Interim report 1 January-30 September 2001

Interim report 1 January - 30 September 2001 01:3 01:2 0109 0009² 17.79 Earnings per share, SEK¹ 6.07 6.04 15.13 Cash flow from current operations 12.47 14.54 33.16 19.24 per share, SEK¹ Net sales, SEK M 20,793 21,556 60,871 49,127 Earnings after financial items, SEK 1,998 2,017 5,978 5,248 M Net earnings after tax, SEK M 1,405 1,407 4,135 3,528 ¹ Adjusted historically to reflect new issue of 1.8 million shares in 2001 for stock option program (see page 9). ² Excluding non-recurring items. Nine months 2001 compared with corresponding period a year earlier Earnings per share improved by 18%. Higher operating profit in all business areas: Hygiene Products 58%, Packaging 18% and Forest Products 11%. Cash flow from current operations rose 72%. Third quarter 2001 compared with the second quarter Operating margins maintained in all business areas. Increased operating margin for Consumer products of 2 percentage points to 11%. · Earnings per share and cash flow on level with preceding quarter. NET SALES AND EARNINGS Earnings per share increased 18% and amounted to SEK 17.79 (15.13) excluding non-recurring items. Net earnings after tax amounted to SEK 4,135 M (3,528). Consolidated net sales amounted to SEK 60,871 M (49,127), an increase of 24% compared with the year-earlier period. Of this increase, 13% was attributable to company acquisitions and organic growth, while higher sales prices and an improved product mix accounted for 1%. Currency movements affected net sales positively by 10%. Group operating profit amounted to SEK 7,040 M (6,169), an increase of 14% compared with the year-earlier period excluding non-recurring items. Excluding the Group's share in earnings of Modo Paper, which amounted to SEK 644 M in the first nine months of 2000, the increase was 27%. All business areas reported higher operating profit. The operating profit for Hygiene Products amounted to SEK 3,233 M (2,044), an increase of 58%. Packaging reported operating profit of SEK 2,509 M (2,123), an increase of 18%, and operating profit in Forest Products amounted to SEK 2,200 M (1,986), up 11%. Financial items amounted to an expense of SEK 1,062 M (expense: 921). The increase was due to higher interest rates as a result of a change in currency mix in the loan portfolio and the weakening of the Swedish krona. Average net debt was unchanged. Group earnings after financial items amounted to SEK 5,978 M (5,248), an improvement of 14% compared with the year-earlier period excluding non- recurring items. Currency movements increased earnings after financial items by 6%, an effect that arose primarily in Forest Products and Packaging. Excluding non-recurring items, return on shareholders' equity was 14% (14) and return on capital employed was 14% (14). Comparison with the second quarter of 2001 Consolidated earnings per share were on a level with the preceding quarter and amounted to SEK 6.07 (6.04). Operating margin was unchanged in all business areas. Currency movements affected third quarter earnings positively by 1%. The effect on earnings per share from the acquired North American operations amounted to SEK 0.18 (0.40) during the third quarter (the operations were acquired and consolidated in the beginning of March and as a result, the quarters are not fully comparable). Integration is proceeding as planned, the earnings trend was however negatively affected by the rapid economic slowdown in North America. The events of 11 September had at least a temporarily sharp effect on consumption of tissue in the HoReCa (hotel, restaurant, catering) segment. Hygiene Products reported somewhat improved operating profit compared with the preceding quarter due to a distinct improvement for Consumer products, particularly in the tissue segment. Packaging reported a decline in operating profit of 6% in the third quarter as a result of lower volumes. Due to lower pulp prices, Forest Products reported a marginal weakening of operating profit. CASH FLOW The operating cash surplus amounted to SEK 11,340 M (8,811), equal to 19% (18) of net sales. During the period, current capital expenditures, net, totaled SEK 2,349 M (1,427). The change in working capital amounted to SEK 695 M (outflow: 1,413). The improvement is attributable primarily to the European hygiene products operations, however, the North American companies also contributed to the Group's improvement in working capital. After deduction for other items, SEK 28 M, operating cash flow amounted to SEK 9,658 M (5,976). Cash flow from current operations, defined as cash flow before net strategic investments and dividend, amounted to SEK 7,715 M (4,493), equal to SEK 33.16 (19.24) per share. Company acquisitions during the period amounted to SEK 11,701 M and related mostly to the acquisitions in North America. Strategic capital expenditures in plant and machinery etc., totaled SEK 1,278 M. Comparisons with the second quarter of 2001 The operating cash surplus amounted to SEK 3,909 M (3,995). Current capital expenditures, net, amounted to SEK 902 M (949) and working capital decreased by SEK 689 M (775), which resulted in an operating cash flow of SEK 3,691 M (3,872). Cash flow analysis SEK M 01:3 01:2 01:1 0109 0009 Net sales 20,793 21,556 18,522 60,871 49,127 Operating cash surplus 3,909 3,995 3,436 11,340 8,811 % of net sales 19 19 19 19 18 Current capital expenditures, net -902 -949 -498 -2,349 -1,427 % of net sales 4 4 3 4 3 Change in working capital 689 775 -769 695 -1,413 Other operating cash flow changes -5 51 -74 -28 5 Operating cash flow 3,691 3,872 2,095 9,658 5,976 Tax payment etc¹ -554 -317 -272 -1,143 -800 Free cash flow 3,137 3,555 1,823 8,515 5,176 Per share, SEK² 13.52 15.26 7.81 36.59 22.16 Interest payment after taxes -246 -166 -388 -800 -683 Cash flow from current operations 2,891 3,389 1,435 7,715 4,493 Per share, SEK² 12.47 14.54 6.15 33.16 19.24 Strategic investments and -547 -1,017 -11,415 -12,979 3,977 divestments Cash flow before dividend 2,344 2,372 -9,980 -5,264 8,470 ¹ Tax attributable to operating profit. ² Adjusted historically to reflect new issue of 1.8 million shares in 2001 for stock option program. FINANCING Net debt amounted to SEK 25,033 M, which was SEK 9,153 M higher than at year-end 2000. The change was mainly attributable to the American acquisitions and other strategic investments, which created an outflow totaling SEK 12,979 M, a dividend of SEK 1,806 M and negative currency effects of SEK 3,221 M. This is offset by cash flow from current operations of SEK 7,715 M and the effect of asset securitization of SEK 1,138 M. The debt/equity ratio amounted to 0.54 (0.45). The interest coverage multiple was 6.6 (6.7), excluding non-recurring items. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/30/20011030BIT00650/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/10/30/20011030BIT00650/bit0001.pdf The full report