Interim Report for January - June 2000

Interim Report for January - June 2000 * Profit after net financial items amounted to SEK 58 M (9). This is the Group's best six-month earnings to date. * Invoiced sales rose 29% to SEK 515 M (398). * Earnings per share after full tax totaled SEK 6.39 (0.03). * Continued successes in telecom equipment industry; sales rose 47%. * Expanded co-operation with Ericsson. * Trend reversed for business area NEFAB RePak, invoiced sales up 33%. * Decision on capacity investments in Estonia, China and North America. * Profit after net financial items for the full year is expected to total slightly more than SEK 100 M. Second quarter of 2000 The positive start of the year was strengthened further during the second quarter. Invoiced sales amounted to SEK 275 M (207), up 33% compared with the corresponding period in 1999. Order bookings totaled SEK 287 M (214), an increase of 34%. Profit, after net financial items, for the second quarter amounted to SEK 37 M (8). The discounted present value of the surplus funds from SPP is included in earnings in the amount of SEK 7 M. A key reason of the rapid growth is the increased demand from customers in the telecom equipment industry. Invoiced sales to the segment rose during the quarter by about 50%. Other market segments increased by about 20%. First half year 2000 Invoiced sales in the first six months of 2000 amounted to SEK 515 M (398), a 29% increase. Order bookings to date this year amounted to SEK 542 M (408), an increase of 33%. Business area NEFAB ExPak Sales in the largest business area, NEFAB ExPak, rose 29% to SEK 394 M (305). The business area accounts for about 77% of total sales. Increases were noted in almost all markets. The highest growth is in Asia. Sales trends in this business area are strongly dependent on customers in the telecom equipment industry. Business area NEFAB RePak The NEFAB RePak business area shows favorable development for the first half of the year. Invoiced sales increased 33% to SEK 105 M (79). The business area accounts for approximately 20% of total sales. Most of the increase is attributable to markets in Europe. Large orders from sub-suppliers to the automotive industry contributed to favorable order bookings during the period. Telecom equipment and automotive industry market segments Telecom equipment industry Nefab's focus on customers in the telecom equipment industry continues to yield results. Sales increased 47% to SEK 232 M (158) and thus account for about 45% of Group sales. Co-operation with the largest players in the telecom equipment industry is being intensified and Nefab is developing into a supplier of complete packaging solutions. This is exemplified by co-operation agreement signed in April with Ericsson Segment Operators, in which Nefab's contribution involves being a first-tier supplier of packaging materials. In addition to deliveries of complete packaging solutions, Nefab will assist Ericsson by providing consulting services in technical packaging matters. Nefab's deliveries to the telecom equipment industry pertain particularly to packaging of equipment for fixed and mobile networks. About 10% of the packaging is for telephones. Automotive industry Sales to the automotive segment totaled SEK 39 M (35), corresponding to 8% of Group sales. The automotive industry is one of Nefab's priority market segments. The prospects for increased market successes are deemed to be favorable, particularly from business area NEFAB RePak's viewpoint. There are many attractive return flows in the automotive industry and Nefab's packaging products have the potential to solve the problems of customers in the industry in a commercially favorable manner. A number of agreements were signed during the period with sub-suppliers to the automotive industry. Two of them relate to deliveries of returnable packaging for cable products between sub-suppliers and automotive plants in Europe. Earnings Profit after net financial items for the first six months amounted to SEK 58 M (9), included SEK 7 M pertaining to the discounted current value of the surplus funds from SPP. The earnings improvement is attributable to higher sales volumes and the resulting increase in capacity utilization, while overhead costs remained stable. Improvements were noted in virtually all markets and for both business areas. The operations in Brazil are improving continuously and the company reports breakeven earnings during the second quarter. The change in exchange rates is assessed to have affected earnings negatively in the range of SEK 10 M compared with the first six months of 1999. Tax costs for the year have been reduced by SEK 3.6 M as a result of a ruling from the Administrative Court of Appeal regarding a case involving Nefab's income tax returns for 1989. The tax reduction corresponds to SEK 0.52 per share. Earnings per share during the period amounted to SEK 6.39 (0.03), of which the surplus funds from SPP account for SEK 0.71 per share. The return on capital employed was 30.4% (8.1). Capacity and investments Group investments amounted to SEK 24 M (10), most of which pertained to machinery and equipment. Capacity utilization was high in all production units. To increase capacity and ensure a high delivery precision, it was decided to establish a new production unit in Estonia, concurrent with expanding the Canadian and Chinese facilities. These three projects involve investments totaling about SEK 100 M during the next 12-month period. Financial position The equity/assets ratio on June 30 was 43.5% (41.6). Shareholders' equity per share amounted to SEK 39.60 (31.26). The Group's liquid assets at the same date amounted to SEK 75 M (62), including unutilized credit facilities. Outlook for full-year 2000 Invoiced sales within NEFAB ExPak are expected to continue to show favorable development, particularly in the telecom equipment industry segment. The more project-oriented sales within NEFAB RePak are also expected to develop positively during the year, thanks to a number of transactions with customers in the automotive industry segment. As a whole, profit after net financial items for the full year is expected total slightly more than SEK 100 M. Parent company The operations in Nefab AB comprise Group executive management, financing and co-ordination of group-wide marketing and development projects. Sales in the first half of the year amounted to SEK 23 M (20) and profit after net financial items was SEK 17 M (13). Profit and loss accounts (SEK M) 0001-0006 9901-9906 9907-0006 9901-9912 6 months 6 months 12 months 12 months Net sales 515 398 954 837 Cost of goods sold -370 -295 -687 -612 Gross profit 145 103 267 225 Selling expenses -50 -53 -100 -103 Administrative expenses -40 -35 -81 -76 Other operating income 7 - 7 - Operating profit 62 15 93 46 Net financial items -4 -6 -8 -10 Profit after net financial items 58 9 85 36 Taxes -14 -9 -23 -18 Net profit for the year 44 0 62 18 Depreciation included above 19 18 38 37 Balance sheets (SEK M) 000630 990630 991231 Fixed assets 254 240 247 Current assets 377 286 303 Equity capital 274 216 239 Provisions 26 26 28 Long-term liabilities 147 148 125 Current liabilities 184 136 158 Total capital 631 526 550 Of which interest-bearing 166 161 141 liabilities Cash flow statements (SEK M) 0001-0006 9901-9906 9901-9912 Operating profit 62 15 46 Depreciation, financial net and 1 4 9 taxes Cash flow from the year's operation 63 19 55 Change in working capital -47 -14 -19 Net investments in fixed assets -24 -19 -37 Cash flow after investments -8 -14 -1 Dividend -10 -10 -10 Financing 21 17 -5 Changes in liquid funds 3 -7 -16 Key ratios 0001-0006 9901-9906 9907-0006 9901-9912 Operating margin, % 12.0 3.7 9.8 5.5 Profit margin, % 11.2 2.2 8.9 4.3 Return on equity capital, % 34.4 0.2 25.5 7.7 Return on total capital, % 21.2 5.9 16.4 8.8 Return on capital employed, % 30.4 8.1 23.1 12.4 Equity/assets ratio, % 43.5 41.6 43.5 44.1 Employees, yearly average 1048 863 1000 908 Net investments, SEK M 24 19 32 37 Key ratios per share Profit per share, full tax, SEK 6.39 0.03 9.04 2.67 Equity capital per share, SEK 39.60 31.26 39.60 34.65 Number of shares at the end of the period, in thousands 6,907 6,907 6,907 6,907 Share price on closing day, SEK 94 64 94 78 For definitions, see Annual Report for 1999. Future financial reports th Nine-Months Interim Report 2000November 7 , 2000 th, Preliminary report on 2000 operations Februay 14 2001 Annual Report April, 2001 For further information, contact CEO/President Lars-Åke Rydh, tel. +46-70-592 45 70, e-mail lars-ake.rydh@nefab.se, or IR-responsible Anna Stålenbring, tel. +46-70-814 23 44, e-mail anna.stalenbring@nefab.se th Jönköping, August 16 2000 Lars-Åke Rydh CEO and President This Interim Report has not been examined by the company's auditors. Information about Nefab Nefab delivers complete packaging solutions to international industrial groups, primarily within the telecom equipment and automotive industry. Nefab operates within two business areas - NEFAB ExPak (collapsible export packaging systems) and NEFAB RePak (reusable transport-packaging and storage systems). Nefab has its own companies' in Europe, North and South America and Asia. Annual sales is about SEK 1 BN. Nefab is listed on the OM Stockholm Exchange. Nefab AB (publ) Östra Storgatan 20 . P O Box 2184 . SE-550 02 Jönköping . Sweden Telephone +46(0)36-345050 . Telefax +46(0)36-150444 . Organization No. 556226- 8143 Homepage: www.nefab.com . E-mail: info@nefab.se The registered office of the board of directors is in Ovanåker, Sweden Quarterly data Q1/9 Q2/9 Q3/9 Q4/98 Q1/99Q2/9 Q3/9 Q4/9 Q1/0 Q2/0 8 8 8 9 9 9 0 0 Net sales 170 182 188 207 191 207 205 234 240 275 Cost of goods sold -122 -132 -136 -155 -143 -152 -147 -170 -172 -198 Gross profit 48 50 52 52 48 55 58 64 68 77 Selling expenses -23 -25 -23 -30 -26 -27 -22 -28 -24 -26 Administrative -17 -19 -18 -22 -18 -18 -18 -22 -21 -19 expenses Other operating - - - - - - - - - 7 income Operating profit 8 6 11 0 4 10 18 14 23 39 Net financial items -1 0 -2 -1 -3 -2 -3 -2 -2 -2 Profit after net 7 6 9 -1 1 8 15 12 21 37 financial items Taxes -2 -3 -5 -2 -3 -6 -6 -3 -4 -10 Net profit for the 5 3 4 -3 -2 2 9 9 17 27 year Fixed assets 207 215 245 247 241 240 236 246 243 254 Current assets 243 263 273 275 266 286 283 304 335 377 Equity capital 235 229 235 233 223 216 222 239 256 274 Provisions 18 18 22 26 26 26 26 27 26 26 Long-term liabilities 72 104 137 131 140 148 126 126 124 147 Current liabilities 125 127 124 132 118 136 145 158 172 184 Total capital 450 478 518 522 507 526 519 550 578 631 Operating margin, % 4.8 3.2 5.6 0.2 2.2 5.1 8.8 5.8 9.6 14.1 Profit margin, % 4.3 3.2 4.4 -0.3 0.3 3.9 7.5 5.2 8.8 13.3 Return on equity 8.2 4.6 6.5 -4.2 -4.1 4.6 16.4 16.1 28.0 40.5 capital, % Return on total 7.9 5.9 8.8 1.6 3.6 8.4 13.9 10.6 16.6 25.9 capital, % Return on capital 11.1 8.2 12.1 2.2 4.9 11.5 19.6 15.2 23.8 37.3 employed, % Equity/assets ratio, 52.3 48.4 45.7 45.1 44.5 41.6 43.4 44.1 44.3 43.5 % Profit per share, 0.69 0.39 0.54 -0.36 -0.34 0.36 1.30 1.34 2.51 3.88 full tax, SEK Equity capital per 34.0 33.0 33.9 33.68 32.2931.2 32.2 34.6 37.0 39.6 share, SEK 7 9 6 6 2 5 1 0 Share price on closing day, SEK 131 119 98 85 60 64 57 78 70 94 Sales development per quarter Earnings trend per quarter (SPP recovery excluded) ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/16/20000816BIT00460/bit0001.doc http://www.bit.se/bitonline/2000/08/16/20000816BIT00460/bit0002.pdf