04/11/2003
Interim Report January - September 2003 (140kb)
- Operating income MSEK 7.4 (12.5) in the third quarter
- Breakthrough for card operations
- Stralfors again supplier of numberplates
- Net sales January – September MSEK 2 216 (2 396)
- Net income after tax January – September MSEK –8,0 (26,9)
- Earnings per share January – September SEK –0,37 (1,26)
The third quarter
During the third quarter, Group sales amounted to MSEK 670, a reduction of MSEK 60 compared with the same period last year (730). The decline in sales originates primarily from the Graphic Solutions Division. The Information Logistics Division shows a sales increase of 11% for the quarter.
The third quarter shows an operating result (excluding items affecting comparability) of MSEK 7.4 compared with MSEK 12.5 during the same period last year. A higher cover ratio resulting from a change in product mix and lower costs has almost completely compensated for the contribution loss which resulted from reduced sales.
January – September
During the interim period, January – September, sales totalled MSEK 2 216 (2 396). The operating result (exclud-ing items affecting comparability) amounted to MSEK 11.4 (50.7). The reduction primarily derives from the Graphic Solutions Division, and from exchange losses in operating claims (exchange losses this year of MSEK 11, exchange profit last year of MSEK 5). The Information Logistics Division shows an improved result, while the SPI Division shows a result that is unchanged compared with the same period last year.
Breakthrough for card operations
Handelsbanken and Stralfors are commencing co-operation with respect to EMV cards (Europay/MasterCard/Visa card) for an initial value of MSEK 20 to 30. The new business is a result of Stralfors’ strategic investment in card operations. Through co-operation with Oberthur Card Systems, Stralfors can offer the market access to the latest technological developments, and Stralfors’ unit in Uppsala is now also security certified with EMV status. With this, Stralfors can deliver a complete range of cards to the financial sector.
IKEA has chosen Stralfors as supplier of its new electronic present card, which will be available in all 212 IKEA stores throughout the world. The delivery to IKEA is an overall solution, comprising production and distribution to the stores. In addition, Stralfors has been appointed as one of two main suppliers of 3G cards to Vodafone.
Stralfors again supplier of numberplates
The Swedish National Road Administration has again decided to accept Stralfors as supplier of numberplates. During the period 1994 – 2001, Stralfors delivered the numberplates, but lost the assignment in a procurement in 2001. Delivery of the numberplates will commence in January 2004, with an annual volume of up to one million plates. The contract runs for five years, with an option of a further year.
Outlook for the remainder of the year
Earlier provided outlook remains: A number of new orders and customer projects are expected to compensate to some extent for the negative sales effects of a continued weak market. This, in combination with cost reductions, is estimated to lead to that the negative earnings trend will be broken during the second half.
Graphic Solutions
The Graphic Solutions Division, consisting of the Business Areas Graphics and Labels, shows earnings for the third quarter of this year at roughly the same level as during the equivalent period last year. This means that the negative earnings trend from the first half of the year has been broken. Ongoing structural measures have brought with them a progressive decrease in costs, which has almost fully compensated for the loss of revenue.
During the year, the reduction in sales of the Division has primarily affected the product area Forms , the turnover of which fell by fully 20% compared with last year. The product area Gaming Products has had a more favourable development in sales. Newly developed products and delivery solutions are received with great interest by the customers, and it is estimated that they can compensate to an ever increasing extent for continued loss of 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 op-erations in Switzerland at present show a negative trend resulting from reduced demand from, among others, the aerospace and pharmaceutical industries.
Information Logistics
During the third quarter, sales were 11% higher than during the equivalent period last year. This meant that growth increased progressively during the year. During the 1st and 2nd quarters, growth in sales was 2% and 8% respectively. 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. The full interim period of January – September shows an earnings improvement of MSEK 10.
The Division includes both card operations and the manufacture of numberplates. As mentioned above, Stralfors has recently obtained new business within these areas. The outlook for next year regarding continued advantageous growth and improved profitability for the Division has therefore, been further strengthened.
SPI, System and Product-related Information Transfer
The Division, which comprises the Business Areas Supplies and Lasermax, and other operations, shows earnings for the interim period of the same order of size as last year. The Business Area Lasermax has shown positive development during the year, as regards both sales and earnings. Sales have been helped, both by the new product range and an improved global market. In addition, cost levels have been reduced.
The Business Area Supplies, which conducts operations in the Nordic Area, has experienced a decline in sales during the present year in all countries except Norway. Despite fierce competition, margins have been maintained, but the reduced sales have meant a decline in earnings for the Business Area.
Mutual resources
Apart from central Group functions, mutual resources also consist of the Group’s property stock. This year’s devia-tion in earnings, compared with both the third quarter and the entire interim period of last year, derive primarily from exchangerate differences on operating receivables, which have been charged to the central administration.
Items affecting comparability
During the first quarter of this year, capital gains were recorded of MSEK 0.1 net, referring to disposals of property in Finland and England. During the first quarter, MSEK 10.0 was appropriated to a structural reserve, for which reason the entire interim period’s net totals MSEK –9.9.
Group earnings
The Group’s operating income, after financial items, amounted to MSEK 4.6 (10.4) during the third quarter, and MSEK –5.2 (47.1) during the entire interim period. Earnings after tax for the entire interim period were MSEK –8.0 (26.9), equivalent to earnings per share of SEK –0.37 (1.26).
Investment, cash flow, liquidity and financing
During the interim period, investment totalled MSEK 90 (75). The increase compared with last year is related to a completely new installation in England.
Operating cash flow during the interim period amounted to MSEK 12 (50).
During the interim period, liquid funds declined by MSEK 65 (excluding translation differences), and at the end of the period amounted to MSEK 157. In addition to this, at the end of the period, credit facilities which had not been utilised, amounted to MSEK 614.
During the interim period, total assets declined by MSEK 137 and at the end of the period totalled MSEK 1 870. The decline was mainly due to translation differences and reduced liquid funds. At the end of the period, share-holders’ equity amounted to MSEK 959, equivalent to SEK 45 per share. The equity/assets ratio is more-or-less unchanged, 51%.
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.
The next report, the press release for 2003, will be published on 11 February 2004.
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 3.1 billion and operates in 12 countries with a total of 1725 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.
Addresses and Organisation number
Strålfors AB (publ). Postal address: SE- 341 84 Ljungby. Visitors’ address: Helsingborgsvägen 20, Ljungby. Telephone: +46 372 850 00. Webaddress: www.stralfors.com Organisation number: 556062-0618.
Ljungby, 4 November, 2003
Per Samuelson
President and CEO