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Quarterly Report May 30, 2008

3024_10-q_2008-05-30_5b8be762-7af8-4d76-a626-e09b596d61f2.pdf

Quarterly Report

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SCRIBONA AB (publ),

Interim report January 1 – March 31, 2008 for the Scribona Group

Solna, May 30, 2008

  • n Net sales for the first quarter reached SEK 1,903 million (2,180).
  • n Operating profit for the first quarter was SEK -23 million (6).
  • n Profit after tax for the first quarter amounted to SEK -36 million (-7), equal to earnings per share of SEK –0.44 (-0.09).
  • n Net proceeds available to shareholders will be at least 5.60 SEK per share at the conclusion of the wind-down process.

Subsequent events

n The transaction with Tech Data for the sale of Scribona's operating activities was approved by the EU Competition Authority on April 28 and by Scribona's stockholders at the AGM on April 29, 2008. The transaction was completed on May 19, 2008, after which Scribona no longer conducts operating business activities. Of the total preliminary purchase price of SEK 504 million, a first installment of SEK 76 million was received on May 19.

Comments from Board Chairman David Marcus

"The transaction with Tech Data has proceeded according to plan and as of May 19 Scribona no longer conducts any operating activities. The transfer of operations to Tech Data has been completed and Scribona has started an intensive effort to liquidate its assets, liabilities and contract obligations as efficiently as possible."

"The wind-down is expected to be largely completed during 2008 and will lead to the conversion of receivables and liabilities to cash and cash equivalents. The current expectation is that the net proceeds will be at least 5.60 SEK per share. In our interim reports we will give an account of how the wind-down and stockholder value are progressing," says David Marcus, Chairman of Scribona.

"In August, the Board intends to report on Scribona's future strategic course."

"Scribona's current CEO, Fredrik Berglund, will leave his post on June 1, 2008. Board member Lorenzo Garcia will be responsible for the transition process that lies ahead for Scribona, and will also take over the role of CEO. I would like to thank Fredrik for his valuable contributions on behalf of Scribona," concludes David Marcus.

For additional information, contact:

David E. Marcus, Chairman of Scribona, telephone +1 908 378 2888 Fredrik Berglund, President and CEO, telephone +46 (0)8-734 37 39 Hans-Åke Gustafsson, Chief Financial Officer, telephone +46 (0)8-734 35 34

Also visit: www.scribona.com

Scribona is listed on the OMX Nordic Exchange Stockholm and was the leading distributor of IT products on the Nordic market.

Group

The Scribona Group consists of the Parent Company and the Scribona business area with operations in Sweden, Finland and Norway.

The Swedish subsidiary Scribona Nordic AB handles the Group's entire flow of goods including purchasing, logistics and sales in Sweden, Finland and Norway. The local companies in Finland and Norway function as agents for Scribona Nordic AB and serve customers in their respective local markets.

On March 4, 2008, it was announced that Scribona had signed an agreement with Tech Data for the sale of its operating activities. The transaction, which is described in detail in the 2007 annual report, was approved by the EU Competition Authority on April 28 and by Scribona's stockholders at the AGM on April 29, 2008. The transaction was completed on May 19, 2008, after which Scribona no longer conducts any operating business activities.

GROUP DEVELOPMENT

Net sales and profit in continuing operations for the first quarter of 2008

Consolidated net sales totaled SEK 1,903 million (2,180) a decrease of 11%.

The gross profit margin was negatively affected by exchange rate movements. Staff costs decreased significantly compared to 2007.

Consolidated operating profit was SEK -23 million (6) and includes net exchange losses of SEK 5 million (3).

Net financial items amounted to SEK -10 million (-12). Profit before tax was SEK -33 million (-6).

Income tax is reported at SEK -2 million (-1). Profit after tax was SEK -36 million (-7), equal to earnings per share of SEK –0.44 (-0.09).

Discontinued operations

The wind-down of operations in Denmark during 2007 was completed in December 2007 following the sale of the Danish subsidiaries.

Profit after tax in discontinued operations for the first quarter of 2007 was SEK -22 million.

Cash flow from continuing operations

The Group's cash flow from operating activities for the first quarter reached SEK 49 million (94).

Cash flow from investing activities is reported at SEK 0 million (-2).

Cash flow from financing activities amounted to SEK -130 million (41).

The period's cash flow from continuing operations was SEK -81 million (133).

Financial position

Net financial assets at the end of the quarter totaled SEK -337 million (-323). Capital employed in continuing operations was SEK 865 million (981). Cash and cash equivalents at SEK 109 million (148). Customer payments to the accounts receivable securitization program which later became available to Scribona amounted to SEK 208 million (69). After the end of the period, these customer payments have been used primarily for amortization of loans.

Employees

The number of employees in continuing operations at the end of the period was 301 (401).

Key ratios

Earnings per share in continuing operations for the period were SEK –0.44 (-0.09).

Equity per share at the end of the period was SEK 6.46 (8.75).

The equity/assets ratio at March 31, 2008, was 23.8% (27.0).

Return on capital employed in continuing operations over the past 12-month period was –8.1% (-4.7% for the full year 2007).

Return on equity over the past 12-month period amounted to –30.6% (-27.3% for the full year 2007).

SCRIBONA IN THE FIRST QUARTER OF 2008

Market

Scribona's assessment is that the distributor volume is unchanged in value compared to the same quarter of last year, but that the overall distribution share has declined due to a faster rate of growth in the total market. Manufacturer direct sales continue to increase, particularly to retail chains in the consumer channel.

Price erosion remains severe in the IT market and Scribona estimates that the weighted average price of IT products has fallen by 10-15% in just one year.

Development during the quarter

Scribona's net sales in continuing operations for the first quarter reached SEK 1,903 million (2,180), a decrease explained by a weak market during the period. Furthermore, sales fell sharply after the announcement of the agreement with Tech Data as a result of changed buying patterns among the customers and credit limit restrictions from suppliers. In addition, the early Easter holiday had a negative impact on sales and comparison between years. The Easter holiday fell during April in 2007 and during March in 2008. Sales in March 2008 reached only 71% of the level in March 2007.

Gross profit was negatively affected by the drop in sales, but also by the foreign exchange losses and certain provisions for inventory obsolescence.

Other external expenses during the quarter include consulting fees of SEK 3 million arising from the transaction with Tech Data. Staff costs decreased by 22% compared to the previous year.

Operating profit declined to SEK -23 million (6).

Scribona by country

Net sales in Sweden amounted to SEK 830 million (909). Good cost control has partly compensated for weak sales and lower margins. Operating profit was SEK 3 million (9).

Finland reported net sales of SEK 427 million (530). Good cost control has partly compensated for weak sales and lower margins. Operating profit was SEK -5 million (-1).

Net sales in Norway reached SEK 646 million (740). Good cost control has partly compensated for weak sales and lower margins. Foreign exchange effects had a negative impact on the gross profit margin in 2008, compared to a positive impact in 2007. Operating profit was SEK -8 million (4).

Aside from management costs of SEK 3 million (3), Joint Business Area also includes net foreign exchange losses of SEK 5 million (3).

OUTLOOK

At the beginning of 2008, the Board of Directors' and Executive Management's priorities have focused primarily on preparing for the transfer of operating activities to Tech Data. After signing the agreement on March 3, 2008, technical preparations have been intensified to ensure a smooth and friction-free transfer.

Following the transfer of operating activities to Tech Data on May 19, Scribona's balance sheet will be fully intact with the exception of inventories and certain equipment. The value of inventories has been replaced with a receivable from Tech Data in addition to a contracted premium in excess of the purchase price for these inventories. Furthermore, there are obligations to the redundant staff and to a large number of counterparties with which contracts in force have not been transferred to Tech Data.

The preliminary purchase price amounts to SEK 504 million, of which 15% or SEK 76 million was received on May 19. The other three installments price will be paid in an amount of 35% within 30 days, an additional 35% within two months and the remaining 15% within six months. Additional purchase consideration of EUR 1.5 million may be paid during 2009 and certain other deductions may arise in the event of adjustments in valuation of the acquired assets.

After the transfer, a number of individuals will work as efficiently as possible, for limited period, to liquidate assets and liabilities and extinguish obligations under contracts in force. The most significant tasks include collection of accounts receivable and settlement of accounts payable, but also matters such as finding viable solutions for termination of property leases. These activities will be intensive and will demand considerable resources during the first months, but are also expected to require some involvement thereafter. The wind-down is expected to be largely completed during 2008 and will lead to the conversion of receivables and liabilities to cash and cash equivalents.

The value of the transaction to Scribona's stock-holders is dependent on future factors, such as costs for the wind-down of operations. The current expectation is that the net proceeds will be at least 5.60 SEK per share.

In August, the Board intends to report on Scribona's future strategic course.

DISCONTINUED OPERATIONS

The wind-down of the Danish operations was carried out during 2007 and was completed in connection with the sale of the Danish subsidiaries in December 2007. Denmark's net sales for the first quarter of 2007 totaled SEK 246 million and profit after tax was SEK -22 million.

RELATED PARTY TRANSACTIONS

The law firm of Advokatfirman Lindahl KB has assisted the Parent Company Scribona AB in legal matters, for which fees of SEK 2,369,000 have been paid on market-based terms in the first quarter of 2008. Attorney Johan Hessius, a member of Scribona's Board of Directors during the period, is a partner in Advokatfirman Lindahl KB.

Mark Keough, a member of Scribona's Board of Directors, has performed consulting services on behalf of the Parent Company Scribona AB during the year at the request of the Board of Directors. The related fees, which are market-based, amounted to SEK 310,000.

SUBSEQUENT EVENTS

On April 28, 2008, the EU Competition Authority granted its approval for the transaction with Tech Data. On April 29, 2008, Scribona's shareholders at the AGM resolved to approve the transaction with Tech Data. The transaction was completed on May 19, 2008, and Scribona received the first installment of the

purchase price, SEK 76 million, on the same date.

ACCOUNTING POLICIES

This consolidated interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, and in compliance with Chapter 9 of Swedish Annual Accounts Act on Interim Reports.

The same accounting and valuation standards have been applied as in the most recent annual report.

In accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations", the period's profit in the Danish operations is reported in the consolidated income statement under "Profit after tax from discontinued operations". This means that income and expenses in Denmark have been excluded from all items in the income statement for the period under review. As of December 31, 2006, all assets and liabilities relating to Denmark have been excluded from all items in the balance sheet and disclosed separately in "assets of a disposal group held for sale" and "liabilities of a disposal group held for sale. Likewise, in the cash flow statement for 2007 the Danish operations are disclosed under "Cash flow from discontinued operations".

SIGNIFICANT RISKS AND UNCERTAINTIES

In the most recent annual report, risks and uncertainties are described in the administration report, as well as Note 35 Risk and Sensitivity Analysis and Note 36 Financial Risks.

Risks directly attributable to the transaction with Tech Data have been described in the most recent annual report, Note 39 Important Events after the Balance Sheet Date.

PARENT COMPANY

Other operating income in the Parent Company during the quarter amounted to SEK 2 million (2), of which SEK 2 million (2) referred to invoicing of rents to subsidiaries.

Other external expenses include SEK 3 million in consulting costs arising from the transaction with Tech Data.

Dividends from subsidiaries have been received in an amount of SEK 24 million (-).

Profit before tax was SEK 18 million (-2).

Cash and cash equivalents at March 31, 2008, totaled SEK 1 million (1). Net financial assets on the same date amounted to SEK 88 million (380) and total assets to SEK 463 million (1.053). No investments in fixed assets were made during the quarter.

In the most recent annual report, risks and uncertainties are described in the administration report, as well as Note 35 Risk and Sensitivity Analysis and Note 36 Financial Risks.

AUDIT

This interim report has not been subject to special review by the company's auditors.

PUBLICATION

The information contained herein is subject to the disclosure requirements of Scribona AB under the Act on Stock Exchange and Clearing Operations and/or the Act on Trading in Financial Instruments. The information was submitted for publication at 8:00 a.m. (CET) on May 30, 2009.

FINANCIAL CALENDAR 2008

Interim report for January-June 2008 August 22, 2008 Interim report January-September 2008 November 7, 2008 Interim report for January-December 2008 February 20, 2009

Solna, May 30, 2008

Scribona AB The Board of Directors

This document is a translation of the original published in Swedish. In the event of any discrepancies between the Swedish and English versions, or in any other context, the Swedish version shall have precedence.

SUMMARY CONSOLIDATED INCOME STATEMENT

SEK m. Note 2008 2007
Jan-March Jan-March Apr-March
2007/08 2007
Jan-Dec
Net sales 1 1,903 2,180 7,792 8,069
Other operating income 3 16 36 49
1,906 2,196 7,828 8,118
OPERATING EXPENSES
Goods for resale -1,798 -2,041 -7,345 -7,588
Other external costs -68 -67 -260 -259
Staff costs -56 -72 -244 -260
Depreciation and write-downs -1 -6 -48 -53
Other operating expenses -5 -3 -5 -3
OPERATING PROFIT/LOSS 2 -23 6 -73 -44
Net financial items -10 -12 -35 -37
PROFIT/LOSS BEFORE TAX -33 -6 -107 -80
Income tax expense 3 -2 -1 -86 -85
PROFIT/LOSS FOR CONTINUING OPERATIONS -36 -7 -195 -166
Profit/loss after tax in discontinued operations 4 - -22 6 -16
PROFIT/LOSS FOR THE PERIOD -36 -29 -188 -181
EARNINGS PER SHARE BEFORE/AFTER FULL DILUTION
Continuing operations, SEK -0.44 -0.09 -2.35 -2.03
Disontinuined operations, SEK - -0.09 - -0.20
Total, SEK -0.44 -0.35 -2.30 -2.22
Number of shares end of period 81,698,572 81,698,572 81,698,572 81,698,572
Number of shares end of period after full dilution 81,698,572 81,698,572 81,698,572 81,698,572
Average weighted number of shares after full dilution 81,698,572 81,698,572 81,698,572 81,698,572

Scribona has no outstanding convertible loans or subscription warrants.

SUMMARY CONSOLIDATED BALANCE SHEET

2008 2007 2007 2007 2007
SEK m. Note 31 March 31 Dec 30 Sept 30 June 31 March
ASSETS
Goodwill - - 5 5 5
Other intangible fixed assets - - 27 32 36
Tangible fixed assets 8 10 10 13 15
Other fixed assets 6 7 79 80 81
Inventories 706 688 481 466 628
Current receivables 1,385 1,896 1,483 1,441 1,537
Cash and cash equivalents 109 190 62 146 148
Total assets continued operations 2,214 2,791 2,147 2,183 2,450
Disposal group held for sale 4 - - - 96 202
TOTAL ASSETS 2,214 2,791 2,147 2,279 2,652
EQUITY AND LIABILITIES
Equity 528 567 682 684 715
Liabilities
Long-term liabilities 42 45 33 38 38
Current liabilities 1,644 2,179 1,432 1,493 1,753
Equity and liabilities in continued operations 2,214 2,791 2,147 2,215 2,506
Liabilities of disposal group held for sale 4 - - - 64 146
TOTAL EQUITY AND LIABILITIES 2,214 2,791 2,147 2,279 2,652
Capital employed 865 953 922 895 1,038
Capital employed in continued operations 865 953 922 863 981
Capital employed in disposal group held for sale - - - 32 56
Net financial capital -337 -386 -240 -211 -323

CASH FLOW STATEMENT

SEK m. 2008 2007
Jan-March Jan-March Apr-March
2007/08 2007
Jan-Dec
OPERATING ACTIVITIES
Profit/loss after financial items -33 -6 -107 -80
Amortization, depreciation and impairment 1 6 48 53
Other 0 -7 -15 -22
Tax paid -6 0 -24 -18
Cash flow from operating activities
before change in working capital -38 -7 -98 -67
Cash flow from change in working capital
Change in inventories -18 123 -78 63
Change in operating receivables 597 586 305 294
Change in operating liabilities -492 -608 -204 -320
Cash flow from operating activities 49 94 -75 -30
INVESTING ACTIVITIES
Acquisition of fixed assets 0 -2 0 -2
Divestment of fixed assets 0 0 0 0
Cash flow from investing activities 0 -2 0 -2
FINANCING ACTIVITIES
Change in loans -130 41 -27 144
Cash flow from financing activities -130 41 -27 144
CASH FLOW FROM CONTINUED
OPERATIONS -81 133 -102 112
Cash flow from discontinued operations
Cash flow from operating activities - 11 63 74
Cash flow from investing activities - 0 - 0
Cash flow from financing activities - 0 - 0
Cash flow from discontinued operations - 11 63 74
CASH FLOW FROM DISCONTINUED OPERATIONS -81 144 -39 186
Cash and cash equivalents at beginning of period 190 4 148 4
Cash flow for the period -81 144 -39 186
Exchange rate difference in cash and cash equivalents 0 0 0 0
Cash and cash equivalents at end of period 109 148 109 190

CONSOLIDATED REVENUES AND COSTS

SEK m. 2008 2007
Jan-March Jan-March Apr-March
2007/08 2007
Jan-Dec
Revenues and costs reported directly against equity
Exchange rate differences on translation of foreign subsidiaries -3 -1 1 3
Total revenues and costs reported directly against equity -3 -1 1 3
Profit/Loss for the period in continuing operations reported in the income statement -36 -7 -195 -166
Profit/Loss for the period in discontinued operations reported in the income statement - -22 6 -16
Total reported revenues and costs for the period -39 -30 -188 -178
Attributable to parent company shareholders -39 -30 -188 -178

KEY RATIOS

2008 2007
Jan-March Jan-March Apr-March
2007/08 2007
Jan-Dec
Continued operations
Operating margin, % -1.2 0.3 -0.9 -0.5
Return on capital employed, % -8.1 -4.7
Capital turnover rate, times per year 8.6 8.7
Average capital employed, SEK m. 901 930
Earnings per share, SEK -0.44 -0.09 -2.35 -2.03
Average number of employees 325 350
Number of employees end of period 301 401 301 322
Sales per employee, SEK m. 24.0 23.1
Total
Net financial assets, SEK m. -337 -323 -337 -386
Return on equity, % -30.6 -27.3
Average equity, SEK m. 615 662
Eguity/assets ratio, % 23.8 27.0 23.8 20.3
Equity per share, SEK 6.46 8.75 6.46 6.94
Earnings per share, SEK -0.44 -0.35 -2.30 -2.22

For definitions of key ratios, see Scribona's latest annual report.

NOTES

Note 1 NET SALES BY COUNTRY
SEK m. 2008 2007
Jan-March Jan-March Apr-March
2007/08 2007
Jan-Dec
Sweden 830 909 3,442 3,522
Finland 427 530 1,701 1,804
Norway 646 740 2,651 2,746
Intra-business area 0 0 -2 -3
Total 1,903 2,180 7,792 8,069

Note 2 OPERATING PROFIT BY COUNTRY

2008 2007 2007/08 2007
SEK m. Jan-March Jan-March Apr-March Jan-Dec
Sweden 3 9 2 8
Finland -5 -1 -30 -26
Norway -8 4 -1 11
Joint business area -10 -5 -27 -22
Total -19 8 -56 -29
Parent company -4 -2 -17 -15
Total -23 6 -73 -44

Note 3 TAX

SEK m. 2008
31 March
2007
31 Dec
2007
31 March
Deferred taxes recognized in the balance sheet
Deferred tax assets 1 1 76
Deferred tax liabilities -24 -24 -28
2008 2007 2007
SEK m. 31 March 31 Dec 31 March
Reported income tax expense for continued operation
Current tax -2 -17 -1
Deferred tax 0 -69 0
Total tax -2 -85 -1

The tax expense is attributable to the subsidiaries in Finland and Norway, both of which reported a positive profit before tax as agents in their respective markets.

Note 4 DISCONTINUED OPERATIONS

Scribona Denmark was an IT distributor in the Danish market. In 2006 Scribona's Board of Directors decided to sell the Danish business. Following negotiations with a prospective buyer, the Board of Scribona decided to wind-down these operations under its own management. The wind-down was completed in 2007 and the Danish companies were sold in December 2007.

INCOME STATEMENT

2008 2007 2007/08 2007
SEK m. Jan-March Jan-March Apr-March Jan-Dec
Net sales - 246 91 337
Costs - -268 -85 -353
Profit/loss before tax - -22 6 -16
Tax - 0 - -
Profit/loss for the period - -22 6 -16
CASH FLOW STATEMENT
2008 2007 2007/08 2007
SEK m. Jan-March Jan-March Apr-March Jan-Dec
- 246 91 337
Cash flow from operating activities - 11 63 74
Cash flow from investing activities - 0 0 0
Cash flow from financing activities - 0 0 0
Cash flow for the period - 11 63 74

WORKING CAPITAL

2008 2007 2007 2007 2007
SEK m. 31 March 31 Dec 30 Sept 30 June 31 March
Inventories - - - 6 49
Current receivables - - - 90 153
Total assets - - - 96 202
Long-term liabilities - - - - 62
Current liabilities - - - 64 84
Total liabilities - - - 64 146

SUMMARY PARENT COMPANY INCOME STATEMENT

2008 2007 2007/08 2007
SEK m. Jan-March Jan-March Apr-March Jan-Dec
Net sales 2 2 7 7
Other external costs -5 -3 -22 -20
Personnel costs -1 -1 -2 -2
Depreciation 0 0 0 0
OPERATING PROFIT/LOSS -4 -2 -17 -15
Net financial items 22 0 -279 -301
OPERATING PROFIT/LOSS BEFORE TAX 18 -2 -296 -316
Tax - 0 0 -
OPERATING PROFIT/LOSS FOR THE PERIOD 18 -2 -296 -316

SUMMARY PARENT COMPANY BALANCE SHEET

2008 2007 2007 2007 2007
SEK m. 31 March 31 Dec 30 Sept 30 June 31 March
Participations in group companies 366 366 366 366 366
Financial fixed assets 2 3 7 156 156
Current receivables 94 72 392 240 531
Cash and bank balances 1 3 1 1 1
TOTAL ASSETS 463 444 766 763 1,053
Equity 447 430 761 759 743
Provisions 9 9 2 2 2
Current liabilities 7 5 3 2 308
TOTAL EQUITY AND LIABILITIES 463 444 766 763 1,053

This interim report is a translation of the Swedish original. This report can also be viewed at www.scribona.com

Scribona AB, Röntgenvägen 7, P.O. Box 1374, SE-171 27 SOLNA Telephone +46-(0)8-734 34 00, Fax +46-(0)8-82 85 71, e-mail [email protected] The company's registered office is located in Solna, Sweden.

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