03/05/2000
- Income for the period amounted to MSEK 40 before items affecting comparability and tax, 33% higher than for the corresponding period in 1999 (30)
- Net sales amounted to MSEK 689, 8 % higher than for the first quarter of 1999 (638)
- Strålfors is expanding in Europe with the acquisition of Siaco, a French company listed on the Paris Stock Exchange
- Trade-it® is being marketed externally as an e-commerce solution
Income and net sales
Income after financial items was reported as MSEK 46.8 for the first quarter of 2000, to be compared with MSEK 30.4 for the first quarter of 1999. The result of the first quarter this year includes an item affecting comparability that refers to a net income of MSEK 6.5. After adjustment for this item, income for the year amounted to MSEK 40.3, an increase of 33 % compared with the corresponding period in 1999 (30.4). Generally speaking, the improvement in the result stems from improved capacity utilization of the production resources. In addition, the programme of measures introduced to boost the profitability of the Norwegian operation is beginning to take effect, and the business has reported a much better result for the first quarter of 2000 than for the corresponding period last year.
The item affecting comparability that refers to a net income of MSEK 6.5 is composed of a capital gain of MSEK 11.5 and a cost of MSEK 5.0 in respect of supplementary provision for pensions. The capital gain was the result of the sale of assets as part of the move to streamline Strålfors’ sphere of operations.
Net sales during the first quarter amounted to MSEK 689, an organic growth of 8 %, compared with the corresponding period in 1999 (638). Good growth has been reported for Business Areas InfoConcept (36 %), Card Solutions (89 %), and Graphics, especially for gaming products, (14 %). The annual net sales for Business Area IT-Development, which also covers e-commerce and the electronic processing of credit cards, etc., amounted to MSEK 84.
Acquisition of a French company
Strålfors has concluded an agreement on the acquisition of 48.4 % of the shares in the French company, Siaco S.A, which is listed on the Paris Stock Exchange. Strålfors will shortly be making a bid for the remaining shares. Acquisition of all the shares in Siaco will cost approximately MSEK 120. The purchase sum will be settled in cash. Siaco is listed on the Paris Stock Exchange on the Second Marché.
The acquisition gives Strålfors access to an extensive customer and production base, which will facilitate the company’s expansion on the important French market within the prioritized business operations, InfoConcept, smart cards and e-commerce. The acquisition also strengthens Strålfors’ position as the market leader in Europe within the graphic gaming products segment.
It will now be possible after this acquisition to introduce structural measures that are expected to increase Strålfors’ income per share by some 10 %. The acquisition will have only a marginal effect on Strålfors’ result for 2000. Strålfors’ equity/assets ratio after the acquisition will be approximately 50 %, a reduction of 10 percent compared with its present status.
Trade-it® is being marketed as an e-commerce solution
Trade-it®, Strålfors’ own web/EDI-based marketplace, which the company helped to develop, has evolved as one of the market’s most powerful order and information systems for business-to-business commerce. During the current year, Trade-it®, which has been used up to now as a tool for Strålfors’ own sales - IT accessories in particular - will also be delivered externally via Strålfors’ e-commerce company, TradeCom Solutions. Collaboration with an external partner is also envisaged.
The bonus and stock option programme
It is intended to introduce a programme of incentives for a number of key personnel within the Strålfors Group. It will be a long-term proposition and based on the Group’s financial development. The bonus that falls due is to be used partly for the acquisition of stock options. Consequently, the Board of Directors has proposed to the Annual General Meeting that the company should issue promissory notes combined with the right of option on new subscriptions of Strålfors shares.
Financial standing
The company’s equity/assets ratio at the end of the period was 60 % , to be compared with 58 % at the turn of the year, 1999/2000.
Cash flow
The operating cash flow for the first quarter was MSEK 38, to be compared with MSEK 25 for the first quarter in 1999. Capital expenditure during the period amounted to MSEK 25 (19).
At the end of the quarter, liquid funds totalled MSEK 193, a reduction of MSEK 22 during the period. In addition, there is an unused overdraft facility which, owing mainly to reduced borrowing, increased by MSEK 52 during the quarter to MSEK 216 at the end of the period
Return on capital
The return on operating capital (operating income excluding items affecting comparability as a percentage of the balance-sheet total less liquid funds and non- interest-bearing liabilities) amounted during the first quarter to 17 %, to be compared with the figure of 12% for both the first quarter last year and the whole of 1999.
The forecast for 2000
The forecast presented in the Annual Report remains unchanged: a number of factors indicate improved profitability in 2000. The restructuring programme has been completed and the estimate is that the result for the Norwegian operation will be positive. Good growth is expected in several of the market segments where Strålfors is already strong.
Financial information from Strålfors
Questions or enquiries concerning the contents of this report can be addressed to the CEO and Managing Director, Per Samuelson, on +46 372 85440 or to the Vice Managing Director, Kjell Åke Jönsson, on +46 372 85234.
The next report, which is on the first six months’ operations, will be published on 3 August.
Business Concept
Strålfors – originally a printing works – has evolved into an IT-focused Business-to-Business company devising Total Concept solutions for information transfer. The Group has a turnover of 2.6 billion Swedish kronor, and has companies in 11 countries. The company has 1 580 employees, 840 of whom work in Sweden. Strålfors’ shares have been quoted on the Stockholm Stock Exchange since 1984.
The report has not been examined by the company’s auditors.
Ljungby, 3 May, 2000
Board of Directors