Half Year Report January - June 2001

Half Year Report January - June, 2001

• Orders increased to SEK 92 million (52). • Sales totaled SEK 54 million (57). • Profit margin on goods sold rose to 20% (13% for full-year 2000). • The issue of new shares was fully subscribed for. IT Provider’s stake rose to 39%. • A non-recurring write-down of goodwill lowered earnings by SEK 10 million. Operations MultiQ received orders in the first half of the year for SEK 92 million, as opposed to SEK 52 million for the same period of 2000. The single biggest order was EssNet´s purchase of 5,000 monitors for Lotto Hessen. Delivery will begin in August. MultiQ has signed an agreement with ICA, whose 4,600 stores comprise the largest Nordic retail group. The fact that these customers order on an ongoing basis is further evidence that MultiQ´s running sales are steadily increasing. Approval by the Societé Internationale de Télécommunica-tions Aéronautiques (SITA) opened the door for MultiQ at airports around the world. We are currently engaged in discussions with a number of international airports in Europe. Sales of SEK 54 million (57) for the first half of the year fell slightly below the same period of 2000. The decrease stems from the more sluggish general economy and disparities that arose within the framework of project-related deals. Excluding a non-recurring write-down of SEK 10 million, earnings totaled SEK -23 million (-23). Brisker activity in continental Europe boosted selling expenses. Meanwhile, MultiQ´s leaner organization permitted lower administrative and R&D costs than the previous year. The Board decided to adjust the value reported in the balance sheet for the acquisition of Tandberg Display. As a result, a non-recurring write-down of SEK 10 million has been made on the goodwill that arose from the acquisition. The write-down is based on the market´s re-evaluation of the sector as a whole. Given the response to MultiQ´s efforts in new and existing markets, the expanding marketplace, new orders, and a considerably improved cost structure, we anticipate sales growth and steadily improving profitability during the second half of the year. As evidenced by new orders, MultiQ continues to enjoy an upward trend. All of MultiQ´s flat monitors are exceptionally sturdy. As a result, they are perfectly suitable for checkout counters, production sites, and public settings. Part of the unique and powerful concept is the ability of businesses to adapt MultiQ´s products to their own logo, design, and colors. The Company´s sales derive increasingly from specially designed products and less from standard monitors. As a result of this strategy, MultiQ´s profit margin on goods sold rose to just over 20% in the first quarter, as opposed to an average of 13% in 2000. Including MultiQ´s share of earnings in Mobilsys and the non-recurring write-down of goodwill, operating earnings were SEK -33 million (-23). Market trends Due to rapidly declining prices for components and flat monitors, customers held off on their purchases during the first half of the year in hopes of saving money. In addition, the economic downturn caused key groups of customers to postpone new capital investments. As we have indicated earlier, the flat monitor market remains in a growth phase despite short-term fluctuations. Flat monitors accounted for only 5% of all western European monitor sales in 2000. Product prices and the limited availability of panels have inhibited market growth so far. A major increase in production capacity is now helping to ensure greater availability and lower prices. As a result, the market is opening the way to totally new applications and groups of customers. Financial Position. Group cash and cash equivalents increased during the period by SEK 16.5 million to SEK 0.9 million. The guaranteed issue of new shares that was carried out in July 2001 will boost Multi´s liquidity by SEK 20 million. The equity ratio was 51.3 % (56.5). Including the guaranteed issue of new shares, the equity ratio was 64.7%. All product development is expensed on a continuing basis. MultiQ invested a total of SEK 1.2 million (2.1) in fixed assets during the period. The Board believes that the SEK 20 million capital contribution from the issue of new shares will cover the greater amount of capital tied up in connection with the delivery of major orders scheduled for the third quarter. Parent Company. The parent company, which had no sales during the period, reported operating earnings of SEK -12.1 million (-1.0). Earnings after financial items were SEK -12.2 million (-1.9). The parent company invested SEK 0 million (0) in fixed assets during the period. At June 30, 2001, cash and cash equivalents totaled SEK 0.1 million. Accounting principles This quarterly report has been prepared in accordance with the recommendations of the Swedish Financial Accounting Standards Council (Redovisningsrådet). The Company adheres to the accounting and valuation principles of the Redovisningsrådet. By complying with Recommendation 9 of the Redovisningsrådet, MultiQ can report a deferred tax benefit attributable to loss carryforwards of SEK 96 million. This tax benefit has not been reported in the final accounts. Listing The MultiQ share has been quoted on the O list of the Stockholm Stock Exchange since December 7, 1999. Upcoming financial information from MultiQ Report for Q3 October 25, 2001 Preliminary accounts February 7, 2002 Please direct all questions concerning this report to: Jonathan Nilsson, President phone: +46 40 143538, +46 709 743538 e-mail: jonathan.nilsson@multiQ.se ...............................................................