07/05/2003
Interim Report January - March 2003.pdf (108kb)
- Operating income MSEK 15.4 (29.9) before structural costs
- Cash flow MSEK 22.5 (-20.9)
- Continued weak market for the Graphics Area
- Positive earning trend for the other Areas
Sales and Earnings
During the first quarter, Group net sales amounted to MSEK 809, a reduction of MSEK 54 compared with the same period last year (863). The decline in sales derives primarily from the Graphics Area. Compared with the fourth quarter of last year, sales remain generally unchanged (812).
Operating income before items affecting comparability amounted to MSEK 15.4. This is an improvement compared with the fourth quarter of last year (6.7), but lower than for the equivalent period last year (29.9). The decline in earnings compared with last year is due to the reduction in sales within the Graphics Area. The other Areas show improved results. Earnings have been negatively affected, with MSEK 5.4 in respect of operating exchange loss.
The structural costs of MSEK 10 announced in the press release have affected first quarter earnings. During the same period last year, income of MSEK 5.4 affecting comparability was recorded.
Outlook for the Remainder of the Year
Planning for the remainder of the year is based on a continued weak market for the Graphics Area. Measures being taken to cope with this situation include increasing the degree of utilisation of production plant. Reduction in the work force, primarily at the Ljungby factory, and a transition to more flexible working hours are examples of such measures. For the Information Logistics and SPI Divisions, a continued positive trend is expected.
The Group
Graphic Solutions
The Graphic Solutions Division, consisting of Business Area Graphics and Labels, shows an operating income of MSEK 14.3, for the first quarter of this year, which is decidedly better than for the last quarter of last year (-1.7) but lower than during the equivalent period last year (27.6). The decline in sales compared with the first quarter of last year, MSEK 56, derives primarily from Business Area Graphics and it has not been possible to compensate for this fully with lower costs.
Demand for products within the Business Area Graphics during the first quarter has been weak, primarily within the area of Forms, but volumes have also declined somewhat within Gaming Products. The decline in sales derives to a considerable extent from operations in Britain and France. Newly developed products, directed primarily to the pharmaceuticals industry have compensated for the decline within the Forms area in Scandinavia to some extent. The structural costs of MSEK 10, which have been charged to first quarter Group income, are mainly attributable to the Graphics operations in Sweden, and it is estimated that they will have a progressively increasing effect on earnings in the future. In Britain and France, costs have been considerably reduced compared with those of last year.
For Business Area Labels earnings show an improvement in Scandinavia and in Germany, while operations in Switzerland show lower turnover and earnings compared with last year, resulting from a decline in demand from such things as the aircraft and pharmaceutical industries. For the whole Business Area Labels operating income are the same as for the corresponding period last year.
Information Logistics
The Division shows a continued positive earnings trend, primarily within output data management operations and payments services. Gross margins have improved, and projects involving electronic information transfer, for example, electronic invoices, have begun for several large customers.
On 1 January 2003 all the shares of Maila Nordic AB were acquired in order to broaden Stralfors’ supply of solutions for electronic information transfer. The acquisition has brought with it investment in goodwill and other intangible fixed assets totalling MSEK 7.6.
SPI, System- and Product-related Information Transfer
The SPI Division, comprising the Business Areas Supplies and Lasermax, the Company Strålfors TradeCom Solutions and other operations, show improved earnings for the first quarter of this year compared with the same period last year. The market for the products within the Business Area Lasermax has improved during the first quarter this year, after a negative trend during both 2001and 2002. In combination with newly developed products, this has brought with it an improvement in both turnover and earnings compared with the same period last year. Within the Business Area Supplies, turnover and earnings have declined somewhat, primarily due to weak demand in Sweden.
Mutual Resources
Apart from mutual Group functions, mutual resources also consist of the Group’s property stock. The costs of unutilised property are at present charged to the mutual resources, which are also charged with an operating exchange loss of MSEK 5 during the first quarter of the year (0 during the first quarter of last year).
The Group
Interim operating income was MSEK 5.4 (35.3). Quarterly earnings this year have been charged with structural costs of MSEK 10, while last year’s earnings included items affecting comparability of MSEK 5.4. Earnings before tax during the period amounted to MSEK 3.3 (31.6) and earnings per share (after tax) were SEK –0.03 (0.88).
Investment, Cash Flow, Liquidity and Financing
Investment excluding Company acquisitions during the interim period amounted to MSEK 38, of which MSEK 18 applied to new construction in Britain. Existing property in Britain will be disposed of later this year.
Operating cash flow during the first quarter amounted to MSEK 23, which is considerably better than during the equivalent period of last year (-21).
During the interim period, liquid funds have declined by MSEK 5 (excluding translation differences) and at the end of the interim period, amounted to MSEK 224. In addition to this, at the end of the period, credit facilities, which had not been utilised, amounted to a total of MSEK 604.
At the end of the interim period, shareholders’ equity amounted to MSEK 1 030, equivalent to SEK 48 per share. The equity/assets ratio is more-or-less unchanged 51 %.
Financial Information from Stralfors
Questions or queries about the content of this report may be addressed to Per Samuelson, President and CEO, on +46 (0)372-854 40 or to Kjell Åke Jönsson, Vice President, on +46 (0)372-852 34.
The next report, the half-year report, will be published on 7 August 2003.
Stralfors' 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 3.2 billion and operates in 12 countries with a total of 1750 employees. Stralfors “B” shares have been quoted on the Stockholm Stock Exchange since 1984.
Accounting principles
This Interim Report has been drawn up in accordance with the recommendations issued by the Swedish Financial Accounting Standard Council RR20 (Interim Reports). As to the rest the same accounting principles have been applied as stated in the Annual Report 2002.
General audit
This report has not been examined by the company’s auditors.
Ljungby, 7 May 2003
Per Samuelson
President and CEO