SOLNA, Sweden, Aug. 20, 2002 (PRIMEZONE) -- In a market characterized by declining volumes, Scribona succeeded in achieving a strong cash flow and a positive operating result in all business areas.
-- Second quarter sales was MSEK 3,196 (2,947).
-- Operating income for the second quarter improved to MSEK 5 (-69) and income after tax was MSEK -8 (-68). Operating income for the first six months amounted to MSEK 19 (-58) and income after tax MSEK 0 (-65). All three business areas achieved a positive operating resultduring the quarter.
-- The cash flow from operating activities was positive and amounted to MSEK 221 for the quarter and MSEK 649 for the past 12 months.
-- In the second quarter Scribona attained its highest marketshare ever in both the PC product market and the document managementmarket.
-- Earnings per share for the first half of the year was SEK 0.00 (-1.52).
President's commented "Although we are not satisfied with the results, the second quarter of 2002 shows that Scribona is on the right path and is well poised to benefit from a coming market upswing. Despite a flaggingmarket, all three business areas achieved a positive operating resultand Scribona attained its highest market shares ever in both the PCproduct market and the document management markets. While there are noreliable statistics for infra-structure products, there are indicationsthat we have increased our share of this market as well.
"For Scribona, the highlight of the quarter was that cash flow and capital employed showed such strong development. This was achieved through a combination of structural changes in our logistics and organization and determined efforts to improve our capital management. Compared with the corresponding period of last year, we had reduced capital employed at mid-year by a full MSEK 688, a decrease of 42%."
THE MARKET
Compared with the preceding year, Scribona's main markets showed a continued drop in demand during the quarter. One exception is Swedish home PC sales, which boosted the PC market in Sweden to an increase in units sold of around 18%.
However, the total Nordic market for PC products has decreased by around 6% in units sold. In the laptop PC segment, the market was unchanged compared with the preceding year. The market for document management products has contracted by an estimated 5%. While there are not reliable statistics for IT infrastructure products, this market is also estimated to have declined by at least 5%.
The combination of falling prices, primarily in the infrastructural segment, and a decreased volume has further contributed to the shrinking market. The opposite has been true in the document management market, where the average price per product has risen somewhat.
In general, sales to businesses and organizations have continued to decline, while consumer sales via home PC offers and electronics retailer chains have shown more positive development.
DEVELOPMENT DURING JANUARY - JUNE 2002
Sales and income in the second quarter
During the second quarter the Group's sales rose to MSEK 3,196 (2,947), which is an increase of 8%. For comparable units and at unchanged exchange rates, sales were unchanged. Despite a rising market share, sales were adversely affected by a flagging market and a continued drop in prices for IT infrastructure products.
Second quarter sales in the Solutions business area totaled MSEK 628 (789), a decrease of 20% attributable to lower average prices, a continued weak IT infrastructure market and the transfer of high volume products to Scribona Distribution.
Sales in the Distribution business area amounted to MSEK 2,256 (1,761), an improvement of 28%. Adjusted for comparable units and at unchanged exchange rates, this represents an increase of around 14% compared with the preceding year.
Sales in the Brand Alliance business area have continued to decrease, primarily due to an ongoing drop in sales for Toshiba Digital Media. Within the business area, only Carl Lamm noted a favorable sales trend. Total sales in the business area amounted to MSEK 506 (560).
The Group reported operating income of MSEK 5 (-69). The improvement over the preceding year is mainly attributable to dramatically higher earnings in the Distribution business area of MSEK 6 (-51) through volume growth and lower costs. In the previous year, Distribution was charged with accounts receivable losses of MSEK 22. Brand Alliance also achieved earnings growth of MSEK 4 (-10) thanks to a strong result for Carl Lamm.
Solutions showed weaker earnings of MSEK 3 (6) owing to weak sales and lower prices.
Sales and income for the first six months
Sales for the first six months amounted to MSEK 6,564 (5,300), an increase of 24%. PC LAN was acquired on 1 April 2001, and was therefore not consolidated in the Group during the first quarter of last year.
In the first half of the year, the Solutions business area reported sales of MSEK 1,211 (1,081), Distribution of MSEK 4,665 (3,389) and Brand Alliance of MSEK 986 (1,193).
Operating income for the first six months amounted to MSEK 19 (-58). The improvement was attributable to the Distribution business area, which achieved a result of MSEK 18 (-51) through volume growth and lower costs, and Brand Alliance with MSEK 10 (1). Solutions reported a weaker result of MSEK 9 (16).
Net financial items for the first six months amounted to MSEK -19 (-26).
Income before tax was MSEK 0 (-84).
Cash flow and financial position
The Scribona Group's cash flow from operating activities during the first half of the year was MSEK 105 (5). Second quarter cash flow amounted to MSEK 221 and net investments totaled MSEK 7 (70). At the end of June, structural changes and determined efforts to reduce tied up capital resulted in positive net financial capital of MSEK 25 (-625). Capital employed has decreased by MSEK 688 over the past 12-month period, corresponding to a reduction of 42%. Despite a significant growth in operations, inventories were very low at mid-year. The capital turnover rate during the first six months was 12.5/year (7.8).
Employees
The number of employees on 30 June was 1,536 (1,624).
Key ratios
Earnings per share for the first half of the year amounted to SEK 0.00 (-1.52). Earnings per share over the past 12-month period, excluding items affecting comparability, totaled SEK -0.40 (-1.82 for the full year 2001).
Equity per share at the end of the period was SEK 19.11 (19.86).
The equity ratio on 30 June was 26.6% (27.7%).
Return on capital employed excluding items affecting comparability over the past 12-month period was 3.0% (-3.4% for the full year 2001). Including items affecting comparability, return on capital employed was -1.2% (-7.2% for the full year 2001).
Over the past 12-month period, return on shareholders' equity excluding items affecting comparability was -2.1% (-9.1% for the full year 2001). Including items affecting comparability, return on shareholders' equity was -5.7% (-12.7% for the full year 2001).
DEVELOPMENT BY BUSINESS AREA
Scribona Solutions
Investments in IT infrastructure fell short of expectations although the majority of market analysts agree that there is a underlying need for increased infrastructural capacity due to security and data storage requirements. The market weakened further during the quarter. The telecom industry's more restrictive attitude towards investment and a continued drop in average prices have further impacted sales. However, despite declining sales Scribona is believed to have maintained or consolidated its leading position as a distributor of IT infrastructure products.
Second quarter sales in the business area reached MSEK 628 (789), down 20%. Half of the decrease is attributable to the transfer of high volume products to the Scribona Distribution business area. Operating income amounted to MSEK 3 (6).
Sales for the first six months of the year totaled MSEK 1,211 (1,081). PC LAN was acquired on 1 April 2001 and was therefore not consolidated in the Group during the first quarter of last year. Operating income amounted to MSEK 9 (16).
Scribona Distribution
Market development for PC products in the Nordic region showed a declining trend during the quarter, with a 6% decrease in units sold. The corporate market remains weak and contracted by 5% in Sweden. The one positive exception was consumer sales, primarily via home PC sales in Sweden, but also via electronics retailers. Vigorous home PC activity was the main factor behind growth of a full 18% in the Swedish market. The Nordic market for laptop computers was unchanged. It should be noted that the PC product supplier Dell has lost market share during the quarter and that distributors have strengthened their share of the total market for PC products.
Second quarter sales amounted to MSEK 2,256 (1,761). After adjustment for comparable units and at unchanged exchange rates, this represents an increase of around 14% compared with the preceding year. Scribona Distribution has thus achieved its highest market share ever in the PC product market. The positive trend from the beginning of the year continued into the second quarter and operating income amounted to MSEK 6 (-51). This earnings growth was attributable to higher volumes and lower costs. In the previous year, Distribution was charged with accounts receivable losses of MSEK 22.
Sales in the fist six months amounted to MSEK 4,665 (3,389) and operating income to MSEK 18 (-51).
Scribona Brand Alliance
In the second quarter the Brand Alliance business area achieved weaker than anticipated sales of MSEK 506 (560), a decrease of 10%. The market for document management products shrank by around 5% during the second quarter, while the laptop market was stable. The Toshiba Digital Media division continued to lose sales, while sales in the Carl Lamm division increased.
Operating income amounted to MSEK 4 (-10). Toshiba Document Solutions achieved higher income than in the corresponding period of 2001 and Carl Lamm reported significantly higher income than in the preceding year.
Sales during the first six months totaled MSEK 986 (1,193). Operating income amounted to MSEK 10 (1).
Accounting principles
The same accounting and valuation principles have been applied as in the most recent annual report.
This interim report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation no. 20, Interim reports.
Financial calendar Interim report for January - September 2002 5 November 2002 Year-end report for January - December 2002 14 February 2003
This report has not been examined by the company's auditors.
Scribona AB Board of Directors
Facts about Scribona AB
Scribona is the Nordic market's leading provider of IT products and solutions, offering customers cutting-edge product expertise, the industry's leading e-commerce system, optimized product availability and a broad range of complementary services. Scribona's operations are organized in three business areas:
-- Scribona Solutions -- value adding distribution of IT
infrastructure
-- Scribona Distribution -- effective volume distribution of IT
products
-- Scribona Brand Alliance -- exclusive agent for leading brand
suppliers
For additional information, please contact:
Lennart Svantesson, President & CEO
telephone: +46 8 734 35 76
Lars Palm, Executive Vice President
telephone +46 8 734 37 10
Anders Bley, Executive Vice President
telephone +46 8 734 35 55
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