STOCKHOLM, Sweden, February 08, 2002 (PRIMEZONE) -- Scribona ended the year with a continued strong cash flow and fourth quarter operating income of MSEK 46.
Sales in the fourth quarter reached MSEK 3,819 (2,983). Operating income before items affecting comparability in the fourth quarter amounted to MSEK 46 (61) and income after tax was MSEK 12 (42).
The positive cash flow trend that started in the third quarter continued in the fourth and amounted to MSEK 340 (167). As a result, Scribona had a positive cash flow of MSEK 567 (196) in the second half of the year.
The full year was adversely affected by a weak market, accounts receivable losses (MSEK 50) and goodwill amortization (MSEK 50). Sales amounted to MSEK 11,872 (9,479). The sale of PC LAN was consolidated during the period April-December. Operating income before items affecting comparability totaled MSEK -43 (105) and income after tax was MSEK -120 (129).
PC LAN was acquired and integrated during the year, providing scope for cost reductions totaling at more than MSEK 150 at year-end.
The Board proposes that no dividend be paid to the stockholders (previous year SEK 0.50).
CEO's comments
The fourth quarter provided ample proof that the integration of PC LAN was carried out successfully. Both the Solutions and Distribution business areas, which were directly affected by the merger, managed to increase their sales, strengthen their market shares and achieve satisfactory operating income despite unfavorable market conditions. Of total operating income, Solutions accounted for MSEK 31 and Distribution for MSEK 11. At the same time, determined efforts led to further improvement in the Group's cash flow, which reached MSEK 340 in the fourth quarter.
On the whole, 2001 was a dramatic and decisive year for Scribona. After the strategically important acquisition of PC LAN ASA, Scribona is now the market-leader for both the Nordic region and each individual market in the main fields of activity. Furthermore, the acquisition has created a platform for positive development of the Distribution and Solutions business areas. In a sluggish market, the merged group succeeded in increasing its market shares relative to the two companies' combined shares in 2000.
Through the consistent integration of all similar operations in each market, the merged group's cost level was reduced by more than MSEK 150 on a yearly basis. These cost cuts did not reach full effect until the end of 2001 and in a weak market with heavy accounts receivable losses and amortization of goodwill it was not possible to avoid a net loss for the year.
The market
The fourth quarter also saw generally weak demand in Scribona's market areas. Nordic PC sales fell by 7%, which affected laptop and desktop computers in equal proportions. In other words, the anticipated upswing primarily for laptop PCs has still not arrived. On the other hand, sales of PC servers rose by 3% and the market for other IT infrastructure is assessed to have been unchanged.
The market for document handling products also remained feeble and shrank by around 10% compared with 2000 For the year as a whole, the market was a general disappointment for the industry. PC volumes dropped by 5%, which is a steeper decrease than in the preceding year. Of this total, desktop computers accounted for 7% while the laptop segment fell by only 1%. Sales of PC servers rose by 7% while the market for IT infrastructure products was roughly on par with the previous year. The market for document handling products contracted by around 10%.
Sales and income
The Group's fourth quarter sales reached MSEK 3,819 (2,983), including PC LAN.
Fourth quarter sales amounted to MSEK 775 (409) in the Solutions business area and MSEK 2,610 (1,956) in Distribution.
As earlier, Brand Alliance noted the largest drop in sales, 26%, mainly due to declining sales of laptop computers in the Toshiba Digital Media division. The business area's sales amounted to MSEK 642 (863)
Fourth quarter operating income before items affecting comparability amounted to MSEK 46 (61). Both Solutions with MSEK 31 (21) and Distribution with MSEK 11 (31) reported strong growth in earnings towards the end of 2001 compared with earlier in the year. Operating income in Brand Alliance was MSEK 3 (35).
Sales for the full year amounted to MSEK 11,872 (9.479). PC LAN's sales were consolidated for the period April-December. In relation to 2000, sales for comparable units decreased in 2001.
For the full year, Solutions reported sales of MSEK 2,485 (1,073) and Distribution of MSEK 7,762 (6,292), both including PC LAN.
Brand Alliance reported sales of MSEK 2,353 (2,966).
Operating income for the full year before items affecting comparability was MSEK -43 (105). Solutions' operating income of MSEK 39 (9) includes a net amount of MSEK 14 attributable to a capital gain of the sale of an agency operation in Denmark and cost provisions in connection with a minor acquisition.
Distribution with MSEK -49 (38) and Brand Alliance with MSEK -3 (110) achieved lower full-year earnings than in the preceding year. Income in Distribution was charged with accounts receivable losses of more than MSEK 50, while income in Brand Alliance was primarily affected by declining sales of Toshiba's laptop PCs.
The entire remaining goodwill item that arose in connection with Scribona's acquisition of Alfaskop's hardware business was amortized during the third quarter. The write-down amounted to MSEK 50 and is reported among items affecting comparability.
Net financial items for the full year totaled MSEK -49 (6), including an MSEK 17 write-down of receivables in the partly owned web development company Proventum.
Income before tax for the full year was MSEK -140 (180). The year earlier figure included items affecting comparability in the form of a refund of MSEK 56 from Alecta and a capital gain of MSEK 33 on the sale of shares reported as financial income.
Restructuring costs
Total costs for the integration of PC LAN have amounted to MSEK 65. These costs have been deducted against the negative goodwill of MSEK 70 that arose in connection with the acquisition. No additional significant restructuring costs are anticipated.
Cash flow and financial position
The Group's cash flow improved substantially during the year and amounted to MSEK 340 (171) in the fourth quarter. Cash flow for the full year totaled MSEK 190 (-137). Excluding acquired financial debts in PC LAN, cash flow was MSEK 465.
The Group's net investments for the full year reached MSEK -36 (111). Net financial capital at the end of the year totaled MSEK -58 (-248).
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