Year end Report 2000

PartnerTech well positioned - focus on the sectors of the future * Net sales increased by 47% to SEK 1,189 million (807). * Operating profit increased by 49% to SEK 97.7 million (65.7). That figure excludes items affecting comparability of SEK 24.2 million. * Earnings per share after full tax increased to SEK 10.65 (6.01). Excluding items affecting comparability, earnings per share after full tax amounted to SEK 8.34. Market trends The market segments that PartnerTech prioritizes were characterized by solid growth during the year. The Nordic sector for mobile telecom infrastructure is currently moving its production to other countries on an extensive basis. One reason for doing that is to free up domestic resources ahead of the expansion of third-generation (3G) base stations. Construction of the new networks represents very large potential for PartnerTech's operations. PartnerTech's many-faceted operations in the IT/mechatronics market segment continued to show solid growth during the year. Positive trends also characterized the medical technology segment, which has exhibited stable growth for a long period of time. The sector generally experienced shortages of certain types of electronics components during the year. However, the situation improved considerably in the final months of the year. The company is well positioned for the rapid expansion of the market that is expected to begin late in the spring of 2001. However, the transfer of mobile telecom infrastructure production will lead to a temporary decline in volume during the spring. It cannot be ruled out that this decline will necessitate some kind of staff reduction. Such a reduction is not expected to be required in more than one or two of the units, thus affecting only a very small number of the approximately 900 people employed by the company. Results for the fourth quarter For the fourth quarter, the Group reported net sales of SEK 335.7 million (238.1), the highest ever. That represents an increase of 41% from the same period of 1999. The operating profit, excluding items affecting comparability, of SEK 18.2 million (17.3) constituted an improvement of SEK 0.9 million. The operating margin, excluding items affecting comparability, declined from 7.3% to 5.4%. The primary reasons for the difference were large volume and product mix fluctuations, as well as initial costs in connection with project start-ups for new customers. Including items affecting comparability, the operating profit was SEK 20.0 million (17.3). Net sales, profit and profitability In 2000, PartnerTech enjoyed volume growth of 47%, corresponding to sales of SEK 1,188.5 million (807.4). For comparable units, sales rose by 31%. Growth was primarily attributable to PartnerTech's telecom infrastructure and IT/mechatronics market segments. The increase stemmed from underlying market growth, as well as new customers and greater volumes generated by existing customers. Group's performance per quarter SEK million Q4 98 Q1 99 Q2 99 Q3 99 Q4 99 Q1 00 Q2 00 Q3 00 Q4 00 Net revenue 205.5 188.3 209.9 171.2 238.1 250.4 327.0 275.4 335.7 Operating 14.7 9.5 21.1 17.8 17.3 20.5 34.5 24.5 18.2 profit Operating 7.1% 5.1% 10.1% 10.4% 7.3% 8.2% 10.6% 8.9% 5.4% margin* *Excluding items affecting comparability (SEK -4.1 million in Q4 1998 and SEK 22.4 million in Q2 2000, SEK 1.8 million in Q4 2000) Excluding items affecting comparability of SEK 24.2 million, the operating profit for 2000 was SEK 97.7 million (65.7). That represents an increase of 49% from the same period of 1999. The operating margin increased somewhat from 8.1% in 1999 to 8.2% in 2000. The variations in operating margin from quarter to quarter are chiefly due to changes in volume and product mix. However, new products and customers also cause such variations. One item affecting comparability was an SPP refund of SEK 24.2 million, a new recalculation of which resulted in an increase of SEK 1.8 million in the fourth quarter. The Group's financial revenue and expense for 2000 totaled SEK -8.2 million (-3.1). The increase in financial expense was due primarily to the fact that the acquisitions carried out in 1999 and 2000 were financed by means of a positive cash flow from initial operations and greater borrowing. The profit after financial items, excluding items affecting comparability, for 2000 was SEK 89.5 million (62.5), an increase of 43% from 1999. The profit includes goodwill amortization of SEK 3.8 million (1.1). Including items affecting comparability, the profit after financial items was SEK 113.7 million (62.5). Financial position and liquidity The Group's operating capital at the end of the year amounted to SEK 410.8 million (243.2). That represents an increase of SEK 167.6 million. Of the capital, SEK 27.3 million was related to acquisitions. Working capital increased by 94% to SEK 197.2 million (101.4) at the end of the period. Of this working capital, accounts receivable at the end of the year accounted for SEK 196.3 million (131.4), inventories for SEK 192.4 million (148.1), and accounts payable for SEK 114.0 million (97.5). SEK 0.2 million of the increase was attributable to acquisitions. Fixed capital at the end of 2000 was SEK 240.9 million (159.6), of which SEK 61.4 million (56.7) was intangible assets, SEK 159.8 million (102.8) tangible assets and the remaining SEK 19.7 million (0.2) financial assets. Net borrowing, that is, interest-bearing liabilities less cash and equivalents, was SEK 204.5 million (112.0) at the end of the period. Shareholders' equity increased during the year by SEK 75.1 million to SEK 206.3 million (131.2) at the end of the year. The equity/assets ratio rose during the year by 2.8 percentage points, from 29.5% to 32.4%. Funds provided from profit added SEK 117.0 million (69.1) to Group assets. Funds tied up in operations increased by SEK 95.8 million (1.6). That generated a total cash flow from operating activities of SEK 21.2 million (70.7). Net investments during the year totaled SEK 91.1 million (117.3). Of these investments, gross investments in intangible fixed assets totaled SEK 10.2 million (57.7), tangible fixed assets SEK 80.0 million (59.6) and financial assets SEK 0.9 million. The cash flow after investments was SEK -69.8 million (-46.5). Personnel The number of full-time employees averaged 867 (625) during 2000. There were 895 (749) full-time employees at the end of the year. The acquisition of PartnerTech Järfälla gave the Group 30 new employees. The remainder of the increase was related to organic growth. Average sales per employee increased by 6% to SEK 1,37 million (1,29). Important developments in 2000 PartnerTech Inc. was established and incorporated in Atlanta, Georgia in February. PartnerTech started up production at the unit during the year and now provides manufacturing capacity, as well as other services such as development and logistics, to its customers in the United States. In late March, PartnerTech acquired all the shares in Temo Finmekaniska Verkstad AB, which changed its name to PartnerTech Järfälla AB. The company, which reports annual sales of around SEK 60 million and has more than 30 employees, is a contract manufacturer of prototypes and is responsible for specialized processing. The greater part of the work, which is carried out in Järfälla, Stockholm, involves high-speed processing for the telecom market. The acquisition was a strategic move and strengthens PartnerTech, primarily in prototype manufacture and as a development partner. In early July, PartnerTech announced that it had been chosen as a partner in a product and production processes project related to certain special units for Ericsson Radio Access. The project led to the serial production of Tower Mounted Amplifiers (TMA) for radio signals from mobile phones. The project is expected to generate annual sales of approximately SEK 120 million. During December, PartnerTech opened a new Design & Engineering Center in Järfälla. The center is the first that PartnerTech is running and will be a strategic development unit, primarily for telecom. The emphasis will be on development and prototype design. After the end of the financial year, in January 2001, PartnerTech received a large assignment from C Technologies, entailing closer collaboration between the two companies, including new routines for logistics and distribution. The order accorded PartnerTech responsibility for the final assembly, testing and distribution of the C-Pen 600C and C-Pen 800C. The assignment is worth over SEK 100 million to PartnerTech on a yearly basis. Dividends The Board of Directors has proposed to the Annual General Meeting that, of the profit for the year, SEK 1.50 per share (0.75) be distributed as dividends, corresponding to a total of SEK 11.3 million (5.7). Annual General Meeting The meeting will be held at 5:00 PM on Tuesday, March 27, 2001. The meeting will take place at Finlandshuset, Snickarbacken 4, Stockholm. Nomination of Board members Shareholders wishing to submit advance proposals for Board members may contact the members of the nominating committee: Andrejs Cakste, Member of the Board Phone +46 70 852 1221 Patrik Tigerschiöld, Member of the Board Phone +46 8 614 0020 Board Chairman Per Wejke has informed the Board that he would decline a nomination for re-election. Upcoming financial reports The complete Annual Report will be available at PartnerTech, Södra Tullgatan 3 in Malmö no later than two weeks before the Annual General Meeting and will be sent out at the same time to shareholders. * The Annual General Meeting will be held on Tuesday, March 27. * The report for January-March will be published on Friday, April 27. * The report for January-June will be published on Tuesday, August 14. * The report for January-September will be published on Wednesday, October 24. PartnerTech AB, February 6, 2001 Mikael Jonson CEO For additional information, please contact Mikael Jonson, CEO, by phone +46 70 678 10 01, or Jonas Arkestad, Chief Financial Officer, phone +46 40 10 26 42. The Company's auditors have not examined this interim report in its entirety. 2000 1999 1998 1997 Consolidated Income Statement (SEK Jan-Dec Jan-Dec Jan-Dec Jan-Dec million) Net revenue 1 188.5 807.4 585.6 542.0 Cost of goods and services sold -1 049.5 -715.5 -539.3 -498.7 Gross profit/loss 139.0 91.9 46.3 43.3 Selling expenses -24.6 -13.0 -8.3 -10.0 Administrative expenses -18.5 -13.3 -5.2 -3.4 Items affecting comparability 24.2 0.0 -4.1 -10.1 Other operating revenue 4.9 1.5 2.0 4.0 Other operating expenses -3.2 -1.5 -1.7 -3.2 Operating profit/loss 121.9 65.7 29.0 20.6 Net financial items -8.2 -3.1 -3.9 -4.5 Profit/Loss after financial items 113.7 62.5 25.1 16.2 Taxes -33.2 -17.1 -7.9 -4.4 NET PROFIT FOR THE PERIOD 80.5 45.5 17.2 11.7 2000 1999 1998 1997 Consolidated Balance Sheet (SEK million) Dec 31 Dec 31 Dec 31 Dec 31 ASSETS Intangible fixed assets 61.4 56.7 0.0 0.0 Tangible fixed assets 159.8 102.8 54.7 35.5 Financial assets 19.7 0.2 - - Fixed assets 240.9 159.6 54.7 35.5 Current assets - Inventories 192.4 148.1 115.9 101.3 - Accounts receivable 196.3 131.4 129.7 65.8 - Other current assets 6.5 5.4 2.2 2.8 - Cash and equivalents 1.6 0.6 0.3 9.5 Total current assets 396.8 285.5 248.2 179.4 TOTAL ASSETS 637.7 445.2 302.9 214.9 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 206.3 131.2 86.7 71.4 Long-term interest-bearing liabilities 176.4 106.9 62.9 59.8 Current interest-bearing liabilities 29.7 5.7 1.9 0.0 Total interest-bearing liabilities 206.1 112.6 64.8 59.8 Long-term non-interest-bearing liabilities 27.2 17.9 6.6 3.8 (provisions) Accounts payable 114.0 97.5 85.0 36.3 Other current non-interest-bearing 84.1 86.0 59.9 43.6 liabilities Total non-interest-bearing liabilities 225.3 201.4 151.4 83.7 TOTAL EQUITY AND LIABILITIES 637.7 445.2 302.9 214.9 2000 1999 1998 1997 Consolidated Statement of Changes in Jan-DecJan-Dec Jan- Jan- Financial Position (SEK million) Dec Dec Net profit 80.5 45.5 17.2 11.7 Reversal of depreciation/amortization 28.8 12.4 7.6 6.6 Capital gain/loss 0.1 -0.1 -0.3 -0.8 Change in deferred tax liability 7.7 11.3 2.8 1.3 Change in working capital -95.8 1.6 -13.1 7.8 Net investments - 91.1 -117.3 -26.5 -16.1 Cash flow after investments - 69.8 -46.5 -12.3 10.7 Change in loans 44.4 26.1 4.1 -20.4 Change in lease debt 32.1 21.7 0.9 7.8 Dividends -5.7 -3.0 -1.9 - Issue of subscription rights, net - 2.0 - - CHANGE IN LIQUID FUNDS 1.0 0.3 -9.2 -1.9 2000 1999 1998 1997 Key Ratios Jan-DecJan-Dec Jan- Jan- Dec Dec Gross margin, % 11.7 11.4 7.9 8.0 Operating margin, % (excl. items affecting 8.2 8.1 5.7 5.7 comparab.) Operating margin, % 10.3 8.1 5.0 3.8 Profit margin, % (excl. items affecting 7.5 7.7 5.0 4.9 comparab.) Profit margin, % 9.6 7.7 4.3 3.0 Return on operating capital (ROOC), %* 36.1 41.7 20.4 16.5 Return on shareholders' equity, %* 47.3 42.6 23.3 17.0 Equity/assets ratio, % 32.4 29.5 28.6 33.2 * The profitability ratios are calculated based on the average of quarterly balances. 2000 1999 1998 1997 Per Share Data Jan-DecJan-Dec Jan- Jan- Dec Dec No. of shares at end of period, '000s 7 561 7 560 7 560 7 560 Profit after full income tax, SEK (excl. 8.34 6.01 2.67 2.51 items affecting comparability) Profit after full income tax, SEK 10.65 6.01 2.28 1.55 Adjusted equity, SEK 27.29 17.35 11.47 9.44 Employee stock options issued will increase the number of shares on issue by no more than 288,800, or 3.8%. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/06/20010206BIT00790/bit0001.doc http://www.bit.se/bitonline/2001/02/06/20010206BIT00790/bit0002.pdf