07/05/2002
Interim Report January - March 2002 (116kb)
- Continued good growth for Information logistics
- Operating income MSEK 35 (51)
- Forecast for improved full-year report holds good
- Cooperation agreement with Wallace in USA
Earnings trend during the first quarter
Operating income during the first quarter amounted to MSEK 35.3, to be compared with MSEK 50.7 for the corresponding period last year. Net sales amounted to MSEK 863, an increase of 2% (848). Included in income for the first quarter this year are earnings affecting comparability of MSEK 5.4 attributable to the establishment of the joint venture with DMdata in Denmark.
The drop in income during the first quarter originated mainly in the month of March. Demand for the Business Areas Labels (incorporated in the Graphic Solutions Division) and Lasermax (the SPI Division) was weak during the first quarter but is expected to pick up during the rest of the year.
The merger of Stralfors’ and DMdata’s output data management operations in Denmark was formally approved by the competition authorities in March. The companies will move to joint premises in May, and the effects of coordination will gradually be seen during the remainder of the year.
Forecast for 2002
Even if uncertainty has increased with regard to the development of the market, the previous forecast that there would be an improvement in profit this year still holds good. This assessment has been based on the full impact of the implemented cost-savings programme being felt during 2002, and on further measures to increase efficiency have been initiated. In addition, it is estimated that the structural meas-ures already set in motion in France will continue to lower costs.Operating income for the German la-bels operation is also expected to gradually recover.
A cooperation agreement with Wallace in the USA
During the second quarter, Stralfors signed a cooperation agreement with Wallace Inc., market leader in the USA for total solutions within information transfer and with net sales of over SEK 15 billion. The pur-pose of the agreement is to strengthen the companies’ leading position on their respective markets.
Graphic Solutions
Net sales in the first quarter for Graphic Solutions, comprising the Business Areas Graphics and Labels amounted to MSEK 434, (441). Operating income was MSEK 28, to be compared with MSEK 39 for the corresponding period last year. As mentioned above, the weak demand generally has primarily affected Business Area Labels. An improvement in the market in this area in combination with the ongoing struc-tural measures in France and Germany is expected to lead to a recovery of profit during the remainder of the year.
Information Logistics
The Division reports continued good growth. Net sales for the first quarter, corrected for no deliveries of vehicle number plates, are 35% higher than for the corresponding period last year. The new company in Denmark, jointly owned with DMdata, was established on 1 January, 2002. The company combines op-erations previously run by Stralfors and DMdata and the output data management business acquired by Stralfors from Post Danmark on 1 December, 2001. As mentioned above, the integrated businesses will be housed in a new joint facility during the second quarter. The effects of coordination will be reflected in income as of the second half of the year.
Operating income for the period amounted to MSEK 4, to be compared with MSEK 10 for the first quarter last year. A change in the product mix led to lower margins. In order to meet dramatically increased de-livery commitments, extra costs were also incurred in the form of extra personnel and an abnormally large amount of overtime particularly in January and February.
SPI, System- and Product-related Information Transfer
The SPI Division, comprising the Business Areas Lasermax and IT-Supplies, the company Stralfors Tra-deCom Solutions and other businesses, reported net sales of MSEK 259, to be compared with MSEK 268 during the corresponding period last year. The drop in turnover is attributable to Business Area Lasermax and is due to a weakened market primarily in Europe and the USA.
In comparison with the first quarter last year, the Division’s operating income has increased by just over MSEK 2 to MSEK 10. The structural measures implemented within Stralfors TradeCom Solutions have led to a clear improvement in income, and the trend continues to be positive for operating income within Business Area IT-Supplies.
Central items
The increase in costs from central items during the first quarter this year was MSEK 12, to be compared with MSEK 6.5 for the first quarter last year. The difference is due mainly to fewer exchange gains on operating business receivables.
The Group
Income for the Group before tax for the first period amounted to MSEK 31.6, a reduction of MSEK 16 compared with the figure for the first quarter last year (MSEK 47.7). Owing to the weaker demand, gross income for the Group decreased by MSEK 22 to MSEK 201. Software developed by Stralfors is included in Stralfors’ contribution in kind to the new joint venture in Denmark. Half the value of this contribution, MSEK 5.4, constitutes a capital gain, and has been reported as earnings affecting comparability in Stralfors’ statement of income.
Cash flow, liquidity and financing
Improved capital efficiency last year contributed substantially to a positive cash flow. Asset turnover is now higher than it was a year ago, but somewhat lower than for the final quarter last year, which led to a negative cash flow during the first quarter this year. As far as the trend is concerned, however, the im-provement in capital efficiency is expected to continue.
The Group’s liquid funds during the first quarter decreased by MSEK 28, and at the end of the period amounted to MSEK 191. In addition, there are unused credit facilities of MSEK x. Operating capital has increased by MSEK 56, mainly due to major accounts receivable. Investments during the period, MSEK 27, were MSEK 10 lower than depreciation, which led to a reduction capital tied up in fixed assets. The equity/assets ratio at the end of the quarter was 52%, the same level as at the turn of the year 2001/2002.
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, Executive Vice president and CFO, on +46 (0)372-852 34.
The next report, the Interim Report for the period January – March 2002, will be published on 9 August.
Business concept
Stralfors is an IT-focused Business-to-Business company with a print heritage, and provides turnkey so-lutions within the field of information transfer. Stralfors develops, produces and delivers systems, serv-ices 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 1850 employees. Stralfors B shares have been quoted on the Stockholm Stock Exchange since 1984.
Accounting principles
The same accounting principles and methods of calculation have been applied as in the latest Annual Report.
General audit
This report has not been examined by the company’s auditors.
Ljungby, 7 May 2002 The Board of Directors.