SKARPNACK, Sweden, April 15, 2008 (PRIME NEWSWIRE) --
* Net sales amounted to MSEK 383 (391) during the first three months of the year. * Operating profit for three months was MSEK 31 (37) and profit before taxes was MSEK 28 (38). Net profit was MSEK 20 (26). * Earnings per share after dilution was SEK 2.62 (3.33). * Net sales for the latest 12-months amounted to MSEK 1 564 (1 497) and net profit after taxes was MSEK 155 (122). * Decision about split 4:1 with record date April 28, 2008.
Net sales and earnings for the first quarter 2008
The consolidated sales for the first quarter amounted to MSEK 383 (391). This is a decrease of 2 per cent compared with the same period in 2007 that was an unusually strong first quarter. The change in the value of the Swedish krona in relation to export currencies and in comparison with the previous year had no effect on sales.
Net sales for the period have not met expectations in total. Several of HL Display's important markets in Western Europe have declined. The sales companies that was restructured in the beginning of 2007 (among others the UK) has not yet reached expected sales levels. On the positive side Eastern Europe -- in particular Russia -- as well as Asia continuously shows satisfying growth. Also note that Easter, that affects both orders and deliveries, took place during quarter one this year in comparison with 2007 when it affected quarter two.
The operating profit for the first three months of the year was MSEK 31 (37) and profit before taxes amounted to MSEK 28 (38). The change in the value of the Swedish krona in comparison with last year had a positive effect on operating profit of MSEK 1. Net interest for the period amounted to MSEK -1 (-2), while rates of exchange differences and other currency effects amounted to MSEK -2 (3). HL Display's most important export currencies are the Euro, the British pound and the Russian rouble. Gross margin has improved due to an advantageous product mix and price increases accomplished from the beginning of the year. Raw material prices have been continuously high during the first quarter. The efficiency improvements in the factories have however well counteracted negative effects on the result. Operating expenses has increased compared to previous year. Approximately 6 MSEK is relating to new subsidiaries as well as to expansion of sales companies on growth markets, and around 3 MSEK is relating to non-recurrent cost for EuroShop (see below).
Participation on EuroShop
The world's largest retail trade fair, EuroShop, took place in February. HL Display participated as one of the exhibitors with more than 100 co-workers present daily during the week-long fair, representing HL Display's 46 markets. EuroShop is arranged every third year and had this year totally 1,911 exhibitors from 50 countries and 104,000 visitors from 90 countries. The fair's total area covers 107,100 square meters. HL Display's 400 square meters display both was well-visited and showed the latest innovations and unique conceptual shop-solutions.
New sales company
During the first quarter HL Display's former distributor in Bulgaria was acquired.
Investments
During the first three months net investments in fixed assets amounted to MSEK 9 (32). Net investments in 2007 included the acquisition of Display Team. Scheduled depreciation amounted to MSEK 9 (10).
Financial position
Liquidity as at 31 March 2008 amounted to MSEK 164 (138) and was MSEK 177 at the beginning of the year. The interest-bearing net liability that was MSEK 49 at the beginning of the year was on the balance day MSEK 41 (-62). A dividend of MSEK 43 has been decided but not been paid yet. Cash flow from operating activities decreased to MSEK -5 (41), primarily depending on decreased trade and other payables. Operating cash flow was SEK 0.50 (6.84) per share. The equity/assets ratio at the balance sheet date amounted to 56 (44) and was 53 per cent at the beginning of the year.
Personnel
The average number of employees during the period was 977 (949). The number of employees on the balance sheet date amounted to 974 (956) and was 972 at the beginning of the year.
Information on risks and uncertainty factors
Fluctuations in raw material prices and exchange rates constitute uncertainty factors but not considerable risks. Reference is made to the risk and sensitivity analysis on page 32 of the 2007 annual report for a more detailed description of the risks and uncertainty factors that HL Display faces.
Parent company
The parent company's profit after net financial items for the first three months of 2008 amounted to MSEK -25 (-22). No significant changes have been noted to affect the profit or balance sheet calculations.
Annual general meeting
The Board's proposal for dividend for 2007 amounting to SEK 5.50 (3.50) per share was resolved by the AGM that was held April 2, 2008. The AGM also resolved to increase the number of shares in the company through a share split in which each old share will entitle to 3 new shares (4:1). Record date will be April 28, 2008. Anna Ragen and Lars-Ake Rydh were elected new board members and Lis Remius resigned. For information about further decisions reference is made to separate press release or the company's home page.
Prospects for the rest of 2008
As previously announced the organic growth 2008 is expected to reach the interval of 5-10 percent, which is the company's long-term goal. Like in latest years, profitability will be prioritized. Further cost reduction is planned. HL Display plans to strengthen the company's offering and market position through further acquisitions.
A detailed forecast will, as usual, be presented in the nine month interim report.
This interim report has not been reviewed by the company's auditors.
The Board and the Managing Director hereby certify that the interim report gives a fare view on the business, position and result for the group and the parent company. It also describes essential risks and factors for unsecurity that the parent company and the companies that form the group are facing.
Stockholm, April 15th, 2008
Anders Remius Chairman of the Board Jan-Ove Hallgren Member of the Board Stig Karlsson Member of the Board Mats-Olof Ljungkvist Member of the Board Ake Modig Member of the Board Anna Ragen Member of the Board Lars-Ake Rydh Member of the Board Magnus Jonsson Member of the Board, Employee Repr. Kent Mossberg Member of the Board, Employee Repr. Gerard Dubuy Member of the Board, Managing Director and CEO
The full report including tables can be downloaded from the enclosed link.