RNS Number:3150O
Perstorp AB
24 July 2000
PERSTORP GROUP
Report on operations
during the six months ended June 30, 2000
- Pretax earnings rose to SEK 404 m (255). Operating earnings before items
affecting comparability amounted to SEK 355 m (238).
- Strong growth and increased earnings from chemical operations.
- Pergo's performance weakened due primarily to delays in product launches.
- Industri Kapital's offer raised and extended.
General conditions
The first half of the fiscal year was generally characterised by a
continuation of favourable economic conditions in the US and a continued
improvement in Europe and Asia. In Europe, several industrial sectors are
showing higher growth, as a result of increases in exports and domestic
consumption. The American market is continuing to grow, albeit at a lower
pace.
International conditions in the chemical sector are now strong, and demand
for chemical products is favourable. At the same time, sharp increases in the
prices of oil-based chemical raw materials could, in the short term, result
in decreased margins for several chemical products that have a more advanced
position in the processing chain.
Demand for laminate flooring has remained favourable. However, competition -
and hence price pressure also - has continued to intensify, mainly in Europe.
Offer from Industri Kapital
Industri Kapital, a risk-capital company, has made a public offer regarding
the acquisition of all the shares and convertible debentures in Perstorp AB.
Perstorp AB's Board of Directors recommends that holders of shares and
convertible debentures in the Company accept Industri Kapital's new offer.
As is apparent in the separate statement appended to this report, after the
end of the period Industri Kapital raised its cash offer to holders of shares
and convertible debentures in Perstorp AB and extended the subscription
period. Moreover, the European Commission announced that it is intensifying
its investigation into Industri Kapital's acquisition of Perstorp AB. The
Board of Directors of Perstorp AB recommends that holders of shares and
convertible debentures accept Industri Kapital's renewed offer.
Operations
In fulfillment of its strategy of streamlining its operations, the Group now
operates primarily through the two subgroups Perstorp Chemicals AB and Pergo
AB (formerly, Perstorp Flooring AB).
Perstorp Surface Materials, which was divested during the period, is included
in the accounts through March 24. Perstorp Laminatproduktion AB, which was
formerly part of Perstorp Surface Materials, is reported under Other
operations.
With the aim of expanding in the chemical and flooring markets, Perstorp
completed three strategic acquisitions during the latter part of the period,
which are significantly strengthening the Group's market positions. They are
the Degussa-Huls group's polyol operations, Plasta Erkner's phenolic resins
operations and a part ownership of the laminate flooring manufacturer Witex.
These are included in the accounts as of the dates of their acquisition.
Earnings and financial position during the first half of the year
Net sales amounted to SEK 4,629 m (H1, 1999: 5,341). With adjustment for
demerged business units - that is, the divestment of Perstorp Surface
Materials during the period and the spin-off of Perbio Science in the
preceding year - net sales rose 8%. The volume increase was 9%, while prices
and currency changes had a combined negative impact of 1%.
Perstorp Chemicals' sales rose by 17%, mainly due to a favourable volume
trend.
Pergo's net sales declined by 3% during the period, mainly due to lower
prices within certain product segments in Europe and to the fact that
implementation of new product launches during the period was delayed.
Operating earnings amounted to SEK 431 m, up SEK 139 m compared with the year-
earlier period. The operating margin rose from 5.5% to 9.3%. The capital gain
on the sale of Perstorp Surface Materials is included in items affecting
comparability, which amounted to income of SEK 75 m.
Operating earnings after adjustments for items affecting comparability and
demerged units amounted to SEK 355 m (238). This corresponds to an 8.4% (6.1)
increase in operating margin.
Perstorp Chemicals' operating earnings were significantly higher than in the
year-earlier period, mainly as a result of increased volumes and a larger
proportion of speciality products. The operating margin rose to 10.4% (8.2).
Pergo's earnings were slightly better than in the year-earlier period.
However, earnings were adversely affected by lower prices and the said delays
in the launch of new products.
Earnings from participations in associated companies amounted to SEK 6 m (11)
and pertained mainly to Perstorp Clariant AB, which is a producer of water-
borne dispersions.
Perstorp Surface Materials, which was part of the Group until March 24,
reported net sales of SEK 474 m and operating earnings of SEK 1 m for that
period.
Net financial items, which amounted to an expense of SEK 27 m (expense: 37).
The improvement compared with the year-earlier period was due to lower
indebtedness following the sale of Perstorp Surface Materials. The currency
composition of the debt portfolio was changed so that USD and SEK became the
predominant currencies, which led to a higher average expense interest rate.
The interest-coverage multiple was 8.5 (4.5).
Tax costs totalled SEK 154 m (99). The tax rate was 38% (39), adjusted for the
sale of Perstorp Surface Materials.
Earnings per share after full conversion amounted to SEK 3.50 (2.18).
Total assets decreased by SEK 714 m compared with December 31, 1999 to SEK
7,455 m (8,169) at the end of the period. The sale of Perstorp Surface
Materials reduced total assets by approximately SEK 1,600 m. The decrease was
offset by investments in new operations, however.
Investments amounted to SEK 948 m. Strategic investments - that is, measures
that result in a significant increase in the value of a particular subgroup -
accounted for SEK 863 m of total investments. Strategic investments involved
primarily Perstorp Chemicals and Pergo's three acquisitions in Germany. Of the
total investments, SEK 12 m pertained to Perstorp Surface Materials.
Net debt declined during the period to SEK 1,003 m (1,597) on June 30. The
decrease was mainly attributable to the sale of Perstorp Surface Materials,
but was limited by the said acquisitions involving Perstorp Chemicals and
Pergo.
Shareholders' equity rose by SEK 63 m to SEK 3,839 m (3,776). Shareholders'
equity was increased SEK 92 m by exchange-rate effects and SEK 257 m by the
year's net profit, and decreased SEK 286 m by the dividend. Of the exchange-
rate effects, SEK 53 m were a reversal of exchange-rate effects arising in
Perstorp Surface Materials as of the beginning of 1999.
The equity ratio rose to 52%, compared with 47% at the beginning of the
fiscal year.
The return on total capital rose from 7% to 12% due to the sale of Perstorp
Surface Materials and to an improvement in net profit from continuing
operations.
The capital turnover rate improved, mainly in terms of working capital,
whereas it remained unchanged in terms of total capital.
Free cash flow was on a par with the preceding year and amounted to SEK 298 m
(304).
The Group's commercial paper program has been expanded and now amounts to EUR
300 m.
Performance during the second quarter
Net sales by comparable units rose during the second quarter in comparison
with the first, and amounted to SEK 2,215 m (2,004). The increase was mainly
attributable to Perstorp Chemicals.
Perstorp Chemicals' sales rose sharply, due mainly to a favourable volume
trend. Pergo's sales declined due to lower prices and the fact that the
results of new product launches were more limited than expected during the
period, as a result of delays.
The operating earnings of comparable units, after adjustments for items
affecting comparability, rose by SEK 45 m to SEK 188 m compared with the same
period in the preceding year as a result of the favourable performance of
Perstorp Chemicals. The corresponding increase compared with the first
quarter of the current year amounted to SEK 21 m.
Perstorp Chemicals' operating earnings rose from SEK 120 m in the first
quarter to SEK 140 m in the second quarter, primarily due to the favourable
volume trend and an increased proportion of speciality products.
Pergo's operating earnings were only slightly higher than in the first
quarter.
Corporate acquisitions implemented during the period contributed marginally
both to net sales and to earnings in the second quarter.
Net financial items amounted to an expense of SEK 14 m (expense: 23) during
the period. The improvement was largely the result of lower indebtedness
following the sale of Perstorp Surface Materials.
PERSTORP CHEMICALS
SEK m Q II Q I-II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Net sales 1,329 1,060 2,501 2,146 4,512 4,157
Operating earnings 140 89 260 176 469 385
Operating margin, % 10.5 8.4 10.4 8.2 10.4 9.3
Depreciation 69 65 132 128 253 249
Investments 684 162 708 250 859 401
- Demand for several of Perstorp Chemicals' products increased sharply during
the period, due to a general improvement in economic conditions. At the same
time, sharply rising prices were noted for several raw materials, which
Perstorp is countering through price increases for its own products.
- Net sales rose by 17%, due to a favourable volume trend for most products.
Continued strong growth was noted for speciality products, particularly
special polyols, as well as for sales of formalin plants and catalysts.
- Operating earnings rose sharply compared with the first half of 1999, due
mainly to the increase in net sales. The operating margin rose to 10.4%
(8.2).
- Effective June 1, Perstorp acquired the Degussa-Huls group's polyol
operations, with production activities in Bruchhausen, Germany. The operations
are a leading manufacturer of Penta and di-Penta, polyols that are used
primarily in the production of paints and lacquers. The product range also
includes calcium formate, which is used in the production of high-performance
cement systems and as an additive to animal feed in order to reduce the amount
of antibiotics required. The acquired operations have annual sales of slightly
more than SEK 300 m, with some 160 employees.
- The acquisition, which will strengthen Perstorp Chemicals' world-leading
positions in the markets for Penta and di-Penta, is expected to make a
positive contribution to Group earnings during the current year. The
acquisition will also enable a significant increase in the efficiency of
Perstorp's polyol production operations in Europe and will thus generate
considerable synergistic benefits, the full effect of which is expected to be
felt during a two-year period.
- Effective May 1, Perstorp acquired the operations of Plasta Erkner GmbH,
based in Erkner, close to Berlin. The company has annual sales of
approximately SEK 240 m and is one of Europe's leading manufacturers of
phenolic resins, which are used in various applications, mainly within the
construction, automotive and engineering industries. The acquisition will
strengthen Perstorp Chemicals' position as one of Europe's largest producers
of phenol-based resins, and already made a contribution to operating earnings
during the period under review.
- Perstorp Chemicals, via the Perstorp Chemitec subsidiary, has concluded an
agreement with Penn speciality Chemicals Inc of the US regarding the
acquisition of two phenolic resin product lines. The product lines currently
generate annual sales of approximately SEK 40 m. Under the agreement, Perstorp
will take over technology and trademarks for the Furcarb and Farez products.
Furcarb is a fire-resistant material for the foundry industry and Farex is a
resin-based material that is used mainly in the production of glass-fiber
insulation materials. Perstorp is one of Europe's leading suppliers of
phenolic resins, a position that is further enhanced by this acquisition.
- During the period, Perstorp signed agreements regarding the construction of
five formalin plants, in Venezuela, China, Germany, Chile and South Africa.
The combined order value was approximately SEK 140 m. These orders strengthen
Perstorp's position as the world's leading supplier of plants for the
production of formalin. The order backlog now consists of ten plants,
scheduled for delivery during 2000-2001.
- A newly constructed formaldehyde plant for DuPont de Nemours (Nederland)
B.V., in Dordrecht, the Netherlands, was put into operation in January 2000.
PERGO (PERSTORP FLOORING)
SEK m Q II Q I - II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Net sales 906 980 1,771 1,831 3,567 3,627
Operating earnings 39 66 77 72 189 184
Operating margin. % 4.3 6.7 4.3 3.9 5.3 5.1
Depreciation 24 17 47 34 93 80
Investments 171 11 214 21 280 87
- The favourable market trend for laminate flooring continued in Europe and
the US. However, both of the markets are characterised by increased
competition. Direct laminate flooring and new joining systems are increasing
their shares of the total market. Pergo is mainly countering the competition
through intensified product development and ongoing rationalisation measures.
During the period, Pergo broadened its product range by introducing both
direct laminate flooring and flooring with glue-free joints.
- Net sales declined by 3% compared with the year-earlier period. A positive
trend was noted for sales in the US, where revenues rose despite a slight
decline in prices. Sales volumes increased in Europe as well, but lower
prices led to a decrease in sales revenues. Several new products were
launched during the period. However, due to delays in introducing these
products to the market, their impact on sales and earnings is not expected to
be felt until the latter part of the third quarter.
- Earnings amounted to SEK 77 m, corresponding to a rise of SEK 5 m compared
with the year-earlier period (72). Earnings were adversely affected by the
lower net sales. The decrease in operating margin from 5.1% to 4.3% compared
with the preceding year, due mainly to lower prices in Europe, was partly
offset by cost reductions during the period.
- Adaptation of the range to the rapid changes in the demand for various types
of flooring will be intensified. Further product launches are planned, to
strengthen market positions. This will take place within the framework of a
program of corrective measures, which also includes the rationalisation of
manufacturing and distribution, and which will be charged to profit in the
second half of the year.
- As part of the program of change, Perstorp acquired 25.1% of the shares in
the German laminate flooring manufacturer Witex, a globally active flooring
company that had total sales of approximately SEK 1 billion in its most recent
fiscal year, of which flooring products accounted for 75%. Pergo may increase
its shareholding to 49% in 2002, under certain conditions. According to a
long-term delivery agreement, both companies have commenced close cooperation
which is expected to result in stronger market positions and bring Pergo more
efficient production and distribution operations in Europe, the US and Asia.
- The cooperation with Witex broadens Pergo's product range by adding direct
laminate flooring. During the period, Pergo replaced a part of the production
operations at its own plant in Trelleborg, Sweden, with production at the
Witex plant in Augustdorf. This will result in lower manufacturing costs for
the products concerned and enhance Pergo's competitiveness. As a result of
this transfer, employment-termination notices were served on 90 employees at
the plant in Trelleborg.
- Pergo also concluded an agreement with Unilin of Belgium in the area of
glue-free joining systems for laminate flooring. Under the agreement, Pergo
will start to utilize Unilin's Uniclic joining system for several laminate
flooring products. The companies will also commence joint work on the further
development of glue-free joining systems for flooring. The growth potential
for flooring systems with glue-free joints is regarded as favourable. As a
result of the addition of the Uniclic system to Pergo's own new Cliq-lock
system, the company expects to strengthen its position in the various market
segments.
- As part of efforts to intensify product development activity, a new design
and development centre has been put into operation at the complex in
Trelleborg. During the period, Pergo launched an initial stage of its program
to produce a new generation of consumer-oriented Websites (www.pergo.com), as
well as a number of electronic trading solutions focused on key European
customers and channels for marketing Pergo.
PERSTORP SURFACE MATERIALS
As part of the Group's continued streamlining, the Perstorp Surface Materials
AB subgroup was sold to Decorative Surfaces Holding AB on March 31. Decorative
Surfaces Holding is an investment company formed by DLJ Merchant Banking
Partners and CVC European Equity Partners, which are the principal owners of
Formica Corporation, US, and Laminex Industries Inc. of Australia, leading
companies in the market for decorative surface materials.
The sales price of approximately SEK 1,500 m, including the transfer of
loans, generated a capital gain estimated at SEK 75 m. The subgroup's
operations are included in the accounts through March 24 and its net sales
and operating earnings for that period amounted to SEK 474 m and SEK 1 m,
respectively.
Other operations
In addition to the Perstorp Chemicals AB and Pergo AB subgroups, Perstorp's
business operations consist primarily of Perstorp Laminatproduktion AB. This
company, which were part of Perstorp Surface Materials during the preceding
year, mainly comprise the supply of flooring laminates to Pergo. The
operations, which are conducted at the complex in Perstorp, Sweden, have
slightly more than 300 employees.
Net sales amounted to SEK 368 m (392) and operating earnings to SEK 38 m (44)
during the period. In view of Perstorp Laminatproduktion's considerable
dependence on internal sales to Pergo, an overview of the operations' future
course was commenced.
Group-wide costs, the business development company Pernovo and the capital
gain from the divestment of Perstorp Surface Materials are also reported
under Other, including eliminations.
Personnel
The number of Group employees at the end of the period was 3,693 (6,230). The
decline compared with the year-earlier period was due mainly to the
divestment of Perstorp Surface Materials and the spin-off of Perbio Science.
The Perstorp share
At the end of the report period, the prices per Perstorp A and B share were
SEK 122.50 and SEK 107, respectively, compared with SEK 81.50 and SEK 79,
respectively, at the end of the preceding year. The share prices have been
affected by the offer from Industri Kapital.
Pension monies from SPP
As previously announced, Perstorp AB has been notified by SPP of a provision
of SEK 61 m in excess pension monies. Earlier, the Group redeemed its PRI
pensions in a lump-sum amortization in excess of the amount of the provision.
SPP has indicated that the provision will be transferred during the third
quarter, whereupon the amount will be booked as revenue.
Dividend, Annual General Meeting and reporting dates
The Annual General Meeting on May 25 approved the proposed cash dividend of
SEK 4.00 per share, voted in favour of the proposal to authorise the Board to
repurchase and transfer Perstorp shares and re-elected the Board. Anders
Scherman was re-elected and Jan Birgerson was newly elected as auditors of the
Company in conjunction with Stig Nilsson declining re-election. Hans Bjerke
and Lars-Bertil Nilsson were elected new deputy auditors of the Company.
The preliminary publication date for the next quarterly report is October 20.
Outlook
The Group's operating earnings will benefit from general economic conditions,
which will continue to be favourable during 2000.
In addition to increased demand for its own products, Perstorp Chemicals is
expected to benefit from the sale of several formalin plants and deliveries
from the new Dutch plant in Dordrecht. Rising prices for several chemical raw
materials could have an adverse impact on the trend of margins.
Continued favourable market growth for laminate flooring and additional
product launches are expected to gradually strengthen Group sales. The current
changes in the product range and ongoing rationalisation measures will,
however, involve additional costs which will be charged to earnings.
Assuming the current favourable business trend continues, earnings for the
Group in its current structure - that is, excluding "demerged business units"
- are expected to be considerably higher than in the preceding year.
Perstorp, July 24, 2000
Ake Fredriksson
This interim report is unaudited.
Net sales by division
SEK m Q II Q I-II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Perstorp speciality 818 592 1,509 1,214 2,650 2,355
Chemicals
Perstorp Chemitec 439 372 834 734 1,513 1,413
Perstorp Construction 68 70 126 131 274 279
Chemicals
Perstorp Support 120 113 286 268 526 508
Other items including -116 -87 -254 -201 -451 -398
eliminations
Perstorp Chemicals 1,329 1,060 2,501 2,146 4,512 4,157
Pergo 906 980 1,771 1,831 3,567 3,627
Other items including -20 -2 -53 -78 -99 -124
eliminations
of which Perstorp 181 210 368 392 737 761
Laminatproduktion
Comparable net sales 2,215 2,038 4,219 3,899 7,980 7,660
Perstorp Surface 0 530 474 1,005 1,455 1.986
Materials
Perbio Science 0 279 0 527 338 865
Eliminations 0 -55 -64 -90 -133 -159
Group 2,215 2,792 4,629 5,341 9,640 10,352
Operating earnings by division
SEK m Q II Q I-II Most Full year
recent
2000 1999 2000 1999 12 months 1999
Perstorp Chemicals 140 89 260 176 469 385
Pergo 39 66 77 72 189 184
Other items including 9 -54 93 -65 49 -109
eliminations
of which Perstorp 16 24 38 44 80 86
Laminatproduktion
Operating earnings
excluding
demerged business 188 101 430 183 707 460
units
Perstorp Surface 0 29 1 46 51 96
Materials
Perbio Science 0 29 0 63 32 95
Group 188 159 431 292 790 651
Operating earnings by division adjusted for items affecting comparability
SEK m Q II Q I-II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Perstorp Chemicals 138 89 258 176 453 371
Pergo 39 82 77 97 189 209
Other items including 11 -28 20 -35 -54 -109
eliminations
of which Perstorp 16 24 38 44 80 86
Laminatproduktion
Operating earnings
excluding
demerged business 188 143 355 238 588 471
units
Earnings
Consolidated income Q II Q I-II Most Full
statement recent year
SEK m 2000 1999 2000 1999 12 1999
months
Net sales 2,215 2,792 4,629 5,341 9,640 10,352
Cost of goods sold -1,627 -1,979 -3,403 -3,809 -6,951 -7,357
Gross earnings 588 813 1,226 1,532 2,689 2,995
Sales, administration -416 -605 -892 -1,177 -1,996 -2,281
and R&D costs
Items affecting 0 -48 75 -63 52 -86
comparability
Other operating 13 -8 16 -11 32 5
revenues and expenses
Result from 3 7 6 11 13 18
participation in
associated companies
Operating earnings 188 159 431 292 790 651
Net financial items -14 -23 -27 -37 -90 -100
Earnings before taxes 174 136 404 255 700 551
Taxes -61 -57 -154 -99 -336 -281
Minority share in net 4 2 7 2 16 11
profit
Earnings after taxes 117 81 257 158 380 281
Earnings per share, 1.63 1.13 3.59 2.21 5.31 3.93
SEK
Earnings per share 1.59 1.11 3.50 2.18 5.19 3.87
after full conversion,
SEK
Consolidated Balance Sheet
SEK m June 30, 2000 Dec 31, 1999 June 30, 1999
Long-term operating assets 3,837 3,947 4,264
Long-term financial assets 473 316 337
Inventories 994 1,387 1,818
Current operating 2,065 2,312 2,446
receivables
Current financial assets 86 207 185
Total assets 7,455 8,169 9,050
Shareholders' equity 3,839 3,776 4,244
Minority interests 46 56 58
Provisions 528 526 485
Long-term financial 310 271 240
liabilities
Current operating 1,580 1,802 1,835
liabilities
Current financial 1,152 1,738 2,188
liabilities
Total liabilities and 7,455 8,169 9,050
shareholders' equity
Key Ratios
Q II Q I-II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Turnover rate
- total capital, 1.22 1.25 1.19 1.21 1.17 1.2
times/year
- working capital, 6.2 4.5 5.8 4.3 4.9 4.7
times/year
Profit margin, % 8.5 5.7 9.3 5.5 7.3 6.3
Return on
- total capital, % 11 8 12 7 10 8
- shareholders' 12 7 13 7 9 7
equity, %
- capital employed, % 16 10 17 9 14 11
Debt/equity ratio 0.3 0.5 0.3 0.5 0.3 0.4
Equity ratio, % 52 48 52 48 52 47
Interest-coverage 11.2 4.9 8.5 4.5 7.0 5.1
ratio, times
Shareholders' equity 54 59 54 59 54 53
per share, SEK
Free cash flow/net 6 9 6 6 10 9
sales, %
Number of shares
71,589,720 71,584,341 71,589,720 71,584,341 71,589,720 71,584,341
Number of shares after full conversion
74,114,341 73,610,991 74,114,341 73,610,991 74,114,341 74,114,341
Cash flow analysis, summary
SEK m Q II Q I-II Most Full
recent year
2000 1999 2000 1999 12 1999
months
Operating earnings 188 159 431 292 790 651
Depreciation 114 131 241 255 497 511
Change in working -67 91 -151 43 139 333
capital
Current investments in -34 -91 -85 -193 -216 -324
fixed assets
Operating cash flow 201 290 436 397 1,210 1,171
Tax related to -60 -50 -138 -93 -253 -208
operating earnings
Free cash flow 141 240 298 304 957 963
Adjustment of tax, 250 6 294 -101 25 -370
financial items and
other items
Cash flow from 391 246 592 203 982 593
operations
Strategic investments -829 -172 -863 -291 -1.154 -582
in plants and company
acquisitions
Effect of Perbio spin- 0 0 562 0 1,078 516
off/divestments
Cash flow before -438 74 291 -88 906 527
dividend
Dividend to -286 -286 -286 -286 -814 -814
shareholders
Net cash flow -724 -212 5 -374 92 -287
Free cash flow per 1.97 3.35 4.16 4.25 13.37 13.45
share, SEK
Net debt at beginning -277 -1,782 -1,597 -1,623 -2,003 -1,623
of period
Net cash flow -724 -212 5 -374 92 -287
Net debt in 0 0 601 0 923 322
acquired/divested
operations
Currency effects -2 -9 -12 -6 -15 -9
Net debt at end of -1,003 -2,003 -1,003 -2,003 -1,003 -1,597
period
Quarterly Data (1998 pro forma)
SEK m 1998 1999 2000
II III IV I II III IV I II
Net sales 2,931 2,5802,346 2,549 2,792 2,544 2,467 2,414 2,215
Cost of goods sold - - - - - - - - -
2,064 1,8161,673 1,830 1,979 1,825 1,723 1,776 1,627
Gross earnings 867 764 673 719 813 719 744 638 588
Sales, -666 -595 -634 -572 -605 -541 -563 -476 -416
administration and
R&D costs
Items affecting 8 23 -35 -15 -48 -37 14 75 0
comparability
Other operating 0 -4 13 -3 -8 -4 20 3 13
revenues and
expenses
Result from 3 8 9 4 7 6 1 3 3
participation in
associated
companies
Operating earnings 212 196 26 133 159 143 216 243 188
Net financial items -38 -18 -25 -14 -23 -38 -25 -13 -14
Earnings before 174 178 1 119 136 105 191 230 174
taxes
Taxes -62 -63 -34 -42 -57 -94 -88 -93 -61
Minority share in 2 1 3 0 2 7 2 3 4
net profit
Earnings after 114 116 -30 77 81 18 105 140 117
taxes
Quarterly Data by division
Net sales 1998 1999 2000
SEK m II III IV I II III IV I II
Perstorp Chemicals 1,152 1,046 1,022 1,0861,060 950 1,061 1,172 1,329
Pergo 830 822 812 852 980 887 908 865 906
Other items -100 -47 -127 -77 -2 -13 -32 -33 -20
including
eliminations
of which Perstorp
Laminatproduktion 172 167 168 182 210 168 201 187 181
Total "Ongoing 1,882 1,821 1,707 1,8612,038 1,824 1,937 2,004 2,215
business"
Perstorp Surface 544 509 502 475 530 479 502 474 0
Materials
Demerged business 505 250 137 213 224 241 28 -64 0
units and
eliminations
Group 2,931 2,580 2,346 2,5492,792 2,544 2,467 2,414 2,215
Quarterly Data by division
Operating earnings 1998 1999 2000
SEK m II III IV I II III IV I II
Perstorp Chemicals 152 158 90 87 89 85 124 120 140
Pergo 28 21 -45 6 66 58 54 38 39
Other items -34 -30 -18 -11 -54 -42 -2 84 9
including
eliminations
of which Perstorp
Laminatproduktion 16 15 16 20 24 19 23 22 16
Total "Ongoing 146 149 27 82 101 101 176 242 188
business"
Perstorp Surface 25 20 -18 17 29 16 34 1 0
Materials
Demerged business 41 27 17 34 29 26 6 0 0
units and
eliminations
Group 212 196 26 133 159 143 216 243 188
Industri Kapital's offer to acquire all of the shares
and convertible debentures in Perstorp AB
The offer raised and extended
On July 3, 2000, Industri Kapital announced that it is extending the
subscription period and has raised its cash offer to holders of shares and
convertible debentures in Perstorp AB.
The new offer extends the subscription period to September 29, 2000, and has
raised the price that will be paid for B shares by SEK 3 to SEK 124 per share
(corresponding to a total of SEK 128 per B share including the dividend of
SEK 4, distributed earlier). The offer to the holders of convertible
debentures is raised by a corresponding amount - that is, by SEK 3, to SEK
128. The bid for Perstorp A shares remains firm at SEK 136 per share
(corresponding to a total of SEK 140 per share including the previously
distributed dividend of SEK 4).
In the announcement, Industri Kapital reported that shareholders representing
65.3% of the capital and 61.8% of the voting rights in Perstorp AB have
accepted or indicated a positive response to the offer.
On the same day, the European Commission also announced that it is
intensifying its investigation into Industri Kapital's acquisition of
Perstorp AB. The in-depth investigation may take up to four months to
complete - that is, until the beginning of November.
Recommendation of the Board of Directors of Perstorp AB
In view of the new terms offered by Industri Kapital and the decision of the
European commission to launch an in-depth investigation into the acquisition
of Perstorp AB, the Board of Directors of Perstorp AB recommends that holders
of shares and convertible debentures in the Company accept Industri Kapital's
new offer.
The factors on which the previous recommendation was based still hold, namely
that:
- The offer represents an attractive opportunity for Perstorp and its
employees to participate actively in the creation of a leading chemical
company based in the Nordic region, and to continue the development of
Pergo's flooring business.
- In the opinion of the Board, the increase in value that Perstorp can
create in the foreseeable future is smaller than that represented by the
offer, due to the limited supply of capital in the Company's current
structure.
Wilhelm Wendt, member of the Board of Directors, did not take part in the
Board's decision regarding the offer with reference to his ownership in
Perstorp Intressenter AB.
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