Preliminary press release of unaudited earnings figures

Preliminary press release of unaudited earnings figures for the financial year 1998 SEK, million 1998 1997 1998 Sept - Sept - compare Dec Dec d with 1998 1997 1997 Orders received 4,939 5,196 - 5% 1,270 1,517 Net sales 5,278 4,599 + 15% 1,477 1,452 - Operating profit/loss before 279 237 73 114 items affecting comparability Items affecting - 20 - 169 - 20 - 159 comparability Operating 259 68 53 - 45 profit/loss Financial items - 46 -- 38 - 21% - 5 - 15 Profit/loss after financial items 213 30 48 - 60 Net profit for the 165 2 54 - 62 year *Operating profit + SEK 191 million, before items affecting comparability SEK +42 million *Orders received - 5% *Net sales + 15% *Earnings per share SEK 7.00 *Proposed dividend: SEK 2.20 per share All information in brackets in the following text refers to 1997. Orders received and net sales Orders received amounted to SEK 4,939 million (5,196). Trends in Europe and North America have continued good, with a stable inflow of orders. In South East Asia, activity has been low, with the exception of China and Hong Kong. For the product lines, the market situation has been varied. Medium&Heavy has noted a fall in orders received compared with 1997, largely due to the economic situation in Asia, Russia and South America, which has led to a reduction in demand, especially for reachstackers and empty container handlers. For other product lines, orders received were at about the same level as 1997. The order book has shrunk from SEK 1,545 million at the beginning of the year to SEK 1,206 million at the year-end. Net sales amounted to SEK 5,278 million (4,599), an increase of 15 percent compared with the preceding year. Acquisitions during the year increased sales by SEK 3 million. 90 percent of invoicing related to markets outside Sweden. During the fourth quarter, invoicing amounted to SEK 1,477 million (1,452), which was 28 percent (32) of the invoicing for the full year. The currency fluctuations have increased orders received and invoicing with 2 and 3 percent respectively. Net sales by product lines are shown in the table below. 1998 1997 Change Product line SEK million SEK million Medium & Heavy 1,747 1,665 5% Terminal Systems 1,264 967 31% Terminal Tractors 1,079 876 23% Light & Sideloaders 976 1,017 - 4% Other 212 74 Net sales per market area The reduced level of orders received and net sales in Asia were offset in other markets for most products, with the exception of reachstackers and empty container handlers. Net sales per market area are distributed as follows: Europe 53% (49), North America 27% (27), Pacific Asia 7% (11) and other markets 13% (13). Profit/loss Operating profit after depreciation amounted to SEK 259 million (68). Items affecting comparability have been charged against income at SEK 20 million (169), which refer to a reserve for continued restructuring. Profit before items affecting comparability was SEK 279 million, compared with SEK 237 million during the preceding year. The improvement in results is largely due to the higher level of invoicing. Profits after financial items were SEK 213 million (30). Net interest income/expense amounted to SEK - 46 million (-38). The deterioration is attributable to the loan taken out in December 1997 for share redemption and transaction expenses associated with the merger between Kalmar and Sisu Terminal Systems*. Before items affecting comparability, the profit margin was 4.5% (4.3), while the operating margin was 5.3% (5.2 ). Depreciation according to plan increased by SEK 8 million to SEK 154 million (146). The tax charge for the year was SEK 48 million (23). The tax expenses for the year have been reduced by SEK 28 million corresponding to half of deferred taxes in USA. Return on capital employed was 13.8% (4.0) and on equity after tax 16.3 % (0.2). Earnings per share amounted to SEK 7.00 (0.10). * 1 December, 1998, Sisu Terminal Systems Oy changed name to Kalmar Industries Oy Ab. Structural changes As a result of the merger between Kalmar and Sisu Terminal Systems, a comprehensive reorganisation of the Group's production at the various production units has been carried out during the year. On the distribution side, the sales companies have been merged to form one for each market for Sweden, the USA, Great Britain, Singapore and Hong Kong. The sales companies in Norway, Austria and France have taken over full responsibility for their respective markets. The restructuring project from the merger to realise the synergy gains is continuing as planned. The income effects of this during 1998 are estimated to SEK 40 million and full impact with SEK 100 million is not expected until the end of 1999. From the provision of SEK 120 million for structural expenses for the merger, which was made in the accounts for 1997, SEK 100million has been utilized. After the end of the financial year, it was decided to close down the production at Hernöverken plant in Härnösand, Sweden. The above mentioned provision of additional SEK 20 million has been made to cover this and earlier decided structural measures. Thus, at the end of the year, the reserve amounted to SEK 40 million. During the year, the Group acquired an additional nine percent of the shares in Kalmar Pacific Limited, Hong Kong, and now holds 60 percent of the shares. The business in Bartlett Lifting Devices Inc, Chicago, which manufactures fifth wheels for towing tractors, as well as other lifting equipment, was acquired at the end of the year. Bartlett, with an annual turnover of USD 3 million, complements the Group's US manufactured terminal tractors. Investments The Group's total investment in tangible assets excluding company acquisitions amounted to SEK 203 million (176). Of this, investments in rental lift trucks amounted to SEK 92 (62). Balance sheet The balance sheet total increased during the year to SEK 3,177 (2,962). Capital employed increased during the year by SEK 123 million, and amounted at 31 December to SEK 2,066 million (1,943). The capital turnover rate increased to 2.7 times (2.4). Financial position Net debt was SEK 827 million (851). Equity/assets ratio was 37.1% (33.4) and the debt/equity ratio was 79% (101). Cash flow after investment amounted to SEK 6 million (-113). Personnel The number of employees in the Group at the end of the year was 3,278 (3,336). The restructuring of production at the factories in Ljungby and Tampere has led to a reduction in the workforce by just over 100 people. On the other hand, increased volumes have led to an increase in the number of employees at the factories in Kurikka, Finland, and Ottawa, USA. An additional 27 staff joined the Group through acquisitions. Proposed dividend The Board of Directors proposes the Annual General Meeting that a dividend of SEK 2.20 (2,00) per share be paid. Outlook for 1999 The market situation is anticipated not to change compared to 1998 and a possible improvement is expected earliest during the latter part of the year. The earnings trend is negatively affected of the lower order intake during the last months in 1998. The synergy gains of the merger between Kalmar and STS will achieve full impact during the year. Annual General Meeting and future reports The Annual General Meeting will be held in Ljungby on 26 April 1999. The annual report for 1998 is expected to be available at the beginning of April 1999. For interim reports, the following dates apply: Interim report for Jan - March 1999 will be published on 26 April 1999. Interim report for Jan - June 1999 will be published on 19 August 1999. Interim report for Jan - Sept 1999 will be published on 10 November 1999. Ljungby 10 February 1999 Christer Granskog President & CEO Income statement Full Full MSEK year year 1998 1997 Net sales 5,278 4,599 Operating profit before items affecting comparability 279 237 Items affecting comparability -20 - 169 Operating profit 259 68 Net interest income/expense - 46 -38 Profit after financial items 213 30 Balance sheet 31 Dec 31 Dec MSEK 1998 1997 Intangible assets 132 139 Tangible assets 775 724 Financial assets 78 60 Inventories 993 965 Current receivables 1,156 997 Cash and bank balances 43 77 Total assets 3 177 2,962 Shareholders' quity 1,135 943 Minority interest 43 46 Interest-bearing liabilities 931 999 and provisions Non interest-bearing 1,068 974 liabilities and provisions Total equity and liabilities 3,177 2,962 Funds statement Full Full MSEK year year 1998 1997 Cash flow from current 191 24 operations Cash flow from investment - 185 -137 activities Cash flow after investments 6 - 113 Cash flow from financing - 40 93 activities - Change in liquid funds - 34 - 20 Full year Full year Full year Key ratios 1998 1997 1996* 1) Operating margin , % 5.3 5.2 7.2 2) Operating margin , % 4.9 1.5 1) Profit margin , % 4.5 4.3 6.3 2) Profit margin , % 4.0 0.7 Return on capital employed 15.0 13.0 19.2 1) , % Return on capital employed 13.8 4.0 2) , % Return on shareholders' 16.3 0.2 21.4 equity, % Net debt ratio, % 79 101 106 Equity/assets ratio, % 37.1 33.4 32.9 Orders received, SEK 4,939 5,196 4,200 million Order book, SEK million 1,206 1,545 936 Net sales, SEK million 5,278 4,599 4,566 Number of employees at end 3,278 3,336 3,296 of period 1) Earnings per share , SEK 7.60 6.20 8.00 2) Earnings per share , SEK 7.00 0.10 Equity per share, SEK 48.30 40.10 37.40 * Proforma 1) Before items affecting comparability 2) After items affecting comparability For further information, please contact: Christer Granskog, President & CEO Tel. + 46 372 261 21, mobile +358 400 620 471 Anne-Charlotte Eggwertz, Finance Director Tel. + 46 372 261 39, mobile +46 70 592 6139 Sven-Eric Petersson, VP Corporate Communications Tel. + 46 372 261 40, mobile +46 708 778705 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/02/10/19990210BIT00080/bit0001.doc http://www.bit.se/bitonline/1999/02/10/19990210BIT00080/bit0002.pdf