Key figures 3. The Glamox Group 4. Summary of the business areas 6. The board of directors annual report 10. Profit and loss account 16

Transcription

1 Annual report 2006

2 Glamox is a Norwegian industrial group that develops, produces and distributes professional lighting solutions for the global market. Glamox consists of a group of companies with operations in several European countries, as well as Asia, the USA and Canada. The Group is organised with Glamox ASA as the parent company. Operations are divided between two independent business areas: European Professional Lighting and Global Marine & Offshore. Each business area is responsible for its group of companies. Innhold Key figures 3 The Glamox Group 4 Summary of the business areas 6 The board of directors annual report 10 Profit and loss account 16 Cash flow statement 17 Balance sheet 18 Notes 20 Auditors report 36 Key figures 37 Addresses 38 2 GLAMOX

3 Main points Good profit improvement. Profit before taxes of 86.5 MNOK against 48.0 MNOK in Increase in sales revenue of 9.3% before profit from sale of land. Several new product families introduced during the year. Continued high level of investment in modernising and automating the production facilities. 11 MNOK profit from sale of part of the estate in Molde. 15 MNOK allocated for one-off staff bonuses. Key figures Total revenue MNOK Operating profit/loss MNOK Profit/loss before tax MNOK Profit/loss after tax MNOK Cash flow from operations MNOK Total profitability % Equity ratio % Earnings per share NOK Diluted earnings per share NOK

4 the lighting company European Professional Lighting Office and commercial buildings Industrial buildings Educational establishments Health institutions Retail and shopping centres Hotels and restaurants Global Marine & Offshore Commercial marine Cruise & ferries Oil & gas Recreational boats Navy Commercial land The business area European Professional Lighting European Professional Lighting concentrates on the European market for land-based lighting. The business area offers the market total Glamox. A leading European illumination brand for professional markets, offices and industry, onshore and offshore. Has been on the market for 60 years. solutions in several lighting concepts, such as office and commercial buildings, industrial buildings, educational establishments, retail and shopping centres, hotels and restaurants and health institutions. The business area Global Marine & Offshore Aqua Signal. The world leader brand name for marine lighting. Has been on the market for almost 140 years. Produced in Germany. Sold globally. Global Marine & Offshore is one of the world s leading suppliers of light fittings to the global marine and offshore market. The business area offers the market total solutions in the following segments: commercial marine, cruise & ferries, oil & gas, recreational boats, navy and commercial land (outside Europe). Norselight. Manufactures highly specialised search light, floodlight and special applications for the marine market. A high quality brand name. Its history goes back 80 years. Høvik Lys. Established more than 130 years ago, one of the oldest brands in its field world wide. Specialises in luxurious design and customised solutions.

5 the lighting company Glamox Group President & CEO Kjell Stamnes Global Marine & Offshore Jan Berner Senior Vice President Accounting, finance, HR & IT Thomas Lindberg CFO European Professional Lighting Kjell Stamnes Sales Units Production Units Sales Units Production Units Glamox International Norway Aqua Signal AG Bremen - Germany Glamox Norge Norway Glamox Fabrikker Molde - Norway Aqua Signal AG Germany Aqua Signal Teterow GmbH & Co KG Tetrow - Germany Glamox Elektro AB Sweden AS Glamox HE Keila - Estonia Aqua Signal Corp. USA Norselight AS Halden - Norway Glamox A/S Denmark Høvik Lys Produksjon Halden - Norway Glamox Far East Pte. Ltd. Singapore Mariteam Lighting Inc. Canada Glamox Marketing OY Finland Mariteam Lighting Inc. Canada Glamox (Suzhou) Lighting Co. Ltd Suzhou - China AS Glamox HE Estonia Høvik Marine Lighting Norway Glamox Licht GmBH Germany Norselight AS Norway Glamox Ireland Ltd. Ireland Glamox (Suzhou) Lighting Co. Ltd Suzhou - China Glamox Electric Ltd. United Kingdom Revenues by market: MNOK Man-years (average) by market: 982 Norway Norway Nordic Reg. ex. Nor. Nordic Region ex. Nor. Europe ex. Nordic Reg. Europe ex. Nordic Reg. North America North America Asia Asia Other countries

6 Summary of the business areas EUROPEAN PROFESSIONAL LIGHTING (EPL) European Professional Lighting (EPL) is organised as an independent business area within the Glamox Group, with total control over budgets and results. EPL focuses on lighting solutions for land-based market segments in Europe. In some markets, EPL also markets and sells Glamox Heating electric heaters produced by Adax in Norway. EPL has its own sales organisations in Norway, Sweden, Denmark, Finland, Estonia, UK, Ireland and Germany. Elsewhere in Europe, EPL and its products are represented through distributors. EPL has production facilities in Norway and Estonia. The business area has two brand names: Glamox and Høvik Lys. At year-end 2006, EPL reported 612 manlabour years. 32% of the employees are employed in companies outside Norway, and 48% of the turnover is generated abroad. Key figures Operating income NOK mill Operating result NOK mill * Operating margin % *) Before balance sheet write-downs, restructuring costs and other extraordinary costs EPL delivers a broad range of complete lighting solutions to various markets and market segments. Prioritised market segments are office and commercial buildings, industrial buildings and educational establishments, and health institutions in certain markets. Complete lighting solutions are also delivered to hotels, retail and shopping centres and outdoor lighting. Glamox is the market leader in professional lighting in Norway and has good market positions in the other Nordic countries and Estonia. EPL serves all important links in the sales and distribution chain aimed at architects,

7 summary of the business areas consultants, developers, building contractors and installation contractors. The business area selects a distribution model to suit the individual market structure. In Norway, Sweden and Finland the majority of sales are through wholesalers, while in the other markets most sales are made direct to installation contractors, building contractors or the end-user. In all markets there is strong focus on cultivating architects and consultants in order to be included in project specifications. The development in our main European markets was varied, but in general showed a slight growth in 2006 compared with the previous year. However, the picture becomes more nuanced when each market is analysed individually. All our markets are characterised by strong competition and pressure on prices. We generally expect our markets to show further marginal growth in Throughout 2005 and 2006, EPL has reinforced its sales organisations in several markets in order to strengthen the marketing effort, level of activity and market position even further. EPL saw a further improvement in profitability in 2006 as a result of higher sales and good development in gross margins. In recent years the business area has implemented a series of measures in order to improve profitability. These measures have resulted in a reduction in the workforce at the same time as volumes have increased. We have also launched a considerable number of new products in recent years. In 2006 we launched among other products several new families in the industrial segment, which is one of our priority areas. At the beginning of 2007 our D20 downlight series won the Norwegian Design Council s Award for Design Excellence. Roughly 45% of EPL s turnover in 2006 in own-produced lighting came from products launched within the last four years. The level of investment remained high in The main focus has been on product development and capacity-increasing schemes, including investments in automating and improving the efficiency of our production processes. The same level of investment will be maintained in 2007.

8 summary of the business areas GLOBAL MARINE & OFFSHORE (GMO) Global Marine & Offshore is organised as an independent business area within the Glamox Group, and has total control over budgets and results. Global Marine & Offshore is among the world s leading suppliers of light fittings and lighting solutions to the global marine and offshore markets. The business area has four strong international brand names: aqua signal, Glamox, Høvik Lys and Norselight. Global Marine & Offshore has production units in Norway, Germany, China and Canada. The business area is represented globally through its own sales companies, agents and distributors, and has sales units in Norway, Germany, UK, Finland, Singapore, China, USA and Canada. At year-end 2006, Global Marine & Offshore reported 400 man-labour years. 85% of the workforce is employed outside Norway, and 86% of the turnover is generated abroad. Key figures Operating income NOK mill Operating result NOK mill * 14.5* Operating margin % *) Before balance sheet write downs, restructuring costs and other extraordinary costs Global Marine & Offshore (GMO) operates in the following segments: Commercial marine, cruise & ferries, oil & gas, recreational boats, naval marine and in regions outside Europe also commercial land projects. The business area is a leading global player in the commercial marine and cruise & ferries segments, and has a strong market position in the recreational boat segments in Europe and USA. In oil and gas, GMO has strong positions in Norway, UK, Singapore and several other countries.

9 summary of the business areas Global Marine & Offshore has a market model that enables it to serve all important sales and distribution channels aimed at shipyards, shipping companies, architects, consultants and installation contractors. GMO encounters regional competitors in the majority of countries in which it operates. In the global market there are only three or four competitors capable of offering comparable solutions. This applies in particular to the oil and gas segment. The market for Global Marine & Offshore is generally good. There continues to be a high level of activity in the building of new merchant ships, as well as increased activity in cruise & ferries and oil & gas segments. The high level of new building activity is expected to continue in the years ahead. But while this will result in increased demand for lighting solutions, the business area continues to experience increased competition and price press in several markets. greatest growth geographically has been in Southeast Asia and Korea. The total order intake in 2006 was 21% higher than in the previous year. Global Marine & Offshore increased its operating income by 14% in 2006, with an operating profit of 37.0 MNOK against 18.5 MNOK in The demand for lighting solutions is expected to grow in 2007 as a result of the majority of shipyards having full order books and a high level of activity. The high level of new building activity is expected to continue over the next couple of years. There is focus on strengthening the organisation in order to secure further growth. We plan to increase our efforts in the oil & gas segment. We will strengthen our marketing activity, with particular emphasis on having a greater market presence in China. Photo: Harald M. Valderhaug. Global Marine & Offshore experienced growth in order intake in all segments and in the majority of regions in The greatest growth occurred in the commercial marine and oil & gas segments. The Developing new products will increase. This will reinforce our competitiveness in the years ahead. We will to a greater extent use our own production facility in China for the export of products. Photo: Harald M. Valderhaug.

10 Annual Report MAIN POINTS AND KEY FIGURES Good profit improvement. Profit before taxes of 86.5 MNOK against 48.0 MNOK in Increase in sales revenue of 9.3% before profit from sale of land. Several new product families introduced during the year. Continued high level of investment in modernising and automating the production facilities. 11 MNOK profit from sale of part of the estate in Molde. 15 MNOK allocated to staff bonuses. 10

11 annual report Ulsteinkonsernet. In 2006 the Group had an order intake of 1,458 MNOK, compared with 1,249 MNOK in 2005, an increase of 17%. flow, i.e. before financial activities, was positive and ended at 53.2 MNOK (-8.6 MNOK). The sales revenue was 1,353 MNOK against 1,228 MNOK in 2005, an increase of 10.2%. When corrected for the sale of part of the company estate in Molde, the increase is 9.3%. The operating profit was MNOK against 70.3 MNOK in Net profit before tax and ordinary items was 86.5 MNOK, compared with 48.0 MNOK the year before. The improvement is due to higher sales volume combined with a lower cost ratio and lower net financial costs. Profit after tax was 89.4 MNOK against 47.2 MNOK in As of the Group had 205 MNOK in net deficit to be carried forward. In 2006, the Group continued to focus on good asset-liability management. Together with a considerable improvement in results, this has contributed to a good cash flow from business activities. The operating cash The liquidity reserve was MNOK (210 MNOK) at year-end. The parent company, Glamox ASA, had a sales revenue of 803 MNOK, compared with 719 MNOK in The operating profit was 56.4 MNOK (44.8 MNOK). Net profit before tax was 48.2 MNOK (31.4 MNOK). The Board had anticipated further improvement in profitability in last year s annual report, and this goal has been reached with good margin. In acknowledgement of the good results that have been achieved, the Board has decided to give a one-off bonus to all employees in the Group. To this end, the accounts for 2006 are debited with 15 MNOK. The Board is very satisfied with the improvement in results and wishes to thank the entire workforce for the substantial effort made in

12 annual report 12 RESULT IMPROVEMENT MEASURES The Group has now had five consecutive years with result improvements. The Board and management will continue to give priority to improving performance even further. Efforts to increase the sales revenue in both business areas will continue. This will be in the form of further expansion of the sales force and improved quality in the sales function. We will also continue investing in product development. In 2006 we launched several new products. Efforts to improve the competitiveness in our products continued throughout 2006 with, among other things, investments in the automation and modernisation of plant and machinery. We have also implemented a number of schemes to increase purchases from low-cost countries, as well as moving the production of some of our products to Estonia and China. We continue to focus on level-headed cost management and good asset-liability management. CAPITAL AND LIQUIDITY As at , the balance sheet stood at 867 MNOK, compared to 785 MNOK the year before. By year-end, equity capital including minority interests and subordinated loan amounted to 292 MNOK, which corresponds to an equity ratio of 34 %. The cash flow from operating activities, but before financial activities, was 53.2 MNOK in 2006, against minus 8.6 MNOK the year before. At year-end the liquidity reserve was 190 MNOK, against 210 MNOK the year before. In 2006 the Group has renegotiated the greater part of its long-term loans and short-term credit limits. This has generally resulted in a more optimal mix of external finance and lower financial costs. Based on the Group s needs, the shortterm limits have been set lower, and have been reduced by a total of 40.0 MNOK. The liquidity reserve is regarded as satisfactory. As at , the Group had a net interest-bearing debt of MNOK. In relation to the operating result before depreciation of MNOK, this gives a ratio of 1.5. By year-end, 96.6% of the convertible subordinated loan of 50 MNOK had been converted. The share capital in the period increased from 15,050,391 NOK to 64,180,928 NOK. In 2006, ordinary investments amounted to 45.3 MNOK. In 2005, ordinary investments amounted to 146 MNOK, whereof MNOK was used to repurchase the production facility in Molde. The accounts are drawn up on the basis of the company as a going concern. FINANCIAL RISK The company is exposed to credit risk, interest risk and currency risk in its day-today business activity and the Board aims to keep this risk at an acceptable level. Refer to Note 17 to the Annual Accounts for further information. BUSINESS AREA performance European Professional Lighting (EPL) The EPL business area had an order intake of 779 MNOK (691 MNOK), an increase of 13%. The sales revenue was 747 MNOK (706 MNOK), an increase of 6%. The lighting markets in the countries where EPL operates where in sum somewhat better than in However, the development in the individual countries remains varied. The markets in Norway and Finland show stagnation or a slight decline, whereas the other main markets showed growth in Following many years of decline, the German market is now showing positive growth. We estimate that we have increased our market share in several countries. The entire increase in sales revenue in this business area has occurred outside Norway. EPL continued to show improved results in

13 annual report 2006, as it did in Long-term investment in product development, strengthening and professionalizing of the sales apparatus, continuous efficiency improvement of the production units and good cost management are important reasons for the good result improvements that this business area has experienced in recent years. With production in Norway being highly export-oriented, stable exchange rates and moderate wage settlement are important elements in maintaining competitiveness. EPL had an operating profit of 68.5 MNOK (9.2%) against 56.0 MNOK (7.9%) in 2005 Global Marine & Offshore (GMO) The GMO business area had an order intake in 2006 of 679 MNOK (558 MNOK), an increase of 22%. The turnover was 595 MNOK (522 MNOK), an increase of 14%. The global market for GMO has been good throughout There was high activity in new buildings in the commercial marine (merchant ships) segment and in the cruise & ferry segment. There has also been high activity in oil & gas. Despite this buoyant market situation, GMO has experienced considerable price press in We have also had to suffer higher raw material prices, something which we have found difficult to offset through increasing our prices. We have experienced good growth in all our segments, particularly in oil & gas. The leisure boat segment, another important segment for us, has generally followed the same trend as in Even though on a regional basis we have experienced the strongest growth in orders in Asia, it still remains one of GMO s biggest challenges to increase our market shares in the Far East. We have achieved a considerable improvement in results in this business area. This is due to good growth in sales, without any corresponding increase in costs. In 2006, GMO had an operating profit of 37.0 MNOK (6.2%) against 18.5 MNOK (3.6%) before extraordinary write-downs in GLAMOX AND THE EXTERNAL ENVIRONMENT Through planning and long-term effort, Glamox aims to position itself as a company that prides itself in protecting the environment. This is also part of the Group s business concept. The Group s production units in Møre og Romsdal (Norway) and Germany are certified according to EN ISO The facilities satisfy the strictest criteria for environmental control and are obliged to document an effective environmental control system. In 2006, the company continued its efforts to reduce the use of hazardous chemicals and replace the most hazardous products with more environmentally friendly products. Glamox is the market leader in offering solutions in connection with the removal of PCB-bearing light products. Environmental aspects are an important part of our product development strategy. This applies to both the manufacture of environmentally friendly products for the market and reducing the use of materials in the products. Photo: Aker/Aker Kværner 13

14 annual report HUMAN RESOURCES AND WORKING ENVIRONMENT The Group reported 1,035 man-labour years by year-end 2006, against 923 in Glamox ASA reported 464 man-labour years, against 366 in The working environment in the Group s units is satisfactory, and cooperation with workers representatives is good. Absence due to sickness in Glamox ASA in 2006 was 6.2% compared with 7.0% the year before. Despite the improvement, the amount of sick leave in Norway is too high. Reducing the amount of sick leave is always on the agenda. Absence due to sickness in the other units in the Group is generally at an acceptable level. Glamox ASA had five reported injuries resulting in days off in 2006 compared with seven the year before. The H-value in 2006 was 8.3 against 13.9 in H-value is a defined standard measure for the frequency of injury in a company. Focus on a safe working environment will continue with undiminished strength in The number of reported injuries in the Group s other units was minimal in REPORT ON GENDER EQUALITY Glamox ASA had a total of 491 employees by year-end The proportion of women was 31%. The proportion of women working in the production facilities was 38%. The proportion of female office staff was 20%. The proportion of females in line management positions was 7%. Company policy is that same skills and length of service are rewarded on an equal basis regardless of gender. Women and men in all job categories have an equal opportunity to qualify for any type of task and promotion prospects. The proportion of female board members is 33%. 14

15 annual report ORGANISATION Høvik Marine Lighting AS and Høvik Professional Lighting AS were merged into Glamox ASA in 2006 with accounting effect from 1 January GLAMOX 60 YEARS Glamox was founded on 22 February Originally called L/L Maskin El., the company was established in Trondheim by Birger Hatlebakk. The company s 60th anniversary will be marked in various ways, primarily through market activities, but also through some events for the workforce. FEES AND REMUNERATIONS Refer to note 5 in the Annual Accounts for details of fees and remuneration to board members, executives and the auditor SHAREHOLDERS Refer to note 11 in the Annual Accounts for information about the shareholder situation PROPOSAL FOR ALLOCATION OF PROFIT The Board proposes that the profit for the year in Glamox ASA of TNOK 59,286 is conveyed in its entirety to other equity. OUTLOOK The Board anticipates a continued good market situation in For 2007 as a whole, the Board expects the company to perform at least on a par with the performance in Oslo, 27 February 2007 Bjørn Arnestad Chairman of the Board Ralph Høibakk Thorleif Kristiansen Jørn Inge Løvik Eyvin M. Olsen Heidi Marie Petersen Mette Smisetfoss Marianne Ulrichsen Sverre Valvik Kjell Stamnes Chief Executive 15

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38 Glamox ASA Sandakerveien 138 P.O. Box 4253 Nydalen N Oslo Tel Fax EUROPEAN PROFESSIONAL LIGHTING Sales Companies Norway Glamox Norge - Oslo Tel Fax Sweden Glamox Elektro AB - Stockholm Tel Fax info.se@glamox.com Denmark Glamox A/S - Ishøj Tel Fax info.dk@glamox.com Finland Glamox Marketing OY - Vantaa Tel Fax info.fi@glamox.com The Baltic States AS Glamox HE - Tallinn Tel Fax info.es@glamox.com Germany Glamox Licht GmbH - Bremen Tel Fax info.de@glamox.com United Kingdom Glamox Electric Ltd - Northamton Tel Fax info.uk@glamox.com Ireland Glamox Ireland Ltd. - Dublin Tel Fax info.ie@glamox.com Production Plants Norway Glamox Fabrikker, Molde Tel Fax Høvik Lys Produksjon, Halden Tel Fax Estonia AS Glamox HE, Keila Tel Fax GLOBAL MARINE & OFFSHORE Sales Companies Germany Aqua Signal AG, Bremen Tel Fax info@aquasignal.de USA Aqua Signal Corporation, Cary, Illinois Tel Fax aquasignal@aquasignal.net Norway Glamox International, Molde Tel Fax info.gi@glamox.com Høvik Marine Lighting, Halden Tel Fax marine@hoviklys.com Norselight AS, Halden Tel Fax office@norselight.no Singapore Glamox Far East Pte. Ltd. Tel Fax gfe1026@singnet.com.sg China Glamox (Suzhou) Lighting Co. Ltd., Suzhou Tel Fax glamox@public1.sz.js.cn Canada Mariteam Lighting Inc., New Foundland Tel Fax info@mariteam.com Production Plants Germany Aqua Signal AG, Bremen & Teterow Tel Fax Norway Norselight AS, Halden Tel Fax Canada Mariteam Lighting Inc. New Foundland Tel Fax China Glamox (Suzhou) Lighting Co. Ltd., Suzhou Tel Fax

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40 L I G H T Y E A R S Glamox ASA Sandakerveien 138 P.O. Box 4253 Nydalen N Oslo Tel Fax