STOCKHOLM, Sweden, Nov. 1, 2005 (PRIMEZONE) -- Observer AB (publ):
- Production costs to be reduced by SEK 18 million in the Nordics and continued digitalization paves the way for further efficiency improvements
- Organic growth of three percent during the quarter
-The Group's operating revenue rose by 8 percent to SEK 1,287.0 million (1,197.2). Exchange rate effects from the translation to Swedish kronor affected revenue negatively by SEK 1 million compared with the corresponding period of the previous year. Organic growth in local currency was 1 percent (-1). In the third quarter organic growth reached 3 percent.
-Operating profit, EBIT, amounted to SEK 131.3 million (149.8). Exchange rate effects impacted profit negatively by SEK 3 million compared with the year-on-year period. The operating margin was 10.2 percent (12.5). For the third quarter the margin was 10.5 percent (13.0).
-Earnings per share amounted to SEK1.15 (1.25). Profit after financial items amounted to SEK 88.8 million (115.7) and net profit was SEK 80.8 million (87.7).
-Operating cash flow amounted to SEK 89.3 million (165.7).
-Development work in the Nordic countries is strengthening the offering and will reduce costs in the region by approximately SEK 18 million from 2006. The measures will lead to restructuring cost of approximately SEK 7 million in the fourth quarter of 2005.
-Observer has signed an agreement to acquire a broadcast monitoring company in the U.S. Multivision has a yearly turnover of approximately USD 12 million. The acquisition is expected to have a positive impact on Observer's earnings per share and cash flow as of the date of the acquisition. It will lead to substantial profit improvements as well as increased margins in Observer's U.S. subsidiary. The purchase price will be paid in cash. In order to remain financially prepared for further expansion, Observer intends to finance a portion of the acquisition with the proceeds of a new share issue of up to four million shares.
Comment by Observer CEO Robert Lundberg:
"The further development and introduction of our integrated services is producing results. The US continues to develop positively, and we are reaching our goals there. Growth in Europe is improving, and Sweden reported positive growth during the third quarter.
"Service development in the Nordic countries is strengthening our offering in the region. The continued integration of our service areas is leading to more efficient processes. This, together with greater regional coordination, means we can reduce costs by approximately SEK 18 million from 2006.
"Our continued digitalization is increasing opportunities to further enhance our services. It also paves the way for further efficiency improvements moving forward."
Observer is the world leader in communication management and business intelligence. Its services enable clients to identify the right target audience, distribute information, and monitor and analyze their media image.
Observer AB is quoted on the Attract40 segment of Stockholmsborsen's O-list and has around 22,000 shareholders. The company has around 2,600 employees and a turnover of slightly over SEK 1.6 billion in 2004. Observer operates in the US, UK, Sweden, Canada, Germany, Norway, Finland, Denmark, Portugal, Ireland, Estonia, Latvia and Lithuania.
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