Year end report 1999

YEAR END REPORT 1999 January-December 1999 Growth and improved profitability * Net sales advanced 38%, to SEK 807.4 (585.6) million. * Profit after financial items reached SEK 62.5 (25.1) million, up 149%. * Earnings per share after tax increased, to SEK 6.01 (2.28). * Nordisk Kvalitetsproduktion AB, acquired in 1999, is included in the accounts from November first. * In the fourth quarter, PartnerTech received more orders and boosted capacity utilization. Market trends Outsourcing of product development and manufacturing, is flourishing. Many corporations are using outsourcing to shorten the time it takes to launch products, reduce capital requirements, and focus further on their brands in our increasingly global market. This particularly applies to telecommunications, information technology, and medical technology, but even other industries are engaging contract manufacturers to a greater extent. The pace of growth in contract manufacturing is accelerating, which indicates significant growth in the future. PartnerTech's strength is chiefly the ability to combine its recognized expertise in development with substantial manufacturing capacity. Increasingly, the market for contract manufacturing involves both developing and manufacturing complete products, which bodes well for PartnerTech's future. PartnerTech keeps focused on market needs, and the Company's overall strategy includes the goals of growing organically as well as through acquisitions and of providing for its customers, wherever they are. In 1999, the Group took further steps to implement this strategy. Fourth-quarter results Net sales in the fourth quarter totaled SEK 238.1 (205.5) million. The operating margin for the fourth quarter equaled 7.3% (6,6%). The change in operating margin between the quarters almost exclusively depend on the under-absorption of fixed costs caused by volume changes and up-front costs for new assignments. Profit after financial income and expense was SEK 16.7 (13.6 before items affecting comparability) million. Net sales, earnings, and profitability PartnerTech's sales expanded in 1999. Growth came primarily from the telecommunications and information technology sectors. In the transition from the third to the fourth quarter, capacity utilization temporarily declined. This resulted not from adverse developments, such as the loss of a contract, but from the uneven order flow common in growth industries. By year-end, capacity utilization was rising sharply again. Consolidated net sales were up, from SEK 585.6 million in 1998, to SEK 807.4 million in 1999. The rise of SEK 221.8 million represented 38% growth. Of the total increase SEK 167.1 million, was attributable to organic growth, the remaining SEK 54.7 million to acquisitions. Stronger expansion of volumes combined with a sharper focus on analysis and fine-tuning operations improved the operating margin, from 5.0% to 8.1%. The operating profit was SEK 65.7 (29.0) million. Interest rates were lower than in 1998. Combined with the lower average level of debt, this checked net financial income and expenses at SEK -3.1 (-3.9) million. Consequently, profit after financial items ended at SEK 62.5 (25.1) million. Tax expense for 1999 is estimated at SEK -17.1 (-7.9) million. Net profit for the year was SEK 45.5 (17.2) million, or SEK 6.01 (2.28) per share. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/10/20000210BIT01050/bit0001.doc http://www.bit.se/bitonline/2000/02/10/20000210BIT01050/bit0002.pdf