11/02/2004
- Net pre-tax income MSEK 17.3 (6.9) during the fourth quarter
- Operating income excluding items affecting comparability MSEK 4.9 (4.2) during the fourth quarter
- Improved earnings in the Graphic Solutions Division
- New business brings sales of over MSEK 150 per year
- Net sales2003: MSEK 2,991 (3,208)
- Net income after tax 2003: MSEK -8.0 (29.6)
- Earnings per share 2003: SEK -0.37 (1.38)
- Unchanged dividend, SEK 1.75 per share, proposed
The Fourth Quarter
During the fourth quarter, sales amounted to MSEK 775 (812). The Information Logistics Division shows a sales increase of 9%, while the Graphic Solutions and SPI Divisions show lower sales compared with the same period last year.
The fourth quarter shows a pre-tax profit of MSEK 17.3 (6.9). In the year’s quarterly results, items affecting comparability are included totalling MSEK 13.5, consisting of capital gains from disposals of property and write-downs of assets.
During the fourth quarter, operating income excluding items affecting comparability was MSEK 4.9 (MSEK 4.2). A higher coverage ratio resulting from a revised product mix has compensated for the loss of contribution resulting from reduced sales.
The Full Year 2003
For the full year 2003, sales amounted to MSEK 2,991 (3,208). The Information Logistics Division shows a sales increase of 7%. Reduction in sales during the year can be attributed mainly to three areas: Forms operations within Business Area Graphics, Labels operations in Switzerland and Business Area Supplies.
Profit/loss for the year before tax amounted to MSEK 12.1 (54.0). Operating income excluding items affecting comparability was MSEK 16.3 (54.9) for the full year. The reduction in income is primarily attributed to the Graphic Solutions Division and to exchange rate losses on operating accounts receivable (exchange rate losses this year of MSEK 11, exchange rate profits last year of MSEK 5). As regards the Information Logistics Division, an improved result is shown while the SPI Division shows a lower result than last year, due to reduced sales within Business Area Supplies.
New Business
During the third quarter of the year, as described earlier, a breakthrough was made in cards within the Information Logistics Division. Several new customer contracts were signed with Handelsbanken, IKEA and Vodafone, among others. During the fourth quarter, a number of large orders were also received within the Graphics and Supplies areas. The total annual order value of new customer orders received during the second half of the year amounted to over MSEK 150.
Numberplates
In September 2003 the National Swedish Road Administration decided to accept Stralfors as supplier of numberplates as from 1 January 2004. Company with competing tenders appealed against the decision but the County Administrative Court dismissed the appeal. The case then went to the Administrative Court of Appeal, which has now given judgement to the effect that there is at present uncertainty as to which supplier will be given the assignment.
Outlook for 2004
The reduction in earnings during 2003 is primarily attributable to the first half of the year, and a levelling out occurred towards the end of the year. A large number of newly signed customer orders will successively generate increasing additional income during 2004. The negative sales trend is expected to be broken on account of this, and it will be possible to reduce cost levels further. The prospects for improved earnings during 2004 are thus good.
Proposed Dividend
With regard to the company’s strong financial position, the Board and President and CEO propose the same dividend as last year, i.e., SEK 1.75 per share.
Annual Report
The Annual Report is expected to be published and sent to shareholders and other interested parties at the beginning of April, and can at that time also be ordered from the Company.
Annual General Meeting
The Annual General Meeting will be held in Ljungby on Tuesday, 4 May at 16.00.
The Group
Graphic Solutions
The Graphic Solutions Division, comprising the Business Areas Graphics and Labels, reported a considerably better result for the fourth quarter than for the same period last year. The improvement in earnings is primarily due to lower costs attributable to the structural measures which have been carried out. During the fourth quarter, a reduction in sales was also recorded, but at a lower level than earlier during the year. Newly developed logistical and supply solutions have, as described earlier, brought a number of new business deals.
The reduction in sales of the Division during the year has primarily affected the product area Forms, the turnover of which fell by almost 20% compared with last year. The product area Gaming Products has had a favourable development in sales. New products and supply solutions are received with great interest by customers, and have, to a great extent, compensated for the decline in volume within the traditional Forms range.
The Business Area Labels has a continued stable sales and earnings level in Scandinavia. The operations in Germany, which were earlier burdened with losses, now show increasing sales and improved earnings, while operations in Switzerland have had a negative trend, resulting from reduced demand from, among others, the aerospace and pharmaceutical industries.
Information Logistics
During the fourth quarter, sales were 9% higher than during the equivalent period last year. Earnings have not developed at the same rate as sales, primarily because of temporary effects in connection with moving to a completely new installation in England. For the full year 2003 an earnings improvement of MSEK 10 is shown.
The Division’s prospects for continued good growth and improved profitability are very favourable. A breakthrough has occurred in cards, as described earlier, with several new customer contracts. Within the output data operations, fur-ther customer assignments have been gained, including from Sydkraft. The electronic payment services at present show a very positive trend.
SPI, System and Product-Related Information Transfer
The Division, which comprises the Business Areas Supplies and Lasermax, and other operations, shows lower earnings for the fourth quarter than during the equivalent period last year. The reduction in earnings is primarily due to Business Area Supplies, the sales of which have continued to decline during the fourth quarter as well.
The Business Area Lasermax has had good volume development during the year with increasing market share, the reasons for which include product development which has occurred during recent years. The operations receive a considerable part of their payments in US dollars, and the decline of the dollar rate has meant that the volume increase has not shown through fully in the result.
Mutual Resources
Apart from central Group Management and Functions, mutual resources consist of the Group’s property stock. The year’s deviation in earnings compared with both the third quarter and the full interim period last year are primarily due to exchange rate differences on operating receivables which have been charged to the central administration.
Items affecting Comparability
During the fourth quarter this year, items affecting comparability were recorded of MSEK 13.5, consisting partly of capital gains of MSEK 18.5 for disposals of property in Denmark, and partly of write-downs of assets to the extent of MSEK 5.0. Earlier during the year MSEK 10.0 was appropriated to a structural reserve, and capital gains were shown of MSEK 0.1, for which reason, net items affecting comparability for the full year amounted to MSEK 3.6.
Group Earnings
The Group’s operating income after financial items amounted to MSEK 17.3 (6.9) during the fourth quarter, and during the full year to 12.1 (54.0). For the full year 2003, earnings after tax are MSEK –8.0 (29.6), equivalent to earnings per share of SEK –0.37 (1.38).
Investment, Cash Flow, Liquidity and Financing
During the fourth quarter, cash flow from investment operations amounted to MSEK 18.6 (-37.1). Investment amounted to MSEK 41.5,and fixed assets have been sold for MSEK 22.9. The sale amount applies to the disposal of property in Denmark, described above. For the full year 2003, cash flow from investment activities amounted to MSEK –117.5 (-114.2), of which MSEK 8.8 applies to company acquisitions. Investment for the year amounted to MSEK 146, of which MSEK 45 refers to the new installation in England. Fixed assets, primarily property, amounting to a total of MSEK 37 have been disposed of during the year.
Operating cash flow during the fourth quarter amounted to MSEK 19.4 (21.9) and for the full year 2003 to MSEK 31.4 (71.6).
During the interim period liquid funds increased by MSEK 13 (excluding translation differences) and at the end of the year amounted to MSEK 170. In addition to this, at the end of the period, credit facilities which had not been utilised amounted to a total of MSEK 613.
During the interim period, total assets increased by MSEK 22 and at the end of the year, amounted to MSEK 1,892. The increase was mainly due to increased operating receivables. At the end of the period, shareholders’ equity amounted to MSEK 959, equivalent to SEK 45 per share. The equity/assets ratio is more-or-less unchanged, 51%.
Next Report
The next Report, the Press Release for the first quarter of 2004, will be published on 4 May.
Business Concept
Stralfors is an IT-focused Business-to-Business company with a print heritage providing total solutions within the field of information transfer. Stralfors develops, produces and delivers systems, services and products for the efficient communication of information crucial to operating a business. The Group has net sales of SEK 3 billion and operates in 12 countries with a total of 1745 employees. Stralfors “B” shares have been quoted on the Stockholm Stock Exchange since 1984.
Net sales per quarter
Operating income per quarter
(exkl items affecting comparability)
Return on operating capital per quarter
Operating cash flow per quarter
Accounting Principles
This Report has been prepared in accordance with recommendation RR 22 (Formulation of Financial Reports) of the Swedish Financial Accounting Standards Council. Apart from that, the accounting principles and methods of calculation applied are those presented in the Annual Report for 2002.
The Swedish Financial Accounting Standards Council’s recommendation RR 29, “Remuneration to Employees”, shall be applied in the formulation of financial reports which apply to periods beginning as from 1 January 2004. The most important differences compared with earlier standards set apply to accounting of pension liabilities and provisions for pensions, and that the new recommendations require considerably greater information. According to calculations carried out in consultation with external experts, the Stralfors Group’s total pension liability will be reduced by about MSEK 5 when the new recommendations begin to be applied, i.e., 1 January 2004. This amount will be reported directly against shareholders’ equity, which will thus increase by the same amount.
Addresses and corporate identity number
Stralfors AB (publ). Postal address: SE-341 84 Ljungby.
Visiting address: Helsingborgsvägen 20, Ljungby.
Tel: +46(0)372-850 00. Web address: www.stralfors.se
Corporate identity no.: 556062-0618.
Ljungby, 11 February 2004
STRALFORS AB (PUBL)
The Board of Directors
Financial Information from Stralfors
Queries about the contents of this Report may be
addressed to Per Samuelson, President and CEO,
telephone +46( 0)372-854 40,
or to Kjell Åke Jönsson, Vice President,
telephone +46(0)372-852 34.