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Nolato B

Earnings Release Feb 1, 2011

2950_10-k_2011-02-01_2f267667-c426-4e8b-9519-bbf3e5ebc81f.pdf

Earnings Release

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Nolato AB (publ) year-end report 2010 Nolato's best year ever Strong cash flow during the fourth quarter

  • Fourth quarter of 2010 in brief
  • Sales rose by 10% to SEK 864 million (786)
  • Operating income (EBITA) was SEK 63 million (63)
  • Net income was SEK 43 million (57)
  • Earnings per share were SEK 1.64 (2.17)
  • Cash flow after investments was SEK 155 million (79), excluding property disposed of
  • Full-year 2010 in brief
  • Sales rose by 30% to SEK 3,375 million (2,602)
  • Operating income (EBITA) was SEK 262 million (166)
  • Earnings per share increased to SEK 7.11 (4.68)
  • The equity/assets ratio was 50% (51)
  • The Board proposes an ordinary dividend of SEK 3.00 (3.00) plus an extra dividend of SEK 3.00, totalling SEK 6.00 per share (3.00)
  • Review of financial targets
  • Group highlights
SEK millions unless otherwise specified Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net sales 864 786 3,375 2,602
Operating income (EBITDA) 1) 99 126 407 343
Operating income (EBITA) 2) 63 63 262 166
EBITA margin, % 7.3 8.0 7.8 6.4
Income after financial items 61 58 243 148
Net income 43 57 187 123
Earnings per share before and after dilution, SEK* 1.64 2.17 7.11 4.68
Adjusted earnings per share, SEK* 3) 1.74 2.24 7.37 4.90
Cash flow after investments, excl. acquisitions and disposals 155 79 230 139
Net investments affecting cash flow, excl. acquisitions and disposals 43 38 140 118
Return on capital employed, % 18.4 12.1
Return on shareholders' equity, % 16.5 11.5
Equity/assets ratio, % 50 51
Net debt 34 40

* The company does not have any financial instrument programmes which involve any dilution in the number of shares.

This document is a translation from Swedish. In the event of any difference between this version and the Swedish original, the Swedish original shall govern.

1) Operating income (EBITDA): Earnings before interest, taxes, depreciation and amortisation.

2) Operating income (EBITA): Earnings before interest, taxes and amortisation of intangible assets arising from acquisitions.

3) Adjusted earnings per share: Net income, excluding amortisation of intangible assets arising from acquisitions, divided by the average number of shares.

Fourth quarter 2010

  • 900 1000 Sales rose by 10% to SEK 864 million (786)
  • Operating income (EBITA) was SEK 63 million (63)
  • Strong cash flow of SEK 155 million (79), excl. property disposed of
  • Nolato Industrial has decided to start production in Romania

■ Sales

The Group's sales totalled SEK 864 million (786), representing an increase of 10% compared with the corresponding period during the previous year. The acquired unit within Nolato Medical accounted for SEK 43 million. Currency effects had a negative impact on sales of around 1%.

Nolato Medical's sales rose by 32% to SEK 235 million (178). Organic growth was 8% including currency effects. Excluding currency conversion effects, sales rose by 11%.

Nolato Telecom's sales rose by 1% to SEK 377 million (372). Excluding currency conversion effects, sales rose by 2%. Volumes have remained good for most customers, although lower than during the strong third quarter. Onward sales of components (touchscreens) has contributed approximately SEK 80 million in additional sales. Certain deliveries have been postponed past the year-end.

Nolato Industrial's sales rose by 7% to SEK 253 million (236). Demand from virtually all customer segments remained high.

■ Income

The Group's operating income (EBITA) was SEK 63 million (63).

Nolato Medical's operating income (EBITA) was SEK 28 million (22), Nolato Telecom's was SEK 24 million (30) and Nolato Industrial's was SEK 18 million (18).

Nolato Medical's EBITA margin was 11.9% (12.4). The reduction in the margin is attributable to the acquisition of Contour Plastics.

Nolato Telecom's EBITA margin was 6.4% (8.1). Compared with the corresponding period during the previous year, a higher turnover of components, an older product mix and lower levels of capacity utilisation had a negative impact on Nolato Telecom's margin. During 2009, non-recurring items had an impact of SEK 20 million on income during the fourth quarter.

Nolato Industrial's EBITA margin was 7.1% (7.6). The margin was affected by a somewhat unfavourable product mix.

Overall, the Group's EBITA margin was 7.3% (8.0).

■ Sales by quarter

■ EBITA by quarter

■ Adjusted earnings per share by quarter

Sales
Q4/2010
Sales
Q4/2009
Op. income
(EBITA) Q4/2010
Op. income
(EBITA) Q4/2009
EBITA margin
Q4/2010
EBITA margin
Q4/2009
235 178 28 22 11.9% 12.4%
377 372 24 30 6.4% 8.1%
253 236 18 18 7.1% 7.6%
– 1 – 7 – 7
864 786 63 63 7.3% 8.0%

■ Sales, operating income (EBITA) and EBITA margin by business area

Operating income (EBITA): Earnings before interest, taxes and amortisation of intangible assets arising from acquisitions.

Currency effects had a positive impact of around SEK 1 million (+4). These currency effects consist of SEK 1 million in transaction effects.

Operating income (EBIT) was SEK 60 million (61).

Income after net financial items was SEK 61 million (58). These net financial items include currency exchange rate effects of SEK +3 million (0) during the fourth quarter.

Net income was SEK 43 million (57). Earnings per share were SEK 1.64 (2.17). Adjusted earnings per share excluding amortisation of intangible assets arising from acquisitions were SEK 1.74 (2.24). The effective tax rate was 29% (2). Non-recurring items had a positive effect of SEK 9 million on tax expenses during the corresponding period in the previous year.

Full year 2010

■ Sales and income

The Group's sales totalled SEK 3,375 million (2,602) during 2010, representing an increase of 30% compared with 2009. During the year, acquired units contributed sales of SEK 80 million. Currency effects had a negative impact of around 4% on sales.

The Group's operating income (EBITA) was up 58% to SEK 262 million (166). The EBITA margin was 7.8% (6.4).

Operating income (EBIT) was SEK 253 million (158).

Income after net financial items was SEK 243 million (148).

Net income was SEK 187 million (123). Earnings per share before and after dilution stood at SEK 7.11 (4.68). Adjusted earnings per share excluding amortisation of intangible assets arising from acquisitions were SEK 7.37 (4.90). The effective tax rate was 23% (17).

The return on capital employed was 18.4% (12.1%). The return on operating capital was 21.6% (13.9%).

■ Nolato Medical

Full-year sales and income (SEK millions) 2010 2009
Sales 808 692
Operating income (EBITA) 100 89
EBITA margin (%) 12.4 12.9
Operating income (EBIT) 94 84

As previously announced, Nolato has acquired – and, as at 23 July, consolidated – the US company Contour Plastics. The purchase price was SEK 165 million. Contour Plastics, which has changed its name to Nolato Contour, has 180 employees. Its customers consist of a number of US medical technology companies, and the acquisition will also make it possible to offer European customers production in North America. The Company recorded sales for 2010 of SEK 179 million, with a pro forma EBITDA margin of about 13%. The acquisition has brought an additional SEK 80 million in sales during the period Nolato has owned the company, and it has had a marginal positive effect on earnings per share.

Nolato Medical saw sales rise to SEK 808 million (692), corresponding to growth of 17%. Organic growth was 5%. Excluding currency conversion

effects and acquisition effects, growth was 8%. Operations have developed in line with market growth.

Operating income (EBITA) rose to SEK 100 million (89). The EBITA margin was 12.4% (12.9). This margin was affected by continued investments in project resources and technical resources, and by the acquisition.

As previously announced, capacity is being increased in Hörby by 3,700 m² in order to create the optimum production structure within the business area. This work is running according to plan, and the facility is now gradually being brought into use. The premises are rented from the municipal property company Hörby Industrifastigheter, which is also responsible for the enlargement work.

■ Nolato Telecom

Full-year sales and income (SEK millions) 2010 2009
Sales 1,575 1,090
Operating income (EBITA) 122 86
EBITA margin (%) 7.7 7.9
Operating income (EBIT) 122 86

Nolato Telecom's sales rose by 44% to SEK 1,575 million (1,090) as a result of a generally strong product portfolio and onward sales of components (touchscreens) worth approximately SEK 200 million. Excluding currency conversion effects, sales rose by 51%. Volumes were high as a result of customers building up stocks in connection with product launches, particularly during the first six months. This has meant that the normal seasonal variation, involving a weaker first six months, did not apply during 2010.

Operating income (EBITA) rose to SEK 122 million (86). The EBITA margin was 7.7% (6.5 excluding non-recurring items). With the exception of the fourth quarter, new products and high levels of capacity utilisation have had a positive impact on the margin compared with 2009, while a higher proportion of components has had the opposite effect.

In order to cope with greater demand, Nolato Lövepac Converting has moved to larger, more suitable production premises in China, and has started production in Chennai, India.

■ Nolato Industrial

Full-year sales and income (SEK millions) 2010 2009
Sales 994 824
Operating income (EBITA) 79 19
EBITA margin (%) 7.9 2.3
Operating income (EBIT) 76 16

Nolato Industrial's sales rose by 21% to SEK 994 million (824). Demand has gradually risen within most customer segments, albeit from low levels in 2009. A focus on new projects and new market segments has also had a positive impact on sales.

Operating income (EBITA) was SEK 79 million (31 excluding non-recurring items), with an EBITA margin of 7.9% (3.8 excluding non-recurring items). High levels of capacity utilisation, new products and the full effect of earlier restructuring measures have had a positive impact on the margin.

The business area has decided to start small-scale production in Romania. This will take place in rented premises, and is expected to begin during the third quarter of 2011.

■ Cash flow

Cash flow before investments and disposals totalled SEK 370 million (257). The change in working capital was SEK +30 million (–7). Cash flow after investments totalled SEK 84 million (139), including acquisitions and property disposed of. Excluding acquisitions and property disposed of, the cash flow was SEK 230 million (139). Net investments affecting cash flow totalled SEK 286 million (118), of which the acquisition of Contour Plastics accounted for SEK 164 million. Payment of SEK 18 million has been received from the sale of the property in Kristianstad, reducing net investments.

■ Financial position

Interest-bearing assets totalled SEK 239 million (172), and interest-bearing liabilities and provisions totalled SEK 273 million (212). Net debt thus totalled SEK 34 million (40). Shareholders' equity stood at SEK 1,179 million (1,086). The equity/assets ratio was 50% (51). During the second quarter, dividends totalling SEK 79 million were paid to shareholders.

At the end of last year, Nolato extended loan agreements with credit institutions by SEK 350 million, with a three-and-a-half-year term. Nolato therefore has total loan agreements of SEK 700 million, of which SEK 350 million runs until the end of 2012 and SEK 350 million runs until the middle of 2014.

■ Cash flow after investments per quarter

■ Cash flow after investments full year 2006 – 2010

■ Consolidated performance analysis

SEK millions Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net sales 864 786 3,375 2,602
Gross income excl. depreciation/amortisation 150 170 627 501
As a percentage of net sales 17.4 21.6 18.6 19.3
Costs – 51 – 44 – 220 – 158
As a percentage of net sales 5.9 5.6 6.5 6.1
Operating income (EBITDA) 99 126 407 343
As a percentage of net sales 11.5 16.0 12.1 13.2
Depreciation and amortisation – 36 – 63 – 145 – 177
Operating income (EBITA) 63 63 262 166
As a percentage of net sales 7.3 8.0 7.8 6.4
Amortisation of intang. assets arising from acquisitions – 3 – 2 – 9 – 8
Operating income (EBIT) 60 61 253 158
Financial items 1 – 3 – 10 – 10
Income after financial items 61 58 243 148
Tax – 18 – 1 – 56 – 25
As a percentage of income after financial items 29.5 1.7 23.0 16.9
Net income 43 57 187 123

■ Financial position

SEK millions 31/12/2010 31/12/2009
Interest-bearing liabilities, credit institutions 180 120
Interest-bearing pension liabilities 93 92
Total borrowings 273 212
Cash and bank – 239 – 172
Net debt 34 40
Working capital 145 133
As a percentage of sales (avg.) (%) 4.1 4.5
Capital employed 1,452 1,298
Return on capital employed (avg.) (%) 18.4 12.1
Shareholders' equity 1,179 1,086
Return on shareholders' equity (avg.) (%) 16.5 11.5

■ The tax situation in China

With effect from 2011, China has introduced new taxes and charges for foreign companies, which are expected to increase Nolato's tax expenses by around SEK 5–10 million each year. During the period 2008–2010, Nolato was entitled to a 15% tax rate in China, thanks to its high-tech status. The process of applying for this status for 2011–2013 is currently underway.

■ Personnel

The average number of employees during the period was 7,563 (4,308). The significant increase is due mainly to high demand for staff in connection with mobile phone project start-ups in China.

■ Significant risks and uncertainty factors

The business risks and risk management of the Group and the Parent Company, along with the management of financial risks, are described in the 2009 Annual Report on pages 32–33, and in Note 4 on pages 50–51.

No significant events have occurred during the period that would significantly affect or change these descriptions of the Group's and the Parent Company's risks or the management thereof.

■ Events after the balance sheet date

No significant events have occurred since the end of the period.

■ Dividend

At the Annual General Meeting, the Board of Directors and the President and CEO will propose an ordinary dividend of SEK 3.00 per share (3.00) plus an extra dividend of SEK 3.00 per share. The total dividend will therefore be SEK 6.00 per share (3.00), corresponding to SEK 158 million. The pay-out ratio for the ordinary dividend is 42%, and 84% in total. The dividend yield is 7.2% in relation to the stock exchange price on 30 December 2010.

■ Ownership and legal structure

Nolato AB (publ), Swedish corporate identity number 556080-4592, is the Parent Company of the Nolato Group.

Nolato's B shares are listed on the NASDAQ OMX Nordic Exchange, since 1 January 2011 in the Stockholm Mid Cap segment, where they are included in the information technology sector.

The number of shareholders has risen by 19%, totalling 7,889 on 30 December. The largest shareholders were the Paulsson family with 12% of the share capital, the Jorlén family with 10%, and the Boström family with 9%. The ten largest shareholders include financial institutions which own an additional 28% of the share capital, with Lannebo Fonder, Svolder and Skandia Fonder being the largest. The ten largest shareholders hold 59% of the share capital and 79% of the votes.

■ The Parent Company

Sales totalled SEK 23 million (21). The increase in sales is a result of higher costs levied on subsidiaries. Income after financial items was SEK 73 million (26). The rise in income is mainly due to higher dividends from subsidiaries.

■ Accounting and valuation principles

Nolato's consolidated accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU.

The consolidated accounts have been prepared in accordance with the same principles as those applied to the Annual Report, which are described in the 2009 Annual Report on pages 45–49.

The consolidated year-end report has been prepared in accordance with IAS 34 (Interim Financial Reporting). The applicable provisions of the Swedish Annual Accounts Act and the Swedish Securities Market Act have also been applied.

The Parent Company year-end report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Securities Market Act, in line with the provisions of RFR 2.2, Accounting for Legal Entities.

The new or revised IFRS standards or IFRIC interpretations that entered into force on 1 January 2010 have not had any material effect on the Group's income statements or balance sheets.

■ Financial targets

The Board has reviewed Nolato's financial targets, and has decided on the following:

– An EBITA margin in excess of 8%

– A return on capital employed in excess of 15%

– An equity/assets ratio in excess of 35%

This involves an increase in the margin target of one percentage point, from 7% to 8%. The other targets remain unchanged.

■ Annual General Meeting

The Annual General Meeting will be held on 27 April 2011. Any shareholders who wish to submit proposals to the Nomination Committee can contact one of the Nomination Committee representatives by e-mail:

■ Financial calendar

2010 Annual Report: Nolato's Annual Report will be published on the company's website, www.nolato.se, during week 13. A copy of the Annual Report will also be sent to those Nolato shareholders who have specifically requested a copy.

  • Three-month interim report 2011: 27 April 2011
  • 2011 Annual General Meeting: 27 April 2011
  • Six-month interim report 2011: 20 July 2011
  • Nine-month interim report 2011: 26 October 2011

Torekov, 1 February 2011 Nolato AB (publ) The Board of Directors

■ Contact:

Hans Porat, President and CEO, phone +46431 442294. Per-Ola Holmström, CFO, phone +46431 442293.

■ Analyst meeting:

Hans Porat and Per-Ola Holmström will be giving their comments on the year-end report (in Swedish) at a meeting for investors and the media at Regeringsgatan 65, floor IV, Stockholm on 2 February at 08:30. Attendees must register no later than 16:00 on 1 February by e-mailing [email protected] or by telephoning +46 431 442208.

The information contained in this year-end report is the information that Nolato must make public in accordance with the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was made public on 1 February 2011 at 14:30.

This report has not been reviewed by the company's auditor.

■ Consolidated income statement (summary)

SEK millions Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net sales 864 786 3,375 2,602
Cost of goods sold – 750 – 677 – 2,889 – 2,273
Gross profit 114 109 486 329
Other operating income 4 5 5 41
Selling expenses – 21 – 17 – 76 – 71
Administrative expenses – 38 – 39 – 160 – 132
Other operating expenses 1 3 – 2 – 9
– 54 – 48 – 233 – 171
Operating income 60 61 253 158
Financial items 1 – 3 – 10 – 10
Income after financial items 61 58 243 148
Tax – 18 – 1 – 56 – 25
Net income 43 57 187 123
All earnings are attrib. to the Parent Co.'s shareholders
Depreciation/amortisation/writedowns 39 65 154 185
Earnings per share before and after dilution (SEK) 1.64 2.17 7.11 4.68
Number of shares at the end of the period 26,307,408 26,307,408 26,307,408 26,307,408
Average number of shares 26,307,408 26,307,408 26,307,408 26,307,408

■ Consolidated comprehensive income

SEK millions Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net income 43 57 187 123
Other comprehensive income
Translation differences for the period 6 3 – 17 – 25
Cash flow hedges – 5 – 1 2 3
Tax attributable to cash flow hedges 2 0 0 – 1
Other comprehensive income, net of tax 3 2 – 15 – 23
Total comp. inc. for the period attrib. to
the Parent Co.'s shareholders
46 59 172 100

■ Consolidated balance sheet (summary)

SEK millions 31/12/2010 31/12/2009
Assets
Fixed assets
Intangible fixed assets 441 373
Tangible fixed assets 718 702
Other securities held as fixed assets 2 2
Other long-term receivables 1 1
Deferred tax assets 30 25
Total fixed assets 1,192 1,103
Current assets
Inventories 222 215
Accounts receivable 616 573
Other current assets 81 50
Cash and bank 239 172
Total current assets 1,158 1,010
Total assets 2,350 2,113
Shareholders' equity and liabilities
Shareholders' equity 1,179 1,086
Long-term liabilities and provisions 1) 203 202
Short-term liabilities and provisions 1) 968 825
Total liabilities and provisions 1,171 1,027
Total shareholders' equity and liabilities 2,350 2,113
1) Interest-bearing/non-interest-bearing liabilities and provisions:
Interest-bearing liabilities and provisions 273 212
Non-interest-bearing liabilities and provisions 898 815
Total liabilities and provisions 1,171 1,027

■ Changes in consolidated shareholders' equity

SEK millions Full year Full year
2010 2009
Shareholders' equity at the beginning of the period 1,086 1,058
Total comprehensive income for the period 172 100
Dividends – 79 – 72
Shareholders' equity at end of period attrib. to Parent Co's shareholders 1,179 1,086

During 2010 a dividend totalling SEK 79 million (72), was paid to the Parent Company's shareholders, corresponding to SEK 3.00 per share (2.75).

The Group does not have any incentive programmes resulting in a dilutive effect.

■ Consolidated cash flow statement (summary)

SEK millions Q4
2010
Q4
2009
Full year
2010
Full year
2009
Cash flow from op. activities before changes in working cap. 99 113 340 264
Changes in working capital 99 4 30 – 7
Cash flow from operations 198 117 370 257
Cash flow from investment activities – 25 – 38 – 286 – 118
Cash flow before financing activities 173 79 84 139
Cash flow from financing activities – 63 6 – 10 – 130
Cash flow for the period 110 85 74 9
Liquid funds at the beginning of the period 131 83 172 168
Exchange rate difference in liquid funds – 2 4 – 7 – 5
Liquid funds at the end of the period 239 172 239 172

■ Earnings per share

SEK millions Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net income 43 57 187 123
Adjusted earnings:
Amortisation of intangible assets arising from acquisitions 3 2 9 8
Tax on amortisation 0 0 – 2 – 2
Adjusted earnings 46 59 194 129
Average number of shares* 26,307,408 26,307,408 26,307,408 26,307,408
Earnings per share before and after dilution (SEK)* 1.64 2.17 7.11 4.68
Adjusted earnings per share (SEK)* 1.74 2.24 7.37 4.90

*The Company does not have any ongoing financial instrument programmes which involve any dilution in the number of shares.

■ Five-year overview

2010 2009 2008 2007 2006
3,375 2,602 2,824 2,421 2,702
262 166 240 197 79
7.8 6.4 8.5 8.1 2.9
253 158 232 190 78
243 148 216 171 69
187 123 178 150 48
18.4 12.1 18.4 16.3 7.4
16.5 11.5 18.4 18.0 5.9
50 51 50 46 46
7.11 4.68 6.77 5.70 1.82
7.37 4.90 6.99 5.32 6.08

■ Quarterly data (summary)

Q1 Q2 Q3 Q4 Full year
Net sales (SEK millions) 2010 746 878 3,375
2009 606 557 2,602
2008 690 694 2,824
Operating income (EBITDA) (SEK millions) 2010 100 105 407
2009 56 77 343
2008 100 103 399
Operating income (EBITA) (SEK millions) 2010 63 69 887
864
653
786
693
747
103
99
84
126
101
95
67
63
48
63
64
56
7.6
7.3
7.4
8.0
9.2
7.5
65
60
46
61
62
54
60
61
42
58
57
47
47
43
33
57
45
46
4
155
79
78
152
1.64
2.17
1.75
1.74
2.24
1.82
11.3
7.1
7.5
11.8
18.4
12.1
18.4
21.6
13.9
262
2009 16 39 166
2008 59 61 240
EBITA margin (%) 2010 8.4 7.9 7.8
2009 2.6 7.0 6.4
2008 8.6 8.8 8.5
Operating income (EBIT) (SEK millions) 2010 61 67 253
2009 14 37 158
2008 57 59 232
Income after financial items (SEK millions) 2010 57 65 243
2009 6 42 148
2008 53 59 216
Net income (SEK millions) 2010 45 52 187
2009 4 29 123
2008 41 46 178
Cash flow after inv., excl. acq. and disp. (SEK millions) 2010 0 71 230
2009 56 35 – 31 139
2008 47 19 296
Earnings per share before and after dilution (SEK
)
2010 1.71 1.98 1.78 7.11
2009 0.15 1.10 1.26 4.68
2008 1.56 1.75 1.71 6.77
Adjusted earnings per share (SEK
)
2010 1.79 2.01 1.83 7.37
2009 0.23 1.14 1.29 4.90
2008 1.63 1.79 1.75 6.99
Return on total capital (%) 2010 10.2 11.3 11.5 11.3
2009 9.4 8.8 7.5
2008 11.0 12.0 12.1 11.8
Return on capital employed (%) 2010 16.1 18.4 18.6 18.4
2009 14.7 13.7 11.3 12.1
2008 16.7 18.5 18.7 18.4
Return on operating capital (%) 2010 18.0 20.8 20.5 21.6
2009 16.5 14.4 12.7 13.9
2008 17.5 18.9 19.8 19.7 19.7
Return on shareholders' equity (%) 2010 14.9 17.5 18.6 16.5 16.5
2009 14.2 13.0 11.2 11.5 11.5
2008 20.4 22.4 22.0 18.4 18.4

■ Quarterly data business areas

Net sales (SEK millions) Q1 Q2 Q3 Q4 Full year
Nolato Medical 2010 186 185 202 235 808
2009 178 177 159 178 692
2008 147 158 156 171 632
Nolato Telecom 2010 320 434 444 377 1,575
2009 226 183 309 372 1,090
2008 284 277 318 364 1,243
Nolato Industrial 2010 241 259 241 253 994
2009 206 197 185 236 824
Group adjustments, Parent Company 2008
2010
260
– 1
259
0
219
0
212
– 1
950
– 2
2009 – 4 0 0 0 – 4
2008 – 1 0 0 0 – 1
Group total 2010 746 878 887 864 3,375
2009 606 557 653 786 2,602
2008 690 694 693 747 2,824
Operating income (EBITA) (SEK millions) Q1 Q2 Q3 Q4 Full year
Nolato Medical EBITA margin (%) 2010 23
12.4
24
13.0
25
12.4
28
11.9
100
12.4
2009 24 23 20 22 89
EBITA margin (%) 13.5 13.0 12.6 12.4 12.9
2008 21 21 20 27 89
EBITA margin (%) 14.3 13.3 12.8 15.8 14.1
Nolato Telecom 2010 32 34 32 24 122
EBITA margin (%) 10.0 7.8 7.2 6.4 7.7
2009 0 32 24 30 86
EBITA margin (%) 0.0 17.5 7.8 8.1 7.9
2008 25 22 35 32 114
EBITA margin (%) 8.8 7.9 11.0 8.8 9.2
Nolato Industrial 2010 17 23 21 18 79
EBITA margin (%) 7.1 8.9 8.7 7.1 7.9
2009 – 1 – 7 9 18 19
EBITA margin (%) – 0.5 – 3.6 4.9 7.6 2.3
2008 19 21 15 0 55
EBITA margin (%) 7.3 8.1 6.8 0.0 5.8
Group adjustments, Parent Company 2010 – 9 – 12 – 11 – 7 – 39
2009 – 7 – 9 – 5 – 7 – 28
2008 – 6 – 3 – 6 – 3 – 18
Group total 2010 63 69 67 63 262
EBITA margin (%) 2009 8.4
16
7.9
39
7.6
48
7.3
63
7.8
166
EBITA margin (%) 2.6 7.0 7.4 8.0 6.4
2008 59 61 64 56 240
EBITA margin (%) 8.6 8.8 9.2 7.5 8.5
Depreciation/amortisation (SEK millions) Q1 Q2 Q3 Q4 Full year
Nolato Medical 2010 12 12 13 16 53
2009 11 11 11 12 45
2008 10 10 10 11 41
Nolato Telecom 2010 16 14 14 13 57
2009 18 16 15 40 89
2008 19 20 16 17 72
Nolato Industrial 2010 11 12 11 10 44
2009 13 13 12 13 51
2008 14 14 13 13 54
Group total 2010 39 38 38 39 154
2009 42 40 38 65 185
2008 43 44 39 41 167

■ Group financial highlights

Q4
2010
Q4
2009
Full year
2010
Full year
2009
Net sales (SEK millions) 864 786 3,375 2,602
Sales growth (%) 10 5 30 – 8
Percentage of sales outside Sweden (%) 75 77 76 73
Operating income (EBITDA) (SEK millions) 99 126 407 343
Operating income (EBITA) (SEK millions) 63 63 262 166
EBITA margin (%) 7.3 8.0 7.8 6.4
Income after financial items (SEK millions) 61 58 243 148
Profit margin (%) 7.1 7.4 7.2 5.7
Net income (SEK millions) 43 57 187 123
Return on total capital (%) 11.3 7.5
Return on capital employed (%) 18.4 12.1
Return on operating capital (%) 21.6 13.9
Return on shareholders' equity (%) 16.5 11.5
Equity/assets ratio (%) 50 51
Debt/equity ratio (%) 23 20
Interest coverage ratio (times) 31 18 25 14
Net investm. affecting cash flow, excl. acq. and disposals (SEK millions) 43 38 140 118
Cash flow after investments, excl. acq. and disposals (SEK millions) 155 79 230 139
Net debt (SEK millions) 34 40
Earnings per share before and after dilution (SEK) 1.64 2.17 7.11 4.68
Adjusted earnings per share (SEK) 1.74 2.24 7.37 4.90
Cash flow per share (SEK) 5.89 3.00 8.74 5.28
Shareholders' equity per share (SEK) 45 41
Average number of employees 7,563 4,308

Definitions

Adjusted earnings per share

Net income, excluding amortisation of intangible assets arising from acquisitions, divided by the average number of shares.

Cash flow per share

Cash flow before financing activities, divided by average number of shares.

Debt/equity ratio

Interest-bearing liabilities and provisions divided by shareholders' equity.

EBITA margin

Operating income (EBITA) as a percentage of net sales.

Earnings per share

Net income, divided by average number of shares.

Equity/assets ratio Shareholders' equity as a percentage of total capital in the balance sheet.

Interest coverage ratio Income after financial items plus financial expenses, divided by financial expenses.

Net debt

Interest-bearing liabilities and provisions less interest-bearing assets.

Operating income (EBITDA)

Earnings before interest, taxes and depreciation/amortisation.

Operating income (EBITA)

Earnings before interest, taxes and amortisation of intangible assets arising from acquisitions.

Operating income (EBIT)

Income before tax, financial income and expenses.

Profit margin

Income after financial items as a percentage of net sales.

Return on total capital

Income after financial items plus financial expenses as a percentage of average total capital in the balance sheet.

Return on capital employed

Income after financial items plus financial expenses as a percentage of average capital employed. Capital employed consists of total capital less non-interest-bearing liabilities and provisions.

Return on operating capital

Operating income as a percentage of average operating capital. Operating capital consists of total capital less non-interest-bearing liabilities and provisions, less interest-bearing assets.

Return on shareholders' equity

Net income as a percentage of average shareholders' equity.

■ Parent Company income statement

Q4
2010
Q4
2009
Full year
2010
Full year
2009
5 4 23 21
4 4
– 6 – 3 – 15 – 11
– 6 – 16 – 43 – 42
– 19 – 24
– 3 – 34 – 31 – 56
25 99 79
2 2 9 7
5 0 – 4 – 4
29 – 32 73 26
– 21
19
2 – 40 55 24
0 0 0 0
– 32
5
– 21
13
– 32
14

■ Parent Company balance sheet (summary)

SEK millions 31/12/2010 31/12/2009
Assets
Financial fixed assets 877 949
Deferred tax assets 6 4
Total fixed assets 883 953
Other receivables 251 201
Cash and bank 105 74
Total current assets 356 275
Total assets 1,239 1,228
Shareholders' equity and liabilities
Shareholders' equity 837 759
Untaxed reserves 125 93
Other provisions 2 2
Long-term liabilities 17 18
Current liabilities 258 356
Total shareholders' equity and liabilities 1,239 1,228
Collateral pledged
Contingent liabilities 92 99

Transactions with related parties:

Related party Period Services
sold
Services
purchased
Interest
income
Interest
expenses
Result from shares
in Group companies
Rec. from related parties
on the bal. sheet date
Liab. to related parties
on the bal. sheet date
Subsidiary Full year 2010 23 – 15 8 0 99 556 222
Subsidiary Full year 2009 21 – 15 7 – 1 79 444 235

None of the company's Board members or senior executives currently has, or has previously had, any direct or indirect involvement in any business transaction with the company which is, or was, of an unusual character in terms of its conditions. Nor has the Group issued any loans, pledged any guarantees or entered into any surety arrangements for any of the company's Board members or senior executives.

Nolato AB, SE-260 93 Torekov, Sweden • Tel. +46 431 442290 • Fax +46 431 442291 Corporate identity number 556080-4592 • E-mail [email protected] • Website www.nolato.com

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