Bong Ljungdahl Ab Interim Report, January - March 2000

5/8/2000 11:18 AM EST

BONG LJUNGDAHL AB
INTERIM REPORT, JANUARY - MARCH 2000

* NET SALES INCREASED TO SKr 629 MILLION (338)
* OPERATING PROFIT MORE THAN DOUBLED TO SKr 63 MILLION (31)
* PROFIT AFTER NET FINANCIAL ITEMS INCREASED BY 77% TO SKr 46 MILLION(26)
* EARNINGS PER SHARE AFTER TAX INCREASED TO Skr 3:55 (2:81)
* EUROPE'S LARGEST ENVELOPE COMPANY FORMED THROUGH ACQUISITION OF BAUWENS

Bong is a rapidly growing, international envelope company. The Group has
annual sales of some SKr 2.5 billion, approximately 1900 employees and an
output of some 15 billion envelopes per year at its units in Sweden,
Denmark, Norway, Finland, Germany, Great Britain, Ireland, Belgium, Poland
and Estonia.

In recent years, Bong has played an active role in the current process of
restructuring in the European envelope industry, where it sees worthwhile
opportunities for further expansion. The acquisition of Bauwens was an
important part of this process, as it means that Bong is now Europe's
leading envelope company.

SALES AND RESULT
The quarter's turnover increased by SKr 291 million to SKr 629 million
(338) as a result of the acquisition of Bauwens. After adjustment for this
acquisition and the effects of currency fluctuations, the increase was
slightly less than 4 per cent.

The Group's operating profit for the first quarter, traditionally a strong
period, more than doubled to SKr 63 million (31). The profit margin was 10
per cent (9). The marked improvement in the result is predominantly due to
the newly acquired units within Bauwens. Generally favourable market
conditions in Europe, as well as continued healthy and stable development
within the envelope units belonging the former Bong Group, also
contributed to the sharp increase in profit.

Profit after net financial items rose by SKr 20 million to SKr 46 million
(26). Currency fluctuations only had a marginal effect on the result.
Earnings per share after tax and full conversion increased by 26 per cent
to SKr 3.55 (2.81), taking into account the full effect of the slightly
more than 1.6 million shares issued in connection with the acquisition of
Bauwens throughout the quarter.

ACQUISITION OF BAUWENS
The acquisition of Bauwens, which has been consolidated with effect from

January 1st , 2000, has created a leading European envelope company with a
strong position on many of the large, northern European markets. A wide-
ranging process of integration has now begun with the aim of benefiting
from synergies estimated at SKr 40-60 million within purchasing,
production co-ordination and capital expenditure. These synergies are
expected to show through gradually as of the second half of 2000, and will
make their full impact towards the end of 2001.

The purchase price, excluding transaction and integration costs, amounts
to some SKr 500 million, of which approximately SKr 355 million was paid
in cash and the rest took the form of an issue of 1,634,651 shares in Bong
Ljungdahl AB to the former owner of Bauwens. The acquisition brought
goodwill of some SKr 300 million onto the books, which will be depreciated
over 20 years.

MARKET AND SALES
The growth of electronic commerce and communication would appear to be
having a positive effect on the volume of mail. Demand was firm on the
Group's principal markets during the first quarter. In the Nordic
countries the market is estimated to have grown by a few percentage
points, and Bong has maintained its strong market position. The rate of
market growth in Germany and England is still rising, reaching 4-5 per
cent in the early weeks of 2000. Bong's new units report a particularly

strong trend, and we estimate that we have raised our market share,
especially in Great Britain.

PRODUCTION AND PURCHASE
In Sweden envelope print-over activities have now been concentrated in
Kristianstad. Binder production has been transferred to Gdansk in Poland
as planned and these activities have been discontinued in Kristianstad.
The structural changes have been carried out without major problems and
within the planned cost budget.

As part of the restructuring in Belgium the envelope print-over capacity
there has been greatly enlarged following the relocation/installation of a
number of printing machines.

The new factory and warehouse in Warsaw were opened in January and local
production is now being steadily raised.

The purchasing price of paper has risen sharply. The Finnish paper
workers' strike and the structural changes caused some loss of production
and limited supply. Price were raised quite sharply on several occasions
during the spring and this trend is expected to continue. We have been
able to offset this by raising our own prices, and expect to be able to
continue doing so in the future.

LIQUID FUNDS AND FINANCING
Closing liquid funds amounted to SKr 73 million (49) and net debt rose by
SKr 686 million to SKr 971 million (285) as a result of the acquisition of
Bauwens.

At the end of the period, equity amounted to SKr 591 million, of which the
share issue in connection with the acquisition accounted for slightly more
than SKr 137 million, after deduction of issue costs. The closing equity
ratio was 27 per cent (39) and the debt-equity ratio was 1.64 (0.65)

CAPITAL EXPENDITURE
Capital expenditure on machinery, equipment and buildings, excluding that
associated with company acquisitions, amounted to SKr 34 million, of which
SKr 10 million was financed by means of leasing.

EMPLOYEES
The average number of employees was 1,873 (1,176). Acquired units
accounted for an increase of 700.

OUTLOOK
The year began with favourable conditions on the Group's main markets, and
our newly acquired units have made very good progress. At present, we see
no signs that demand will slacken, except for normal seasonal
fluctuations. Conditions are such that we can expect further strong growth
in earnings during the year.


Kristianstad, May 8th 2000

BONG LJUNGDAHL AB (publ)

Lennart Pihl
Managing director

This interim report has not been subject to specific examination by the
company's auditors.

Further information may be obtained from Bong Ljungdahl AB's MD and CEO,
Lennart Pihl; telephone (company) +46 44 20 70 00, (direct) +46 44 20 70
50, (mobile phone) +46 70 594 68 66

Next financial reports
Six-monthly report January-June 2000 Thursday, August 17th 2000
Interim report January-September 2000 Friday October 27th 2000


QUARTERLY ACCOUNTS BONG LJUNGDAHL GROUP JAN-MARCH 2000

Jan-MarchJan-March Jan-Dec
SUMMARY PROFIT AND LOSS 2000 1999 1999

Net turnover 628,8 338,2 1 222,9
Operating -559,8 -305,8 -1 123,2
costs
Operating profit before 69,0 32,4 99,7
depreciation of goodwill
Depreciation of goodwill -6,1 -1,9 -7,5
Operating 62,9 30,5 92,2
profit

Net financial items -17,2 -4,7 -17,2

Profit after net financial items 45,7 25,8 75,0

Tax -14,5 -5,6 -18,9
Net profit after tax 31,2 20,2 56,1

SUMMARY BALANCE SHEET 2000-03-31 1999-03-1999-12-31
31
Fixed assets 1 409,2 633,1 681,5
Receivables 382,4 214,2 202,3
Stocks 328,1 185,5 168,9
Liquid funds 72,5 48,7 29,8
Total assets 2 192,2 1 081,5 1 082,5

Equity 591,0 422,3 433,7
Interest-bearing provisions 75,8 78,1 74,8
Non interest-bearing provisions 208,7 85,1 92,1
Interest-bearing liabilities 986,8 261,9 278,8
Non interest-bearing liabilities 329,9 234,1 203,1
Total equity and liablities 2 192,2 1 081,5 1 082,5

Jan-MarchJan-March Jan-Dec
FINANCIAL RATIOS 2000 1999 1999
KRONOR PER SHARE
Earnings after 3,55 2,81 7,83
tax
Equity 68,98 61,19 62,77

RATIOS
Operating margin before 11,0% 9,6% 8,2%
depreciation of goodwill
Operating 10,0% 9,0% 7,5%
margin
Profit margin 7,3% 7,6% 6,1%

Return on 21% 19% 13%
equity
Return on capital employed 15% 16% 12%

Debt-equity 1,64 0,65 0,73
ratio
Equity ratio 27% 39% 40%
Interest cover 3,7 6,1 4,9
Capital 1 653,6 762,3 787,3
employed
Net interest-bearing debt 970,6 284,6 315,8

Average number of shares (after 8 799 4917 164 840 7 164 840
full conversion)
QUARTERLY COMPARISONS GROUP (MSEK)

1/20004/19993/19992/1999 1/1999 4/19983/1998 2/1998 1/1998

Net 628,8 316,6 265,5 302,6 338,2 336,4 228,4 255,3 275,3
turnover
Operating -565,9-292,0-251,0-280,0 -307,7 -312,2-217,6 -247,0 -262,4
costs
Operating 62,9 24,6 14,5 22,6 30,5 24,2 10,8 8,3 12,9
profit

Capital
gain on
sale of
subsidiary - - - - - - - - 7,0
company
Net -17,2 -4,6 -3,7 -4,2 -4,7 -5,3 -3,6 -2,6 -3,9
financial
items
Result 45,7 20,0 10,8 18,4 25,8 18,9 7,2 5,7 16,0
after net
financial
items


CASH FLOW ANALYSIS GROUP (MSEK)

Jan-March Jan-March Jan-Dec
2000 1999 1999
Operating profit 62,9 30,5 92,2
Net financial items -13,7 -4,7 -17,2
Tax paid -14,0 -6,0 -15,2
Depreciation 33,2 16,8 65,1
Other items not affecting 2,6 - -12,7
liquidity
71,0 36,6 112,2

Change in working -12,7 12,4 21,1
capital
Cash flow from current 58,3 49,0 133,3
operations

Capital expenditure -25,2 -21,5 -98,3
Acquisitions -301,3 - -21,8
Cash flow after capital -268,2 27,5 13,2
expenditure etc