Lindab JANUARY - SEPTEMBER 2000
The sales of the Lindab Group have continued to develop in a positive direction and in line with Lindab’s strategy for growth
increase. Significant endeavours have been made with regard to market and product development. During the first nine months of the year consolidated sales increased by 21 percent to 3 166 (2 612). Within the period volumes increased by 22 percent, of which acquired companies represented 10 percent. The strengthening of the Swedish Krona, compared with the corresponding period last year, has affected sales negatively by 3 per-centage units. Sales prices went up by 2 percent during the first nine months of the year.
Sales outside of Sweden increased by 15 percent to 2 295 (1 992), which represented 72 percent (76) of consolidated
sales. During the last 12-month period sales amounted to 4 123 (3 516), an increase of 17 percent. Demand for the majority of the Group's product groups has been good during the period. The business situation has been positive on those markets that are most important to Lindab. The Swedish market has remained strong. The marketing endeavours made, together with the companies acquired, have resulted in an increased market share for Lindab. Within the rest of the Nordic markets Denmark has shown good development. Inside Western Europe the British and French markets have developed well, whereas competition has become fiercer in Germany. The slowing down of some of the Eastern European countries, primarily Poland, that became noticeable in the first six months has remained. Lindab has continued to expand in the USA, where round duct systems are being accepted more and more. The powerful sales increases on other markets can partly be explained by the acquisition of the Swiss company Bartholet, which was made in October 1999.
Profit
During the period January - September the operating profit amounted to 246 (214). The greater volumes have had a posi-tive
influence on the profit. The raw-material and sheet-metal price increases that have come about during the year have been
compensated for successively by sales price increases and rationalisation, but however with a time lag. The increases in costs are primarily related to marketing and sales endeavours and the consolidation of acquired companies.
The high rate of investment and company acquisitions made during recent years have given rise to increased depreciation.
The period's depreciation amounted to 131 (106), of which goodwill depreciation represented 18 (13).
During the second quarter Lindab recorded SPP surplus funds as income. Based on SPP's rules the utilisation of these funds
will take place over a period of three years. The current value of the expected refund amounts to 21, and has been recorded as other operating income.
The profit, after financial items, amounted to 216 (195). The net interest has gone down by 11 to -30, due to a greater net liability caused by company acquisitions and high rate of investment. The strengthening of the Swedish Krona has affected the result negatively by 6.
The net profit amounted to 152 (135). The acquisition of Folkebolagen has marginally affected the consolidated profit but
has reduced the operating margin by 0.3 percentage units, due to a change in product mix with greater volumes and lower
margins.
Profile
This business area represents a broad range of sheet metal products that are used for the system solutions within the construction industry; items such as roof sheeting and cladding, rainwater systems, construction profiles and construction kits for steel halls.
During the period sales increased by 23 percent to 1 176 (959). The Swedish market was responsible for 36 percent (32)
of the sales of the business area, the other Nordic markets for 31 percent (28), the EU excepting Nordic members for 6 percent (9), Eastern Europe for 27 percent (30) and the rest of the world for 0 percent (1).
The operating profit amounted to 102 (71). The refund of surplus funds from SPP represents 10 (0) of profit improvement.
The higher profit is partly due to the ever improving situation in the construction industry on Lindab's more important mar-kets
and partly due to an improved product mix and increased system sales.
Cash flow and net liability
The net cash flow of the Lindab Group amounted to -454 (-49). The consolidated net liability - the difference between interest-bearing liabilities and liquid funds - amounted to 978. The reason for the negative cash flow lies mainly in investments of 391 of which company acquisitions represent 182 and an increased working capital of 244, which to a certain extent is seasonal, but which has also been affected by the acquisitions made to an extent of 113. In total the acquisitions have increased the net liability by 255. During the month of May the dividend representing SEK 3.00 (2.00) per share was paid, representing a total of 72 (48). The repurchase of own shares has increased the net liability by 23.
The consolidated liquid funds amounted to 154 (115). Liquid funds, including unutilised overdraft facilities, amounted to 801;
of which 455 pertained to the parent company. The consolidated equity amounted to 1 321 (1 181). The equity/assets ratio was 38 percent (45).
Investments
During the period January - September investments, excluding company acquisitions, amounted to 209 (189); of which
118 (104) represented machines and equipment and 91 (85) property. The greatest individual investments were production
premises in Switzerland and the construction and extension of production and warehousing premises in Sweden, Denmark
and Croatia. Company acquisitions during the period have resulted in investments of 35 (36) in machines and equipment
and 42 (1) in property. The acquisitions during the period have also resulted in an increase in goodwill of 105 (22).
Investments in plant, excluding company acquisitions, comprised 82 (63) in Sweden and 127 (126) abroad.
Company acquisitions
Scandab AB was acquired during the period. The company, which operates within the environmental sector, develops,
markets, stocks and distributes products and systems for industry. The acquisition strengthens Lindab's Ventilation
business area, as co-ordination benefits exist within the Transfer product area. In a rolling 12-month period Scandab is estimated to turn over 65.
On 8 May Lindab AB made an offer for Folkebolagen AB, a company listed on the OM Stockholm Stock Exchange. In
total the offer was worth 148. The acquisition of Folkebolagen will strengthen Lindab's Profile business area, primarily within the Swedish market. A compulsory redemption was requested on 18 September and the last trading day was 29 September.
On 30 September shareholders representing 99.7 percent of the capital and 99.8 percent of the voting rights had accepted
the offer. Our judgement is that Folkebolagen will increase Lindab's profit and profit per share; however these profit
effects will only be marginal during the current year. The company is estimated to turn over 500 on an annual basis.
Personnel
At the end of September the number of people employed within the Lindab Group amounted to 3 524, compared with
the 3 004 employed at the turn of the year. During the period the number of people employed in Sweden increased by 343 to 1 344; this increase is primarily related to company acquisitions. The number employed abroad increased by 177 to 2 180.
Parent company
The sales revenue of the parent company consists exclusively of invoicing Group companies. During the period the sales of
the company amounted to 39 (37). The result, after financial items, was -11 (4), of which SPP funds represented 4 (0).
Investments
in fixed assets amounted to 25 (2). The liquid funds of the parent company amounted to 10 (37).
Share data
In accordance with the decision of the shareholders attending the Annual General Meeting Lindab began to repurchase its
own shares. A total of 239 800 shares have been repurchased, which represents 1 percent of the total number of shares. The mandate stipulated by the Annual General Meeting amounts to a total of 960 000 shares, representing 4 percent of the total number of shares. Repurchase took place at an average price of SEK 95.35, which represents about 23. At the end of the September the total number of shares outstanding amounted to 23 760 200. The profit per share has been calculated as a weighted average of the number of shares during the period January -September, which has been calculated as 23 995 533. The profit after full taxes amounted to SEK 6.36 for the first nine months of the year, compared with the SEK 5.62 of the preceding year. The outstanding synthetic option programme has not affected the profit. At the end of the period the listed price for Lindab shares on the OM Stockholm Stock Exchange was SEK 106.50. At the turn of the year the price was SEK 98.00.
Outlook for 2000
The powerful increase in volumes is expected to continue and sales are expected to amount to about 4 300 (3 596).
During the course of the year raw-material prices have increased enormously, and those for galvanised sheet metal have
gone up much more than could have been predicted. The price adjustments made during the autumn are expected to reach
full effect in the beginning of next year. The profit for this year is expected to remain at the same level as last year, excluding
the SPP refund.
Grevie, 26 October 2000
LINDAB AB (publ)
Carl-Gustaf Sondén
Managing Director and Chief Executive Officer
This report has not been subjected to special scrutiny by the company auditors.
Definitions:
Profit per share
Calculated on a weighted average of 23 895 533 shares for the period.
Equity per share
Recorded equity distributed over a weighted average of 23 961 617 shares for 12 months.
Return on capital employed
The return on capital employed comprises the consolidated profit after financial items with supplement for interest expenses and exchange rate differences as a percentage of the average capital employed. By capital employed is meant the total capital reduced by current, non-interest bearing liabilities. Furthermore, in accordance with the recommendations of the Swedish Industry and Commerce Stock Exchange Committee, a deduction has been made for the deferred tax liability.
Return on equity
The return on equity comprises the profit for the period as a percentage of average equity.
Equity/assets ratio
The equity/assets ratio has been calculated as equity as a percentage of assets, according to the balance sheet.
Operating margin
The operating margin has been calculated as the operating profit as a percentage of the sales of the period.
Today the Lindab Group is a world-wide corporation which operates at more than a hundred locations in twenty
countries. Operations are primarily composed of the manufacture and sales of sheet-metal products within two business
areas. The major business area is Ventilation in which Lindab has a world-leading position within the round
duct system product area. The other business area, Profile, comprises a broad product range for the building con-struction
industry; including roof sheeting, cladding, rainwater systems, up-and-over doors, roof-safety products
and construction profiles.
Schedule for financial information 2001
The interim and year-end reports are also published on Lindab's web site www.lindab.com.
16 February 2001 Year-End Report for 2000
Middle of April Annual Report for 2000
26 April Interim Report, January - March
26 April Annual General Meeting
9 August Interim Report, January - June
24 October Interim Report, January - September
The reports will be available in Swedish, Danish and English and can be ordered from the address below
The full interim report including tables is avaiable to download from the enclosed link.