Interim report January - September, 2000

Interim report January - September, 2000 * Profit after financial items increased by 35 % to MSEK 187 (139), of which items affecting comparability accounted for a net amount of MSEK 36 (10). * Earnings per share rose by 40 % to SEK 6.65 (4.75). For the past 12-month period, earnings per share improved by 61 % to SEK 11.20 (6.95). * Invoiced sales amounted to MSEK 3,423 (3,675). For comparable units and after adjustments for currency fluctuations, invoiced sales increased by 2 %. * For 2000 as a whole, the profit after net financial items is expected to amount to some MSEK 320, which is unchanged in relation to the previous forecast. * Following the acquisition of Chubb Safes, Gunnebo has become the world leader in physical security. Sales Invoiced sales amounted to MSEK 3,423 (3,675). After adjustment for acquisitions, divestments and currency effects, invoiced sales rose by 2 %. The foreign sales ratio increased to 88 % (76). The order intake amounted to MSEK 3,600 (3,785). The order intake for the period exceeded invoiced sales by 5 %. After adjustment for acquisitions, divestments and currency effects, the order intake rose by 3 %. Sales have developed favourably on most European markets, with the exception of Sweden, where demand slackened slightly, and Germany, where developments have been very weak, especially for Garny and Gunnebo Troax. In the USA, sales have shown continued strength. Gunnebo Security increased its invoiced sales to MSEK 2,575 (2,281) while Gunnebo Engineering's sales declined to MSEK 859 (1,408) following the divestment of Gnosjö-Gruppen. Result The consolidated operating profit after depreciation of goodwill increased to MSEK 195 (180). The improvement of the operating profit for comparable units is MSEK 29, excluding items affecting comparability. The operating profit includes net items affecting comparability of MSEK 36 (0) consisting of a capital gain of MSEK 109 on the divestment of Gnosjö- Gruppen and a provision of MSEK 94 to cover decided structuring measures within Gunnebo Security. It also includes income of MSEK 41 being the refund of surplus assets from the SPP insurance company and a MSEK 20 provision to cover early retirements. The operating profit includes depreciation according to plan of MSEK 116 (146), of which depreciation of goodwill accounts for MSEK 25 (32). The return on capital employed before depreciation of goodwill improved to 22.0 % (16.3) and after depreciation of goodwill to 15.0 % (11.0). Gunnebo Security's operating profit before deprec-iation of goodwill amounted to MSEK 122 (121). Gunnebo Engineering's operating profit before depreciation of goodwill was MSEK 77 (105). The acquisition of Chubb Safes, which took place at the end of August, has so far had a marginal effect on the result. Financial items amounted to a net cost of MSEK 8 (cost 41). This includes Gunnebo's MSEK 31 (16) interest in the earnings of associate companies, which largely comprises its 50 percent share holding in Gnosjö-Gruppen. The profit after financial items improved to MSEK 187 (139), of which items affecting comparability amounted to MSEK 36 (10). The return on equity increased to 19.4 % (13.3). The operating profit for the third quarter amounted to MSEK 52 (80). The divestments of Gnosjö-Gruppen and the lock activities account for some MSEK 20 of the decrease. Acquisition of Chubb Safes At the end of August, Gunnebo acquired Chubb Safes from Assa Abloy. Chubb Safes' annual turnover amounts to some MSEK 1,200. The company has 3,600 employees, of whom 2,500 are in Asia. Chubb Safes is one of the world's best known brand names in physical security with strong penetration of markets in Europe, Asia and Africa. Chubb Safes is market leader in this product area in Great Britain, Canada, South Africa, India and Indonesia.The price paid for the net assets amounted to MSEK 700. The acquisition involved goodwill, including the right to the brand name Chubb Safes, of MSEK 390 upon consolidation, with a depreciation period of 20 years. Chubb Safes has incurred losses in recent years. An extensive restructuring programme has therefore been set in motion, and a total review of the business is now being undertaken. Production will be co-ordinated with Gunnebo Safe Production's activities and production capacity will be adjusted. In addition, several sales companies will lower their costs radically, and will be integrated with Gunnebo Security's other business activities. In connection with this acquisition, a provision of MSEK 300 was made to cover planned structuring measures. The effect of the restructuring process at Chubb Safes and of its integration with Gunnebo Security will be reported in connection with the year-end release for 2000. Chubb Safes has been consolidated with effect from September 1, 2000. The acquisition is estimated to only have a marginal effect on earnings per share for the current year. Substantial synergies will be generated by co- ordinating Chubb Safes with Gunnebo Security, in production, product development, and distribution. The full effect will be achieved within two to three years, once the integration process is completed. Divestment of Gnosjö-Gruppen At the beginning of February, 50 % of Gunnebo's shares in Gnosjö-Gruppen were sold to the Dutch company Schuttersveld N.V. The remaining future divestment of shares will expected to be recognised in income at the end of the current year. The total capital gain on the divestment, including Gunnebo's interest in Gnosjö-Gruppen's result for 2000, is estimated to amount to MSEK 220 after tax. The divestment of the first 50 % of the shares realised a capital gain of MSEK 109. Gnosjö-Gruppen is treated as an associate company as of January 1, 2000. Other structural changes In February, Gunnebo Fichet-Bauche acquired an alarm installation business from Matra Nortel Communication in Paris. with a turnover of MSEK 35. In June, Gunnebo Engineering acquired WH Scott & Son, Northern Ireland, which has an annual turnover of some MSEK 20. The process of co-ordinating production within Gunnebo Safe Production is proceeding as planned. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/10/24/20001024BIT00010/bit0001.doc The full report http://www.bit.se/bitonline/2000/10/24/20001024BIT00010/bit0002.pdf The full report