Year end Report for gglunds Drives Hydraulic drive by liaoqinmei

VIEWS: 4 PAGES: 12

									Year-end Report for 2006
                               2006         •      hägglunds drives




        • New orders rose by 27 per cent to 1 735 MSEK (1366).
        • Net sales amounted to 1 547 MSEK (1 176), up 32 per cent.
        • EBITA rose by 49 per cent to SEK 263 million (176).
        • Net profit was SEK 182 MSEK (116).
        • Continued strong market trend, particularly in Mining and Materials handling,
          Marine and Offshore, Pulp and Paper and Sugar.
        • Growth in all geographical markets, with significant growth in Asia, Australia,
          North America and the Nordic countries.
        • The first deliveries of the high power system Gemini is completed.
        • Large orders on Gemini systems from LKAB in December.



        Net sales                                                Operating profit
  500                                               1 800   90                                               300
                                                    1 600   80
  400                                                                                                        250
                                                    1 400   70
                                                    1 200   60                                               200
  300
                                                    1 000   50
                                                                                                             150
                                                    800     40
  200
                                                    600     30                                               100

  100                                               400     20
                                                                                                             50
                                                    200     10
    0                                               0        0                                               0
          Q3     Q4     Q1     Q2     Q3     Q4                    Q3     Q4     Q1      Q2     Q3     Q4
         2005   2005   2006   2006   2006   2006                  2005   2005   2006    2006   2006   2006

          Net sales, MSEK                                          Operating profit (EBITA), MSEK
          Rolling 12 months                                        Rolling 12 months
	                                     Contents		|
                               Year-end Report | 3
                             Income statement | 6
                                 Balance sheet | 6
    Consolidated statement of changes in equity | 7
                           Cash flow statement | 8
                                    Key figures | 8
                       New orders by segment | 9
                          Net sales by segment | 9
               New orders by geographical area | 10
                Net sales by geographical area | 10
                      Hägglunds Drives in brief | 11




                       Hägglunds Drives   | Year-end Report for 2006 | 2
Hägglunds Drives
Year-end Report for 2006

New	orders,	net	sales	and	market                             the Group’s market position has shown strong develop-
New orders rose by 27 per cent, to 1 735 MSEK (1 366).       ment, along with machinery manufacturers particularly in
During Q4 the new orders rose with 14 per cent to 413        the Nordic countries.
MSEK (362).                                                      During the spring, Hägglunds Drives received three
    Net sales amounted to 1 735 MSEK (1 366) in 2006,        major orders from the Indian sugar industry worth a total
an increase of 27 per cent compared with the previous        of 90 MSEK. This was an important breakthrough in the
year. Exchange rates resulted in no change in sales com-     Indian market. Deliveries of the major US order
pared to previous year. During Q4 the net sales rose with    (70 MSEK) in 2005 were completed during the autumn.
16 per cent to 435 MSEK (375).                               The increased use of sugar cane for ethanol production
    World market demand for raw materials was very           has also contributed to growth.
strong during the year, which combined with high energy          High raw materials prices and increasingly stringent
prices led to a substantial increase in the market for       environmental legislation in Europe and the USA have
Hägglunds Drives’ products. This applied particularly to     had a positive impact on the recycling industry. Environ-
the Group’s raw materials-related operations. Hägglunds      mental awareness is also beginning to be seen in Asia.
is well prepared with our strong application knowledge       The increased use of residual products for energy produc-
within several segments combined with a good geograp-        tion has also stimulated growth.
hical spread which render possible continued growth              The Rubber and Plastics segment focuses on ma-
opportunity.                                                 nufacturing industry and does not benefit to the same
    Demand in the Group’s largest segment, Mining and        extent from the current boom in raw materials markets.
Materials Handling, remains at a high level. This is true    Nevertheless, sales exceeded expectations during the lat-
of both raw materials producing regions, such as Australia   ter part of the year.
and North and South America, and more typical user               Growth in land-based mobile industry was significant,
regions, such as China and North America. In December,       with particularly good sales growth in oil and gas drilling
Hägglunds Drives received three orders worth a total of      in North America.
50 MSEK for which the international minerals group               Sales rose in all the Group’s geographical markets.
LKAB will be the end user.                                   Growth was particularly strong in Asia, Australia, North
    Marine and Offshore operations have been stimula-        America and the Nordic countries. The current growth in
ted by high energy prices, which have led to substantial     the Asian economies, in particular China and India, with
construction of new oil rigs, and by the increase in world   their high industrialisation rate, infrastructure expansion
trade, which has resulted in an expansion and new con-       and increased trade and private consumption, has had a
struction of ports, such as in the Netherlands and China.    positive impact on the Group’s sales.
    Pulp and Paper sales also showed favourable growth,          Market interest in the Group’s new high-power system
which is mainly explained by the extensive construction      Gemini is considerable and the first deliveries were made
of new pulp mills in South America and Asia. Hägglunds       during the autumn. Two of the orders from LKAB in
Drives is currently experiencing a growth phase, in which    December are for Gemini systems, confirming the
                                                             system’s benefits in a number of different application areas.




Net	sales	by	segment,	January-December	2006

n   Mining and materials handling 24%
n   Marine and offshore 16%
n   Pulp and paper 16%
n   Sugar 14%
n   Recycling 11%
n   Rubber and plastics 5%
n   Mobile 5%
n   Other 9%




                                                                                       Hägglunds Drives   | Year-end Report for 2006 | 3
Outlook	for	the	future                                        Export	awards
World market demand for raw materials, metals, mine-          Hägglunds Drives was awarded two prizes during the
rals and energy is expected to remain very strong. As         year. The Export Hermes 2006 prize, which is awarded by
indicated in the latest interim report, our assessment is     the Foundation for Export Growth to the most successful
therefore that the Group will experience ongoing favou-       export company of the year, was presented to the Group
rable development. The results for 2006 also support this     by King Carl XVI Gustaf. Moreover, the Group’s German
assessment.                                                   sales company was nominated Swedish Export Company
                                                              of the Year by the Swedish Chamber of Commerce, the
Sales	organisation	and	production                             Swedish Trade Council and the Embassy of Sweden in
In accordance with Hägglunds Drives’ objective of further     Germany.
strengthening its market presence, particularly in Asia and
North and South America, extensive increases in sales         Financial	targets
resources were implemented during the year. In India,         Our financial targets for the next three-year strategic plan-
the sales network was expanded and staffing increased.        ning period are:
In Peru and Argentina, agreements were signed with two           • Organic growth of 8 per cent per year.
new distributors.                                                • EBITA margin of 20 per cent.
    The after-market – i.e. service, preventive main-
tenance, repairs, installation, spare parts and training      Performance
– accounts for approximately one-third of sales and is a          Operating profit (EBITA) amounted to 263 MSEK,
strategically important part of the Group’s operations.       which is a substantial increase compared with the
Investments in this area include, for example, the con-       previous year’s 176 MSEK. The large rise in profit is
tinuous expansion of workshops worldwide. During the          mainly attributable to increased volumes and a maintai-
year, workshops in China, Italy and Japan were expanded       ned good sales margin as well as high resource utilisation
and relocated to larger and better premises. In October,      in production. The operating margin was 17,0 per cent,
the new headquarters and service workshop opened in           an increase of 2,0 percentage points compared with the
Shanghai. Brand new units were established in Mexico,         previous year. The exchange rate had a negative impact of
Canada and Finland.                                           0,5 percentage points on operating profit. Operating profit
    In order to meet increased market demand, the high        for Q4 rose with 5 per cent to 81 MSEK (77).
investment rate in the production plant continued. It was         Profit after financial items amounted to 254 MSEK
also decided to extend the hydraulics laboratory to further   (171). Net profit amounted to 182 MSEK (116).
improve the Group’s testing and development operations.           The return on capital employed (ROCE) rose to 56,0
Production continued throughout the summer for the first      per cent, a clear improvement compared with 45,2 per
time. The outcome was very positive and the usually           cent the previous year.
fairly weak sales months of July and August showed very
favourable growth. The increase in capacity has at times      Financial	position
led to delivery problems for some of the Group’s supp-        Net debt – the difference between interest-bearing assets
liers. Measures have therefore been taken to establish an     and interest-bearing liabilities – amounted to 131 MSEK
even broader and stronger network of subcontractors.          (145) at the year-end. The equity/assets ratio was 40 per
    Integration of GW Hydraulic, which was acquired in        cent (39) and the debt/equity ratio 0,60 per cent (0,61).
December2005, was carried out according to plan. The              Net financial expense was -8 MSEK (-5). The low
company is an important internal supplier of special units    financial expense is due to the low net debt. The increased
to the Group’s sales companies mainly in Europe.              financial expense compared to previous year is attribu-
    Implementation of the Group’s new business systems        table to the 100 MSEK dividend which was paid to the
continued during the year.                                    owner during the second quarter.


Net	sales	by	geographic	area,	January-December	2006

n Asia/Oceania 30%
n North America 23 %
n Europa exkl Nordic countries 20%
n Nordic countries 21 %
n Other markets 6%




                                                                                        Hägglunds Drives   | Year-end Report for 2006 | 4
Investments                                                   Parent	company
Net investments amounted to 42 MSEK (51), of which            The parent company’s net sales amounted to 940 MSEK
the majority related to expansion investments in produc-      (700) in 2006. Profit after financial items was 146 MSEK
tion equipment and service workshops. Total deprecia-         (118).
tion was 26 MSEK (24). Consolidated surplus values in
intangibles were not amortised.                               Refinancing
                                                              In November 2006, Hägglunds Drives AB recieved a new
Cash	flow                                                     parent company when its owner, Ratos AB, transferred
Cash flow from operating activities amounted to +153          its shareholding in Hägglunds Drives AB to one of its
MSEK, compared with +62 MSEK the previous year.               wholly-owned subsidiaries, Hägglunds Drives Holding
The sharp increase in cash flow is explained by the higher    AB. The transaction released capital to Ratos and contri-
operating profit and better utilisation of working capital.   butes positively to the owner’s return.
The cash flow for Q4 was +16 MSEK, compared with +4
MSEK for last year.                                           Accounting	principles
                                                              The Group has applied International Financial Reporting
Personnel                                                     Standards (IFRS) since 1 January 2005. This interim
The Group had 653 (572) employees at the year-end. The        report for the Group has been prepared in accordance with
increase compared with the previous year is mainly att-       IAS 34, Interim Financial Reporting, which complies with
ributable to the increased recruitment of sales personnel,    the requirements in the Swedish Financial Accounting
service technicians and engineers in the sales companies      Standards Council’s recommendation RR 31, Interim Fi-
and the parent company. In addition, recruitment took         nancial Reporting for Groups. The accounting principles
place to increase the production capacity at the plant in     applied in this interim report are those described in the
Mellansel.                                                    2005 Annual Report in the section Notes to the financial
                                                              statements and in Note 35.




                                                                                       Hägglunds Drives   | Year-end Report for 2006 | 5
Hägglunds	Drives	Group


Income statement
	                                                            Oct-Dec	   Oct-Dec	       Jan-Dec	          Jan-Dec
SEK	000	                                                        2006	      2005	          2006	             2005
	
Net sales                                                     434 854    375 112      1 547 294         1 175 940
Cost of goods sold 1)                                        -242 155   -198 512       -875 209          -657 412
Gross	profit	                                                192	699	   176	600	        672	085	          518	528

Selling expenses 1)                                           -74 159    -55 312       -282 668          -239 254
Administrative expenses 1)                                    -32 150    -38 720       -103 106           -84 704
Research and development costs 1)                              -5 629     -5 362        -23 730           -18 677
Operating	profit	                                             80	761	    77	206	        262	581	          175	893

Financial income                                                  578        128             1 468           1 640
Financial expenses                                             -3 754     -1 781            -9 804          -7 013
Profit	before	tax	                                            77	585	    75	553	        254	245	          170	520

Tax                                                           -16 644    -23 946        -72 636            -54 312
Profit	after	tax	                                             60	941	    51	607	        181	609	          116	208

1) Depreciation on assets included in the Operating profit     -6 339     -8 102        -25 990            -23 660




Balance sheet
SEK	000												                                                         2006-12-31	              2005-12-31	

Assets	                                                                                	
Goodwill                                                                         7 248                     7 248
Other intangible assets                                                         11 161                    13 980
Tangible assets                                                                156 188                   139 053
Financial investments                                                            2 650                     2 650
Non-current receivables                                                          2 828                     3 268

Inventories                                                                    258 325                   240 906

Receivables                                                                    350 465                   296 968
Cash and cash equivalents                                                       32 698                    24 137
Total	assets	                                                                  821	563	                  728	210

Equity	and	liabilities	                                                               	
Equity                                                                         329 244                   282 100

Non-current interest-bearing liabilities                                           70 891                 72 149
Other non-current liabilities                                                           -                    992
Provisions for pensions                                                            70 401                 67 707
Deferred tax liabilities                                                           10 477                  9 052
Total	non-current	liabilities	                                                 151	769	                  149	900
	                                                                                      	                           	
Current interest-bearing liabilities                                            22 137                    28 904
Other                                                                          318 413                   267 306
Total	current	liabilities	                                                     340	550	                  296	210
Total	equity	and	liabilities	                                                  821	563	                  728	210




                                                                              Hägglunds Drives       | Year-end Report for 2006 | 6
Consolidated statement of changes in equity
	                                               																			           			
	                                               	                        	                  	 Retained	earnings
	                                               	                  Share		                  	     incl.	net	profit	               	
SEK	000	                                        	                 capital	          Reserves	       for	the	year	            Total	
	                                               	
Opening equity, 1 January 2005                                        1 000               741             159 426         161 167
Adjustment for changed accounting principle                                           -14 197                             -14 197
Adjusted equity, 1 January 2005                                       1 000           -13 456             159 426         146 970

Change in translation difference for the year                                          12 003                              12 003
Change in hedging reserve for the year                                                  6 919                               6 919
Net profit for the year                                                                                   116 208         116 208
Equity	carried	forward	2005-12-31	                                    1	000	            5	466	            275	634	        282	100




	                                               	                        	                  	 Retained	earnings
	                                               	                  Share		                  	     incl.	net	profit	               	
SEK	000	                                        	                 capital	          Reserves	       for	the	year	            Total	
	                                               	
Opening equity, 1 January 2006                                        1 000             5 466             275 634         282 100

Change in translation difference                                                       -9 391                              -9 391
Change in hedging reserve                                                              -3 834                              -3 834
Net profit for the period                                                                                 181 609         181 609
Dividend                                                                                                 -100 000        -100 000
Group contribution                                                                                        -21 240         -21 240
Equity	carried	forward	2006-12-31	              	                     1	000	           -7	759	            336	003	        329	244




                                                                                                   Hägglunds Drives   | Year-end Report for 2006 | 7
Cash flow statement
	                                                         Q4	           Q4	           Q1-4	               Q1-4
SEK	000	                                                2006	         2005	           2006	               2005
	
Operating activities
Profit before tax                                      77 585       71 833          254 245            170 520
Adjustment for non-cash items                          15 815       15 162           29 576             31 806
Income tax paid                                       -20 009          200          -55 838            -17 884
Cash	flow	from	operating	activities		
before	change	in	working	capital	                      73	391	       87	195	        227	983	           184	442
Change in working capital                             -57 680       -83 549         -75 051           -122 361
Cash	flow	from	operating	activities	                  15	711	         3	646	        152	932	             62	081


Investing	activities	                                           	            	                	
Acquisition of group companies                                      -16 028                             -16 028
Acquisition of other tangible/intangible assets       -19 303       -14 655         -42 395             -35 228
Cash	flow	from	investing	activities	                  -19	303	      -30	683	        -42	395	            -51	256


Financing	activities	                                           	            	                	
Dividend paid                                                                      -100 000
Change in interest-bearing liabilities                 -4 423       14 647              443             -12 459
Cash	flow	from	financing	activities	                   -4	423	      14	647	         -99	557	            -12	459

Cash flow for the period                               -8 015       -12 390          10 980              -1 634

Cash and cash equivalents, opening balance            42 019        36 496           24 137              23 634
Translation difference in cash and cash equivalents   -1 306            31           -2 419               2 137
Cash	and	cash	equivalents,	closing	balance	           32	698	       24	137	          32	698	             24	137




Key figures
SEK	000												                                                      2006-12-31	                2005-12-31

New orders                                                                    1 735 028              1 366 379
Net sales                                                                     1 547 294              1 175 940
EBITA                                                                           262 581                175 893
EBITA margin, %                                                                    17,0                   15,0
Net profit after tax                                                            181 609                116 208
Equity ratio, %                                                                    40,1                   38,7
ROCE, %                                                                            56,0                   45,2
Employees, average number of                                                        638                    548




                                                                          Hägglunds Drives        | Year-end Report for 2006 | 8
New orders by segment
                    Mining and materials handling          Pulp and paper
              600                                    300

              500                                    250

              400                                    200

              300                                    150

              200                                    100

              100                                     50

                0                                      0
                      Q3   Q4   Q1   Q2   Q3   Q4            Q3   Q4   Q1   Q2   Q3   Q4
                     2005 2005 2006 2006 2006 2006          2005 2005 2006 2006 2006 2006

                       Rolling 12 months, MSEK               Rolling 12 months, MSEK




                    Recycling                              Marine and offshore
              250                                    350
                                                     300
              200
                                                     250
              150                                    200

              100                                    150
                                                     100
               50
                                                      50
                0                                      0
                      Q3   Q4   Q1   Q2   Q3   Q4            Q3   Q4   Q1   Q2   Q3   Q4
                     2005 2005 2006 2006 2006 2006          2005 2005 2006 2006 2006 2006

                       Rolling 12 months, MSEK                Rolling 12 months, MSEK




Breakdown of net sales by segment
	                                                    Okt-Dec	        Okt-Dec	           Jan-Dec	         Jan-Dec
SEK	000	                                                2006	           2005	              2006	            2005
	
Mining and materials handling                        100 025          108 978            365 411          333 333
Pulp and paper                                        80 056           42 916            246 403          152 926
Rubber and plastics                                   25 711           19 161             71 964           57 890
Recycling                                             53 128           59 507            166 941          168 056
Sugar                                                 58 022           11 784            222 726           57 507
Mobile                                                24 887           17 941             73 555           48 458
Marine and offshore                                   67 097           69 392            245 755          195 212
Other                                                 25 928           45 433            154 539          162 558
	                                                    434	854	         375	112	          1	547	294	      1	175	940




                                                                              Hägglunds Drives       | Year-end Report for 2006 | 9
New orders by geographical area
                    Nordic countries                       Europe excl. Nordic countries
              400                                    400
              350                                    350
              300                                    300
              250                                    250
              200                                    200
              150                                    150
              100                                    100
               50                                    50
                0                                      0
                      Q3   Q4   Q1   Q2   Q3   Q4            Q3   Q4   Q1   Q2   Q3   Q4
                     2005 2005 2006 2006 2006 2006          2005 2005 2006 2006 2006 2006

                       Rolling 12 months, MSEK               Rolling 12 months, MSEK




                    North Amerika                          Asia/Oceania
              500                                    700
                                                     600
              400
                                                     500
              300                                    400

              200                                    300
                                                     200
              100
                                                     100
                0                                     0
                      Q3   Q4   Q1   Q2   Q3   Q4            Q3   Q4   Q1   Q2   Q3   Q4
                     2005 2005 2006 2006 2006 2006          2005 2005 2006 2006 2006 2006

                       Rolling 12 months, MSEK                Rolling 12 months, MSEK




Breakdown of net sales by geographical area
	                                                    Oct-Dec	        Oct-Dec	           Jan-Dec	         Jan-Dec
SEK	000	                                                2006	           2005	              2006	            2005
	
Nordic countries                                      43 998           64 130            269 182         235 455
Europe excl. Nordic countries                         92 651           87 539            318 931         281 726
North America                                         77 585           74 607            354 249         218 368
Asia/Oceania                                         189 910          125 150            502 464         357 972
Other markets                                         30 710           23 686            102 468          82 419
	                                                    434	854	         375	112	          1	547	294	      1	175	940




                                                                            Hägglunds Drives       | Year-end Report for 2006 | 10
 Hägglunds Drives in brief

Hägglunds Drives is a global leader in the hydraulic            Financial	reporting	for	2007
motors and drive systems niche.                                 Interim report to 31 March, 9 May 2007
    The Group develops, manufactures and markets                Interim report to 30 June, 21 August 2007
system solutions for high torque, low speed and variable        Interim report to 30 September, 9 November 2007
speed applications. Drive systems are used in a wide            Year-end report for 2007, February 2008
range of industries, such as mining and materials hand-
ling, recycling, marine and offshore, pulp and paper,           Mellansel, 22 February 2007
rubber and plastic, sugar and mobile industry.                  Board of Directors, Hägglunds Drives AB
    Hägglunds Drives has 700 employees. Turnover for
2006 was 1 547 MSEK, with an operating profit of 263            This report has not been reviewed by Hägglunds Drives’
MSEK. Production is located in Mellansel, Sweden and            auditors.
Columbus, Ohio, USA. The Group has subsidiaries in 16
countries with personnel in over 20 countries with ap-          For further information please contact:
proximately 50 sales- and service offices.                      Per Nordgren, CEO
    In addition, there are distributors in around 20 countri-   Tel: +46 660 870 01
es. The largest geographical markets are Europe, Asia,          Email: per.nordgren@se.hagglunds.com
Australia and North America.                                    For more information visit: www.hagglunds.com
    Hägglunds Drives is owned by the private equity
company Ratos, which is listed on Stockholmsbörsen’s
Large Cap list.




                                                                                       Hägglunds Drives   | Year-end Report for 2006 | 11
Hägglunds Drives AB
SE-890 42 Mellansel, Sweden
Telephone: +46 660 870 00
Fax +46 660 871 60
Reg. no. 556305-6042
www.hagglunds.com             Our	drive	is	your	performance.
                                Hägglunds Drives   | Year-end Report for 2006 | 12

								
To top