06/02/2003
Closing Statement 2002 (116kb)
- Dividend unchaged, SEK 1.75 per share
- Recovery for Information Logistics
- Weaker than expected within Graphic Solutions
Turnover and result
The market for Stralfors’ products and services continued to be weak during the fourth quarter. Turnover for the Graphic Solutions Division was lower than expected. The Information Logistics Division reported a 15 % growth in turnover during the fourth quarter. Within the SPI Division turnover continued to decline for the Business Area Lasermax, albeit more slowly towards the end of the quarter.
Net sales during the fourth quarter amounted to MSEK 812, a decrease of MSEK 67 compared with the figure for the same period in 2001 (879). The difference is due mainly to turnover in the graphics operations. The increase in turnover within Information Logistics has compensated for the decrease within SPI.
Operating profit/loss during the fourth quarter amounted to MSEK 7 (33). The fall in turnover combined with contiued price pressure and an unfavourable product mix have led to a considerably lower contribution margin compared with the figure for the fourth quarter in 2001. The reduction in costs could not fully compensate for the decrease in the contribution margin.
Turnover for the full year 2002 was MSEK 3,208 (3,282). The operating profit/loss amounted to MSEK 63 (122). Included in the operating profit/loss for the year are earnings affecting comparability of MSEK 8 attributable partly to the establishment of a joint venture in Denmark and partly to the sale of property in England.
The outlook for 2003
The measures to improve efficiency already carried out and currently in progress in combination with Stralfors’ traditionally strong customer-focused approach mean that even a minor improvement in the market situation has a very quick impact on the result. The planning for the current year, however, is based on the market continuing to be weak for Stralfors’ products and services. Efficiency and productivity within the Group will continue to receive high priority. The Group’s total costs, cleared of the effects of inflation and additional operations, decreased by MSEK 90 in 2002. Costs are expected to decrease even further in 2003, primarily in the graphics operations. The rationalisation programme that has already been implemented will be a charge of MSEK 10 on the result during the first half of 2003.
The Graphic Solutions Division, comprising the Business Areas Graphics and Labels, reported sales in the fourth quarter of MSEK 366, a decrease of 16 % compared with the figure for the same period in 2001 (437).
The difference in turnover stems mainly from the Business Area Graphics, whose delivery volumes of both forms and gaming products were considerably lower than expected. About half of the lower contribution margin due to the drop in turnover was compensated for by the reduction in costs. The quarterly result for Business Area Labels is the same as for the fourth quarter in 2001.
As mentioned above, measures will be implemented during the first six months of 2003 to lower the level of costs even further within the Business Area Graphics. The programme is expected to halt the negative trend that was reported primarily during the fourth quarter.
The Division recorded a growth of 15 % in net sales during the fourth quarter. This is a considerable improvement compared with the figure for the first three quarters of 2002 (7 %). Even if the result is still unsatisfactory, the negative trend during the first three quarters of the year has been reversed. The result for the fourth quarter in 2002 was somewhat higher than for the same period in 2001.
The growth in turnover for 2003 is expected to be of the same magnitude as that during the fourth quarter in 2002. The assessment is that it could be realised within the framework of existing resources, which should lead to continued improvement of the result.
The acquisition of Maila Nordic AB, which was announced earlier, has now been completed. With this purchase Stralfors gains access to important knowledge of business communication via e-mail and the Internet. This is being asked for by a growing number of customers.
The Division comprises the Business Areas IT-Supplies and Lasermax, the company Strålfors TradeCom Solutions AB and other businesses. The negative development in the market for the Lasermax products was checked towards the end of 2002. A drop in net sales for the fourth quarter was reported, however, and a lower result compared with that for the same period in 2001. The Business Area IT-Supplies reported an improvement in the result for the fourth quarter as well. This Area has now reached a fully acceptable level of profitability. The Division’s lower result compared with the figure for 2001 was also influenced by the result in other operations being abnormally high during the fourth quarter in 2001 on account of the boom in sales in connection with the changeover to the euro in France. Over the last few years, Business Area IT-Supplies has developed from being a local specialist within the segment IT accessories to becoming an international organisation marketing products for IT and office work. To mark this, the Business Area has now changed its name to Supplies. This name establishes a wider framework to cover the contents of the Area’s range of products and reflects to a better extent what the market is being offered.
Common resources
In addition to the central Group functions, the common resources also include the Group’s real estate. On account of the structural changes that have been made in Denmark and France, for example, three of the Group’s properties have now become superfluous and are therefore for sale. The expense of these properties is, at present, a charge on the Group’s central resources. The cutback in costs within the central Group functions compensated for this additional cost during the fourth quarter.
The Group
The Group’s income before tax amounted to MSEK 6.9 during the fourth quarter, to be compared with MSEK 30.8 for the same period in 2001. Earnings affecting comparability of MSEK 2.5 were reported during the fourth quarter relating to the sale of a property in England. Another property will be sold in England in 2003 in connection with the removal of the operations to a new factory. The net financial income/expense for the fourth quarter was positively influenced by the present value computation of the surplus funds at Alecta.
Income before tax for the full year 2002 amounted to MSEK 54.0 (110). Included in the result for the full year 2002 are earnings affecting comparability of MSEK 7.9 attributable partly to the establishment of a joint venture in Denmark and partly to the above-mentioned sale of property in England.
Cash flow, liquidity and financing
An operating cash flow of MSEK 72 (217) was reported for 2002. The difference in the amount compared with the figure for 2001 depends on the lower result and changes in operating capital. The operating capital remained the same in 2002, while it decreased in 2001 by MSEK 81.
The Group’s liquid funds increased during the year by MSEK 16 and amounted to MSEK 235 at year-end 2002. In addition to the liquidity reported, there were unused credit facilities of some MSEK 600.
Total assets on the balance sheet date amounted to MSEK 2007, which is a decrease during the year of MSEK 88. The change depends on the reduction mainly of fixed assets and inventories and a strengthening of the Swedish krona in relation to other Group currencies. The equity/assets ratio on the balance sheet date was 52% (51).
Accounting principles and audit
The company applies the stipulations of the Annual Report Act and follows the recommendations and pronouncements of the Swedish Financial Accounting Standards Council. As mentioned in the Annual Report 2001, a number of new recommendations have been followed for financial reports drawn up for the financial year beginning as from 1 January, 2002. The new applications have had no appreciable effect on the company’s financial position and performance
This closing statement is based on an audit of the financial statements by the company’s auditors.
Proposed dividend
The Board and President and CEO of Stralfors propose the payment of a dividend of SEK 1.75 per share, i.e. the same dividend as in 2001.
The Annual Report
The Annual Report is expected to be published and sent to shareholders and other interested parties at the beginning of April. The Report can also be ordered from Stralfors at that time.
The Annual General Meeting
The Annual General Meeting will be held in Ljungby at 4 p.m. on 7 May.
Financial Information from Stralfors
Questions or queries about the contents of Closing Statement may be addressed to President and CEO, on +46 (0)372-854 40 or to Kjell Åke Jönsson, Executive Vice President and CFO, on +46 (0)372-852 34. The next report, the first quarter report, January-March 2003, will be published on 7 May.
Business Concept
Stralfors is an IT-focused Business-to Business company with a print heritage, and provides turnkey 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 3.2 billion and operates in 11 countries with a total of 1750 employees. Stralfors B shares have been quoted on the Stockholm Stock Exchange since 1984.
Ljungby, 6 February, 2003.
Per Samuelson
President and CEO