Financial Report 2000

Financial Report 2000 * Net revenues increased by 48 percent to MSEK 1,299.0 (875.5). * Operating income, not including surplus funds from SPP and items affecting comparability increased by 56 percent to MSEK 190.4 (121.9). * Amortization of goodwill in an amount of MSEK 19.8 (20.1) has been charged to the operating result. * Earnings per share were SEK 4.48 ( 2.29). * Proposed dividend increase of SEK 0.30 to SEK 1.35 per share. REVENUES AND RESULT All comparative numbers in parenthesis refer to pro forma accounting for the new LGP Telecom Holding Group as of December 31, 1999. 2000 The LGP Group continues to display strong growth. Consolidated net revenues amounted to MSEK 1,299.0, which for continuing operations translates to an increase by MSEK 423.5, or 48.4 percent. Operating income for the period amounted to MSEK 190.4, including amortization of goodwill, but not including surplus funds from SPP in an amount MSEK of 6.1, and items affecting comparability of MSEK 8.2. Operating income for continuing operations in 1999 amounted to MSEK 121.9. The operating margin was 15.1 percent; 14.7 percent not including surplus funds from SPP. Surplus funds from SPP are reported as other operating income. Amortization of goodwill arising in the acquisition of LGP Telecom AB was charged to the result in amount of MSEK 19.8 ( 20.1). Costs arising in connection with an offer to the shareholders in Allgon amounted to MSEK 8.2 and are reported as an item affecting comparability. Earnings per share were SEK 4.48 ( 2.29). Earnings per share not including surplus funds from SPP were SEK 4.32 (2.29). It is the telecom sector that accounts for the increase in growth. Telecom accounts for 77 percent of total revenues. Compared to the year before, sales of telecom-related products increased by 72 percent. Expansion of mobile telephone infrastructure is very rapid. Markets in Europe, China and South East Asia show strong growth. The future of the American market looks very bright as more and more operators switch from TDMA to the GSM standard. Our production capacity is being expanded to meet demand. Construction of a new production unit in Tullinge with a total floor area of 6,000 square meters for assembly and final adjustment of telecom products continues according to plan. The total investment will reach MSEK 80. The facility will come on line during May 2001. Investments to increase machining capacity in Tullinge and Falköping have been made. These investments contributed to increased capacity starting in November 2000. Sales companies were established in Shanghai, China and Sao Paulo, Brazil. In October 2000 LGP launched its 3G TMA, Tower Mounted Amplifier. Shipments of this product have already begun. LGP has also concluded an agreement for a global partnership with Nokia relating to second and third generation mobile telephone systems. Fourth quarter 2000 Revenues for the fourth quarter amounted to MSEK 386.9 ( 285.5), which for continuing operations translates to an increase of 35.5 percent. Operating income before items affecting comparability amounted to MSEK 49.3 ( 44.2), which is an increase of 11.5 percent. MSEK 10.3 was charged during the period against earnings for costs relating to the introduction of new products in the production phase. Operating income was also charged with costs of MSEK 8.2 attributable to the bid to the shareholders of Allgon. These costs are accounted for as items affecting comparability. CAPITAL EXPENDITURES Consolidated net investments in machinery, equipment and buildings amounted to MSEK 178.9 ( 60.1) during the period January - December. PERSONNEL The number of employees as of December 31 was 818, which means increase during the year of 210 employees. FINANCING The equity ratio as of December 31, 2000 was 62.8 percent. As of December 31, 1999 the pro forma equity ratio was 72.6 percent. The Group's liquid funds amounted to MSEK 54.8 and unutilized committed credit facilities amounted to MSEK 34.7. Cash flow for the period amounted to MSEK 12.5 (28.4). As of December 31, 1999 the Group's liquid funds amounted to MSEK 42.3 on a pro forma basis and unutilized committed credit facilities stood at MSEK 71.2. Shareholders' equity per share amounted to SEK 33.4 (29.8). DIVIDEND The Board of Directors has resolved to propose to the Annual General Meeting that a dividend be declared for year 2000 of SEK 1.35 (1.05) per share, a total of MSEK 37.5 (29.2). MISCELLANEOUS On May 19 Arkivator AB changed its name to LGP Telecom Holding AB pursuant to a resolution passed at the regularly scheduled Annual General Meeting held April 3. The ownership share in LGP Telecom AB is 99.9 percent of the total number of voting shares outstanding. Compulsory redemption proceedings for the remaining outstanding are in progress. A stock dividend 1:1 was declared with a record date of May 5, 2000. The Annual General Meeting of shareholders held April 3 resolved the issuance of a subordinated convertible debenture issue in a nominal amount of SEK 100,000 by issuing debentures with detachable warrants. All employees in the Group have subsequently been offered to subscribe for warrants. The warrants remain valid for subscription during the period July 4, 2000 - June 2, 2003, inclusive. This option program means that up to 1,000,000 shares may be issued for a dilutive effect of 3.5 percent. On August 21, 2000 it was decided to make a public offer to the shareholders and holders of options in Allgon AB (publ) to acquire all outstanding shares and options in Allgon. By the end of the bid period October 11, holders of shares and options representing only 17 percent of the share capital had accepted the offer. Since LGP's offer was conditioned by acceptance by more than two thirds of the share capital in Allgon, the Board of Directors decided not to carry out the offer. At an extra general meeting of shareholders held October 2, the Board of Directors of LGP Telecom Holding AB received authorization valid until the next following regularly scheduled Annual General Meeting year 2001 to issue up to 35,000,000 shares to finance LGP's offer to the shareholders of Allgon and/or other corporate acquisitions. ANNUAL GENERAL MEETING The regularly scheduled Annual General Meeting will be held at 5:00 p.m., Tuesday April 24, 2001 at IVA, The Royal Academy of Engineering Sciences, Grev Turegatan 16 in Stockholm. FORECAST 2001 LGP's sales for 2001 are expected to exceed MSEK 1,850 with sustained profitability. REPORTING 2001 The annual report for 2000 will be available from March 5, 2001. Quarterly Report 1 April 24 Semi-Annual Report August 14 Quarterly Report 3 October 16 Stockholm, January, 31 2001 Board of Directors ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/01/31/20010131BIT00350/bit0001.doc http://www.bit.se/bitonline/2001/01/31/20010131BIT00350/bit0002.pdf