11/02/2002
Report on year 2001 operations (125kb)
- Operating income increased to 122 MSEK (74)
- Substantially improved cash flow
- Information Logistics in Denmark
- Continued profit improvement expected 2002
Earnings trend
Operating income for 2001 amounted to MSEK 122, which is an improvement of 65% on the operating income reported for 2000 (MSEK 74 excluding items affecting comparability). The result now being reported lies within the forecast interval given in the report on the first nine months’ operations in 2001 (MSEK 120 – 130).
Operating income for the fourth quarter amounted to MSEK 33, which is MSEK 8 better than the figure for the fourth quarter in 2000 (25). The earnings trend for the labels operation in Germany was negative and was a charge on operating income in the fourth quarter of MSEK 12.
Net sales in 2001 amounted to MSEK 3282, an increase of 17% (2809). MSEK 190 of the increase in turnover can be attributed to Siaco, the French company acquired during the second quarter in 2000. Excluding the addition of Siaco and currency changes, the organic increase in turnover amounted to 4%.
The improvement in income is due to both an increase in turnover and reduced costs. Gross income has increased by MSEK 70, corresponding to 9%, to MSEK 814 (744), while selling and administrative costs have increased by only MSEK 20 to MSEK 699 (679).The increase in gross income and costs was influenced by Siaco, which has been included in the consolidated accounts since June 2000. For comparable units, a higher gross income and lower costs were reported during the year compared with the respective figures for 2000.
The cost-savings programme implemented in 2000 led to a gradual reduction in costs during the year and had a greater effect than planned. A large number of substantial orders led to an increase in net sales within the Business Area Information Logistics. As for Stralfors, the slowdown in business is noticeable within the Swedish labels operations. There is at present a good flow of orders in the other operations.
Up to now, the cost-savings programme has had an impact mainly within the areas covered by sales and administration. As of 2002, the coordinating effect of Stralfors’ new business area structure will result in cost savings primarily within production. The Group’s purchasing routines are under review, and this is expected to result in more cost savings.
Development of Business Area Information Logistics
Stralfors concluded an agreement with DMdata in Copenhagen during the fourth quarter to set up a joint-owned company for information logistics with a total concept for output data management services such as printing, electronic document handling, database management and mailing routines. The company, which also includes the printing and output data management operation that Stralfors acquired from Post Denmark, will be one of the largest in Denmark within this field.
To further strengthen its position on the Scandinavian market and to support its customers deploying the new technology for mobile telephony and gaming and bank card solutions, Stralfors signed an agreement on partnership this January with the French company, Oberthur Card Systems, the global leader in the field of solutions for so-called smart cards.
The acquisition of Siaco
Stralfors acquired the remaining outstanding shares in Siaco by compulsory purchase in December 2001. The original analysis of the acquisition was corrected during the year, resulting in a final goodwill value of MSEK 106. The goodwill item will be written off over a period of 20 years.
The outlook for 2002
Continued improvement in profit is expected during the current year, primarily as of the second quarter. This assessment is based on the full impact of the implemented cost-savings programme being felt during 2002, and on the further measures now being carried out to increase efficiency. In addition, it is estimated that the structural measures already set in motion in France will continue to lower costs.Operating income for the German labels operation is also expected to gradually recover.
Graphic Solutions
Net sales for Graphic Solutions, which comprises the Business Areas Graphics and Labels, amounted in 2001 to MSEK 1 663 (1 470). Of the increase in turnover for the year, MSEK 150 can be attributed to the acquisition of Siaco. Operating income for 2001, MSEK 86.2, represents a marginal improvement compared with the figure for the previous year. There is still a good flow of orders within the Gaming Products area, but the decline in business led to a fall-off in demand primarily within the labels operation in Sweden. The integration of Siaco is proceeding as planned, and the operation reported better profit during the second half of 2001. The four factories in France at Stralfors’ disposal following the acquisition of Siaco will have been reduced to two during the first half of 2002.
As mentioned above, the labels operation in Germany reported a deficit. The impact of the measures now in progress to restore profitability is expected to be seen in the figure for operating income during the second half of 2002.
Information Logistics
Net sales for Information Logistics, comprising the previous Business Areas Info Concept, Card Solutions and most of IT-Development, amounted during the year to MSEK 572, an increase of 32% on the figure for 2000 (MSEK 432). A large number of major orders at the operations in Sweden and Norway has gradually increased the growth of business. The above-mentioned expansion of operations in Denmark and the agreement on development signed with Oberthur will contribute to continued excellent growth within the Business Area.
Operating income for the Business Area in 2001 was MSEK 27, an increase of 20% on the figure for 2000. Income for the fourth quarter was charged with the cost of moving the Norwegian card operation from Horten to Oslo.
The National Road Administration’s procurement of number plates means that deliveries by Stralfors ceased at the turn of the year. Owing to unclear points in the basis for procurement, a new agreement on procurement will be presented during the first half of 2002. Regardless of the outcome, there will be no deliveries of numberplates for most of 2002. This means there will be a drop in turnover of some MSEK 50.
SPI, System- and Product-related Information Transfer
The third business block in the new organization, comprising the Business Areas Lasermax and IT-Supplies, the company Stralfors TradeCom Solutions and other businesses, reported net sales in 2001 of MSEK 1 047, an increase of 15% on the figure for 2000 (907). The computer peripherals business included in Siaco accounted for MSEK 40 of the increase in turnover.
Operating income during the year amounted to MSEK 31, an increase of MSEK 26 compared with the figure for 2000 (5).The improvement in profit derives from the Business Area IT-Supplies and the computer peripherals business in Siaco. During the third quarter in 2001, operations at Stralfors TradeCom Solutions were confined to EDI solutions only, and the Internet operation run previously was discontinued. This measure led to a clear improvement in profit during the fourth quarter.
Central items
Cost savings and the transfer of certain previously central resources to the business areas resulted in the charge on income from the Group’s central functions during the year being reduced by MSEK 16 to MSEK 22 (38). Exchange gains from receivables in foreign currencies also contributed to the reduction.
The Group
Income for the Group before tax in 2001 amounted to MSEK 110. Included in the corresponding income for the same period in 2000, MSEK 94, were net earnings affecting comparability of MSEK 28 (mainly surplus funds from Alecta, MSEK 55, and structural costs, MSEK 27). The lower financial net in 2001 was due to the acquisition of Siaco.
Income per share during the year amounted to SEK 3.36. Included in the corresponding figure for the same period in 2000 (2.65) were earnings affecting comparability of SEK 0.90 per share.
Cash flow, liquidity, financing
The operating cash flow for the year amounted to MSEK 217, a dramatic improvement on the figure for the same period in 2000 (30). The operating cash flow exceeds the operating income for the year (122) by nearly MSEK 100, owing mainly to the reduction in operating capital.
Liquid funds during the year increased by MSEK 92, and amounted at the end of the year to MSEK 223. In addition, there were unused credit facilities at the end of the period totalling MSEK 537.
Shareholders’ equity increased by MSEK 71 during the year, and at the end of 2001 amounted to MSEK 1 078, corresponding to SEK 50 per share. The equity/assets ratio at year-end 2001 was 51%. This was somewhat higher than at the turn of the year 2000/01 (50).
Total assets during the year increased by MSEK 98 to MSEK 2 095. As mentioned above, liquid funds increased by MSEK 92, and the weakening of the Swedish krona led to an increase in total assets of MSEK 86. Excluding these items, total assets diminished by MSEK 80 owing among other reasons to a reduction in tied-up capital in fixed assets.
Proposed dividend
The Board and Managing Director propose the payment of a dividend of SEK 1.75 per share (1.65 in 2000).
Proposed new Board Members of the Board
The Stralfors Nomination Committee has announced its intention to propose the adoption of Caroline Sundewall and Jan Åström as new Members of the Board at the Annual General Meeting in May.
The Annual General Meeting
The Annual General Meeting will be held in Ljungby at 4 p.m. on 7 May.
Annual Report
The Annual Report is expected to be published and sent to shareholders and other interested parties at the beginning of April. The Report can also be ordered from Stralfors at that time.
Financial information from Stralfors
Questions or queries about the contents of this Report may be addressed to
Per Samuelson, CEO and Managing Director, on +46 (0)372-854 40 or to
Kjell Åke Jönsson, Vice Managing Director, on +46 (0)372-852 34.
The next report, the First Quarter Report, January – March 2002, will be published on 7 May.
Business Concept
Stralfors is an IT-focused Business-to-Business company with a print heritage, and provides 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 3.3 billion and operates in 11 countries with a total of 1900 employees. Stralfors “B” shares have been quoted on the Stockholm Stock Exchange since 1984.
Accounting principles
This Report has been drawn up in accordance with the recommendations issued by the Swedish Financial Accounting Standards Council for interim financial reporting (RR 20).
During quarter three this year a reclassification was made between costs of goods sold, sales- and administration costs. Comparative figures were recalculated due to this change. As to the rest the same accounting principles and methods of calculation were used as in the annual report 2000.
Ljungby, 11 February, 2002
The Board of Directors