STOCKHOLM, Sweden, Jan. 22, 2002 (PRIMEZONE) --
-- Net sales amounted to SEK 2,001M (2,696)
-- Operating income amounted to SEK -133M (57).
-- Operating income for the fourth quarter amounted
to SEK - 44M (-14).
-- One-off costs amounted to SEK 38M (29) in the fourth quarter.
-- Systems entered into a number of 3G agreements relating to base
station antennas.
-- Mobile Communications' profitability improved still further
during the fourth quarter.
-- Microwave recently entered significant agreements for delivery
of microwave link.
Fourth Quarter 2001
During the fourth quarter, Allgon's net sales amounted to SEK 485M (710). Operating income amounted to SEK - 44M (-14) and income after financial items to SEK - 48M (-21). Operating income includes one-off costs of SEK 38M (-), mainly relating to staff cuts and restructuring within production. The previous year's operating income includes items affecting comparability of SEK -29M.
During the quarter, deliveries of 3G base station antennas increased significantly whilst negotiations on the agreements relating to other 3G products intensified. At the turn of the year, Allgon Microwave entered into an agreement with Svenska UMTS-nat AB and Terracom AB for microwave link. An efficiency improvement program was initiated within Systems, which will approximately result in annual savings of SEK 70M.
January - December 2001
Market:
Following strong growth during 2000, the market changed around the 2000/2001 turn of the year. Investment in mobile infrastructure fell globally. The fall was especially significant in Europe pending new investment in 3G. In the USA, the market changed because of lower rate of expansion in infrastructure and because many TDMA operators elected to migrate to GSM. China was an exception due to China Unicom's expansion of a CDMA network. The global downturn hit suppliers of radio equipment very hard and led to large staff cuts. This also led to the implementation of a number of structural deals aimed at increasing the companies' competitiveness. The market for mobile telephones fell, for the first time, and is generally estimated at 380-390 (405) million telephones sold during 2001. In the previous year, the market for components was approximately on a par with the number of sold mobile telephones. During 2001, component and finished mobile telephone inventories were reduced to significantly lower levels. This reduction was implemented among mobile telephone manufacturers, distributors and operators. The market for components in 2001, have fallen by approximately 20 percent compared with the previous year.
The market in 2002 is difficult to judge. The first six months are expected to be weak but an upturn is anticipated during the second half of the year.
Group net sales and orders received:
Net sales fell to SEK 2,001M (2,696) and orders received to SEK 1,952M (2,434).
Allgon Systems:
Net sales fell to SEK 1,369M (1,703) and operating income to SEK -118M (198). Operating income includes one-off costs of SEK 88M (-). The downturn in sales is mainly attributable to combiners, which is due to the rapid changeover from TDMA to GSM in North America. Sales of other products were successful, bearing in mind the significant fall in demand for radio equipment for mobile infrastructure. In the fourth quarter, Asia was the largest market for Systems for base station antennas and repeaters. Sales of repeaters continue to increase and Allgon maintains its leading position. Allgon has entered into a number of 3G contracts relating to base station antennas and is negotiating 3G contracts for filter panels and tower top amplifiers. The workforce was cut from 753 to 607 during the year. During the quarter, yet another efficiency improvement program was initiated which is expected to generate savings of SEK 70M annually. Systems' profitability before one-off costs improved in the fourth quarter.
Allgon Mobile Communications:
Net sales fell to SEK 540M (870) and operating income to SEK -13M (45). Operating income includes one-off costs of SEK 29M (-). The previous year's operating income includes items affecting of SEK 28M. Because of the fall in demand for mobile telephone antennas, measures were implemented to reduce the fixed costs. As early as February 2001, the workforce was cut within this sector and the number of employees reduced from 407 to 242 during the year. Many of our customers moved their production from the USA to Latin America and Asia. As a result, the demand for local manufacturing in the USA ceased. The business area, therefore, decided to close its manufacturing in the USA and concentrate its production on Sweden. At the same time, Allgon started constructing a plant in China (Beijing), which will start production during the second quarter of 2002. Following the implemented measures, the business area has reported a profit from the third quarter.
Allgon Microwave:
Net sales fell to SEK 71M (112) and operating income to SEK -65M (-45). Around the turn of the year, Allgon Microwave entered into its first agreements relating to 3G expansion and is in similar negotiations with other operators in Europe. Allgon's products have proved to have a technical edge over its competitors. Sales within this business area are expected to increase significantly during the second half of 2002.
Wireless Solutions:
Net sales increased to SEK 21M (11) and operating income rose to SEK -19M (-76). The business area was divested during the second quarter and was consolidated to May inclusive.
Consolidated results:
Allgon's operating income fell to SEK -133M (57) and income after financial items to SEK -160M (27). The results include one-off costs totaling SEK 121M (-). Also included, as an item affecting comparability, is the capital gain from sale of Wireless Solutions with SEK 109M (30).
Income after financial items would have been SEK 79M (57) higher if Allgon had not had any hedging. On the closing date, there are forward contracts, which have not yet been taken up as income, amounting to USD 3M signed at an average call rate of SEK 10.59.
Financial position:
At December 31, 2001, the equity ratio amounted to 42 (42) percent. Cash flow including the sale of Wireless Solutions, amounted to SEK 171M (-181). Net borrowing amounted to SEK 194M (370) at the period end.
Capital expenditure:
During the period, capital expenditure in buildings and land, and machinery and equipment amounted to SEK 106M (202) gross, of which the completion of the building in Taby, Sweden, accounted for SEK 36M in 2000.
Dividend:
Taking into account the results of the Allgon Group, the Board of Directors has decided, as in the previous year, to recommend that the Annual General Meeting resolve that no dividend is paid for 2001.
Parent company:
Operations in the parent company, Allgon AB (publ), consist of Group co-ordination tasks and assets consist mainly of shares in subsidiaries.
Accounting and valuation principles:
The same accounting principles and calculation methods have been applied in the Year-end Report as in the last Annual Report. This Year-end Report has not been the subject of special examination by Allgon's Auditors.
Annual General Meeting:
The Annual General Meeting will be held on Allgon's premises in Antennvagen 6, in Arninge, Taby, north of Stockholm, on Wednesday March 13, 2002, at 6 p.m.
Nomination of Board Members:
Shareholders who wish to submit proposals for Board Members in advance can contact one of the following Members of the Nomination Committee: Gunnar Bark +46 708-40 21 87 Per Wejke +46 708-42 33 73
Future information dates:
March 13, 2002 Annual General Meeting April 22, 2002 Interim Report Jan - March
The Annual Report will be available at Allgon not later than February 27 and will be mailed to shareholders who have requested it. The Annual Report will also be available on Allgon's homepage www.allgon.se.
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