Financial report for the year ended March 31, 2003

Financial report for the year ended March 31, 2003 · Net revenues amounted to MSEK 1 463 (1 983). · Operating income amounted to MSEK 27 (81). · Cash flow from current operations amounted to MSEK 70 (158). · The Group's financial position is strong and the equity ratio stands at 56 percent (53). · After the period's repurchases of own shares, Lagercrantz owns 10 percent of the number of shares outstanding and 7.4 percent of the votes in the Company. · Additional cost containment measures will have a positive effect on income for the current year. · A dividend of SEK 0.90 is proposed (0.90). NET REVENUES AND RESULT Net revenues amounted to MSEK 1 463 (1 983). Operating income was MSEK 27 (81), with a profit margin of 1.8 percent (4.1). Income after financial items amounted to MSEK 16 (79). The declining trend in the USD/SEK exchange rate lowered the Group's net of financial items by MSEK 8. Earnings per share were SEK 0.34 (1.96). The market situation for the Group's operations was stable during the year. However, a low level of order bookings in division Electronics had the effect of weak profitability for the Group. A new round of cost containment measures and efficiency- improvement actions will therefore be taken during the first quarter in Electronics. These measures are expected to lower costs by about MSEK 15 on an annual basis. Positive effects of the Group's initiatives in the field of industrial communication (M2M) were noticeable during the latter part today. This area is expected to contribute significantly to the Group's future earnings performance. ELECTRONICS Net revenues amounted to MSEK 843 (1 261). Operating income amounted to MSEK 3 (55), with an operating margin of 0.4 percent (4.4). The market for the division's operations was stable during the year, but weak. The cost containment program initiated during the previous year was completed during the early part of the year The year's program included personnel cutbacks by about 30 persons and a lowered cost level of MSEK 20 on an annual basis. The process to improve profit continues. A weak economy with low demand had a negative effect on operations. Also structural changes, such as moving production from the Nordic Region, had a negative effect on earnings. Efforts in the division for growth area industrial communication (M2M) continue. The year was marked by increased focus on total solutions, a stronger international presence and continuing streamlining of the Group's product offerings. A significant increase in order bookings in the area of industrial communication during the latter part of the year has not yet been delivered. A positive effect on earnings of this development will be seen during the current year. The division's level of results is not satisfactory, however, and during the first quarter of the current year additional cost containment measures will be taken in conjunction with a structural streamlining of the organization. These measures are expected to have a positive effect on the division's earnings for the current year. It may also be noted that to indicate the division's shift of main focus, it changed its name at the end of the year from Components to Electronics. PRODUCTION SERVICES Net revenues amounted to MSEK 183 (198) and operating income was MSEK 7 (9). The operating margin was 3.8 percent (4.5). The cable harness operations, which makes customized cable harnesses, was stable during the year with good profitability. The 2B Electronics operation that offers complete solutions for electronics applications had a negative result for the year. This investment in the Group's ability to add value has been well received in the marketplace, however, and the 2B Electronics companies in Denmark and Hong Kong were transferred to division Electronics effective as of April 1, 2003. We believe that the opportunities for developing customer synergies and new projects will increase by integrating the holistic concept of 2B Electronics in a broader sales organization. COMMUNICATION Net revenues amounted to MSEK 437 (524). Operating income was MSEK 14 (14) with a profit margin of 3.2 percent (2.7). The operations of the division are organized in three areas: Security, Communication and Infrastructure, and Software and Consulting. The Security area provides security solutions for large data networks. This business is established throughout the Nordic Region via the Heath Comm group and revenues amounted to about MSEK 90. A significant increase in revenue and income is expected for the current year. The Communication and Infrastructure area offers products and solutions in the following areas: access and test, video and telecommunications. The area's revenues amount to MSEK 175. It enjoys a leading market position in the Swedish market. Software and Consulting builds solutions for customer service and process management, and also provides consulting services and solutions in the area of design. Revenues amounted to about MSEK 175 and the profitability was good. This business saw a very positive development during the year and we are expecting more of the same for the current year. Stockholm, May 13, 2003 Jan Friis President & CEO AUDITORS STATEMENT We have reviewed this year-end financial report in accordance with the recommendation issued by the Swedish Institute of Authorizrd Public Accountants. A review is significantly limited in comparison to an audit. Nothing has come to our attention that causes us to believe that the year-end financial report does not comply with the requirements of the Swedish Securities and Clearing Operations Act and the Swedish Annual Accounts Act. Stockholm, May 13, 2003 George Pettersson Thomas Thiel Authorized Public Authorized Public Accountant Accountant An Interim Report for the period April 1 - June 30, 2003 will be presented August 26, 2003. The Annual General Meeting will be held in Stockholm August 26, 2003. The Group's Annual report will be distributed to the shareholders in mid- July 2003 and will be available at the Company's Web site at the same time. Lagercrantz Group AB (publ) P.O. Box 3508 Torsgatan 2 SE-103 69 Stockholm, Sweden Telephone +46-8-700 66 70 Telefax +46-8-28 18 05 info@lagercrantz.com www.lagercrantz.com Organization number 556282-4556 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/05/14/20030514BIT00710/wkr0001.doc The full report http://www.waymaker.net/bitonline/2003/05/14/20030514BIT00710/wkr0002.pdf The full report