Quarterly Report NetCom AB

FOR IMMEDIATE RELEASE Tuesday, November 17, 1998 NETCOM AB ANNOUNCES STRONG GROWTH IN OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 54% Increase in EBIT for the First Nine Months 50% Increase in Operating Revenues 126% Increase in Operating Profit before Depreciation for Mobile Telephony New York and Stockholm - November 17, 1998 - NetCom AB ("NetCom") (Nasdaq : NECSY), the leading alternative provider of telecommunication services in Scandinavia, today announced financial results for the first nine months and third quarter of 1998. FINANCIAL HIGHLIGHTS (in MSEK) N ine Months Ended, September 30 1998 1997 % Change MSEK (except per share amounts) 4 ,305 2 ,861 5 0 Operating Revenue Operating Profit before depreciation and 1 ,001 7 68 3 0 amortization * after depreciation and 4 91 3 18 5 4 amortization ** Gain after financial items 289 6 - *** G ain after tax for the period 133 2 5 4 32 Gain per common share (SEK) 1 .28 0 .33 **** * EBITDA EBIT * The 1997 comparative figure excludes a deferral to the first quarter of 1997 of MSEK (38) relating to NetCom ASA's fourth quarter of 1996 financial results. ** Earnings per share figures are after tax and full conversion. Anders Björkman, President and CEO stated, "In the first nine months of 1998, NetCom achieved strong growth with significant investment in new operations. NetCom retained its position as the price leader within the industry and continued to launch innovative and cost effective telecommunication solutions. The acquisition of cellular interests in the Baltic region will provide significant opportunities for future growth and enable the Group to use its expertise from the Scandinavian countries as a platform for the expansion of it integrated operations." F INANCIAL AND OPERATING HIGHLIGHTS NetCom continues to experience significant growth within its operations. Operating revenue to September 30, 1998, increased by 50% to MSEK 4,305 (MSEK 2,861); Substantial increase in operating profit both before and after depreciation and amortization, increased by 30% and 54% respectively, dispite continuos efforts on the Danish and Norwegian markets which lowered operating profit after depreciation with MSEK -203 (MSEK -74); Comviq had a record first nine months of 1998 with 500,000 net new subscribers, an increase of 76% on the comparative period of 1997; Mobile telephony operations increased operating profit by 126% from MSEK 354 to MSEK 799 over the twelve month period; Tele2 in Sweden reported a 115% increase in fixed telephony customers to 633,000; Tele2 had 350,000 dial up Internet customers at September 30, 1998, an increase of 61% on the comparable 1997 period; A new interconnect agreement with Telia will lead to higher margins for Tele2's fixed telephony operations from December 1, 1998; NetCom announced the acquisition of a 48% interest in Ritabell, a cellular operation in Estonia and a Memorandum of Understanding ("MOU") to acquire 2 cellular operations in Lithuania; NetCom AB announced its name change from NetCom Systems AB, effective from October 15, 1998. REVIEW OF OPERATIONS Financial Results for the nine months ended September 30, 1998 Operating revenues for the first nine months of 1998 were MSEK 4,305, an increase of 50% compared to the MSEK 2,861 reported in the comparative period of 1997. The increase in operating revenues was fueled by strong volume growth in the major operating companies. The Mobile Telephony operation in Sweden contributed MSEK 2,149 to group operating revenue, an increase of 46% over the MSEK 1,471 reported in the comparative period of 1997. The Fixed Telephony and Internet Operations increased operating revenue by 46% to MSEK 1,631 from MSEK 1,118 reported in the comparable period of 1997. There has been strong growth in NetCom's operations in Denmark and Norway in the period reported. The Cable Television operation contributed revenues of MSEK 107 for the nine month period, compared to MSEK 157 in the comparative period of 1997. The reduction in revenue is primarily a result of the sale of the SMATV operation in the fourth quarter of 1997. Operating profit before depreciation and amortization in the first nine months of 1998 increased by 30% to MSEK 1,001 from MSEK 768 reported in the comparable period of 1997. The operating profit margin before depreciation and amortization, decreased in the first nine months of 1998 from 27% to 23% reported in the comparative period of 1997 as a result of reduced margins in the Swedish market for fixed telephony and Internet, following a 20% price reduction introduced in May and also costs associated with continued market efforts in the Danish and Norwegian operations. The Employee Share Option Program operates relative to the market value of the Groups equity. The increase in share price has increased the provisions due under the terms of the Program with MSEK 37. In the first nine months of 1998, operating profit after depreciation and amortization increased by 54% to MSEK 491 from MSEK 318 reported in the comparative period of 1997. The operating profit margin after depreciation and amortization, remained stable at approximately 11%. In the period ended September 30, 1998, Mobile Telephony operations contributed MSEK 799 to group operating profit after depreciation and amortization, an increase of 126% compared to MSEK 354 in the corresponding period of 1997. The Fixed Telephony and Internet operations reported operating profit after depreciation and amortization of MSEK 57, compared to MSEK 128 reported in the comparable period of 1997. The results for the first nine months were negatively impacted by pricing initiatives in international and national fixed telephony services to maintain market position as the price leader. NetCom's Norwegian listed associated company, NetCom ASA, reported an operating profit after depreciation and amortization of MNOK 186 in the nine months ended September 30, 1998, compared to a loss of MNOK 6 in the comparative period of 1997. NetCom has a 25% holding in NetCom ASA. Net interest expense and other financial items for the first nine months of 1998 amounted to MSEK 203, compared to MSEK 214 for the comparative period of 1997. The reduction in net interest reflects lower interest rates on debt outstanding during the period. The gain after financial items amounted to MSEK 289 compared to a gain of MSEK 6 in the corresponding period of 1997. The net gain reported for the first nine months of 1998 amounted to MSEK 133, or a profit of SEK 1.28 per share, compared with a net gain of MSEK 25 or SEK 0.33 per share in the comparable period of 1997. The net profit reported over the first nine months of 1998 reflects the improving profitability of NetCom's operations NetCom's total assets at September 30, 1998 increased to MSEK 8,871 compared to MSEK 8,684 reported at December 31, 1997. Financial Results for the three months ended September 30, 1998 Operating revenues for the three months ended September 30, 1998 increased by 46% to MSEK 1,520 compared to MSEK 1,044 for the three months ended September 30, 1997. Operating profit before depreciation and amortization increased by 35% to MSEK 410 in the third quarter of 1998 compared to MSEK 304 in the comparable period of 1997. Results for the third quarter of 1998 have been impacted by a price reduction initiated on fixed telephony services and start up costs associated with the operation in Norway. Results were positively effected by a strong third quarter for the Mobile Telephony operation with operating profit before depreciation and amortization increasing by 70% from MSEK 231 in the third quarter of 1997 to MSEK 392 in the third quarter of 1998. The performance of the shares in The Employee Share Option Program for the three months ended September 30, 1998, resulted in a revenue of MSEK 21. Operating profit after depreciation and amortization increased by 55% to MSEK 231 in the third quarter of 1998 compared to MSEK 149 in the three months ended September 30, 1997. Net interest and other financial expenses for the third quarter of 1998 were MSEK 67 compared to MSEK 68 for the third quarter of 1997. The gain after financial items in the third quarter of 1998 was MSEK 167 compared to MSEK 81 in the three months ended September 30, 1997. COMPANY NAME CHANGE Effective from October 15, 1998 NetCom Systems AB will change its name to NetCom AB ACQUISITIONS In the third quarter of 1998, NetCom announced the acquisition of a 48% interest in Ritabell of Estonia ("Ritabell") from Millicom International Cellular SA ("MIC") for a consideration of $50 million. Ritabell is a cellular operation in Estonia and at September 30, 1998 reported 35,032 gross cellular subscribers. Revenues for the nine months ended September 30, 1998 were $4.7 million and operating profit before depreciation and amortization totaled $0.5 million. The acquisition became effective on October 1, 1998 and Ritabell will therefore be reflected in NetCom's consolidated financial results for the fourth quarter of 1998. In the third quarter of 1998, NetCom also signed a Memorandum of Understanding ("MOU") with Millicom International Cellular S.A. ("MIC") to acquire MIC's 24.5% shareholding interest in Comliet UAB of Lithuania ("Comliet") and its 35.8% interest in Bité GSM ("Bité"), subject to referral to the clauses under MIC's existing shareholders agreement, including rights of first offer. YEAR 2000 Within NetCom, there are many systems dependent operations. The Board and management are currently giving high priority to the issue of the Year 2000 and the potential effect that this may have on the Company, its products, services and employees. An Activity Plan has been produced and resources dedicated to the planning, upgrading and testing of systems. The management are committed to a regular review of the process and will give regular quarterly updates to its shareholders. OPERATIONAL REVIEW Tele2 AB in Sweden Tele2 AB encompasses 3 operational divisions: Mobile Telephony, Fixed Telephony and Internet and Cable Television which are marketed under the respective brand names of Comviq, Tele2 and Kabelvision. Mobile Telephony In the first nine months of 1998, Tele2 AB's mobile telephony operations continued to make strong progress. As of September 30, 1998, Comviq reported 1,155,000 subscribers, inclusive of prepaid card subscribers, representing an increase of 76% on the 655,000 subscribers reported in the same period of 1997. The annual churn rate excluding prepaid subscribers has remained stable at approximately 20%. In the first nine months of 1998, the number of activated prepaid card customers increased by18% from 438,000 to 518,000. The total numbers of cards sold to retailers increased by 14% from 550,000 to 625,000. Tele2 continues to invest in its cellular infrastructure to meet the growing demand for cellular services across its markets. During the period, Tele2Mobil has been relaunched. Tele2Mobil is the only brand in the market offering a mobile telephony service designed specifically for business customers. The main advantages of the service are the low call tariffs which exist for calling between the customers office and mobile phone and between individual company registered mobile phones, in adition to the 24 hour customer service facility. The average minutes of use per customer, excluding prepaid, per month has increased to 116 minutes in average in the third quarter of 1998 from 100 minutes in the third quarter 1997. The monthly revenue per customer, excluding prepaid card subscribers, for the nine months ended September 30, 1998 was SEK 393 compared to SEK 366 for the same period of 1997, an increase of over 7%. Strong subscriber growth continues to be fueled by the introduction of new marketing initiatives. In September 1998, under the Comviq brand a new local mobile telephony service was launched in 3 additional cities in Sweden with the benefit to customers of a low subscription fee and call rates that are competitively priced in comparison with an ordinary fixed line telephone subscription. Fixed Telephony and Internet In the period September 30, 1997 to September 30, 1998, Tele2 in Sweden increased the number of its fixed telephony customers by 115% from 295,000 to 633,000. At September 30, 1998 211,000 subscriptions were registered through NetCom's collaboration with the Swedish Cancer Society and its telephone lottery, Ringo, which utilizes Tele2's network. Tele2 reported 350,000 dial up Internet customers at September 30, 1998, corresponding to a 61% increase on the 218,000 customers reported in the comparative period of 1997. Call2Web, the IP based telephony service, has increased the functionality of its customer offering and recently launched an innovative service allowing customers to make and receive telephone calls on a single line whilst also surfing the Net. In September 1998, Tele2 announced an agreement with Disney Online to license Disney Online content and the children's service Disney Blast for distribution on the Internet in Sweden, Denmark and Norway. The agreement with Disney has significantly increased the value added content of Tele2's customer offering on the Internet and will be a significant stand alone service. A new interconnect agreement with Telia will lead to higher margins for Tele2's fixed telephony operations from December 1, 1998. Cable Television In the first nine months of 1998, Cable Television sales have remained stable. In August, a new program offer was launched in collaboration with Viasat. NätTeknik/Datametrix NätTeknik/Datametrix extends NetCom's expertise into the areas of systems integration and support both for the Group's telecommunications and data net services and for third parties in Scandinavia. In August 1998, NätTeknik/Datametrix announced an agreement with Lucent Technologies ("Lucent") to sell Lucent's communications servers in call centers in Sweden. Lucent is the world leader in the field of call center solutions and is one of the largest manufacturers of telecommunications equipment. In collaboration with Lucent, NetCom aims to challenge competitors in the field of call center solutions in Scandinavia. The collaboration with Lucent also includes Internet based telephony and powerful computer switchboards. An agreement has also been signed with Quintus Corporation on all inclusive software for call center solutions, focusing on customer service in integrated telephony and computer environments. Tele2 A/S Danmark, Denmark In the first nine months of 1998, Tele2 A/S, Denmark's the second largest company in the provision of fixed telephony services, continued to grow substantially. Using the "1001" prefix, Tele2 A/S reported 239,000 fixed telephony customers on September 30, 1998, an increase of 108% on the nine month period. Tele2 A/S has both private and corporate customers. Tele2 A/S markets its dial up Internet service to private individuals as "get2net" and reported 103,000 customers, an increase of 415% for the nine month period. The Company also provides Internet services to both the private and corporate market under the brand name of UNI2, which increased its customer base by 125% to 18,000 customers for the nine months ended September 30, 1998. Tele2 Norge AS, Norway The market for public telecommunications in Norway was deregulated in January, 1998, at which time Tele2 Norge launched service using the "1502" prefix and calling its service "1502". As of September 30, 1998, Tele2 Norge reported 120,000 subscribers, an increase of 60% on the 75,000 subscribers reported at June 30, 1998. Included within the 120,000 subscribers reported are 26,000 business customers. Tele2 Norge had a total of 70,000 Internet subscribers, as at September 30 1998. NetCom ASA NetCom's Norwegian affiliate, NetCom ASA, has made significant progress in the first nine months of 1998. The number of subscribers increased in the third quarter of 1998 by 35,812 for a total of 489,541, an increase of 31% on the 372,892.subscribers reported in the comparative period of 1997. There has been a corresponding increase in the average minutes of usage per subscriber from 145 in the third quarter of 1997 to 151 in the third quarter of 1998. In the first nine months of 1998, operating revenues increased by 25% to MNOK 1,515 compared to MNOK 1,207 for the comparative period of 1997. Operating profit before depreciation and amortization in the first nine months of 1998, increased by 142% to MNOK 394, compared to MNOK 163 in the comparative period of 1997. This improvement occurred as a result of strong subscriber growth during the period and a reduced churn rate. The operating profit after depreciation and amortization over the same period amounted to MNOK 186, compared to a loss of MNOK 6 in the comparable period in 1997. ACCOUNTING PRINCIPLES NetCom has reported its quarterly financial statements in accordance with the accounting principles and methods used in the Annual Report and Accounts for the 1997 financial year. For the purposes of comparison, the figures for 1997 have been restated to reflect the new organizational structure of the Group adopted in the first quarter of 1998. This results in the cable television operations of Tele2 AB being accounted for separately from other cable operations which as separate legal entities are accounted for within Other Operations. Operating revenues for the 1997 financial year for these independent companies totaled MSEK 14, and an operating loss of MSEK 1. For the purpose of comparison there has also been a reduction in operating revenues for the 1997 financial year for the Mobile Telephony and Fixed Telephony operations within Tele2 AB to reflect internal sales between Comviq and Tele2. FINANCIAL SUMMARY Capital expenditure The group's capital expenditure during the nine month period ended September 30, 1997 amounted to MSEK 1,097 (MSEK 726). In addition, investments amounting to MSEK 115 have been made through financial leasing obligations with regard to NetCom's fixed telephony operations in the nine month period. Capital expenditure within Tele2 AB for the first nine months of 1998 totaled MSEK 933, compared to MSEK 649 in the comparative period of 1997. Within Tele2 AB, Mobile Telephony accounts for MSEK 426 (MSEK 337), Fixed Telephony and Internet MSEK 406 (MSEK 302) and Cable Television MSEK 5 (MSEK 10). Investment in share purchase programs totaled MSEK 96. Capital expenditure in the Group's operations in Norway and Denmark totaled MSEK 49 (MSEK 11) and MSEK 78 (MSEK 75) respectively. The figures shown in brackets correspond to the comparable periods in 1997. Depreciation and Amortization The group's depreciation and amortization charge for the three months ended 30 September, 1998 was MSEK 510 compared to MSEK 450 for the period ended 30, September 1997. This reflects increased investment in the Company's asset base during the period. In the first nine months of 1998, Tele2 AB's charge for depreciation and amortization was MSEK 403 (MSEK 380). Mobile Telephony accounted for MSEK 203 (MSEK 181), Fixed Telephony and Internet MSEK 151 (MSEK 132) and Cable Television MSEK 49 (MSEK 67). Depreciation and amortization for the Group's operations in Norway and Denmark totaled MSEK 13 (MSEK 4) and MSEK 26 (MSEK 10) respectively. Comviq accounted for MSEK 181 and Tele2 MSEK 132 of the group depreciation and amortization charge. The figures shown in brackets correspond to the comparable periods in 1997. Share Structure The number of a and B shares at September 30, 1998 was 103,850,246 and the weighted average number of shares in issue was 103,514,444. Parent Company At the parent company level, the loss after financial items for the nine months ended September 30, 1998 was MSEK 4 compared to a loss of MSEK 40 in the corresponding period of 1997. In 1997, the Company had large costs connected with the issue of new shares and the listing of the equity on the Nasdaq stock market. Included within the reported loss figure is a provision of MSEK 37 relating to the Company's obligations to senior executives under the Employee Share Option Program. Investments in property, plant and equipment in the nine months ended September 30, 1998 totaled MSEK -2 compared to MSEK 8 in the corresponding period of 1997. In the third quarter of 1998, convertible debentures representing 755,555 B shares were converted, thereby increasing shareholders equity by MSEK 38. COMPANY DISCLOSURE Full Year January - December, 1998 NetCom's fourth quarter and full year numbers for the period ended December 31, 1998 will be released on February 25, 1998. The nine months report has not been subject to specific review by the company's auditors. Stockholm, November 17, 1998 President and CEO of NetCom AB NetCom AB was formed in 1993 and is a leading alternative provider of telecommunications services in Scandinavia. The company operates in the GSM mobile telephony market under the brand names of Comviq, Tele2 in Sweden and through its listed affiliate, NetCom ASA in Norway and its affiliate Ritabell in Estonia. The Group has operations in the areas of public telecommunications, Internet and data communications services, where the group operates under the brand name of Tele2, in Sweden and its subsidiaries Tele2 A/S in Denmark and Tele2 Norge AS in Norway. The group also operates in the cable-TV service sector. The company is listed both on the Stockholm Stock Exchange under the symbols NCOMA and NCOMB and on the Nasdaq Stock Market under the symbol NECSY. CONTACTS Anders Björkman Telephone: + 46 8 562 640 00 President and CEO, NetCom AB, Sweden Jörgen Latte Telephone: + 46 8 562 640 00 CFO, NetCom AB, Sweden Samantha Drover Telephone: + 44 171 647 6403 Director of Investor Relations Press Inquiries: Janerik Larsson Telephone: +46 70 762 00 85 Internet: www.netcom.se FIVE YEAR SUMMARY 1998 1997 1997 1996 1995 1994 * * 9 9 mont mont h h Income Statement and Balance Sheet (MSEK) Operating revenue 4 2 4 2 1 882 305 861 036 872 953 Operating profit before 1 768 1 651 depreciation 001 000 (431 (241 ) ) Operating profit after 491 318 392 254 depreciation (728 (480 ) ) Loss/gain after financial 289 6 29 (1 items (37) 456) (951 ) Shareholders' equity 3 3 3 2 19 328 130 156 276 (910 ) Shareholders' equity, 3 3 3 2 19 after full conversion 328 167 193 923 (910 ) Total assets 8 7 8 7 4 4 871 815 684 527 831 278 Cash flow provided by 925 179 411 610 operating activities (759 (491 ) ) Liquidity 1 453 1 819 189 11 293 499 Net borowing 3 3 3 3 4 3 854 405 579 894 555 322 Net borrowing, after full 3 3 3 3 4 3 conversion 854 368 542 247 555 322 Investments including 1 726 1 1 1 1 financial lease** 212 117 016 006 081 Key ratio (%) Solidity 38% 40% 36% 30% 1% negati ve Solidity, after full 38% 41% 37% 39% 1% conversion negati ve Return on shareholders' nega equity 4.1% 2.3% 3.2% negatinegatitive ve ve Return on shareholders' nega equity, after full 4.1% 2.4% 3.2% negatinegatitive conversion ve ve Return on capital employed nega 6.9% 3.9% 4.8% 1.3% negatitive ve Average interest rate 6.7% 7.2% 7.1% 8.9% 11.5 13.4 % % Average interest rate, after full conversion 6.7% 7.2% 7.1% 8.6% 11.5 13.5 % % Value per share (SEK) Gain/loss nega 1.29 0.25 0.50 2.80 negati tive ve Gain/loss, after full nega conversion 1.28 0.33 0.57 2.78 negati tive ve -of which Tele2 Norway (1.0 (0.3 (0.4 (0.1 9) 0) 6) 2) -of which Tele2 Denmark (1.0 (0.4 (0.7 (0.1 9) 8) 9) 6) -of which associated companies (0.0 (0.6 (0.8 2.52 5) 8) 5) -of which Tele2 Sweden and other operations 3.51 1.79 2.67 0.54 Shareholders' equity 32.1 31.9 32.1 25.7 negati970. 5 2 8 8 ve 10 Shareholders' equity, after full conversion 32.0 30.6 30.8 28.7 negati970. 4 2 6 0 ve 10 Market value at closing - - day 263. 115. 170. 110. 00 00 50 50 P/E-ratio*** - - 153. 344. 344. 39.4 07 05 43 0 P/E-ratio, after full - - conversion*** 154. 258. 298. 39.8 07 27 12 1 * NetCom, formerly a wholly owned subsidiary of Industriförvalnings AB Kinnevik, was listed in 1996. ** Financial leases are included from January, 1 1997. *** The P/E-ratios are calculated on an annualized basis. Definitions: See the 1997 Annual Report. P/E-ratio = market price divided by earnings per share. CONSOLIDATED INCOME STATEMENT (MSEK) 1998 1997 1997 Jan 1 - Jan 1 - Full Sept 30 Sept 30 Year Operating revenue 4 305 2 861 4 036 Operating expenses (3 930) (2 707) (3 850) Other revenues 125 186 217 Other expenses (9) (22) (11) Operating Profit 491 318 392 Share of gain/loss of associated 1 (60) (81) companies Non-recurring items* - (38) (38) Net interest and other financial (203) (214) (310) expenses** Gain/loss after financial items 289 6 (37) Taxes (156) 19 86 Gain for period 133 25 49 Earnings per share after tax and after full conversion Tele2 Norway (1.09) (0.31) (0.46) kr kr kr Tele2 Denmark (1.09) (0.48) (0.79) kr kr kr Associated companies (0.05) (0.68) (0.85) kr kr kr Tele2 Sweden and other operations 3.51 kr 1.80 kr 2.67 kr Total 1.28 kr 0.33 kr 0.57 kr e 1997 figure relates to a deferral to the first quarter of 1997 of NetCom ASA's fourth quarter of 1996 financial results. ** The full year figure for 1997 includes the expensing of one- off interest costs in 1997 totaling MSEK 45 associated with loan agreements preceding the refinancing of the total group. REVIEW OF THE GROUP (MSEK) 1998 1997 1997 Jan 1 - Sept Jan 1 - Sept Full 30 30 Year Operating revenue by business area Tele2 AB: -Mobile telephony 2 149 1 471 2 058 -Fixed telephony including 1 631 1 118 1 584 Internet -Cable Television 107 157 227 3 887 2 746 3 869 Tele2 Norway 99 20 35 Tele2 Denmark 374 127 192 Other operations 106 36 64 Parent company 4 2 3 Adjustments for internal (165) (70) (127) sales Total 4 305 2 861 4 036 Operating profit by business area Tele2 AB: -Mobile telephony 799 354 444 -Fixed telephony including 57 128 211 Internet -Cable Television (44) 4 (9) 812 486 646 Tele2 Norway (103) (28) (43) Tele2 Denmark (100) (46) (76) Other operations (8) 2 (2) Parent company (51) (41) (60) Group adjustments, (59) (55) (73) depreciation Total 491 318 392 Gain/loss after financial items Tele2 548 281 332 Tele2 Norway (113) (31) (48) Tele2 Denmark (113) (50) (82) Other operations 29 (1) (8) Parent company (4) (40) (39) Shares of gain/loss in 1 (60) (81) associated companies Non-recurring items* - (38) (38) Group adjustments, (59) (55) (73) depreciation Total 289 6 (37) * The 1997 figure relates to a deferral to the first quarter of 1997 of NetCom ASA's fourth quarter of 1996 financial results. CONSOLIDATED BALANCE SHEET (MSEK) 1998 1997 1997 Septembe Septembe December r 30 r 30 31 ASSETS Fixed assets Intangible assets 1 698 1 869 1 707 Property, plant and 5 305 4 173 4 583 equipment Financial investments* 426 567 624 7 429 6 609 6 914 Current assets Materials and supplies 24 10 9 Current receivables 1 305 963 1 182 Cash 113 233 579 1 442 1 206 1 770 Total assets 8 871 7 815 8 684 EQUITY AND LIABILITIES Shareholders' Equity Restricted equity 4 240 4 296 4 332 Non-restricted equity (912) (1 166) (1 176) 3 328 3 130 3 156 Minority interest 2 2 2 Provisions 72 - 35 Long-term liabilities Interest-bearing 3 967 3 614 4 146 liabilities Convertible loan debenture - 37 37 3 967 3 651 4 183 Short-term liabilities Interest-bearing - 6 4 liabilities Interest-free liabilities 1 502 1 026 1 304 1 502 1 032 1 308 Total equity and 8 871 7 815 8 684 liabilities * The figures include deferred tax for the periods September 30, 1998, September 30, 1997 and December 31, 1997 of MSEK 411, MSEK 514 and MSEK 580 respectively. CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION (MSEK) 1998 1997 1997 Jan 1 - Sept Jan 1 - Sept Full Year 30 30 Cash flow from 802 557 650 operations Changes in 123 (378) (239) working capital Cash flows provided by 925 179 411 operating activities Investing (1 097) (726) (1 084) activities Financing (296) 560 1 032 activities Net change in (468) 13 359 cash Cash at beginning 579 220 220 of year Exchange 2 - - difference in cash Cash at end of 113 233 579 period PARENT COMPANY'S STATEMENT OF CHANGES IN FINANCIAL POSITION (MSEK) 1998 1997 1997 Jan 1 - Sept Jan 1 - Sept Full Year 30 30 Cash flow from (4) (48) (88) operations Changes in 42 (40) 33 working capital Net cash flow from 38 (88) (55) operating activities Investing (58) (8) (350) activities Financing - 173 404 activities Net change in (20) 77 (1) cash Cash at beginning 36 37 37 of year Cash at end of 16 114 36 period CHANGE OF SHAREHOLDERS´ EQUITY (MSEK) Restricted equity Non-restricted equity Share Other restr. Share in Other capital eq. equity retained losses Equity, Jan 1, 516 3 816 (304) (872) 1998 Distribution to 55 (55) legal reserve Conversion of 3 34 debentures Transfers: -Shares in associated 1 (1) companies -Deferred tax (151) (6) 157 -Other (35) 35 Translation 2 - differences Profit for the 133 period Equity, Sep 30, 519 3 721 (309) (603) 1998 Total restricted 4 240 equity and (912 retained losses ) ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/11/17/19981117BIT00250/bit0001.doc http://www.bit.se/bitonline/1998/11/17/19981117BIT00250/bit0002.pdf