Annual Report • Apr 19, 2016
Annual Report
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A focused product range An in-store product range limited to 2,000 items simplifies administration and procurement.
Economical store locations Out-of-town stores that are easily accessible for customers in vehicles provide low rents.
Drive-in at all stores Personnel costs can be kept low when customers load their vehicles themselves.
Constant improvements
Continuous efficiency enhancement of each process and procedure.
Strong corporate culture
The entrepreneurial spirit in each store forms the foundation for our ability to succeed.
Customer-oriented website
Our customers find inspiration and building instructions on our website.
| Byggmax in brief | 4 |
|---|---|
| The year in summary | 5 |
| President's comments | 6 |
| Vision, concept, targets and strategy | 8 |
| Operations | 10 |
| Employees | 15 |
| Byggmax's values | 17 |
| The Building Planner - a new way to renovate | 19 |
| Our responsibilities | 20 |
| Byggmax + Buildor = True | 29 |
| Byggmax makes a difference | 30 |
| The Byggmax share | 31 |
| Chairman's comments | 33 |
| Administration report | 34 |
|---|---|
| Corporate governance | 38 |
| Multi-year overview | 42 |
| Consolidated income statement | 43 |
| Consolidated balance sheet | 44 |
| Consolidated statement of changes in | |
| shareholders' equity | 46 |
| Consolidated statement of cash flows | 47 |
| Parent Company income statement | 48 |
| Parent Company balance sheet | 49 |
| Changes in Parent Company's shareholders' equity | 51 |
| Parent Company cash-flow statement | 52 |
| Accounting policies and notes | 53 |
| Auditors' report | 78 |
| Byggmax Group management | 79 |
| Byggmax Board of Directors | 80 |
| Content index including standard GRI disclosures | 81 |
| Definitions | 87 |
| Distribution of Annual Report | 87 |
In 2015, Byggmax generated sales of approximately SEK 4.1 billion, up 16.5 percent year-onyear. The EBIT margin amounted to 8 percent. The company opened 7 new stores and had 119 stores at year end and an average of 762 employees over the year.
4 BYGGMAX, 2015 ANNUAL REPORT BYGGMAX, 2015 ANNUAL REPORT 5 Byggmax opened its first stores in 1993 to retail high-quality standard building materials at low prices. The description of the product range is Lumber, Construction, Flooring and Paint. The idea from the start is for customers to be able to drive their vehicles in and load the products themselves. Byggmax never has
Third quarter cont. • On October 16, Byggmax signed an agreement to acquire Buildor AB as of November 2, 2015. Byggmax is acquiring Buildor for a total of SEK 130 M. The price is a combination of an initial purchase consideration of SEK 70 M for an unlevered company, and earnouts based on future sales and profit.
Byggmax has always kept true to one simple fundamental concept: to retail high-quality standard building materials at the lowest possible price. We aim to do this in as simple and accessible a manner as possible in all of our 119 stores in the Nordic region. We will therefore remain true to our pricing model, meaning: No campaigns, no sales and no discounts. At Byggmax, the same low price applies for every customer.
sales, discounts or campaigns. The product range is of high quality and comes from Swedish suppliers.
The entire product range is subject to the same low prices and all stores have the same prices. To earn customer confidence, Byggmax becomes the first DIY retailer in Sweden to offer a Lowest-Price Guarantee. All customers can borrow a trailer at no cost.
• Low prices • Price guarantee • High quality • Fixed product range • Drive-in • Free trailer
Since it was founded in 1993, the company's names were Gunnars Byggnetto, Byggnetto and Netto-Netto. In 1999, all the stores changed their name to Byggmax to establish a new, clear and unified profile. The logo, the name and the graphical profile are intended to convey the message that we have optimized the relationship between price and quality for standard building materials.
BYGGMAX SELLS PRESSURE-TREATED DECKING LUMBER FOR SEK 3.95 A METER In parallel with Byggmax's opening in Staffanstorp in 1996, we started to sell pressuretreated decking lumber for
SEK 3.95 a meter. Other companies were selling the same lumber for between SEK 8.00 and 13.00 a meter. The lines were long and success was cemented.
On January 1, 2006, the venture capital firm Altor 2003 Fund became the new majority shareholder. Altor believes in the Byggmax concept and wants to continue expanding in Sweden and abroad. In 2014, Altor divested the remainder of its holding in Byggmax.
The DIY trend took Sweden by storm in 1997. Many people realize that building is not as hard as they thought and substantial sums are there to be saved. The building materials industry was at full capacity and Byggmax established operations in many locations.
In 2008, Byggmax aired its first TV commercial. Our customers played the leading roles and got to show their projects on TV while sharing their experiences.
BYGGMAX CARD IS LAUNCHED The Byggmax card was launched in 2007. Both companies and consumers could get between 30 and 60 days cost-free credit. Today, it is possible to use a PIN code and get a specified invoice sent home.
2000 to answer customer questions seven days a week. Customer service aims to answer all calls within three minutes.
BYGGMAX IN NORWAY On March 23, 2007, Byggmax opened its first store in Hamar, 140 km north of Oslo.
1993 Täby (Sthlm), Halmstad, Västerås.
1996 Staffanstorp (Malmö).
1997 Helsingborg.
1998 Hisings Backa (Gbg), Upplands Väsby (Sthlm),
BYGGMAX CUSTOMER SERVICE CENTER OPENS Byggmax opened a central customer service center in 2007 Sweden: Åkersberga (Sthlm), Visby. Norway: Hamar, Skien, Abildsø, Gjøvik, Kongsvinger.
Umeå.
2001 Borås, Löddeköpinge (Malmö).
Jönköping. Kållered (Gbg). Kristianstad. Linköping, Kalmar, Sundsvall, Tumba (Sthlm), Luleå, Karlstad.
2004 Växjö, Norrköping, Falun, Östersund, Vellinge (Malmö), Uddevalla. 2005 Örebro, Karlskrona. Uppsala, Varberg, Länna (Sthlm).
2006 Hudiksvall, Skellefteå, Skövde, Eskilstuna, Gävle,
2008 Sweden: Motala, Västervik, Örnsköldsvik, Hässleholm, Kungsbacka, Nyköping. Norway: Sarpsborg, Sandefjord, Drammen, Ullensaker, Bærum. Finland: Turku.
2009 Sweden: Piteå, Falkenberg, Kungsängen, Bromma, Borlänge. Norway: Trondheim. Finland:
Vaasa.
2010 Sweden: Ystad, Värnamo, Karlshamn, Trollhättan, Partille. Norway: Ski, Kristiansand, Stavanger, Fredrikstad, Haugesund. Finland: Jyväskylä.
2011Sweden: Ängelholm, Lidköping, Norrtälje, Enköping, Avesta, Bollnäs. Norway: Trondheim Syd, Arendal, Lillehammer. Finland: Porvoo, Raisio, Vantaa, Pori.
2012 Sweden: Malmö, Smedjebacken, Eslöv, Sisjön. Norway: Moss, Askim, Stord.
Finland: Oulu. 2013Sweden: Karlskoga, Torslanda, Sandviken, Härnösand, Arvika. Norway: Askøy, Larvik, Haugenstua. Finland: Espoo, Kangasala, Seinäjoki.
2014 Sweden: Värmdö, Ullstämma (Linköping), Katrineholm, Munkedal. Norway: Åsane (Bergen), Tønsberg. Finland: Pirkkala.
2015 Sweden: Mariestad, Nacka, Vetlanda, Falköping. Norway: Krokstad Senter, Drøbak, Halden.
On June 2, 2010, Byggmax was listed on the Nasdaq OMX Stockholm Exchange.
CONSTRUCTION SERVICES In 2013, Byggmax launched fixedprice construction services.
BYGGMAX 2.0 In 2013, Byggmax launched the new store concept, Byggmax 2.0.
In the spring of 2009, Byggmax Online was launched. The service comprises
home delivery of all products in the range, which is unique when it comes to heavy construction materials. The goods are picked from the closest Byggmax store to the customer and the only additional costs are for picking and freight. In the majority of cases, there is next-day delivery.
Byggmax opened in Turku on February 28, 2008. A strong DIY tradition exists in Finland and customers like the new contender, Byggmax. Byggmax receives much publicity in the media since all our low prices are published on the website.
ACQUISITION OF BUILDOR AND SKÅNSKA BYGGVAROR.
Byggmax acquired Buildor, an online DIY store, in 2015. Byggmax also signed an agreement to acquire
Skånska Byggvaror.
2015
In 2011, a range of products available only to order was added to Byggmax Online. There were over 20,000 products in the range available to order on the Swedish website in 2015, along with 10,000 on the Norwegian and Finnish sites. These products are only sold online, which enables us to offer Byggmax prices on even more products without increasing store costs. The main focus of the website is ease of use, which makes it just as easy to shop online as in a store.
6 BYGGMAX, 2015 ANNUAL REPORT Byggmax årsredovisning 2014 BYGGMAX, 2015 ANNUAL REPORT
Group's online sales, the share of online sales would amount to 20 percent in the fourth quarter.
Byggmax has a number of investment areas: expan sion in Finland, the online store and construction services. In 2015, after depreciation and amortiza tion, these areas resulted in a total charge of 2.3% on the EBIT margin. In other words, if these investments are disregarded, the EBIT margin would be 2.3% higher. We will continue to invest to grow and capture market shares in 2016. The aim is for the effect on the EBIT margin in 2015 to be less than three percentage points.
Byggmax 2.0 is an updated store concept, with more articles and clearer communication, utilizing the same sales area as before and with substantially im proved sales control. Byggmax 2.0 stores have delive red promising sales increases following conversion. 38 stores were converted during the year and, at the end of the year, a total of 107 stores (90 percent) were aligned with the concept. Our aim is that all remaining stores will have been converted ahead of the peak season in 2016, in other words, by the end of April.
Since 2009, an annual environmental report has been produced on Byggmax's environmental impact. This year's report shows a reduction in carbon emissions per ton of materials sold and the main explanation for this is that goods are handled more efficiently due to a larger proportion of products passing through the warehouse, as well as more transportation by boat. Since 2009, carbon emissions per ton transported have declined 18 percent and were in line with the previous year in 2015. This means we are well on the way to reaching our goal of a 25-percent reduction by 2020. As of 2011, Byggmax reports its sustainability initiatives in line with the Global Reporting Initiative's (GRI) framework for sustainability reporting. We report in line with the G4 Core level.
As Byggmax purchased companies for almost SEK 1 billion at the end of 2015, the Board has proposed a dividend in line with the company's dividend policy, which states that at least 50 percent of net profit should be distributed, but is reduced in relation to the previous year's dividend. Byggmax has never carried out purchases, redemptions or spin-offs.
It is gratifying to have continued our growth and maintained healthy profitability. It shows the strength inherent in the concept and the increasing consumer trend towards choosing the low-price alter native when purchasing building supplies - irrespec tive of economic conditions. We continue to see great potential in growing in the three countries where we currently have operations, and in the long term to also start looking further afield. We now also have the chance to be part of developing two other strong formats, Buildor and Skånska Byggvaror. Buildor is an online DIY store that was launched in 2013 with the aim of offering a broad range of products at competi tive prices. Skånska Byggvaror is an online mail-order retailer of value-added building products for the DIY market. Byggmax aims to establish a store network of 180 stores in our existing markets. Skånska Byggva ror will open more showrooms, and is aiming for five openings in 2016. All formats will continue to broaden and improve our e-commerce offering.
When we look ahead towards 2016, we foresee a num ber of areas with positive development potential. This includes opening new stores, an updated product range in Byggmax 2.0, construction services, Finland and the online store. Byggmax is on a solid footing, which enables us to invest in several initiatives in parallel.
In conclusion, I would like to thank all our employees, who were involved in helping us achieve our strong results, and all our customers who show their confi dence in us every day.
Stockholm, March 7, 2016
Over the full year, Byggmax opened seven stores, which was in line with our target of 7-13 stores for the year. We have identified a potential to expand the existing total of 119 stores to a total of 180 stores in Sweden, Norway and Finland. The store potential by country is: Sweden 95, Norway 60 and Finland 25.
During the second quarter, we launched the Building Planner for designing rooms. A completely new way to renovate! Using the Building Planner, you will be able to design your room as you want by selecting flooring, colors, mouldings and millwork, etc. You will see the finished results in an image while making your selec tions and will automatically receive a list with correct quantities in terms of the products and construction services you need to execute your dream project. During the same quarter, fixed-price construction services were launched under the Proffsbyggt brand. Visit the website for more details. We intend to launch these services in Norway and Finland in 2016.
From January 1, 2016, Byggmax will be relocating its picking stock to Växjö and a new third-party solution. The new warehouse will entail better opportunities for consolidated shipments and more efficient logis tics. The new warehouse will also support Byggmax's expansion by providing more space when needed. Byggmax announced two acquisitions during the fourth quarter, Buildor AB and Skånska Byggvaror. Buildor was acquired during that quarter and Skånska Byggvaror at the beginning of 2016. Both of these companies are e-commerce companies. If Buildor and Skånska Byggvaror are included in the Byggmax " "
Byggmax has developed strongly in 2015 and we have captured market shares in our markets. In 2015, the Finnish market trended below expectations, while the markets in Sweden and Norway outperformed expectations. Low-price concepts such as Byggmax are favored in tougher economic climates and we are capturing market shares in all our markets.
The market grew by 12.6 percent in Sweden in 2015, 4.0 percent in Norway and -0.9 percent in Finland, including price changes. The price change was 0.2 in Sweden (no data is available for Norway and Finland). Byggmax has seen greater price cuts than the market.
To achieve its financial goals, Byggmax has defined the following strategies to expand the store network, improve its operations and develop the business
Over time, Byggmax will increase its presence in Swe den to about 95 stores, in Norway to about 60 stores and in Finland to about 25 stores in economically attractive locations. Byggmax performs ongoing ana lyses of acquisition opportunities for establishment in new markets but as yet no decision has been made.
Byggmax will improve operations by further expan ding its use of economies of scale at its purchasing function by handling larger product volumes and through sourcing from low-cost countries. The orga nization will enhance its resource-efficiency by imple menting continuous business process improvements and reducing overheads. Furthermore, Byggmax will capitalize on newly opened stores becoming more profitable once they reach maturity and on increasing sales in already well-established stores.
Byggmax works continuously with business develop ment. IT support and, in particular, the website are developed every year in a number of projects with the customer in focus. Purchasing, sales procedures and marketing undergo ongoing development in respect of private customers and professional tradesmen. The online store was launched in late 2008, delive ring from the store to the customer and substantial focus has been placed on developing this service. In 2011, the online store was expanded with the addition of online goods with direct delivery to the customers from the suppliers. The range available to order that we sell via the online store is expanded continuously. Byggmax has launched an offering of construction services which is undergoing ongoing development. Byggmax is in the final stage of implementing the updated Byggmax 2.0 store concept. The concept entails enhanced store layout and a new interior design concept that allows a larger range and clearer communication. In addition, Byggmax is adjusting the range to seasonal variations to boost sales in the first and fourth quarters. In 2015, the Group acqui red Buildor, which is an online store, and signed an agreement to acquire Skånska Byggvaror, which was carried out on January 4, 2016.
Value drivers are factors that affect the development of Byggmax in the short and long term. The following constitute those that the management assesses as having most relevance. Many factors impact opera tions in both the short and long term and, as such, are listed under the category where they are conside red to exert most influence.
GOALS
• to achieve organic growth in excess of 15 percent of net sales
per year by expanding the store network and increasing like-for like sales, and • to maintain an EBIT margin in
relation to net sales of more than 11 percent.
• Expansion of the store network • Operational excellence
• Business development
The business concept is to retail high-quality building materials at the lowest possible price. Below is a description of the Byggmax concept:
The Byggmax vision is to be the world's best DIY retailer. Read more about how we in tend to achieve it.
The Byggmax vision is to be the world's best DIY retailer.
Byggmax's financial goals are:
• to achieve organic growth in excess of 15 percent of net sales per year by expanding the store net -
work and increasing sales in comparable stores, and
• to maintain an EBIT margin in relation to net sales of more than 11 percent.
Sales in the Swedish, Norwegian and Finnish ope rations outperformed expectations in 2015. During the year, expansion initiatives for Finland, the online store and construction services were implemented with an impact on the EBIT margin after depreciation and amortization of a total of 2.3 percent. This meant that during the 2015 fiscal year, Byggmax achieved net sales growth of 16.5 percent and an EBIT margin of 8.3 percent, excluding acquisition costs linked to the acquisition of Buildor and Skånska Byggvaror.
Byggmax posted average annual net sales growth of 10.1 percent during the 2008-2015 period.
Byggmax posted average annual EBIT growth of 11.7 percent during the 2008-2015 period. The EBIT margin in 2008 was impacted by the establishment of operations in Norway and Finland, respectively. In 2010, the EBIT margin was impacted by listing costs. The EBIT margin amounted to 8.3 percent in
Byggmax offers affordable high-quality products for the most common maintenance and DIY projects. The primary target group is consumers and the product range encompasses standard building materials, such as lumber, insulation, sheets and boards as well as paint – at the same low price regardless of whether the customer is a professional or a private consumer. With its focused range, Byggmax handles large volumes and can obtain economies of scale in purchasing and logistics. Since the company was founded in 1993, its operations have been conducted in accordance with the Byggmax concept, which has been
essential to the company's development. The concept is based on a focused product range, a resourceefficient organization, a strong corporate culture and effective pricing strategy, as well as the characteristic design of the stores. Today, Byggmax has a strong market position, an extensive store network and a recognized brand.
Byggmax does not own its own factories and instead purchases goods from independent suppliers, primarily in the Nordic region, but also from other European countries and Asia. Byggmax does not own its own stores either; it leases store premises from
Since the company was founded in 1993, the Byggmax concept has been essential to the development of operations. The concept is based on a focused product range, a resourceefficient organization, a strong corporate culture and consistent pricing strategy.
stores and wholesalers. The Swedish market has been dominated by Beijer and local DIY retailers, but the international chains and, above all, Byggmax are the companies growing rapidly. Many international chains are expending, for example Bauhaus and Krauta.
The Norwegian market is dominated by a few strong chains with Byggmakker as the market leader. These chains sell to private consumers and the trade. Other competitors include Maxbo, Coop Bygg, Optimera, Bygger'n, XL Bygg and Neumann Bygg.
The market in Finland has been dominated by Rautakesko with its two concepts K-rauta and Rautia. In recent years, the only international chain to establish operations in Finland has been Bauhaus. Other competitors in Finland include Starkki, and S Group.
The typical Byggmax customer is aged between 25 and 60 and the owner of a detached house, who wants to repaint the house, build a terrace or put up a fence. Most customers are private consumers, although about a fifth comprises professional tradesmen. Byggmax's offering includes the materials needed for building a house and carrying out the most common repairs, maintenance or DIY projects.
Byggmax's offering is based on simplicity and low prices – customers should focus less on their purchases and more on their DIY projects. Prices and stock availability are available from the website and stores have drive-in facilities, where customers do more themselves and the stores require fewer employees. By having a focused product range, Byggmax can maintain high volumes of sales for most of its products. In addition, the range primarily contains products that require a lower level of assistance and
All of the operations are managed from the head office in Solna, Sweden. The company's business model serves as a platform to generate continued organic growth through both the expansion of the store network and increased comparable sales per store. Byggmax has a large economic impact. During the year, Byggmax had about 1,000 employees who made many people's building dreams a reality.
Byggmax conducts business activities in the Swedish, Norwegian and Finnish DIY markets. The European DIY market generates sales totaling approximately EUR 112.8 billion (estimated according to the size of the DIY market in 2013) according to Mintel1, and is expected to grow by about 2 percent annually over the next five years compared with average annual growth between 2009 and 2013 of 2.2 percent. Corresponding figures for the same period for Sweden, Norway and Finland show average annual growth that has outperformed many other European markets since 2009, with Sweden at the top with 7.6 percent. Sweden, Norway and Finland jointly represent almost 5 percent of the European market, with Norway accounting for the highest DIY sales per capita in Europe. Given Byggmax's average annual growth rate of 10.1 percent between 2008 and 2015, the growth potential in Sweden, Norway and Finland is assessed as remaining high. The building supplies market is fragmented and the housing market has a high turnover rate. It is relatively expensive to use professional tradesmen and there is a long tradition of doing the work oneself. Interest in home renovation and interior design has grown markedly in the Nordic region since the mid-1990s, which can be seen in the large number of DIY/ home decorating television programs and the range of interior-design publications.
Byggmax's competitors are other retail chains, online stores and purchasing organizations, independent
1 Mintel International Group – provider of market knowledge and analysis within the DIY sector – retail.
The new marketing concept in Finland has posted successful results. Byggmax also took home gold at the Effie Awards - Finland's only event measuring companies' marketing effectiveness.
technical support, for example, sawn lumber, insulation, doors and windows.
Byggmax's pricing strategy is primarily built on offering competitive prices relative to the competition rather than making specific mark-ups on its own purchases. In addition, Byggmax continuously analyzes pricing and takes measures to secure competitiveness as well as profitability. It should always be cheapest to buy supplies for building projects at Byggmax. The company also has a "lowest price guarantee," which means that a customer who finds a comparable item at a lower price from a competitor will receive the lower price plus a discount on the difference. Another element of Byggmax's pricing strategy is to always offer low pricing instead of applying seasonal sales or campaign discounts.
Prices are set centrally, which enables rapid reaction to changes in market conditions. For several consecutive years, Byggmax has been named the winner in price comparisons of various players in the building sector. According to the publication Vi-i-Villa's "villa panel", Byggmax continues to have a strong position among Sweden's house owners. Some 21 percent of house owners plan to shop at Byggmax according to the 2015 report, which was the highest figure for any DIY store included in the survey.
Byggmax purchases its products from around 300 carefully selected suppliers, of which three-quarters
are located in the Nordic countries. Byggmax sources products locally to an increasing extent. For example, more than 80 percent of lumber, which is Byggmax's largest product group, is procured locally. Byggmax defines locally as within one country, except for Sweden, which due to its size is divided into two parts; North and South. A delivery is deemed local if it originates in the same country or part of a country as its destination. Byggmax avoids being dependent on a single supplier by having at least two suppliers per product category and ensures that stores have products in stock even if a supplier has encountered delivery problems.
With its product strategy, Byggmax is one of the largest purchasers in its geographic market and can negotiate attractive contractual terms and discounts.
The greatest volumes are delivered by the supplier directly to the stores, in full truckloads. Byggmax has two distribution centers that handle half of all products, which gives us increased efficiency through consolidation effects with deliveries and has given us the right conditions to maintain lower inventory levels. The proportion delivered via the distribution centers has increased in recent years. During the year, Byggmax moved one of the distribution centers from Gothenburg to Växjö. Byggmax imposes strict requirements on its suppliers in such areas as delivery conditions, product quality, price, procedures and CSR work.
The high inventory turnover places major demands on efficient distribution and logistics. Currently, threequarters of the orders from suppliers are handled automatically in the business system and Byggmax is striving to further automate its supply chain. The purchasing department can identify inventory shortages in all of the stores at any one time and place an order. Furthermore, the purchasing department communicates closely and regularly with store personnel to pinpoint sales trends and activities not identified by the business system.
Practically all Byggmax stores have an identical range of products, which assists customers in their purchase planning. The range consists of the most in-demand building supplies and includes about 2,000 products, which is far fewer than the industry norm where large retailers may have up to 100,000 products. The roll-out of the upgraded store concept Byggmax 2.0 has meant a slight increase in the range to cover a larger proportion of customers' needs for building materials. The range in the stores normally only changes marginally from year to year since demand for products for repairs, maintenance and DIY projects is relatively stable. Demand and customer requests for specific new products are followed up by store personnel and the purchasing department based on close and regular contact. Byggmax also offers a range of online goods that, essentially, are sent directly from the supplier to the customer. The range of products available to order is supplemented on an ongoing basis with new items. " "
It can often be difficult as a retailer to get the opportunity to participate in and influence the life cycle of a product. As regards Byggmax's major product group, lumber, this is the product group where the company is sometimes able to collaborate with suppliers and influence the development of the product concept, its manufacture and production, marketing, distribution and use as well as scrapping and recycling.
Our procurement practices are important because everything we sell comes from others. Furthermore, thanks to our practices we are able to influence other companies, for example by setting terms of employment for our suppliers' employees.
Since 2003, the store network has expanded from 19 stores to a total of 119 stores, of which 76 are located in Sweden, 30 in Norway and 13 in Finland.
By owning and operating the individual stores itself, Byggmax can control every aspect of daily operations and ensure that the concept is fully applied throughout the store network. The performance of store managers is measured by a few key performance indicators (KPIs) that the managers themselves are able to directly affect to a significant degree. The store managers compare their performance with stores generating comparable sales and exchange experiences to meet their KPIs. Since 2009, part of the stores' day is to process the online store orders that are sent from store to customer. Store personnel have to provide information about and sell the new range of online goods that are sent directly to the customer from the supplier.
Byggmax's stores have a standardized design for store communication, interior fittings and display of merchandise. Even if stores can vary in size and design, customers always recognize a Byggmax store. In principle, all stock is located in the area or directly adjacent to the area where sales are made. The stores are designed to enable customers to drive into and around the site, and to allow customers to quickly load goods into their vehicles. All stores have a number of trailers that customers can borrow free of charge. All products are clearly labeled with prices and this facilitates driving between open storage and storage racks used outside for displaying merchandise. Inside, in the heated area of the store, products are located according to product category. As an inventory is regularly taken of the entire stock and all stock is procured centrally by head office, the shelves and store are rarely out of stock. The stores are sparsely manned and the main task of store employees is to organize the store's inventory, receive deliveries, assist customers and manage payment transactions.
Byggmax 2.0 is an updated store concept, with more articles and clearer communication, utilizing the same sales area and with substantially improved sales control. The new concept makes it easier for customers to shop and means that Byggmax can meet a larger proportion of customers' building material needs. In 2015, 38 stores were converted to the new concept. At the end of the year, Byggmax had 107 stores under the Byggmax 2.0 concept. All new stores in 2015 opened with the new concept in place. In 2016, the conversion is planned for a further 12 stores, at which point the entire store network will have converted to 2.0.
Byggmax continuously evaluates its store network and seeks new locations in which to establish outlets. A proven method for identifying attractive store sites exists with access to the store, and the demographics and disposable income in an area among the key criteria in determining the location of a new store. Byggmax also offers rewards to people who assist the company in identifying suitable plots or properties that are available. The method has proven effective and popular.
The costs of opening a new store are limited and a new outlet is expected to contribute to profitability after one year, and reach full sales maturity within two to three years. After a new rental lease is signed and the property made ready for occupancy, it normally takes Byggmax four to six weeks to open a store. The aim is to open new stores immediately before or in conjunction with the hectic summer season. During the past four years, Byggmax has opened an average of eight new stores every year. To date, Byggmax has not closed any of its stores, indicating that both the underlying analysis and expansion model works well.
If Byggmax identifies a more attractive store location in an existing area, the store is relocated. This is one way of developing operations. In 2015, Byggmax relocated stores in Halmstad to new premises in the existing areas.
The diagram illustrates the development in the number of stores since the start in 1993. During the past four years, Byggmax has opened an average of eight new stores every year.
over this period which has gradually strengthened the brand. Byggmax has now managed to achieve na tionwide brand recognition in Sweden and high brand recognition in Norway, where the chain was launched in 2007. The brand is strengthened by the company's distinct business concept and the characteristic and effective store design made clear by the 2.0 concept.
Byggmax has invested substantial time and effort in developing its brand and attaining econo mies of scale in its marketing concept. Advertising uses a consistent form of expression, with realistic situations and real customer projects, which adds a documentary feeling to activities, all in line with the strategy of making things easy for DIY enthusiasts. Byggmax's customers are the main characters in television commercials, advertisements, direct mail and on the website. Customers are interviewed while carrying out their building project over a summer and comment, without being directed, on Byggmax and its products. The concept demonstrates the geograp hical spread of Byggmax by using customers from all over Sweden. In particular, according to independent trade publications and surveys, it has strengthened Byggmax's price profile and brand. Byggmax does not use any advertising agencies. TV commercials are produced with the assistance of a production company and all Byggmax advertising is produced in-house.
The same concept has not worked as well in Finland, which is why a new concept was launched in 2015 which has the same values and feel, but is expressed differently. The new concept has received major acclaim and won gold at the Effie Awards, one of Finland's top advertising prizes.
The Byggmax Group is growing extremely fast and acquired Buildor in 2015 and Skånska Byggvaror in 2016.
"We are impressed by Buildor's ability to increase net sales and the scope of its product range while keeping costs under control. We are convinced that Byggmax can help Buildor grow even faster and achieve profitability even more quickly. We also note that Buildor can help us improve even further in the area of e-commerce," says Magnus Agervald, Presi dent of the Byggmax Group.
Buildor is a fast-growing e-commerce player with operations in Sweden. The company has sold building supplies online since 2013 and is pleased to join the Byggmax Group.
"Together with Byggmax, we now have a totally new purchasing opportunity and the chance to sell product ranges we do not currently have access to. We can make use of Byggmax's volumes and purcha sing channels. This will mean a powerful vitamin injection for Buildor," explains Jonatan Schwamberg, CEO of Buildor
Byggmax's solid corporate culture – Byggmax's values – is a prerequisite for the successful applica tion and development of the company's business model. The corporate culture highlights freedom of action and clearly defined areas of responsibility for employees, in addition to a flat and communicative organization, cost awareness, continuously improved business processes and efficiency in daily operations.
Consultants are seldom used, and regional ma nagers are normally recruited internally – primarily through the promotion of store managers. As a result, the organization is characterized by efficient decisi on-making processes and a distinct entrepreneurial spirit.
The corporate culture is maintained by means of robust and integrated business methods, continuous internal communication and through the presence of corporate culture bearers with extensive experience in various areas of operations. All head office person nel work at least once per year out in the stores to maintain their links to store operations.
Byggmax applies a lean approach at both the head office and in the stores. Application of a lean ap proach means working with resource efficiency and minimizing waste.
Collective bargaining agreements are applied for 100 percent of staff.
Byggmax has a resource-efficient organization with the majority of business activities centrally managed. Aside from the sales force, which is based in Byggmax stores, most business processes are managed function-wide across all stores by the head office in Solna, near Stockholm. Thus, there are no local offices – a feature that contributes to the ef ficiency and economies of scale that characterize the Byggmax concept.
Store operations are organized around two main areas of responsibility, namely, regional and store management. Regional managers are responsible for the management, operation and financial performan ce of a number of stores in a specific region and for identifying appropriate new locations for additional outlets. Currently, there are eight regional managers in Sweden, Norway and Finland. The regional mana gers are responsible for a number of store managers
in their respective region, who in turn manage the day-to-day operations.
During 2015, Byggmax had an average of 762 fulltime employees (673), with store personnel accounting for the majority of the workforce. Due to significant seasonal variations, the operations require flexible store manning, which is achieved by having a substantial proportion of part-time employees. The relatively high degree of personal freedom of action for employees in combination with clearly defined areas of responsibility has created a highly motivated organization. Work attendance vis-à-vis normal wor king hours was 96 percent (96) during the year.
Investments in store personnel are made on an ongoing basis through regular internal training cour ses in product knowledge, sales and customer ser vice. In addition, the company uses mystery shoppers each month to evaluate stores in terms of customer service, appearance, work environment and safety.
No written rules are in place as regards employing locally. However, established practice and the nature of business activities with operations in many smal ler communities means the store staff, including the manager, are recruited locally.
Of the Group management, 100 percent (7 of 7) reside in Sweden. Of other individuals in senior po sitions in the remainder of the organization (regional managers), 9 of 9 (100 percent) are local employees. At the next management level down, 100 percent of store managers in Sweden and Finland are locally employed and the corresponding figure for Norway is 73 percent.
Byggmax receives subsidies for the employment of certain members of staff who are participating in various state-funded employment measures to promote employment. The total amount received in such subsidies totaled SEK 6.2 M in 2015 and SEK 6.1 M in 2014.
Since 2008, Byggmax has had an extensive systema tic work environment program, in which all accidents and incidents are reported pursuant to a unified standard and followed up.
Byggmax's business model is based on a solid corporate culture, with the focus on free dom of action and clearly defined areas of responsibility for employees.
Byggmax Online was launched in 2009 as a way of ex panding the sales channels, but e-commerce is more significant than this alone today.
Customers interested in building can find inspira tional films and are met by a wide range of building supplies so the customer can find the exact quality and function they are looking for. For this reason, Byggmax has extended its range extensively and now offers over 20,000 products on the Swedish website and 10,000 on the Norwegian and Finnish websites respectively. This allows us to offer the same product range as a much bigger building materials retailer, but without the major fixed costs and tied-up capital. The investment has led to good results and the extended product range has been a strong driver of growth during the year. Byggmax does not only focus on customers interested in building, but also on those who want to have their entire building project com pleted without being personally involved. This is why the Building Planner was launched in 2015 - a unique and pioneering tool that customers can use to design their room according to their own taste and have the entire room renovated and completed at a fixed price, including construction services. E-commerce is also an important source of information for customers who choose to visit a Byggmax store, as the website continuously updates prices and stock levels for each individual Byggmax store. This enables customers to check from the comfort of their home if the product they are seeking is available ahead of any visit to a Byggmax store. E-commerce will continue to be an im portant part of our operations and we will make major investments in this area in 2016.
In 2015, Byggmax further developed its retailing construction services that underwent a test launch in 2014. Byggmax also established a new business area in Sweden in 2015, under the name "Proffsbyggt". Customers are offered the chance to purchase servi ces at a fixed price under the "Proffsbyggt" name. The services can be purchased via Byggmax's website, stores and telephone at the Byggmax customer ser vice center. Customers can purchase flooring, pain ting, heating, ventilation and sanitation (VVS) and electricity services as well as various construction services at fixed prices. The concept has significant potential among customers who want to renovate but who are either unable to or unwilling to do it them selves. In 2016, a launch of construction services is also planned for the Norwegian and Finnish markets. Continued expansion via a broadened service offering will be the approach in Sweden.
Between 2010 and 2015, Byggmax has consistently applied its "Sverige bygger" (Sweden builds) and "Norge bygger" (Norway builds) advertising concept, and has continuously expanded the store network
Byggmax has a resource-efficient organization with the majority of business activities centrally managed. Aside from the sales force, which is based in Byggmax stores, most business processes are managed function-wide across all stores by the service office in Solna, Stockholm. Thus, there are no local offices – a feature that contributes to the efficiency and economies of scale that characterize the Byggmax concept.
In the 2015 fiscal year, the distribution of reported work accidents was as follows: Out of 16 personal injuries, the number of women amounted to 4 and the number of men 12.
Byggmax strongly distances itself from any form of discrimination. Written policies and procedures, in the form of an equality policy, personnel policy,
ethical guidelines, HR strategy and an action plan for cases of abusive treatment are all contained in the Byggmax personnel manual, which is available to all Byggmax employees. Equality Policy is also published on the Byggmax website. No known incidents of discrimination occurred in 2015.
The following table specifies the estimated number of hours training for each personnel category per employee per year. The variation in the number of hours is attributable to the individual levels of previous experience and knowledge. The lower number of hours is specified for individuals with substantial previous experience, for example, of the company and similar positions. Mkr % NETTOOMSÄTTNING OCH EBITA-MARGINAL 5000
Equal pay regardless of gender, background, etc. is a natural part of our organization and forms a part of our set of values as it is included in the value word "Respect".
The proportion of external training amounts to between 25 and 35 percent of the total number of hours of training, depending on whether it is calculated on the higher or lower number of hours per personnel category. 0 2007 2008 2009 2010 2011 2012 2013 2014 2015
On comparison within the same personnel category, women have somewhat lower salary levels than men at Byggmax. This differs between countries, as in Sweden women have higher salaries than men. Base data comprised the closing basic salaries for store employees in Norway and Sweden as of December 31, 2015.
The above table illustrates staff turnover by age group and gender. The high total level of staff turnover is attributable to the seasonal nature of Byggmax's operations and the corresponding large increase in temporary staff during the summer. Estimates have been made pursuant to the GRI standard but are shown according to gender and age due to insufficient basic data for statistical certainty. 0
Responsible for store operations, customer service, establishment of new stores and training.
Responsible for strategic purchases, supplies, pricing, product range and logistics.
Responsible for accounting, financial controlling, HR & payroll.
Responsible for market strategy, production of advertising materials, the website, and operation and development of the IT environment.
Byggmax gathered all permanent employees at a major conference on November 16-17, 2013, to draw up a new set of values.
All permanent employees of Byggmax were gathered at a major conference on November 16-17, 2013, to draw up a new set of values. The conference was extremely successful and generated substantial energy and enthusiasm.
I stand behind my thoughts, words and actions. I deliver what I promise and always act in the best interests of Byggmax.
I see, listen to and try to understand everyone around me. By treating others as I would like to be treated I contribute to building strong and healthy relations.
| Gender | Staff turnover |
|---|---|
| Men 12 |
56% |
| Women | 76% |
| 9 Age |
Staff turnover |
| < 30 | 82% |
| 30-40 6 |
27% |
| 40-50 | 34% |
| 50+ | 23% |
| 3 Total |
60% |
I view everyone as fantastic and spread joy by being open and through my smile. In this way, we all have fun together!
I choose to always see opportunities and solutions. My positive thinking energizes the team and our customers. Anything is possible!
I maintain an open attitude and go that extra mile. I actively participate and demonstrate a genuine interest in colleagues and customers.
I always do my best and pay attention. We will be the world's best DIY retailer!
| Work-related injuries | 2015 2014 | |
|---|---|---|
| Number of personal injuries, employees | 16 | 17 |
| Fatalities | - | - |
| No. of lost time injuries (LTIs) | 5 | 2 |
| Total number of days absent (calendar days) due to work-related injuries |
62 | 13 |
| Accident ratio | 2.1 | 2.6 |
| Working days lost | 8.2 | 2.0 |
| Introduction, number of hours |
Annual repetition, number of hours |
|
|---|---|---|
| Pickers | 15 | 10 |
| Store employees | 100 | 40 |
| Store managers | 150 | 60 |
| Regional managers | 80 | 80 |
| 2015 | 2014 | |
|---|---|---|
| Women's salaries as a | 98.2% 103.7% | |
| percentage of men's |
The Building Planner shows how Byggmax is constantly striving to focus on solutions and find new ways to help those who love building to shop. All of this started when a number of customers were asked why so many building dreams never become reality. The three biggest problems were:
• I don't know how to build.
• I don't know how much or what type of materials I should use.
• It's inconvenient and difficult to find reliable tradesmen.
Byggmax therefore developed the Planner to solve any problems with just a couple of clicks. Using the optimized tool, you design your room precisely as you want it. Using a simple and intuitive interface, you design the room, arrange doors and windows and then choose between more than 100 billion combinations of wallpapers, flooring, wall paints, and mouldings and millwork. You can see your choices in an inspiring environment right on the screen. You can also see what the material will cost, which tools and accessories you need and make the choice about whether you want to do the work yourself or hire a professional builder to do it for you.
Room Renovation is included in the initial launch, but the number of building projects will soon be extended. Next in line are decking and drainage. The Building Planner is a collaboration between several parties and Byggmax and NetRelations are responsible for the concept development. NetRelations has also worked with the user experience (UX), design and the development of the solution's interface. Avensia is responsible for the underlying system development.
Sonny Rehal, technical manager at Byggmax web, has taken the role of technical project manager from Byggmax's side. He has quality-assured the project and ensured, together with his colleagues, that everything works as it should.
"This has been a challenge as it is an entirely new application - bringing together the technical quantity calculator, which works out how much material is needed, and creating an inspiring design. It should be both practical and appealing. The next release will be decking, which will be released in the spring. It is fun to work with the Building Planner as it is both a unique and cool product," he says.
Lukas Debudaj, test manager at Byggmax, is sitting alongside Sonny Rehal. He has tested the Building Planner's functionality.
"I have tested it so that everything works and so the tool can be integrated into the site we have. The fact that everything was completely new was a challenge, but we now understand it so the decking release will be fast and simple," says Lukas.
Sonny Rehal and Lukas Debudaj will continue their work and "Bygg altan" (Build a deck) will be launched in the spring, enabling users to design their decking with just a few clicks of a button, exactly as they could with Room Renovation. Fast, fun and simple!
The Building Planner - one of Byggmax's greatest innovations in 2015. This is a useful tool for all building visionaries. With just a few clicks of a button you can order a total renovation - including materials, tradesmen and everything else.
Now you can finally calculate, sketch and design your own building project, from start to finish - directly on the screen. You can visualize the results in an inspiring environment and see at once which material you need - and how much of it. You can keep a close eye on the overall price and have the products delivered to your door. Start your next project at byggmax.se/byggplaneraren
From SKETCH TO
SUCCESS With just a few clicks of a button.
Renovate your room online. Choose from lots of wallpapers, paints, floors, and mouldings and millwork!
Do the job yourself or have it professionally built!
"Byggmax is a part of society, and so it is im portant for us to contribute to sustainable develop ment. The company's social responsibility extends over many different areas and varies in nature depending on the company's operations. As Byggmax does not have its own manufacturing operations and instead purchases its materials, and since most purchasing takes place in the Nordic region and Eu rope, we have focused our sustainability reporting on environmental impact.
Through our collaborations in Europe, such as our Bricoalliance purchasing collaboration, we can also take responsibility for our purchasing outside Europe, despite the relatively small volumes we purchase in those geographies.
Byggmax is also involved in the European collabo rative organization for DIY retailers, EDRA. Through this organization we participate in the dialogue with politicians in Brussels, and we also collaborate with our suppliers. It is very positive that retailers and suppliers collaborate. In 2013, for example, a joint do cument was signed regarding how the industry wants to ensure payments and payment times are upheld.
You can also find other information such as Our responsibilities in our reporting, which is carried out in accordance with the Global Reporting Initiative (GRI). We have set a goal of achieving a 25% reduction in carbon dioxide emissions, measured as emissions per ton transported, by 2020. We set this goal in con nection with our first environmental report in 2009. In 2015, work continued on reducing the environmental impact and carbon emissions per ton of goods carried declined.
Since the first measurements in 2009, emissions of CO2 have been reduced by 18% per ton transpor ted. In order to achieve the goal, we need to imple ment new measures. This is one of the reasons we are setting up another distribution center in Gävle. This will enable us to replace road freight with maritime freight, which will reduce the impact on the environ ment.
Other areas that have developed positively over time include waste management at stores, where the proportion of mixed waste declined from 11 percent in 2009 to five percent in 2015, which means sorted and rejected waste increased from 83 percent in 2009 to 87 percent in 2015.
The goal for 2016 is to achieve more than a 20% reduction in CO2 emissions compared with 2009 and to continue the positive trend in the area of waste management."
Magnus Agervald, President
Byggmax's guidelines for social responsibility comprise a code of conduct for suppliers, ethical guidelines, environmental policy, work environment policy and equality policy. All policy documents are available in their entirety on Byggmax's website.
Byggmax's policy documents are based on the Global Compact and the OECD's guidelines for multi national companies. Below is an overview of the UN Global Compact's ten principles in the areas of human rights, labor, the environment and anticorruption for companies, with reference to the documents and policies where the guidelines have been incorporated into Byggmax's operations
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights (Code of conduct for suppliers). Principle 2: Businesses should make sure that they are not complicit in human rights abuses (Work envi ronment policy, Equality policy).
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining (Code of conduct for suppliers). Principle 4: Businesses should uphold the elimination of all forms of forced and compulsory labor (Code of conduct for suppliers).
Principle 5: Businesses should uphold the effective abolition of child labor (Code of conduct for suppliers). Principle 6: Businesses should uphold the elimina tion of discrimination in respect of employment and
Byggmax's guidelines for social responsibility comprise a code of conduct for supp liers, ethical guidelines, environmental policy, work environment policy and equality policy. All policy documents are available in their entirety on Byggmax's website.
occupation (Work environment policy, Equality policy and Code of conduct for suppliers).
Principle 7: Businesses should support a precautio nary approach to environmental challenges. Principle 8: Businesses should undertake initiatives to promote greater environmental responsibility. Principle 9: Businesses should encourage the deve lopment of environmentally friendly technologies.
Principle 10: Businesses should work against corrup tion in all its forms, including extortion and subor nation (Code of conduct for suppliers and Ethical guidelines).
Byggmax's values serve as a supplement to the above documents. All of these documents form part of the Byggmax work environment process, which ensures that these documents remain relevant for the organization.
Since Byggmax performs a minor portion of its pro curement in Asia, about five percent, the risks asso ciated with such procurements are relatively limited compared with if the proportion had been higher. However, these risks are not negligible. The greatest opportunity for Byggmax to make an impact is in rela tion to the environment, specifically, the transport of goods to stores.
"As a part of society, we not only provide employ ment for many people, but also bring taxpayers into society and influence the environment." to "As a part of society, we not only provide employment for many people, we also generate tax revenue for society and influence the environment."
The Annual Report contains various metrics applica ble to the company's impact on society. The mea suring methods used are primarily the aggregate of actual outcomes at stores. When it is impractical to track outcomes per store, tracking is sometimes per formed on an aggregate level. In some cases, a single product category has been selected for tracking. In such instances, it is necessary for Byggmax to be a relatively large buyer to be able to influence various supplier behaviors and, consequently, not all product categories are relevant.
To reconcile and support the measuring methods utilized, Byggmax has examined this summary and reporting based on the guidelines for sustainability reporting G4, produced by the international stakehol - der organization the Global Reporting Initiative (GRI). This examination was performed by Tyréns AB, an external consulting firm.
Byggmax's sustainability report presents GRI disclo sures concerning its primary commercial operations. These operations comprise the store organization of Byggmax AB, including affiliates, as well as the subsidiary Svea Distribution, where applicable. The administration element of the organization is not included in the sustainability report, since its impact is insignificant in relation to the store organization. It is included in the section concerning employees. All Group subsidiaries, except Byggmax Fastighets utveckling AB, are jointly reported unless otherwise specified. Byggmax Fastighetsutveckling AB is not reported at all, since the company did not conduct any significant operations in 2015.
In 2010, the first ever materiality analysis was carried out together with Byggmax's stakeholders in order to identify and prioritize significant issues which form the basis of the report's content. This analysis is kept updated and current via an ongoing dialogue with sta keholders and is reviewed as part of the GRI report by those reviewing the analysis. For more information, see the "Process to define the contents of the report and application of the accounting policies" appendix.
The issues identified as significant based on both the analysis and the GRI's aspects are outlined below.
Finances:
Economic impact (within and outside the organiza tion)
Market presence (within and outside the organiza tion) Procurement practices (within the organization) Environment:
Biological diversity (within and outside the organiza tion)
Emissions (within and outside the organization) Products and services (within and outside the organi zation)
Employment conditions and terms of employment: Employment (within the organization and at suppli ers)
Work environment (within the organization and at suppliers)
Training and education (within the organization) Diversity and equal opportunities (within the organi zation and at suppliers)
Equal pay for men and women (within the organiza tion and at suppliers)
Non-discrimination (within the organization) The organization's role in society:
Society (outside the organization)
Product and service labeling (outside the organization)
Byggmax maintains contact with a number of stake holder groups. These include customers, suppliers, employees, politicians, property owners, neighbors
and shareholders to name but a few. The policy applied to select which stakeholders Byggmax will systematically communicate with has been to select those parties with which communication is frequent at present. A description follows of how Byggmax communicates with key stakeholders:
Customers: Through advertising, the website, customer service and employees in the stores. This communication is conducted on a daily basis.
Suppliers: Through the head office via purchasing. This communication is conducted on a daily basis.
Employees: Via intranet, through the company's management structure and through training. This communication is conducted on a daily basis. In addi tion, an annual employee survey has been performed since 2011.
Politicians: Byggmax has relatively limited contact with political organizations and spokespersons. The company is a member of a European collaboration, EDRA, which has a number of contacts at EU level. EDRA has meetings two to four times per year at which Byggmax participates.
Owners: Byggmax submits financial reports every quarter. In addition, the company participates in Small Cap meetings arranged by shareholder clubs three to five times per year, meets investors in conjun ction with the interim reports and invites sharehol ders to the annual general meetings.
Core issues for Byggmax stakeholders are defined as follows:
Customers: Product quality and price. Employment conditions and terms of employment at Byggmax and at suppliers. Byggmax's environmental impact.
Suppliers: The stability of Byggmax as a customer and Byggmax's financial impact.
Employees: The stability and attractiveness of Byggmax as an employer. Employment conditions and terms of employment at Byggmax. Byggmax's financial impact.
Politicians: The stability of Byggmax as an em ployer and our contribution to society as a whole. Employment conditions and terms of employment at Byggmax and at suppliers. Byggmax's environmental impact.
Owners: Future dividends from Byggmax and sustainable business. Employment conditions and terms of employment at Byggmax and at suppliers. Byggmax's environmental impact.
Over the past few years, Byggmax has produced a sustainability report in accordance with the GRI framework. This year we will transition to the new way of reporting in accordance with the GRI.
Byggmax does not conduct manufacturing opera tions but instead buys its products from some 300 carefully selected suppliers. Byggmax's purchasing strives to find products that hold high quality and which follow relevant standards.
The company has guidelines that cover work con ditions and social responsibility in its own operations as well as in relationships with suppliers of products and services. The Code of Conduct complies with the UN's Global Compact and the OECD's guidelines for multinational companies. Suppliers are personally responsible for ensuring that their operations are pursued in line with the Code of Conduct and, when requested, must provide Byggmax with information concerning their sub-suppliers.
Byggmax's employees must fulfill their undertakings in a manner that does not abuse the company's confidence. This means, for example, that employees must not abuse corporate information, act in matters in which they are partial, or permit their personal undertakings to take precedence over their duty and responsibility to Byggmax.
In their capacity as employees of Byggmax, personnel must not offer, request or accept inappro priate gifts, payments or trips for themselves or for relatives. Under no circumstances are employees at Byggmax to participate in any cartel or act in a man ner that improperly curtails free competition.
Using active environmental programs, Byggmax promotes sustainable social development. Byggmax primarily impacts the environment through product transport, the environmentally hazardous content of packaging and products, printing and distribution of brochures, and through the energy consumption of business activities. The company takes environme ntal considerations into account in all decisions and at all levels of operations and endeavors to comply with applicable legislation and other environmental requirements.
Environmental programs are based on a lifecycle perspective and thus take into account the environ mental impact throughout the product's entire value chain. The company pursues continuous dialog with suppliers and entrepreneurs and imposes relevant requirements. Byggmax also seeks to raise employee awareness of environmental issues and stimulates par ticipation in environmental work. In addition, the share of environmentally friendly products will increase, supplemented by improvements in environmental information for customers. Environmental programs are based on an environmental policy with tangible ob -
jectives and measures for priority areas. The programs are assessed each year in an environmental report that measures the status and development in each area. The goal is to achieve improvement in priority areas from year to year.
The goals of Byggmax's systematic work environ ment programs are to prevent occupationally related illnesses and promote a good physical and psycho social work environment. These efforts encompass the study of working conditions, risk assessment, implementation of preventive measures and the monitoring of business activities. To facilitate these programs, considerable efforts are made to ensure that all the company's executives undergo training in work environment-related programs and fire safety.
Byggmax endeavors to handle work environment issues locally in the organization and make them a natural part of day-to-day activities. The President has primary responsibility for work environment pro grams and fire safety in the organization. The regio nal managers are responsible for ensuring that store managers in their region have undergone training and that the established procedures are complied with. All store managers are responsible for safety, fire safety and the work environment at their facilities and must ensure that all employees have received basic training in these issues, as well as access to current legislation and regulations in addition to the opportu nity to participate in work environment programs.
Byggmax seeks to create an environment in which women and men – both as groups and individu als – jointly and equally create range and totality in operations. The company endeavors to create an awareness of gender and equality that permeates the entire organization and which forms a natural part of internal and external recruitment, pay setting and pay negotiations. Women and men have equal rights, obligations and opportunities within the framework of their employment at Byggmax. This applies both to the physical and psychosocial work environment.
The Byggmax GRI profile is available on page 81 with page references. The report is formulated in accor dance with the GRI's principles at G4 Core level. Since the previous reporting period, Byggmax has made the transition to GRI G4 Core from GRI G3. Significant changes in terms of scope and aspect boundaries that have occurred due to this transition include the fact that the 2015 report only reported aspects identified as significant, in contrast to the previous period which reported all aspects that it was possible to report.
| 2015 | 2014 | 2013 | Trend 2014-2015 | Trend 2009-2015 | |
|---|---|---|---|---|---|
| NOX [g/ton] |
246 | 246 | 256 | 0% | -17% |
| CO [g/ton] | 63.9 | 63.7 | 66.3 | 0% | -16% |
| HC [g/ton] | 10.8 | 10.8 | 11.1 | 0% | -16% |
| Particles [g/ton] | 6.0 | 6.1 | 6.1 | 0% | -14% |
| NOX [ton] |
159.1 | 139.0 | 133.4 | 14% | 35% |
| CO [ton] | 41.4 | 36.0 | 34.6 | 15% | 38% |
| HC [ton] | 7.0 | 6.1 | 5.8 | 14% | 37% |
| Particles [ton] | 3.9 | 3.4 | 3.2 | 14% | 40% |
Table 2, emissions of greenhouse gases and environmentally hazardous substances per ton of goods transported and in absolute measures. Emissions per ton-kilometer are based on emission data from ntmcalc.se
Methods of transportation and overall purchase orders were unchanged during the year, which could also be seen in many of the key performance indicators which were extremely similar to the previous year's level. Looking to the future, we are investigating the possibility of using train transportation again, as this would lead to significant improvements in terms of emission levels.
The proportion of marine freight has declined slightly, which is in line with previous years' cycles with excess and insufficient inventory in alternate years. In the case of excess inventory of products that come in large quantities and do not sell well, purchases from Asia are generally lower, while the opposite is true in the case of insufficient inventory. If purchases from Asia decline, marine transport work is inevitably lower. This two-year cycle becomes all the more clear when it is compared with the previous year. Purchasing levels were lower in 2015, which explains the
reduced amount of marine freight. Emissions of other greenhouse gases and environmentally hazardous substances, per ton transported and in absolute figures, are presented in table 2 below. This category includes nitrogen oxides (NOx), hydrocarbons (HC), carbon monoxide (CO) and small particles.
In the table below it is possible to see extremely small changes compared with the previous year. At times this entails a minor improvement, at others a minor deterioration, but all fall within the ±0.5% span when measured in g/ton km. The fact that total emissions of greenhouse gases and environmentally hazardous substances have increased since 2009 was attributable to the number of stores increasing from 61 to 119 over the corresponding period and to the stores' geographic spread now being substantially larger than it was four years ago.
2015 advertising circulars - filled with loads of building products, tips and tricks and inspiration. Our own customers are often displayed on the front, and they also figure in our commercials.
During 2009, Byggmax initiated its environmental program through the creation of an environmental policy with environmental goals. As a consequence of this policy, an environmental report has been produced and efforts were initiated to continuously achieve improvements to reduce the organization's negative impact on the environment.
Byggmax's main impact on the environment is defined in the environmental policy as follows: • the transportation of products from manufacturer to store or warehouse and from store to customer, • the products' contents of environmentally hazardous substances and the products' packaging, • printing and distribution of brochures, and
• energy consumption in business activities.
Byggmax's environmental policy stipulates yearly measurement of the status and trends in the aforementioned items, in the form of measures implemented and quantitative measurement where possible. The ambition is to improve every year in the areas specified above. The goal is a 25-percent reduction, per ton transported, in emissions of carbon dioxide and other greenhouse gases between 2009 and 2020. The calculation methods utilized and the format of the report are checked by an external consultant.
In 2015, the performance of the distribution centers was in line with the previous year. Management, administration, IT systems, processes, etc. continued to run smoothly without any major deviations, improvements or deterioration.
Some fine-tuning and goal-oriented improvements have, however, resulted in a slightly improved perfor-
| 2015 | 2014 | 2013 | Trend | Trend | |
|---|---|---|---|---|---|
| 2014-2015 | 2009-2015 | ||||
| Transported goods [thousand tons] | 648.0 | 565.9 | 521.5 | 15% | 64% |
| Transport work [million ton-kilometers] | 389.3 | 343.2 | 319.1 | 13% | 43% |
| Of which marine [million ton-kilometers] | 84.1 | 76.5 | 56.2 | 10% | 79% |
| Share marine | 22% | 22% | 18% | -3% | 25% |
| Of which rail [million ton-kilometers] | 0.0 | 0.0 | 0.0 | 0% | 0% |
| Share rail | 0.0% | 0.0% | 0.0% | 0% | 0% |
| Of which road [million ton-kilometers] | 307.0 | 266.7 | 262.1 | 15% | 37% |
| Share road | 79% | 78% | 82% | 1% | -5% |
| Transport work per ton [ton-kilometers/ ton] |
603 | 606 | 612 | 0% | -12% |
| CO2 emissions per ton of goods trans ported [kg] |
28.4 | 28.4 | 30.0 | 0% | -18% |
| CO2 per krona of sales [kg/SEK] | 4.5 | 4.5 | 4.9 | 1% | -19% |
| Absolute carbon emissions CO2 [ton] | 18,422 | 16,046 | 15,662 | 15% | 33% |
Table 1, compilation of key freight ratios. Emissions per ton-kilometer are based on emission data from ntmcalc.se.
mance. If we summarize all transport-related data for 2015, we can see that transport work per ton of goods transported has pleasingly fallen for the fourth year in a row, which means a reduction of about 22% compared with four years ago. If
we look at the quantity of CO2 per ton of transported goods, we can see a decline of over 20 percent compared with 2010.
Emissions are measured as direct emissions produced during the transportation of Byggmax's goods. Each individual route is assigned a method of transportation (different types of truck, boats, etc.) and a distance. The
emission is defined using the method of transportation and distance as a basis. All reductions are solely direct Scope 1 reductions. The stated methods of transportation include all those that arrive at our stores from suppliers, regardless of whether Byggmax is responsible for them or not. It is notable that the report refers to carbon dioxide, however Byggmax intends to supplement the report next year by including carbon dioxide equivalents.
waste as possible is recovered and converted into energy or new materials. The aim is to minimize the amount of waste that goes to landfill and achieve zero mixed waste.
Mixed waste has a declining trend when viewed between 2009 and 2015. Total waste volumes are increasing per store, which is attributable to many of the items that have been included in the product range being of the type that has more transport pack aging than heavy building materials.
Table 5, waste volumes by store in Sweden, 2013-2015.
The total weight of printed direct mail has not changed appreciably between 2014 and 2015. Byggmax works together with a printing firm that is certified in line with the Nordic Ecolabel, EU Ecolabel, PEFC and FSC. Among other measures, this means minimizing the use of health-impairing chemicals in printing ink and paper and striving to promote socially and economically sustainable forestry. The printing firm runs entirely on renewable electricity.
| Waste | 2015 | 2014 | 2013 | Diff | Diff |
|---|---|---|---|---|---|
| cat - |
2014- | 2009- | |||
| egory | 2015 | 2015 | |||
| Mixed waste |
4.8% | 6.2% | 6.7% -1.36% | -6.5% | |
| To land - fill |
8.0% | 7.1% 7.6% 0.92% | 2.11% | ||
| Sorted | 87.2% 86.8% 85.7% 0.44% 4.39% | ||||
| Totalt | 100% | 100% | 100% |
Table 6, total printed matter and per store for the 2009-2015 period.
The printed matter produced and distributed by the Group is an important part of its environmen tal impact. Over a six-year period – from 2009 to 2015 – Byggmax has reduced the volume of printed advertisements per store by about 46 percent. This change was primarily attributable to new stores being established in existing distribution areas, which has significantly cut the average volume of advertise ments distributed per store. an increase in orders at those stores. In the period between 2010 and 2015, the stores increased the number of received orders by about 43 percent while diesel consumption per received order reduced by about 31 percent. During the year, price signs have started to increas ingly be produced in-store, instead of being produced and delivered from a central printing works.
Byggmax endeavors to achieve energy efficiency and all new stores constructed surpass the building regu lations imposed in the respective countries. Prefabri cated insulating facades and thermopane glass in the buildings' windows contribute to favorable energy utilization. Newly built stores have heat recycling integrated in the ventilation system and do not just rely on direct heating. New and renovated stores have LED lighting installed as the light source.
Byggmax is subject to the law regarding energy map ping by major companies.
The direct energy used by Byggmax principally com prises fuel in the form of diesel and gasoline used in the organization's vehicles. These comprise diesel forklifts and company cars.
Table 7, direct energy use by energy source, 2013-2015.
In total, diesel consumption has increased as a result of Byggmax increasing the number of stores and
The fleet of forklifts is gradually being renewed and all new forklifts procured are of environmental class III, in accordance with the European Parliament direc tive 97/68/EU, and electric/diesel hybrids. About 90% of the forklift fleet are now either hybrid or elec tric. The possibility of changing to biodiesel has been examined but the volumes of diesel that Byggmax buys are too small for such a change to be financially viable at present.
The indirect energy used by Byggmax per primary
| Waste | 2015 | 2014 | 2013 | Diff | Diff |
|---|---|---|---|---|---|
| in tons | 2014- | 2009- | |||
| 2015 | 2015 | ||||
| Mixed waste |
2.9 | 3.5 | 3.7 | -6.1% | 31.5% |
| To land - fill |
4.9 | 4.0 | 4.2 -4.0% | 12.0% | |
| Sorted | 53.4 | 49.4 | 47.7 | 3.5% | 8.6% |
| Totalt | 61.3 | 56.9 | 55.7 | 2.3% 5.0% |
| Printed | 2015 2014 2013 | Trend | Trend |
|---|---|---|---|
| matter | 2014-2015 | 2009-2015 | |
| Printed, direct mail (ton) |
853 1 097 1 105 | -22.2% -22.4% | |
| Printed, direct mail (ton/store) |
7.17 9.79 10.5 | -26.8% -60.2% |
The emissions calculations did not include online goods deliveries and home deliveries from stores. At present, such freight comprises a relatively small portion of the company's total goods freight. A constantly increasing proportion of online goods and home deliveries also reduces the amount of freight and emissions, in part through optimiz ing freight to end customers, and in part through customers ordering online and not utilizing their vehicles to go shopping.
Product and service labeling is important. Environ mental labeling and other similar labeling makes it possible for our customers to make a personal choice about how much they want to influence the environ ment, for example.
Byggmax's policy stipulates that all products must have a product description. Furthermore, society requires certain products, primarily of a chemical nature, to have a safety data sheet. This comprises about 15 percent of all products.
| Direct energy use (GJ) | 2015 | 2014 | 2013 |
|---|---|---|---|
| Diesel | 11,631 10,142 | 9,772 | |
| Gasoline | 0.0 | 0.3 | 49 |
| Totalt | 11,631 10,142 | 9,821 | |
| Per store | 98 | 91 | 94 |
| Per order | 0.119 | 0.119 | 0.132 |
The table below applies in cases where it is of use. Our agreements also require suppliers and/or produc ers to comply with national and EU laws regarding product content and labeling.
Products and packaging affect the environment directly and indirectly, for example, through the raw materials they contain, the energy required in their manufacture and in use, and to the extent to which they are recycled or reused at the end of their service life.
Byggmax works actively to promote the use of wood and thus reduce the use of less environmentally friendly material including concrete, cement and hard plastic. Byggmax only retails NTR-labeled pressuretreated lumber that complies with the environmental goals set by the Swedish Wood Preserving Asso ciation and the Nordic Wood Preservation Council. Lumber is procured mainly from Nordic suppliers who produce in the Nordic region and in full loads directly from sawmills to minimize environmental impact.
The majority of parquet flooring sold is labeled FSC, Forest Stewardship Council, the international envi ronmental labeling that aims to promote sustainable forestry.
Byggmax handles goods with a low proportion of packaging. Only a low percentage of articles sold in stores have consumer packaging, meaning packaging that is sold together with the goods and taken home by the customer. Otherwise, products have varying types of transport packaging for protection. Transport packaging is recycled in partnership with recycling centers and pallets are reused in the pallet exchange system of the major freight forwarders and in the building pallet exchange system.
Through membership in REPA, the producer part of the Packaging and Newspaper Collection Service tasked with ensuring that packaging and newspa pers in Sweden are collected and recycled, Byggmax shoulders its responsibility as a producer for packag ing on all brought-in and imported goods. For goods manufactured in Sweden, it is the producer that bears the producer responsibility, meaning that Byggmax indirectly defrays the costs for the handling of these products.
In Sweden, Byggmax has a broad collaboration with Ragn-Sells to ensure that as much of the stores'
| Product labeling | Yes | No |
|---|---|---|
| Components in product | X | |
| Contents, in particular substances which have environmental impact |
||
| Safe usage of the product | X | |
| Disposal of products and environmental impact |
x |
energy source mainly comprises electricity and heat. In 2011, the electricity agreements were renegotiated in Sweden for the stores that do not have electricity included in lease agreements and the choice fell to guarantee-of-origin hydroelectricity from power sta tions in Ljusnan from 2012. In addition, 100 percent of the energy for the stores in Norway is also derived from renewable sources. Stores in Finland have a residual mix of electricity.
Table 8, indirect energy use by primary energy source in 2015 for stores where indirect use is possible to influence. The data for Finland pertains to 2014.
Energy consumption is measured either via our own meters, when available, or is taken from the invoicing documents provided by the property's landlord who invoices Byggmax for energy consumption based on the rented surface area, if no separate meter is avail able.
In collaboration with the electricity supplier, an initiative was carried out to identify and eliminate unnecessary grid loads in Byggmax stores in Swe den. All store managers have undergone energy efficiency training and receive reports of energy use and power usage.
The table show an increase among stores in Swe den, which is due to the fact that in April 2015 we moved our customer service to larger premises with its own meter for reading consumption. We have also converted most stores in Sweden into 2.0 stores throughout 2014-2015, installing better store lighting which has increased consumption. Most of our stores are heated using electricity.
| 2015 | 2014 | 2013 | |
|---|---|---|---|
| Total energy consump - tion (TJ) |
|||
| Sweden | 28.06 | 23.2 | 23.4 |
| Norway | 19.79 | 17.8 | 18.8 |
| Finland | 3.67 | 3.8 | 1.7* |
| Per store, Sweden | 0.37 | 0.3 | 0.3 |
Per store, Norway 0.66 0.7 0.8
Per store, Finland 0.28 0.3 0.1* Table 9, total indirect energy use between 2013 and 2015 for stores where indirect use is possible to influence.* The low figures for Fin land in 2013 were due to data only being available for part of the year.
A review was performed of Byggmax stores and their
| Of which, renewable energy |
Of which, nuclear power |
Of which, fossil fuel |
|
|---|---|---|---|
| Sweden | 100% | ||
| Norway | 100% | ||
| Finland | 9.4% | 46.4% | 44.2% |
locations in relation to protected or valuable areas of nature. The county administrative boards' GIS database was used to provide basic data including the layers of data available that applied to areas of valuable and protected nature. The supporting data differs between the various counties, but the most common types of nature protection are the same for all counties: areas of national interest and Natura 2000, nature reserves and national parks. In Norway, basic data has been collected from the Norwegian government site www.environment.no.
The store in Karlstad is located in an area desig nated in the Swedish national wetland inventory for biological diversity and is located in the vicinity of valuable water resources (meriting protection for fish and birds, water catchment, Natura 2000 and natural environment of national interest). Through its location, which is in a heavily developed area, the store has no impact on biological diversity in the area designated in the wetland inventory. The Torslanda store is located relatively close to an embankment protected inlet and known bird habitat. The store in Larvik, Norway, is located in the vicinity of important coastal biotopes. In general, stores located near the coast can be assumed to be more exposed to climate change. Our assessment is that Byggmax stores do not have an impact on biological diversity to any notable extent.
Eight new stores opened in 2015, of which five were in Sweden and three in Norway. It is worth noting that the store in Vetlanda is near Emån, which is located within the municipality's protected waterway of national interest. The store in Halden is near the Unnerbergbekken waterway which represents an important biotope. However, none of these stores are located in such a way as to pose any direct threat to the waterways. The operations are not considered to pose any threat to the waterways. In connection with other new stores, there are areas of national interest involving paths, cultural heritage sites, archeologi cal cultural sites and ancient monuments. The stores are not considered to pose any threat to these sites in their current design either.
Senior management has taken climate change and the risks and opportunities this entails for the organiza tion into consideration. The major risks to operations comprise physical changes (seasonal variations and flooding) as well as regulatory changes. The oppor tunities include better communication of Byggmax's environmental initiatives to create an environmental profile toward customers and to launch new products that are more environmentally-friendly than existing products. Each of Byggmax's stores has a surface area of approximately 0.01 km2 (kilometers squared). In total, five stores are named under this item, and their total surface area is approximately 0.05 square kilometers.
"That we grew so quickly is not least a result of the fact that we focused a lot on the satisfaction of our customers combined with a very wide product range," explains Jonatan.
With its goal of making it easier and more pleas ant to shop for building supplies, much of Buildor's corporate culture is in line with that of Byggmax. Furthermore, the two companies complement each other both in terms of product range and purchasing channels.
"We have a slightly different profile than Byggmax as we sell a lot in the areas of furnishings, the home and gardens. Early on, when we looked at how Buil dor would benefit from becoming a part of a larger group, we saw that there were a lot of synergies with Byggmax, particularly in terms of purchasing, crossselling and sharing skills, all of which benefit both companies," says Jonatan.
The main areas of focus for both Buildor and Byg gmax include customer satisfaction, efficiency and simplicity. This means that the companies suit each other very well.
"Now we are working together on a daily basis, we can see just how well it is actually working."
It remains to be seen what the future will bring. Right now the companies are working hard to expose the synergies that can be found between the companies. Jonatan feels positive about the collaboration and there are many ideas about how Buildor and Byggmax can help each other.
"Buildor has enormous amounts to learn from Bygg max in the areas of purchasing, traditional marketing, financial procedures and so forth. We, in the mean time, can help Byggmax online, or in other words increase the growth of Byggmax Online further. This way, the transaction means both Byggmax and Buil dor are winners in a range of areas."
In autumn 2015, Buildor became a part of the Byggmax Group. The net-based contender started up in 2013 and has grown at a tremendous pace since then. Jonatan Schwamberg is CEO at Buildor and has been involved since the start
The last price paid on December 31, 2015 was SEK 87, corresponding to a market capitalization for Byggmax of SEK 5,284 million. The highest price noted for the share during the fiscal year was SEK 87 and the lowest notation was SEK 49. In 2015, approximately 49.2 percent of trading in the Byggmax share took place on Nasdaq OMX Stockholm and only about 0.0 percent was carried out on Burgundy. 37 percent com prised over-the-counter (OTC) trading. OTC trading is subsequently reported to, among others, Boat xoff and the Stockholm Stock Exchange for registration. For the 2015 period, the standard deviation for the share price was 2.2% and the Beta 0.914 compared with the OMX Stockholm All Share index.
The share capital in Byggmax Group AB (publ) amoun ted to SEK 20,245,682 divided among 60,737,045 shares with a quotient value of SEK 0.33 per share. Only one class of share exists and all shares have the same rights.
At December 31, 2015, the number of shareholders in Byggmax was 12,231 (7,919) according to Euroclear. The ten largest shareholders owned shares amoun ting to 52 percent of the votes and capital in the company. The percentage of non-Swedish ownership amounted to 59 percent.
Byggmax endeavors to furnish the stock market with clear and current information. Financial information is provided primarily in the Annual Report, the year-end report and in three interim reports. Before publication of the reports, Byggmax maintains a quiet period of 30 days. Byggmax's annual report is only distributed via the Group's website, where it is possible to subs cribe to the company's financial reports.
The 2013 and 2015 Annual General Meetings resolved to introduce warrant programs for senior executives and other key staff at Byggmax. These can be exerci sed in the final six months of their term. The warrants can be exercised in the final six months of their term. The warrants are priced at market value, which is based on a valuation made by an independent party. Each warrant entitles its holder to subscribe for one share in the company at the exercise prices shown in the table below. The participants in the warrants program have entered into a pre-emption agreement.
| 2013 | 2015 | |
|---|---|---|
| Total number | 562,000 | 1,116,000 |
| Price | 2.24 | 3.98 |
| Exercise price | 42.8 | 66.4 |
| Term | 4.5 | 3.5 |
| Number of participants | 13 | 21 |
Byggmax policy is for dividends to amount to at least 50 percent of Byggmax's net profits for the preceding fiscal year, subject to Byggmax's need for capital, its EBIT, financial position, capital requirements and cur rent economic conditions.
The Board of Directors proposes to the Annual Ge neral Meeting a dividend of SEK 2.14 (2.6) per share for 2015, equivalent to 50 percent (73) of the Group's profit after tax.
Byggmax has an attractive business model that crea tes value for shareholders. Byggmax combines heal thy growth with a favorable dividend yield, which is enabled by a highly capital-efficient business model. Since being listed in 2010, the dividend has increased annually by 7 percent.
Byggmax has a history of healthy growth and has suc cessfully established stores since its start in 1993. We estimate that the number of stores in existing markets can be increased from 119 to 180. Byggmax also has a number of exciting investments currently being developed. These include the increased invest ment in e-commerce, continued conversion of existing stores to the Byggmax 2.0 store concept, sales of construction services and the acquisition of Buildor and Skånska Byggvaror.
The Byggmax share was listed on June 2, 2010, on NASDAQ OMX Stockholm and is tra ded on the Mid Cap list.
Futebol dâ força (FDF) means "football gives strength," and is the name of an organization that supports young girls using volunteer coaches. Along side football training, FDF's goal is to reinforce the self-confidence and self-image of young girls. They also actively work to give young girls concrete tools to improve their future prospects themselves.
In Mozambique, the organization runs the national football league Mutola Cup, which is played in 30 districts across the country. In this league, young girls get the chance to play football matches every weekend. Before the matches, they are educated about human rights, sexual and reproductive health and how violence and sexual exploitation can be prevented.
"Through football the leaders can reach out to a large group of young people and society as a whole, without being frightening or provocative. During the matches, we educate the crowds in the same topics as the girls. This year alone we expect to reach out to about 300,000 people in Mozambique," explains founder Cecilia Andrén Nyström.
The team that wins the Mutola Cup gets the chance to travel to Sweden to take part in the Gothia Cup. For the second year in a row, Byggmax joined in and sponsored the flight tickets for the girls to go abroad.
"The work that Cecilia and all of the leaders are doing through Futebol dá força is unbelievably important and we obviously want to be a part of it and ensure the girls are able to come to Sweden," says Emelie Gessner, Marketing Manager at Byggmax.
New in 2015 is the beginning of a collaboration between Byggmax and ActionAid. Over a three-year period, Byggmax will support development in the Vietnamese town of Nam Chua, which is currently characterized by extensive poverty and a lack of educational options.
"Sustainability issues have long been a natural part of our operations. Through this collaboration with Ac tionAid we are taking that work to a new level, where social responsibility is given even greater importan ce. ActionAid is one of few organizations that works side by side with people in the countries in which they work. We believe this is a key factor for bringing about long-term change and is in line with our values concerning social responsibility," says Daniel Juhlin, Marketing Manager at Byggmax.
The investment is being conducted under the name Byggmax Friendship Village and will initially entail Byggmax supporting repairs and extensions of school buildings, as well as improvements to the surroun ding infrastructure.
"We are very pleased that Byggmax is choosing to en ter into a collaboration with ActionAid through which we can bring about long-term change together with a vulnerable group, as well as increase awareness of Vietnam as a developing country. ActionAid has been working locally in Vietnam for around 25 years. Supporting ethnic minorities and promoting young people's right to a good education are two of the most highly prioritized issues," says Christine Von Sydow, Secretary General at ActionAid Sweden.
In addition to Byggmax Friendship Village, Byggmax also undertook an extra venture together with Actio nAid. In September, Byggmax's personnel had the chance to donate a voluntary amount from their net salary to help collect money for people fleeing Syria. Byggmax doubled the collected amount which was then given in full to ActionAid's work in and around refugee camps in Jordan and Lebanon.
Through its collaboration with the organizations Futebol dâ força and ActionAid, Byggmax has expanded its work in the areas of sustainable development and social responsibility over the past year.
It has been an intensive year for Byggmax, with increased market shares, the opening of seven new stores, the conversion of 38 stores to Byggmax 2.0 and the acquisition of two new members of the Byggmax Group; Buildor AB and Skånska Byggvaror Group AB. Naturally, these events impacted the Board's work and influenced the financial situation
Byggmax has a well-composed Board with members of varying and complementary backgrounds and skills. The Board held 18 meetings during the year. Important resolutions taken during the year included:
The evaluation of the Board's work concluded that it is effective and goal-oriented.
As made evident in the Corporate Governance Report, Byggmax applies the Swedish Corporate Governance Code. The Audit Committee, which comprises the Board, follows up the company's assessment of the internal audit through measures including contact with the company's auditors.
Through its budget concept, Byggmax has historically strengthened its market position in a weaker economy. At year-end 2015, Byggmax held a strong position. Net profit amounted to SEK 260 M (218). Shareholders' equity had increased from SEK 1,048 M at December 31, 2014 to SEK 1,142 M at December 31, 2015. Byggmax's financial strength is important as it enables us to invest in the future. You can read more about our investments in the President's Comments.
I am very enthusiastic regarding the investments being made, with more stores continuing the roll-out of Byggmax 2.0 and two acquisitions. Finally, I would like to show my appreciation to our Group management and all employees for a job well done in 2015.
Anders Moberg
Chairman of the Board
| Name | Number of shares | Holding (%) |
|---|---|---|
| Nordea investment Funds | 6,406,178 | 10.55% |
| Swedbank Robur fonder | 5,322,418 | 8.76% |
| SEB Investment Management | 4,859,045 | 8.00% |
| JP Morgan Assets Management (UK) Ltd. | 3,035,975 | 5.00% |
| Schroder Investment Management North America Inc | 2,400,000 | 3.95% |
| Jarrton Management (Göran Petersson) | 2,381,296 | 3.92% |
| Carnegie fonder | 1,789,297 | 2.95% |
| Threadneedle Asset Management Ltd. | 1,717,050 | 2.83% |
| FIL Investment Advisors (UK) Ltd | 1,693,352 | 2.79% |
| T Rowe Price International Ltd. | 1,683,132 | 2.77% |
| Total of the ten major shareholders | 31,287,743 | 51.51% |
| Total other shareholders | 29,449,302 | 48.49% |
| Total at December 31, 2015 | 60,737,045 | 100.00% |
Source: Euroclear
| SHARE PERFORMANCE | 2015 | 2014 |
|---|---|---|
| Earnings per share, SEK | 4.3 | 3.6 |
| Equity per share, SEK | 18.8 | 17.2 |
| Dividend per share, SEK | 2.141 | 2.6 |
| Cash flow from operating activities per share, SEK | 8.1 | 5.1 |
| Number of shares outstanding, thousands | 60,737 | 60,737 |
| Average number of shares, thousands | 60,737 | 60,737 |
| Dividend as a percentage of profit after tax | 501 | 74 |
| Number of shareholders | 12,231 | 7,919 |
| Share price at December 31 | 87.0 | 52.8 |
| Dividend yield, % | 2.51 | 4.9 |
For non-Swedish shareholders, the above data is based on available information.
1 The dividend for 2015 is the proposed dividend by the Board to the AGM
The Byggmax Group conducts sales of building supplies. The business concept is to retail high-quality building supplies at the lowest possible price. Business activities are conducted in Sweden, Norway and Finland. At the end of the period, there were 119 stores, of which 76 were in Sweden, 30 in Norway and 13 in Finland. In addition to the Byggmax stores, there is a service office that manages purchasing, accounting and finance as well as IT functions across the stores.
Byggmax Group AB's (publ) share is listed on Nasdaq OMX Stockholm. At December 31, 2015, the largest shareholder was Nordea Investment Funds with 10.6 percent of the shares.
A list of the ten largest shareholders is available on page 32. Byggmax Group AB's (publ) share capital was SEK 20,245,682 and consists of 60,737,045 shares with a quotient value of SEK 0.33 per share. All shares have equal voting rights. The Articles of Association contain no preemption rights or other limitations on the share's assignability. No circumstances exist of the type the company has an obligation to report in accordance with the provisions in the Annual Accounts Act, Chapter 6, Section 2a, paragraphs 4-11.
The Byggmax Group's retail sales in Norway are conducted by the subsidiary Byggmax Norge and in Finland by the subsidiary Byggmax AB Finland.
Net sales amounted to SEK 4,131.1 M, compared with SEK 3,547.2 M in the preceding year, which was an increase of 16.5 percent. Net sales for comparable stores rose 12.8 percent in local currency. Currency effects on sales were a negative 1.1 percent.
The gross profit margin amounted to 30.6 percent, compared with 31.1 percent for the preceding year. Personnel and operating expenses increased by a total of SEK 107.6 M. This was primarily due to costs of SEK 35.7 M incurred for new stores that were not open at December 31, 2014. Acquisition costs for Skånska Byggvaror and Buildor amounted to SEK 9.6 M. The increase in costs during the year, other than for new stores and acquisition costs, was attributable to expenses associated with the investments being made. From January 1, investments related to the conversion to Byggmax 2.0 will be capitalized. At December 31, 2015, Byggmax had a total of 107 stores with the Byggmax 2.0 concept in place, 38 of which were conversions of existing stores, seven newly opened stores in 2015 and one store that moved to new premises in an existing location. Moving forward, the total investment to convert a store is expected to be around SEK 1.7 M and conversion is expected to lead to about SEK 0.6 M tied up in inventory per store, which is partly financed by an increase in accounts payable.
Operating profit amounted to SEK 331.7 M (296.8) which corresponds to an EBIT margin of 8.0 percent (8.4). EBIT amounted to SEK 341.4 M and the EBIT margin to 8.3 percent, excluding acquisition costs.
The Board of Directors and President of Byggmax Group AB (publ), corporate registration number 556656-3531, with its registered office in Stockholm and head office in Solna, Stockholm, hereby submits its Annual Report for the fiscal year January 1, 2015 to December 31, 2015. Unless otherwise specified, all information applies to the Group. Information in brackets refers to the preceding year. All amounts are stated in SEK million (SEK M) unless otherwise specified.
Cash flow from operating activities amounted to SEK 491.9 M (311.1), up SEK 180.8 M year-on-year. At the end of the fiscal year, inventory amounted to SEK 666.1 M (612.7). Compared with the same period in the preceding year, seven new stores were added, and inventory in the new stores amounted to SEK 33.2 M.
Distribution inventory was SEK 3.3 M higher than in the year-earlier period. Inventory turnover was a multiple of 4.5 (4.2) during the fiscal year. Investments during the year (including financial leasing) totaled SEK 164.2 M (146.5), of which SEK 61.2 M (50.4) pertained to stores converted to the Byggmax 2.0 concept.
Consolidated shareholders' equity amounted to SEK 1,142 M (1,047.6) on December 31, 2015. Consolidated net debt was SEK 319.3 M (451.5) and decreased SEK 132.2 M compared to the preceding year. Net debt in relation to EBITDA amounted to a multiple of 0.8 (1.2). The equity/assets ratio amounted to 48.9 percent (49.4).
Swedish Customs had previously decided, on two occasions (decisions in 2012 and 2013), to levy an additional charge on Byggmax with respect to customs and anti-dumping duties for 2010. In spring 2013, Swedish Customs reviewed the decision regarding customs and anti-dumping duties and reduced the overall amount by SEK 3.2 M. Following the review, the total amount is SEK 29.3 M. Byggmax has appealed parts of this decision.
In autumn 2014, the Administrative Court set aside the decision by Swedish Customs dated March 26, 2012 pertaining to charges for customs and anti-dumping duties. The Administrative Court also annulled the decision by Swedish Customs dated April 12, 2012 to levy additional customs charges. The total value amounts to SEK 12.2 M, which has no impact on earnings for Byggmax. Following the appeal by Swedish Customs of the Administrative Court's ruling, in its turn, on September 22, 2015, the Administrative Court of Appeal set aside the Administrative Court's ruling and referred the case back to the Administrative Court for a new hearing. Byggmax appealed the Administrative Court of Appeal's decision and, on December 1, the Supreme Administrative Court decided not to review the case and, accordingly, the decision of the Administrative Court
remains in force. The case is currently being dealt with by the Administrative Court. Byggmax has also appealed the second decision (from 2013). Byggmax's appeal has been heard in both the Administrative Court and the Administrative Court of Appeal. Byggmax's appeal has been rejected by the Administrative Court and the Administrative Court of Appeal has decided not to pass leave to appeal. Byggmax has appealed the Administrative Court of Appeal's decision to the Supreme Administrative Court.
Byggmax has agreed on future compensation in a corresponding amount with the supplier that sold the products in question to Byggmax. Byggmax paid a total of SEK 23.2 M in customs and anti-dumping duties and exposure to the supplier amounts to SEK 18.7 M at December 31, 2015. This receivable is reported under long-term receivables.
Just as in any other business, Byggmax's business activities are associated with risks. The management of risks is of fundamental significance for the Group's success. Some of the risk factors and significant relationships that are assessed as being of significance for Byggmax's business activities, financial position and performance are shown below.
36 BYGGMAX, 2015 ANNUAL REPORT BYGGMAX, 2015 ANNUAL REPORT 37
| Change (percentage point) all other fac - tors unchanged |
Effect on profit (SEK M) after tax 2015 |
|
|---|---|---|
| Cost price | +1% | -22.4 |
| Personnel costs | +1% | -3.0 |
Risk management is performed by the finance department in accordance with the financial policy set annually by the Board of Directors. A more detailed description of the Group's financial risks and risk management is available in Note 3 among supplementary disclosures.
Byggmax's business activities are strongly affected by sea sonal variations steered by consumer demand for standard building materials. Due to the weather's effect on demand, Byggmax's sales and cash flow are normally higher during the second and third quarters when approximately two-thirds of Byggmax's sales are generated and subsequently decline in the fourth and first quarters. Although seasonal variations
in the country of employment. Total compensation to senior executives consists of fixed salary, variable salary in the form of Short-Term Incentives based on annual performance targets, Long-Term Incentives based on performance over se veral years, pension and other benefits. In addition, there are conditions relating to termination and severance pay. Fixed salaries should be set below market averages. However, overall remuneration, including Short-Term Incentives and Long-Term Incentives, entails that the market average may be exceeded. The combined remuneration must be reviewed annually to ensure that it is in line with the market and is com petitive. When making comparisons, position, the company's size, salary and the person's experience must be taken into consideration.
Fixed salaries form the basis for total compensation. Fixed salaries must be related to the relevant market and reflect the scope of responsibility that the work entails
In addition to fixed salary, senior executives are able to receive STIs for results that exceed one or more predefined performance targets during a fiscal year. Compensation from the STI program can amount to a maximum of 100 percent of the fixed salary for the President and 30 percent of fixed sala ries for the remaining management, thus enabling Byggmax to calculate maximum levels of remuneration. STIs are deter mined by both qualitative and quantitative measures.
The 2013 and 2015 general meetings resolved to introduce a warrants-based incentive program. The incentive program is described in Note 9 of the Annual Report.
Where possible, pension agreements should be premiumbased and designed in accordance with the levels and prac tices applicable in the country where the senior executive is employed.
Other benefits may be provided in accordance with the condi tions that apply in the country where the senior executive is employed. However, all such benefits should be as limited in scope as possible and are not permitted to comprise a signifi cant proportion of total remuneration.
Senior executives are to be offered terms of employment according to the prevailing legislation and practices in the country in which the senior executive is employed. During the notice period, the senior executive is prohibited from working for a competing business. In certain cases, a prohibition of competition may be applied in exchange for continued remuneration for a maximum of 24 months after the end of the notice period. Currently, the longest notice period in the Byggmax Group is 12 months and no contract includes severance pay.
The Board has the right to deviate from the aforementioned guidelines if the Board deems that it is motivated in specific cases.
The above guidelines are unchanged compared with the guide lines adopted by the 2015 AGM.
Refer to Note 9 for further information on senior executives.
In compliance with the Swedish Annual Accounts Act, Chap ter 6, Section 8, Byggmax prepares a Corporate Governance Report, which is included in the Administration Report on pages 38-41.
The average number of employees, (full-time employees) totaled 762 (673). Further information about employees can be found in Note 9
Operations will continue to expand through the opening of new stores in Sweden, Norway and Finland and through the refinement and enhancement of existing stores. Over time, Byggmax will increase its presence in Sweden to about 95 stores, in Norway to about 60 stores and in Finland to about 25 stores. The Board of Directors expects a continued positive sales trend. Byggmax does not provide forecasts for competi tive reasons.
Byggmax mainly affects the environment through the transportation of products from manufacturers to stores or warehouses and from stores to customers as well as through products containing substances that impact the en vironment and through product packaging. Byggmax strives to minimize its impact on the environment and comply with environmental requirements according to Swedish legisla tion. The environmental effort is conducted through such measures as a continuous dialog on environmental issues with our suppliers and contractors and by imposing relevant requirements. Byggmax works to increase the proportion of environmentally friendly products and to improve environ mentally oriented information to customers. Byggmax's environmental report is included in the Annual Report (see page 24).
Pursuant to a motion to the 2016 Annual General Meeting (AGM), the following guidelines apply until the 2017 AGM. The guidelines are to apply for employment contracts that are entered into after the Meeting's resolutions and in cases in which amendments are made to existing agreements after the Meeting's resolutions.
The overriding principles for compensation to senior execu tives are to be based on position, individual performance and the Group's EBIT. Compensation must be competitive
| Retained earnings | 80,014,684 | ||||
|---|---|---|---|---|---|
| Profit for the year | 130,359,303 | ||||
| TOTAL | 210,317,987 | ||||
| The Board of Directors and the President propose that | |||||
| these earnings be distributed such that: | |||||
| Dividend to shareholders (SEK 2.14 per share) 129,977,276 | |||||
| To be carried forward | 80,396,711 | ||||
| TOTAL | 210,373,987 |
Byggmax Group AB's (publ) aim is that dividends to share holders comprise a minimum of 50 percent of the net profit for the year, subject to Byggmax's need for capital, its EBIT, financial position, capital requirements and the prevailing economic conditions.
The Board has examined the Parent Company's and the Group's financial positions and finds that a dividend in ac cordance with the Board's proposal is justifiable in respect of the prudence concept in Chapter 17, section 3, second and third paragraphs of the Swedish Companies Act (2005:551). The opinion of the Board is that the character, scope and risks of the business are currently of such an extent that the proposed dividend does not affect the above assessment.
After payment of the proposed dividend, the company and the Group will still retain a healthy equity/assets ratio, which in the opinion of the Board corresponds with those requirements that can be set at present for the industry in which the company operates. After payment of the proposed dividend, the liquidity of the Parent Company and Group is deemed satisfactory and their consolidation needs as met.
The Board of Directors is of the opinion that the proposed distribution of profits will not lead to any material limitation of the company's or Group's ability to make any necessary investments or to meet their obligations in the short and long term. Nor is the proposed value transfer expected to impact the company's ability to make any necessary invest ments.
On overall assessment of the company's and the Group's financial positions, the Board finds no obstacles to the proposed distribution of profits in line with the Board's proposal.
up the positions as President of Skånska Byggvaror and a member of Byggmax's Group management. See Note 16 for more information.
Byggmax Group AB is a holding company. Operations are conducted in the subsidiary Byggmax AB (Corp. Reg. No. 556645-6215), in the subsidiary Byggmax Fastighetsutveck ling AB (Corp. Reg. No. 556726-8593), in a subsidiary to that company Byggmax Fastighetsholding AB (Corp. Reg. No. 556726-8601), Svea Distribution AB (Corp. Reg. No. 556602- 5895) and in Buildor AB (Corp. Reg. No. 556867-2405). Byggmax Group AB (publ) did not have any employees during the year. Net sales for the Parent Company amounted to SEK 0.3 M (0.3). Profit after financial items was SEK 130.4 M (170.0).For 2015, the Parent Company has an anticipated dividend of SEK 140.0 M (170.0) from Byggmax AB.
Byggmax's dividend policy is presented in greater detail under the "Byggmax share" on page 31. The following earn ings in the Parent Company are at the disposal of the Annual General Meeting:
do not normally affect Byggmax's earnings and cash flow from year to year, earnings and cash flow may be impacted during the year by unusually harsh or mild weather condi tions, or by excessive or insufficient precipitation. Byggmax strives to balance the seasonal effects by, for example, launching new products throughout the year that are not as susceptible to seasonal variations.
Corporate governance means the rules and regulations as well as the existing structure for managing and leading business activities in a limited company with an efficient and controlled approach. Ultimately, corporate governance aims to meet shareholder requirements in respect of return and to provide all stakeholders with adequate and correct information about the company and its development.
The Byggmax Group AB (publ), hereinafter called Byggmax or the company, is listed on NASDAQ OMX Stockholm and applies the Swedish Corporate Governance Code (the Code) from the date of its listing, which was June 2, 2010. The Code builds on the principle "comply or explain" which means that companies that apply the Code can deviate from specific rules but must explain the underlying reasons behind the deviation. Byggmax has not made any deviations from the Code in 2015.
The share capital in Byggmax amounted to SEK 20,245,682 M divided among 60,737,045 shares. Only one class of sha res exists and all shares have equal rights to participation in the company's assets and profits. The number of share holders on December 31, 2015 was 12,231. At December 31, 2015, the largest shareholder was Nordea Investment Funds with 10.6 percent of the shares. Non-Swedish owners ac counted for ownership of approximately 59.0 percent of the total number of shares. For further information regarding the share and shareholders please see pages 31-32 and the Byggmax website.
Shareholders exercise their influence over the company at the Annual General Meeting (AGM) which constitutes the company's highest decision making body. Byggmax's Articles of Association are available in their entirety at byggmax.com.
The 2015 AGM was held on May 5, 2015, at the Primus con ference center in Stockholm. At the AGM, 105 shareholders representing 54.0 percent of the votes were present either in person or via representatives. Fredrik Cappelen was elected Chairman of the AGM.
The main resolutions passed were as follows:
Policies for the appointment of the Nomination Com mittee.
The next AGM for shareholders in Byggmax will be held on Wednesday, May 10, 2016, at Alviks Strand Conference Center in Bromma (Stockholm) from 10:00 a.m. to 12.00 p.m. For further information regarding the AGM, please visit the Byggmax website.
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The Board's formal work plan and written instructions Each year, the Byggmax Board of Directors adopts a formal work plan and written instructions in respect of financial reporting and allocation of duties between the Board and the President. The formal work plan regulates the Board's obligations, the division of work among Board members, the minimum number of Board meetings per year, notice of and documents before Board meetings and the preparation of the minutes of Board meetings.
Written instructions regulate the reporting system that exists to enable the Board to continuously assess the company's and the Group's financial situations and the al location of work between the Board and the President.
The Board's assessment of the individual Board members relation to the company and the shareholders is defined in the table "The Board's composition and attendance at mee tings" (See page 40). As is made evident, Byggmax meets the Code's requirement that the majority of the elected Board members are independent of the company and the Group management and that at least two of these are inde pendent of the company's major shareholders.
Byggmax Group AB (publ) is a Swedish public limited liability company listed on Nasdaq Stockholm. Byggmax applies the Swedish Corporate Governance Code and hereby submits its Corporate Governance Report for the fiscal year January 1, 2015 to December 31, 2015. Byggmax has prepared the Corporate Governance Report in accordance with the Swedish Annual Ac counts Act (1995:1554) and the Swedish Corporate Governance Code. The guidelines for the Swedish Corporate Governance Code are available from the website of the Swedish Corporate Governance Board (www.corporategovernanceboard.se). The Corporate Governance Report is included as part of the Administration Report.
The Board's composition and attendance at meetings A detailed description of the Board members is availa ble on page 80 and the Board's composition and atten dance at Board meetings is presented on page 40.
The Board held 18 meetings in 2015. Important issues addressed by the Board in 2015, in addition to the adoption of the Annual Report and interim reports, and the business plan and attendant budget, included the following:
The Group's President, Magnus Agervald and CFO, Pernilla Walfridsson, participate at Board meetings. Other em ployees may also participate in Board meetings to present specific issues
Evaluation of the work of the Board of Directors in 2015 The Chairman of the Board is responsible for evalua ting the work of the Board including the input of the individual Board members. The evaluation focuses on the supply and demand of specific competence and ways of working. In 2013, an external company was engaged to carry out a thorough evaluation of the Board's members and work. The evaluation of the work of the Board concluded that the work is efficient and goal oriented. The external company used also completed an evaluation of members of the Group management and the assessment was that the mana gement functions well. In 2015, the Board carried out
an internal evaluation of the Board's work, which was reported verbally to the Nomination Committee by the Chairman of the Board.
The Board currently has no separate remuneration commit tee or audit committee. It is the Board's belief that the tasks that would otherwise be performed by committees can be carried out more effectively by the Board in its entirety.
The Board, as a whole, prepares and addresses issues regarding remuneration and other employment terms for senior executives, and assesses the application of the guidelines adopted by the AGM for remuneration of senior executives. The audit committee is comprised by the Board in its entirety. The committees/Board meet the company's auditors twice yearly to discuss matters including audit plans and audit reports. At meetings with the company's auditors, the committee/Board are given the opportunity to meet with the auditor without the President being present.
The President, also CEO, is tasked with managing the ongoing operation of the company in accordance with the written instructions adopted by the Board. Magnus Agervald has been the President and CEO of Byggmax since January 1, 2008. He has no shareholding or partnership in any company that the company has a significant business relationship with.
The Byggmax Group management comprises seven mem bers including the President. A description of the mana gement is available under the heading "Byggmax Group Management" (page 79).
For information concerning salaries and other remuneration to the President and other senior executives see Note 9, page 62.
NOMINATION COMMITTEE Appointed by the majority shareholders. Prepares AGM resolutions in items including appointments.
AGM The AGM constitutes the company's highest decision-making body. The AGM appoints the Board of Directors and auditor.
BOARD OF DIRECTORS The Board and its Chairman are appoint ed by the AGM. The Board is responsible for the organization and management of the company's affairs.
AUDIT COMMITTEE
Prepares audit issues.
REMUNERATION COMMITTEE Prepares remuneration issues.
PRESIDENT AND SENIOR EXECUTIVES
The President and other senior executives are responsible for the Group's ongoing business activities.
AUDITORS The auditor is appointed by the AGM.
The AGM appoints the company's auditors every year. Öhrlings Price-WaterhouseCoopers, referred to below as PWC, has been the company's auditor since the 2010 AGM. In autumn 2013, Ann-Christine Hägglund was appointed the new Auditor in Charge for the audit. In addition to the audit assignment, Byggmax has consulted PWC on taxes and other accounting issues. PWC is obligated to test its independence prior to accepting independent advisory assignments in addition to its auditing assignments for Byggmax. Information in respect of the fees paid to the auditing company is provided in Note 8.
According to the Code, the company's Board should ensure that the interim report in respect of the second or third quarter is reviewed by the auditors. Byggmax's auditors conducted a review of the company's nine-month interim report.
The company has a simple legal and operative structure and a comprehensive management and internal control system. The Audit Committee follows up the company's assessment of the internal audit through contact with the company's auditors. In view of the aforementioned, the Board has opted not to have a separate internal audit function. The question of whether to establish a separate internal audit function is tested on an annual basis.
| Name | Function | Elected | Board Attendance |
Directors' fees | Dependency of the company's manage ment and major shareholders |
|---|---|---|---|---|---|
| Fredrik Cappelen2 | Chairman of the Board | 2006 | 5/18 | SEK 172,651 | No |
| Anders Moberg | Chairman of the Board | 2006 | 18/18 | SEK 447,238 | No |
| Karin Hygrell Jonsson |
Board member | 2014 | 18/18 | SEK 256,575 | No |
| Hannele Kemp painen1 |
Board member | 2015 | 13/18 | SEK 170,939 | No |
| Stefan Linder2 | Board member | 2006 | 5/18 | None | No |
| Lottie Svedenstedt | Board member | 2010 | 17/18 | SEK 256,575 | No |
| Daniel Mühlbach1 | Board member | 2015 | 13/18 | SEK 170,939 | No |
| Stig Notlöv | Board member | 2006 | 14/18 | SEK 256,575 | No |
The Board's responsibility for internal control is regulated by the Swedish Companies Act and in the Swedish Corporate Governance Code, which contains requirements for annual external disclosures regarding the organization of internal control for financial reporting.
The Board has overriding responsibility for internal control at Byggmax. The President has the ongoing responsibility for maintaining internal governance and controls. The ultimate aim of internal control is to ensure that Byggmax's financial reports are prepared in accordance with the law, applicable accounting policies and other requirements that apply to listed companies, and to protect Byggmax's assets. Byggmax has elected to use COSO's definition of internal control as the foundation for its work with internal control. According to COSO, internal control comprises five different parts; the control environment, risk assessment, control activities, information and communication and follow-up. These various parts are described briefly below.1
The control environment forms the basis for the internal control and builds on the culture that the Board of Directors and management communicate and work by. It primarily comprises values, competence, management philosophy, organizational structure, responsibility and authorizations as well as policies and routines. A key component of the control environment is the clear definition and communication of decision paths, authorizations and responsibility between differing levels in the organization and that steering documents in the form of internal policies and guidelines include all material areas and that these provide guidance to the various employees of Byggmax.
A key component of the Board's work is the preparation and approval of a number of policies including the rules of procedure for the Board of Directors, the President's instructions, financial policy, IT policy, information policy and the logbook and insider policy. The aim of these policies includes creating the foundation for sound internal control. All policies are reported annually and adopted by the Group management or Board. Byggmax's accounting process is documented in an accounting manual.
Furthermore, the Board has ensured that the organizational structure provides clear roles, responsibilities and processes that promote efficient management of operational risks and enable targets to be achieved. The responsibility structure includes, as one element, evaluation by the Board of the performance and results of business activities through an appropriate reporting package comprising outcome, forecasts, business plans, strategic plans, follow up of financial risks and analyses of key performance indicators.
All business activities are linked to a certain degree of risk taking. A structured risk assessment enables the identification of significant risks. Byggmax operates an ongoing process of risk analysis in which the risks of errors in the
1 COSO (Committee of Sponsoring Organizations of the Treadway Commission), which is the framework that has the widest spread and international acceptance, and which takes a particular position on the definition of accepted internal control.
financial reporting of significant income statement and balance sheet items are analyzed. Other risks in conjunction with the financial reporting include the risk of fraud, loss or misappropriation of assets. The Board of Byggmax continuously assesses the company's risk management. This includes assessing the preventative measures taken to reduce the company's risks, which entails ensuring the company is appropriately insured and that the company has the requisite policies and guidelines in place.
The Group' control structure is designed to handle the risks the Board assesses as being significant for the internal control of financial reporting. In Byggmax, the control structures comprise an organization with clear roles that enables an efficient, and from an internal control perspective, suitable allocation of responsibilities, and additionally of specific control activities that are aimed at identifying or safeguarding from the risks of errors in the reporting. Byggmax has a systematic modus operandi to minimize the risk of fraud and/or theft, this includes efforts to minimize waste in the stores.
Byggmax has an information policy that includes guidelines for internal and external information from the company. External information is disclosed in compliance with stock exchange and securities legislation and the Swedish Financial Supervisory Authority's regulations. Internal dissemination of price-sensitive information occurs only after Byggmax has released the corresponding information to the stock market. Steering documentation in the form of policies, guidelines and manuals are communicated via the Group's intranet and accounting manual.
The Group's accounting functions are integrated via a joint accounting and reporting system. The Board and Group management are provided with ongoing information in respect of the Group's financial performance, situation and development of the business. The reports also contain analytical follow-ups, trend monitoring and benchmarking between stores. The accounting function has the same procedures and requirements of documentation at every monthly accounts date. The Board continuously evaluates
The work with internal control supports the Board and management with assessing and reviewing significant risk areas in the financial reporting to thereafter be able to select actions and follow-up measures in the chosen areas. the information provided by the Group management. The work includes ensuring that measures are taken in respect of faults and proposed measures that may have been identified in the external audit.
1) Daniel Mühlbach and Hannele Kemppainen were elected at the 2015 AGM.
2) Fredrik Cappelen and Stefan Linder declined re-election ahead of the 2015 AGM.
| 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | |
|---|---|---|---|---|---|---|---|
| Results, SEK M | |||||||
| Net sales | 4,131.1 | 3,547.2 | 3,216.4 3,090.4 | 2,987.1 | 2,773.0 | 2,443.5 | |
| EBITDA | 415.8 | 366.4 | 304.1 | 305.6 | 323.0 | 314.0 | 306.7 |
| EBITA | 331.7 | 296.8 | 246.7 | 252.2 | 277.5 | 274.8 | 272.7 |
| EBIT | 331.7 | 296.8 | 246.7 | 252.2 | 277.5 | 274.8 | 272.7 |
| Profit before tax | 334.1 | 283.2 | 237.9 | 231.5 | 251.6 | 237.4 | 203.9 |
| Income tax | -74.3 | -65.2 | -53.9 | -51.7 | -69.5 | -65.2 | -42.7 |
| Profit for the year | 259.8 | 217.9 | 184.0 | 179.8 | 182.2 | 172.2 | 161.2 |
| Net sales growth, % | 16.5 | 10.3 | 4.1 | 3.5 | 7.7 | 13.5 | 16.0 |
| Like-for-like (LFL) sales growth, % | 12.8 | 3.8 | -0.7 | -2.7 | -1.9 | 2.7 | 6.0 |
| Gross margin, % | 30.6 | 31.1 | 30.7 | 30.2 | 30.1 | 29.7 | 29.8 |
| EBITDA margin, % | 10.1 | 10.3 | 9.5 | 9.9 | 10.8 | 11.3 | 12.5 |
| EBITA margin, % | 8.0 | 8.4 | 7.7 | 8.2 | 9.3 | 9.9 | 11.2 |
| Operating (EBIT) margin, % | 8.0 | 8.4 | 7.7 | 8.2 | 9.3 | 9.9 | 11.2 |
| Interest coverage ratio, % | 57.9 | 40.6 | 21.0 | 18.9 | 19.7 | 13.3 | 8.2 |
| Balance sheet, SEK M | |||||||
| Assets | |||||||
| Fixed assets | 1,527.2 | 1,375.5 | 1,299.6 | 1,266.5 | 1,218.2 | 1,207.4 | 1,181.6 |
| Inventories | 666.1 | 612.7 | 538.3 | 465.8 | 424.9 | 350.5 | 295.0 |
| Other current assets | 109.3 | 100.4 | 73.8 | 87.3 | 99.8 | 70.0 | 98.0 |
| Cash and cash equivalents | 31.7 | 30.9 | 33.1 | 33.9 | 22.8 | 34.1 | 31.6 |
| Total assets | 2,334.4 | 2,119.5 | 1,944.8 | 1,853.5 | 1,765.8 | 1,662.0 | 1,606.3 |
| Shareholders' equity and liabilities | |||||||
| Shareholders' equity | 1,142.0 | 1,047.6 | 970.0 | 914.2 | 844.4 | 748.5 | 337.8 |
| Long-term interest-bearing liabilities | 42.9 | 0.0 | 0.0 | 0.0 | 130.0 | 239.3 | 765.3 |
| Long-term non-interest-bearing liabilities | 105.8 | 97.4 | 84.1 | 82.4 | 100.8 | 53.6 | 58.4 |
| Current interest-bearing liabilities | 350.9 | 480.5 | 504.3 | 483.5 | 344.0 | 240.0 | 71.3 |
| Accounts payable | 520.3 | 370.4 | 284.7 | 278.7 | 268.9 | 268.9 | 285.6 |
| Other current liabilities | 172.5 | 123.6 | 101.7 | 94.7 | 77.7 | 111.7 | 88.0 |
| Total liabilities and shareholders' equity | 2,334.4 | 2,119.5 | 1,944.8 | 1,853.5 | 1,765.8 | 1,662.0 | 1,606.3 |
| Operating capital | 1,461 | 1,499 | 1,447 | 1,381 | 1,332 | 1,194 | 1,143 |
| Operating capital less goodwill | 289 | 448 | 396 | 330 | 281 | 143 | 98 |
| Net debt | 319 | 451 | 477 | 467 | 488 | 445 | 805 |
| Return on operating capital employed | 22.4 | 20.1 | 17.4 | 18.6 | 22.0 | 23.5 | 24.3 |
| Return on operating capital less goodwill, % | 90.1 | 70.3 | 68.0 | 82.6 | 131.0 | 228.2 | 347.2 |
| Return on equity, % | 23.7 | 21.6 | 19.5 | 20.4 | 22.9 | 31.7 | 62.9 |
| Net debt/EBITDA | 0.8 | 1.2 | 1.6 | 1.5 | 1.5 | 1.4 | 2.6 |
| Average net working capital, % of net sales | -2.1 | 2.2 | 1.4 | 0.5 | -1.5 | -3.0 | -2.8 |
| Equity ratio/risk-bearing capital, % | 48.9 | 49.4 | 49.9 | 49.3 | 47.8 | 45.0 | 49.5 |
| Per share data | |||||||
| Equity per share, SEK | 18.8 | 17.2 | 16.0 | 15.1 | 13.9 | 12.3 | 6.1 |
|---|---|---|---|---|---|---|---|
| Earnings per share, SEK | 4.3 | 3.6 | 3.0 | 3.0 | 3.0 | 2.8 | 2.9 |
| Dividend per share, SEK | 2.14 | 2.6 | 2.3 | 2.0 | 1.8 | 1.5 | – |
| Cash flow from operations per share, SEK | 8.1 | 5.1 | 3.2 | 3.6 | 1.5 | 3.4 | 2.9 |
| Amounts in SEK M | Note | 2015 | 2014 |
|---|---|---|---|
| Operating income | |||
| Net sales | 5 | 4,131.1 | 3,547.2 |
| Other operating income | 6, 12, 18 | 10.0 | 12.2 |
| Total operating income | 4,141.1 | 3,559.4 | |
| Operating expenses | |||
| Goods for resale | -2,868.3 | -2,443,6 | |
| Other expenses | 7, 8, 12, 18, | -471.2 | -409.6 |
| 33 | |||
| Personnel costs | 9, 29 | -385.8 | -339.7 |
| Depreciation, amortization and impairment of tangible | |||
| and intangible fixed assets | 13, 14 | -84.1 | -69.6 |
| Total operating expenses | -3,809.4 | -3,262.6 | |
| EBIT | 331.7 | 296.8 | |
| Profit from disposal of shares in Group companies | 11.8 | 0.0 | |
| Financial income | 12 | 19.1 | 15.0 |
| Financial expenses | 12 | -28.6 | -28.6 |
| Profit/loss from financial items | 10 | 2.4 | -13.6 |
| Profit before tax | 334.1 | 283.2 | |
| Income tax | 11 | -74.3 | -65.2 |
| Profit for the year | 259.8 | 217.9 | |
| Other comprehensive income for the period | |||
| Items that will not be reclassified to profit or loss | 0.0 | 0.0 | |
| 0.0 | 0.0 | ||
| Items that may be subsequently reclassified to profit or loss | |||
| Translation differences | -11.1 | -0.6 | |
| Other comprehensive income for the period | -11.1 | -0.6 | |
| Comprehensive income for the period | 248.7 | 217.3 | |
| Earnings per share before dilution, SEK | 4.3 | 3.6 | |
| Earnings per share after dilution, SEK | 4.2 | 3.6 | |
| Average number of shares, thousands, before dilution | 60,737 | 60,737 | |
| Average number of shares, thousands, after dilution | 60,737 | 60,737 | |
| Number of shares outstanding at end of period | 60,737 | 60,737 | |
The profit and the total comprehensive income for the year are attributable in their entirety to Parent Company shareholders.
| Amounts in SEK M | Note Dec. 31, 2015 Dec. 31, 2014 | ||
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Capitalized expenses for development work | 5, 13 | 43.0 | 31.5 |
| Goodwill | 5, 13 | 1,172.7 | 1,051.0 |
| Buildings and land | 5, 14 | 19.1 | 41.4 |
| Leasehold improvements | 5, 14 | 0.0 | 11.8 |
| Equipment, tools, fixtures and fittings | 5, 14 | 267.5 | 214.3 |
| Deferred tax assets | 28 | 5.4 | 4.6 |
| Other long-term receivables | 19.6 | 20.9 | |
| Total fixed assets | 1,527.2 | 1,375.5 | |
| Current assets | |||
| Inventories | 21 | 666.1 | 612.7 |
| Prepayments to suppliers | 21 | 9.6 | 4.0 |
| Accounts receivable | 20 | 4.2 | 1.6 |
| Derivatives | 19 | 0.0 | 1.3 |
| Current tax assets | 0.0 | 0.0 | |
| Other receivables | 22 | 65.4 | 53.5 |
| Prepaid expenses and accrued income | 23 | 30.1 | 40.0 |
| Cash and cash equivalents | 24 | 31.7 | 30.9 |
| Total current assets | 807.1 | 744.0 | |
| TOTAL ASSETS | 2,334.4 | 2,119.5 |
| 25 | 20.2 | 20.2 |
|---|---|---|
| 25 | 441.0 | 441.0 |
| 26 | -13.6 | -6.0 |
| 694.3 | 592.3 | |
| 1,142.0 | 1,047.6 | |
| 27 | 0.1 | 1.8 |
| 19 | 0.0 | 0.0 |
| 28 | 105.8 | 95.6 |
| 42.9 | 0.0 | |
| 148.7 | 97.4 | |
| 27 | 350.9 | 480.5 |
| 520.3 | 370.4 | |
| 18.4 | 6.7 | |
| 19 | 0.1 | 0.0 |
| Amounts in SEK M | Note Dec. 31, 2015 Dec. 31, 2014 | ||
|---|---|---|---|
| SHAREHOLDERS' EQUITY | |||
| Capital and reserves that can be attributed to the Parent Company's owners |
|||
| Share capital | 25 | 20.2 | 20.2 |
| Other capital contributions | 25 | 441.0 | 441.0 |
| Reserves | 26 | -13.6 | -6.0 |
| Earnings brought forward including profit for the year | 694.3 | 592.3 | |
| Total shareholders' equity | 1,142.0 | 1,047.6 | |
| LIABILITIES | |||
| Long-term liabilities | |||
| Borrowing from credit institutions | 27 | 0.1 | 1.8 |
| Derivative instruments | 19 | 0.0 | 0.0 |
| Deferred tax liabilities | 28 | 105.8 | 95.6 |
| Long-term liabilities | 42.9 | 0.0 | |
| Total long-term liabilities | 148.7 | 97.4 | |
| Current liabilities | |||
| Borrowing from credit institutions | 27 | 350.9 | 480.5 |
| Accounts payable | 520.3 | 370.4 | |
| Current income tax liabilities | 18.4 | 6.7 | |
| Derivative instruments | 19 | 0.1 | 0.0 |
| Other liabilities | 30 | 34.4 | 29.1 |
| Accrued expenses and deferred income | 31 | 119.6 | 87.8 |
| Total current liabilities | 1,043.7 | 974.5 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 2,334.4 | 2,119.5 | |
| Pledged assets - shares in subsidiaries | 0.0 | 1,147.4 | |
| Pledged assets - chattel mortgages | 0.0 | 120.0 | |
| Pledged assets - blocked bank funds | 7.7 | 8.4 | |
| Contingent liabilities | None | None |
| Attributable to shareholders in Parent Company | ||||||
|---|---|---|---|---|---|---|
| Note | Share | Other capital |
Retained | Total share holders' |
||
| Amounts in SEK M | 25, 26 | capital | contributions | Reserves | earnings | equity |
| Opening balance at January 1, 2014 | 20.2 | 441.0 | -8.4 | 517.1 | 970.0 | |
| Profit for the year | 217.9 | 217.9 | ||||
| Other comprehensive income for the year | ||||||
| Translation differences | -0.6 | -0.6 | ||||
| Total comprehensive income | -0.6 | 217.9 | 217.3 | |||
| Dividend11 | -139.7 | -139.7 | ||||
| Total transactions with shareholders | 0.0 | 0.0 | 0.0 | -139.7 | -139.7 | |
| Closing balance at December 31, 2014 | 20.2 | 441.0 | -9.0 | 595.3 | 1,047.6 | |
| Opening balance at January 1, 2015 | 20.2 | 441.0 | -9.0 | 595.3 | 1,047.6 | |
| Profit for the year | 259.8 | 259.8 | ||||
| Other comprehensive income for the year | ||||||
| Translation differences | -11.0 | -11.0 | ||||
| Total comprehensive income | -11.0 | 259.8 | -11.0 | |||
| Issues of warrants | 3.6 | 3.6 | ||||
| Dividend2 | -157.9 | -157.9 | ||||
| Total transactions with shareholders | 0.0 | 0.0 | 0.0 | -154.0 | -154.0 | |
| Closing balance at December 31, 2015 | 20.2 | 441.0 | -20.0 | 700.8 | 1,142.0 |
1 Dividend 2014, SEK 2.3 per share 2 Dividend 2015, SEK 2.6 per share
| Amounts in SEK M Note |
2015 | 2014 | |
|---|---|---|---|
| Cash flow from operations | |||
| EBIT | 331.7 | 296.8 | |
| Non-cash items | |||
| –Depreciation/amortization of tangible and intangible fixed assets | 85.4 | 69.6 | |
| –Other non-cash items1 | -6.5 | 1.4 | |
| Interest received | 8.7 | 6.9 | |
| Interest paid | -16.7 | -21.0 | |
| Tax paid | -51.5 | -44.6 | |
| Cash flow from operations before changes in working capital | 351.1 | 309.0 | |
| Changes in working capital | |||
| Increase/decrease in inventories and work in progress | 21 | -59.0 | -78.3 |
| Increase/decrease in other current receivables | 22 | 25.9 | -20.5 |
| Increase/decrease in other current liabilities | 30 | 174.0 | 100.9 |
| Cash flow from operations | 491.9 | 311.1 | |
| Cash flow from investing activities | |||
| Divestment of subsidiaries | 18 | 31.8 | 0.0 |
| Investment in intangible fixed assets | -22.8 | -12.0 | |
| Investment in tangible fixed assets | -141.4 | -134.5 | |
| Divestment of tangible fixed assets | 0.0 | -0.6 | |
| Investment in other financial fixed assets | 0.7 | 0.0 | |
| Investment in subsidiaries | 16 | -72.1 | 0.0 |
| Cash flow from investing activities | -203.7 | -147.1 | |
| Cash flow from financing activities | |||
| Change in overdraft facility | -128.3 | -16.7 | |
| Issue of warrants | 3.9 | 0.0 | |
| Dividend to Parent Company's shareholders | -157.9 | -139.7 | |
| Amortization of loans | -4.4 | -9.8 | |
| Cash flow from financing activities | -286.8 | -166.2 | |
| Cash flow for the period | 1.4 | -2.2 | |
| Cash and cash equivalents at the beginning of the period | 24 | 22.5 | 24.7 |
| Cash and cash equivalents at the end of the period2 | 24 | 23.9 | 22.5 |
1 Other non-cash items pertain to translation differences 2 Note that cash and cash equivalents in the cash flow is adjusted for blocked bank funds (SEK 7.7 M in 2015 and SEK 8.4 M in 2014)
| Amounts in SEK M | Note | 2015 | 2014 |
|---|---|---|---|
| Operating income | |||
| Net sales | 0.0 | 0.0 | |
| Other operating income | 0.3 | 0.3 | |
| Total operating income | 0.3 | 0.3 | |
| Operating expenses | |||
| Other external expenses | 8, 9 | -15.8 | -4.9 |
| Personnel costs | 9 | -0.8 | -0.4 |
| Total operating expenses | -16.6 | -5.3 | |
| EBIT | -16.3 | -5.0 | |
| Dividends from Group companies | 140.0 | 170.0 | |
| Interest income and similar items | 25.2 | 27.4 | |
| Interest expenses and similar items | -18.6 | -22.4 | |
| Profit from financial items | 10 | 146.6 | 175.0 |
| Profit before tax | 130.4 | 170.0 | |
| Tax on profit for the year | 11 | 0.0 | 0.0 |
| Profit for the year | 130.4 | 170.0 |
No statement of other comprehensive income was prepared since the company recognized no transactions under other comprehensive income. Accordingly, the profit for the period corresponds with the comprehensive income for the period.
| Amounts in SEK M | Note | 2015-12-31 | 2014-12-31 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Financial fixed assets | |||
| Participations in Group companies | 15 | 507.0 | 358.0 |
| Receivables from Group companies | 354.0 | 354.0 | |
| Total fixed assets | 861.0 | 712.1 | |
| Current assets | |||
| Current receivables | |||
| Receivables from Group companies | 12.6 | 12.1 | |
| Other receivables | 22 | 140.0 | 170.0 |
| Prepaid expenses and accrued income | 1.6 | 1.7 | |
| Total current receivables | 154.2 | 183.8 | |
| Cash and bank balances | 0.0 | 0.0 | |
| Total current assets | 154.2 | 183.8 | |
| TOTAL ASSETS | 1,015.3 | 895.9 |
| Amounts in SEK M | Note Dec. 31, 2015 Dec. 31, 2014 | ||
|---|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted equity | |||
| Share capital | 25 | 20.2 | 20.2 |
| Total restricted equity | 20.2 | 20.2 | |
| Unrestricted equity | |||
| Share premium reserve | 418.7 | 418.7 | |
| Retained earnings | -338.7 | -350.7 | |
| Profit for the year | 130.4 | 170.0 | |
| Total unrestricted equity | 210.4 | 238.0 | |
| Total shareholders' equity | 230.6 | 258.2 | |
| Long-term liabilities | |||
| Liabilities to credit institutions | 27 | 0.0 | 0.0 |
| Other long-term liabilities | 42.9 | 0.0 | |
| Total long-term liabilities | 42.9 | 0.0 | |
| Current liabilities | |||
| Borrowing from credit institutions | 27 | 701.9 | 635.7 |
| Accounts payable | 1.2 | 0.2 | |
| Current income tax liabilities | 0.0 | 0.0 | |
| Liabilities to related parties | 20.0 | 0.0 | |
| Other liabilities | 10.1 | 0.2 | |
| Accrued expenses and deferred income | 31 | 8.5 | 1.6 |
| Total current liabilities | 741.7 | 637.7 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,015.3 | 895.9 | |
| Pledged assets | 32 | None | 358.0 |
| Contingent liabilities | 32 | None | None |
| Restricted equity |
Unrestricted equity | |||||
|---|---|---|---|---|---|---|
| Amounts in SEK M | Note 25, 26 |
Share capital |
Share premium reserve |
Retained earnings |
Profit for the year |
Total share holders' equity |
| Shareholders' equity on January 1, 2014 | 20.2 | 418.7 | -311.0 | 100.0 | 227.9 | |
| Carried forward | 100.0 | -100.0 | 0.0 | |||
| Profit for the year | 170.0 | 170.0 | ||||
| Other comprehensive income | 0.0 | |||||
| Total comprehensive income | 0.0 | 0.0 | ||||
| Dividend1 | -139.7 | -139.7 | ||||
| Total transactions with shareholders | -139.7 | -139.7 | ||||
| Shareholders' equity on December 31, 2014 | 20.2 | 418.7 | -350.8 | 170.0 | 258.2 | |
| Shareholders' equity on January 1, 2015 | 20.2 | 418.7 | -350.8 | 170.0 | 258.2 | |
| Carried forward | 170.0 | -170.0 | 0.0 | |||
| Profit for the year | 130.4 | 130.4 | ||||
| Other comprehensive income | 0.0 | |||||
| Total comprehensive income | 0.0 | 0.0 | ||||
| Dividend2 | -157.9 | -157.9 | ||||
| Total transactions with shareholders | -157.9 | -157.9 | ||||
| Shareholders' equity on December 31, 2015 | 20.2 | 418.7 | -338.7 | 130.4 | 230.6 |
1 Dividend 2014, SEK 2.3 per share 2 Dividend 2015, SEK 2.6 per share
| Amounts in SEK M Note |
2015 | 2014 |
|---|---|---|
| Cash flow from operations | ||
| EBIT | -16.3 | -5.0 |
| Adjustment for non-cash items | ||
| –Group contributions received | 12.6 | 12.1 |
| –Other non-cash items | 140.0 | 170.0 |
| Interest received | 12.6 | 15.3 |
| Interest paid | -18.4 | -21.7 |
| Tax paid | 0.0 | 0.0 |
| Cash flow from operations before changes in working capital | 130.6 | 170.6 |
| Changes in working capital | ||
| Operating receivables | 29.6 | -68.1 |
| Operating liabilities | 2.8 | -0.1 |
| Cash flow from operations | 162.9 | 102.4 |
| Cash flow from investing activities | ||
| Investments in subsidiaries | -72.1 | 0.0 |
| Cash flow from investing activities | -72.1 | 0.0 |
| Cash flow from financing activities | ||
| Repayment of debt | 0.0 | 0.0 |
| Dividend | -157.9 | -139.7 |
| Changes in current financial liabilities | 67.0 | 37.3 |
| Cash flow from financing activities | -90.9 | -102.4 |
| Cash flow for the period | 0.0 | 0.0 |
| Cash and cash equivalents at the beginning of the period | 0.0 | 0.0 |
| Cash and cash equivalents at the end of the period | 0.0 | 0.0 |
The Byggmax Group conducts sales of building supplies and is established in 72 locations in Sweden, 27 locations in Norway and 13 locations in Finland. Byggmax's business concept is to sell high-quality building supplies at the lowest possible price.
The Parent Company is a limited-liability company registe red in Sweden, Stockholm. The address of the head office is Armégatan 40, SE-17 171 Solna.
The Parent Company is listed on NASDAQ OMX Stockholm.
On March 7, 2016, the Board of Directors approved these consolidated financial statements for publication. The Annual Report will be presented to the Annual General Meeting on May 10, 2016.
All amounts are recognized in SEK millions (SEK M) unless otherwise specified. Amounts in brackets represent the cor responding year-earlier period.
The most important accounting policies applied in the pre paration of this annual report are detailed below. The same policies are usually applied by both the Parent Company and the Group.
The financial statements of the Byggmax Group were prepa red in accordance with the Annual Accounts Act and Inter national Financial Reporting Standards (IFRS)/International Accounting Standards (IAS), as adopted by the EU, and recommendation RFR 1 Supplementary Accounting Rules for Groups issued by the Swedish Financial Reporting Board.
Recommendation RFR 2 Accounting for Legal Entities, issued by the Swedish Financial Reporting Board, and the Annual Accounts Act were applied in the preparation of the financial statements of the Parent Company.
The financial statements of the Group and the Parent Company refer to the fiscal year ended December 31, 2015. Byggmax applies the acquisition method when measur ing assets and liabilities, with the exception of derivative instruments, which are recognized at fair value in profit or loss.
2.1.1 New and amended standards applied by the Group Those standards applied by the Group for the first time for the fiscal year starting January 1, 2015 and that have a ma terial impact on the consolidated financial statements are detailed below: The implementation of IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities only impacted supplementary disclosures.
No standards, amendments and interpretations that enter force for fiscal years starting January 1, 2015 have any mate rial impact on the consolidated financial statements.
2.1.2 New standards, amendments and interpretations of existing standards that have not been applied by the Group. A number of new standards and interpretations came into effect for fiscal years beginning on or after January 1, 2015 and were not applied in the preparation of this financial report. None of these are expected to materially impact the consolidated financial statements, with the exception of those outlined below:
IFRS 9 Financial Instruments addresses the classifica tion, measurement and recognition of financial assets and liabilities. The complete version of IFRS 9 was issued in July 2014. This replaces the parts of IAS 39 relating to the classification and measurement of financial instruments. The standard is to be applied to fiscal years beginning on or after January 1, 2018. Early adoption is permitted. The Group has yet to evaluate the impacts of implementing the standard.
IFRS 15 Revenue from Contracts with Customers governs how income recognition is performed. The principles on which IFRS 15 is based aim to provide users of financial re ports with more informative, relevant disclosures about the company's revenue. The expanded disclosure requirements mean that information about the nature, timing and uncer tainty of revenue and cash flows arising from the company's contracts with customers must be provided. Under IFRS 15, revenue should be recognized when customers gain control of the sold product or service and are able to use or receive benefits from the product or service. IFRS 15 replaces IAS 18 Revenues and IAS 11 Construction Contracts as well as the SICs and IFRICs relating thereto. IFRS 15 enters force on January 1, 2018. Early adoption is permitted.
IFRS 16 Leases. In January 2016, the IASB published a new leasing standard that will replace IAS 17 Leasing contracts as well as accompanying interpretations IFRIC 4, SIC-15 and SIC-27. The standard requires assets and liabilities attribu table to all leasing contracts, with a few exceptions, to be recognized in the balance sheet. This report is based on the view that the lessee is entitled to use an asset for a specific period of time while also having an obligation to pay for this entitlement. The lessor report will be largely unchanged. The standard applies to fiscal years beginning on or after January 1, 2019. Early adoption is permitted. The EU has not yet adopted the standard. The Group has not yet evaluated the impact of IFRS 16.
None of the other IFRS or IFRIC interpretations that have yet to come into legal effect are expected to have any material impact on the Group.
Goodwill corresponds to the amount by which the cost exceeds the fair value of the Group's share of an acquired subsidiary's identifiable net assets on the acquisition date. Goodwill from the acquisition of subsidiaries is recognized as an intangible asset.
Goodwill, which is recognized separately, is tested annually to identify possible impairment needs and is recognized at cost less accumulated impairment. Impairment of goodwill is not reversed. Gains or losses from the divestment of a unit include the remaining recognized value of the goodwill attributable to the divested unit.
Goodwill is allocated to the cash-generating unit (CGU) that existed when the goodwill item arose when assessing possible impairment needs. The distribution is based on the CGUs or groups of CGUs that are expected to benefit from the business combination that resulted in the goodwill item. The Byggmax Group distributes the original goodwill to the CGU that existed on the date when the original good will arose. Additional goodwill is distributed to the units deemed to benefit from the business combination.
All tangible fixed assets are recognized at cost less depre ciation. The cost includes fees that can be directly attribu ted to the acquisition of the asset.
Additional fees are only added to the asset's carrying amount or recognized as a separate asset, depending on what is most appropriate, if it is probable that the future economic benefits associated with the asset will accrue to the Group and the asset's cost can be measured in a reliable manner. The carrying amount for the replaced portion is eliminated from the balance sheet. All other forms of repairs and maintenance are recognized as costs in profit or loss during the period in which they arise. There is no deprecia tion on land. Depreciation of other assets to reduce their cost to the estimated residual value over the estimated economic lifetime is applied in a straight line according to the following:
| Renovations and land maintenance | 20 years |
|---|---|
| Equipment, tools, fixtures and fittings | 5-10 years |
Computers and IT-related equipment 5 years The residual values of assets and their economic lifetimes are reviewed every balance-sheet date and adjusted as necessary. An asset's carrying amount is written down im mediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses from divestments are established by com paring the sale proceeds with the carrying amount and are recognized under other operating income or other expenses in profit or loss. Properties that the Group owns are sold when the building is ready for use. Thus depreciation does not arise on Byggmax's properties, which are sold directly after construction. All properties are classified as operating properties.
The Group capitalizes borrowing costs that are directly
attributable to the purchase, construction or production of an asset that takes a substantial period of time to complete for its intended use or sale as part of the cost of the asset. During 2015, the Group did not capitalize borrowing costs, since there were no assets during the period that required a substantial period of time for completion for use or for sale.
Assets that have an indeterminate economic lifetime, such as goodwill, are not depreciated but instead tested annually for the need for impairment. Tangible fixed assets that are depreciated and such intangible assets that are amortized are assessed with respect to decline in value whenever events or changes in circumstances indicate that the asset's carrying amount exceeds its recoverable amount. Impair ment is recognized in an amount corresponding to the amount by which the asset's carrying amount exceeds the recoverable amount. The recoverable amount is the higher of the asset's fair value reduced by sales costs and its value in use. In assessing impairment needs, assets are grouped at the lowest level for which separate cash flows can be identified (CGUs). For tangible and intangible fixed assets that have been impaired, an assessment is made on each balance-sheet date as to whether a reversal should take place. Impairment of goodwill is not reversed.
The Group classifies its financial assets in the following categories: financial assets and liabilities measured at fair value in profit or loss, loan receivables and accounts recei vable, financial assets held until maturity, available-for-sale financial assets and other financial liabilities. This classifi cation depends on the purpose for which the financial asset was acquired. Management establishes the classification of the financial assets on the first reporting date and reasses ses this decision on every reporting date. At present, the Group has no financial assets that are classed as financial assets held until maturity or available-for-sale financial assets.
Financial assets and liabilities measured at fair value in profit or loss are financial instruments held for sale. A financial asset or a financial liability is classified in this ca tegory if it was primarily acquired to be sold within a short period. Derivatives are classified as held for sale unless they are identified as hedges. The Group holds derivative instruments in the form of currency forward contracts. The Byggmax Group does not apply hedge accounting accor ding to IAS 39, meaning that all derivative instruments are measured at fair value in profit or loss. Changes in the value of derivative instruments attributable to borrowing are recognized under financial expenses. Other changes in the value of derivative instruments are recognized as financial income or expenses.
Loan receivables, accounts receivable and other receivables. Loan receivables, accounts receivable and other receivables are financial assets which are not derivatives, which have payments that are established or can be established and which are not listed on an active market. They are included in current assets with the exception of items with maturity dates greater than 12 months from the balance-sheet date,
The preparation of financial statements in compliance with IFRS and generally accepted Swedish accounting principles requires assessments and assumptions to be made that affect recognized asset and liability items and income and expense items, respectively, as well as other information disclosed. The actual outcome may differ from these as sessments. The areas that require a high degree of complex assessment, or such areas in which assumptions and estimates are of material significance to the consolidated accounts, are detailed in Note 4.
Subsidiaries are all companies over which the Group exer cises controlling influence. The Group controls a company when the Group is exposed to, or has rights to, variable returns from its holding in the company and has the ability to affect those returns through its influence over the company. Subsidiaries are fully consolidated from the date on which controlling influence is transferred to the Group. They are eliminated from the consolidated accounts as of the date the controlling influence ceases.
The acquisition method is the recognition method used when consolidating a subsidiary. The cost of an acquisition corresponds to the fair value of the assets received as com pensation, issued equity instruments and liabilities arising or assumed on the acquisition date. Expenses attributable to the acquisition should be recognized as a cost. Identifi able assets, liabilities and contingent liabilities are initially measured at fair value, regardless of any minority interest. A positive difference between the cost of the acquisition and the fair value of the Group's share of net assets is recognized as goodwill. If the cost of the acquisition is less than the fair value of the Group's share of net acquired assets, the dif ference is recognized directly in profit or loss.
Intra-group transactions and balance-sheet items, as well as unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of a need for impairment of the transferred asset. The accounting policies for subsidia ries were changed as appropriate to guarantee consistent application of the Group's policies.
The subsidiary Buildor AB was acquired in November 2015 and is included in the consolidated financial statements as of November 2, 2015. Information about the acquisition and preliminary acquisition balance sheet is presented in Note 16.
The subsidiary Skånska Byggvaror AB was acquired in January 2016. This company is included in the consolidated financial statements from the acquisition date on January 4, 2016. For a preliminary acquisition balance sheet, see Note 16.
In connection with the acquisition of a company, an as sessment is made as to whether the acquisition should be classified as a business or an asset. Byggmax defines an acquisition as a business combination in the event of the
acquired business includes employees in addition to the acquired assets and liabilities. Business combinations are recognized in accordance with IFRS 3, which entails, for ex ample, that acquisition costs are expensed directly and that deferred tax is recognized as the difference between the acquired assets' market value and their residual value for tax purposes. For assets acquisitions, all acquisition costs are recognized as an increase of the cost in accordance with IAS 16 and IAS 38. Byggmax determines whether the acquisition is to be classified as a business or an asset on a case-by-case basis.
Operating segments are recognized in a manner that cor responds to the internal reporting submitted to the chief operating decision maker (CODM). The CODM is the function that is responsible for the allocation of resources and as sessment of the operating segments' results. In the Group, this function was identified as the Board of Directors. Byggmax has only one identified operating segment, which is the Nordic segment.
Functional currency and reporting currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity ope rates (the "functional currency"). In the consolidated accounts, Swedish kronor (SEK) is used, which is the Parent Company's functional currency and reporting currency.
Transactions in foreign currency are translated to the fun ctional currency according to the exchange rate prevailing on the transaction date. Exchange-rate gains and losses arising in payment of such transactions and in translation of monetary assets and liabilities in foreign currencies at the closing-date rate are recognized in profit or loss. Exchangerate differences in accounts payable and accounts receivable are recognized in EBIT. Other exchange-rate differences are recognized in net financial items.
Consolidation of foreign subsidiaries and branches The assets and liabilities of foreign subsidiaries and branches are translated at the closing-date rate, while all items in profit or loss are translated monthly at the month's average rate and all exchange-rate differences that arise in the translation of foreign subsidiaries' financial statements are recognized in other comprehensive income.
Capitalized expenses for development work and similar items investments in the Group's business system and website, are recognized at cost less accumulated amortization and any impairment. Amortization is applied on a straight-line basis over the estimated economic lifetime, which is five years.
Costs for maintenance of proprietary decelopment work are expensed as they arise. Development costs attributable to the development and testing of identifiable products and systems are recognized as an intangible fixed assets when the criteria for recognizing an intangible asset are satisfied.
Tax is recognized in profit or loss, except when tax pertains to items that are recognized in other comprehensive income or directly in shareholders' equity. In such cases, tax is recognized in other comprehensive income and shareholders' equity respectively.
The current tax cost is calculated based on the tax regulations that are in effect on the balance-sheet date or in practice approved in the countries in which the Parent Company's subsidiaries are active and generate taxable income. Management actively evaluates the claims that are made in tax returns regarding situations where tax regulations are subject to interpretation and allocates reserves, where appropriate, for amounts that are likely to be paid to tax authorities.
Deferred tax is recognized in its entirety according to the balance-sheet method on all temporary differences arising between the value for tax purposes of assets and liabilities and their carrying amounts in the consolidated accounts. A deferred tax liability is not recognized, however, if it arises as a result of the initial recognition of goodwill. Neither is deferred tax recognized if it arises as a result of a transaction for an asset or liability being recognized for the first time that is not a business combination and which on the acquisition date does not affect recognized or taxable earnings. Deferred income tax is calculated by applying tax rates and laws that have been approved or announced on the balance-sheet date and which are expected to apply when the deferred tax assets are realized or when the deferred tax liabilities are settled.
Deferred tax assets are recognized to the extent that it is probable that future surpluses for tax purposes will be available to offset temporary differences.
Deferred tax is calculated on the basis of temporary differences arising in participations in subsidiaries except in cases where reversal of the temporary differences can be controlled by the Group and it is probable that the temporary difference will not be reversed in the foreseeable future.
When there is an intent to settle balances through net payments, deferred tax assets and liabilities are offset when a legal right of offset exists for current tax assets and tax liabilities and when the deferred tax assets and liabilities can be attributed to taxes debited by one and the same tax authority and apply to the same tax subject or different tax subjects.
Pension obligations
The Group companies only have defined-contribution pension plans with the exception of Alecta, which is a definedbenefit plan that for the time being can be treated as a defined-contribution plan.
For defined-contribution pension plans, Byggmax pays a fee to a publically or privately administered pension insurance plan on an obligatory, contractual or voluntary basis. The Group has no further payment obligations when the fees have been paid. The fees are recognized as personnel costs in profit or loss at the rate in which they are earned
by employees performing services for the company during a period. Prepaid fees are recognized as an asset to the extent that cash payment or a reduction of future payments will accrue to the Group.
Compensation on termination of employment is paid when employment is terminated by Byggmax prior to the normal pension age or when the employee accepts a voluntary termination in exchange for such compensation. The Group recognizes severance pay when the Group is demonstrably obligated either to terminate employment according to a detailed formal plan without any option for recall or to provide compensation in a case of termination of employment as a result of an offer made to encourage voluntary resignation. Benefits that are due more than 12 months after the balance-sheet date are discounted to current value.
The Group recognizes a liability and an expense for bonuses. The Group recognizes a provision when there is a legal obligation or an informal obligation due to previous practice.
Share-based payments within the scope of the existing options program do not entail any cost, since the price of the warrants corresponds to their fair value.
The Group's income is generated from the sale of goods and services that are included in the Byggmax product range. Sales are primarily to private customers, although there are some sales to companies. There is no production or development of products within the Group. Sales recognized are net of intra-Group sales.
Income includes the fair value of what has been received or will be received for goods sold and services in the Group's ongoing operations. Income is recognized in net amounts with deductions for VAT, returns and discounts. The Group recognizes income when its amount can be measured in a reliable manner and it is probable that future economic benefits will accrue to the company. This date coincides with delivery of the goods to the customer.
Interest income is recognized at the rate in which it is earned.
The Group builds properties which after completion are sold to a leasing company (see also 2.14 Leasing below with respect to Sale-and-leaseback transactions). Byggmax recognizes income from the sale of the property when the risks and benefits associated with ownership are transferred to the leasing company, which normally coincides with the transfer date.
Leasing in which a significant portion of the risks and
which classifies them as fixed assets. Loan receivables, accounts receivable and other receivables are recognized as accounts receivable, other receivables and other long-term receivables in the balance sheet. Cash and cash equivalents are also included in this category. An impairment of accounts receivable and other receivables is recognized in profit or loss under other expenses.
The Group's borrowing (which includes borrowing from credit institutions and other long-term borrowing in the balance sheet) and accounts payable are classified as other financial liabilities.
Purchases and sales of financial assets and liabilities are recognized on the transaction date, which is the date on which the Group pledged to purchase or sell the asset or liability. Financial assets and liabilities are initially recognized at fair value in the balance sheet. Financial assets are removed from the balance sheet when the right to receive cash flows from the instrument has expired or been transferred and the Group has transferred virtually all risks and benefits associated with ownership rights. Financial liabilities are removed from the balance sheet when the contractual obligation has been fulfilled or in some other manner extinguished.
Financial assets and liabilities measured at fair value in profit or loss and available-for-sale financial assets are recognized after the acquisition date at fair value. Loan receivables, accounts receivable and other receivables and financial assets held until maturity and other financial liabilities are recognized after the acquisition date at amortized cost with application of the effective-interest method.
The fair value of currency forward contracts is established using observable data for currency forwards on the balancesheet date. Fair value for interest swaps is calculated as the current value of estimated cash flows.
On each balance-sheet date, the Group considers whether there is objective evidence of a need for impairment for a financial asset or a group of financial assets, such as the closure of an active market or the probability that a debtor will not be able to discharge its obligations. Impairments of equity instruments, which are recognized in profit or loss, are not reversed in profit or loss. Impairment testing of accounts receivable is described below.
Accounts receivable and other receivables are initially recognized at fair value and thereafter at amortized cost with application of the effective-interest method reduced by any provisions for decline in value. The carrying amount for accounts receivable and other receivables, after any impairments, is assumed to correspond to the fair value, since this item is short-term by nature. Provisions for a decline in value in accounts receivable are made when there is objective evidence that the Group will not be able to receive all amounts due according to the original terms of the receivables. Significant financial difficulties for the debtor, probability that the debtor will be declared bankrupt or undergo financial reconstruction and missing or late payments (due for more than 90 days) are considered indicators that a need for impairment of an account receivable may pertain. Losses relating to accounts receivable, other receivables and recovered and previously impaired accounts receivable and other receivables are recognized under the item other expenses in profit or loss.
In the Group's report on financial position, cash and cash equivalents correspond to cash, bank balances, other short-term investments with maturity dates within three months from the acquisition date and blocked bank balances that are expected to be settled within 12 months after the balance-sheet date. The overdraft facility is recognized as borrowing among current liabilities.
Cash and cash equivalents in the cash-flow statement do not agree with the definition of cash and cash equivalents in the balance sheet. In the cash-flow statement, we have excluded blocked bank balances, since they are expected to be settled later than three months from the acquisition date.
Common shares are classified as shareholders' equity. Transaction costs that can be directly attributed to new share issues are recognized in net amounts after tax in shareholders' equity as a deduction from the issue proceeds. Premiums for warrants are recognized in the shareholders' equity item retained earnings.
Accounts payable are initially recognized in the balance sheet at fair value and then at amortized cost with application of the effective-interest method. The carrying amount of accounts payable is assumed to correspond to their fair value, since this item is short-term by nature.
Borrowing is recognized initially at fair value net after transaction costs. Borrowing is subsequently recognized at amortized cost, and any difference between the amount received (net after transaction costs) and the repayment amount is recognized in profit or loss distributed over the term of the loan with application of the effective-interest method. Borrowing is classified as current liabilities unless the Group has an unconditional right to defer payment of the debt for at least 12 months after the balance-sheet date.
Inventories are recognized at the lower of cost and net sales value. The cost is established using the weighted-average method. The cost of goods for resale corresponds to the purchasing cost for the goods. Borrowing costs are not included. Inventory consists of building supplies sold in Byggmax stores. The net sales value is the estimated sales price in operations reduced by applicable variable sales costs. Provisions required for obsolescence were made.
The tax cost for the year comprises current and deferred tax.
or negatively affected by how the risks described below are managed.
Although Byggmax's consolidated accounts are stated in SEK, the Group has operations in Sweden, Norway and Finland and purchases some goods in other currencies than SEK. This means that the Group is exposed to currency risk in that unfavorable changes in exchange rates can have a negative effect on EBIT, shareholders' equity and cash flow.
Payment flows in the form of accounts receivable and accounts payable in foreign currency result in currency exposure for the Group. Byggmax has currency exposure in NOK, some exposure resulting from the purchase of goods in USD and in EUR (for which there is a natural hedge in sales in EUR in the Finnish market).
| Change in (percentage points) all other factors |
Effect on EBIT (SEK M) |
Effect on EBIT (SEK M) 2014 |
|
|---|---|---|---|
| unchangede | 2015 | ||
| NOK | +10/- 10% | +/- 1.5 | +/- 1.3 |
| EUR | +10/-10% | +/- 0.3 | +/- 0.2 |
Byggmax hedges currency positions greater than SEK 100 M on an annual basis each quarter by hedging 50 percent for the coming six months and 25 percent for the coming quarter, meaning that 75 percent is hedged.
The Group's EBIT is also affected by currency effects arising due to exchange-rate trends in the local currencies of the various foreign subsidiaries and branches against SEK. Translation effects also arise for the Group's net assets in consolidation of the balance sheets of foreign companies and branches. This risk is not hedged.
The Group's interest risk arises primarily through long-term borrowing. The Group's borrowing carries floating-rate interest, thus resulting in exposure. Borrowing that is subject to floating-rate interest exposes the Group to interest risk with respect to cash flow. To reduce the interest risk, the Group has as its policy that interest is to be fixed for 50 percent of the remaining bank loans for at least two years. If interest on the Group's borrowing in SEK had been 1.0 percentage point higher/lower during 2015 with all other variables constant and consideration taken to interest swaps, the consolidated profit after tax for the fiscal year would have been SEK 2.4 M higher/lower, primarily as an effect of higher interest expenses for borrowing with floating-rate interest. Byggmax continuously monitors the interest risk by examining the effect of loans with floating-rate interest on EBIT for the year. Under the existing financing agreement with Handelsbanken, there was no long-term borrowing at December 31, 2015 and thus no hedging of interest rates was carried out.
| Change in (percentage points) all other factors |
Effect on EBIT (SEK M) 2015 |
Effect on EBIT (SEK M) |
|
|---|---|---|---|
| unchanged | 2014 | ||
| Interest Rate | 1% | 2.4 | 4.2 |
Byggmax has very low credit risk in relation to the Group's customers in that the majority of sales are in cash and since the Group does not invoice external customers. Credit exposure primarily comprises accrued but as yet unpaid bonuses from suppliers.
Byggmax's policy in respect of liquidity risk is to ensure the Group has sufficient cash and cash equivalents to finance operations. The Board of Directors manages the liquidity risk exposure through ensuring that Byggmax has sufficient credit facilities in place to satisfy the future needs of the business. The need is established through continuous follow up of forecast and actual cash flows with consideration taken to the tenors of financial assets and liabilities in the balance sheet. Byggmax's primary credit facility is provided by Svenska Handelsbanken by way of a credit agreement. The agreement with Svenska Handelsbanken extents until November 2, 2018.
The size of the credit facility available is reviewed regularly and is designed to cover forecast peaks in the gross debt level with a healthy margin. On December 31, 2015, the Group had cash and cash equivalents totaling SEK 31.7 M (30.9) and an unutilized credit facility of SEK 251.6 M (99.2). Information regarding blocked bank funds is available in Note 24.
The table below shows the non-discounted cash flows that arise from the Group's liabilities in the form of financial instruments based on the remaining contracted periods on the balance-sheet date. Amounts in foreign currencies and amounts to be paid are based on floating-rate interest and were estimated by using the exchange and interest rates prevailing on the balance-sheet date.
| DKK EUR NOK PLZ SEK USD | ||||||
|---|---|---|---|---|---|---|
| Accounts receivable 0.0 | 0.1 | 0.0 0.0 | 1.3 | 0.0 | ||
| Accounts payable | 2.8 | 3.9 | 0.2 0.3 39.1 | 0.0 |
| DKK | EUR | NOK | SEK | USD | |
|---|---|---|---|---|---|
| Accounts receivable | 0.0 | 0.1 | 0.0 | 0.3 | 0.0 |
| Accounts payable | 3.7 | 3.5 | 0.4 | 27.7 | 0.3 |
benefits of ownership are retained by the lessor is classified as operational leasing. Payments made during the leasing period are expensed in profit or loss linearly over the leasing period.
Leasing of fixed assets in which Byggmax in all significant respects has the economic risks and benefits associated with ownership is classified as financial leasing. At the beginning of the leasing period, financial leasing is recognized in the balance sheet at the lower of the leasing object's fair value and the current value of the minimum leasing fees. Each leasing payment is distributed between amortization of the debt and financial expenses to achieve a fixed interest rate for the recognized liability. The corresponding payment obligations, after deduction of financial expenses, are included in the balance sheet under borrowing from credit institutions. The interest portion of financial expenses is recognized in profit or loss and distributed over the leasing period so that an amount is recognized in every reporting period that corresponds to a fixed interest rate for the recognized liability during the respective period. Fixed assets held according to financial leasing contracts are amortized over the shorter of the periods for the asset's economic lifetime and the leasing period.
A sale-and-leaseback transaction comprises the sale of an asset and subsequent leasing of the same asset under a leasing contract. When Byggmax builds a property, it is sold after completion to an external party, whereby the property is leased back to Byggmax for its operations. In assessing the terms of the sales transaction and the leasing contract, the Group considers if the sale price is on market terms and if the leasing fee that the Group pays is based on market levels.
All sale-and-leaseback transactions are considered to be operational leasing contracts, and the sale is considered to be based on market terms, meaning that the leasing fee was not subject to adjustments. The leasing fee is expensed in a straight line over the period of the leasing contract and in accordance with the contract.
Gains relating to sale-and-leaseback transactions are recognized in the item financial income in profit or loss and losses relating to sale-and-leaseback transactions are recognized in the item financial expenses in profit or loss.
Dividends to the Parent Company's shareholders are recognized as a liability in the consolidated financial statements in the period in which the dividend is approved by the Parent Company's shareholders.
The Parent Company has prepared its Annual Report in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation, RFR 2 Accounting for Legal Entities. This entails that in interim reporting for legal entities, the Parent Company is to apply all IFRSs and interpretations approved by the EU as far as possible within the framework of the Swedish Annual Accounts
Act and take into account the connection between accounting and taxation. The recommendation specifies the exceptions and supplements that are to be applied from IFRS. The Parent Company applies different accounting policies than the Group as specified below.
The Parent Company applies the presentation forms specified in the Swedish Annual Accounts Act, which means in part that another presentation of shareholders' equity is applied and that provisions are recognized under a separate heading in the balance sheet.
Shares in subsidiaries are recognized at cost after deduction of any impairment. Received dividends are recognized as income, whereupon an assessment is made of any need for impairment of shares in subsidiaries. When there is an indication that shares and participations in subsidiaries have declined in value, a calculation of the recoverable amount is performed. If that value is lower than the carrying amount, impairment is recognized. Impairments are recognized under income from participations in Group companies.
The Parent Company applies RFR 2 for Group contributions. This entails that Group contributions that the Parent Company receives from subsidiaries are recognized as financial income and that Group contributions paid by the Parent Company to subsidiaries are recognized as an increase in the participation in a subsidiary. The tax on Group contributions received/paid is recognized in accordance with IAS 12 in profit or loss.
Through its operations, the Group is exposed to various financial risks, such as market risk (including currency and interest risk), credit risk and liquidity risk.
The Group's overriding financial policy is intended to identify and minimize the effects of financial risks. Practical risk management is handled by Byggmax's central finance department according to the financial policy established each year by the Board of Directors. The financial hedging relations established by the Group as part of its risk management do not qualify for hedge accounting according to the rules in IAS 39.
The Board of Directors continuously receives reports in respect of cash flows, debt levels and fulfillment of the terms of financial agreements, together with comparisons with budgets and forecasts.
The Parent Company Byggmax Group AB is deemed to have limited risk exposure, meaning that the descriptions below primarily relate to the Group as a whole. The described risks can thus affect the Parent Company indirectly in that the asset item participations in Group companies may be positively
The Group makes estimates and assumptions regarding the future to be able to prepare the accounts in accordance with generally accepted accounting practices. Estimates and assumptions are evaluated regularly and are based on historical experience and other factors, including expectations regarding future events that are considered reasonable under the prevailing circumstances. The actual outcome may differ from the estimates and assumptions made. The estimates and assumptions made in the final accounts on December 31, 2015, are not considered to be able to significantly affect the Group's EBIT and financial position for the coming fiscal year.
All sale-and-leaseback transactions are considered to be operational leasing contracts, which is based on an appraisal of each leasing contract in relation to the following criteria: financial implication, leasing period and whether the contract contains an option on the property.
The Group determines each year if there is any need to recognize an impairment of goodwill, in accordance with the accounting policy described in Note 2.8 Impairment of non-financial fixed assets. The assumptions and assessments made in respect of expected cash flows and the discount rate are described in Note 13.
| Information by geographic area | 2015 | 2014 |
|---|---|---|
| Net sales Sweden | 3,038.2 | 2,606.2 |
| Net sales Norway | 882.4 | 771.7 |
| Net sales other countries | 210.5 | 169.2 |
| Total sales | 4,131.1 | 3,547.2 |
| Assets | 2015 | 2014 |
| Assets in Sweden | 2,073.3 | 1,887.4 |
| Assets in Norway | 218.3 | 199.8 |
| Assets in other countries | 42.8 | 32.3 |
| Total assets | 2,334.4 | 2,119.5 |
Byggmax has only identified one operating segment, the Nordic segment, as described in Note 2.3. The Parent Company has no net sales.
| Group | 2015 | 2014 |
|---|---|---|
| Exchange-rate differences | 5.1 | 7.0 |
| Gain from divestment of equipment | 0.1 | 0.3 |
| Other | 4.8 | 4.9 |
| Total other operating income | 10.0 | 12.2 |
| Group | 2015 | 2014 |
|---|---|---|
| Exchange-rate differences | -17.5 | -8.2 |
| Loss from divestment of equipment | -0.4 | -0.7 |
| Total other operating expenses | -18.0 | -8.9 |
| Group (SEK M) | Less than 1 year |
Between 1 and 2 years |
Between 2 and 5 years |
More than 5 years |
|---|---|---|---|---|
| At December 31, 2015 | ||||
| Borrowing | 349.5 | 1.1 | 1.0 | |
| Liabilities related to financial leasing | 2.5 | 0.1 | ||
| Net regulated derivative instruments (interest swaps) | ||||
| Gross regulated derivative instruments (currency forwards) |
0.0 | |||
| Accounts payable | 520.3 | |||
| Total | 872.2 | 1.2 | 1.0 | 0.0 |
| At December 31, 2014 | ||||
| Borrowing | 476.7 | 1.2 | ||
| Liabilities related to financial | 4.7 | 1.8 | ||
| Net regulated derivative instruments (interest swaps) | ||||
| Gross regulated derivative instruments (currency forwards) |
1.3 | |||
| Accounts payable | 370.4 | |||
| Totalt | 853.1 | 3.0 | 0.0 | 0.0 |
| Less than | Between 1 | Between 2 | More than | |
| Parent Company (SEK M) | 1 year | and 2 years | and 5 years | 5 years |
| At December 31, 2015 | ||||
| Borrowing | 349.5 | 1.1 | 1.0 | |
| Totalt | 349.5 | 1.1 | 1.0 | 0.0 |
| At December 31, 2014 | ||||
| Borrowing | 476.7 | 1.2 | ||
| Totalt | 476.7 | 1.2 | 0.0 | 0.0 |
The Byggmax Group works to reduce its capital/financing risk by:
· Establishing adequate credit facilities well in advance of foreseeable needs.
· Monitoring due dates for the total debt in order to match amortization to anticipated cash flow.
· Satisfying key ratios according to financing contracts. The key ratios are the interest-coverage ratio, debt/equity ratio and the equity ratio/risk-bearing capital.
· Optimizing working capital within the Group. Working capital refers to: the total of inventory, accounts receivable, receivables on bonuses from suppliers, other receivables and prepaid expenses/accrued income less the total of accounts payable, tax liabilities, other current liabilities and accrued expenses/deferred income. While Byggmax has no specified goal for the equity ratio, there is a dividend target. Byggmax policy is for dividends to amount to at least 50 percent of Byggmax's net profits for the preceding fiscal year, subject to Byggmax's need for capital, EBIT, financial position, capital requirements and current economic conditions.
| 2015 | 2014 | |||||
|---|---|---|---|---|---|---|
| Salaries and other compensation plus social costs (SEK M) |
Salaries and other com pensation |
Social costs (of which pension costs) |
Num ber |
Salaries and other com pensation |
Social costs (of which pension costs) |
Num ber |
| Group | ||||||
| Board members, President and other senior executives |
17.3 | 7.7 (2.6) | 12 | 14.3 | 7.3 (2.5) | 12 |
| Other employees | 274.6 | 78.6 (15.4) | 764 | 256.8 | 68.7 (12.2) | 661 |
| Total | 291.9 | 86.3 (18.0) | 776 | 271.1 | 76.0 (14.7) | 673 |
| Parent Company | ||||||
| Board members | 1.7 | 0.5 (0.0) | 6 | 1.4 | 0.4 (0.0) | 6 |
| President and other senior executives | 1 | 1 | ||||
| Other employees | ||||||
| Total | 1.7 | 0.5 (0.0) | 7 | 1.4 | 0.4 (0.0) | 7 |
No separate remuneration is payable to the President of Byggmax Group AB (publ) 2015.
2015 2014
| Average number of employees |
Of whom men |
Average number of employees |
Of whom men |
|
|---|---|---|---|---|
| Subsidiaries | ||||
| Sweden | 556 | 78% | 482 | 80% |
| Norway | 133 | 88% | 122 | 86% |
| Finland | 73 | 73% | 69 | 69% |
| Total in subsidiaries | 762 | 79% | 673 | 80% |
| Group total | 762 | 79% | 673 | 80% |
| Total in subsidiaries | 762 | 79% | 673 | 80% |
|---|---|---|---|---|
| Finland | 73 | 73% | 69 | 69% |
| Norway | 133 | 88% | 122 | 86% |
| Sweden | 556 | 78% | 482 | 80% |
| Subsidiaries |
| 2015 | 2014 | |||
|---|---|---|---|---|
| Number on the balance sheet date |
Of whom men |
Number on the balance sheet date |
Of whom men |
|
| Group (including subsidiaries) | ||||
| Board members | 6 | 50% | 6 | 67% |
| President and other senior executives | 8 | 88% | 8 | 88% |
| Group total | 14 | 71% | 14 | 78% |
| Parent Company | ||||
| Board members | 6 | 50% | 6 | 67% |
| President and other senior executives | 1 | 100% | 1 | 100% |
| Parent Company total | 7 | 57% | 7 | 84% |
Auditing assignments include examination of the Annual Report and financial statements, as well as the administration of the Board of Directors and the President, other work assignments that are the responsibility of the company's auditors, and guidance and assistance occasioned by observations in conjunction with such reviews or the completion of such other work assignments. Everything else is other assignments.
| Group | 2015 | 2014 |
|---|---|---|
| Öhrlings PricewaterhouseCoopers AB | ||
| Auditing assignments | 0.9 | 0.9 |
| Other assignments | 0.0 | 0.0 |
| Tax consultancy | 0.3 | 0.5 |
| Other services | 0.4 | 0.3 |
| Total auditors' fees | 1.5 | 1.7 |
| Parent Company | 2015 | 2014 |
| Öhrlings PricewaterhouseCoopers AB | ||
| Auditing assignments | 0.4 | 0.4 |
| Other assignments | 0.0 | 0.0 |
| Tax consultancy | 0.0 | 0.0 |
| Other services | 0.3 | 0.0 |
| Total auditors' fees | 0.6 | 0.4 |
| Total employee benefits | 385.5 | 353.0 |
|---|---|---|
| Other personnel costs | 8.3 | 7.2 |
| Pension costs | 18.0 | 14.7 |
| Social costs | 69.1 | 61.2 |
| Salaries and other compensation | 290.2 | 269.9 |
| Group | 2015 | 2014 |
The guidelines for determining compensation to senior executives that were adopted by the 2015 AGM correspond, in all material respects, with the guidelines proposed to the 2016 AGM. Information about these guidelines is available in the Administration Report on page 32. Remuneration to senior executives was paid in accordance with previous resolutions and the guidelines that were adopted at the AGM. Bonuses to the Board of Directors, President and other senior executives amounted to SEK 0.0 M (0.0).
| Group | 2015 | 2014 |
|---|---|---|
| Profit from participations in Group companies | 11.8 | 0.0 |
| Total | 11.8 | 0.0 |
| Financial income | ||
| Exchange-rate gains | 8.5 | 7.2 |
| Changes in fair value – interest swaps and currency derivatives | 10.5 | 8.1 |
| Interest income | 0.1 | -0.4 |
| Other financial income | 0.0 | 0.1 |
| Total | 19.1 | 15.0 |
| Financial expenses | ||
| Exchange-rate losses | -8.1 | -11.0 |
| Changes in fair value – interest swaps and currency derivatives | -11.9 | -7.6 |
| –interest expenses, bank loans | -6.2 | -9.0 |
| –interest expense, discount rate, earnout | -0.8 | 0.0 |
| –financial leasing, reversal of discounting effect | -0.2 | -0.4 |
| Other financial expenses | -1.5 | -0.5 |
| Total | -28.6 | -28.6 |
| Loss from financial items | 2.4 | -13.6 |
| Parent Company | 2015 | 2014 |
| Earnings from shares in Group companies | ||
| Dividends from Group companies | 140.0 | 170,0 |
| Total | 140.0 | 170,0 |
| Interest income and similar items | ||
| Exchange-rate gains | 0.3 | 0.0 |
| Group contributions | 12.6 | 12.1 |
| Interest income | 12.4 | 15.3 |
| Total | 25.2 | 27.4 |
| Interest expenses and similar items | ||
| Exchange-rate losses | -0.6 | 0.0 |
| Interest expenses | -18.0 | -22.4 |
| Total | -18.6 | -22.4 |
| Loss from financial items | 146.6 | 175.0 |
| Base sal | Variable | Other | ||||
|---|---|---|---|---|---|---|
| ary/Board | compen | Other | Pension | compen | ||
| Compensation to senior executives (SEK M) | fee | sation | benefits | costs | sation | Total |
| 2015 | ||||||
| Chairman of the Board – Anders Moberg | 0.4 | 0.4 | ||||
| Chairman of the Board – Fredrik Cappelen | 0.2 | 0.2 | ||||
| Board member - Daniel Mulhbach | 0.2 | 0.2 | ||||
| Board member – Hannele Kemppainen | 0.2 | 0.2 | ||||
| Board member – Karin Hygrell-Jonsson | 0.3 | 0.3 | ||||
| Board member – Lottie Svedenstedt | 0.3 | 0.3 | ||||
| Board member – Stig Notlöv | 0.3 | 0.3 | ||||
| President | 3.9 | 3.8 | 1.1 | 0,9 | 9.7 | |
| Other senior executives (five individuals, of whom one woman) |
6.4 | 1.3 | 1.5 | 0,3 | 9.5 | |
| Total | 12.2 | 5.1 | 0.0 | 2.6 | 1.2 | 21.1 |
| Base salary/ Directors' |
Variable compen |
Other | Pension | Other compen |
||
|---|---|---|---|---|---|---|
| Compensation to senior executives (SEK M) | fees | sation | benefits | costs | sation | Total |
| 2014 | ||||||
| Chairman of the Board – Fredrik Cappelen | 0.5 | 0.5 | ||||
| Board member – Anders Moberg | 0.3 | 0.3 | ||||
| Board member – Karin Hygrell-Jonsson | 0.2 | 0.2 | ||||
| Board member – Lottie Svedenstedt | 0.3 | 0.3 | ||||
| Board member – Stig Notlöv | 0.3 | 0.3 | ||||
| Board member – Stefan Linder | 0.0 | 0.0 | ||||
| President | 3.2 | 2.0 | 1.0 | 6.2 | ||
| Other senior executives (five individuals, of whom one woman) |
6.5 | 0.8 | 1.5 | 8.8 | ||
| Total | 11.3 | 2.8 | 0.0 | 2.5 | 0.0 | 16.6 |
There are no agreements concerning severance pay for the President or Group management. The period of notice for the President in the event of termination by the company or by the President is three months. The retirement age for the President and other senior executives is 65. Fixed salary and pension was renegotiated for the President in 2015 in line with the relevant market and reflects the scope and responsibility entailed in the assignment. The President has a defined-contribution pension. Variable compensation pertains to remuneration for bonus earned in 2015 that is payable in 2015.
The 2013 and 2015 Annual General Meetings resolved to introduce warrant programs for senior executives and other key staff at Byggmax. The warrants are priced at market value, which is based on a valuation made by an independent party. Each warrant entitles its holder to subscribe for one share in the company at the exercise prices shown in the table on page 31. The participants of the warrants program have entered into a pre-emption agreement. The 2013 warrant program expires on November 30, 2017 and can be exercised from May 30, 2017. The 2015 warrant program expires on November 30, 2018 and can be exercised from May 30, 2018.
In accordance with the resolution at the General Meeting on May 5, 2015, other compensation include a subsidy in the form of an extra cash payment (after tax) for purchases of warrants.
| Capitalized expenses for development work | ||
|---|---|---|
| Group | 2015 | 2014 |
| Opening cost | 75.7 | 67.7 |
| New acquisitions | 22.8 | 12.0 |
| Increase through acquisitions | 2.5 | 0.0 |
| Sales and scrapping | -0.6 | -4.3 |
| Exchange-rate differences | -0.1 | 0.1 |
| Closing accumulated cost | 100.3 | 75.7 |
| Opening amortization | -44.0 | -37.3 |
| Sales and scrapping | 0.1 | 4.2 |
| Depreciation for the year | -13.4 | -10.8 |
| Exchange-rate differences | 0.0 | 0.0 |
| Closing accumulated amortization | -57.3 | -44.0 |
| Closing carrying amount | 43.0 | 31.5 |
| Capitalized development costs relate to development of business systems and the website. | ||
| Goodwill | 2015 | 2014 |
| Opening cost | 1,051.0 | 1,051.0 |
| Increase through acquisitions | 121.7 | |
| Closing accumulated cost | 1,172.7 | 1,051.0 |
| Closing carrying amount | 1 172,7 | 1,051.0 |
The reported SEK 1,172.7 M of goodwill, SEK 1,051.0 M relate to the Swedish operations at Byggmax AB and SEK 121.7 M relate to Buildor AB, which was acquired in November 2015.
The carrying amount for goodwill is tested on an annual basis. In addition, Byggmax assesses at the end of each reporting period if there is any indication that an asset may have declined in value. If there is an indication of a decline in value, the asset is tested for impairment. During the fourth quarter of each year, the Group examines whether or not there is any impairment need for goodwill.
Previously recognized goodwill of SEK 1,051.0 M is entirely attributable to the Swedish part of the business activities in Byggmax AB, which is considered the cash-generating unit (CGU). As regards the newly acquired goodwill from the acquisition of Buildor, the CGU is considered to comprise Buildor in its entirety.
The recoverable amount for the CGU linked to the Swedish operations at Byggmax AB and the CGU comprising Buildor were both determined on the basis of calculations of value in use.
In both cases, the calculation is based on estimated future cash flows based on the 2015 business plan and forecasts for the period from 2015 to 2020 that were prepared by Group management and approved by the Board. The management's forecasts are based on historical experience as well as external data on market growth, etc. The forecasts are based on a number of principal assumptions concerning future growth and EBIT margins. The calculated recoverable amount is compared with the carrying amount. Cash flows beyond the five-year period, meaning after 2020, are extrapolated using an estimated growth rate of 2 percent, which corresponds to a weighted average growth rate under the Riksbanken's (the Swedish Central Bank) inflation targets and is in line with sustainable growth for the industry. In the corresponding calculations for 2015, an estimated growth rate of 2 percent was used for the CGU comprising the Swedish operations at Byggmax AB and the growth rate for the CGU comprising Buildor was 2 %. With regard to testing Buildor for impairment, the same WACC was used but, since Buildor is expected to have a faster growth rate, higher sales growth has been assumed.
When discounting expected future cash flows, a weighted average cost of capital (WACC) before tax was used, which is currently 8 percent (7). The WACC was based on the following assumptions:
• Risk-free interest rate: Ten-year treasury bond rate • Market risk premium: 6.8 percent
| Group | 2015 | 2014 |
|---|---|---|
| Current tax for the year | -62.9 | -51.3 |
| Current tax attributable to previous years | -0.2 | 0.0 |
| Remeasured deferred tax due to changed tax rate in Sweden | 0.0 | 0.0 |
| Deferred tax expense relating to temporary differences | -9.5 | -17.0 |
| Deferred tax income relating to temporary differences | -1.7 | 3.1 |
| Total | -74.3 | -65.2 |
| Parent Company | 2015 | 2014 |
|---|---|---|
| Current tax for the year | 0.0 | 0.0 |
| Total | 0.0 | 0.0 |
The difference between recognized tax expense and the estimated tax expense based on prevailing tax rates was as follows:
| Group | 2015 | 2014 |
|---|---|---|
| Profit before tax | 334.1 | 283.2 |
| Income tax calculated according to the Group's prevailing tax rate | -73.5 | -62.3 |
| Non-taxable income | 2.5 | 0.1 |
| Non-deductible costs | -2.9 | -2.3 |
| Tax effect of interest on the tax allocation reserve | 0.0 | 0.0 |
| Remeasured deferred tax due to changed tax rate in Sweden | 0.0 | 0.0 |
| Deficits for tax purposes for which no deferred tax asset is recognized | 0.0 | 0.0 |
| Blocked amounts on foreign taxes for tax purposes | 0.0 | -1.1 |
| Effect of foreign tax rates | 0.0 | 0.0 |
| Adjustment of current tax relating to previous years | -0.2 | 0.0 |
| Other | -0.3 | 0.5 |
| Tax expense | -74.3 | -65.2 |
| Parent Company | 2015 | 2014 |
|---|---|---|
| Profit before tax | 130.4 | 170.0 |
| Income tax calculated according to prevailing tax rate | -28.7 | -37.4 |
| Non-taxable income | 30.8 | 37.4 |
| Non-deductible costs | -2.1 | 0.0 |
| Tax expense | 0.0 | 0.0 |
| Weighted average tax rate within the Group: | 22.2% | 23.03% |
The prevailing tax rate for income tax within the Group and the Parent Company is 22.0 (22.0) percent.
Exchange-rate differences were recognized in profit or loss according to the following:
| Group | 2015 | 2014 |
|---|---|---|
| Other operating income | 5.1 | 7.0 |
| Other expenses | -17.5 | -8.2 |
| Financial income | 8.5 | 6.3 |
| Financial expenses | -8.1 | -10.1 |
| Total exchange-rate differences | -12.0 | -4.9 |
| Group | 2015 | 2014 |
|---|---|---|
| Opening cost | 15.6 | 13.8 |
| Purchases | 3.8 | 2.2 |
| Sales and scrapping | 0.0 | -0.4 |
| Exchange-rate differences | -0.6 | 0.0 |
| Closing accumulated cost | 18.8 | 15.6 |
| Opening depreciation | -3.8 | -2.9 |
| Sales and scrapping | 0.0 | 0.1 |
| Depreciation for the year | -1.2 | -1.1 |
| Exchange-rate differences | 0.2 | 0.0 |
| Group | 2015 | 2014 |
|---|---|---|
| Opening cost | 15.6 | 13.8 |
| Purchases | 3.8 | 2.2 |
| Sales and scrapping | 0.0 | -0.4 |
| Exchange-rate differences | -0.6 | 0.0 |
| Closing accumulated cost | 18.8 | 15.6 |
| Opening depreciation | -3.8 | -2.9 |
| Sales and scrapping | 0.0 | 0.1 |
| Depreciation for the year | -1.2 | -1.1 |
| Exchange-rate differences | 0.2 | 0.0 |
| Closing accumulated depreciation | -4.8 | -3.8 |
| Closing carrying amount | 14.0 | 11.8 |
| Parent Company | 2015 | 2014 |
|---|---|---|
| Opening cost | 358.0 | 358.0 |
| Investments | 149.0 | 0.0 |
| Closing carrying amount | 507.0 | 358.0 |
| Stockholm | 100 % |
|---|---|
| Stockholm | $100\%$ |
| Stockholm | 1იი% |
| Stockholm | 100% |
| Stockholm | $100\%$ |
| Stockholm | $100\%$ |
| Oslo | $100\%$ |
| Oslo | $100\%$ |
| Helsinki | 1იი% |
| Helsinki | $100\%$ |
| Helsinki | $100\%$ |
| The Parent Company has participations in the following Group companies: | Carrying amount | |||||
|---|---|---|---|---|---|---|
| Name | Corporate regis tration number |
Registered office |
Share of capital |
Num ber of shares |
2015 | 2014 |
| Companies owned by Byggmax Group AB (publ) | ||||||
| Byggmax AB | 556645-6215 | Halmstad | 100% 100,000 | 345.0 | 345.0 | |
| Svea Distribution AB | 556602-5895 | Eslöv | 100% | 200 | 13.0 | 13.0 |
| Byggmax Fastighetsutveckling AB | 556726-8593 | Stockholm | 100% | 1,000 | 0.1 | 0.1 |
| Buildor AB | 556867-2405 | Stockholm | 100% | 1,558 | 149.0 | 0.0 |
| 507.0 | 358.0 |
| Byggmax International Purchasing AB | 556757-2473 | Stockholm | 100% |
|---|---|---|---|
| Byggmax Fastighets Holding AB | 556726-8601 | Stockholm | 100% |
| Byggmax Fastighetsutveckling 6 AB | 556751-4442 | Stockholm | 100% |
| Byggmax Fastighetsutveckling 7 AB | 556757-3133 | Stockholm | 100% |
| Byggmax Fastighetsutveckling 8 AB | 556889-6780 | Stockholm | 100% |
| Byggmax Fastighetsutveckling 9 AB | 556916-5250 | Stockholm | 100% |
| Byggmax Fastighet 2 AS | 991 127 895 | Oslo | 100% |
| Byggmax Fastighet 3 AS | 991 127 917 | Oslo | 100% |
| Byggmax Finland Fastighetsholding 1 Oy | 2186417-4 | Helsinki | 100% |
| Byggmax Finland Fastighet 1 Oy | 2186407-8 | Helsinki | 100% |
| Byggmax Finland Fastighetsholding 2 Oy | 2186507-0 | Helsinki | 100% |
Testing indicates that the recoverable amount exceeds the carrying amount. Sensitivity analyses for the entire Group show that a rise in the discount rate of 4 percentage points or a decline in cash flow of 10 percent would not affect the results of the test.
| Group | 2015 | 2014 |
|---|---|---|
| Opening cost | 516.1 | 405.6 |
| Purchases | 127.0 | 119.1 |
| Sales and scrapping | -10.9 | -8.8 |
| Reclassifications | 0.0 | 0.0 |
| Exchange-rate differences | -8.0 | -0.2 |
| Closing accumulated cost | 624.2 | 516.1 |
| Opening depreciation | -301.8 | -251.3 |
| Sales and scrapping | 9.0 | 7.0 |
| Depreciation for the year | -68.5 | -54.9 |
| Reclassifications | 0.0 | 0.0 |
| Exchange-rate differences | 4.6 | -2.6 |
| Closing accumulated depreciation | -356.7 | -301.8 |
| Closing carrying amount | 267.5 | 214.3 |
The item equipment, tools, fixtures and fittings includes leasing objects that the Group holds according to financial leasing contracts in the following amounts:
| Group | 2015 | 2014 |
|---|---|---|
| Cost – capitalized financial leasing | 152.5 | 152.5 |
| Accumulated depreciation | -151.4 | -140.5 |
| Carrying amount | 1.1 | 12.0 |
As of 2012, the Group does not lease inventory to the same extent as earlier, but rather these are financed internally.
| Group | 2015 | 2014 |
|---|---|---|
| Opening cost | 45.1 | 31.5 |
| Increase through asset acquisitions | 0.0 | 13.6 |
| Reduction due to divestment of company | -37.2 | |
| Sales and scrapping | 0.0 | 0.0 |
| Exchange-rate differences | 0.0 | 0.0 |
| Closing accumulated cost | 7.9 | 45.1 |
| Opening depreciation | -3.7 | -2.7 |
| Reduction due to divestment of company | 1.3 | |
| Sales and scrapping | 0.0 | 0.0 |
| Depreciation for the year | -0.4 | -1.0 |
| Exchange-rate differences | 0.0 | 0.0 |
| Closing accumulated depreciation | -2.8 | -3.7 |
| Closing carrying amount | 5.1 | 41.4 |
On November 2, 2015, Buildor AB (Corp. Reg. No. 556867-2405) was acquired with the aim of strengthening Byggmax's online store offering. Buildor AB is a fast-growing e-commerce player with operations in Sweden. The acquisition includes 100% of the shares in Buildor AB and has affected the consolidated balance sheet and cash and cash equivalents as set out below. An earnout of SEK 60.0 M was recorded. The outcome of the earnout depends on future sales and earnings. The earnout for the acquisition is valued at fair value meaning its full payout value and discounted based on future payment dates. As of December 31, 2015, the discounted earnout amounted to SEK 51.5 M. Since the acquisition date, Buildor AB has contributed SEK 9.5 M in sales and a negative SEK 1.0 M in EBIT. Had the acquisition taken place on January 1, 2015, Buildor AB would have contributed SEK 55.5 M in sales and negative SEK 5.2 M in EBIT. Goodwill resulted from the acquisition, and consists of synergy effects. The effect of deferred tax was also taken into account when preparing the acquisition analysis. The acquisition analysis is subject to a final adjustment one year after the date of acquisition.
| Preliminary acquisition analysis | Fair value, SEK M |
|---|---|
| Intangible assets | 2.5 |
| Tangible assets | 0.0 |
| Deferred tax assets | 1.9 |
| Other long-term receivables | 0.1 |
| Accounts receivable and other receivables | 2.3 |
| Cash and cash equivalents | 4.7 |
| Accounts payable and other liabilities | -5.0 |
| Net assets acquired | 6.5 |
| Goodwill | 121.7 |
| Total purchase consideration | 128.2 |
| Unpaid part of purchase consideration | -51.5 |
| Cash and cash equivalents at acquired company | -4.7 |
| Change in the Group's cash and cash equivalents following the acquisition | -72.1 |
On January 4, 2016, Skånska Byggvaror AB (Corp. Reg. No. 556987-6849) was acquired with the aim of strengthening Byggmax's online store offering. Skånska Byggvaror AB is a fast-growing e-commerce player with operations in Sweden, Norway and Denmark. The acquisition includes 100% of the shares in Skånska Byggvaror AB and has affected the consolidated balance sheet and cash and cash equivalents as set out below. An earnout of SEK 110.0 M was recorded, with a potential outcome if EBITDA exceeds SEK 67 M in 2016, and a maximum dividend if EBITDA reaches SEK 79 M or more. The earnout for the acquisition is valued at fair value meaning its full payout value and discounted based on future payment dates. Had the acquisition taken place on January 1, 2015, Skånska Byggvaror AB would have contributed SEK 720.9 M in sales and negative SEK 33.1 M in EBIT. Goodwill resulted from the acquisition, and consists of synergy effects. The effect of deferred tax was also taken into account when preparing the acquisition analysis. The acquisition analysis is subject to a final adjustment one year after the date of acquisition.
| Preliminary acquisition analysis | Fair value, SEK M |
|---|---|
| Customer relationships | 117.8 |
| Trademark | 191.2 |
| Intangible assets | 0.0 |
| Tangible assets | 22.8 |
| Deferred tax assets | 0.0 |
| Other long-term receivables | 0.0 |
| Inventories | 58.9 |
| Accounts receivable and other receivables | 28.2 |
| Cash and cash equivalents | 39.0 |
| Deferred tax | -1.0 |
| Long-term liabilities | -172.5 |
| Accounts payable and other liabilities | -127.5 |
| Net assets acquired | 156.9 |
| Goodwill | 687.7 |
| Total purchase consideration | 844.6 |
|---|---|
| Unpaid part of purchase consideration | -101.9 |
| Cash and cash equivalents at acquired company | -39.0 |
| Change in the Group's cash and cash equivalents following the acquisition | -703.7 |
The Group's financial assets and liabilities are measured at amortized cost with the exception of derivative instruments, which are measured at fair value in profit or loss. Derivative instruments are recognized separately on a separate line in the balance sheet. For a more detailed description of the Group's derivative instruments, refer to Note 19.
Financial instruments measured at fair value in the balance sheet and information is thus required on valuation at fair value per level in the following fair-value hierarchy:
• Other observable data for the asset or liability than listed prices included in level 1, either direct (i.e. like price
Byggmax only holds derivative instruments measured at fair value in its financial statements. These instruments are measured at fair value in profit or loss. The value of the derivative instruments is based on observable data for the asset or liability, i.e. level 2. No reclassifications between the various levels took place during the fiscal year.
| Loan receivables and | Assets measured at fair | ||
|---|---|---|---|
| Assets in the balance sheet at Dec. 31, 2015 | accounts receivable | value in profit or loss | Total |
| Derivative instruments | 0.0 | 0.0 | |
| Accounts receivable and other receivables ex | |||
| cluding prepaid expenses and accrued income | 69.6 | 69.6 | |
| Cash and cash equivalents | 31.7 | 31.7 | |
| Total | 101.3 | 0.0 | 101.3 |
| Liabilities in the balance sheet at Dec. 31, 2015 | Other financial liabilities | Total | |
| Borrowings (excluding liabilities related to financial leasing) | 348.4 | 348.4 | |
| Additional earn-out | 51.5 | 51.5 | |
| Liabilities related to financial leasing | 2.6 | 2.5 | |
| Accounts payable and other liabilities excluding accrued | |||
| expenses and deferred income | 546.1 | 546.1 | |
| Total | 948.6 | 948.6 | |
| Loan receivables and | Assets measured at fair | ||
| Assets in the balance sheet at Dec. 31, 2014 | accounts receivable | value in profit or loss | Total |
| Derivative instruments | 1.3 | 1.3 | |
| Accounts receivable and other receivables | |||
| excluding prepaid expenses and accrued | |||
| income | 55.1 | 55.1 | |
| Cash and cash equivalents | 30.9 | 30.9 | |
| Total | 86.0 | 1.3 | 87.3 |
| Liabilities in the balance sheet at Dec. 31, 2014 | Other financial liabilities | Total | |
| Borrowings (excluding liabilities related to financial leasing) | 475.8 | 475.8 | |
| Liabilities related to financial leasing | 6.5 | 6.5 | |
| Accounts payable and other liabilities excluding accrued | |||
| expenses and deferred income | 399.6 | 399.6 | |
| Total | 881.9 | 881.9 |
The subsidiary Lännersta 14:1 AB including a property, 1 Nacka, was divested in 2015. The divestment led to a positive earnings effect of SEK 11.8 M and the purchase consideration amounted to SEK 31.8 M.
| Group Dec. 31, 2015 | Assets | Liabilities |
|---|---|---|
| Derivative instruments | ||
| Interest swaps – held for sale | 0.0 | 0.0 |
| Currency forwards - held for sale | 0.0 | 0.1 |
| Total derivative instruments | 0.0 | 0.1 |
| Group Dec. 31, 2014 | Assets | Liabilities |
| Derivative instruments | ||
| Interest swaps – held for sale | 0.0 | 0.0 |
| Currency forwards - held for sale | 1.3 | 0.0 |
| Total derivative instruments | 1.3 | 0.0 |
Derivative instruments held for sale are classified as current assets or current liabilities. The nominal amount for outstanding currency forward contracts was SEK 165.0 M (150.0) on the balance-sheet date. The nominal amount for interest swaps outstanding was SEK 0.0 M (0.0) on the balance-sheet date.
The maximum exposure to credit risks on the balance-sheet date was the fair value of the derivative instruments recognized as assets in the balance sheet.
| Group | 2015 | 2014 |
|---|---|---|
| Accounts receivable | 4.5 | 1.6 |
| Provisions for doubtful receivables | -0.3 | 0.0 |
| Total accounts receivable | 4.2 | 1.6 |
The fair value of the Group's accounts receivable corresponds with the carrying amount.
| Group | 2015 | 2014 |
|---|---|---|
| Completed goods and goods for resale | 666.1 | 612.7 |
| Prepayments to suppliers | 9.6 | 4.0 |
| Total inventories | 675.7 | 616.7 |
Inventories consist in their entirety of goods for resale. No impairment was carried out.
| 2015 | 2014 | |
|---|---|---|
| Bonus receivables from suppliers | 53.6 | 40.2 |
| Other receivables | 11.9 | 13.3 |
| Total other receivables | 65.4 | 53.5 |
| Parent Company | ||
| Dividends from Group companies | 140.0 | 170.0 |
| Total other receivables | 140.0 | 170.0 |
Most bonus receivables are in SEK. As of the balance-sheet date, December 31, 2015, no other receivables were considered doubtful. In respect of existing bonus receivables, the majority of the items have a corresponding entry in accounts payable. The fair value of the Group's other receivables corresponds to the carrying amount. Dividends from Group companies pertain to receivables for anticipated dividends.
| Group | 2015 | 2014 |
|---|---|---|
| Prepaid rent | 23.1 | 33.5 |
| Prepaid leasing fees | 0.2 | 0.3 |
| Accrued interest income | 0.7 | 0.0 |
| Other items | 6.1 | 6.2 |
| Total prepaid expenses and accrued income | 30.1 | 40.0 |
Cash and cash equivalents in the balance sheet and the cash-flow statement include the following:
| Group | 2015 | 2014 |
|---|---|---|
| Balance sheet | ||
| Cash and bank balances | 24.0 | 22.5 |
| Blocked funds | 7.7 | 8.4 |
| Total cash and cash equivalents | 31.7 | 30.9 |
| Balance sheet | ||
|---|---|---|
| Cash and bank balances | 24.0 | 22.5 |
| Blocked funds | 7.7 | 8.4 |
| Total cash and cash equivalents | 31.7 | 30.9 |
| Total cash and cash equivalents | 24.0 | 22.5 |
|---|---|---|
| Short-term investments | 0.0 | 0.0 |
| Cash and bank balances | 24.0 | 22.5 |
Blocked funds refer to rent deposits of SEK 1.7 M (1.9) and a customs credit of SEK 6.0 M (6.5).
The specification of changes in shareholders' equity is presented in the report Changes in shareholders' equity directly after the balance sheet.
| Koncernen | No. of shares (000s) Share capital |
Other capital contributions |
Total | |
|---|---|---|---|---|
| At 31 december 2015 | 60.7 | 20.2 | 1,121.7 | 1,142.0 |
| At 31 december 2014 | 60.7 | 20.2 | 441.0 | 461.3 |
The shares have a quotient value of SEK 0.33 per share (SEK 0.33 per share). Each share represents one vote. All registered shares were paid in full on the balance-sheet date.
The category Reserves within shareholders' equity consists in its entirety of translation differences arising in the translation of foreign subsidiaries.
| Group | 2015 | 2014 |
|---|---|---|
| Long-term | ||
| Liabilities related to financial leasing | 0.1 | 1.8 |
| Total | 0.1 | 1.8 |
| Short-term | 2015 | 2014 |
|---|---|---|
| Liabilities to credit institutions | 200.0 | 175.0 |
| Overdraft facilities | 148.4 | 300.8 |
| Liabilities related to financial leasing | 2.5 | 4.7 |
| Total | 350.9 | 480.5 |
| Total borrowing | 351.0 | 482.3 |
| Parent Company | 2015 | 2014 |
| Liabilities to credit institutions | 200.0 | 460.7 |
| Overdraft facility | 502.8 | 175.0 |
| Total | 702.8 | 635.7 |
| Total borrowing | 702.8 | 635.7 |
All borrowing within the Group is in SEK. All external loans have an interest period of three months, meaning that the carrying amount closely corresponds to fair value. There are pledged assets for these loans. See Note 32.
The Group has the following unutilized credit facilities:
| Group | 2015 | 2014 |
|---|---|---|
| Overdraft facility | 251.6 | 99.2 |
| Total | 251.6 | 99.2 |
Of the above available overdraft facilities, SEK 6.0 M (6.5) is a customs credit.
Gross liabilities for financial leasing
| Group | 2015 | 2014 |
|---|---|---|
| Within one year | 0.1 | 5.1 |
| Later than one year but within five years | 2.6 | 2.1 |
| Total | 2.6 | 7.2 |
| Future financial expenses for financial leasing | -0.1 | -0.7 |
| Present value of liabilities related to financial leasing | 2.6 | 6.5 |
In the balance-sheet item borrowing from credit institutions, financial leasing is included as follows:
| Group | 2015 | 2014 |
|---|---|---|
| Within one year | 2.5 | 4.7 |
| Later than one year but within five years | 0.1 | 1.8 |
| Later than five years | 0.0 | 0.0 |
| Total | 2.6 | 6.5 |
See also Note 33, Obligations.
| Group | 2015 | 2014 |
|---|---|---|
| Deferred tax liabilities | ||
| Untaxed reserves | 106.0 | 94.4 |
| Leasing | -0.3 | 1.2 |
| Total deferred tax liabilities | 105.8 | 95.6 |
| Deferred tax assets | ||
| Derivatives | 0.0 | -0.3 |
| Valuation of loss carry-forwards | 5.4 | 4.9 |
| Other | 0.0 | 0.0 |
| Total deferred tax assets | 5.4 | 4.6 |
| Deferred tax liabilities, net | 100.4 | 90.9 |
| Gross changes relating to deferred taxes are as follows: | ||
| Group | 2015 | 2014 |
| On the opening date | 90.9 | 76.7 |
| Reversal of discount effect | 0.0 | 0.0 |
| Recognition in profit or loss | 11.0 | 13.9 |
| Recognition in profit or loss due to changed tax rate in Sweden | 0.0 | 0.0 |
| Acquired deferred tax asset | -2.4 | 0.0 |
| Adjustment from current receivable to deferred tax asset | 0.0 | 0.0 |
| Exchange-rate differences | 0.8 | 0.3 |
| On the balance-sheet date | 100.4 | 90.9 |
Deferred tax assets are recognized as loss carry-forwards for tax purposes insofar as it is probable that they can be offset by future taxable profits. The Group recognized deferred tax assets of SEK 5.4 M (4.6). Of these, SEK 0.2 (0.0) is in respect of losses amounting to SEK 1.7 M (0.0) that can be offset against future taxable profits. SEK 2.0 M (3.7) pertains to taxes on internal gains of SEK 9.1 M (16.8), a negative SEK 0.0 M (neg: 0.3) to derivatives and SEK 1.2 M (1.2) to blocked amounts for foreign tax.
Obligations for retirement and family pensions for salaried employees in Sweden are secured via insurance with Alecta. According to statement UFR 10 from the Swedish Financial Reporting Board, this is a defined-benefit plan that includes several employers. For the 2015 fiscal year, the Group did not have access to information that would enable it to be recognized as a defined-benefit plan. The pension plan according to ITP that is secured through insurance in Alecta is therefore recognized as a defined-contribution plan. The year's fees for pension insurance issued by Alecta amounted to SEK 5.8 M (4.6). Alecta's surplus can be distributed to policy holders and/or insured persons. On December 31, 2015, Alecta's surplus in the form of the collective consolidation level amounted to 153 percent (144). The collective consolidation level corresponds to the market value of Alecta's assets as a percentage of pension obligations as calculated according to Alecta's actuarial assumptions, which are not in agreement with IAS 19.
| Group |
|---|
| VAT liabilities |
| Personnel-related liabilities |
| Other |
| Total other liabilities |
| Group | 2015 | 2014 |
|---|---|---|
| VAT liabilities | 5.7 | 9.5 |
| Personnel-related liabilities | 6.5 | 5.7 |
| Other | 22.1 | 13.9 |
| Total other liabilities | 34.4 | 29.1 |
| Group | 2015 | 2014 |
|---|---|---|
| Accrued salaries | 34.1 | 27.5 |
| Accrued vacation pay | 36.2 | 33.5 |
| Accrued social fees | 11.7 | 9.5 |
| Other | 37.7 | 17.2 |
| Total accrued expenses and deferred income | 119.6 | 87.8 |
| Parent Company | ||
| Other | 8.5 | 1.6 |
| Total accrued expenses and deferred income | 8.5 | 1.6 |
| Pledged assets | ||
|---|---|---|
| Group | 2015 | 2014 |
| For own debts and provisions: | ||
| Shares in subsidiaries | 0.0 | 1,147.4 |
| Blocked bank funds | 7.7 | 8.4 |
| Chattel mortgages | 0.0 | 120.0 |
| Total pledged assets, contingent liabilities and contingent assets | 7.7 | 1,275.8 |
| Parent Company | ||
|---|---|---|
| Shares in subsidiaries | 0.0 | 358.0 |
| Total pledged assets and contingent liabilities | 0.0 | 358.0 |
| Contingent liabilities | ||
| Group | 2015 | 2014 |
| Capital adequacy guarantee on behalf of Group companies | None | None |
The Group leases rental premises, as well as miscellaneous small equipment, according to terminable operational leasing contracts.
Future leasing fees for non-terminable operational leasing contracts fall due for payment according to the following:
| Group | 2015 | 2014 |
|---|---|---|
| Within one year | 175.3 | 164.5 |
| Later than one year but within five years | 517.5 | 512.0 |
| Later than five years | 327.7 | 308.4 |
| Total | 1,020.5 | 984.9 |
Most of the above amounts relate to the rent for premises. In other respects, most of the Group's leasing contracts are classified as financial leasing. Information on financial leasing is presented in Note 27. Expensed leasing costs amounted to SEK 186.0 M (171.3).
In 2015, the President Magnus Agervald made personal purchases of materials and services at Byggmax to a value of SEK 1.4 M, these purchases were made in accordance with Byggmax's policy for employee purchases. Information regarding key individuals in senior management is provided in Note 9, Employee benefits.
On January 4, 2016, Byggmax Group AB (publ) completed the acquisition of all shares in Skånska Byggvaror. In connection with this transaction, Anders Johansson Eickhoff took up the positions as President of Skånska Byggvaror and a member of Byggmax's Group management.
The Board of Directors and President hereby affirm that the consolidated accounts have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU, and provide an accurate portrayal of the Group's financial position and performance. The Annual Report has been prepared in accordance with the generally accepted accounting practices in Sweden and accurately reflects the Parent Company's financial position and performance. The Administration Report for the Group and the Parent Company provides an accurate overview of trends in the Group's and Parent Company's operations, financial position and performance, as well as describing significant risks and instability factors faced by the Parent Company and companies in the Group.
The Parent Company's income statement and balance sheet and the Group's consolidated income statement and balance sheet will be presented to the Annual General Meeting on May 10, 2016 for adoption.
| Stockholm, March 7, 2016 | ||
|---|---|---|
| ANDERS MOBERG | ||
| Chairman of the Board | ||
| DANIEL MÜHLBACH | KARIN HYGRELL-JONSSON | |
| Board member | Board member | |
| LOTTIE SVEDENSTEDT | HANNELE KEMPPAINEN | |
| Board member | Board member | |
| STIG NOTLÖV | MAGNUS AGERVALD | |
| Board member | President and CEO | |
| Our auditors' report was submitted on March 21, 2016 |
Our auditors' report was submitted on March 21, 2016 Öhrlings PricewaterhouseCoopers AB
| ANN-CHRISTINE | |
|---|---|
| Arrator anterior de Dantott |
ANN-CHRISTINE HÄGGLUND Authorized Public Accountant
To the Annual General Meeting of Byggmax Group AB (publ) Corp. Reg. No. 556656-3531
Report on the annual accounts and consolidated accounts We have audited the annual accounts and consolidated accounts of Byggmax Group AB (publ) for the year 2015 with the exception of the Corporate Governance Report on pages 38-41. The annual accounts and consolidated accounts of the company are included in the prin ted version of this document on pages 34-77.
The Board of Directors and the President are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Ac counts Act, and for such internal control as the Board of Directors and the President determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the annual accounts and consolidated accounts are free from material missta tement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the annual accounts and consolidated accounts, whether due to fraud or error. In making those risk as sessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's inter nal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the President, as well as evaluating the overall presentation of the annual accounts and consolidated accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
-
In our opinion, the annual accounts have been prepared in accordan ce with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of Decem ber 31, 2015 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of December 31, 2015 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act.
Our opinions do not cover the Corporate Governance Report on pa ges 38-41. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. We therefore recommend that the Annual General Meeting (AGM) adopt
the income statement and balance sheet for the Parent Company and the Group.
Report on other legal and regulatory requirements In addition to our audit of the annual accounts and consolidated accounts, we have also audited the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the President of Byggmax Group AB (publ) for the year 2015. We have also conducted a statutory examination of the Corporate Governance Report.
Responsibilities of the Board of Directors and the President The Board of Directors is responsible for the proposal for appropria tions of the company's profit or loss, and the Board of Directors and the President are responsible for administration under the Compa nies Act and that the Corporate Governance Report on pages 36-39 has been prepared in accordance with the Annual Accounts Act.
Our responsibility is to express an opinion with reasonable as surance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit or loss, we examined the Board of Directors' reasoned statement and a selection of sup porting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act. As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined signifi cant decisions, actions taken and the circumstances of the company to determine whether any member of the Board of Directors or the President is liable to the company. We also examined whether any member of the Board of Directors or the President has, in any other way, acted in contravention of the Companies Act, the Annual Ac counts Act or the Articles of Association.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Further more, we have read the Corporate Governance Report and, based on that reading and our knowledge of the company and the Group, we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the Corporate Governance Report is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and gene rally accepted auditing standards in Sweden.
We recommend to the AGM that the profit be appropriated in ac cordance with the proposal in the statutory administration report and that the members of the Board of Directors and the President be discharged from liability for the fiscal year. In our opinion, the Corporate Governance Report has been prepared and its statutory content is consistent with the other parts of the annual accounts and the consolidated accounts.
Stockholm, March 21, 2016 Öhrlings PricewaterhouseCoopers AB
Ann-Christine Hägglund Authorized Public Accountant Auditor in Charge
President since 2008 (employed since 2006). Born 1975. Education: M.Sc. Stockholm School of Economics and M.Sc. Engineering KTH Royal Institute of Technology. Background: Formerly worked as a con sultant at McKinsey & Company and analyst at IDI AB and founder of Icomera. Other assignments: Board member of Granngården and Pa roc Group Oy. Shareholding: 100,000 shares and 900,000 warrants.
Marketing and IT Manager since 2012. Born 1974. Educa tion: M.Sc. Engineering KTH Royal Institute of Technology. Background: Formerly worked as a consultant at McKinsey & Company, held several sales and marketing positions at Toms and Cloetta Fazer, President of Friggs AB and Presi dent of Karamellkungen AB. Other assignments: No other assignments. Shareholding: 2,500 shares via endowment insurance, 5,500 shares via pension insurance and 110,000 warrants.
IT Manager since 2009 (employed 2008). Born 1982. Educa tion: M.Sc. Engineering from Luleå University of Techno logy. Background: Previous positions at Byggmax were as a Strategic Purchaser and Purchasing Analyst. Other as signments: No other assignments. Shareholding: 4 shares and 2,000 warrants.
Business Manager since 2015 (employed since 2006). Born 1975. Education: 3-year high-school program in vehicle system technology and a technical foundation year. Back ground: Previously Store Manager and Regional Manager at Byggmax, and Store Manager for Intersport. Other assign ments: No other assignments. Shareholding: 0 shares.
Sourcing and Supply Chain Manager since 2013 (employed in 2008). Born 1974. Education: M.Sc. in Engineering from the Institute of Technology, Linköping University. Back ground: Previously Business Area Manager at Rusta. Other assignments: No other assignments. Shareholding: 44,965 shares, 144,000 warrants and exposure through endow ment insurance to a further 28,850 shares.
CFO since 2005. Born 1973. Education: Master of Science in Business and Economics, Växjö University. Background: Formerly CFO of consumer electronics chain Power, Busi ness Controller of IKEA Russia and Controller at IKEA AB. Other assignments: Board Member of NetOnNet Group AB. Shareholding: 213,500 shares and 56,000 warrants.
The President of Skånska Byggvaror Group AB will join the Group management of Byggmax Group AB as of January 4, 2016. Born 1961. Background: Previously President of Jotex AB and several management positions at Ellos Group AB. Other assignments: No other assignments. Shareholding: 0 shares.
Byggmax's auditor is Öhrlings PricewaterhouseCoopers AB, with Ann-Christine Hägglund as auditor in charge since 2013. Ann-Chris tine Hägglund is an authorized public accountant and a member of FAR SRS. The address of Öhrlings PricewaterhouseCoopers AB's offices is Torsgatan 21, SE-113 97 Stockholm, Sweden.
Magnus Agervald Daniel Juhlin Erik Börjesson Marcus Hed
Per Haraldsson Pernilla Walfridsson Anders Johansson Eickhoff
Anders Moberg Lottie Svedenstedt Karin Hygrell-Jonsson
Daniel Mühlbach Hannele Kemppainen Stig Notlöv
Board member since 2006. Born 1950. Background: Formerly Board member of Velux A/S and ICA AB and CEO of the IKEA Group, Royal Ahold N.V. and Majid Al Futtaim Group LLC. Other assignments: Anders is a Board member of ZetaDisplay AB, Hema B.V., ITAB AB, Rezidor AB, Amor GMBH, Ahlstrom OY, Bergendahl & Son AB and Suomen Lahikauppa OY. Shareholding: Does not own any shares but is exposed to 350,000 shares in Byggmax through his endowment insurance.
Board member since 2010. Born 1957. Education: Lawyer from Uppsala University. Background: Former Regional Manager for H&M, President Inter Ikea Systems A/S, Business Area Manager Ikea of Sweden and CEO Kid Interiør A/S. Other assignments: Chairman of the Board of the MiL Institute, Uppstart Helsingborg and K-utveckling Engineering AB. Board member of MiL Foundation, Gullberg & Jansson AB, ITAB Shop Concept AB, Swedavia AB and Vanna AB. Shareholding: 10,000 shares.
Board member since 2014. Born 1955. Education: M.Sc. Stockholm School of Economics. Background: Currently CFO of Axfood AB. Employed by the Axfood Group since 1991 and a member of Group management since 2007. Other assignments: No other assignments. Shareholding: 2,000 shares in Byggmax.
Board member since 2015. Born 1974. Education: M.Sc. Engineering from Luleå University of Technology. Background: Currently President and part-owner of FootWay Group AB. Previously – President of the Lensway Group from 1999 to 2010. Other assignments: Board member of, among others, FootWay Group AB and Solidar Pension AB and previously on the Board of Coastal Contacts Inc. among others. Shareholding: 0 shares.
Board member since 2015. Born 1970 Education: B.Sc. in International Business and Marketing from the American College of Switzerland. Background: Currently General Manager at Colgate Palmolive Finland and, previously, was Country Manager at Colgate Palmolive Finland. Hannele was at Proctor & Gamble from 1991 through 2005 and Country Manager and Head of Trade Marketing at Reckitt Benckiser from 2005 to 2010. Other assignments: Board Member and Chairman of the Finnish Cosmetics and Toiletries Association. Shareholding: 0 shares.
Board member of the current company since 2006, Board member of former Parent Company since 1993. Born 1947. Background: Formerly President of Byggmax. Other assignments: No other assignments. Shareholding: 0 shares.
| Disclosure | Explanation | Page Omission | |
|---|---|---|---|
| Strategy and analysis | |||
| G4-1 | Statement from the chief operating decision maker of the organi zation about the relevance of sustainability to the organization and its strategy |
20 | |
| Organizational Profile | |||
| G4-3 | Name of the organization | 1 | |
| G4-4 | Primary brands, products and/or services | 10 | |
| G4-5 | Location of organization's headquarters. | 34 | |
| G4-6 | Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. |
34 | |
| G4-7 | Nature of ownership and legal form. | 31-32 | |
| G4-8 | Markets served | 11, 34 | |
| G4-9 | Scale of the reporting organization. | 34-37 | |
| G4-10 | Total workforce by employment type, employment contract, and region. |
15, 34-37 | Regions are not reported |
| G4-11 | Percentage of employees covered by collective bargaining agre ements. |
15 | |
| G4-12 | Organization's supply chain. | 12 | |
| G4-13 | Significant changes during the reporting period regarding the organization's size, structure, ownership and supply chain. |
34-37 | |
| G4-14 | Explanation of whether and how the prudence concept is comp lied with by the organization. |
58 et seq. | |
| G4-15 | Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. |
20 | |
| G4-16 | Memberships in associations (such as industry associations) and/or national/international advocacy organizations. |
22 | |
| Scope and boundary of report | |||
| G4-17 | Entities included in the organization's consolidated financial statements or similar documents. |
21,69 | |
| G4-18 | Process for defining the report's contents and Aspect Boundaries as well as how the organization has implemented the principles for defining report content. |
21-23, appendix "Process to define the contents of the report and applica tion of the |
|
| accounting policies" |
|||
| G4-19 | Significant aspects that have been identified. | 21 |
| Disclosure | Explanation | Page Omission | Indicator | Explanation | Page Omission | ||
|---|---|---|---|---|---|---|---|
| G4-20 | Aspect Boundary for each material aspect within the organiza tion. |
21 | PERFORMANCE INDICATORS |
||||
| G4-21 | Aspect Boundary for each material aspect outside the organiza | 21 | ECONOMIC | ||||
| tion. | Economic performance | ||||||
| G4-22 | Explanation of the effect of any restatements of information pro vided in earlier reports, and the reasons for such restatements. |
23 | DMA | 11 | |||
| G4-23 Stakeholder engagement |
Significant changes since the previous reporting period with regard to Scope and Aspect Boundaries |
23 | G4-EC1 | Direct economic value generated and distributed, including revenues, operating expenses, employee compensation, dona tions and other community investments, retained earnings, and payments to capital providers and the public sector. 43 et seq. |
43 följande | ||
| G4-24 | List of stakeholder groups engaged by the organization. | 21-22 | G4-EC2 | Financial implications and other risks and opportunities for the organization's activities due to climate change. |
28 | ||
| G4-25 | Basis for identification and selection of stakeholders with whom to engage. |
21-22 | G4-EC3 | Coverage of the organization's defined-benefit plan obligations. | 57 | ||
| G4-26 | Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. |
21-22 | G4-EC4 | Significant financial assistance received from the public sector. | 15 | ||
| G4-27 | Key topics and concerns that have been raised through stake | 21 | Market presence | ||||
| holder engagement, and how the organization has responded to those key topics and concerns, including stakeholder groups that have highlighted important topics and how these have affected the organization's reporting. |
G4-EC6 | Procedures for local hiring and proportion of senior executives hired from the local community at locations of significant opera tion. |
15 | ||||
| Procurement practices | |||||||
| Reporting profile | DMA | 12 | |||||
| G4-28 | Reporting period. | 34 | G4-EC9 | Policy, practices, and proportion of spending on locally-based | 12 | ||
| G4-29 | Date of most recent previous report. | 77 | suppliers at significant locations of operation. | ||||
| G4-30 | Reporting cycle. | 34 | |||||
| G4-31 | Contact point for questions regarding the report or its contents | 88 | ENVIRONMENTAL PERFOR MANCE INDICATORS |
||||
| GRI index | Energy | ||||||
| G4-32- | GRI index | 81-85 | DMA | 27 | |||
| G4-EN3 | Energy consumption within the organization. | 27-28 | |||||
| Assurance | G4-EN6 | Initiatives to reduce indirect energy consumption and reductions | 27-28 | ||||
| G4-33 | Policy and current practice with regard to seeking external as surance for the report. |
21 | achieved. | ||||
| Biodiversity | |||||||
| Governance | DMA | 28 | |||||
| G4-34 | Governance structure of the organization. | 38-41 | G4-EN11 | Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. |
28 | ||
| Ethical standards and integrity G4-56 |
Codes of conduct | 15, 22 | G4-EN12 | Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high |
28 | ||
| biodiversity value outside protected areas | |||||||
| Emissions | |||||||
| DMA | 36 | ||||||
| G4-EN15 | Total direct and indirect greenhouse gas emissions by weight. | 24-25 | |||||
| G4-EN19 | Initiatives to reduce greenhouse gas emissions and reductions | 24-25 |
achieved.
| Indicator | Explanation | Page Omission | Indicator | Explanation | Page Omission | ||
|---|---|---|---|---|---|---|---|
| G4-EN21 | NOX, SO2 and other significant air emissions by type and weight | 25 SO2 is not reported |
G4-SO1 | Nature, scope and effectiveness of any programs and practices that assess and manage the impacts of operations on communi ties including entering, operating, and exiting. |
20 et seq. | ||
| Products and Services. | |||||||
| G4-EN27 | Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. |
26 | PRODUCT RESPONSIBILITY |
||||
| G4-EN28 | Percentage of products sold and their packaging materials that are reclaimed by category. |
26 | Product and service labeling DMA |
26 | |||
| G4-PR3 | Type of product and service information required by procedures, | 26 | |||||
| EMPLOYMENT CONDITIONS AND TERMS OF EMPLOYMENT | and percentage of significant products and services subject to such information requirements. |
||||||
| Employment DMA |
15 | ||||||
| G4-LA1 | Total number and rate of new employee hires and employee tur nover by age group, gender, and region. |
16 | Regions are not reported |
||||
| Occupational health and safety |
|||||||
| DMA | 16 | ||||||
| G4-LA6 | Rates of injury, occupational diseases, lost days, and absen teeism, and number of work-related fatalities by region. |
16 | Regions are not reported |
||||
| Training and education | |||||||
| G4-LA9 | Average hours of training per year per employee by employee category. |
16 | |||||
| Diversity and equal opportunity | |||||||
| G4-LA12 | Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity. |
15, 79-80 | |||||
| Equal pay for men and women | |||||||
| DMA | 16 | ||||||
| G4-LA13 | Ratio of basic salary of women to men by employee category and significant locations of operation. |
16 | |||||
| HUMAN RIGHTS | |||||||
| Non-discrimination | |||||||
| G4-HR3 | Freedom of association and collective bargaining. | 16 | |||||
| ORGANIZATION´S ROLE IN SOCIETY | |||||||
| Society | |||||||
| DMA | 20-21 |
Tyréns (the Reviewer) has reviewed Byggmax's sustainability report for the 2015 fiscal year, including the environmental report included in the sustainability report. For the first time, the review was based on GRI version 4. Byggmax reporting follows the "In Accordance Option" "Core". Previous reports have followed version 3.0. The Reviewer can state that the report largely follows the GRI G4 guidelines. Byggmax has responded appropriately to the reviewer's questions and provided supplementary documentation upon request. The Reviewer's viewpoints have been taken into consideration and proposals for additions and corrections have been included as far as possible in the report. Tyréns has also offered proposals and viewpoints for future reports, and these have been presented to the company.
DEFINITIONS OF FINANCIAL KEY RATIOS/REPORTING TER-MINOLOGY
Average net capital employed: Each year's monthly net capital employed has been weighted in the same manner to calculate an average.
Average operating capital employed: Operating capital employed for the past two years divided by two.
Cash flow from operating activities per share: Cash flow from operating activities for the period divided by the number of shares.
Dividend per share: Dividend divided by the number of shares.
EBITA: EBIT after depreciation/amortization and impairment but before deduction for impairment of goodwill.
EBITDA: EBIT before depreciation/amortization and impairment.
Equity per share: Shareholders' equity divided by the number of shares outstanding.
Equity ratio/risk-bearing capital: Adjusted shareholders' equity plus subordinated shareholder loans divided by total assets.
Interest-coverage ratio: EBITDA in relation to total interest expenses.
Net debt: Interest-bearing liabilities less cash and cash equivalents.
Net debt/EBITDA: Interest-bearing liabilities excluding shareholder loans minus cash and cash equivalents divided by EBITDA.
Net debt/equity ratio: Net debt divided by equity.
Net operating capital: Balance-sheet data from the principal ledger (not amended), measured as the total of inventory, accounts receivable, receivables on bonus from suppliers, other receivables and prepaid expenses/accrued income less the total of accounts payable, tax liabilities, other current liabilities and accrued expenses/deferred income.
Byggmax's Annual Report is available only via the Group's website.
Operating capital: Shareholders' equity plus net debt. Operating margin (EBIT margin): EBIT (operating profit) divided by net sales.
Return on equity: Earnings for the year divided by average equity.
Return on operating capital employed: EBITA divided by average operating capital.
Stock turnover: Inventory costs for the year divided by the average inventory (mean value of incoming and outgoing inventory value).
Growth in like-for-like sales: A comparable unit (like-for-like unit) is regarded as comparable from the second year-end after the store has opened. For example, this means that a store that opened in 2011 is classified as a comparable unit from 2013. Stores relocated to new premises in an existing location are treated in the same manner.
CO2 emissions per ton of goods transported [kg]: Carbon emissions per ton of transported goods.
Landfill, unsorted: General waste that is not suitable for recycling or energy recovery.
Mixed waste: Unsorted material that is not packaging. Paper, corrugated board, wood and plastic, mixed scrap, textiles, non-combustible waste.
Sorted waste: Not landfill or mixed waste.
Transported goods [tons]: The amount of goods, in tons, that are transported from suppliers to Byggmax facilities and distribution centers.
Transport work [ton km]: The mass in tons of every individual type of goods multiplied by the transport distances in kilometers.
Transport work per ton [ton km/ton]: The amount of transport work per ton of goods transported.
The Annual General Meeting of the shareholders of Byggmax Group AB (publ), corporate registration number 556656-3531, will be held on Tuesday, May 10, 2016, at 10:00 a.m. at Alviks Strand conference center, Gustaviundsvägen 141 in Bromma, Stockholm.
To be able to participate at the AGM, shareholders who have registered their shares in the name of a trustee must request registration of the shares in their own names in the register maintained by Euroclear Sweden AB. Registration of shareholders should be completed not later than Tuesday, May 3, 2016. The shareholder should notify the trustee well in advance of this date. Such registration may be temporary.
Notice of participation in the AGM should be submitted in one of the following ways:
On notification, shareholders must provide the following information:
When applicable, notice should be accompanied by full proof of authority such as the certificate of registration or its equivalent.
Shareholders who have registered their shares in the name of a trustee must temporarily re-register the shares in their own names in the register maintained by Euroclear Sweden AB in order to participate at the AGM. Such temporary re-registration must be executed no later than Tuesday, May 3, 2016. This means that shareholders are advised to notify their trustee well in advance of this date.
Welcome to Byggmax's investor relations pages on: www. om.byggmax.se/en
Byggmax Box 6063 SE- 171 06 Solna, Sweden www.byggmax.se
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