Ab as auditor with Sixten Nyman, KHT, as the responsible
auditor.
GLASS AND STONE TECHNOLOGY BUSINESS AREA GLASTON TECHNOLOGIES
Net sales, operating profit and order book
Kyros Glass and Stone Technology business area, which was named as
Glaston Technologies during the period under review, includes
Tamglass, the market and technology leader in safety glass machinery,
Z. Bavelloni, a leading manufacturer of glass pre-processing machinery
and tools, the Glasto group of distribution companies, Uniglass
Engineering, a maker of flat tempering machines, and Tamglass Glass
Processing, a significant Finnish comprehensive supplier of processed
glass products.
The net sales of business area grew with acquisitions by 85% to EUR
46.6 (25.0) million. Operating profit before amortisation of goodwill
grew by 72% to EUR 4.3 (2.5) million, representing 9.3% (10.0%) of net
sales.
The net sales of the Tamglass group of companies remained at the same
level as in the corresponding period of the previous year, despite the
strengthening of the euro and the postponement of some deliveries to
the following quarter. The profitability of Tamglass improved from the
corresponding period of the previous year, due to new products and
improved productivity at its Finnish and U.S. production plants.
The net sales and profitability of the Bavelloni group declined from
the record levels they reached during the first quarter of last year.
This decline was mainly due to the weakening of several important
billing currencies against the euro and the postponement of decisions
to place orders.
The order book of Glaston Technologies on 31.3.2003 stood at EUR 63.6
million (EUR 45.2 million on 31.12.2002). The order book of Tamglass
grew during the period strongly from the beginning of the year. The
order book of Z. Bavelloni matched the level at the beginning of the
year.
The order book of Z. Bavelloni is relatively modest in relation to its
business volume because most of the machinery and tools it sells are
delivered from stock, with the exception of the largest CNC lines.
Consequently, monthly business volume changes are typically greater
than for Tamglass.
Synergies between Tamglass, Z. Bavelloni and Glasto
Bavelloni, Glasto and Tamglass cooperate with one another closely.
Tamglass and Bavelloni continue to conduct business under their
respective well-established brands and current organisations. Synergy
benefits are achieved particularly through selling the companies
products to their combined customer base as well as cooperation in
purchasing, logistics and maintenance services.
Markets and sales
The development of glass architecture, the proliferation of value-
added glass products, the growth and increasing diversity of glass
surfaces on vehicles, and the advancement of safety glass legislation
and regulations all serve to increase demand for processed glass
products.
The growth in glass processing creates the basis for the long-term
growth of the glass processing machinery business. Safety glass is the
fastest growing segment of the glass processing industry.
Weak economic growth and the war in Iraq continued to slow down
investment decisions in Europe and the United States. Favourable
demand continued in the Far East.
Production and products
The capacity utilisation rate of Glaston Technologies plants was good
during the period under review. Bavellonis Bregnano plant expansion,
which was begun in 2002, was taken into partial use toward the end of
the period. This expansion will ensure adequate capacity as the market
for glass pre-processing machinery and equipment continues to grow.
Uniglass Engineerings flat tempering machine business is performing
to plan due to the reorganisation and efficiency measures undertaken
last year.
Products of the Glaston Technologies companies hold strong positions
in their respective categories. The product ranges of Tamglass safety
glass machinery and Bavellonis pre-processing machinery and equipment
are the broadest in the industry.
Tamglass, Bavelloni and Uniglass Engineering will participate this
year in a number of trade fairs, with the years main commercial event
being held in June at Milan, where Tamglass and Z. Bavelloni will also
launch new products.
Maintenance services
The service order book of Glaston Technologies is growing. The sales
of spare parts and product updates was affected by the general
investment climate, which slowed down the growth of maintenance
service business. The sale of used machines, which constitutes a part
of the service business, was modest despite strong demand because of
the scarcity of machines available for reconditioning.
Tamglass Glass Processing
Tamglass Glass Processing plays an important role in the technology
development of Glaston Technologies. The newly acquired companies,
Tamglass Finton and Tamglass Insulated Glass, enhance this role
further. This combination of three glass processing companies is a
comprehensive supplier of glass products for building exteriors.
ENERGY KYRO POWER
Kyro Power net sales grew by 24 % to EUR 8.0 (6.5) million. Operating
profit increased by 25 % to EUR 1.7 (1.3) million, representing 20.8%
(20.6%) of net sales. Net sales and operating profit grew due to
strong energy demand and an increase in electricity prices. Kyro
Powers order book (12 months) on 31.3.2003 totalled EUR 22.0 (23.6)
million.
The water situation and cold winter in the Nordic countries continued
to maintain the demand and market price of electricity at a high
level. Scarce water reserves restricted the capacity utilisation of
the hydroelectric plant to less than 20% of normal. Kyro Powers power
plants did not experience any operating problems.
The capacity utilisation of customers in the forest products industry
was at a good level. Long-term energy supply contracts provide the
customers of Kyro Power with steady electricity rates and Kyro Power
with a steady business volume and good predictability.
FUTURE OUTLOOK
Kyro Group and its business areas are well-positioned for 2003.
Glaston Technologies is the global market leader in its field, and its
order and offer books are at a good level. New orders are expected to
turn to growth as soon as the general investment climate improves.
Kyro Powers net sales and operating profit in 2003 are expected to
grow slightly from the level of the previous year.
Kyro net sales in 2003 will grow strongly following the acquisitions
that have been made. Investments in these acquisitions, the business
cycle, and foreign exchange movements may reduce the Groups relative
profitability this year, but the cash flow from operations is expected
to increase.
Provided that the general economic conditions do not weaken further,
Kyro Groups profitability is expected to be at a good level in 2003.
TIMING OF FINANCIAL RELEASES
Kyros next interim reports will be published as follows:
Interim report 2/2003 (1.1-30.6.2003) on 14 August 2003
Interim report 3/2003 (1.1-30.9.2003) on 5 November 2003
Kyros electronic and printed annual report for 2002 were published in
March 2003. The electronic annual report is available at www.kyro.fi,
and the printed report may be ordered through e-mail from
kristiina.springfelt@kyro.fi.
Helsinki, 7 May 2003
Board of Directors
Additional information on Kyros financial reports is available from
Kyros President, Pentti Yliheljo, and from its Chief Financial
Officer, Veli Kronqvist, phone: +358 3 372 3111.
Investor Kyro Corporation, Mr. Mika Nevalainen, VP, Corporate
Relations: Communications, Phone +358 400 882 024, IR pages at
the Internet address www.kyro.fi
Distribution: Helsinki Exchanges
Key media
KYRO GROUP 1-3/2003, INCOME STATEMENT AND BALANCE SHEET
Consolidated Income Statement, EUR million
1-3/03 1-03/02* 1-12/02*
Net sales 54.4 31.6 144.3
Other oper. income 0.3 0.9
Expenses 47.9 27.0 121.1
Depreciation and amortisation
without consolidated goodwill 1.6 1.3 5.2
Operating profit before
amortisation
of consolidated goodwill 5.2 3.4 18.9
% of net sales 9.6 10.6 13.1
Amort. of consol. goodwill 0.8 0.2
Operating profit 4.4 3.3 18.7
% of net sales 8.1 10.6 13.0
Financing income and exp. 0.6 1.1 -0.6
Earnings before tax 3.7 4.4 18.1
Income taxes -1.5 -1.2 -5.7
Minority interest -0.1 -0.6 -0.6
Net income 2.1 2.6 11.7
* Comparative figures for 2002 exclude subsequent acquisitions.
Consolidated Balance Sheet, EUR million
31.3.03 31.3.02* 31.12.02*
Fixed assets 124.9 72.2 73.6
Current assets
Inventories 37.2 17.3 15.7
Deferred tax receivable 6.7 4.1 6.1
Financial assets 88.2 103.6 91.7
Total assets 257.0 197.2 187.1
Shareholders equity 133.2 129.1 137.1
Minority interest 1.3 4.0 0.7
Non-discretionary reserves 5.1
Liabilities
Interest bearing liab. 43.1 4.4 3.7
Non-interest bearing liab. 65.7 52.8 38.7
Deferred tax liability 8.6 7.0 6.9
Total equity and liabilities 257.0 197.2 187.1
Key figures 1-03/03 1-03/02* 1-12/02*
Earnings per share, EUR 0.05 0.07 0.31
Equity per share, EUR 3.33 3.15 3.36
Total shares,
thousands 39 675 39 675 39 675
of which outstanding 39 427 38 088 38 191
Return on capital, % 10.3 13.3 13.6
Return on equity, % 6.8 9.8 9.4
Equity ratio, % 54.7 70.7 77.1
Gearing, % 8.4 -48.9 -40.5
Investments, EUR million 60.8 0.3 6.8
Personnel at end of period 1,147 478 531
Personnel on average 1,015 474 536
Order book, EUR million 85.6 73.1 67.4
Contingent liabilities, EUR million
Mortgages 0.8 0.5
Other liabilities 18.7 5.6 7.8
Derivative contracts
Value of underlying security
Forward currency contracts 31.2 36.2 18.4
Market value
Forward currency contracts 30.5 36.5 17.5
Cash Flow, EUR million
Cash flow from operations
before taxes and financing 5.1 -0.8 20.5
Financing -0.3 0.7 -0.5
Taxes paid -0.7 1.5 -5.3
Cash flow from operations 4.1 1.4 14.7
Cash flow from investments -0.7 0.1 -1.1
Acquisition of subsidiaries -72.1 -0.3 -2.3
Cash flow from investments -72.8 -0.2 -3.4
Dividends paid -5.8 -13.3
Disposal of treasury shares 7.4 0.7
Change in net debt 44.5 -0.5 -2.2
Cash flow from financing 46.1 -0.5 -14.7
Change in cash and equiv. 22.6 0.7 -3.4
NET SALES, OPERATING PROFIT BEFORE THE AMORTISATION OF CONSOLIDATED
GOODWILL, AND ORDER BOOK BY QUARTER
Net sales
1-3/02 4-6/02 7-9/02 10-12/02 1-3/03
EUR million
Glass and stone
technology 25.0 34.3 23.0 35.4 46.4
Energy 6.5 5.7 6.0 8.2 8.0
Parent company, other
opers, elim. 0.1 0.0 0.0 0.0 0.0
Group total 31.6 40.0 29.0 43.6 54.4
Operating profit before the amortisation of
consolidated goodwill/EBITA%
1-3/02 4-6/02 7-9/02 10-12/02 1-3/03
EUR million
Glass and stone
technology 2.5 3.9 2.4 6.7 4.3
EBITA% 10.0 11.5 10.3 18.9 9.3
Energy 1.3 1.1 1.1 2.0 1.7
EBITA% 20.6 18.5 19.1 24.3 20.8
Parent company, other
opers, elim. -0.5 -0.7 -0.6 -0.4 -0.8
Group total 3.4 4.3 2.9 8.3 5.2
EBITA% 10.6 10.8 10.1 19.1 9.6
Order book
3/02 6/02 9/02 12/02 3/03
EUR million
Glass and stone
technology 49.5 49.7 42.1 45.2 63.6
Energy 23.6 23.0 23.0 22.2 22.0
Group total 73.1 72.7 65.1 67.4 85.6
