The report in brief
- Pro forma net sales rose 8% to SEK 6,299 m (5,849). The fiscal year was characterized by sharp increases in raw-material prices. In turn, this led to uncertainty with respect to demand. Price levels rose by an average of 9% during the year. Volumes declined by 3%, mainly with respect to basic products and formalin projects. The exchange-rate effect was positive, 2%.

- Pro forma operating earnings before depreciation amounted to SEK 1,156 m (1,040). The reversal of acquisition balance sheet reserves had a favorable impact of SEK 49 m on earnings, while rationalization costs of SEK 67 m were charged against earnings in 2004. For certain products, the sharply higher raw-material prices led to reduced margins, which was offset by the increased efficiency resulting from the rationalization programs in 2004 and prior years.

- Extensive capacity-enhancing investments to meet increased demand. During 2005, the Perstorp Group implemented or initiated extensive investments aimed at increasing the manufacturing capacity for several specialty chemicals products. Decisions were also made to invest in the manufacture of potassium formate and fatty acids methyl esthers. As a result of the investments, the Perstorp Group is well equipped to meet anticipated growing demand for existing and new specialty chemicals products.

- The Perstorp Group pro forma consists of the Group that PAI partners acquired at the end of 2005; that is excluding the operations conducted within Perstorp Compounds and Moldable Composites (Vyncolit), which were divested during the year. Franklin, an acquired operation, is included in full in the pro forma figures for both 2005 and 2004.

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