Gränges Group Year-end Report for 1999

Gränges Group Year-end Report for 1999 Continued growth and increased margins * Net sales rose by more than 31 percent during the fourth quarter - and by more than 19 percent, to MSEK 12,220 (10,249), for the year as a whole * Operating profit was up 79 percent during the final quarter (including net nonrecurring items of MSEK +30) - and increased by more than 34 percent (including net nonrecurring items of MSEK +13) for the full year, compared with 1998 * Profit before tax amounted to MSEK 700 (526), up more than 33 percent compared with 1998 * Earnings per share rose 33 percent to SEK 13.00 (9.80) Gränges in brief Okt-Dec Okt-Dec Jan-Dec Jan-Dec 1999 % 1998 1999 % 1998 Net sales, MSEK 3 347 +31 2 547 12 220 +19 10 249 1 Operating profit, MSEK 275 +79 153 789 +34 589 1 Profit before tax, MSEK 254 +83 139 700 +33 526 2 Operating margin, % 8.2 6.0 6.5 5.7 1 Return on capital 18.1 17.0 employed, % 1 Return on shareholders' 18.6 16.0 equity, % Debt/equity ratio, % 66 43 1 Before nonrecurring gain of MSEK 69 2 Before nonrecurring items - margin of 7,3% For further information, please contact Cecilia Lager, Vice President - Investor Relations & Communications, tel: +46 8-459 5941. The year-end report is also available on Gränges' web site on the Internet, www.graenges.se STRONG GROWTH AND INCREASED MARGINS The full year 1999 Gränges continued to make improvements in its earnings and margins. Operating profit, which amounted to MSEK 789 for the year, was favorably affected by net nonrecurring items of MSEK 13. These items related primarily to insurance compensation paid to Strip & Foil (fire at the rolling plant in Skultuna), termination costs for the foils plant in Belgium and closure costs for the Autoplastics plants in Olofström and Kristinehamn. Operating profit improved by 34 percent, compared with the MSEK 589 reported for 1998. Accordingly, the operating margin was 6.5 percent, compared with 5.7 percent in 1998. Excluding nonrecurring items, the operating margin was 6.3 percent. The improvement in earnings, which was noted by all three business areas, was due to a combination of higher volumes, increased efficiency and a favorable mix of products with better value-added margins. The Autoplastics business area, which is continuing its restructuring work, showed strongly improved earnings during the final quarter of 1999 but its earnings for the year as a whole remained unsatisfactory. During the year, the Group's net sales rose by slightly more than 19 percent to MSEK 12,220 (10,249). The market for Gränges' products was favorable during the year. The Group continued to hold leading market positions and increased its share in several markets. Markets that developed particularly strongly included France, Germany, Poland and the Netherlands. The Autoplastics business area showed strong sales growth of 50 percent, compared with 1998. The merged operations from Norsk Hydro accounted for slightly more than half of the increase. In terms of volumes, approximately 289,400 (248,100) tonnes of value-added aluminium products were delivered during 1999, an increase of 16 percent (for comparable operations, the volume increase was more than 6 percent). The European market for extrusions and rolled aluminium increased by approximately 3 percent during the year. Profit after tax totaled MSEK 478 (359), corresponding to earnings per share of SEK 13,00 (9.80) and an 18.6-percent (16.0) return on shareholders' equity. The return on capital employed for the year was 18.1 percent (17.0). All figures for 1998 have been calculated prior to the nonrecurring capital gain of MSEK 69. Tax costs for the Group correspond to 34 percent. Fourth quarter Net sales during Q4 rose by more than 31 percent to MSEK 3,347 (2,547). Operating profit rose to MSEK 275 (153). Excluding nonrecurring items of MSEK + 30, operating profit amounted to MSEK 245, up 60 percent, resulting in an operating margin of 7.3 percent (6.0). In addition to volume increases (+23 percent), Q4 earnings were positively affected by increased efficiency and a good price and product mix, with a higher level of value- added products within all business areas. The Extrusions business area continued to show a strong trend of earnings in most of its markets. Operating profit for Extrusions amounted to MSEK 162 (116), corresponding to a margin of 9.5 (8.8) percent. Within Strip & Foil, Heat Transfer operations continued its favorable growth rate. During the quarter, Heat Transfer showed growth of 26 percent and a strong improvement in earnings. Strip & Foil posted operating profit of MSEK 85 (34). Excluding nonrecurring items for the quarter of MSEK +43, this business area showed operating profit of MSEK 42, equivalent to an operating margin of 5.8 (5.2) percent. The Autoplastics business area continued to show strong sales growth during the quarter (+63 percent), slightly more than half of which was accounted for by merged operations. The extensive restructuring work during the year is beginning to show results and Autoplastics reported a significant increase in operating profit for the fourth quarter to MSEK 29 (13). Excluding nonrecurring items, the business area had operating profit of MSEK 42, equivalent to an operating margin of 4.7 (2.3) percent. 99:4 99:3 99:2 99:1 98:4 98:3 98:2 98:1 Net sales, 3 347 2 981 3 058 2 835 2 547 2 435 2 648 2 619 MSEK Operating 275 172 186 157 153 134 163 139 profit, MSEK 1 Profit before 253 147 166 134 139 116 146 126 tax, MSEK 2 1 Operating 8.2 5.8 6.1 5.5 6.0 5.5 6.1 5.3 margin, % Deliveries, 72 300 70 000 74 800 72 300 57 700 59 800 65 600 65 000 tonnes 1 Before capital gain of 69 MSEK 2 Before nonrecurring items the margin is 7.3% ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/01/27/20000127BIT00140/bit0001.doc http://www.bit.se/bitonline/2000/01/27/20000127BIT00140/bit0002.pdf