STOCKHOLM, Sweden, Feb. 20, 2002 (PRIMEZONE) -- Nefab:
-- Invoiced sales amounted to SEK 1,121 M (1,121).
-- Profit after financial items amounted to SEK 67 M (123, of
which 7 in SPP surplus funds).
-- Earnings per share after full tax amounted to SEK 6.49 (13.29).
-- Dividend proposed unchanged of SEK 2.80 per share (2.80).
-- Acquisition of MK Special Emballage AB and of a returnable
packaging pool.
-- Collaboration with SCA Packaging established.
-- New factories in China and Estonia.
-- Restructuring of operations in North America and the UK charged
against earnings in an amount of approximately SEK 40 M.
-- Significant reductions of fixed costs.
Fourth Quarter 2001
Demand from customers in the telecom equipment industry remained weak during the fourth quarter. Total invoiced sales amounted to SEK 260 M (321), down 19% compared with the year-earlier period. The positive effect on invoiced sales attributable to changes in currency exchange rates is estimated at approximately SEK 11 M. Order bookings amounted to SEK 237 M (312).
Profit after financial items during the fourth quarter amounted to SEK 11 M (32).
Full-Year 2001
Invoiced sales during the full-year 2001 amounted to SEK 1,121 M (1,121). The positive effect on invoiced sales attributable to changes in currency exchange rates is estimated at approximately SEK 65 M. Order bookings amounted to SEK 1,082 M (1,126).
Europe
Central Europe, where the customer base primarily consists of automotive companies and other engineering companies, showed a positive trend throughout the year.
At the end of 2000, an agreement was reached to expand cooperation with Flextronics, whereby Nefab assumed responsibility for delivery of complete packaging solutions to the customer's operations in Poland. A sales company was established near Gdansk for this purpose.
To meet demand in the Hungarian market, a sales office is being established in Hungary.
The trend in the UK is characterized by a slowdown in the export industry. This has resulted in a weak volume trend for Nefab. The operations were restructured during the autumn. This involved redistributing production capacity from the UK to other European units.
The Swedish market, in which significant deliveries are made to the telecom equipment market, was affected adversely by the downturn in the industry. As a result, the number of personnel in the Swedish production units was reduced. Volumes stabilized during the third and fourth quarters.
Asia
The Chinese market is continuing to develop well. Invoiced sales are mainly to customers in the telecom equipment sector. In response to increased demand from southern China, a new plant was established in the province of Guangdong during the autumn.
North and South America
After growing strongly for several years, the market in North America is now showing signs of a slowdown due to the weakened economy. Operations in North America were restructured during the summer. Production has been concentrated to the newly constructed production plant in Canada.
Demand in the Brazilian market remains weak.
Telecom Equipment Industry
Invoicing to customers in the telecom equipment industry decreased by 5% to SEK 507 M (534), accounting for 45% of consolidated sales.
The year was characterized by weak development in the telecom equipment market. The decline in volumes mainly affected Nefab's operations in the Nordic region, the UK and North America. On the other hand, the current trend toward relocation of production to low-cost countries is having a positive effect on Nefab's operations in China and Eastern Europe.
The Automotive Industry and Other Market Segments
The automotive industry segment showed a positive trend. Invoiced sales rose 10% to SEK 104 M (95), corresponding to 9% of consolidated sales.
An agreement valued at SEK 25 M during the coming year was signed in September with Draxlmaier, the German manufacturer of vehicle components. The agreement relates to deliveries of returnable packaging for shipping cables. Earlier in the year an order for returnable packaging was secured from the cable manufacturer Yazaki. These two agreements are the result of a marketing campaign focused on the market segment producing cables for the automotive industry.
Invoiced sales to other market segments increased by 4% to SEK 510 M (492).
Complete Packaging Solutions
Nefab's product range has increasingly shifted from supplying a packaging to offering the customer a total solution. The product then becomes a combination of analysis, consultation and delivery of both Nefab's products and purchased products. During 2001, the proportion of purchased products increased by about SEK 70 M.
As part of efforts to deliver complete packaging solutions, operations in MK Special Emballage were acquired early in the year. Operations consist of production and sales of inner packaging materials for the Nordic market.
At the beginning of October, an agreement was reached with Ericsson to acquire the company's packaging pool, which is one of Europe's largest, with more than 600 users of nearly one million returnable packagings. The pool will serve as a base enabling Nefab to also develop logistics services for other customers and segments.
Cooperation with SCA
In May, an agreement was signed with SCA pertaining to strategic cooperation within the industrial packaging sector. The agreement relates to global cooperation on product development, service, marketing, sales and logistics. Cooperation was also initiated with the new global division for protective packaging that is currently being established by SCA in North America. The base of these operations is the North American company Tuscarora Inc., which was acquired by SCA during the year.
During the nine months that SCA and Nefab have been cooperating, some 50 projects have been initiated.
Earnings
Profit after financial amounted to SEK 67 M (123). Surplus funds from SPP amounting to SEK 7 M were included in the year-earlier result. Changes in currency exchange rates have had a marginal effect on profit after financial items for the year.
In connection with the strong expansion of the latter part of 2000, decisions were made to reinforce capacity, both in the form of material investments and organization. Due to the weakening of the economy during the year, the Group's fixed costs were successively adapted. As part of this adaptation, operations in North America and the UK were restructured. It is estimated that the earnings for the year were negatively affected to the amount of approximately SEK 40 M for this restructuring. Costs were also incurred during the year for the adaptation of operations in Sweden to lower volumes.
The successively increasing proportion of purchased products is changing the cost structure. The proportion of costs of goods sold is increasing, while overhead costs and tied-up capital - and consequently depreciation and financial expenses - are declining in relation to products produced internally.
The Group's sales costs rose, due mainly to increasing costs of technical sales support. These costs are part of a concerted effort to enhance expertise within the Group with respect to the sale of complete packaging solutions.
The year's financial net was affected by a substantial volume of investments made during the past two fiscal years. Efforts to reduce tied up capital were intensified.
Earnings per share for the year amounted to SEK 6.49 (13.29). Nonrecurring items exerted a positive effect amounting to SEK 1.23 on earnings per share for 2000. Return on capital employed was 15.5% (29.9).
Capacity and Investments
Group investments for the year amounted to SEK 123 M (83), of which SEK 25 M are attributable to company acquisitions.
In response to the demand signaled by the market during the second half of 2000, an investment program was approved in order to increase capacity within the Group. Capacity was strengthened in both Europe and North America.
The investment in a production facility in Estonia was completed in December.
The capacity of the Alfta plant was adapted to lower volumes during the year. In connection with this, staffing at the facility was reduced by some 100 persons.
The operations in North America were restructured with a view to concentrating production to the newly constructed plant in Canada. Production capacity in Europe also underwent restructuring, which involved closing down production in the UK. The restructuring is part of a program aimed at redistributing production to countries with a favorable cost structure.
Due to the strong growth in Asia a new production unit was established in Shenzhen in southern China.
Financial Position
The equity/assets ratio at December 31 was 45.8% (44.8). Shareholders' equity per share amounted to SEK 53.47 (47.82). Group liquidity improved during the year, among other measures due to a concerted focus on capital rationalization. The Group's liquid assets on the closing date, including unutilized credit facilities, amounted to SEK 181 M (121).
Group equity, which at the beginning of the year amounted to SEK 330 M, was increased by net earnings of SEK 45 M for the year, decreased by a dividend payment of SEK 19 M, and, including a translation gain of SEK 13 M, amounted to SEK 369 M at year-end.
Outlook for 2002
It is expected that deliveries to the telecom equipment industry will, initially, remain at a low level. Volumes are expected to increase successively during the year.
Profit and loss accounts 0110- 0010- 2001 2000 1999
(SEK M) 0112 0012
3 3 12 12 12
months months months months months
Net sales 260 321 1,121 1,121 837
Cost of goods sold -189 -234 -821 -811 -612
Gross profit 71 87 300 310 225
Selling expenses -33 -31 -126 -105 -103
Administration expenses -25 -22 -90 -81 -76
Other operating income - - - 7 -
Operating profit 13 34 84 131 46
Net financial items -2 -2 -17 -8 -10
Profit after net financial 11 32 67 123 36
items
Taxes -3 -8 -22 -31 -18
Net profit for the year 8 24 45 92 18
Depreciation included above 13 10 49 38 37
Profit per share, full tax, 6.49 13.29 2.67
SEK
Balance sheets (SEK M) 2001 2000 1999
Intangible assets 26 12 19
Tangible assets 352 276 219
Financial assets 6 17 9
Inventories etc. 132 134 98
Current assets 248 276 194
Cash and bank 44 23 11
Equity capital 369 330 239
Provisions 46 31 28
Long-term liabilities 214 159 125
Current liabilities 179 218 158
Total capital 808 738 550
Of which interest-bearing 229 175 141
liabilities
Cash flow statements 0110- 0010- 0101- 0001- 9901-
(SEK M) 0112 0012 0112 0012 9912
Operating profit 13 34 84 131 46
Depreciation, financial net 8 - 10 -1 9
and taxes
21 34 94 130 55
Cash flow from the year's
operations
Change in working capital -16 -1 -10 -57 -19
Net investments in fixed -11 -52 -123 -83 -37
assets
Cash flow after investments -6 -19 -39 -10 -1
Dividend - - -19 -10 -10
Financing 12 25 79 32 -5
Changes in liquid funds 6 6 21 12 -16
Key ratios 0110- 0010- 0101- 0001- 9901-
0112 0012 0112 0012 9912
Operating margin, % 5.0 10.7 7.4 11.7 5.5
Profit margin, % 4.2 9.9 6.0 11.0 4.3
Return on equity capital, % 8.9 29.7 12.8 32.2 7.7
Return on total capital, % 7.0 19.5 11.1 20.6 8.8
Return on capital employed, 9.4 28.6 15.5 29.9 12.4
%
Equity/assets ratio, % 45.8 44.8 45.8 44.8 44.1
Employees, yearly averages 1,038 1,096 908
Net investments, SEK M 11 52 123 83 37
Key ratios per share
Profit per share, full tax, 1.18 3.41 6.49 13.29 2.67
SEK
Equity capital per share, 53.47 47.82 53.47 47.82 34.65
SEK
Dividend per share, SEK(*) 2.80 2.80 1.40
Direct yield, % (*) 2.5 1.9 1.8
Number of shares at the end
of the period in thousands 6,907 6,907 6,907 6,907 6,907
Share price on balance day, 114.00 147.50 114.00 147.50 78.00
SEK
For definitions, see Annual Report 2000. (*) Proposed dividend for 2001.
Proposed Dividend
The Board is proposing to the Annual General Meeting a dividend of SEK 2.80 per share (2.80). The total dividend will amount to SEK 19.3 M (19.3).
Annual General Meeting
The Annual General Meeting will be held in Alfta on Saturday, May 25, 2002 at 2:00 p.m. Information concerning the notification procedure prior to the Meeting is provided in the Annual Report, which will be mailed to the shareholders in early April.
Financial Reports
Interim Report, January-March 2002 May 3, 2002 Annual General Meeting May 25, 2002 Interim Report, January-June 2002 August 13, 2002 Interim Report, January-September 2002 October 30, 2002
This report was prepared in accordance with the recommendation of the Swedish Financial Accounting Standards Council.
Information about Nefab Nefab delivers complete packaging solutions to international industrial groups, primarily within the telecom equipment and automotive industries. Nefab companies are located in Europe, North and South America and Asia. Invoiced sales in 2001 amounted to SEK 1.1 billion. The Nefab share is listed on the OM Stockholm Exchange.
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