FAGERSTA, Sweden, Nov. 6, 2002 (PRIMEZONE) -- SecoTools:
-- Invoicing in the third quarter declined by 6 percent compared with the year-earlier period and operating margin was 14.0 percent (16.4). -- Improved operating cash flow compared with preceding year. -- Unchanged demand expected during remainder of the year.
Market
The industrial economy remained soft in Europe and the U.S. during the period.
In general, the demand for Seco's products in Europe remained lower than in the corresponding period last year, with the exception of the Scandinavian countries. Sales compared with earlier in the year were stable for most of the other European markets, with a favorable trend in Italy, Spain and Germany, in relation to the market situation. Development in Central and Eastern Europe was similar.
Sales in the U.S. continued to be weak during the period due to a continued subdued market. The sales trend in Asia for most markets was stable, with certain positive signs in China and Korea.
The Group's invoicing for the quarter totaled SEK 943 M (1,005), which is a decline of 6 percent. Structural and currency effects amounted to plus 3 and minus 6 percentage points. Sales at fixed exchange rates for comparable units declined by 3 percentage points compared with the corresponding period in the preceding year.
Consolidated profit after financial items for the quarter amounted to SEK 124 M (156). Operating margin was 14.0 percent (16.4). Earnings were affected adversely primarily by reduced volumes and currency effects.
Invoicing by market area
2002 2001 2002 2001 2002/2001 2002/2001
July-Sep July-Sep Jan-Sep Jan-Sep July-Sep Jan-Sep
SEK M SEK M SEK M SEK M %1) %1)
Sweden 53 47 184 172 1 -2
EU, exc(l) 449 464 1 448 1 517 -4 -7
Sweden
Other Europe 83 83 269 271 -5 -8
Total for 585 594 1 901 1 960 -4 -7
Europe
NAFTA 216 256 710 796 -6 -9
South America 27 33 92 102 20 11
Africa, Middle 20 20 57 61 23 13
East
Asia, 95 102 282 295 0 -2
Australia
Group tota(l) 943 1 005 3 042 3 214 -3 -6
(1) Change from preceding year is shown in fixed currencies for
comparable units.
Sales and earnings for the year
A generally weakening demand in the U.S. and Europe during the year resulted in reduced sales overall. To date, the decline has been more pronounced in the U.S. than in Europe. Within Asia/Pacific, sales at fixed exchange rates were on level with the preceding year.
The Group's invoicing totaled SEK 3,042 M, which is 5 percent lower than the preceding year, in which the net of structural and currency effects increased sales by 1 percentage point. Accordingly, the decline for comparable units at fixed exchange rates was 6 percent.
Profit after financial items year-to-date amounted to SEK 455 M (608). The operating margin was 16.1 percent (19.4). Lower sales volume was the main reason for a lower earnings level than in the preceding year. Negative currency effects impacted earnings in the amount of SEK 7 M.
Earnings per share in the most recent 12-month period amounted to SEK 14.00 (19.00). Return on capital employed was 24.3 percent (34.4). Return on equity amounted to 20.8 percent (28.1).
2002 2001 2002 2001
July-Sep July-Sep Jan-Sep Jan-Sep
Invoiced sales 943 1 005 3 042 3 214
Cost of goods sold -484 -517 -1 470 -1 578
Gross profit 459 488 1 572 1 636
Administration and selling costs -331 -329 -1 047 -1 037
Other revenues and costs 4 6 -35 26
Operating profit 132 165 490 625
Financial items -8 -9 -35 -17
Profit after financial items 124 156 455 608
Taxes -36 -50 -142 -194
Net profit 88 106 313 414
The Group's depreciation according to plan amounted to SEK 227 M (214).
Sales invoiced by the Parent Company amounted to SEK 1,627 M (1,741), with operating profit of SEK 344 M (452). Liquid funds declined by SEK 18 M from the beginning of the year and amounted to SEK 55 M at the close of the reporting period. The Parent Company's interest-bearing loans, including the convertible debenture loan, amounted to SEK 292 M.
Key figures
2002 2001 2002 2001
July-Sep July-Sep Jan-Sep Jan-Sep
Operating margin, % 14.0 16.4 16.1 19.4
Profit margin, % 13.2 15.5 15.0 18.9
Earnings per share before 3.10 3.70 10.80 14.40
dilution, SEK
Earnings per share after 3.00 3.70 10.80 14.30
dilution, SEK
Return on capital employed 24.3 34.4 24.3 34.4
before tax, % (1)
Return on equity capital after 20.8 28.1 20.8 28.1
tax, % (1)
Equity capital per share before 65.90 69.15 65.90 69.15
dilution, SEK (1)
1) All key figures are calculated on a rolling 12-month basis.
The number of shares before dilution at the close of the third quarter in both 2002 and 2001 was 28,832,898, which was also the average number of shares in both periods. After adjustments for full conversion of the convertible debentures, corresponding to 274,160 shares, the number of shares at the close of the third quarter in 2002 and 2001 amounted to 29,107,058. The average number of shares after dilution was 29,107,058.
No convertible debentures were converted to shares during the year.
Balance sheet (SEK M)
Sep 30, 2002 Dec 31, 2001
Intangible fixed assets 203 111
Other fixed assets 1 510 1 535
Inventories 878 935
Current receivables 946 973
Liquid funds 368 365
Total assets 3 905 3 919
Shareholders' equity 1 900 2 072
Interest-bearing provisions and liabilities 812 588
Non-interest-bearing provisions and 1 193 1 259
liabilities
Total equity and liabilities 3 905 3 919
Change in shareholders' equity (SEK M)
Sep 30, 2002 Sep 30, 2001
Shareholders' equity, December 31, 2001 and 2 072 2 006
2000
Effect of change in accounting principles - 35
Adjusted shareholders' equity, January 1, 2 072 2 041
2002 and 2001
Currency exchange differences -81 116
Profit for the year 313 414
Dividend -404 -577
Shareholders' equity, September 30, 2002 and 1 900 1 994
2001
Cash flow statement (SEK M)
Sep 30, 2002 Sep 30, 2001
Profit after financial items 455 608
Reversal of depreciation 227 214
Other 23 -12
Taxes paid -156 -145
Change in working capital 9 -215
Investment activities -305 -172
Financing activities, incl dividends -227 -572
Cash flow 26 -294
Rolling 12-month review
Invoicing Change Operating Operating
SEK M % profit margin
SEK M %
Q4, 2001 1 071 4 162 15.1
Q1, 2002 1 031 -7 170 16.5
Q2, 2002 1 068 -3 188 17.5
Q3, 2002 943 -6 132 14.0
Rolling 12 months 4 113 652 15.9
Any items affecting comparability are excluded from the operating profit and operating margin.
Accounting principles
The interim report complies with recommendations of the Swedish Financial Accounting Standards Council. At year-end 2001, the Swedish Financial Accounting Standards Council issued several new recommendations, including RR 15 regarding intangible assets. This recommendation means that Seco, after fulfillment of certain criteria, will capitalize a small percentage of expenses for IT and new product development. Effects on the operating result for this year are positive in an amount of SEK 38 M.
Liquidity, equity ratio and cash flow
The Group's liquid funds in the form of short-term investments and bank balances increased during the quarter by SEK 128 M and amounted to SEK 368 M at the end of September. The cash flow from current operations improved substantially compared with the year-earlier period. The Group's interest-bearing loans, including the convertible debenture loan, amounted to SEK 711 M (568).
The Group's equity ratio was 49 percent (51).
Personnel
The number of employees in the Group at the close of the period was 3,900 (3,904 at year-end 2001). The change in personnel during the period was insignificant and in total amounted to a decline of four persons.
Capital expenditures
Group investments in fixed assets during the quarter amounted to SEK 176 M (188), of which intangible assets totaled SEK 38 M. Most investments were related to machinery and equipment for the production units in Sweden, the US and the Czech Republic. Investments in 2002 are estimated at approximately SEK 300 M.
Short-term market outlook
Unchanged demand is expected for the remainder of the year.
Market outlook published on August 7, 2002
We anticipate stabilized demand in most principal markets compared with the first six months of the year.
This report has not been reviewed by the Company's auditors. The next report, covering full-year 2002, will be published on February 11, 2003.
Fagersta, November 6, 2002
SECO TOOLS AB; (publ)
Lars Renstrom President and CEO
For additional information, contact:
Lars Renstrom, President and CEO (Tel: +46 223-401 10) Tomas Eliasson, CFO (Tel: +46 223-401 20) or Stefan Sjodahl, Investor Relations (Tel: +46 223-401 32). E-mail may be sent to: investor.relations@secotools.com
Previously published financial information is available under "Investor Relations" at the Seco Tools' website (www.secotools.com)
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