Partek´s Interim Report January-March 2000
04.09.2001Profit after financial items doubled to 22.0 (1-3/1999:10.7) million Euro
Operating profit was 30.2 (17.2) million Euro
the operating margin was 5.8 (3.5) percent
Net sales increased 5.5 % to 521 (494) million Euro
for the engineering business growth was 17 percent
Earnings per share were 0.28 (0.13) Euro
Orders received increased 29 percent to 555 (430) million Euro
the order book grew 54 percent from year-end to 441 million Euro
Partek has acquired 81.0 percent of the shares and 85.3 percent of the votes in Zeteco
Market development
Global demand for heavy material-handling products has increased compared to last year.
The Load handling and Forest machines Business Areas benefited from the stronger economic development in Europe, which also strengthened the market for container-handling equipment. European demand for tractors, however, decreased slightly, but sales of Valtra tractors increased. The North American market for Load handling and Container handling continued strong, while it recovered somewhat for Forest machines. In Latin America demand for tractors fell clearly compared to the corresponding period last year. On the North American tractor market the first signs of positive development could be seen towards the end of the period.
The economic recovery in Asia supported the demand for Container handling and Load handling products.
Net sales
Partek"s January-March net sales increased 5.5 percent to 521 (1-3/1999: 494) million Euro. In this Interim Report the Swedish engineering company Zeteco AB has been consolidated as a subsidiary as of the beginning of March with net sales of 20.3 million Euro. The comparison figures for the first quarter in 1999 include the insulation company: Paroc Group. Partek sold its majority in the insulation business in August 1999 and with Partek"s 38.4 percent holding it is included as an associated company.
All Business Areas increased their net sales except Container handling, where the decrease is largely attributable to the sale of units and to the winding up of operations.
Net sales for Load handling increased 18 percent and there was clear growth in all product groups, supported by increasing demand for heavy trucks and a high level of building activity. Production of demountable equipment for the German Atlas, which is a leading brand of demountables for trucks in Germany, started in the beginning of the year.
Forest machines" net sales increased 22 percent, influenced by the higher activity in Central Europe due to the storm damages from late 1999 and the strong demand in Finland and Sweden. Partek Forest"s market position strengthened.
In Europe Valtra-tractors continued to increase market share and net sales grew substantially. In Finland the market share exceeded 50 percent. In Latin America, on the other hand, deliveries decreased slightly. Net sales of the Business area increased 17 percent. The HiTech-models, which were introduced in autumn 1998, account for half of Valtra"s tractor production in Europe. In India production of Valtra"s small tractors started under license.
Orders received and order book
Orders received during the period were 555 (430) million Euro. The order book for the engineering business at end-March was 441 (March 31, 1999: 324) million Euro, which is 54 percent higher than at end-1999 and 36 percent higher than at end-March 1999. The increase is 32 percent on the year-end amount when Zeteco"s order book is excluded.
In February Partek Cargotec won a contract to supply the Swedish Defence Material Administration (FMV) with 253 newly developed demountable systems. Zeteco"s subsidiary Zetterbergs will mount the equipment on the Swedish Army"s new fleet of standardised military trucks. The majority of the systems will be delivered during the year.
After the close of the period Kalmar was awarded a USD 190 million contract in the U.S. for the supply of 390 container-handling machines. These newly developed and patented rough terrain container-handling machines will be delivered to the US Army during the period 2000 - 2007. The machines will be manufactured in the factory in Lidhult, Sweden.
Profitability
The operating profit was 30.2 (17.2) million Euro and the operating margin was 5.8 (3.5) percent. The operating margin for the engineering business was 5.9 (4.7) percent. The target for the individual Business Areas is to reach an operating margin of 8 percent by end-2001.
Within Container handling the focus on the after-sales market and strong development in the Trailer Logistics segment led to improved profitability. For Load handling the profit improvement was mainly attributable to Hiab loader cranes, but the result for truck-mounted forklifts also improved. The results for both Forest machines and for Tractor operations in Europe improved markedly.
A 3.6 million Euro VAT-refund from the 1995 fiscal taxation is included in the period"s result. Depreciation according to plan was € 18.8 (19.7) million, including goodwill write-offs of 4.7 (4.3) million Euro. The share of associated company"s" net result was -0.4 (+1.0) million Euro.
Net financial expenses were 7.8 (7.5) million Euro. Profit after financial items was 22.0 (10.7) million Euro, which is 4.2 (2.2) percent of net sales. Earnings per share was 0.28 (0.13) Euro and equity per share was 11.98 (Dec 31, 1999: 12.18) Euro. Return on capital employed was 9.9 (6.6) percent and return on equity 9.4 (4.7) percent.
Balance sheet
The balance sheet total was 1,849 (Dec 31, 1999: 1,685) million Euro, which is an increase of 164 million Euro over end-1999. Net interest-bearing debt excluding capital loans increased on end-1999 by 100 million to 420 million Euro. The increase is chiefly due to investment in Zeteco shares. Gearing rose from 38 percent to 50 percent and the equity to total assets ratio was 46 (50) percent.
Further focusing
The Swedish engineering company Zeteco AB, whose products include tail-lifts for trucks and container spreaders, became a subsidiary of Partek during the period. Partek owned 81.0 percent of the shares and 85.3 percent of the votes in Zeteco on May 11, 2000.
In April Partek increased its holding in Kalmar Industries AB from 67.9 percent to 70.6 percent of the votes and shares.
In February Partek entered into a Memorandum of Understanding with U.S. forest-machine company Timbco, whereby Timbco and Partek Forest will merge. Timbco produces purpose-built, leveling, track forest machines, which command a leading market position in North America. Timbco has net sales of about USD 50 million.
Partek continues to release capital from various assets and holdings in order to develop its core business. The 50 percent stake in Parma Metals Oy and real estate in Brussels were sold during the period.
Investment and product development
Gross investment during the period was 119 (31) million Euro. Of the investments 106 million Euro was in shares, almost exclusively in Zeteco.
Partek is investing in its electronic business operations. The aim is to integrate strong brands and electronic customer services with Partek"s customer-order based operating method.
The Tractors Business Area has implemented the Group"s e-business pilot project. In January the company opened its Internet service "Meidän Valtramme" (Our Valtra), an electronic marketplace which includes service packages, attachments and pre-owned tractors for Finnish farmers. By the end of April about 4,000 users had registered. In February at the CeBit fair in Germany, Valtra introduced a solution based on WAP-technology. This e-commerce application enables customer service irrespective of time and place.
In April four new forest-machine models were introduced, and the expansion and modernisation of the forest machine plant in Umeå, Sweden was completed.
Construction of a new customer service centre at the tractor plant in Suolahti, Finland was started at the end of March.
In February new demountable models were successfully introduced at the RAI fair in the Netherlands. A new, low-built demountable was launched in the Nordic countries.
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