6-K 1 y48617e6-k.txt NERA ASA 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ------- FORM 6-K REPORT OF FOREIGN ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For 1st Quarter 2001 Results NERA ASA Kokstadveien 23, P.O. Box 7090 N-5020 BERGEN Norway Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark whether the registrant by furnishing the information continued in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised. NERA ASA By: Bjorn Ove Skjeie (sign.) Name: Bjorn Ove Skjeie Title: President and Chief Operating Officer Dated: May 3, 2001 3 [NERA LOGO] -------------------------------------------------------------------------------- NERA ASA Postal Address P.O. Box 7090, N-5020 BERGEN, Norway, PRESS RELEASE, 3 May 2001 Office Address Kokstadvn. 23, BERGEN, Norway, Tel.No. +47 55 22 51 00 Fax.No. +47 55 22 52 99 Head Office Nera ASA, 5020 BERGEN Register of Business Enterprises NO 944 536 949 MVA ( NERAY ) NERA ASA PRESENTS RESULTS FOR THE FIRST QUARTER 2001 Bergen/Norway, 3 May 2001; NERA ASA (OSE: NER, NASDAQ: NERAY) CONTINUES ITS GROWTH, EXPERIENCING CONTINUED STRONG GROWTH FOR TRANSMISSION NETWORKS. NEW ORDERS FOR THE COMPANY IN THE FIRST QUARTER OF 2001 WERE 703 MNOK, AN INCREASE OF 19% COMPARED TO THE SAME PERIOD LAST YEAR. OPERATING REVENUE INCREASED TO 724 MNOK FROM 615 MNOK AND OPERATING MARGINS WERE 8,5% AND 10,3% FOR TRANSMISSION NETWORKS AND MOBILE SATELLITE COMMUNICATION RESPECTIVELY. THE COMPANY HAS DURING THE FIRST QUARTER OF 2001 CONTINUED ITS FOCUS ON NEW TECHNOLOGY AND MARKET DEVELOPMENT WHILE AT THE SAME TIME TURMOIL IN THE GLOBAL ECONOMY HAS CAUSED DELAYED DEVELOPMENT OF THE MARKET FOR WIRELESS BROADBAND ACCESS BUSINESS. THIS WILL HAVE CONSEQUENCES FOR THE COMPANY'S FUTURE PLANS FOR BROADBAND ACCESS ACTIVITY. - Operating income Q1: -9,4 MNOK (50,1 MNOK) - Income before tax Q1: 21,3 MNOK (62,7 MNOK) - Transmission Networks booked new orders of 503 MNOK, a 37% increase compared to Q1 2000. - Mobile Satellite Communication experienced steady business as expected. - Wireless Broadband Access costs were as expected.

* Wireless Broadband Access - These results are in accordance with the goals set by ourselves and have been achieved in a period which has been challenging due to the global economic turbulence, says Bjorn Ove Skjeie, CEO of Nera, and continues; - The first quarter has been a positive period for Nera despite the international turbulence, with positive developments for the Transmission Networks business providing a basis for optimism. The changes caused by the economic turbulence are monitored closely, especially our costs as well as less optimistic 4 [NERA LOGO] -------------------------------------------------------------------------------- market opportunities for Wireless Broadband Access in the short term. We are prepared to make necessary adjustments, but this will not alter our goal of becoming a leading company within wireless communication. To achieve this we have to also improve our production capacity and deliverability, says Skjeie. STRONG GROWTH WITHIN TRANSMISSION NETWORKS The business area Transmission Networks booked 503 MNOK of new orders in the first quarter, an increase of 37% compared to the same period last year. This reinforces the strong trend from the last quarter of year 2000, and the prospects for the second quarter are also considered good. Sales within Transmission Networks was 559 MNOK for the quarter, compared to 376 MNOK last year with demand for traditional products being strongest. The strength of the new orders reaffirms the positive trend from the last quarter last year, with prospects for the second quarter 2001 considered good. New orders and sales to South East Asia, Africa and South America have been particularly strong. Operating income for the quarter was 47,3 MNOK, an increase of 19,9 MNOK or 73% compared to the same period last year. Nera is pleased to maintain an operating margin in the margin range set as a goal for this business segment, while at the same time seeing a significant growth in the business segment. Operating margin for the quarter was 8,5% compared to 7,3% for the same period last year. STABLE AND PROFITABLE BUSINESS WITHIN MOBILE SATELLITE COMMUNICATION. Nera booked 199 MNOK new orders within Mobile Satellite Communication during the quarter, up 4% on the same period last year. Market developments during the first quarter confirmed Nera's expectation of a stable business situation in 2001 for this business segment, although somewhat sensitive to the development of the global economic situation. Mobile Satellite Communication achieved sales of 155 MNOK in the quarter which is lower than for the same period last year but similar to sales in the fourth quarter year 2000. Nera also strengthened its position as a leading supplier of earth stations within the Inmarsat system by winning several new earth stations contracts. Operating income for the first three months of the year was 15,9 MNOK with an operating margin of 10,3% for Mobile Satellite Communication. The company is pleased that the business segment maintains its profitability, achieving a double digit operating margin. WIRELESS BROADBAND ACCESS (WBA) IS WAITING ON MARKED DEMAND. The development of Nera's new business segment Wireless Broadband Access (WBA) has continued. WBA had 12 MNOK sales in the first quarter, with a operating loss of 68,3 MNOK, which is in accordance with expectations. The company has during the quarter continued development of the DVB-RCS products in cooperation with EUTELSAT, and the test system for the `Wireless local loop' product Velocity in the US has had its functionality expanded. However, the current global economic turbulence has during the quarter created more uncertainties regarding commercialisation of the market for WBA's products during 2001, which will have consequences for the company's activity within this business. 5 [NERA LOGO] -------------------------------------------------------------------------------- YEAR 2001; TURBULENCE PROVIDES OPPORTUNITIES - The results achieved by the Transmission Networks business segment are the best achieved during the first quarter of any year, and we anticipate continued growth within this segment for the remainder of the year. A significant challenge will be to increase production and deliverability to support this business growth, says Bjorn Ove Skjeie. WBA will during the next two quarters commence sale of the company's own products Velocity and DVB-RCS. In response to the reduced market expectations Nera is working to adapt its investment pace, activity level and organisation. However, the new situation within the broadband market will also open opportunities for new industrial structural changes. Nera has previously expressed expectations that the development within the business area Mobile Satellite Communication will be flat during 2001, and this remains the company's view. However, Nera also sees opportunities which may strengthen Nera's position as a leading supplier within this business segment. - Development of new Inmarsat products such as Inmarsat F and cooperation with other companies within the satellite communication business will be important in our future strategy for Mobile Satellite Communication, says Skjeie. IT and telecom stocks have suffered badly during the last months, but Nera's share price has held up better than comparable shares. This, together with a strong technology and customer base and considerable free liquid assets in our balance sheet, positions Nera favourably with regards to exploiting industrial structural opportunities. - Exploiting this will be important to Nera going forward, says Bjorn Ove Skjeie. Bergen/Oslo, May 3, 2001 For additional information contact: Director Communication, Helge Skaar, + 47 55 22 58 20 (office), + 47 90 14 20 40 (mobile) or hsk@nera.no 6 INCOME STATEMENTS

7 BALANCE SHEETS

8 RESULTS BY QUARTERS

9 STATEMENTS OF CASH FLOWS

10 PRESENTATION 31 March 2001 [NERA LOGO] enabling a wireless future 11 NERA 31 MARCH 2001 [Triangle] Transmission Networks achieved best first quarter ever [Triangle] Mobile Satellite Communications continues with steady sales and double digit margin [Triangle] Broadband activity similar to Q4 2000. Turbulence in global economy causes concern for market development [Triangle] Nera Telecommunication Ltd.,Singapore shows strong growth [Triangle] Global financial turbulence provides opportunities to exploit Nera's financial strength, diversified product portfolio and large customer base. [NERA LOGO] enabling a wireless future 12 KEY FIGURES

[NERA LOGO] enabling a wireless future 13 TRANSMISSION CONTINUES STRONG GROWTH [Triangle] High demand for transmission products continues [Triangle] Many attractive market opportunities in South East Asia, Latin America and Africa [Triangle] Demand in Europe weaker than expected [Triangle] Increased productivity and deliverability supporting higher growth [NERA LOGO] enabling a wireless future 14 SATELLITE COMMUNICATION STABLE AND PROFITABLE [Triangle] Confirms leading market position within the Inmarsat-system by winning more earth station contracts [Triangle] Maintains market leader position within satellite communication terminals. Stable market. [Triangle] New Inmarsat products, including Inmarsat F, being developed [Triangle] Cooperation with other satellite communication companies important part of future strategy [NERA LOGO] enabling a wireless future 15 EXTENSIVE "INVESTMENT" IN WIRELESS BROADBAND ACCESS [Triangle] Global economic uncertainty influences market developments. Activities - so far - as planned [Triangle] Satellite wireless broadband transmissions using DVB-RCS products have started [Triangle] IP-Citylink ready for delivery in Q3 [Triangle] Test delivery of Velocity in the US, continues with increased functionality [NERA LOGO] enabling a wireless future 16 ORDERS RECEIVED BY BUSINESS AREAS

[NERA LOGO] enabling a wireless future 17 NEW ORDERS BY REGION [REGION MAP]

[NERA LOGO] enabling a wireless future 18 OPERATIONS [Triangle] Increased production and delivery capability achieved in Q1 [Triangle] 49% increased sales by Transmission Networks in Q1 [Triangle] Mobile Satellite Communications business similar in volume to Q4 2000, but less than record high Q1 2000 [NERA LOGO] enabling a wireless future 19 SALES BY BUSINESS AREA

[NERA LOGO] enabling a wireless future 20 INVOICING OF ORDER BACKLOG [BAR CHART]

[NERA LOGO] enabling a wireless future 21 OPERATING RESULTS KEY FIGURES

[NERA LOGO] enabling a wireless future 22 OPERATING INCOME BY BUSINESS AREA

[NERA LOGO] enabling a wireless future 23 OPERATING MARGINS* BEFORE R&D

[BAR CHART] * OPERATING RESULTS BEFORE R&D AS PERCENTAGE OF OPERATING REVENUES RESEARCH & DEVELOPMENT

[BAR CHART] * R&D AS PERCENTAGE OF OPERATING REVENUES [NERA LOGO] enabling a wireless future 24 INCOME STATEMENTS

[NERA LOGO] enabling a wireless future 25 BALANCE SHEETS

[NERA LOGO] enabling a wireless future 26 STATEMENTS OF CASH FLOWS

[NERA LOGO] enabling a wireless future 27 PROSPECTS [Triangle] Transmission Network is favourably positioned, expecting more than 20% growth in 2001 [Triangle] Delivery capacity to be further increased, representing a potential for additional growth [Triangle] Anticipating stable business volume with double digit operating margin from Mobile Satellite Communication [Triangle] Cooperation with other companies within mobile satellite communication central to growth strategy s Activity level and future investment pace in WBA under reconsideration s Global economic uncertainty opens structural opportunities for Nera [NERA LOGO] enabling a wireless future 28 APPENDIX [NERA LOGO] enabling a wireless future 29 KEY FIGURES 31. MARCH 2001

[NERA LOGO] enabling a wireless future 30 RESULTS BY QUARTERS

[NERA LOGO] enabling a wireless future 31 NEW ORDERS BY QUARTERS BY BUSINESS AREAS

[NERA LOGO] enabling a wireless future 32 SALES BY QUARTERS BY BUSINESS AREAS

[NERA LOGO] enabling a wireless future 33 NEW ORDERS BY MARKET REGIONS

[NERA LOGO] enabling a wireless future 34 SALES BY MARKET REGIONS

[NERA LOGO] enabling a wireless future 35 [NERA LOGO] enabling a wireless future NERA ASA: REPORTING RESULTS FOR THE FIRST QUARTER 2001 NERA ASA (OSE: NER, NASDAQ: NERAY) CONTINUES ITS GROWTH THROUGH THE FIRST QUARTER OF 2001 DESPITE THE TURBULENCE IN GLOBAL ECONOMY. THE TRANSMISSION NETWORKS BUSINESS ACHIEVED ITS BEST FIRST QUARTER EVER, WHILE MOBILE SATELLITE COMMUNICATION SALES WERE, AS EXPECTED, SIMILAR TO THE END OF YEAR 2000. WIRELESS BROADBAND ACCESS ACTIVITIES WERE SIMILAR TO THE FOURTH QUARTER OF 2000, BUT UNCERTAINTIES IN THE GLOBAL ECONOMY IS DELAYING MARKET DEVELOPMENTS. THIS WILL HAVE CONSEQUENCES FOR NERA'S PLANS FOR DEVELOPING THE WIRELESS BROADBAND ACCESS BUSINESS. The prospects are however unchanged for the Transmission Networks and the Mobile Satellite Communication. Nera's Transmission Networks business has actually strengthened its competitive position during the first quarter, improving the possibility of establishing itself as a leading company within this market. A 20% growth in sales and new orders are in accordance with Nera's own expectations for the first quarter. Transmission Networks, which accounts for 77% of sales, achieved a growth of 49%. Nera's management is carefully monitoring the market developments and the company's position in light of the uncertainties in the global economy, which has negatively impacted several equipment manufacturers. However, Nera is operating in markets which so far have seen very little reduction in demand, including South East Asia, Africa and Latin America where investments in existing and new telecommunication infrastructure continues unabated as it does in Europe. Transmission Networks experienced a 37% growth in new orders compared to first quarter last year. Construction of 3G-net is delayed in Europe and demand for 'access' products are lower than expected reflecting the global uncertainty. Nera is not very exposed to the market developments in North America, and has not seen any reduced demand in the market for satellite communication. The main challenge in the first quarter has been to improve deliverability of transmission products. Improved deliverability is essential both to meet current contract requirements as well as securing new contracts. Efforts have been focused on strengthening Nera's production capacity, improve work with subcontractors and productions partners and adjust procurement practises and routines. One outcome is a significant expansion of work shift arrangements in the factory in Bergen, contributing to improved delivery capacity for most products by the end of the first quarter. Nera's market position within Transmission Networks has been strengthened during the first quarter compared to competitors. This is due to a weak market for `access' products, which is a major business segment for many of Nera's peer competitors. Nera's broad product scope has reduced its vulnerability to these market fluctuations compared to other independent transmission suppliers. Two new contracts for earth stations secured in the first quarter have further strengthened the company's position as a leading supplier of mobile satellite communication within the Inmarsat system. The market for satellite terminals where Nera is a leading supplier, is growing slowly. However, development of future high capacity systems is continuing with Nera reviewing the possibility of exploiting DVB-RCS as a standard for the mobile satellite terminals. This is the same technology standard which is in the process of developing a position within broadband communication, and which Nera is developing within Wireless Broadband Access. The current global uncertainties have caused the market growth within Wireless Broadband Access to be delayed which means that sale of DVB-RCS products in the current year becomes more uncertain. It is also more difficult to sell point-to-multipoint solutions. The first quarter has seen important progress in development of DVB-RCS equipment including start-up of the first transmissions via satellite in 36 [NERA LOGO] enabling a wireless future cooperation with EUTELSAT. In the US the functionality in the test system of the 'Wireless local loop' product Velocity is improved, and commercial sales activities will start in the second quarter. PROFIT AND LOSS STATEMENT, BALANCE SHEET, LIQUIDITY AND EQUITY. Operating income for Nera was 724 MNOK in the first quarter, an increase of 18% compared to the same quarter last year, with operating costs of 620 MNOK. Operating income before R&D was 82,7 MNOK, resulting in a margin of 11,4%. This compares to 108 MNOK and 16,3% for the same period in 2000. The reduced margin before R&D is attributable to increased depreciation and higher costs particularly associated with the broadband activity. A significant part of these cost must also be seen in conjunction with Nera's entry into the US. R&D expenses was 92 MNOK during the period, an increase of 34 MNOK compared to last year. This is 12,7% of operating revenues, and is 2,1% above last year. The company's operating income was (9,4) MNOK for the first quarter, or 58,9 MNOK before including Wireless Broadband Access. Operating margin for Transmission Networks was 8.5% and 10,2% for Satellite Communication. Earnings from investments in associated companies were 8,7 MNOK, primarily from Nera Telecommunication Ltd. in Singapore where Nera's 47,4% ownership yielded a contribution of 9,3 MNOK in the first quarter. This company enjoyed a significant growth within all areas of business, resulting in almost doubling sales compared to first quarter last year. It won in particular several new telecommunication projects in Malaysia and the Philippines. The market value of Nera's ownership of Nera Telecommunications Ltd is 640 MNOK at the current stock price. Nera has a pre tax result of 21,3 MNOK for the period after net financial expenses of 21,9 MNOK. After estimating tax for the period the net result is 17 MNOK, or earnings per share of 0,14 NOK based on an average of 123,2 million shares. Nera's total balance sheet was 3 560 MNOK at the end of the quarter, up 83 MNOK from the end of 2000, with the company's equity ratio being 56,1%. The company's liquid assets were 1 325 MNOK, similar to at the start of the year, with interest bearing debt of 251,4 MNOK. NEW ORDER INTAKE AND ORDER BACKLOG New orders received in the first quarter was 703 MNOK, with 503 MNOK from Transmission Networks, 199 MNOK from Mobile Satellite Communication and 2,1 MNOK from Wireless Broadband Access, after 1,7 MNOK of intercompany transactions being eliminated. This is a 19% increase. Transmission Networks continues its growth with a 37% increase in new orders in the quarter. New contracts from South East Asia has been a positive contribution this quarter. The order backlog at the end of the quarter was 1 130 MNOK of which 618 MNOK will be invoiced in the second quarter. This compares to an order backlog of 802 MNOK (after adjusting for the ICO contract) at the end of the first quarter 2000, where 431 was to be invoiced in the second quarter of that year. 37 [NERA LOGO] enabling a wireless future PROSPECTS Market prospects for the company's transmission business are positive, and should as earlier indicated see a growth in excess of 20% compared to last year. Regional composition of sales and product mix may differ from previously assumed with lower sales in Europe and for access products. The global economic creates uncertainties, but it is Nera's ambition to exploit its strong position with a broad product portfolio and global market organisation, to become the world's leading independent transmission networks provider. The goal within Mobile Satellite Communication is to reinforce Nera's position as a market leader within the Inmarsat system, securing a stable turnover with double digit operating margin. Development of new Inmarsat products, such as Inmarsat F, are important in maintaining Nera's position. Cooperation with other players within the satellite communication business is another important aspect of Nera's strategy for the future of Mobile Satellite Communication. The company has previously indicated an "investment" of 120-140 MNOK in Wireless Broadband Access in 2001, assuming expected gradual increase in sales and operating income from the second quarter. Commercial sales of the company's own products Velocity and DVB-RCS will start during the second and third quarters, with the DVB products being available from the end of the summer. Several customers in Europe and Asia have expressed a strong interest in this product. Velocity will be launched on the exhibition Supercomm in Atlanta, USA, in June. However, as the short term market outlook has weakened, the company is working to adjust its activities, organisation and investment pace within broadband access market in response to an anticipated slower development of this market. The new situation in the broadband access market also opens up for new structural possibilities for Nera ASA. The Board of Nera ASA Bergen, 2 May 2001

NERA ASA 6-K