04/05/2004
- Operating income MSEK 24 (MSEK 15 excluding items affecting comparability)
- Continued improvement in earnings expected
- Net sales January – March MSEK 792 (809)
- Net income after tax January – March MSEK 12.0 (-0.7)
- Earnings per share January – March SEK 0.56 (-0.03)
The First Quarter
The large number of customer orders signed recently is beginning to show through in sales. Net Group sales amounted to MSEK 792 during the first quarter, a decline of MSEK 17 compared with the same period last year (809). The entire decline is due to currency movements. This means that the negative sales trend of the last two years was halted during the period.
Operating income amounted to MSEK 23.9, an increase of fully 50% compared with the first quarter of last year (15.4 excluding items affecting comparability). The improvement in earnings derives from the Graphic Solutions and Information Logistics Divisions. Movements in currency rates continued to have a marginal effect on earnings.
New Business
During the period, several new customer agreements have been signed with, among others, Svenska Golfförbundet and Coop Norden AB. Svenska Golfförbundet has given Stralfors the assignment of providing all members in Sweden with the new electronic membership card. In total, this involves almost 600 000 members in 460 clubs. The agreement with Coop Norden AB involves delivery of their total requirement of office material, including A4 paper to all stores and logistic units in the Nordic Area.
Outlook for the Remainder of the Year
The assessment given in the press release in February continues to apply: A large number of newly signed customer orders will successively generate increasing additional revenue during 2004. The negative trend in sales is thus expected to be halted, and cost levels will be further reduced. The prospects for improved earnings during 2004 are thus good.
Graphic Solutions
The Graphic Solutions Division, comprising the Business Areas Graphics and Labels, reported operating income of MSEK 21.3 for the first quarter, which is a clear improvement over the same period last year (14.3). The improvement in operating income is primarily due to reduced costs in combination with a levelling out of the sales trend, which had been negative. The Division’s sales during the first quarter amounted to MSEK 371 (378). New products and delivery solutions within the Graphic Business Area are increasingly compensating for declining volumes within traditional forms ranges. Several outsourcing agreements have been reached in which Stralfors takes care of all the printing and forms requirements for the customer. Sales within the Gaming Products area were 10% better during the first quarter than during the same period last year. Business Area Labels was weak at the beginning of the year, above all in Switzerland. A recovery occurred during the latter part of the quarter.
Information Logistics
The Information Logistics Division reports continued improvement of both sales and earnings during the first quarter. The improvement in earnings is primarily derived from the half-owned Danish operation, the productivity of which was considerably improved. Towards the end of the period, earnings also recovered in the English operation. Progress in cards has continued this year, through such things as the agreement mentioned above with Svenska Golfförbundet on delivery of electronic membership cards.
Stralfors’ new invoicing and message service, eBusiness Communication, which, among other things, connects different computer systems and file formats together, has been received with great interest. Co-operation has commenced with SPCS, whose new EDI system for handling of electronic documents is based on Stralfors’ eBusiness Communication. Tens of thousands of Sweden’s small and medium sized companies can handle their electronic business transactions through the system, easily and cost-effectively.
SPI, System and Product-Related Information Transfer
The SPI Division, which includes the Business Areas Supplies and Lasermax, and the company Stralfors TradeCom Solutions and other operations, reports operating income of MSEK 3.3 (13.0) for the first quarter of this year. Sales amounted to MSEK 238 (258). The decline in sales is mainly related to currency movements, due to considerable invoicing in Norwegian kronor and US dollars, two currencies which have weakened considerably in relation to the Swedish krona. This, in combination with continued weak demand for Business Area Supplies, has produced an unfavourable result. It is expected that the weak demand situation within Supplies can be compensated with a number of new business deals, including the agreement referred to above with Coop Norden AB.
Joint Resources
Joint resources, including Group-wide currency management, have burdened the Group’s operating income with MSEK 9.3 during the first quarter of 2004, which is considerably lower than during the same period last year (17.6). The improvement is primarily due to exchange rate differences on operating receivables.
The Group
Operating income for the period was MSEK 23.9 (5.4). The result for the first quarter last year included structural costs of MSEK 10. For the quarter, pre-tax income amounted to MSEK 21.5 (3.3), and earnings per share (after tax) were SEK 0.56 (-0.03).
Investment, Cash Flow, Liquidity and Financing
Investment during the quarter amounted to MSEK 22, compared with MSEK 38 (excluding company acquisitions) during the equivalent period last year.
During the first quarter, operating cash flow amounted to MSEK 23 (23).
During the interim period, liquid funds increased by MSEK 35 (excluding translation differences), and at the end of the period amounted to MSEK 206. In addition to this, at the end of the period, credit facilities which had not been utilised amounted to a total of MSEK 620.
At the end of the interim period, shareholders’ equity amounted to MSEK 990, equivalent to SEK 46 per share. The equity/assets ratio remains unchanged at 51%. During the interim period, shareholders’ equity increased by MSEK 3.5, due to the adaptation to the Swedish Financial Accounting Standards Council’s recommendation, RR 29 ”Remuneration to Employees”. The pension liability has been reduced by MSEK 4.8, which amount, after deduction of deferred tax, is reported directly against shareholders’ equity.
Financial Information from Stralfors
Queries about the content 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.
The next report, the six-month report, will be published on 11 August 2004.
Accounting Principles
This Report has been prepared in accordance with Recommendation RR 22 (Formulation of Financial Reports) of the Swedish Financial Accounting Standards Council. The Swedish Financial Accounting Standards Council’s Recommendation, RR 29 (Remuneration to Employees) has been applied from 1 January 2004. As a result, the total pension liability of the Stralfors’ Group has been reduced by MSEK 5.This amount has, after deduction of deferred tax, been posted to shareholders’ equity, see Changes in Shareholders’ Equity above. Otherwise, the accounting principles and methods of calculation applied are those presented in the Annual Report for 2003.
General Audit
This Report has not been examined by the Company’s Auditors.
Addresses and Corporate Identity Number
Strålfors AB (publ). Corporate Identity Number: 556062-0618. Postal address: SE-341 84 Ljungby.
Visiting address: Helsingborgsvägen 20, Ljungby.
Tel: +46 (0)372-850 00.
Web address: www.stralfors.se
Ljungby, 4 May 2004
Per Samuelson
President and CEO
Description of our Activities
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 1740 employees. Stralfors "B" shares have been quoted on the Stockholm Stock Exchange since 1984.