Financial statement 2001

FINANCIAL STATEMENT 2001 - Sales in the consulting business climbed by 19% - Group sales increased by 11.9% to SEK 1,127 million (1 007 m) - The operating profit (EBIT) reached SEK 5.7 million (30.4 m*) - Restructuring costs amounting to of SEK 31 million affected results - EPS of SEK 0.08 (1.99) - The Board proposes that no dividend be paid (0.50) Comments by CEO Hans Johansson -"Semcon is reporting an increase in sales in the consulting business of 19% for 2001 despite a market slowdown in the second half of the year that established itself more quickly than I have seen in over 20 years in this industry. The IT and telecom sectors suffered the most, and the Stockholm region was hit hardest of all. "We began taking countermeasures immediately in the autumn. These are proceeding according to plan and will generate savings of at least SEK 50 million over the full year. These measures include reducing our workforce by over 100 employees, of whom over 30 worked in administration. We have closed down offices and departments that had weak profitability. "But despite tough times, the year also included several successes. Zipper by Semcon, which delivers IT strategies and more efficient operation of IT infrastructure, signed strategically important agreements with Akzo Nobel and Mölnlycke Healthcare. Our new specialist operation for the Medical sector, LifeScience, signed important contracts with Novo Nordisk and Pharmadule/Emtunga. Meanwhile Informatic, our operation for technical documentation, has acquired a leading position in northern Europe thanks to its unique business offer. Our partnership with Volvo Car deepened and we signed new partnership agreements with Besam and ABB. "The economic climate means that customers are rationalising their activities, which is creating new business opportunities. One good example of this is the letter of intent signed with Ericsson (EPMI) concerning the outsourcing of training and consulting activities connected with the PROPS project management tool. We are fulfilling our strategy for increasing the amount of value-based business and projects where we take complete responsibility. At the end of 2001 and in early 2002 we signed several important agreements that confirm that our skills and services are still in demand. "The market as a whole will continue to be weak during the first six months of 2002. We will prioritise profits ahead of growth. I expect our restructuring measures to lead to improved profitability for the full year." *Excluding Alecta refund of SEK 19.6 million. Business activities Sales for the full year increased by 11.9% to SEK 1,127 million (1,007 m). Growth was organic and was due to outsourcing agreements. The operating profit before goodwill was SEK 12.2 million (34.9 m), representing a profit margin of 1% (3). The operating profit after goodwill amounted to SEK 5.7 million (30.4), representing a profit margin of 0.5% (3). Semcon's sales in Q4 2001 were SEK 297.6 million (278.4 m) and the operating profit was SEK -22.0 million (-0.6 m). The major downturn in the telecom market affected sales and profits in all business areas. Hardest hit was e-Design. Results were also hit by costs for closing down unprofitable activities and for restructuring. These costs totalled SEK 31.1 million. Business Sales Growt Operating Operating margin areas (SEKm) h profit (%) (%) (SEKm) 2001- 2000- 2001- 2000- 2001- 2000-12-31 12-31 12-31 12-31 12-31 12-31 Industrial 570.4 485.4 +17.5 14.5 22.0 2.5 4.5 Design e-Design 449.5 416.9 +7.8 -1.0 50.8 - 0.2 12.2 Technology 106.7 44.5 +139. -7.8 2.7 - 7.3 6.2 Management 7 SUBTOTAL 1126.6 946.8 +19.0 5.7 75.5 0,5 8,0 Competence - 60.4 - -45.1 - -74.6 Development * TOTAL 1126.6 1007. +11.9 5.7 30.4* 0.5 3.1** 2 * * Competence development phased out during 2000. The business area accounted for 7 % of total sales. **Excluding SEK 19.6 million refund from Alecta. Industrial Design Industrial Design focuses on the development and design of products and production systems. Our strong connection to industrial design unites people and technology in a unique way. Sales climbed 17.5% to SEK 570.4 million (485.4 m). The operating profit was SEK 14.5 million (22.0 m). Results were affected by restructuring costs amounting to SEK 3.2 million. The business area accounts for 50 % (48) of total sales. Operations continued to progress favourably thanks to stable demand from the vehicle, pharmaceutical and basic industries and the fact that Semcon is a preferred supplier to many leading businesses. Large orders were received from the Swedish Defence Materiel Administration, Novo Nordisk and Pharmadule/Emtunga. These agreements are for two to three years. e-Design e-Design develops embedded IT systems for products and production systems, interactive web solutions and web design, system solutions and also supplies IT products. Sales increased by 7.8% to SEK 449.5 million (416.9 m). The operating profit was SEK -1.0 million (50.8m). The business area accounts for 40% (41) of total sales.The Group's restructuring measures hit this business area hardest. Results were affected by SEK 25.9 million in restructuring costs. Results were also affected considerably by the downturn in the Telecom sector, which resulted in companies making cost savings, laying off large numbers of staff and cutting down on projects. Prices came under pressure, but there were also opportunities for outsourcing. Informatic With around 200 employees providing technical information services, Informatic is progressing positively. Volvo Car expressed its trust in us by extending its partnership with us. Partnerships were also signed with Besam and ABB. Informatic complemented its activities with Zooma by Semcon, which employs over 10 employees specialising in visualisation and film. Zooma acts as a bridge between technical information and marketing information, rationalising the customer's entire information flow. Informatic's unique service means that we take an active role when discussing outsourcing. IT Solutions Semcon IT Solutions delivers efficient tools and methods for product development within the CAD and PDM. Activities progressed strongly during the year and staff now total over 50. IT Solutions received an order worth SEK 20 million from Saab Automobile for IT equipment. Saab Automobile has also outsourced its CEE activities to Semcon via a five- year agreement concerning outsourcing of system and operational support for the product development environment. Technology Management Technology Management improves customers' results by developing strategies for processes, IT, people and technology. The business area's work with strategic issues and transformation projects at senior management level creates opportunities for comprehensive undertakings where the complete range of Semcon's skills can be exploited. Sales increased to SEK 106.7 million (44.5 m), a climb of 139,7%. The loss was SEK -7.8 million (2.7). The business area accounts for 10% (4) of total sales. Restructuring costs affected results by SEK 2 million. The reason for the weaker results was the downturn in the Telecom sector combined with faltering demand for general management consulting services. Demand remained strong for specialist services such as strategies for efficient development of products and production. A letter of intent was signed with Ericsson regarding the take-over of the PROPS activity in Karlstad during 2002. Zipper by Semcon Zipper focuses on strategies for IT infrastructure. Zipper helps businesses to cut IT costs by implementing effective concepts and taking complete project responsibility. The aim is to create smart and cost- effective solutions for IT infrastructure. During the year business was transacted with Akzo Nobel, Mölnlycke Healthcare and others. A new office was opened in Stockholm and a new business for systems integration, Zipper Systems AB, was started in Göteborg. Start-up costs affected results by SEK 3.5 million. Business has started positively in 2002. Parent company Semcon AB is the parent company in the Group and responsible for company- wide issues such as strategy, information and marketing. Sales totalled SEK 20.0 million (27.4m). The profit/loss after depreciation was SEK 0.4 million (0.4 m). The parent company's liquidity was SEK 50 million (-37.5 m). The company's investments in inventories totalled SEK 0 million (6.0). Personnel and organisation As of 31 December 2001 the total number of employees was 1,601 (1,623). A further 46 people will leave the company in early 2002, bringing the total number of redundancies to around 100. The average number of employees during the year was 1,585 (1,504). Financial items and investments The Group's total investments, mainly in computer hardware and software, totalled SEK 26.2 million (26.9 m). At the end of the period the equity/assets ratio stood at 29% (34). Liquid funds at the period's end amounted to SEK 7.0 million (12.5 m). Of a total of SEK 100 million in bank overdraft facilities, SEK 44.1 million was utilised. Investments in subsidiaries' shares amounted to SEK 6.7 million (41.1). Dividend The Board has established a dividends policy whereby the share dividend in the long term shall represent 30-50% of profits after tax. On 31 December 2001 the number of Semcon shares was 17,391,021. Taking the Group's results into consideration the Board has decided to propose to the AGM that no dividend be paid out for 2001 (SEK 0.5 per share for 2000). Outlook The long-term forces driving product development remain unchanged. Greater technology and IT content in products and demands for better design mean that our customers will continue to develop more products and more varieties of products. The global economic situation will lead to restructuring. New business opportunities will be created in connection with outsourcing. We expect customers to continue focusing on core activities and revising supplier structures during 2002. Customers will want fewer, but larger suppliers. The close relationships that Semcon has built up over 20 years provide fertile ground for positive development over the long term. The market as a whole will remain weak during the first half of 2002. Priority will be given to profits ahead of growth. The company's assessment is that its restructuring measures will lead to improved profitability for the full year. Further information All figures are based on the same accounting principles and calculation periods used in the previous financial year. This interim report has been produced in accordance with recommendations and statements by the Swedish Financial Accounting Standards Council. Reports and AGM The 2001 Annual Report will be published in early March and will be sent to shareholders who have indicated that they wish to receive financial information. The Annual Report will also be available from Semcon's head office at Vasagatan 45, Göteborg, Sweden. It can be ordered via tel. +46 31 721 00 00, fax. +46 31 721 03 33, or via email: lotta.magnusson@semcon.se The AGM will be held at 6 p.m. on 18 March 2002 at Semcon's head office at Vasagatan 45, Göteborg, Sweden. The Q1 report will be published on 24 April 2002. For further information please contact CEO Hans Johansson on Tel. +46 (0)31 721 03 05, or mobile +46 (0)70 591 43 34 or CFO Bengt Nilsson on Tel. +46 (0)31 721 03 11, or mobile +46 (0)70 447 28 68. Göteborg, 30 january 2002 SEMCON AB (publ) Financial information in 2002 Date 2001 Annual Report early March AGM 18 March New date Q1 report 24 April Q2 report 21 August Q3 report 23 October ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/01/30/20020130BIT00120/bit0001.doc The Full Year-End Report http://www.waymaker.net/bitonline/2002/01/30/20020130BIT00120/bit0002.pdf The Full Year-End Report