Interim Report 1 January to 31 March 2001

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Interim Report 1 January to 31 March 2001 The first quarter of 2001 · Earnings before taxes rose by 19 % to MSEK 55,8 (46,9) · The Order intake rose to MSEK 1 177 (1 123), an increase of 5 %, in a comparable structure · Invoiced sale rose to MSEK 1 125 (1 060), an increase of 6 %, in comparable structure · Motecos production in Swedish relocated to Kina and Malaysia · Hexagon focussed in to four business areas · Acquisition of Brown & Sharpe completed - consolidation from 1 of May 2001 · Disposal of, substantially, all operating within Tecla (formerly AKA) and Fagerberg. The divestiture generated a capital gain of MSEK 19,8 For further information, please call: Ola Rollén, CEO, Hexagon AB, tel. no +46 (0) 8 - 601 26 20 Subscription for Hexagon's financial information available from e-mail at www.hexagon.se Select Reports or alternatively Press Releases Hexagon AB (publ) Tel +46 (0) 8 601 26 20 Box 1112 Fax +46 (0) 8 601 26 21 131 26 Nacka Strand www.hexagon.se E-mail postmaster@hexagon.se Earnings and invoiced sales for the first quarter of 2001 Earnings after financial items amounted to MSEK 55,8 (46,9), an increase by 19 %. This amount consist of a capital gain of MSEK 19,8 (1,7) from the sale of Tecla (formerly AKA) / Fagerberg. The divestiture is effective as of January 1st 2001. Adjusted for capital gains the earnings before taxes fell to MSEK 36,0 (45,2). The Reduction is a consequence of lower sales of hand set antennas in Moteco. Motecos loss for the first quarter amounted to MSEK -10,6 (0,5). GigaAnt ABs loss of MSEK -4,8 (0,0) is related to the ongoing development of Bluetooth antennas . The earning before taxes, excluding the capital gain and the loss in Wireless, increased by 16 % to MSEK 52,0 (45,0). The Group net revenue amounted to MSEK 1 125 (1 210). The reduction is a consequence of the divestitures and lower net sales in Moteco. In a comparable structure the net sales grew by 6 % from MSEK 1 060 to MSEK 1 125. The EBIT margin increased to 5,9 % (4,6). The EBIT margin excluding the capital gain was 4,2 % (4,4) during the first quarter. Order intake for the first quarter of 2001 The Order intake increased by 5 % to MSEK 1 123, in a comparable structure. Quarterly figures 2000 2001 Q 1 Q 2 Q 3 Q 4 Q 1 Order intake 1 292 1 343 1 184 1 395 1 177 Invoiced sales 1 210 1 289 1 184 1 416 1 125 Earnings after financial items 47 122 61 -7 55,8 EBIT margin* 4,4% 5,0% 3,6% 6,1% 4,2% *= Adjusted for capital gains and non-recurring items New Group structure Hexagon have during the past year acquired Berendsens hydraulic operations in the Nordic region and sold Norfoods, JMBC and Tecla AB (formerly AKA Industriprodukter) and Gustaf Fagerberg excluding these companies filter operations. Furthermore has the operation in Brown & Sharpe Inc acquired by May 1st 2001. The restructuring of the group makes it possible for Hexagon to focus the operations into a few core businesses. Hexagon's operations are divided into four business areas: Hexagon Automation Dacke Hydraulik is the core in this business area including Berendsens hydraulic operations in the Nordic region witch was acquired in June 2000. The business area also includes the filter operations that were a part of Tecla/Fagerberg. Automation will continue to expand within the segments aftermarket services and wind power as well as geographically. The turnover of the business area is approximated to SEK 2,2 billion on an annual basis. Hexagon Engineering The Business area consists of the engineering groups SwePart, Johnson Industries and Gislaved Gummi. The common denominator for these companies is that they all supply components and systems to leading OEM-buyers. The business area has a number of interesting expansion projects which will lead to new structures. The turnover of the business is approximated SEK 2,1 billion on an annual year basis. Hexagon Wireless The strategic target for the business area is to strengthen Moteco´s position as leading supplier of mobile phone antennas as well as to position gigaAnt as one of the largest manufacturers of Bluetooth applications. The turnover of the business is approximated MSEK 200 on an annual basis. Hexagon Metrology The business area will, initially, consist of Brown & Sharpe that is the world leader in metrology. The Acquisition was completed on May 1st 2001. The Business area is expected to have a turnover of MUSD 290 (SEK 2,9 billion) on an annual basis. Profitability Return on average shareholders equity was 8 % (7) after earnings were charged with full tax. The return on average capital employed amounted to 12 % (10). Financial position of the group On March 31st 2001, the equity ratio was 51 % (52). The Net equity, amounting to MSEK 1732 (1 642), has been affected by the change in accounting principles issued by the Swedish Financial Accounting Standards Council, Recommendation No 9. The Change in accounting principles increases the Net equity in the Hexagon group by MSEK 154, which is equal to the tax gain in Hexagons loss carry forwards. If this accounting principle had been in effect on Dec 31st 2000 the group net equity would have been MSEK 1 685. All historical values have been corrected for the change in accounting principles. Cash including non-utilised over draft facilities amounted to MSEK 368 (344). The non-utilised portion of the syndicated bank loan amounted to MSEK 838 (848). The Group net debt amounted to MSEK 300 (700). The net gearing was 0,17 times (0,43). The net gearing has been reduced with MSEK 406 out of which MSEK 365 is the cash effect from the sale of Tecla/Fagerberg. The Cash from this transaction was received on April 5th 2001. Interest coverage ratio amounted to 3,6 times (5,3). In connection to the Brown & Sharpe bid an agreement has been made to borrow on a short-term basis until a new multi-currency syndicated facility is negotiated. The New facility is expected to be placed during June 2001. The Group investments in fixed assets amounted to MSEK 31 (27). The group has sold assets for a net worth of MSEK 1 (2). The Group depreciations amounted to MSEK 39 (48). Cash flow The Cash flow from operations before working capital changes were MSEK 57 (72), which corresponds to SEK 3,82 per share (4,87). The operative cash flow amounted to MSEK -87 (-49). (MSEK) 2001 Q 1 2000 Q 1 Cash flow from operations before working capital 57 72 changes Working capital net change -114 -96 Net cash flow from operations -57 -24 Net investments in fixed assets -30 -25 Operational cash flow -87 -49 Cash flow from other investment activities 420 3 Cash flow from financing activities -351 37 Change in net cash position -18 -9 Group Tax rate Hexagons tax rate deviates from the Swedish tax rate of 28% because of goodwill amortisation as well as operations abroad. Net sales and earnings (Q 1) including distributed goodwill depreciations per business area (business area as operating earnings) Net sales Earnings (Mkr) 2001 2000 2001 2000 Hexagon Automation 530 182 18,7 2,9 Hexagon Engineering 579 567 43,5 41,9 Hexagon Wireless 24 55 -15,4 0,6 Hexagon Metrology - - - - Other operations* - 412 - 5,5 Share of earning in affiliates - - 4,6 7,2 Capital gains - - 19,8 1,7 Financial net - - -10,8 - 8,5 Group adjustments and group costs - 8 - 6 - 4,6 - 4,4 Group 1 125 1 210 55,8 46,9 * Under other companies reports Tecla, Fagerberg and Norfoods whish was disposed of during 2000 Hexagon Automation Invoiced sales within the business area amounted to MSEK 530 (182). Order intake increased to MSEK 595 (157). Net sales in a comparable structure rose by 10 % and order intake rose by 11 %. EBIT rose and amounted to MSEK 18,7 (2,9). Berendsen PMC Nordic was acquired on June 13th 2000 and with an expected turnover of MSEK 1 100 on an annual basis is influencing the comparisons considerably. Most entities within Automation have developed favourably during the period. Hexagon Engineering Invoiced sales amounted to MSEK 579 (567) and the order intake was MSEK 567 (531). Comparisons are affected by the divestiture of Johnson Metal Bearing Components A/S. Net sales in a comparable structure rose by 10 % and order intake rose by 7 %. The EBIT rose to MSEK 43,5 (41,9). All unit in the business area record higher operating profits than the previous year except for the heavy vehicle related entities within SwePart. These entities have noticed a significant reduction in demand because of the slow down in that industry. Hexagon Wireless Invoiced sales in the business area fell to MSEK 24 (55) and EBIT deteriorated to MSEK -15,4 (0,6). The Operation in gigaAnt AB, geared to antenna solutions for Bluetooth is proceeding according to plan. Invoiced sales in gigaAnt amounted to MSEK 0,8 (0) and EBIT was MSEK -4,8 (0). Motecos (antennas for mobile telephones) order intake was 75 % lower than the previous year. Invoiced sales were 59 % down since Motecos principal customer had a significant drop in shipments as well as too high components inventories. Moteco has received several new orders from Asian manufacturers of mobile phones. Deliveries will ramp up successively during the remainder of the year. The Relocation of Motecos production from Sweden to Kina and Malaysia is running according to plan. Affiliated companies VBG AB contributes to Hexagons earning in accordance with the equity method with MSEK 4,6 (7,2). Share date The Earnings per share after tax was SEK 2,41 (2,02). The Equity per share was SEK 117 (111) as of March the 31 2001. The share closed at SEK130 (144). The total number of shares outstanding was 14 793 182 (14 793 182). Parent company The Parent company recorded earnings after financial items amounting to MSEK 57,6 (-5,9). The Main reason for the increase is capital gains as well as dividends from affiliated companies. The Equity ratio in the parent company was 54 % (55). The Shareholders equity including the capital proportion of untaxed reserves amounted to MSEK 1 407 (1 222). Liquid assets, including unutilised overdraft facilities amounted to MSEK 226 (191). The corresponding figure at 31 December was MSEK 211. Accounting principles Hexagon complies with the recommendations issued by the Swedish Financial Accounting Standards Council. Except for the above-mentioned change in accounting principles regarding the taxation of loss carry forwards Hexagon applies the same accounting standards as before. Subscription warrants 4 May 2000 Hexagon's annual general meeting decided to introduce a warrants programme. The Motive was to facilitate for key personnel in the Group to become shareholders in the company in the long term. 272 000 warrants rights of 700 000 had been subscribed. Each warrant right entitles the holder to subscribe one new share of series B during the period from 1 June 2002 up to and including 31 May 2005 for SEK 201. The warrant rights are transferred at market value. No dilution with calculation of the key ratio Reports published during 2001 Quarter 2 6th August 2001 Quarter 3 30th October 2001 Forecast for fiscal 2001 A Downturn in the economy appears likely. Hexagon Wireless has been affected by the general slow down that the telecom sector is currently experiencing. However, if the slowdown is brief and the growth in the global economy picks up towards the end of 2001, Hexagon should still be able to achieve its goal of profit growth of at least 15 per cent during the current fiscal year. Nacka Strand 7th of May 2001 HEXAGON AB (publ) Ola Rollén C.E.O. and President Consolidate income statement - 2001 2000 Outcome 2000 summary last (MSEK) Q 1 Q 1 12 month Full period year Net sales 1 125,4 1 209,8 5 014,4 5 098,8 Gross profit 240,8 244,8 -1 128,8 1 132,8 Sales expenses -103,1 -111,3 -518,1 -526,3 Administration costs -90,2 -81,9 -387,5 -379,2 R & D costs -7,6 -6,1 -28,1 -26,6 Other operational costs and 2,3 1,0 11,1 9,8 revenues Non-recurring items - - 13,6 13,6 Share of earnings in affiliates 4,6 7,2 21,6 24,2 Capital gains earnings sale 19,8 1,7 36,7 18,6 Group company Operating profit 66,6 55,4 278,1 266,9 Financial revenue and expenses -10,8 -8,5 -46,0 -43,7 Income before taxes 55,8 46,9 232,1 223,2 Tax -19,3 -16,3 -83,9 -80,9 Minority interest -0,8 -0,7 -3,5 -3,4 Net income 35,7 29,9 144,7 138,9 Deprecations are included with -38,9 - 47,9 -193,9 -202,9 Consolidated balance Sheet - 2001-03-31 2000-03-31 2000-12-31 summary (MSEK) Goodwill 164,4 311,0 253,5 Other fixed assets 1 173,6 1 216,6 1 293,2 Total fixed assets 1 338,0 1 527,6 1 546,7 Other current assets 1 490,7 1 526,1 1 766,3 Other interest bearing current 406,1 0,0 40,4 assets* Cash and cash equivalents 176,3 97,9 194,1 Total current assets 2 073,1 1 624,0 2 000,8 TOTAL ASSETS 3 411,1 3 151,6 3 547,5 Shareholders equity 1 696,6 1 611,9 1 546,0 Periods reported net profit 35,7 29,9 138,9 Total shareholders equity 1 732,3 1 641,8 1 684,9 Minority interest 14,1 10,4 13,2 Interest bearing allocations and 882,8 798,2 873,7 liabilities Non interest bearing allocations 781,9 701,2 975,7 and liabilities Total allocations and liabilities 1 664,7 1 499,4 1 849,4 TOTAL EQUITY, ALLOCATIONS AND 3 411,1 3 151,6 3 547,5 LIABILITIES * Payment for the divestitures of Tecla, Fagerbergs and Norfoods Change of Group shareholders equity Q 1 2001 Q 1 2000 Full year (MSEK) 2000 Amounts at 1 January 1 684,9 1 616,1 1 616,1 Dividend - - -74,0 Subscription warrants - - 3,4 Translation difference 11,7 -4,2 0,5 Net income 35,7 29,9 138,9 Amounts at 31 March 1 732,3 1 641,8 1 684,9 Key ratios Q 1 2001 Q 1 2000 Full year 2000 Earnings per share after full tax 2,41 2,02 9,39 (SEK) Cash flow per share (SEK) 3,82 4,87 25,59 Return on shareholders equity 8 7 8 after tax (%) Return on capital employed (%) 12 10 12 Solvency ratio (%) 51 52 48 Visible shareholders equity per 117 111 114 share (SEK) Share price (SEK) 130 144 120 Average numbers of share 14 793 14 793 14 793 (thousands) This interim report has not been subjected to special examination by the Company's auditors ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/07/20010507BIT00800/bit0001.doc http://www.bit.se/bitonline/2001/05/07/20010507BIT00800/bit0001.pdf

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