07/11/2002
Interim Report January - September 2002 (110kb)
- Unchanged quarterly result despite a weak market
- Cash flow MSEK 47 in third quarter (-27)
- Investment in cutting-edge competence for e-mail communication
Barnings trend
In spite of continued weak demand on Stralfors’ markets in Europe, the report for the third quarter shows the same level for net sales and result as for the corresponding period last year. Parallel with a gradual adaptation of rsources to the prevailing market situation, the company has intensified the marketing and development of new products and services. As a step in this development, a declaration of intent has been made regarding the aquistion of all the shares in Maila Nordic AB thereby providing Stralfors with software and cutting-edge competence for advanced e-mail communication.
Operating profit/loss during the third quarter amounted to MSEK 12.5 (12.3 for the corresponding period last year). Net sales amounted to MSEK 730 (741). The Graphic Solutions Division reports a somewhat better result for the third quarter than for the corresponding period last year. The quarterly result for the Information Logistics Division is lower than last year’s figure but constitutes a recovery compared with the weak result for the second quarter. The SPI Division reports a strong result improvement during the quarter compared with the same period last year.
The Group’s operating cash flow during the quarter amounted to MSEK 47, a significant improvement compared with the figures for both the third quarter last year (-27) and the two first quarters this year (3).
The operating profit/loss for the first nine months of this year is MSEK 56 (89). Net sales during the nine-month period amounted to MSEK 2 396 (2 403).
Market prospects
The market has developed less well than expected during the current year. The adjustment of costs has partly compensated for the effect that weakened market circumstances have had on profit. At the same time, Stralfors is intensifying work on new products and services to increase its earning capacity. There is still great uncertainty, however, about the development of net sales, in the short term, primarily for the graphics operations in France and England. The recovery in profit for the Business Area Information Logistics is expected to continue during the fourth quarter, and likewise the positive profit trend within IT-Supplies. The market for Lasermax products is epected to be weak during the fourth quarter as well.
The Group
Graphic Solutions
The Graphic Solutions Division, comprising the Business Areas Graphics and Labels, reports a somewhat better result for the third quarter than for the corresponding period last year.
The Business Area Graphics continues to report good sales within the Gaming products area. Shrinking volumes within parts of the Forms area have been counteracted by newly developed products aimedprimarily at the pharmaceuticals industry. In order to heighten the efficiency of the forms business, all of production in Scandinavia is being concentrated to the unit in Ljungby. Development activities which have already been reported with regard to e-commerce, logistics and e-based products are proceeding as planned. The operations in Norway and England record a positive profit trend for the third quarter as well, while a continuing weak market in Sweden has had a negative effect on this business.
The Business Area Labels reports result improvements from the operations in Sweden and Switzerland while profit in Germany is still unsatisfactory. Further cost reductions in Germany during the fourth quarter are expected to improve profit as from 2003.
Information Logistics
The Division reports a clear result improvement for the third quarter compared with the poor result for the second quarter (- MSEK 11). The improvement is due mainly to reduced costs.The Division is expected to continue to have good growth possibilities and a number of new outsourcing deals are expected to contribute to increased turnover during the coming year. It is estimated that this, in combination with the economies that have been made, will lead to a continued recovery in profit for the Division.
The coordination of operations is proceeding in the new Danish company, Stralfors Information Logistics A/S (joint-owned with DMdata ) with the major part of the business in Jutland/Jylland being transferred to the plant in Kastrup at the beginning of next year. The business is developing strongly with several new customers, including the municipality of Copenhagen.
As mentioned above, a declaration of intent has been concluded for the acquisition of all the shares in Maila Nordic AB; the purpose being to broaden Stralfors’ range of solutions for electronic information transfer. The company has some fifty customers.
SPI, System- and Product-related Information Transfer
The SPI Division, comprising the Business Areas Lasermax and IT-Supplies, the company Stralfors TradeCom Solutions and other businesses, reports result improvements for both the third quarter and the whole of the first interim period. Profit for the Business Area IT-Supplies continues to develop positively. The Division was charged during the third quarter last year with costs for the restructuring of Stralfors TradeCom Solutions. As a result, the latter now reports a satisfactory profit. The market for the Business Area Lasermax continues to be weak in Europe and America. This has meant a drop in turnover and less profit compared with last year.
Common resources
In addition to the central Group functions, the common resources also consist of the Group’s real estate. As a result of the structural changes carried out in Denmark and France, for example, two properties have now been put on the market. All in all, the sales will result in capital gains. At present, these properties are a charge on the common resources, which have also had to bear increased development costs primarily within the area of electronic information transfer.
The Group
The operating income for the period of this interim report was MSEK 56.1 (88.9). Included in the profit for the year are earnings affecting comparability of MSEK 5.4, attributable to the establishment of the new joint-owned company in Denmark. Profit before tax amounted to MSEK 47.1 (79.2), and earnings per share (after tax) were SEK 1.26 (2.43).
Cash flow, liquidity and financing
The operating cash flow during the third quarter amounted to MSEK 47, which is a significant improvement on the figure for the corresponding period last year (-27). Liquid funds during the interim report period increased by MSEK 37, and amounted to MSEK 222 at the end of the first nine months. In addition there were unused credit facilities at the end of this period totalling MSEK 576.
Shareholders’ equity at the end of the first nine months amounted to MSEK 1 046, corresponding to SEK 49 per share. The equity/assets ratio increased marginally to 52%.Total assets have decreased since the turn of the year 2001/02 by MSEK 93 to MSEK 2003.
Financial information from Stralfors
Questions or queries about the contents 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 trading report, the Report on 2002 Operations, will be published on 6 February, 2003.
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 3.3 billion and operates in 11 countries with a total of 1800 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 Standards Council RR20 (Interim Reports). As stated in the latest Annual Report, a number of new recommendations are being applied for the financial reports drawn up for the financial year beginning 1 January, 2002. The new applications have had no appreciable effect on the financial position and performance.
General audit
This report has not been examined by the company’s auditors.
Ljungby, 7 November, 2002
Per Samuelson
President and CEO