The Year 1998 • Tandberg Data surpassed MNOK 1000 in year revenue • Tandberg Data surpassed MNOK 100 in revenue for a single month OEM agreements • New OEM agreement with Siemens for deliveries of SLR5 (4/8GB tape drive) • New OEM agreement with Fujitsu/ICL for deliveries of SLR5 (4/8GB tape drive) • IBM expands its OEM agreement to include SLR5 for use in AS/400e servers and systems • New OEM agreement entered into with Acer, for deliveries of SLR32 (MLR1) • IBM expands its OEM agreement to also include SLR50 (MLR3) for use in the AS/400 series • Siemens expands its OEM agreement to include SLR50 • Fujitsu ICL Computers expands its OEM agreement to include SLR50 Partnerships • Agreement entered into with Overland Data for development and manufacturing of SLR automation products. An agreement was also entered into concerning use of the VR2 technology in SLR tape drives • Agreement entered into with Quantum Corporation concerning marketing and licence manufacturing of DLT tape drives • Agreement with ADIC concerning the production of a DLT auto- loader New products • SLR50 25/50 GB (MLR3) tape drive launched • Travan product series expanded through introduction of Tandberg NS20, a 20 GB 3.5” tape drive directed at the SOHO entry level market • Tandberg Data expanded its library range by integrating its SLR50 (50 GB tape drives) in existing library products, thus providing storage capacities of up to 2 TB. • Tandberg Data introduced SLR24 (24 GB tape drive) on 09.07.98. • Tandberg Data introduced DLT4000 and DLT7000, based on Quantum’s DLT technology, on 14.12.98. • Tandberg Data introduced its “Advanced Replacement Service – ARS” for all Tandberg Data products. 1 2 Key Financial Figures 1994–1998 Based on proforma accounting figures for 1994 and 1995 for the Data Storage business Revenues 1998 1997 1996 1995 1994 Operating income NOK mill. 1 020 889 * 829 854 855 Annual growth in operating income % 14.8 3.9 - 2.9 - 0.2 16.7 Export Share % 96.6 97.2 97.7 97.9 97.4 Profit/Loss Operating profit NOK mill. 1.6 66.0 * 49.9 44.0 44.4 Operating profit in % of opr. income % 0.2 7.4 * 6.0 5.2 5.2 Profit before tax NOK mill. - 3.2 70.9 * 42.8 36.7 37.8 Profit before tax in % of opr. income % - 0.3 8.0 * 5.2 4.3 4.4 Profitability Return on total assets 1) % - 0.04 13.4 * 10.3 8.8 9.2 Return on equity 2) % - 0.5 21.3 * 19.6 20.2 24.0 Return on capital employed 3) % - 2.0 18.6 * 14.7 Solvency/Liquidity Total assets accounted for NOK mill. 939 605 499 510 492 Equity NOK mill. 747 411 256 180 157 Equity ratio 4) % 79.6 67.9 51.3 35.3 32.0 Liquidity ratio 1 5) 4.9 3.2 2.8 1.9 1.7 Liquidity ratio 2 6) 3.8 2.1 2.2 1.2 1.1 Operating incomes last 5 years (NOK mill.) Equity 1994-1998 (NOK mill.) Profit before tax 1994-1998 (NOK mill.) 1200 90 800 747 80 1020 700 1000 70.9 889 70 855 854 829 600 800 60 500 411 50 42.8 600 400 40 37.8 36.7 300 256 30 400 180 20 200 157 10 200 100 - 3.2 0 0 0 10 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 Shares** 1998 1997 1996 1995 1994 Earnings per share 7) ** NOK - 0.31 1.53 * 1.25 1.13 1.07 Cash-flow per share 8) ** NOK 0.39 2.21 * 1.94 1.87 1.67 Share capital on 31.12 NOK mill. 116.3 103.5 57.6 55.0 55.0 Market price (Oslo Stock Exchange) ** NOK 26.50 85.00 26.33 7.51 4.55 P/E 9) ** - 84.8 55.5 * 21.1 6.6 4.2 Risk value ** NOK 0.00 1.41 0.33 0.75 0.00 * Adjusted for contribution from sale of Oslo premises corresponding to NOK 49.0 mill., as well as restructuring costs and gua- rantee costs amounting to NOK 30.3 mill. ** Adjusted for split of shares in 4 on 28.04.95 and split in 3 on 14.10.97, as well as demerger of ASK ASA in August 1996. Personnel No. of employees on 31.12 586 640 555 595 584 Salaries and social costs NOK mill. 279 235 226 208 205 Sales revenue per employee 10) NOK 1000 1 741 1 389 1 493 1 435 1 465 1) Return on total assets 4) Equity ratio (Equity on.31/12) x 100 8) Cash-flow per share (Profit before extraordinary items Total assets on 31/12 Profit/Loss for year + ord. deprec., adjusted for + interest costs) x 100 min. interests Average total capital 5) Liquidity ratio 1 Average number of shares Current assets on 31/12 2) Return on equity Current liabilities on 31/12 9) P/E (Profit before extra items) x 100 Market price Average equity 6) Liquidity ratio 2 Profit per share Liquidities + short-term receivables on 31/12 3) Return on capital employed Current liabilities on 31/12 10) Sales revenues per employee (Profit before tax + debt interest) x 100 Sales revenue Average interest-bearing liability and equity 7) Earnings per share Average number of employees Profit/Loss for year adjusted for minority interests Average number of shares Profit before tax in % of operating incomes Equity ratio the last 5 years (%) Share Capital 1994-1998 (NOK mill.) 80 79.6 1200 12% 120 116.3 1020 70 67.9 103.5 1000 889 10% 855 854 829 100 60 800 8% 51.3 50 80 600 6% 40 35.3 60 55.0 55.0 57.6 400 4% 32.0 30 40 200 2% 20 20 0 0% 10 - 200 - 2% 0 0 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 1994 1995 1996 1997 1998 3 An SLR24 24GB tape drive stores just as much data in three hours as a person … writing ten closely-written A4 pages with text every day all year round can produce in 800.000 days, or more than 2190 years •The calculation is based on one A4 page consisting of 3000 letters. 6 Report from the Board Growth in revenues for Tandberg Data in 1998 The company’s cost-effectiveness will be further improved First half-year 1998 was influenced by a weak global market based on a review of all areas of Tandberg Data’s flow of with decline in revenues. Tandberg Data ASA (“Tandberg goods, from raw materials to deliveries of finished products Data”) was positioned for growth in revenues and conse- to customers. The company will deploy the opportunities quently the company’s cost level was too high. The company provided by modern Supply Chain Management, with em- experienced shortfalls in turnover especially during the se- phasis on module-based production. This will lead to a re- cond quarter 1998, and as consequence a negative result. duction on the number of suppliers as well as more effective administration of materials and logistics operations. In order Based on revenue and profit developments for the first half- to maintain competitiveness it is decisive to maintain control year the company initiated activities to increase the revenue over the value-chain. This includes improved supplier con- and reduce the costs. The company decided to increase the trols, shorter lead times, reduced resource consumption and market activities to secure growth in revenues and to reduce a reduction in compulsory savings. the manpower by up to 80 man-years in order to adapt costs and capacity to the expected revenue level. With its SLR product line, Tandberg Data possesses a tech- nology and a set of core skills which are among the world- Second half-year was influenced by the efficiency measures leading technologies within the data storage industry. The the company had initiated immediately. These measures have company will continue to focus on developing its own pro- provided positive revenue, as well as cost and streamlining ef- ducts based on this technology. fects. At the same time, Tandberg Data experienced improve- ments in the market for data storage products. Growth in sa- Profitability restored and financial positioned les during fourth quarter 1998 was 25% compared to fourth strengthened quarter 1997 and 47% compared to second quarter 1998. Tandberg Data restored profitable operations during fourth Growth in revenues during the second half-year led to some de- quarter 1998. In 1998 Tandberg Data’s sales revenues lay in the planned personnel reductions. The company expects amounted to NOK 1.020 mill. compared to a corresponding further effect of these reductions during first quarter 1999. NOK 889 mill. for 1997. This is equivalent to a growth in re- venues of 15%. Sales revenues during the second half-year The operating profit improved significantly in the second increased 27.5% compared to the first half-year 1998. Sales half-year. From a negative operating profit in the second revenues for the first half-year were lower than anticipated, quarter of NOK –18.5 mill., Tandberg Data achieved a posi- mainly due a weak market situation in USA and Asia. The tive operating profit for the fourth quarter of NOK 11.0 mill. company’s market developments during this period were in Profit before tax developed also positively from a loss in the line with developments experienced by our competitors. second quarter of NOK 32.9 mill.