SKARPNACK, Sweden, Jan. 22, 2009 (GLOBE NEWSWIRE) --
* Sales during the fourth quarter of 2008 amounted to MSEK 382
(413), operating profit amounted to MSEK 20 (49) and profit
before tax to MSEK 27 (48). Net profit was reported as MSEK 18
(35) and profit per share after dilution was SEK 0.60 (1.11) for
the same period.
* Net sales for the year amounted to MSEK 1 536 (1 571). Operating
profit was MSEK 130 (161) and profit before tax was MSEK 136
(155). Net profit amounted to MSEK 96 (108).
* EBITA-margin for the fourth quarter was 5.2 (11.8) percent and
for the year 8.5 (10.3) percent.
* Profit per share after dilution amounted to SEK 3.11 (3.48) for
the year.
* The Board proposed a dividend of SEK 1.38 (1.38) per share.
* For 2009 net sales is expected to be on the same level as 2008.
Statement by the Managing Director
The end of 2008 has been characterized to a great extent by the turbulence in the global financial markets and clear signs of an economic downturn. As far as HL Display is concerned we have earlier had limited impact from swings in the business cycle. During the last two months, however, this has been the case. Yet it is pleasing to note that despite a sales decrease we have been able to retain a good level of profitability. Work in recent years has had a clear emphasis on profitability improvement and we are currently running a far more efficient business than was the case a few years ago. We also have a strong balance sheet with low indebtedness. For this reason HL Display has a competitive advantage relative to our smaller competitors in the current market situation.
During the year there was a positive effect on our profit from an increase in the gross margin and a negative one because operating expenses were too high. The continued improvement in the gross margin is based on a number of factors in combination. In addition to the measures to improve productivity that we are implementing on an ongoing basis, our new logistical structure with regional warehouses has resulted in an increase in the average order size. This in turn creates longer production runs, which is an important precondition for efficient production.
The significant productivity improvements in production mean that we now produce more with fewer machines. As a consequence, we currently face an issue of over-capacity in production, which will be dealt with during 2009.
At the same time we have clearly set our sights on creating growth, and we have a number of development projects under way in the company. We must, however, be humble towards the fact that market climate can deteriorate further and that this could quickly get distinct negative effects on our business. This means that we will be paying very close attention to changes in the market climate in order to be prepared to respond quickly and appropriately if required.
Gerard Dubuy
Interim report
Net sales and result for the fourth quarter of 2008
Net sales for the Group amounted to MSEK 382 (413) for the fourth quarter, a decrease of 8 percent compared to the same quarter 2007. Operating profit for the same period was MSEK 20 (49) and profit before tax amounted to MSEK 27 (48). The financial net for the fourth quarter amounted to MSEK 7 (-1) whereof net interest MSEK 0 (1), and exchange rate effects MSEK 7 (-2). The result of the fourth quarter has been impacted with MSEK 5.1 related to severance pay including social charges.
Net sales and result for the year 2008
The Group's net sales amounted to MSEK 1 536 (1 571) for the year, a decrease with 2 percent compared to 2007. The change in the value of the krona vis-a-vis the export currencies has had a positive impact on net sales with MSEK 18 in comparison with last year.
Operating profit for the year amounted to MSEK 130 (161) and profit before tax was MSEK 136 (155). The change in value of the krona compared to last year had a positive effect of MSEK 6 on operating profit. Financial net for the year amounted to MSEK 6 (-6) whereof interest net MSEK -1 (-6) and exchange rate effects MSEK 7 (0). HL Display's most important trade currencies besides SEK are Euro, British pounds and Russian roubles.
Gross margin has improved, thanks to a favourable product mix, price increases and efficiency improvements in production. Operating expenses have increased with MSEK 39 or 8 percent in comparison with last year. Around MSEK 22 is related to newly acquired subsidiaries and the building up of sales companies on growth markets. Around MSEK 4 are costs related to the retailing trade fair EuroShop, which is held every third year.
Sales development by market
During 2008 the sales on the markets in which HL Display operates has in total been weaker than initially expected. The exception has been the Nordic countries, which developed satisfactory and showed a growth in sales of 3 percent. Sales in Western Europe decreased by 6 percent, mainly explained by disturbances in connection with organizational changes. Sales in Eastern Europe increased by 1 percent. Sales in Asia increased by 29 percent during 2008, in line with expectations.
Seasonal effects
HL Display is normally affected negatively by seasonal variations during December and January. The reason is that customers, who consist mainly of retailing companies, do not plan any changes during the Christmas shopping period.
Investments
Net investments in non-current assets amounted to MSEK 32 (70) during the year. Net investments for 2007 included the acquisition of Display Team. Depreciation according to plan amounted to MSEK 36 (40).
During the fourth quarter net investments were MSEK 8 (10). Depreciation according to plan during the same period were amounted MSEK 9 (9).
Cash flow and financial position
Cash flow from operating activities fell to MSEK 130 (138). During the fourth quarter cash flow from operating activities amounted to MSEK 74 (46).
Operational cash flow amounted to MSEK 130 (138) for the year were lower profit was compensated by lower investment levels. Operational cash flow per share was SEK 4.32 (4.59).
As at 31 December 2008, liquidity amounted to MSEK 221 (177). Interest-bearing net receivable amounted to MSEK 120 (49) on the balance sheet date. Dividend decided upon MSEK 43 (27) has been paid during the year.
The equity ratio on the balance sheet date amounted to 57 (53) percent.
Employees
The average number of employees during the period was 973 (968). The number of employees on the balance sheet date was 965 (972).
Information about risks and uncertainty factors Variations in raw material prices and exchange rate differences constitute uncertainty factors, but not significant risks. For a closer description of the risks and uncertainty factors facing HL Display, please see the risk and sensitivity analysis on page 32 of the annual report for 2007.
Parent company
The parent company's result after financial items for the first nine months of 2008 amounted to MSEK 116 (98). No significant changes have been noted in the income statement or balance sheet.
Dividends, General meeting, Extra shareholders' meeting and Annual report
The Board's long term aim is to have a dividend share equalizing 30 to 50 percent of earnings per share after tax. The Board proposes a dividend for 2008 of SEK 1.38 (1.38) per share. Annual general meeting 2009 will be held at Factory, Nacka Strand, on April 2, 2009. Extra shareholders' meeting with purpose to change residence will bet held at Ratos, Drottninggatan 2, Stockholm, on February 25, 2009. The Annual Report for 2008 will be published on the company's website and distributed to all shareholders during week 11.
Related party transactions
Please see note 5 for related party transactions.
Events after the balance sheet date No significant events after the balance sheet date with effect on the book closing have occurred in the Group or the Parent Company.
Prospects for 2009
For 2009 the net sales is expected on the same level as 2008. The company's long-term growth and profitability goals remain unchanged.
Nacka, January 22, 2009 On Behalf of the Board Gerard Dubuy Member of the board and MD
The full report incl. tables can be downloaded from the enclosed link.