Munters AB: Preliminary Accounts Report, 1 January-31 December 2001 (with link)

Stockholm, SWEDEN


STOCKHOLM, Sweden, Feb. 22, 2002 (PRIMEZONE) -- Munters:


                                January- 31 December 2001
                                    2001    2000   Change
 Order intake, SEK M               3 945   3 322   + 19 %
 Net sales, SEK M                  3 894   3 179   + 22 %
 Operating earnings1), SEK M         401     306   + 31 %
 - as a percentage of net sales     10.3     9.6        -
 Earnings before taxes1), SEK M      389     289   + 35 %
 - as a percentage of net sales     10.0     9.1        -
 Earnings per share, SEK            9.57    7.37   + 30 %
 Dividend (for 2001, proposal)      3.00    2.30   + 30 %
 
 
 1) Excluding the discounted value of surplus funds of SEK 15M
    from Alecta/SPP which was booked in quarter 3 of 2000.

 -- Order intake during the fourth quarter exceeded SEK one billion
 -- Net sales during the year increased by 22 per cent to SEK 3,894M
 -- Operating earnings for the year improved by 31 per cent to
    SEK 401M
 -- Earnings per share rose by 30 per cent to SEK 9.57
 -- The Board of Directors proposes a dividend of SEK 3.00 (2.30)

MUNTERS OPERATIONS

Munters is the world leader in moisture control with products and services for dehumidification, humidification and air cooling within selected niches.

Munters' business objective is to be a global application and service driven niche company within air treatment from a base in dehumidification and humidification.

Operations are divided into three geographic regions - Europe, the Americas and Asia. In each region, operations are subdivided into the divisions: Dehumidification, Moisture Control Services (MCS) and HumiCool. Manufacturing and sales are carried out via the Group's own companies in more than 25 countries. The Group had 2,579 employees at the year end.

MARKET TRENDS

A large proportion of Munters' customers are non-cyclical, which lead to stable demand despite the deepening recession.

During the year, the demand in Europe improved, especially within MCS and HumiCool. In the fourth quarter, demand also increased within Dehumidification.

The market in America showed continued high growth within Dehumidification and MCS, whereas HumiCool was affected by the low investment level within the poultry industry. The semiconductor industry, in which Munters mainly sells Zeol products, suffered gradually falling demand during the year. MCS enjoyed very high demand as a consequence of Hurricane Allison.

Demand in China, Australia and South East Asia has been good, whereas market activities in Japan were lower.

FOURTH QUARTER 2001

Munters' order intake during the fourth quarter amounted to SEK 1,029M (863), an increase of 19 per cent compared with the previous year. When adjusted for currency fluctuations, the order intake increased by 12 per cent for comparable units. Net sales increased by 14 per cent to SEK 1,063M (932). When adjusted for currency fluctuations, the increase was 6 per cent for comparable units. Operating earnings improved by 20 per cent to SEK 137M (114, excluding the refund from the Alecta/SPP in 2000). This is equivalent to an operating margin of 12.8 per cent (12.2). When adjusted for currency fluctuations, the increase was 8 per cent.

GROUP ORDER INTAKE, NET SALES AND EARNINGS FOR 2001

During the year, order intake increased by 19 per cent to SEK 3,945M (3,322) and the backlog rose by SEK 83M to SEK 593M (510). Adjusted for currency fluctuations the increase in order intake was 8 per cent for comparable units.

Net sales of the Munters Group rose by 22 per cent to SEK 3,894M (3,179). When adjusted for currency fluctuations, the increase was 12 per cent for comparable units.

Distributed by region, net sales increased by 16 per cent in Europe, 29 per cent in the Americas and 22 per cent in Asia. The MCS operation reported the highest growth in all regions.

Consolidated operating earnings amounted to SEK 401M (306, excluding the refund from Alecta/SPP), an improvement of 31 per cent. During the year, the operating margin amounted to 10.3 per cent (9.6). Operating earnings were affected positively by exchange rates fluctuations, by approximately SEK 40M.

Consolidated earnings before taxes increased by 35 per cent to SEK 389M (289, excluding the refund from Alecta/SPP). Net earnings for the year improved by 30 per cent to SEK 240M (184) after an effective tax rate of just over 38 per cent (39). Adjusted for non-deductible goodwill amortisation, the tax rate was 37 per cent. Earnings per share increased to SEK 9.57 (7.37).

Net sales increased through expansion within MCS, higher value content in made deliveries and through positive currency effects on translation into SEK. The earnings improvement is due to increased net sales within all the divisions, improved margins, especially within MCS, and rationalisation. From a percentage viewpoint, the number of employees has increased less than sales in all regions.

FINANCIAL POSITION

At the year-end, the equity ratio amounted to 45.4 per cent (41.2). During the year, Munters repurchased 247,500 of the company's shares for SEK 41M, which affected the equity ratio by -1.0 per cent. Liquid funds were SEK 152M (88) and interest-bearing liabilities (including PRI pensions) were SEK 348M (421). During the year, the net debt decreased by SEK 137M to SEK 196M despite a buy-back of the company's own shares and the strong growth. The Group has unutilised loan facilities of approximately SEK 155M.

INVESTMENTS

The Groups total capital expenditure amounted to SEK 140M (148). The majority relates to investment in MCS, production and IT equipment. Depreciation amounted to SEK 125M (103) during the period, of which goodwill amortisation accounted for SEK 14M (11).

During the year, a decision was made to invest in a new production plant, including production equipment, in China to meet the increased demand. The production unit will be put into operation during the first quarter of 2002. At the turn of the year, SEK 16M has been invested in this expansion.

PERSONNEL

At the year-end, the number of staff was 2,579, an increase of 205 during the year. Within Europe, the number increased by 188; within the Americas it fell by 26; and within Asia the number rose by 39. MCS is the product area which reported the largest increase in the number of staff, up by 194.

During the year, 49 senior executives subscribed for warrants in Munters AB. In connection with the previous option scheme from 2000 and the year's option scheme, Munters has repurchased a total of 447,500 of the company's own shares for an average price of SEK 147 per share to cover the company's undertaking in accordance with the option schemes and to avoid dilution effects. (See also Note 2).

REGIONS

EUROPE

During the year, order intake in Europe increased by 16 per cent to SEK 1,979M (1,702). Net sales rose by 16 per cent to SEK 1,950M (1,674). When adjusted for currency fluctuations, the increase was nine per cent. Operating earnings improved by 20 per cent and amounted to SEK 179M (150). Earnings were affected positively by increased net sales, especially within MCS, rationalisation within the production of dehumidifiers, and positive currency effects.

The Dehumidification division reported an increase in order intake, following a recovery during the last quarter of the year. Net sales increased during 2001 thanks to a strong end to the year and operating earnings improved following rationalization measures taken and positive currency effects.

The MCS division had a positive trend. Order intake, sales and operating earnings improved significantly compared with the previous year. The operating margin also improved thanks to a more even distributed growth rate. During the year, two companies were acquired to expand the service offering and strengthen the local market positions.

The HumiCool division reported a significant increase in order intake, but a slightly weaker sales growth and lower operating earnings. Growth remains high in equipment for cooling poultry and green houses and for cooling of inlet air to gas turbines.

AMERICAS

During the year, order intake in the Americas rose by 22 per cent to SEK 1,611M (1,325). Net sales increased by 29 per cent to SEK 1,592M (1,231). When adjusted for currency fluctuations, the increase was 15 per cent. Operating earnings during the period amounted to SEK 190M (140). Earnings during the year were influenced by high net sales, especially within MCS and Dehumidification, the results of rationalisation and positive currency effects.

The Dehumidification division reported continued strong order intake, sales and operating earnings. The order intake for Zeol units, which are mainly sold to the semiconductor and automotive industries, weakened gradually during the year.

The MCS division had very strong growth, partly as a result of the water damage restoration after Hurricane Allison, Texas, which generated net sales of USD 9M. Increased sales and a favourable service mix meant that earnings continued to develop very positively. Increased efforts on industrial applications also contributed to an increase in order intake and net sales, and contributed to significantly improved operating earnings. Munters was also engaged to lessen the effects after the 11 September terror attacks on Pentagon and World Trade Center.

The HumiCool division had weak order intake, slightly increased sales and improved operating earnings. Order intake was affected by the slow- down in the American poultry industry. This market has weakened as a result of reduced exports due to the stronger USD rate. The downturn in the poultry industry was compensated for by increased sales relating to products for cooling of inlet air to gas turbines and mist eliminators.

ASIA

Munters in Asia improved the order intake, net sales and earnings. During the year, order intake rose by 15 per cent to SEK 410M (357). Net sales increased by 22 per cent to SEK 408M (335). When adjusted for currency fluctuations, the increase was 18 per cent. Operating earnings amounted to SEK 48M (40).

The Dehumidification division reported a fall in order intake, increased net sales and improved operating earnings. Operating earnings were affected positively by a favourable product mix, especially in China and Australia.

The MCS division reported significantly increased sales, whereas earnings fell from an already low level. The sales increase is due to the acquisition of Mullins Restoration in Australia during January 2001. The operation has not yet generated satisfactory earnings and measures have been implemented to improve profitability. The HumiCool division enjoyed increased order intake, sales and operating earnings. The establishment of an operation in Thailand during the previous year significantly compensated for decreased demand in Japan and China.

PARENT COMPANY

The Parent Company's results after financial income and expenses amounted to SEK -9.2M (-14.7). There were no sales. Capital expenditure amounted to SEK 2.1M (0.2) and the number of employees was 14 (13).

ACQUISITIONS DURING 2001

In January, Munters acquired the operations of the Australian company, Mullins Restoration. The company operates in the fire damage control sector. It has three depots, approximately 30 employees and reports sales of SEK 35M.

In June, Munters acquired all the shares in the Swedish company, Sundsvalls Totalsanering AB. The company has three service depots, 25 employees and reports sales of SEK 13M. The objective of the acquisition is to expand Munters' service supply and strengthen its market position in northern Sweden.

In June, Munters acquired the assets and liabilities, including know-how and patent rights relating to SCR systems (Selective Catalytic Reduction) for nitrogen oxide treatment (Nox reduction), from ABB Flakt Marine. The acquisition enables Munters to offer a complete supply of products for treatment of nitrogen oxide discharges from large diesel engine installations.

In July, Munters acquired all the shares in M'Renov SA, France. The company is located in St Head, near St Etienne in France, and has around 20 employees and sales of approximately SEK 14M per annum. The acquisition is aimed at expanding Munters' service supply and strengthening its market position in the south of France.

SUBSEQUENT EVENTS

In January 2002, Munters acquired the assets and liabilities, including all the operations, in its American competitor, Glacier-Cor. The company is one of the three largest manufacturers of components for evaporative cooling systems with sales of SEK 50M. Munters is already the largest company in the world in this sector. The acquisition is aimed at further strengthening Munters' HumiCool operation.

PROPOSAL FOR DIVIDEND

The Board of Directors has decided to propose that the Annual General Meeting approve an increase in dividend to SEK 3.00 (2.30) per share for 2001. This is equivalent to a dividend of SEK 74M (57). The proposed dividend constitutes 31 per cent of earnings per share.

OPTION SCHEME

The Board of Directors intends to propose that the Annual General Meeting authorise the Board to issue an option scheme directed at senior executives within Munters. The scope and terms of the scheme are currently being analysed and will be submitted to the Annual General Meeting in April.

OPPORTUNITY TO BUY BACK SHARES

The Board of Directors has decided to propose that the Annual General Meeting (AGM) renew the Board's authority to decide a buy-back of the company's shares. Such a mandate would mean that the Board is given the opportunity until the next AGM - if this is deemed to be appropriate - to decide a buy-back of the company's shares. Any buy-back could be made via the stock market as well as through an offer to the shareholders. The Board of Directors' mandate is also proposed to include an opportunity to transfer repurchased shares.

ANNUAL GENERAL MEETING

The Annual General Meeting will be held in Finlandshuset Konferens, Snickarbacken 4, in Stockholm at 5pm on Thursday 25 April 2002.

FUTURE INFORMATION DATES

The complete Annual Report for Munters AB will be available on the Company's premises at the beginning of April. At the same time, it will be distributed to the registered shareholders.


 25 April 2002      - Annual General Meeting and Interim Report 
                       January-March 2002
 13 August 2002     - Interim Report January-June 2002
 28 October 2002    - Interim Report January-September 2002
 February 2003      - Year-End Report 2002

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 www.waymaker.net/bitonline/2002/02/22/20020222BIT00360/bit0002.doc
 The full year-end report
 
 www.waymaker.net/bitonline/2002/02/22/20020222BIT00360/bit0002.pdf
 The full year-end report 


        

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