Larox Corp, Finland

Larox Corp, Finland

Filtration Industry Analyst March 2004 GL&V, Canada Larox Corp, Finland Key Figures ( million) Year ended 31.12 Key Figures (C$ million) Third qu...

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Filtration Industry Analyst

March 2004

GL&V, Canada

Larox Corp, Finland Key Figures ( million) Year ended 31.12

Key Figures (C$ million) Third quarter ended 31.12 Revenues Of Which: Pulp and Paper Group Process Group Manufacturing Cost of Contracts and Goods Sold

COMPANY WATCH

Gross Margin

2003

2002

145.7

103.7

55.7 96.7 6.0

55.7 54.0 8.7

59.2

Other Income from Business Operations

0.3

0.3

Expenses from Business Operations

50.5

55.6

Operating Profit

4.2

2.3

Profit before Appropriations and Taxes

3.1

0.6

Net Profit

1.6

0.1

Order Backlog

13.8

13.2

Average Number of Personnel

280

314

Return on Invested Capital (%)

10.4

7.0

32.2

8.7

5.2

Earnings Before Income Taxes

4.6

1.7

Net Earnings

3.9

1.3

Nine months ended 31.12 2003

2002

400.9

257.1

156.3 261.7 16.0

167.2 100.0 22.1

Cost of Contracts and Goods Sold

300.8

178.9

Gross Margin

100.1

78.2

EBITDA1

26.0

16.3

Earnings Before Income Taxes

12.9

7.7

Net Earnings

10.4

5.7

1Earnings

before depreciation and amortization, financial expenses and income taxes.

COMMENT

8

56.5

Net Sales

71.5

33.5

For the three months ended 31 December, GL&V posted record quarterly sales of C$145.7 million. The result was up 40.6% over the year earlier figure, although it included a full three-month contribution from Eimco compared to only two months in 2002. Net earnings for the period tripled to C$3.9 million compared to last year, while EBITDA for the quarter rose 69% to C$8.7 million

2002

112.2

EBITDA1

Revenues Of Which: Pulp and Paper Group Process Group Manufacturing

2003

Laurent Verreault, the GL&V president and CEO, said that a year after Eimco’s acquisition the sales and synergy objectives were becoming clearly visible. “The major strategic benefits of that acquisition, the first being to reduce our exposure to the pulp and paper industry, take on their full value in today’s economy,” declared Verreault. ■

COMMENT Larox Corp has reported satisfactory full year results for 2003. While net sales were down 4.6% on the previous year at 56.5 million, the operating profit was up 84% for the period to 4.2 million. The increase in profitability reflected initiatives implemented at the beginning of the year to improve efficiency. These also saw sales per employee rise 6.9% on the 2002 figure to 0.2 million, while the group’s result before extraordinary items, provisions and taxes rose significantly from 0.6 million to 3.1 million. As in previous years, more than 90% of Larox’s net sales were generated by exports and the company’s foreign operations. Europe accounted for 24.7% of the group’s net sales, South America 15.3%, North and Central America 9.4%,

Africa 12.7%, Australasia 11.2% and the rest of Asia 26.7%. The group’s investment for the year totalled 1.4 million, with the majority of the spending going on new test equipment, profilematching equipment, software and other replacement expenditure. Spending on R&D for the year totalled 3.5 million, some 6.2% of net sales. Looking to the future, Larox completed its acquisition of Outokumpu’s filter business for 31 million on 8 January 2004. With the incorporation of this unit, the group has set a net sales target for the current year of 100 million. The merger is also expected to yield annual synergy benefits of approximately 4 million, although these benefits are not expected to be fully realised until 2005. ■