NOTE provides supplementary financial information
Restructuring costs
The EU's eastward expansion, with the removal of trade barriers and the establishment of new component distributors, has made direct sourcing in low-cost countries a practical possibility. Accordingly, in the autumn, NOTE transferred some component sourcing and component management directly to the group's Industrial Plants in Poland and Lithuania, enabling it to relocate the volume production that still takes place in Sweden. The restructuring entailed a redundancy programme of around 200 people in Sweden, which in turn resulted in 187 redundancies. Most of the redundancies will be completed by the end of the first quarter of 2005.
The cost of the Group's restructuring in 2004 was around SEK 30 million. This includes the effects of the relocation of purchasing and production, which has burdened delivery capacity.
Future assessment
Including acquisitions made, the NOTE group's sales are expected to be some SEK 1,600 m in 2005. The recently completed acquisitions in Finland and Estonia are expected to contribute sales of some SEK 90 m in 2005. The acquisition in Skellefteå is expected to contribute sales of approximately SEK 190 m.
The measures implemented mean that NOTE is well positioned for continued growth, and further acquisitions and establishments in Sweden and abroad may be relevant.
Financial objectives
The NOTE group has the following unchanged financial targets for the current three-year period.
- Average organic revenue growth 10 % per year
- Average profit margin (EBT) 6 %
- Average return on equity 18 %
- Solidity 25 - 35 %
- Dividend policy 10 - 15 % for 2004 thereafter one third of net profit after tax
Business model
NOTE's business model is based on supporting product owners in the initial phases of a product cycle (development, prototyping, industrialisation, pre-series) with geographical proximity. This is achieved through strategically located production units (Excellence Plants).
Through a so-called Seamless Transfer, production is moved at a later stage, if necessary, to the Group's low-cost units outside Sweden (so-called Industrial Plants).
For global manufacturing, NOTE offers transfer of production through its own established co-operation alliance (ems-ALLIANCE).
This business model has been well received by the market, and several strategically important contracts with new customers were signed in the autumn. In Sweden, NOTE expanded its presence in central and northern Sweden. Outside Sweden, NOTE established a presence in Finland, the UK and France. To meet increased order bookings, NOTE also strengthened its low-cost production by acquiring a production plant with some 140 employees in Estonia.
For further information, please contact
Erik Stenfors, President and CEO, NOTE AB, +46 (0)176 - 799 01 or +46 (0)709 - 50 80 70
Gunilla Olsson, CFO, NOTE AB, +46 (0)176 - 799 05 or +46 (0)709 - 50 80 71
Annica Johansson, Group Controller, NOTE AB, +46 176 799 07 or +46 708 45 50 54