Year-end release January - December 2000

2/21/2001 10:55 AM EST

YEAR-END RELEASE JANUARY-DECEMBER 2000

BONG STRENGTHENS ITS LEADING POSITION AS
EUROPE'S LARGEST ENVELOPE MANUFACTURER

· TURNOVER INCREASED BY 92 % TO MSEK 2,347 (1,223)

· OPERATING PROFIT ROSE TO MSEK 224 *) (92)

· OPERATING PROFIT FOR THE FOURTH QUARTER INCREASED BY 76 % TO MSEK 44
(25)

· PROFIT AFTER NET FINANCIAL ITEMS IMPROVED TO MSEK 160 *) (75)

· A LETTER OF INTENT WAS SIGNED IN JANUARY 2001 FOR THE ACQUISITION OF
STRONGHOLD GROUP, HOLLAND'S LEADING ENVELOPE COMPANY

· THE BOARD PROPOSES A DIVIDEND OF SEK 3:00 FOR 2000 (2.60)

*) Items affecting comparability positively of MSEK 44 are included.

TURNOVER AND RESULT
Turnover for the January-December 2000 period increased by MSEK 1,124, or
92 %, to MSEK 2,347 (1,223). Of the increase, MSEK 1,106 is attributable
to acquired units and MSEK 45, or 4 %, to organic growth within the
previous Group structure. The effect of currency fluctuations was to
reduce turnover by MSEK 27.

The operating profit (excluding items affecting comparability) increased
by 96 % to MSEK 181 (92). The improvement is largely due to the extremely
good progress made by recently acquired units within the Bauwens Group and
some impact from synergies resulting from this acquisition. Generally firm
demand on the Group's main markets, particularly at the beginning of the
year, also contributed to the successful result. Despite sharp increase
during the year in the price of fine paper, by far the Group's most
important input material, the operating profit improved slightly to 7.7 %
(7.5).
During the fourth quarter the operating profit rose by MSEK 19 to MSEK 44
(25).

The Group's premises in Kristianstad and Nybro were sold to Nordisk
Renting AB for MSEK 130, as one element in the financing of the current
expansion process. The transaction generated a capital gain of MSEK 33
before tax (MSEK 25 after full tax) and is stated, together with the
refund of MSEK 11 in surplus pension funds from the SPP insurance company,
among items of MSEK 44 affecting comparability (0). A long-term leasing
agreement has been reached with Nordisk Renting AB for the continued use
of the premises.

The profit after net financial items (excluding items affecting
comparability) increased by MSEK 41 to MSEK 116 (75), and including items
affecting comparability the profit amounted to MSEK 160 (75). The fourth-
quarter profit after net financial items (excluding items affecting
comparability) amounted to MSEK 29 (20), the twelfth consecutive quarter
in which the pre-tax profit increased in relation to the previous quarter.
Earnings per share after tax and full conversion amounted to SEK 12.44
(7.83) including items affecting comparability, and to SEK 8.65 (7.83)
excluding items affecting comparability. The placement of more than 1.6
million shares in connection with the acquisition of Bauwens made a full
impact during the entire January-December 2000 period.

MARKETS, SALES, PURCHASING
The envelope market in Europe has continued to grow and was strong at the
beginning of the year. Bong further increased its market shares in Great
Britain and Poland, while in the Nordic countries and Germany it
maintained its already strong positions. Markets remained extremely
competitive and prices are still under intense pressure.

For much of the year the market for fine paper, the Group's most important
input material, was more or less overheated. On the basis of firm
underlying demand, paper producers were able to raise their prices sharply
on several occasions. From time to time material was in short supply.
During the first half of the year the Bong Group was more or less able to
offset this by increasing prices to its customers, although after some
delay. During the autumn it became steadily more difficult to raise prices
on certain markets, which led to narrower margins in the fourth quarter.
Paper prices have now stabilised.

COMPANY ACQUISITIONS
The Bauwens group was acquired early in 2000, as a result of which the
Group's turnover almost doubled. Measures to integrate Bauwens with the
other units within the Group are continuing according to plan. The changes
being made to production with the object of streamlining the structure
continued at an intense pace during the autumn. Completed and planned
measures involve the closure of four of the Group's production facilities,
which will reduce the work force by around 100. The earlier estimate of
overall cost reductions in the region of MSEK 40-60 remains unchanged;
they are expected to show through to the full towards the end of 2001. The
effects in 2000 are estimated to have amounted to MSEK 10-12.

An important step in the development of the Group was taken with the
acquisition of Rexam Envelopes in September 2000. Rexam Envelopes is one
of Great Britain's leading envelope companies, with a turnover of some £16
million in 1999 and approximately 140 employees. Following the
acquisition, Bong's aggregate turnover in Great Britain will amount to
some £50 million (approximately MSEK 700), which makes the Group market
leader on Europe's largest envelope market.

Rexam Envelopes is now being successively integrated with Bong's existing
business in Britain. Rexam is expected to make a positive contribution to
the consolidated result in 2001.

Norsk Konvolutt AS (Norkon), which has a turnover of some MNOK 15 and 10
employees, was acquired in November 2000. The acquisition will strengthen
the Group's market position in Norway and is expected to generate
potential for synergies, mainly within production and purchasing.

In January 2001, a letter of intent was signed for the acquisition of
Stronghold Group, a Dutch company that consists of Van Stolk & Reese,
Bramson, Koverto, Autoprint and Mekvale. Stronghold Group is Holland's
leading envelope company with an annual turnover of some MSEK 500 and 350
employees. Stronghold also has extensive sales in Great Britain. Mekvale
is one of England's largest envelope printers, located in London.

The acquisition of Stronghold will strengthen Bong's already good market
position in northern Europe by filling the gap in Holland and
consolidating the position of market leadership in England. The
transaction, which is expected to be finalised in March 2001, is subject
to satisfactory due diligence procedures, a definite acquisition contract,
and the necessary official consents. The acquisition will be paid for in
cash, the initial intention being to finance this by bank borrowing.

In January 2001, Bong finalised an agreement to acquire the envelope
business of Bording Polska through its Polish subsidiary. Bording Polska
distributes and manufactures envelopes for the Polish market and has sales
of some MSEK 5. The acquired business will be co-ordinated with the
Group's existing unit in Poland and further strengthen its position on the
fast growing Polish envelope market.

RIGHTS ISSUE IN 2001
With the object of strengthening the Group's capital base and as one stage
in the financing of the current expansion process, the Board has decided
to recommend the Annual General Meeting to make a rights issue to existing
shareholders. The size of the issue and the detailed conditions are
expected to be agreed and announced around February 28, 2001.

LIQUID FUNDS AND FINANCING
Liquid funds amounted to MSEK 70 (30) at the end of the reporting period.
Net debt amounted to MSEK 1,016 (315), of which some MSEK 700 was incurred
on the acquisition of Bauwens.

At the end of the period, the company's equity amounted to MSEK 675, of
which the issue in connection with the acquisition of Bauwens accounts for
just over MSEK 137 after deduction of issue costs. The closing equity
ratio is 29 % (40) and the debt equity ratio is 1.51 (0.73).

CAPITAL EXPENDITURE
The year's capital expenditure on machinery, equipment and buildings,
excluding the effect of acquisitions, amounted to MSEK 103 (82) and
represents the planned adjustment to a distinctly lower relative level
than has been the case in recent years. MSEK16 of the period's investments
were financed by leasing.

EMPLOYEES
The average number of employees during the year was 1,892 (1,132), of whom
some 750 joined the Group with acquired units.

PARENT COMPANY
The parent company's business consists of the administration of operative
subsidiary companies and the provision of Group management functions.

DIVIDEND
The Board has decided to recommend to the Annual General Meeting that a
dividend of SEK 3:00 per share (2.60) be paid for the 2000 financial year.

PROSPECTS
Given Bong's strong position on Europe's fast growing envelope markets,
together with the expected synergies from the co-ordination of the
acquired units, the outlook for further growth in sales and income is
considered to be quite bright.

ANNUAL GENERAL MEETING
The Annual General Meeting will be held at the company's office on
Uddevägen 3, Kristianstad at 5.00 p.m. on May 9, 2001.

Information concerning the date and venue for the Extraordinary General
Meeting to consider the planned rights issue is expected to be released
around February 28, 2001 together with the issue conditions.

Wuppertal, February 21, 2001

BONG LJUNGDAHL AB
Board

For further information, please contact Lennart Pihl, President and CEO
Telephone: +46 44 20 70 50 or mobile: +46 70 594 68 66

Bong is a fast expanding international envelope company. The Group has an
annual turnover of some MSEK 2,500 and around 1,900 employees. It has an
annual production of some 16 billion envelopes at factories in Sweden,
Denmark, Norway, Finland, Germany, Great Britain, Ireland, Belgium, Poland
and Estonia. In recent years, Bong has played an active part in the
current process of restructuring in the European envelope industry and
sees significant potential for further expansion and development. Bong is
a public company and its shares are listed on the OM Stockholm Stock
Exchange's Attract 40 list.