Annual Report • Apr 5, 2016
Annual Report
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This motto originates from a letter written by Marcus Wallenberg (1899-1982) to his brother Jacob Wallenberg (1892-1980), commenting on a sale of the family's railroad business and investing in aviation. This is a guiding principle that still applies to how Investor works today.
| Investor 100 years II |
|---|
| Investor in brief VI |
| Portfolio overviewVII |
| Highlights 2015 1 |
| Letter from the Chairman 2 |
| Letter from the CEO 4 |
| Financial development 6 |
| Objective and operating priorities 8 |
| Active ownership 9 |
| Our Investments 11 |
| Listed Core Investments 12 |
| EQT 17 |
| Patricia Industries 18 |
|---|
| Investor's employees 23 |
| Sustainable business 24 |
| The Investor share 26 |
| Corporate Governance Report 28 |
| Management Group 37 |
| Board of Directors38 |
| Proposed Disposition of Earnings40 |
| List of contents of Financials 41 |
| Statements for the Group 42 |
| Notes for the Group46 |
| Statements for the Parent Company 82 |
| Notes for the Parent Company 86 | |
|---|---|
| Auditor's Report94 | |
| Five-Year Summary 95 | |
| Definitions96 | |
| Shareholder information 97 | |
The Annual Report for Investor AB (publ.) 556013-8298 consists of the Administration Report on pages 6-7, 11, 23-40 and the financial statements on pages 41-93.
The Annual Report is published in Swedish and English.
Production: Investor and Addira. Photos: Mattias Bardå, Jeppe Wikström, Lennart Hansson/Atlas Copco, Ingemar Eriksson/Scania Archive, SFEHF and photos from Investor's holdings. Print: Åtta.45 Tryckeri AB, Sweden, 2016. Paper: Profimatt, 250 g/100 g.
Investor, founded by the Wallenberg family a hundred years ago, is a leading owner of high-quality, international companies. We have a long-term investment perspective and support our companies in their efforts to create sustainable value. Through board participation, industrial experience, our network and financial strength, we strive to make our companies best-in-class.
As a long-term owner, we actively support the building and development of best-in-class companies. EQT 5% 18%
Investor owns significant stakes in highquality companies. Through the Boards of Directors, we work for continuous improvement of the performance of the companies.
With our industrial experience, broad network and financial strength, we strive to make and keep our companies best-inclass. We always look at the opportunities and challenges facing each individual company. Noterade Kärninvesteringar
Our cash flow allows us to financially support strategic initiatives in our companies, capture investment opportunities and provide our shareholders with a steadily rising dividend. 78% 150 200 250 300 350
Our investments are managed within Listed Core Investments, EQT and Patricia Industries. Through substantial ownership and board representation, we engage to develop our companies, both within Listed Core Investments and Patricia Industries. We define value creation plans and benchmark our companies to support them in maintaining or achieving best-in-class positions in their respective industries.
2016 marks the 100-year anniversary for Investor AB. Since Investor was founded by the Wallenberg family in 1916, we have been an active and long-term owner of high-quality companies and persistently worked to make them best-in-class.
The Investor story actually begins with André Oscar Wallenberg who founded Stockholms Enskilda Bank, Sweden's first private bank, in 1856. During the 1870's, when Sweden was hit by a recession, the bank became the owner of several industrial companies, customers to the bank, by converting debt into equity, in order to protect its capital. Investor was established in October 1916 when new Swedish legislation restricted the banks' ability to own shares in other companies. The holding in Atlas Diesel, today's Atlas Copco, among others, was transferred to Investor. Today, a 100 years later, it is still an important holding in Investor's portfolio.
The global recession struck Sweden with full force in 1920 and Investor felt the aftermath of this economic slope. This was a painful period for Investor and the Board discussed a possible restructuring of the company as well as selling several of the major holdings. There was no reconstruction, but the dividend was suspended for seven years. The deterioration of the business climate reinforced the Wallenberg tradition of prioritizing financial flexibility. The economy eventually recovered and Investor's position gradually improved.
By the end of World War II, Investor was a well-consolidated company. Investor, whose organization was closely integrated with the bank, appointed its first CEO, Frans G Liljenroth, in 1949. A few years earlier, 1946, Jacob Wallenberg (1892-1980) became the Chairman of the Investor Board.
Up until the early 1980's, Investor continued to work closely with the bank. Later, Investor gradually developed into an own entity with independent operations, developing its own global network of people and companies.
Towards the end of the 1970's, Investor's CEO Carl de Geer passed away and speculation ran high about whom would be appointed his successor. Claes Dahlbäck, 30 years old, was appointed new CEO of Investor, a position he would hold for more than 20 years. At the same time, Marcus Wallenberg (1899-1982) was elected Chairman of the Board, succeeding his brother Jacob. Marcus' son Peter Wallenberg (1926-2015) was elected Vice Chairman.
In 1982, Peter Wallenberg was elected Chairman of the Board and in the following years, Investor's organization expanded from six employees to approximately 100. A number of structural transactions were also made, concentrating the portfolio further. As a result
| SKF | 18.6 |
|---|---|
| Ostasiatiska Kompaniet | 8.0 |
| Atlas Diesel (now Atlas Copco) | 6.0 |
| Halmstad-Nässjö Järnvägs AB (now HNJ intressenter) |
4.7 |
| Papyrus | 2.8 |
| Järnvägsaktiebolaget Stockholm Saltsjön |
2.8 |
| Kopparberg-Hofors (now part of Billerud and STORA) |
2.2 |
| Stora Kopparbergs Bergslag | 1.8 |
| Separator (now Alfa-Laval) | 0.5 |
| Göta kanalbolag | 0.5 |
| Scania-Vabis | 0.4 |
| Yngeredsfors (name change to Papyrus in 1963) |
0.3 |
| Other companies1) | 18.4 |
| 67.0 | |
| 1) Including Emissionsutskottet, |
Göteborgs Ris & Valskvarn, Kol & Koks, Svenska Diamantbergborrning and Svensk-Dansk-Ryska Telefon.
of this, Investor could take a more active role in the development and expansion of its portfolio.
During the 1980's, the stock market rallied. On the Stockholm Stock Exchange, the index rose by approximately 1,200 percent. The Investor share was one of the best performers, gaining approximately 2,000 percent.
During 1982, Marcus Wallenberg had been concerned about Atlas Copco's almost halved profit and low share price, and offered Volvo the opportunity to buy a 25 percent stake in the company. After Marcus' death in 1982, Volvo acquired large stakes in Atlas Copco, but also, to Peter Wallenberg's surprise, in Stora Kopparberg. This had not been part of the agreement.
Peter Wallenberg and CEO Claes Dahlbäck decided to buy Volvo's stakes back in Atlas Copco and Stora Kopparberg, and AB Patricia was formed to handle these transactions. These acquisitions were financed through shareholders subscribing to convertible bonds for a total value of SEK 3 bn., the largest ever capital raising at that time in Sweden.
In the 1990's, Sweden was hit by new recession. For years, discussions about the integration of long-term holdings in an operating company had taken place and in the beginning of the 1990's, Investor and its sister company Providentia took Saab-Scania private. Shortly afterwards, Investor and Providentia merged. The recession was felt by Investor's holdings, but with the previously implemented structural changes and cost savings, and with the help from the devaluation of the SEK, they were well-equipped and most of them built world-leading positions in their respective fields.
In the mid-1990's, Investor started to invest in unlisted growth companies. Investor Growth Capital (IGC) was formed and Investor was one of the founders of the private equity company EQT. Through IGC, Investor built a portfolio of holdings in new industries, especially within technology and healthcare.
The automobile company Saab was refinanced and divested in two stages to the U.S. company GM. In 1995, Saab-Scania was split into two independent companies, with the intention to broaden the ownership in the company. The following year, Investor divested a 55 percent stake in Scania in conjunction with its listing on the stock exchange. In 1998, the defense company Saab was listed.
Peter Wallenberg left Investor's Board in 1997 and two years later his nephew Marcus Wallenberg was appointed CEO of Investor, succeeding Claes Dahlbäck.
The 2000's was an active decade for Investor, with strong development and several large transactions. In 2005, the build-up of a portfolio of wholly-owned subsidiaries began, with Mölnlycke Health Care being the largest one today. The same year, Jacob Wallenberg was elected new Chairman of the Board and Börje Ekholm was appointed CEO.
In 2011, Investor strengthened its focus on long-term ownership in a number of strategic listed holdings further. In 2015, Patricia Industries, a part of Investor, was formed to manage Investor's unlisted investments, and Johan Forssell succeeded Börje Ekholm as the CEO of Investor. The strategy, based on growing the net asset value, operating efficiently and paying a steadily rising dividend, remains intact.
Our portfolio of great companies, strong balance sheet, clear strategy focusing on buyto-build and a highly dedicated organization, puts Investor in a solid position to create long-term competitive returns to our shareholders.
Learn more about our history on www.investorab.com
Don't miss our 100-year anniversary book, published on May 10th, 2016.
During our first 100 years we have developed an active ownership model that works well for us.
| CHAIRMAN OF THE BOARD | ||
|---|---|---|
| More than | Otto Printzsköld 1916-1925 |
|
| Marcus Wallenberg 1925-1943 |
||
| 12 | Johannes Hellner 1943-1946 |
|
| Jacob Wallenberg 1946-1978 |
||
| 250 | Marcus Wallenberg 1978-1982 |
|
| percent average annual | Peter Wallenberg 1982-1997 |
|
| companies have | total return on the Investor | Percy Barnevik 1997-2002 |
| had Investor as | share since 1919 | Claes Dahlbäck 2002-2005 |
| an owner | Jacob Wallenberg 2005- |
|
| Investor | CEO | |
| Frans G Liljenroth 1949-1950 |
||
| 100 years | Rolf Calissendorff 1950-1957 |
|
| Walther Wehtje 1957-1971 |
||
| For more information, | Carl de Geer 1971-1978 |
|
| 9 | please visit our anniversary | Claes Dahlbäck 1978-1999 |
| percent annual | webpage: | Marcus Wallenberg 1999-2005 |
| net asset value growth | Börje Ekholm 2005-2015 |
|
| since 1917 | www.investor100years.com | Johan Forssell 2015- |
The Investor share was traded for the first time on the Stockholm Stock Exchange's A list on June 2, 1919. The value of the A share on December 31, 2015, was SEK 312.60, compared to 19 Swedish öre the first day of trading. If the dividends received since 1919 were reinvested in Investor shares, the value as of December 2015, would be SEK 10 492.10 per share, corresponding to an average annual total return of 11.9 percent.
becomes a large owner of Nasdaq OMX.
Investor invests in Biovitrum and supports the merger between Biovitrum and Swedish Orphan International (Sobi).
2012
2013
Permobil is acquired and becomes a wholly-owned subsidiary.
A new division, Patricia Industries, is formed to focus on creating a portfolio of wholly-owned subsidiaries and makes its first U.S. wholly-owned subsidiary, BraunAbility.
2016
Structure as of December 31, 2015
| Share of total assets |
Business | Key figures, 2015 | |
|---|---|---|---|
| Provides compressors, vacuum and air treatment systems, construction and mining equipment, power tools and |
Net Sales, SEK m. EBIT Value of holding, SEK m. |
102,161 19,728 43,100 |
|
| 15% | assembly systems | Share of capital/votes, % | 16.8/22.3 |
| 14% | A financial services group with the main focus on the Nordic countries, Germany and the Baltics |
Total operating income, SEK m. Operating profit Value of holding, SEK m. Share of capital/votes, % |
44,148 20,865 40,826 20.8/20.8 |
| 12% | Provides power and automation technologies to utility and industry customers |
Net Sales, USD m. EBITA (Operational) Value of holding, SEK m. Share of capital/votes, % |
35,481 4,169 35,424 10.0/10.0 |
| 10% | A global, innovation-driven biopharmaceutical company |
Net Sales, USD m. EBIT (Core) Value of holding, SEK m. Share of capital/votes, % |
24,708 6,902 29,869 4.1/4.1 |
| 5% | A specialty healthcare com pany developing and delive ring innovative therapies and services to treat rare diseases |
Net Sales, SEK m. EBITA (excl. EO) Value of holding, SEK m. Share of capital/votes, % |
3,228 433 14,515 39.6/39.8 |
| 5% | Provides communications technology and services |
Net Sales, SEK m. EBIT Value of holding, SEK m. Share of capital/votes, % |
246,920 21,805 14,086 5.3/21.5 |
| 5% | Provides of complete lifecycle power solutions for the marine and energy markets |
Net Sales, EUR m. EBIT, excl. EO Value of holding, SEK m. Share of capital/votes, % |
5,029 612 13,077 17.2/17.2 |
| 4% | Provides household appliances and appliances for profes sional use |
Net Sales, SEK m. EBIT Value of holding, SEK m. Share of capital/votes, % |
123,511 2,741 9,860 15.5/30.0 |
| 3% | Provides trading, exchange technology, information and public company services |
Net Sales, USD m. EBIT (non-GAAP) Value of holding, SEK m. Share of capital/votes, % |
2,090 976 9,423 11.8/11.8 |
| 3% | Provides products, services and solutions for military defense and civil security |
Net Sales, SEK m. EBIT Value of holding, SEK m. Share of capital/votes, % |
27,186 1,900 8,535 30.0/39.5 |
| 2% | Provides outdoor power products, consumer watering products, cutting equipment and diamond tools |
Net Sales, SEK m. EBIT (excl. EO) Value of holding, SEK m. Share of capital/votes, % |
36,170 2,980 5,428 16.8/32.7 |
| EQT | |||
|---|---|---|---|
| Share of total assets |
Business | Key figures, 2015 | |
| 5% | A private equity group with portfolio companies in Europe, Asia and the U.S. |
Net distribution to Investor, SEK m. Value of holding, SEK m. |
4,496 13,021 |
| Share of total assets |
Business | Key figures, 2015 | |
|---|---|---|---|
| 7% | Provides single-use surgical and wound care products for customers, healthcare profes sionals and patients |
Net Sales, EUR m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
1,353 374 20,050 99/99 |
| 1% | Provides advanced mobility and seating rehab solutions |
Net Sales, SEK m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
2,931 547 3,963 94/90 |
| 1% | Provides healthcare and care services in Scandinavia |
Net Sales, SEK m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
8,540 492 3,869 100/100 |
| 1% | Provides wheelchair accessible vehicles and wheelchair lifts |
Net Sales, USD m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
399 30 2,781 95/95 |
| 1% | Develops and manages real estate, including Grand Hôtel and Aleris-related properties |
Net Sales SEK m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
158 92 1,795 100/100 |
| <1% | Consists of Scandinavia's leading five-star hotel Grand Hôtel, and Lydmar Hotel |
Net Sales SEK m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
597 41 175 100/100 |
| 2% | Provides mobile voice and broadband services in Sweden and Denmark |
Net Sales, SEK m. EBITDA Reported value of holding, SEK m. Share of capital/votes, % |
10,831 2,916 5,611 40/40 |
In addition, there is a number of financial investments within Patricia Industries. In total, the reported value of Financial Investments within Patricia Industries amounted to SEK 12,850 m. as of December 31, 2015, representing 5 percent of our total assets.
| Johan Forssell was appointed CEO of Investor AB. |
Page 4 | ||
|---|---|---|---|
| Our new portfolio structure with Listed Core Investments, EQT and Patricia Industries, was introduced. |
Page 11, 12, 17, 18 | ||
| Total shareholder return (TSR) amounted to 13 percent. During the past 20 years, average annual TSR has been 14 percent. |
Page 26 | 350 300 250 200 150 100 50 0 1995 2000 2005 2010 2015 |
350 300 250 200 150 100 50 0 |
| We strengthened our ownership in ABB and invested SEK 5.6 bn. in the company. |
Page 13 | 350 300 250 |
|
| We committed SEK 3.2 bn. to EQT VII, EQT's largest fund to date, and received record net cash flow from EQT. |
Page 17 | 200 150 100 50 0 1995 2000 2005 2010 2015 |
|
| Patricia Industries acquired BraunAbility, its first U.S. subsidiary, investing SEK 2.8 bn. in equity for a 95 percent ownership. |
Page 20 |
In 2016, Investor AB is turning 100, an important milestone in the history of our company. Investor today bears little resemblance to the company created in 1916, when Investor was spun out of Stockholms Enskilda Bank. From having been tightly linked to the bank, Investor gradually evolved into an independent industrial holding company with its own operations, developing its own global network of people and companies. The view expressed by my grandfather, that "change is the only tradition worth keeping", still summarizes our philosophy well. In today's world, characterized by major technology shifts and new challenges, continuous innovation in our companies remains more important than ever.
The last one hundred years have been marked by two world wars, booms and busts, financial crisis and periods of great growth and innovation. The world has profoundly changed since Investor was founded. The Swedish society has become one of the most prosperous in the Western world and technological changes have, in most areas, revolutionized the way we live our lives. From Electrolux' first washing machine in 1951, Ericsson's Cobra telephone in 1956, and Astra's Xylocain in 1948, to today's sensor-monitored equipment, sustainable and energy-efficient machines, molecularbased bio-medical research, Investor and its companies continue to innovate and are always on the look-out for better technologies and solutions.
Despite all these changes, Investor has had the same business philosophy ever since it was founded in 1916 - to build best-in-class companies. The same values have been passed from generation to generation, namely to think long-term and be an engaged owner.
We will have many opportunities to celebrate Investor's anniversary this year, with you, dear shareholders, with our companies and with all our friends from the large domestic and international network that Investor has built over the last one hundred years.
Throughout its history, Investor has made sure that its companies have invested in innovation and R&D. Globalization forces small countries like Sweden to strengthen their competitiveness. This requires companies which can offer the world markets products and services with added value. This is a continuous challenge as the competition becomes increasingly tougher. European and traditional industrial countries are seriously challenged by ambitious large nations such as China and India, and countries such as South Korea and Israel, which are focused on scientific research and innovation and which have very clear national strategies as to how to succeed in very competitive markets.
What is today called the "Fourth Industrial Revolution", the exploding digitalization in industrial and consumer markets, is completely changing the traditional rules of production, distribution and service. Who would have thought only five years ago that companies such as Uber and Airbnb would challenge companies with large assets and business models that have been refined during many years? The so called "shared economy" will not stop at a few markets and some clever apps, but will challenge our entire industrial eco-system. Are we ready for disruption and how can we accelerate our companies' transformational power? These are questions that Investor is addressing together with our companies. Innovation is one part of the answer, but more important is a commitment from the top, from the boards of the companies to all parts of the management and the employees. In the next few years, we will need to employ and educate more people who are knowledgeable in the digital space and all its ramifications.
"Change" is what Investor has been about during its first 100 years, and this tradition will, I am convinced, help propel us into a bright future.
2015 was characterized by continued political and economic turmoil. Many are concerned about the growth deceleration in the Chinese economy, reflected in very volatile stock markets. To change from an industrial to a consumer and servicedriven economy is a big challenge for a country and its political elite that only started its industrialization process a little more than thirty years ago.
Looking at the whole political and economic landscape of 2015 and the beginning of this year, it is obvious that we currently are in a far more unstable global
environment than we have been for a long time. We are facing considerable challenges, from migration and a possible Brexit to the war in the Middle East and weakening emerging markets.
For me, as a Swede and European, what I experience as the biggest challenge is the flow of refugees, and we are all responsible for helping to solve this human crisis. Europe should help to integrate the newcomers in our society and economy, something that will benefit us all long-term and is part of fundamental European values.
As announced last year, Investor introduced a new structure with Listed Core Investments, EQT, and Patricia Industries. This structure allows us to work in a more focused way with both our listed and unlisted holdings. We continued to invest in our companies, particularly in ABB where we increased our shareholding to 10 percent. We also committed capital to the new fund EQT VII, and Patricia Industries made its first U.S. investment through the acquisition of BraunAbility. BraunAbility offers many of the qualities we look for in our investments: a strong corporate culture, strong market positions and great opportunities for international expansion. Our clear ambition is to add more wholly-owned companies in the years to come.
In general, our companies continued to work hard with both efficiency measures and growth initiatives. The ability to adapt to rapid swings in demand, while captur-
"Throughout its history, Investor has made sure that its companies have invested in innovation and R&D."
ing attractive investment opportunities, is key for all companies, especially in today's low-growth environment.
Sustainability is another highly important area. We strive to ensure that our companies will be the leaders of their industries for many decades to come. Companies that work in a responsible and ethical way will be able to offer the most demanded products and services, and recruit the best employees, thereby outperforming their competitors in the long run. Therefore, sustainability must never be seen as an obstacle to long-term profitable growth. On the contrary, it is a fundamental prerequisite.
2015 was another successful year for Investor, and we continued to outperform the overall stock market. Our total shareholder return was 13 percent, compared to 10 percent for the Stockholm Stock Exchange. Over the past 20 years, our total shareholder return has averaged 14 percent per year, compared to 12 percent for the overall market. In a given year this difference may seem small, however compounded over 20 years, Investor's outperformance is significant. For 2015, our Board of Directors proposes a dividend of SEK 10 per share, an increase from SEK 9 last year.
On behalf of the Board, I would like to thank Johan Forssell for his successful leadership in his first year as CEO, as well as his colleagues in the management team and everyone at Investor for yet another year of committed work.
I would particularly like to thank you, dear shareholder, for your support throughout the years. With a clear strategy, solid financials and our portfolio of great companies, we will do our utmost to continue to create value.
Jacob Wallenberg Chairman of the Board
The macroeconomic and geopolitical situation did not improve during 2015, and there is no lack of challenges near-term. However, we know from history that challenging times often offer attractive long-term investment opportunities, both for Investor and for our companies. 2015 was another active year for Investor, with a new structure, major investments and strong cash flow generation. Our total shareholder return amounted to 13 percent. With a clear strategy, we are well positioned to continue to create long-term value.
In 2015, we launched a new structure, with Listed Core Investments, EQT and Patricia Industries allowing us to work in a more focused way both with our listed and unlisted holdings. In line with our strategy, we made substantial investments within Listed Core Investments, committed capital to the new EQT VII fund, and Patricia Industries acquired BraunAbility in the U.S. At the same time, our cash flow was strong, driven by dividends from Listed Core Investments, strong net cash flow from EQT, and capital distribution from Mölnlycke Health Care and 3 Scandinavia.
As an active owner, supporting our companies to successfully navigate in this challenging environment is a key task for Investor. The boards of our companies remain our most important ownership tool. Therefore, we have stepped up our efforts to make sure that we have the best boards possible in our companies, with a dynamic and relevant mix of competencies for each company. The board members must have integrity, business acumen and really understand the operating environment. They also need to make sure to constantly challenge, but also support, management.
We focus on the industrial value creation in our companies, and drive the initiatives that we believe will create the most value over time, even if profitability might be impacted negatively near-term. Our companies should always be able to focus on executing on well-defined strategies, strongly anchored in their boards. Having said that, a long-term perspective must never be an excuse not to constantly improve efficiency or follow up of ones operations as this too is important for long-term competitiveness.
During 2015, we continued to refine our value creation plans for all our companies. One focus area is our companies' ability to capture profitable growth opportunities, which, among other things, requires strong enough balance sheets. Our view is clear: the companies should have balance sheets that allow them to pursue investment opportunities and of course to run the operations efficiently. Once those needs are met, any excess capital should be distributed to the owners. However, these priorities must never be reversed, as this would jeopardize the ability to create long-term value.
To create long-term value, companies must be willing to take calculated risk, an inherent part of doing business. Sometimes you will succeed, sometimes you will not. The most important thing when an investment or a project does not turn out as expected, is to learn from it, quickly adapt and move on.
The current business environment is tough. However, long-term trends such as demographics, major technology shifts,
the need for productivity improvement and increased focus on sustainability also offer great opportunities. Consequently, it is more important than ever that our companies focus on constantly improving efficiency, while continuing to invest for the future. During 2015, many of our listed core investments made progress, both operationally and strategically. For example, Wärtsilä acted swiftly to reduce costs in its marine business and Atlas Copco in its mining-related segments. ABB launched a substantial cost savings program and Ericsson continued to work hard on improving efficiency. Simultaneously, Saab built a solid order book driven by the Gripen aircraft, submarines and radar systems. Atlas Copco continued to invest in the attractive vacuum area and Ericsson entered a strategically important partnership with Cisco. Sobi recently launched Elocta, for the treatment of hemophilia A, and AstraZeneca strengthened its pipeline, both organically and through acquisitions. These are all examples of initiatives to build stronger platforms for the future. Within Listed Core Investments, we invested SEK 5.6 bn. in ABB, increasing our ownership to 10 percent. We also invested SEK 0.2 bn. in Wärtsilä.
EQT contributed strongly to Investor in 2015, with SEK 4.5 bn. in net cash flow and a value change in constant currency of 32 percent. Activity within EQT remained high. Several new funds, including EQT VII, the largest one to date, and to which we committed SEK 3.2 bn., were successfully launched. Given the excellent historical track record and the attractive return potential, we will continue to invest in EQT's funds.
The top priority for Patricia Industries, focusing on the longterm expansion of our portfolio of wholly-owned companies, is currently to step up the efforts to grow and develop the existing holdings and realize the value of the financial investments. However, the team is also actively looking for new subsidiaries, both in the Nordics and North America. Regarding new investments, we look for companies with strong corporate cultures and market positions in attractive industries that we understand well.
Mölnlycke Health Care reported good growth and profitability. The company invested in sales force expansion and product innovation, which weighed on profitability during the fourth quarter. However, we expect these investments to contribute to sustained profitable growth in the years ahead. Profitable growth, both organic and through acquisitions, remains the key priority, as exemplified by the acquisition of Sundance Solutions in early 2016. During 2015, Mölnlycke Health Care distributed EUR 440 m. to Patricia Industries, reflecting the company's strong cash flow generation.
Aleris reported good growth and stable profitability. Growth was mainly driven by Norway, but all areas contributed positively. The acquisition of Teres Medical Group strengthens Aleris' offering. We will continue to build Aleris into a highquality private provider of care and healthcare services and see additional opportunities for further improvement.
"We focus on the industrial value creation in our companies, and drive the initiatives that we believe will create the most value over time."
Permobil continued to progress well. Sales growth was good, particularly during the latter part of the year, driven by strong demand for the new F-Series wheelchairs, both in the U.S. and in Europe. In addition, Permobil successfully integrated several complementary acquisitions.
In October, Patricia Industries completed the acquisition of BraunAbility, its first U.S. subsidiary, for an equity investment of SEK 2.8 bn. BraunAbility has strong market positions in its core markets, wheelchair accessible vehicles and wheelchair lifts, and significant growth potential.
Grand Group reported good growth and improved earnings. Vectura also progressed well and is investing to accelerate growth. 3 Scandinavia had a strong 2015, with good subscriber intake, service revenue growth and cash flow generation.
Our strategy, built on growing our net asset value, operating efficiently and paying a steadily rising dividend, remains firm. To achieve good net asset value growth, we need to be a world-class owner and allocate our capital wisely. In line with our strategy, Patricia Industries will continue to invest through its existing subsidiaries and look for new ones. We will continue to commit capital to EQT's funds, and we will gradually strengthen our ownership in selected listed core investments when we find valuations attractive. While we prioritize the expansion of our portfolio of unlisted companies, we have the strategic flexibility to act on opportunities on the listed side as well. In short, we will try to capture those opportunities which we find the most attractive.
We will continue to run our operations efficiently. In 2015, our management costs were below our SEK 500 m. annual target, and we maintain strict cost discipline.
We also remain committed to our dividend policy, with the ambition to pay a steadily rising dividend over time.
2016 marks Investor's 100th anniversary, and our model of active, long-term ownership has served us well for a century. Today, we have a portfolio of great companies and strong financial flexibility. We also have a highly professional and dedicated organization, which I would like to thank for all the efforts made in 2015. Based on this combination, and hard work of course, I am confident in Investor's continued ability to handle challenges and capture attractive opportunities, never losing sight of our overarching goal to create long-term value to you, dear shareholder.
Johan Forssell President and Chief Executive Officer
At year-end 2015, net asset value amounted to SEK 271.8 bn., an increase of SEK 10.8 bn. during the year. With dividend added back, the increase was 7 percent, compared to the SIXRX's 10 percent. Investor's leverage was 5.5 percent.
The contribution to net asset value from the business areas during 2015 amounted to SEK 8,804 m. from Listed Core Investments (41,209), SEK 3,995 m. from EQT (4,364), and SEK 4,855 m. from Patricia Industries (6,214).
1) Including management costs, of which Listed Core Investments SEK 86 m., EQT SEK 8 m., Patricia Industries SEK 268 m., and Groupwide SEK 121 m.
2) Including paid dividends of SEK 6,856 m.
Impact on net asset value, SEK m.
| SEK m. | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| Changes in value | 8,538 | 41,960 | 37,031 | 19,472 |
| 300 000 Dividends |
7,821 3 995 |
7,228 4 855 40 |
6,052 –6 856 |
5,177 271 801 |
| 8 804 260 963 Other operating income1) |
58 | 177 | 362 | 509 |
| Management costs 250 000 |
–483 | –368 | –359 | –377 |
| Other items | 1,500 | 1,691 | 2,020 | –606 |
| Profit (+)/Loss (–) 200 000 |
17,434 | 50,688 | 45,106 | 24,175 |
| Non-controlling interest | –1 | –32 | 59 | 51 |
| Dividends paid | –6,856 | –6,089 | –5,331 | –4,563 |
| 150 000 Other effects on equity |
262 | 979 | 885 | –1,035 |
| Total | 10,838 | 45,546 | 40,719 | 18,628 |
1) Includes interest received on loans to associates.
1) Inkl. finansnetto, återköp av egna aktier, påverkan på eget kapital och förvaltningskostnader. Substansvärde 2015 Koncern Utdelning gemensamt Patricia Industries Noterade EQT Kärninvesteringar Substansvärde 2014 1) The consolidated net profit amounted to SEK 17,434 m. (50,688). Management costs amounted to SEK 483 m. (368). The increase is mainly explained by the inclusion of the former Investor Growth Capital operations in 2015.
Net debt amounted to SEK 15,892 m. at year-end (20,453), corresponding to leverage of 5.5 percent (7.3). Gross cash amounted to SEK 19,062 m., of which Patricia Industries SEK 14,616 m.
Our target leverage range is 5-10 percent over a business cycle. While leverage can fluctuate above and below the target level, it should not exceed 25 percent for any longer periods of time. Our leverage policy allows us to capture investment opportunities in the market and support our companies.
The debt financing of the wholly-owned subsidiaries within Patricia Industries is ringfenced and hence not included in Investor's net debt. Investor guarantees SEK 0.7 bn. of 3 Scandinavia's external debt, which is not included in Investor's net debt.
The average maturity of the debt, excluding the debt of the wholly-owned subsidiaries within Patricia Industries, was 10.3 years as of year-end (11.3).
During the fourth quarter 2015, Moody's upgraded Investor's long-term credit rating to Aa3 from A1.
| SEK m. | Consolidated balance sheet |
Deductions related to Patricia Industries |
Investor's net debt |
|---|---|---|---|
| Other financial investments | 6,665 | –18 | 6,648 |
| Short-term investments, | |||
| cash and cash equivalents | 15,061 | –2,646 | 12,414 |
| Receivables included in net debt | 1,909 | – | 1,909 |
| Loans | –52,532 | 15,764 | –36,769 |
| Provision for pensions | –743 | 648 | –95 |
| Total | –29,640 | 13,748 | –15,892 |
| Change in net debt | |
|---|---|
| SEK m. | 2015 |
| Opening net debt | –20,453 |
| Listed Core Investments | |
| Dividends | 7,681 |
| Other capital distributions | 1,241 |
| Investments, net of proceeds | –5,783 |
| Total | 3,139 |
| EQT | |
| Proceeds (divestitures, fee surplus and carry) | 6,086 |
| Draw-downs (investments and management fees) | –1,603 |
| Total | 4,483 |
| Patricia Industries | |
| Proceeds | 8,012 |
| Investments | –3,814 |
| Other | 38 |
| Total | 4,236 |
| Investor Groupwide | |
| Dividend paid | –6,856 |
| Other | –441 |
| Closing net debt | –15,892 |
Results after financial items were SEK 8,360 m. (41,898), mainly related to Listed Core Investments, which contributed with dividends of SEK 7,182 m. (6,033) and value changes of SEK –2,582 m. (32,568). The Parent Company invested SEK 21,292 m. in financial assets (19,056), of which SEK 15,677 m. in group companies (15,042), and SEK 5,613 m. in Listed Core Investments (2,264). At year-end, shareholders' equity amounted to SEK 228,433 m. (226,768).
Risk management is an integral part of the board's and management's governance and follow-up of operations. The board is responsible for setting appropriate risk levels and establishing authorities and limits. The boards in the operating subsidiaries manage the risks in their respective businesses and decide on appropriate risk levels and limits. The following is a brief description of the most significant risks and uncertainty factors affecting the Group and the Parent Company. For a more detailed description, see note 3, Risks, page 47.
Commercial risks primarily consist of a high level of exposure to a particular industry or an individual holding, as well as market changes that impact our net asset value, limit investment potential or prevent exits from holdings at a chosen time. The overall portfolio risk is mitigated by many investments active in several different industries and geographies. Commercial risks in the operating subsidiaries' businesses are managed by continuous focus on product development, customer needs, market analysis and cost efficiency, among other things.
The main financial risks are market risks, i.e. the risks associated with changes in the value of a financial instrument. For Investor, share price risk is clearly the largest financial risk. When it comes to fluctuations in exchange rates and interest rates, Investor uses derivatives as one method of managing these risks.
In line with our strategy, we will continue to gradually increase our ownership in selected listed core investments and commit capital to EQT. Patricia Industries will focus on developing its existing subsidiaries, add new ones and realize value from its financial investments. We will maintain strict cost discipline and we stay committed to our dividend policy with the ambition to pay a steadily rising dividend over time.
We are committed to generating an attractive long-term total return, exceeding the market cost of capital. Our long-term return requirement is the risk free interest rate plus an equity risk premium, in total 8-9 percent annually. Our operating priorities are to grow our net asset value, operate efficiently and pay a steadily rising dividend.
Average annual return • Grow our net asset value
To achieve good net asset value growth, we need to own high-quality companies and be a good owner, supporting our companies to achieve profitable growth. We also need to allocate our capital wisely.
2015: Our net asset value amounted to SEK 271.8 bn. at year-end 2015 (261.0), an increase, with dividend added back, of 7 percent (24). The SIXRX total return index rose by 10 percent (16).
700 We maintain strict cost discipline to remain efficient and in order to maximize our operating cash flow.
300 400 500 600 0,4 0,5 0,6 2015: Management costs were SEK 483 m. (368), corresponding to 0.18 percent of our net asset value (0.14). The increase compared to 2014 is mainly explained by the inclusion of the former Investor Growth Capital operations.
Mkr % 500 600 700 0,6 0,7 Our dividend policy is to distribute a large percentage of the dividends received from the listed core investments, as well as to make a distribution from other net assets corresponding to a yield in line with the equity market. The goal is also to pay a steadily rising dividend.
200 300 400 0,2 0,3 0,4 2015: The Board of Directors and the President has proposed a SEK 10.00 dividend per share (9.00). Based on this proposal, our dividend has increased by 15 percent annually over the past five years.
We are a long-term owner and through our board participation, our network and industrial expertise, we focus on what we deem will create the most value for each holding. Our business model is built on substantial ownership in each holding, enabling us to impact key strategic decisions.
We invest in companies in industries we understand well, and in which we can utilize our experience and network as well as our financial expertise.
We have a long-term investment horizon focusing on "buy-tobuild". Our base case is not to divest holdings but rather to develop them over time, as long as we see further value creation potential. If we arrive at the conclusion that a certain holding no longer offers attractive enough potential, or that it would be better off with another main owner, we would actively drive an exit process in order to find a new good owner for the company and maximize the value for our shareholders at the same time. Flexibla affärsmodeller
We look for certain characteristics in our companies. They should have strong market positions, flexible and sustainable business models, high exposure to growth markets and strong cash flow generation. We focus on high-quality companies that we can contribute to developing further over time. Exponering mot service och eftermarknad Exponering mot tillväxtmarknader Starkt kassaflöde Starka marknadspositioner
Given our long-term investment horizon, we actively support our companies in making long-term value-creating investments such as expanding their positions in growth markets, R&D and Hållbarhet Innovation och FoU
product launches and other efforts to strengthen long-term competitiveness. Attractive products and services are always the basis for long-term competitiveness and a key value driver. Our focus is on maximizing the intrinsic value of our holdings, i.e. the net present value of all future cash flow in the company. Given this, we do not refrain from taking actions with a negative short-term impact, as long as we believe that they will increase the intrinsic value longer-term.
Over the past few years, we have established a strong cash flow platform. This cash flow allows us to finance investments in both existing and new holdings without divesting other assets. It also allows us to pay a steadily rising dividend. Going forward, our capital allocation focus is to invest through our existing whollyowned subsidiaries within Patricia Industries and finding new ones. In addition, we will continue to strengthen our ownership in selected listed core investments, and we will also continue to invest in EQT's funds.
As a long-term investor and owner, we look for certain characteristics in our investments
To maintain profitability through the business cycle, it is critical that our holdings have flexible business models. Flexible business models also allow the companies to better manage rapid, sometimes disruptive, technological change.
A strong service and aftermarket offering improves the understanding of customer needs and builds customer loyalty. It also offers attractive profitability, additional growth opportunities and increased product penetration.
Our holdings should be well positioned to capture growth through product extensions, new products, and new geographic markets.
Our holdings should have market leading positions as this enhances pricing power and creates the foundation for sustainable good profitability.
Our holdings should have strong cash flow capacity that can be used for investments, for example in R&D and market expansion, and steady distribution to the owners.
To achieve and ensure strong market positions, growth and profitability over time, continuous innovation and focus on R&D is essential.
Running operations in a sustainable, responsible and ethical way is a prerequisite for long-term attractive profitability. Companies that are best-in-class when it comes to sustainability will provide superior products and services, and recruit the best employees, thereby outperforming competition over time.
The boards in our holdings are the main tool for our active ownership. Therefore, we work hard to make sure that we have the best board possible in each company. In our listed core investments, we work through the nomination committees and utilize our network to find the best board candidates. We strive to have two board representatives, including the Chairman position. In our subsidiaries, we appoint board representatives both from Investor and Patricia Industries as well as external members from our network. In our view, a well-functioning board should be composed of individuals with a mix of genders, age, ethnicity and relevant industrial and financial expertise. Integrity and business acumen is also important. Our experience is that well-diversified groups improve the dynamic and create more value. As the conditions under which a company operates change over time, the board composition also needs to change. Therefore, it is important to regularly evaluate the boards to ensure that the composition remains dynamic and well adapted.
A clear division of responsibilities between the owners, boards and management teams in the companies is important. The owners of a company are responsible for ownership-related issues, for example the appointment of the board. The board
appoints the CEO, defines the strategy and monitors the performance of the company, while the management team is responsible for executing the strategy. This model works well for us.
Our ownership work in our companies is mainly carried out by our investment organizations and their business teams within Listed Core Investments and Patricia Industries. The business teams consist of our board representatives, investment managers and analysts at Investor. The business teams conduct extensive benchmarking of our companies versus their competitors and define value creation plans. These plans identify strategic key value drivers that we want the companies to focus on over the next 3-5 years in order to maximize long-term value and maintain or achieve best-in-class positions.
The business teams are also responsible for regularly updating our view of the long-term fundamental values of our companies, serving as the starting point for our investment decisions. When we find the valuation attractive and we are not restricted, we normally gradually increase ownership in selected listed core investments. Within Patricia Industries, the business teams also actively screen the market for new investment opportunities.
78 percent of our total assets as of yearend 2015, consists of 11 listed holdings in which we are a significant minority owner. We have a long-term, active ownership perspective with the objective to grow net asset value and generate returns through value appreciation and capital distribution.
Our listed core investments are multinational companies with proven business models and strong market positions.
At year-end 2015, our investments in EQT represented 5 percent of our total assets. We are one of the founders of the private equity company EQT and a sponsor since its inception in 1994. Since then, EQT has evolved into a world-class private equity company, having raised approximately EUR 29 bn. in different funds. We have committed capital to the vast majority of these funds and own 19 percent of EQT AB.
Patricia Industries, representing 18 percent (excluding gross cash) of our total assets as of year-end 2015, focuses on long-term, active ownership and development of unlisted companies. The objective is to build a portfolio of whollyowned subsidiaries with strong long-term growth potential and cash flow generation. Proceeds from the divestitures of financial investments will be reinvested in new subsidiaries.
Listed Core Investments, representing 78 percent of our total assets as of year-end 2015, consists of our listed holdings in which we are a significant minority owner. We have a long-term investment perspective with the objective to generate returns through value appreciation and dividends. As an active owner, we strive to ensure that our holdings have the best boards possible and through our value creation plans, we support our companies to maintain or achieve best-in-class positions.
Our listed core investments are ABB, AstraZeneca, Atlas Copco, Electrolux, Ericsson, Husqvarna, Nasdaq, Saab, SEB, Sobi and Wärtsilä. These are multinational companies with strong market positions and proven track records.
Listed Core Investments contributed SEK 8.8 bn. to the net asset value during 2015, and the total return amounted to 4 percent. Given the proposals ahead of the Annual General Meetings 2016, dividends to be received in 2016 for fiscal year 2015 are currently estimated at SEK 8.2 bn. (7.7).
As an active owner, we work through our board representatives to support our companies to maintain or achieve best-in-class positions. The foundation for active ownership in the listed core investments is a significant minority ownership, as this is a prerequisite to be able to influence the board composition in each company and to impact key strategic decisions.
We work with a structured approach to evaluate current company performance, both in absolute terms and compared to relevant peers. Our business teams perform extensive benchmarking in terms of growth, profitability, cash flow and total shareholder return to determine the performance versus com-
| petitors. This benchmarking and extensive fundamental analysis |
|---|
| form the basis for identifying improvement potential in the |
| companies. We define value creation plans consisting of the key |
| strategic focus points we believe that the companies should |
| work with over the next few years in order to maximize their |
| long-term value. These value creation plans are regularly refined |
| and are a central tool in our interaction with the companies. |
| Examples of focus points in the value creation plans include |
| investing in product development and sales forces to accelerate |
| growth in certain segments, improving the cost structure in |
| a division or improving inventory management. |
As part of our strategy, we increase our ownership in selected listed core investments when we find valuations fundamentally attractive. During 2015, we bought shares in ABB for SEK 5.6 bn. and in Wärtsilä for SEK 0.2 bn. While we do not actively seek new investments within Listed Core Investments, we do not rule out additional investments, should attractive opportunities arise.
In general, we believe that our listed core investments are well positioned, although there is always room for further improvement.
| Contribution to net asset value | |||
|---|---|---|---|
| SEK m. | 2015 | 2014 | |
| Changes in value | 1,209 | 35,084 | |
| Dividends, listed | 7,681 | 6,227 | |
| Management costs | –86 | –102 | |
| Total | 8,804 | 41,209 |
www.atlascopco.com
| Key figures, SEK m. | 2015 | 2014 |
|---|---|---|
| Net sales | 102,161 | 93,721 |
| Operating margin, % | 19.3 | 18.2 |
| Net profit | 11,723 | 12,175 |
| Earnings per share, SEK | 11.921) | 10.01 |
| Dividend per share, SEK | 6.30p | 6.00 |
| Net debt | 14,805 | 15,428 |
| Market capitalization % |
248,328 | 259,191 |
| Number of employees 20 |
43,114 | 44,056 |
| 15 Investor's engagement |
2015 | 2014 |
| Share of capital, % 10 |
16.8 | 16.8 |
| Share of votes, % | 22.3 | 22.3 |
| 5 Value of holding, SEK m. |
43,100 | 44,972 |
0 9.8% 6.7% Board Members from Investor: Hans Stråberg
ABB Peers (Chairman), Johan Forssell
20 % Provides compressors, vacuum and air treatment systems, construction and mining equipment, power tools and assembly systems
15 Chairman: Hans Stråberg
10 President and CEO: Ronnie Leten
AstraZeneca Peers 20 % • Atlas Copco strengthened its vacuum business with the acquisition of Oerlikon Leybold Vacuum, with annual sales of SEK 3.3 bn. This follows the 2014 acquisition of Edwards Group Ltd., its first major step into the vacuum solutions business.
0 5 Electrolux Peers 10.6% 14.8% −10 −5 0 5 10 15 20 Ericsson Peers % –2.1% –6.8% % Atlas Copco has world-leading market positions as a provider of sustainable productivity solutions, and a strong corporate culture. The company has best-in-class operational performance and has generated a total return significantly higher than its peers. Strong positions in key growth markets, and world-class aftermarket operations have been instrumental to the historical performance. Going forward, the strong market positions, the flexible business model and focus on innovation provide an excellent platform for capturing business opportunities, also in the current low growth environment. The strong cash flow allows for both substantial capital distribution to shareholders, and flexibility to act on attractive growth opportunities.
0
Electrolux Peers
| 15 10 |
www.seb.se | ||
|---|---|---|---|
| 5 Key figures, SEK m. –2.1% |
2015 | 2014 | |
| 0 Total operating income |
44,148 | 46,936 | |
| –6.8% −5 Operating profit |
20,865 | 23,348 | |
| −10 Net profit Ericsson Peers |
16,581 | 19,219 | |
| Earnings per share, SEK | 7.57 | 8.79 | |
| Dividend per share, SEK | 5.25p | 4.75 | |
| Core Tier 1 ratio, % | 18.8 | 16.3 | |
| Market capitalization % % |
196,083 | 218,384 | |
| Number of employees 20 20 |
15,605 | 15,714 |
| 15 Investor's engagement 15 |
2015 | 2014 | |
|---|---|---|---|
| Share of capital, % 10 10 |
20.8 | 20.8 | |
| Share of votes, % | 20.8 | 20.8 | |
| 5 5 Value of holding, SEK m. |
40,826 | 45,407 | |
| 7.1% 7.5% 9,8% 6,7% 0 0 Board Member from Investor: Marcus Wallenberg |
Saab Peers Jämförelsebolag ABB (Chairman)
20 % 20 % A financial services group with main focus on the Nordic countries, Germany and the Baltics Chairman: Marcus Wallenberg President and CEO: Annika Falkengren
0 Jämförelsebolag Electrolux 10,6% 14,8% −10 −5 0 5 10 15 20 Jämförelsebolag Ericsson % –2,1% –6,8% % SEB continues to focus on deepening customer relationships across its geographies and expanding within the savings and pensions area. Operating leverage has increased, alongside a strengthened balance sheet. Nonetheless, sustained capital and funding efficiency will remain essential in the new regulatory environment and to support sustainable and competitive returns. In addition, investments in digital platforms and competencies will be necessary to drive continued operational efficiency as well as improved customer experiences. We believe that SEB is well prepared to navigate the banking landscape of tomorrow.
0
Electrolux
Jämförelse-
of total assets www.abb.com
12%
| 5 Key figures, USD m. –2,1% |
2015 | 2014 |
|---|---|---|
| 0 Net sales –6,8% |
35,481 | 39,830 |
| −5 Operational EBITA margin, % |
11.8 | 11.2 |
| −10 Net profit Ericsson Jämförelse |
1,933 | 2,594 |
| bolag Earnings per share, USD |
0.87 | 1.13 |
| Dividend per share, CHF | 0.74p | 0.72 |
| Net debt | 1,241 | 923 |
| Market capitalization, SEK m. % |
334,880 | 372,763 |
| Number of employees 20 |
135,800 | 140,400 |
| 15 Investor's engagement |
2015 | 2014 |
| 10 Share of capital, % |
10.0 | 8.6 |
| Share of votes, % | 10.0 | 8.6 |
| 5 Value of holding, SEK m. |
35,424 | 33,192 |
20 % 20 % Provides power and automation technologies for utility and industry customers Chairman: Peter Voser President and CEO: Ulrich Spiesshofer
0 5 AstraZeneca Peers 9.1% 7.9% 0 5 10 15 20 Electrolux Peers % 10.6% 14.8% The power and automation industries are attractive and benefit from structural growth drivers such as investments in smarter electricity grids as well as increased energy efficiency and productivity in industrial processes. ABB is well positioned due to its broad industry and geographic presence, leading product portfolio and strong market positions. There is nevertheless room to improve ABB's customer focus and cost efficiency. The company needs to execute on current strategic initiatives and continue to invest for the future. ABB's balance sheet is strong, supporting further investments in growth as well as attractive distribution to shareholders.
10% of total assets
| 10 | ||
|---|---|---|
| Key figures, USD m. | 2015 | 2014 |
| 5 Net sales 9.8% 6.7% |
24,708 | 26,547 |
| 0 Core operating margin, % |
27.9 | 26.1 |
| ABB Peers Net profit |
2,826 | 1,233 |
| Earnings per share (core), USD | 4.26 | 4.28 |
| Dividend per share, USD | 2.80 | 2.80 |
| Net debt | 7,762 | 3,223 |
| % Market capitalization, SEK m. |
730,592 | 692,203 |
| 20 Number of employees |
57,500 | 51,500 |
| 15 Investor's engagement |
2015 | 2014 |
| 10 Share of capital, % |
4.1 | 4.1 |
| Share of votes, % 5 |
4.1 | 4.1 |
Value of holding, SEK m. 29,869 28,270 Board Member from Investor: Marcus Wallenberg Average annual total return, 10 years 0 Atlas Copco Peers 14.3% 6.5%
A global, innovation-driven, biopharmaceutical company Chairman: Leif Johansson President and CEO: Pascal Soriot 15 20 %
AstraZeneca faces patent expirations for some key products in the coming years, which makes continued strengthening of the research pipeline and bringing new innovative products to the market highly important. AstraZeneca has made encouraging progress, and the coming two years will be important in terms of late-stage pipeline results. It is also important that AstraZeneca continues to strengthen its presence in emerging markets and strives for operational excellence. 0 5 10 15 20 Saab Peers % 7.1% 7.5%
20 % 20 %
15
| 10 | 10 | ||
|---|---|---|---|
| 10 | 10 | ||
| 5 Key figures, SEK m. 5.8% 17.4% |
2015 | 2014 | 5 5,8% 17,4% |
| 5 0 Net sales |
3,228 | 2,607 | 5 0 |
| 9,8% 6,7% Nasdaq Peers 0 EBITA margin, adjusted, % |
13.4 | 11.8 | 9.1% 7.9% Nasdaq Jämförelse 0 bolag |
| ABB Jämförelse Net profit bolag |
68 | –268 | AstraZeneca Peers |
| Earnings per share, SEK | 0.26 | –1.01 | |
| Dividend per share, SEK | 0.00p | 0.00 | |
| % Net debt |
–82 | 298 | % |
| 20 % Market capitalization |
36,022 | 21,083 | % 20 |
| 20 Number of employees 15 |
702 | 584 | 20 15 |
| 15 10 Investor's engagement |
2015 | 2014 | 15 10 |
| 10 Share of capital, % 5 |
39.6 | 39.7 | 10 5 |
| 18.9% 8.8% Share of votes, % 5 |
39.8 | 39.8 | 5 |
Value of holding, SEK m. 14,515 8,532 Board Members from Investor: Lennart Johansson, Helena Saxon 0 Jämförelse-Atlas Copco
A specialty healthcare company developing and delivering innovative therapies and services to treat rare diseases Chairman: Bo Jesper Hansen President and CEO: Geoffrey McDonough 10 15 20 %
In January 2016 Sobi launched Elocta (hemophilia A) in the first countries in Europe. Securing the full commercial potential of Sobi's hemophilia assets is the key focus for the company. Continued focus on operational performance, extending the life of the existing products and commercial agreements is also key near-term. −10 Jämförelsebolag Ericsson 15 20 %
Atlas Copco Peers
5% of total assets www.sobi.se
www.ericsson.com
5% of total assets
| 5 Key figures, SEK m. 5.8% 17.4% |
2015 | 2014 |
|---|---|---|
| 0 Net sales 9,8% 6,7% Nasdaq Peers |
3,228 | 2,607 |
| EBITA margin, adjusted, % | 13.4 | 11.8 |
| ABB Jämförelse Net profit bolag |
68 | –268 |
| Earnings per share, SEK | 0.26 | –1.01 |
| Dividend per share, SEK | 0.00p | 0.00 |
| Net debt | –82 | 298 |
| Market capitalization | 36,022 | 21,083 |
| Number of employees | 702 | 584 |
| Investor's engagement | 2015 | 2014 |
| Share of capital, % 5 |
39.6 | 39.7 |
| 18.9% 8.8% Share of votes, % |
39.8 | 39.8 |
| 0 Value of holding, SEK m. 14,3% 6,5% Wärtsilä Peers |
14,515 | 8,532 |
| Atlas Copco Jämförelse Board Members from Investor: Lennart Johansson, bolag Helena Saxon |
Provides communications technology and services Chairman: Leif Johansson 20 %
President and CEO: Hans Vestberg 15
• Ericsson and Cisco announced a strategic partnership enabling the two companies to leverage Ericsson's leading position in mobile networks and global services, and Cisco's in IP and routers, in order to offer customers end-to-end solutions. 0 5 Saab Peers 7.1% 7.5% %
Mobile data traffic continues to grow significantly and Ericsson is well-positioned to support telecom operators in managing this development. At the same time, Ericsson's earnings growth and total shareholder return has been weak in recent years. In order to secure good performance going forward, Ericsson must defend its strong market positions, ensure a competitive cost position and realize a good return on the recent years' investments in adjacent growth areas. 0 5 10 SEB Peers 3.7% 6.3% 15 20 %
www.wartsila.com
| Key figures, EUR m. | 2015 | 2014 |
|---|---|---|
| Net sales | 5,029 | 4,779 |
| Operating margin, % (ex. EO) | 12.2 | 11.9 |
| Net profit | 451 | 351 |
| Earnings per share, EUR | 2.25 | 1.76 |
| Dividend per share, EUR | 1.20p | 1.15 |
| Net debt | 372 | 94 |
| % Market capitalization |
8,314 | 7,315 |
| 20 Number of employees |
18,856 | 17,717 |
| 15 Investor's engagement |
2015 | 2014 |
| 10 Share of capital, % |
17.2 | 16.9 |
| Share of votes, % 5 |
17.2 | 16.9 |
| 5.8% 17.4% Value of holding, SEK m. 0 |
13,077 | 11,776 |
Board Member from Investor: Tom Johnstone, CBE Nasdaq Peers
Provides complete lifecycle power solutions for the marine and energy markets Chairman: Mikael Lilius President and CEO: Jaakko Eskola 20 %
Wärtsilä's leading global market positions and large emerging market exposure provide an excellent platform for profitable growth. To counteract end-market cyclicality, the company has an asset-light business model focused on R&D and design, with in-house manufacturing of critical components. The sizeable aftermarket business provides earning stability in downturns and supports both marine and energy customers. We see strong long-term value potential driven by stricter environmental regulation, build-out of smart power generation and increased penetration of natural gas-powered engines in the marine and energy markets.
20 %
Key figures, SEK m. 2015 2014 Net sales 123,511 112,143 Operating margin, % 2.2 3.2 Net profit 1,568 2,242 Earnings per share, SEK 5.45 7.83 Dividend per share, SEK 6.50p 6.50 Net debt 6,407 9,631 Market capitalization 58,974 65,510 Number of employees 58,265 60,038
Investor's engagement 2015 2014 Share of capital, % 15.5 15.5 Share of votes, % 30.0 30.0 Value of holding, SEK m. 9,860 10,952 Board Member from Investor: Petra Hedengran
Jämförelse- bolag
Average annual total return, 10 years
Provides household appliances and appliances
Jämförelse-
Electrolux Peers
10.6% 14.8%
• GE terminated the agreement to divest its Appliances division to Electrolux and therefore, the transaction was not completed. • To address weak profitability in Small Appliances, Electrolux announced headcount reductions and downsizing of activities to
–6.8%
Jämförelse- bolag
President and CEO: Keith McLoughlin (Jonas Samuelsson as of February 1, 2016)
IMPORTANT EVENTS 2015
Ericsson Peers
structurally reduce costs.
Saab Peers
SEB Peers
3.7% 6.3%
7.1% 7.5%
OUR VIEW
%
20
%
%
%
%
• In early 2016, Jonas Samuelsson was appointed new CEO, succeeding Keith McLoughlin, who decided to step down.
The global appliances industry is highly competitive due to moderate growth in mature markets and a tough industry structure. The long-term growth potential in emerging markets is however high, supported by a fast-growing middle class and increased appliance penetration. Industry margins are low, but returns are healthy thanks to high capital turnover. For Electrolux, we believe that progress is becoming visible and we see good potential for a higher long-term operating margin. To achieve this, it is critical to ensure that the turnaround of the European operation is sustainable and to restore profitability in the North American business.
for professional use Chairman: Ronnie Leten
Sobi
Wärtsilä
10 15 20
%
%
Nasdaq
AstraZeneca Peers
| 4% | |
|---|---|
| of total assets |
www.electrolux.com
Simple average for peers: Whirlpool, LG, Samsung, Midea, Haier, and Arcelik
bolag
www.nasdaq.com
3% of total assets
| 10 | ||
|---|---|---|
| Key figures, USD m. | 2015 | 2014 |
| 5 Net sales 14,3% 6,5% |
2,090 | 2,067 |
| 0 Operating margin, % (non-GAAP) Atlas Copco Jämförelse |
46.7 | 45.0 |
| Net profit bolag |
427 | 413 |
| Earnings per share, USD | 2.50 | 2.39 |
| Dividend per share, USD | 0.90 | 0.58 |
| Net debt | 2,063 | 1,886 |
| % Market capitalization |
9,544 | 8,097 |
| 20 Number of employees |
3,824 | 3,687 |
| 15 Investor's engagement |
2015 | 2014 |
| 10 Share of capital, % |
11.8 | 11.6 |
| Share of votes, %1) 5 |
11.8 | 11.6 |
| Value of holding, SEK m. 9,1% 7,9% 0 |
9,423 | 7,266 |
| AstraZeneca Jämförelse Board Member from Investor: Börje Ekholm (Chairman) bolag 1) No single owner is allowed to vote for more than 5 percent at the AGM. |
||
| Average annual total return, 10 years | ||
| % % |
||
| 20 20 |
Simple average | |
| 15 15 |
for peers: London |
Provides trading, exchange technology, information and public company services Chairman: Börje Ekholm President and CEO: Robert Greifeld 10 15 20 % 15 20 %
Nasdaq has leading market positions and a unique brand in an industry we know well. An exchange is at the core of the financial system, and we believe that more financial products will be traded on exchanges, supported by increased digitalization of trading. Nasdaq has strengthened its non-transactional business, such as corporate solutions and information services, increasing the share of recurring revenue and resilience. We see expansion into new asset classes, geographies and adjacent businesses as some of the main drivers for continued value creation. Nasdaq's strong cash flow supports continued growth initiatives as well as attractive shareholder cash distribution. 0 5 10 15 20 Jämförelsebolag SEB % 3,7% 6,3% 15 20 %
INVESTOR 2015 LISTED CORE INVESTMENTS 15
0 10 15
–2.1%
AstraZeneca Peers
0
www.saab.com
| 15 | ||
|---|---|---|
| 10 Key figures, SEK m. |
2015 | 2014 |
| 5 Net sales |
27,186 | 23,527 |
| 10.6% 14.8% Operating margin, % |
7.0 | 7.1 |
| 0 Net profit Electrolux Peers |
1,402 | 1,168 |
| Earnings per share, SEK | 12.88 | 10.86 |
| Dividend per share, SEK | 5.00p | 4.75 |
| Net debt | 3,217 | 2,113 |
| Market capitalization % |
27,634 | 21,343 |
| Number of employees 20 |
14,685 | 14,716 |
| 15 Investor's engagement 10 |
2015 | 2014 |
| Share of capital, % | 30.0 | 30.0 |
| 5 |
Share of votes, % 39.5 39.5 Value of holding, SEK m. 8,535 6,624 Board Members from Investor: Marcus Wallenberg −10 −5 0 –6.8%
(Chairman), Johan Forssell, Lena Treschow Torell Ericsson Peers
Provides products, services and solutions for military defense and civil security Chairman: Marcus Wallenberg President and CEO: Håkan Buskhe 20 %
Saab provides state-of-the-art products and is well positioned in many niche markets globally. With many defense budgets under pressure, Saab's cost competitive product portfolio becomes increasingly attractive. In light of the record-strong order book, successful execution on the large orders will be critical going forward. Continued operational efficiency is important to support internal R&D investments and marketing efforts in order to secure a strong platform for the future.
bolag AstraZeneca
Ericsson Peers
0
| www.husqvarna.com 15 15 |
|||
|---|---|---|---|
| 10 10 Key figures, SEK m. |
2015 | 2014 | |
| 5 5 Net sales |
36,170 | 32,838 | |
| 7.1% 7.5% 10,6% 14,8% Operating margin, excl. EO, % 0 |
8.2 | 7.2 | |
| 0 Net profit Saab Peers Electrolux Jämförelse |
1,888 | 824 | |
| bolag Earnings per share, SEK |
3.28 | 1.43 | |
| Dividend per share, SEK | 1.65p | 1.65 | |
| Net debt | 6,375 | 7,234 | |
| Market capitalization % % |
33,066 | 32,054 | |
| Number of employees 20 20 |
13,572 | 14,337 | |
| 15 15 Investor's engagement 10 |
2015 | 2014 | |
| Share of capital, % 10 5 |
16.8 | 16.8 | |
| –2,1% Share of votes, % 0 |
32.7 | 31.2 | |
| 5 –6,8% Value of holding, SEK m. −5 |
5,428 | 5,598 |
Jämförelse-
2% of total assets
Board Members from Investor: Tom Johnstone, CBE (Chairman), Magdalena Gerger, Daniel Nodhäll −10 Jämförelsebolag Ericsson 0 SEB Peers 3.7% 6.3%
Jämförelsebolag
Provides outdoor power products, consumer watering products, cutting equipment and diamond tools Chairman: Tom Johnstone, CBE 20 %
2006
President and CEO: Kai Wärn 15
Husqvarna Peers
Saab
• Husqvarna continued to improve its operating margin under the Accelerated Improvement Program launched in 2013. In two years, the Groups operating margin excluding items affecting comparability has recovered from 5.3 to 8.2 percent, despite a significant negative currency impact. 0 Jämförelsebolag SEB 3,7% 6,3% 20 %
Total shareholder return for Husqvarna has been unsatisfactory since the spin-off from Electrolux, caused by weak markets for outdoor products and an unsatisfactory operational performance. However, over the last two years we have seen a significant improvement in profitability thanks to a clear focus on core brands and profit pools, a differentiation between the dealer and retail business models and strong focus on operational excellence. The new organizational structure implemented in 2015 will increase business model differentiation further and increase end customer focus. Near-term, it is important to improve profitability in the Consumer Brands division. The company is well positioned for profitable growth with world-leading market positions, strong brands and a global sales organization. 0 5 Jämförelsebolag Husqvarna 3,6% 0,3%
Jämförelsebolag Ericsson
| SEK m. | bolag 2016 |
2015 |
|---|---|---|
| SEB | 2,395 | 2,167 |
| ABB | 1,450 | 1,349 |
| Atlas Copco | 1,303 | 1,2411) |
| % AstraZeneca 20 |
1,2052) | 1,204 |
| Ericsson | 648 | 595 |
| 15 Wärtsilä |
376 | 359 |
| Sobi Electrolux 10 |
311 | 311 |
| Husqvarna AstraZeneca |
160 | 160 |
| 5 Saab 3,7% |
164 6,3% |
156 |
| 0 Nasdaq Nasdaq SEB |
1543) Jämförelse |
139 |
| Total | bolag 8,166 |
7,681 |
1) In addition, Investor received SEK 1,241 m. through mandatory Saab
share redemption of SEK 6.00 per share.
2) Based on the assumption of unchanged dividend. 3) Based on the most recently decided quarterly dividend. % Wärtsilä
| Ericsson 3,6% 0 |
0,3% No. of shares |
SEK m. |
|---|---|---|
| Husqvarna ABB ABB |
Jämförelse +32,200,000 |
–5,613 |
| Wärtsilä | bolag +500,000 |
–170 |
| Total SEB |
–5,783 |
Our investments in EQT represented 5 percent of our total assets as of year-end 2015. Since its inception in 1994, EQT has evolved into a worldclass private equity company. Over time, our investments in EQT have generated strong returns, and we will continue to invest in its funds.
EQT was founded in 1994, with Investor as one of its three founders. EQT operates in Europe, the U.S. and Asia with several different investment strategies: equity, mid-market, infrastructure and credit. Since inception, EQT has raised approximately EUR 29 bn. from more than 300 institutional investors and has invested more than EUR 16 bn. in around 140 companies in a variety of industries.
EQT has always focused on the industrial development of its holdings, and the clear majority of the returns generated is attributable to operational improvements such as increased sales and efficiency gains. On average, portfolio companies have increased the number of employees by 11 percent, sales by 8 percent and earnings by 11 percent annually, during EQT's ownership.
As a sponsor since the start, Investor has committed capital to the vast majority of the funds that EQT has raised, and today, Investor owns 19 percent of EQT AB, which allows us to take part of carry and surplus from the management fees. This represents a significant enhancement of our total return from each respective fund over time.
% Mkr
www.eqt.se
| Impact on Investor's net asset value, SEK m. | 2015 | 2014 |
|---|---|---|
| Net asset value, beginning of the year | 13,552 | 11,615 |
| Contribution to net asset value (value change) | 3,995 | 4,3641) |
| Draw-downs (investments and management fees) | 1,590 | 2,3971) |
| Proceeds to Investor (divestitures, fee surplus and carry) | –6,086 | –4,854 |
| Net asset value, end of year | 13,021 | 13,522 |
| 1) Restated |
| Investor's engagement | 2015 | 2014 |
|---|---|---|
| Investor's share of funds, % | 5-37 | 6-64 |
| Reported value of holding, SEK m. | 13,021 | 13,522 |
Board Member from Investor: Johan Forssell
| SEK m. | Fund size, EUR m. |
Investor's share |
Investor's remaining commit ment, SEK m. |
Reported value, SEK m. |
|---|---|---|---|---|
| Terminated funds1) | 1,633 | – | – | |
| Fully Invested funds2) | 11,692 | 10-37% | 689 | 6,119 |
| EQT VI | 4,815 | 6% | 589 | 3,170 |
| EQT VII | 6,750 | 5% | 3,175 | 0 |
| EQT Mid Market | 1,054 | 24% | 757 | 1,909 |
| EQT Mid Market U.S. | 535 | 27% | 1,353 | 0 |
| EQT Infrastructure II | 1,938 | 8% | 621 | 1,127 |
| EQT Credit Fund II | 845 | 10% | 242 | 676 |
| EQT new funds | 1,096 | 0 | ||
| EQT AB | 19% | 20 | ||
| Total | 29,262 | 8,522 | 13,021 | |
| 1) EQT I, EQT II, EQT Denmark, EQT Finland, EQT Asia. |
2) EQT III, EQT IV, EQT V, EQT Expansion Capital I, EQT Greater China II,
EQT Infrastructure, EQT Credit Fund, EQT Opportunity.
A private equity group with portfolio companies in Europe, Asia and the U.S.
Chairman: Conni Jonsson
President and CEO (EQT AB): Thomas von Koch
Our investments in EQT's funds have proven very successful over time. Although "lumpy" by nature, depending on whether the funds are in an investment or exit phase, our investments in the EQT funds are expected to continue to generate strong net cash flow over time. We will continue to invest in EQT's funds going forward.
Patricia Industries focuses on the development and expansion of Investor's unlisted holdings, predominantly wholly-owned subsidiaries, in the Nordics and North America. Patricia Industries has a separate board of directors, and its own CEO and management group.
Patricia Industries was established in 2015 in order to enhance Investor's focus on unlisted investments. Patricia Industries, with offices in Stockholm, New York and Palo Alto, is headed by Börje Ekholm and has a separate board of directors, acting pursuant to a mandate from the board of Investor.
The business model focuses on long-term development of unlisted companies based on an active ownership model. The objective is to build a portfolio of wholly-owned subsidiaries with potential for secular growth and strong cash flow generation. Patricia Industries operates with the same long-term return requirement as the listed portfolio.
Focus is on the long-term industrial development of the businesses, pursuing both organic and inorganic opportunities. Patricia Industries uses debt to finance the investments and to maintain capital efficiency, but leverage is lower than typical private equity levels and should never be so high as to constrain investment in the business's long-term growth.
Patricia Industries works through the board of directors of the individual companies. Therefore, it is critical to have the right mix of people on the boards for the challenges facing each company at each point in time. The board is responsible to Patricia Industries for the development of the company. The board appoints the CEO, who, together with the management team and the organization, run the business. Alignment of interests between owners, board and management is an integral part of our model. Patricia Industries strives to have a long-term vision, but is relentlessly impatient in tracking and improving the shortterm performance of its companies.
The key priorities for Patricia Industries are to develop the existing wholly-owned subsidiaries, add new subsidiaries and realize value within Financial Investments. Patricia Industries' investment capacity consists of its current gross cash, proceeds from realizations within Financial Investments, and the cash flow generated by the companies in the portfolio.
| Contribution to net asset value | ||
|---|---|---|
| SEK m. | 2015 |
|---|---|
| Changes in value | 5,145 |
| Management costs | –268 |
| Other items | –21 |
| Total | 4,855 |
Regarding new investments, Patricia Industries is looking for mid-market companies in the Nordics and North America, with strong corporate cultures and market positions in industries supported by solid long-term trends and growth drivers. Patricia Industries partners with strong management teams in building the companies. Such industries include healthcare, engineering, technology and business services. Potential investments should offer solid platforms for continued long-term value creation through industrial development, organic and non-organic opportunities and international expansion.
The current wholly-owned subsidiaries are Aleris, BraunAbility, Grand Group, Mölnlycke Health Care, Permobil and Vectura, companies that have the potential to offer attractive long-term value-creation. As a long-term owner, Patricia Industries supports these companies in their efforts to remain or become bestin-class in their respective industries.
During 2015, Patricia Industries made its first new investment by acquiring BraunAbility - a U.S.-based, family-owned company that is the market leader in wheelchair accessible vehicles (WAV) and wheelchair lifts. Patricia Industries invested SEK 2.8 bn. in equity for 95 percent ownership of BraunAbility.
The partner-owned mobile operator 3 Scandinavia has considerable potential for continued growth and operating leverage.
Financial Investments includes all legacy Investor Growth Capital investments and other holdings for which the investment horizon has not yet been defined. The majority of these investments will be divested over time, and the proceeds reinvested in new subsidiaries.
7% of total assets
www.molnlycke.com
| Key figures, EUR m. | 2015 | 2014 |
|---|---|---|
| Net sales | 1,353 | 1,213 |
| Sales growth, % | 12 | 5 |
| In constant currency % | 5 | 5 |
| EBITDA | 374 | 349 |
| EBITDA, % | 28 | 29 |
| EBITA | 337 | 322 |
| EBITA, % | 25 | 27 |
| Change in working capital | –4 | –5 |
| Capital expenditures | –57 | –46 |
| Operating cash flow | 313 | 298 |
| Acquisitions (–)/divestments (+) | – | – |
| Shareholder contribution (+)/distribution (–) | –440 | –130 |
| Other | –85 | –83 |
| Increase (–)/decrease (+) in net debt | –212 | 85 |
| Net debt | 855 | 643 |
| Working capital/sales, % | 12 | 11 |
| Capital expenditures/sales, % | 4 | 4 |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 99.0 | 99.0 |
| Share of votes, % | 99.0 | 99.0 |
| Reported value of holding, SEK m. | 20,050 | 22,952 |
Provides single-use surgical and wound care products for customers, healthcare professionals and patients Chairman: Gunnar Brock
President and CEO: Richard Twomey
With its strong market positions and its highly competitive product offering, Mölnlycke Health Care is well positioned to continue to deliver strong growth, profitability and cash conversion. Continued focus on product innovation together with sales force expansion in existing and new markets create a robust platform for continued profitable growth.
of total assets www.permobil.com
1%
| Key figures, SEK m. | 2015 | 2014 |
|---|---|---|
| Net sales | 2,931 | 2,053 |
| Sales growth, % | 43 | 18 |
| Organic sales growth, constant currency % | 8 | 6 |
| EBITDA | 547 | 426 |
| EBITDA, % | 19 | 21 |
| EBITA | 392 | 341 |
| EBITA, % | 13 | 17 |
| Adjustments to EBITDA | 29 | – |
| Change in working capital | –80 | –29 |
| Capital expenditures | –164 | –155 |
| Operating cash flow | 331 | 242 |
| Acquisitions (–)/divestments (+) | –1,053 | –362 |
| Shareholder contribution (+)/distribution (–) | – | – |
| Other | –222 | –214 |
| Increase(–)/decrease(+) in net debt | –944 | –334 |
| Net debt | 2,395 | 1,451 |
| Working capital/sales, % | 20 | 20 |
| Capital expenditures/sales, % | 6 | 8 |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 94.0 | 94.0 |
| Share of votes, % | 90.0 | 90.0 |
| Reported value of holding, SEK m. | 3,963 | 3,737 |
Provides advanced mobility and seating rehab solutions Chairman: Martin Lundstedt President and CEO: Jon Sintorn
Permobil is a globally leading provider of advanced mobility and seating rehab solutions, with a strong dedication to improve the quality of life for its users. The company's strong portfolio of brands, competitive product offering, innovation capabilities and leading market positions provide a strong base to capture additional growth, both in existing and new markets.
of total assets www.aleris.se
1%
| Key figures, SEK m. | 2015 | 2014 |
|---|---|---|
| Net sales | 8,540 | 7,527 |
| Sales growth, % | 13 | 8 |
| Organic sales growth, constant currency % | 10 | 7 |
| EBITDA | 492 | 355 |
| EBITDA, % | 6 | 5 |
| EBITA | 323 | 199 |
| EBITA, % | 4 | 3 |
| Change in working capital | 21 | 22 |
| Capital expenditures | –182 | –176 |
| Operating cash flow | 331 | 201 |
| Acquisitions (–)/divestments (+) | –786 | –119 |
| Shareholder contribution (+)/distribution (–) | – | – |
| Other | 9 | –60 |
| Increase (–)/decrease (+) in net debt | –446 | 22 |
| Net debt | 1,415 | 969 |
| Working capital/sales, % | –2 | –2 |
| Capital expenditures/sales, % | 2 | 2 |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 100.0 | 100.0 |
| Share of votes, % | 100.0 | 100.0 |
| Reported value of holding, SEK m. | 3,869 | 3,762 |
Provides healthcare and care services in Scandinavia Chairman: Lars Idermark President and CEO: Liselott Kilaas
Demographics and changing consumption patterns drive long-term growth in the Scandinavian healthcare and care market. Aleris has a strong market position and an attractive platform for growth. Delivering high-quality and cost-efficient service is the main differentiator for this business over the long-term, which is why efforts to constantly improve quality and service for patients and payers are the top priorities. Although we have seen some improvement in profitability in 2015, we continue to see additional potential for improving performance.
www.braunability.com
| Unlisted | ||
|---|---|---|
| Key figures, USD m. | 2015 | 2014 |
| Net sales | 399 | 391 |
| Sales growth, % | 2 | 14 |
| Organic sales growth, constant currency % | 2 | 14 |
| EBITDA | 30 | 34 |
| EBITDA, % | 8 | 9 |
| EBITA | 27 | 31 |
| EBITA, % | 7 | 8 |
| Change in working capital | –3 | –1 |
| Capital expenditures | –1 | –3 |
| Operating cash flow | 26 | 30 |
| Acquisitions (–)/divestments (+) | – | – |
| Shareholder contribution (+)/distribution (–) | – | – |
| Other | –49 | –15 |
| Increase (–)/decrease (+) in net debt | –23 | 15 |
| Net debt | 75 | 52 |
| Working capital/sales, % | 15 | |
| Capital expenditures/sales, % | 0 | |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 95.0 | n.a. |
| Share of votes, % | 95.0 | n.a. |
| Reported value of holding, SEK m. | 2,781 | n.a. |
| Board Member from Patricia Industries: Noah Walley |
Provides wheelchair accessible vehicles and wheelchair lifts Chairman: Keith McLoughlin (as of March 2016) President and CEO: Nick Gutwein
BraunAbility is the U.S. market leader in automobile mobility products for people with disabilities, with clear number one market positions within both Wheelchair Accessible Vehicles (WAV) and wheelchair lifts. The company has significant organic growth potential as its core WAV market is underpenetrated and benefits from sustainable, demographic growth drivers. There are also multiple opportunities for broadening the product portfolio and international expansion, which is in its early stages, as well as substantial upside in manufacturing efficiency. In addition, there are multiple non-organic growth opportunities in and adjacent to the company's core markets.
1% of total assets
www.investorab.com
| Key figures, SEK m. | 2015 | 2014 |
|---|---|---|
| Sales | 158 | 130 |
| Sales growth, % | 22 | 5 |
| EBITDA | 92 | 73 |
| EBITDA, % | 58 | 56 |
| EBITA, adjusted | 19 | –2 |
| EBITA, % | 12 | –2 |
| Change in working capital | 19 | 17 |
| Capital expenditures | –139 | –351 |
| Operating cash flow | –28 | –261 |
| Acquisitions (–)/divestments (+) | –28 | –28 |
| Shareholder contribution (+)/distribution (–) | 367 | – |
| Other | –53 | 9 |
| Increase(–)/decrease(+) in net debt | 258 | –280 |
| Net debt | 1,105 | 1,363 |
| Patricia Industries' engagement | 2015 | 2014 |
|---|---|---|
| Share of capital, % | 100.0 | 100.0 |
| Share of votes, % | 100.0 | 100.0 |
| Reported value of holding, SEK m. | 1,795 | 1,313 |
Board Members from Patricia Industries: Lennart Johansson (Chairman), Christer Eriksson
Develops and manages real estate, including the Grand Hôtel and Aleris-related properties
Chairman: Lennart Johansson
President and CEO: Susanne Ekblom
We see opportunity to create value in Vectura by efficient real estate management and development. The company enables its customers to focus on its core business in well-adapted facilities, within care, hotels and offices. Vectura is investing in its organization to support accelerated growth.
<1% of total assets
www.grandhotel.se
| Unlisted | ||
|---|---|---|
| Key figures, SEK m. | 2015 | 2014 |
| Sales | 597 | 541 |
| Sales growth, % | 10 | 17 |
| Organic sales growth, % | 10 | 11 |
| EBITDA | 41 | 30 |
| EBITDA, % | 7 | 6 |
| EBITA | 15 | 5 |
| EBITA, % | 3 | 1 |
| Change in working capital | –12 | –20 |
| Capital expenditures | –13 | –21 |
| Operating cash flow | 16 | –11 |
| Acquisitions (–)/divestments (+) | – | – |
| Shareholder contribution (+)/distribution (–) | – | – |
| Other | 5 | –31 |
| Increase(–)/decrease(+) in net debt | 21 | –42 |
| Net debt | –106 | –85 |
| Working capital/sales, % | –10 | |
| Capital expenditures/sales, % | 2 | |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 100.0 | 100.0 |
| Share of votes, % | 100.0 | 100.0 |
| Reported value of holding, SEK m. | 175 | 158 |
| Board Member from Patricia Industries: Daniel Johansson |
The Grand Group consists of Scandinavia's leading five-star hotel
Grand Hôtel, and Lydmar Hotel Chairman: Peter Wallenberg Jr
President and CEO: Pia Djupmark
Grand Hôtel and Lydmar Hotel have unique brands and locations. The two hotels have complementing brands, and we see the potential for additional synergies between them. The Grand Group has improved profitability during the past years thanks to strong growth and cost control. Focus going forward remains on revenue growth and continued improvement of operational excellence.
of total assets
www.tre.se
| Key figures SEK m. | 2015 | 2014 |
|---|---|---|
| Net sales | 10,831 | 10,387 |
| Sweden, SEK m. | 7,238 | 6,633 |
| Denmark, DKK m. | 2,868 | 3,063 |
| Service revenue | 6,313 | 5,763 |
| Sweden, SEK m. | 4,176 | 3,730 |
| Denmark, DKK m. | 1,703 | 1,663 |
| EBITDA | 2,916 | 2,662 |
| Sweden, SEK m. | 2,149 | 1,868 |
| Denmark, DKK m. | 612 | 649 |
| EBITDA, % | 27 | 26 |
| Sweden | 30 | 28 |
| Denmark | 21 | 21 |
| Net debt | 1,579 | 1,118 |
| Other key figures | ||
| Subscribers | 3,190,000 | 3,015,000 |
| Sweden | 2,016,000 | 1,889,000 |
| Denmark | 1,174,000 | 1,126,000 |
| Postpaid/prepaid ratio | 79/21 | 80/20 |
| Capital expenditures/sales, % | 9 | 10 |
| Patricia Industries' engagement | 2015 | 2014 |
| Share of capital, % | 40.0 | 40.0 |
| Share of votes, % | 40.0 | 40.0 |
| Reported value of holding, SEK m. | 5,611 | 6,123 |
Provides mobile voice and broadband services in Sweden and Denmark Chairman: Canning Fok
President and CEO Sweden: Nicholas Högberg
3 Scandinavia has consistently grown by capturing market share in Sweden and Denmark. With strong cost control in place, future revenue growth should translate into enhanced profit and cash flow generation. High network quality and fair access to spectrum will continue to be key for 3 Scandinavia's ability to provide superior services to a growing subscriber base.
| Company | Operations |
|---|---|
| Listed | NSFocus Provides enterprise-level network security solutions and services in the Americas, Europe and Asia |
| Listed | Tobii Provides eye tracking, developing equipment and services used by more than 2,000 compa nies and 1,500 research institutions |
| Unlisted | Madrague An equity long/short fund with European focus and active portfolio management driven by fundamental research combined with a top-down view |
| Unlisted | Mindjet Provides mind-mapping software for individu als and organizations, and software for crowd sourced innovation |
| Listed | Newron A clinical-stage biopharmaceutical company discovering, developing and commercializing novel drugs to treat diseases of the Central Nervous System and pain |
Financial Investments consists of investments in which the investment horizon has not yet been defined. Our objective is to maximize the value and use realized proceeds for investments in existing and new subsidiaries. We are also evaluating if some holdings could become long-term investments. Finansiella Investeringar
As of December 31, 2015, European, U.S. and Asian holdings represented 21, 47 and 32 percent of the total value of Financial Investments. 52 percent of the net asset value of Financial Investments was in publically listed companies. The five largest investments represented 55 percent of the total value of Financial Investments. Vectura Permobil 3 Skandinavien Mölnlycke Health Care
Our employees are central to our value creation model. It is only with the determination and dedication of our people that we can create long-term value for our shareholders and run our operations efficiently. To recruit and retain the right people, we focus on creating a sustainable and attractive workplace that emphasizes competence, professionalism and quality awareness.
Our organization consists of the Management Group, the investment organizations for Listed Core Investments and Patricia Industries, Corporate Relations & Communications, Group Finance, Human Resources, IT, Legal, Corporate Governance & Compliance, Office Support, and Trading.
The competence of our employees is key for our ability to conduct our active ownership and operate efficiently. We focus on our employees' individual longterm development and offer the opportunity to continuously build skills and knowledge.
Internally, Investor has many activities to enhance knowledge and provide information, such as theme lunches, breakfast meetings and conferences. All employees have access to free healthcare and to promote a healthy, balanced lifestyle, Investor conducts various internal activities.
A strong corporate culture is important if we are to successfully achieve our vision and goals. We are constantly developing
our corporate culture based on our Core Values; Create value, Continuous improvement, Contribute your view and Care for people. Our Core Values are an integral part of our way of doing business, as well as our high ethical standards. We conduct employee surveys regularly to ensure that we make progress and that we can continue to offer a sustainable, attractive workplace.
We believe that diversity, making use of the total talent base available, builds
stronger and more dynamic teams. Our organization is well diversified in terms of age, gender and expertise. Our ambition is to continue to have at least one man and one woman in the final process for every external recruitment, labor laws permitting.
Annually, Investor offers talented students internships at its different departments. This investment is a part of finding and attracting future employees and strengthens our employer brand. During 2015, ten interns worked at Investor. Investor also hosts student presentations and meets with students at selected university fairs on a continuous basis.
During 2015, we continued to focus on improving and developing collaborations with our holdings. In addition to rotation programs and networking, a common job market for Investor and our subsidiaries was launched. The intention is to promote talent exchange between Investor and its subsidiaries, and to further increase knowledge-sharing and sourcing of employees within the sphere.
0 20-29 30-39 40-49 50-59 60-69 1) Excluding the operating subsidiaries.
Investor firmly believes that focus on sustainability is critical and that it offers attractive opportunities. Companies that are best-in-class when it comes to operating in a sustainable way will be able to provide superior products and services and recruit the best employees, thereby outperforming their competitors longer-term.
Investor has a long tradition of acting as a responsible company, owner and employer. We are fully committed to the highest standards of corporate governance and we support the UN Global Compact and the OECD guidelines for Multinational Enterprises. The company's basic principle is that long-term profitability and shareholder value is ensured by taking into account the interests of stakeholders, such as shareholders, holdings, employees, suppliers, government, media, local communities and society as a whole.
Investor's Board of Directors, in cooperation with its Management Group, has formulated an internal framework on how Investor shall act as a responsible company, owner and employer, and reflect the UN Global Compact's ten principles. These topics are addressed in the Code of Conduct and the internal policies for Anti-Corruption, Corporate Responsibility and Whistleblowing. Every employee and representative of the company is expected to comply with these policies. Investor's Code of Conduct can be found on our website, www.investorab.com.
As part of our ownership philosophy, Investor strives to ensure that the companies we invest in, and have influence in, conduct their operations in a responsible and ethical manner.
We have high expectations of our holdings regarding Corporate Responsibility (CR) issues. We believe that there is
a strong link between long-term profitability and sustainability, and we support our holdings to develop sustainable business models.
As an industrial holding company, our main focus lies in our role as a responsible owner, as this is where we can make the most impact. The risks vary depending on company, industry and country, and consist among others of geographical risks, environmental risks, political climate, brand risks as well as supplier risks.
Investor pays consideration to CR-related matters in our investing activities. As we believe focus on sustainable business is a prerequisite of building long-term profitability and shareholder value, it is natural for Investor's analysts to monitor the development and reporting in our existing holdings on an ongoing basis and to include sustainability aspects in the analysis for new investments.
If a serious CR-related matter occurs, the employee who becomes aware of the matter is responsible for raising the matter internally within Investor and directly with the company through our board representatives. The analysts are responsible for following up the steps the company takes and report to relevant people within Investor.
Investor's sustainability work was intensified in 2015. Within the Management Group, the Head of Corporate Relations, Sustainability and Communications is responsible for our sustainability work, and employees within our different departments are actively engaged in this work. We also updated and improved the Investor sustainability guidelines for our holdings and a process for a more structured follow-up of our holdings' sustainability work was initiated.
During the year, Investor had an ongoing dialog with the portfolio companies and worked to support all holdings through their Boards of Directors and via formal and informal contacts.
For more information, visit: www.investorab.com
Investor supports the UN Global Compact's ten principles and the OECD guidelines on Multinational Enterprises. We also support and respect internationally proclaimed human rights.
Investor expects all holdings to continuously improve their work with human rights.
Investor's direct environmental impact is limited, but we always strive to avoid unnecessary impact on the environment and to further reduce environmental impact. During 2015 Investor decided to carbon-offset flights. In accordance with the EU Energy Efficiency Directive and Swedish law, Investor has initiated a process to analyze its energy use. The analysis will result in proposals on actions that can be taken to reduce Investor's energy use further.
Investor expects all holdings to continually reduce their environmental impact and to encourage their stakeholders, such as suppliers and trading partners, to meet the same expectations.
Investor shall ensure compliance with labor and employment laws, including working hours. Furthermore, the right to collective bargaining is recognized in Investor and through the Code of Conduct, it is also stated that no colleagues should be discriminated against because of age, gender, national origin, disability, religion, sexual orientation, marital or maternity status, union membership or political opinion, among others. Violations connected to discrimination must be reported to the closest manager, HR or through our whistleblower system.
Investor expects all holdings to continuously improve labor and working conditions.
It is of the highest importance that Investor and our holdings adhere to and comply with all given legislations and regulations as well as setting their own bar for how to act and behave in society – always with the highest possible ethics.
Investor expects all holdings to continually improve their work against corruption and bribery.
The total return for the Investor B-share in 2015 was 13 percent, while the SIXRX total return index rose by 10 percent. The average annualized total return has been 12 percent over the past ten years and 14 percent over the past 20 years. The price of Investor's A-share increased by 9 percent during the year from SEK 281.30 to SEK 306.60. The B-share increased by 10 percent from SEK 284.70 to SEK 312.60.
During 2015, the turnover of Investor shares on the Nasdaq Stockholm totaled 324 million (290), of which 22 million were A-shares (21) and 302 million were B-shares (270). This corresponded to a turnover rate of 7 percent (7) for the Ashare and 65 percent for the B-share (59), compared with 73 percent for the Nasdaq Stockholm as a whole (67). On average, 1.3 million Investor shares were traded daily (1.2). Our B-share was the ninth most actively traded share on the Nasdaq Stockholm in 2015 (18th). Additional Investor shares were also traded on other exchanges.
At year-end, our share capital totaled SEK 4,795 m., represented by 767,175,030 registered shares, of which 5,270,322 owned by the company, each with a quota value of SEK 6.25. We had a total of 155,629 shareholders at year-end 2015 (140,774). In terms of numbers, the largest category of shareholders is private
investors, and in terms of the percentage of share capital held, institutional owners dominate. The largest single shareholder category is foundations, of which the three largest are Wallenberg foundations. The Wallenberg foundations' aggregated holding amounts to 23.3 percent of the capital and 50.1 percent of the votes in Investor.
Within the framework of our long-term share based remuneration, all employees are given the opportunity to invest approximately 10-15 percent (or in some cases more) of their gross fixed base salary in Investor shares. Approximately 92 percent of Investor's employees participated in the Long-Term Variable Remuneration program 2015 (87). In total, employees invested in and contributed Investor shares worth of SEK 12.7 m. within the programs for long-term share based remuneration during 2015. The CEO and approximately 20 other senior executives are required to invest a part of
their fixed base salary in Investor shares. Personal investments mean that the program has both an upside and a downside, aligning the interest of the employees with the shareholders.
For more information on remuneration, see Investor's employees page 23 and note 9, Employees and personnel costs, page 54.
The Board and the President propose a dividend to shareholders of SEK 10.00 per share (9.00), corresponding to a maximum of SEK 7,672 m. to be distributed (6,856), based on the total number of registered shares.
Our dividend policy is to distribute a large percentage of the dividends received from Listed Core Investments, as well as to make a distribution from other net assets corresponding to a yield in line with the equity market. The goal is also to pay a steadily rising dividend.
Övriga juridiska personer 5%
Lit: Traditional trading, buy- and sellorders are public Off-book: trading outside the exchange, registered afterwards Auction: auctionprocedure at excange Dark pool: buy- and sellorders are not public
Firms publishing analyses of Investor AB
| Number of shares | Number of shareholders |
Holding, % |
|---|---|---|
| 1-500 | 117,618 | 2 |
| 501-1,000 | 17,957 | 2 |
| 1,001-5,000 | 17,389 | 5 |
| 5,001-10,000 | 2,250 | 2 |
| 10,001-15,000 | 712 | 1 |
| 15,001-20,000 | 365 | 1 |
| 20,001- | 1,377 | 87 |
| Total | 157,668 | 100 |
| % of | % of | |
|---|---|---|
| 12/31 2015 | capital | votes |
| Knut and Alice Wallenbergs Foundation | 20.0 | 43.0 |
| Alecta | 5.4 | 2.9 |
| AMF | 3.8 | 7.9 |
| The Northern Cross Investments Ltd. | 2.3 | 0.5 |
| SEB Foundation | 2.3 | 4.9 |
| First Eagle Investment management | 2.1 | 3.0 |
| Marianne and Marcus Wallenbergs | ||
| Foundation | 1.9 | 4.1 |
| SEB-funds | 1.6 | 0.5 |
| Norges Bank Investment Management | 1.6 | 0.3 |
| Marcus and Amalia Memorial Fund | 1.4 | 3.1 |
| Robur funds (incl. Swedish church) | 1.1 | 0.6 |
| Vanguard Group Inc. | 1.1 | 0.2 |
| Invesco Advisers, Inc. | 1.1 | 0.2 |
| Handelsbanken funds | 0.8 | 0.2 |
| Fourth AP-fund | 0.8 | 0.9 |
1) Swedish owners are directly registered or registered in the name of nominees. Foreign owners through filings, custodian banks are excluded. Source: Euroclear.
Magnus Dalhammar: +46 8 614 2130 [email protected]
IR Group: +46 8 614 2131
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Corporate governance practices refer to the decision making systems through which owners, directly or indirectly, govern a company. Investor's business model of active ownership is to create value in the portfolio companies. Good corporate governance is not only an important matter for Investor's own organization, it is an important part of Investor's core business. Below the corporate governance within Investor is described.
Investor complied with the Code during 2015. Investor did neither deviate from the Nasdaq Stockholm Rule Book for Issuers nor from good stock market practice.
Investor is a Swedish limited liability company, publicly traded on the Nasdaq Stockholm Exchange, and adheres to the Swedish Code of Corporate Governance (the Code). The Code is published on www.corporategovernanceboard.se, where a description of the Swedish Corporate Governance model can be found.
This Corporate Governance Report is submitted in accordance with the Swedish Annual Accounts Act and the Code. It explains how Investor has conducted its corporate governance activities during the 2015 financial year.
The Corporate Governance Report has been reviewed by Investor's auditor, see page 94.
The 2016 Annual General Meeting (AGM) of Investor will take place on May 10 at the City Conference Centre in Stockholm. Shareholders who would like to have a particular matter discussed at the AGM should submit such request to the Nomination Committee before March 15 and to the company before March 22, 2016. Contact information is available on the company website.
Investor always strives to ensure that the Board, the Management Group, the Nomination Committee and the auditor are present at the AGM.
Each Investor shareholder entitled to vote may vote for the entire number of the shares owned and represented by the shareholder without restrictions to the number of votes. A-shares are entitled to one vote and B-shares are entitled to 1/10 vote.
1) Within given mandate from Investor's Board of Directors the operation within Patricia Industries is run independently. The Board of Patricia Industries consists of Gunnar Brock, Sune Carlsson, Johan Forssell, Jacob Wallenberg and Marcus Wallenberg (Chairman). For members in Investor's Board of Directors see page 38.
2) The President and CEO of Investor has the overall responsibility for the whole Investor Group. In the daily operations, the President and CEO of Investor, however works closer to the two business areas Listed Core Investments and EQT, as Patricia Industries has a Board of Directors that independently makes investment and management decisions, within a given mandate from Investor's Board of Directors, regarding the companies within Patricia Industries. The President and CEO of Investor is a member of the Patricia Industries' Board.
In addition to applicable law, regarding shareholders' right to participate at the AGM, there is a requirement in Investor's Articles of Association of confirming intention to attend within given time, stated in the notice of the AGM. The shareholder shall at the same time also inform of any assistant participation.
The documents from the AGMs and the minutes recorded at the AGMs are published on the website.
At year-end 2015, Investor had 155,629 shareholders according to the register of shareholders maintained by Euroclear Sweden. Institutional owners dominate the ownership structure. See page 27 for Investor's largest shareholders and page 84 for Investor's share capital.
Investor's distribution policy is to distribute a large percentage of the dividends received from Listed Core Investments, as well as to make a distribution from other net assets corresponding to a yield in line with the equity market. Investor's goal is to generate a steadily rising annual dividend.
The 2015 AGM decided on a dividend payment of SEK 9.00 per share to shareholders. The Board and President recommend to the 2016 AGM a distribution of dividend to shareholders of SEK 10.00 per share.
Since year 2000, the Board has requested and been granted a mandate by the AGM to repurchase Investor shares. The company's holding of its own shares should not exceed 1/10 of all shares outstanding in the company. In 2015, no shares were repurchased. However, 526,638 B-shares were transferred. Also, for the 2016 AGM, there is a proposal to authorize the Board to buy back Investor shares in order to hedge the long-term sharebased remuneration programs.
| 2015 | Number shares held by Investor |
Share of total number of outstanding shares, % |
Nominal value, SEK m. |
Trans action price, SEK m. |
|---|---|---|---|---|
| Opening balance B-shares |
5,796,960 | 0.76 | 36.2 | |
| Repurchased B-shares |
0 | 0 | 0 | |
| Transferred B-shares | –526,638 | –0.07 | –3.3 | –57.4 |
| Closing balance | 5,270,322 | 0.69 | 32.9 |
According to the current instruction for the Nomination Committee, the Committee shall consist of one representative from each of the four shareholders or groups of shareholders controlling the largest number of votes that desire to appoint a representative and the Chairman of the Board. The register of recorded shareholders and shareholder groups from Euroclear Sweden and other reliable shareholder information available to the company as of the last business day of August serves as the basis for identifying the members. For further information regarding instruction for the Nomination Committee, see the company website.
Up until February 29, 2016, the Nomination Committee had held three meetings at which the minutes were recorded. They also stayed in contact between these meetings. The AGM documents related to the Nomination Committee are published on the website.
| Nomination Committee members |
Independent in relation to the company and company Management |
Independent in relation to the company's major shareholders |
12/31 2015 % of votes |
|---|---|---|---|
| Hans Wibom, | |||
| Wallenberg Foundations | Yes | No1) | 50.1 |
| Peder Hasslev, AMF | Yes | Yes | 7.9 |
| Lars Isacsson, | |||
| SEB Foundation | Yes | Yes | 4.9 |
| Ramsay Brufer, Alecta | Yes | Yes | 2.9 |
| Jacob Wallenberg, Chairman of the Board |
Yes | No2) |
The composition of the Nomination Committee was made public on September 29, 2015. The composition meets the independence criteria set forth by the Code.
1) Representing the Wallenberg Foundations.
2) Member of Knut and Alice Wallenberg Foundation.
Pursuant to its Articles of Association, Investor must have one or two auditors, and no more than two deputies. A registered firm of auditors may be appointed as the company's auditor. The auditor is appointed by the AGM for a mandate period of one year, as nothing further is stated in Investor's Articles of Association.
At the 2015 AGM, the registered auditing company, Deloitte AB was re-elected as auditor for the period until the end of the 2016 AGM. The Authorized Public Accountant Thomas Strömberg is the auditor in charge for the audit.
The auditing firm has, besides the audit, conducted a limited number of other assignments on behalf of Investor. These assignments mainly consisted of services associated with auditing, such as in-depth reviews during audit. By limiting the extent to which the auditor is allowed to perform services other than auditing, it is possible to ensure that the auditor is independent of the company. For details on remuneration to auditors, see note 10, Auditor's fees and expenses.
Auditor-in-charge: Thomas Strömberg, Authorized Public Accountant Born: 1966 Auditor-in-charge for Investor since 2013 Shares in Investor AB: 0 shares Other auditing assignments: Rezidor Hotel Group AB, Tele2 AB
Pursuant to the Articles of Association, the Board must consist of no less than three and no more than thirteen Directors, as well as no more than four deputies. Since the 2015 AGM, the Board has consisted of eleven members and no deputies. The percentage of women on the Board, calculated on non-executive Directors, is 40. A more detailed presentation of the Board is found in the adjacent table, on page 38 and on the website.
New Board members are introduced to Investor's business operations by attending an introduction orientation involving, for example, meetings with department managers. Board members are continuously updated on new regulations, practices and statutory requirements that may affect the business.
The composition of Investor's Board meets the requirements concerning the independence of Directors. Several of the Board members are Directors of Investor's holdings and they receive remuneration from these companies. This consideration is not considered to entail a dependence of these members on Investor or its Management. Investor is an industrial holding company and works actively through the Boards of its holdings to identify and drive value-creating initiatives. The work of the Board of Directors in Investor's holdings is the core of Investor's active ownership model. For Investor, where a fundamental component is to have
the right Board in each company, it is natural that Members of Investor's Board of Directors and Management have Board assignments in Investor's holdings. The assessment of each Board member's independence is presented in the table below.
The Chairman of the Board, Jacob Wallenberg, is in addition to his active involvement in Investor also involved in a number of other companies and serves on a number of international organizations. He has an extensive international network and he participates in various policy forums.
Pursuant to the Rules of Procedure, the Chairman of the Board initiates an annual evaluation of the performance of the Board. The objective of the evaluation is to provide insight into the Board members' opinions about the performance of the Board and identify measures that could make the work of the Board more effective. A secondary objective is to form an overview of the areas the Board believes should be afforded greater scope and where additional expertise might be needed within the Board.
The 2015 evaluation was answered by each Board member. In addition, the Chairman met with each Board member separately to discuss the work done by the Board during the year. The Board discussed the results of this year's evaluation and the Chairman of the Board presented them to the Nomination Committee.
Investor's Board continuously evaluates the performance of the President by monitoring the development of the business in relation to the established objectives. A formal performance review is carried out once a year.
| Board of Directors elected at the AGM 2015 | ||||||
|---|---|---|---|---|---|---|
| Member | Elected | Position | Year of birth | Nationality | Independent in relation to the company and company Management |
Independent in relation to the company's major shareholders |
| Jacob Wallenberg | 1998 | Chairman | 1956 | Swedish | Yes | No1) |
| Marcus Wallenberg | 2012 | Vice Chairman | 1956 | Swedish | Yes | No1) |
| Josef Ackermann | 2012 | Member | 1948 | Swiss | Yes | Yes |
| Gunnar Brock2) | 2009 | Member | 1950 | Swedish | Yes | Yes |
| Johan Forssell | 2015 | Member | 1971 | Swedish | No3) | Yes |
| Magdalena Gerger | 2014 | Member | 1964 | Swedish | Yes | Yes |
| Tom Johnstone, CBE | 2010 | Member | 1955 | British | Yes | Yes |
| Grace Reksten Skaugen | 2006 | Member | 1953 | Norwegian | Yes | Yes |
| Hans Stråberg | 2011 | Member | 1957 | Swedish | No4) | Yes |
| Lena Treschow Torell | 2007 | Member | 1946 | Swedish | Yes | Yes |
| Sara Öhrvall | 2015 | Member | 1971 | Swedish | Yes | Yes |
1) Member of Knut and Alice Wallenberg Foundation.
2) In conjunction with taking over as the Chairman of Mölnlycke Health Care 2007 (which was prior to joining the Board in Investor), Gunnar Brock acquired shares (ordinary and preferred) in Mölnlycke Health Care as part of the stock investment program for the Board and senior executives of that company. A part of this holding was reinvested in connection with the new program set in place during 2014 and the remainder was exited. However, it has been concluded that this does not make Gunnar Brock dependent on Investor or its Management.
3) President.
4) Has been President of a closely-related company during the last five years.
During the year, the Board held 12 meetings, of which eight were regular meetings, three were extra meetings, and one was statutory. The Board members' attendance is shown in the table on page 33. The secretary of the Board meetings was, with a few exceptions, General Counsel, Petra Hedengran. Prior to each meeting, Board members were provided with written information on the issues that were to be discussed. Each Board meeting has included an item on the agenda during which Board members had the opportunity to discuss without representatives of the company's Management being present. Tydliga ägare Effektiva processer Engagerad
In the beginning of the year, the Board decided on the succession of the President which was announced on January 28. Thereafter, the Board devoted considerable time to the implementation of Investor's new structure with investments managed within Listed Core Investments, EQT and Patricia Industries, acquisition of shares in, inter alia, ABB and Wärtsilä, investments in EQT-funds, divesture of remaining ownership interests in Lindorff, value creation plans of the companies, and other strategic matters. Prior to each transaction, extensive analysis were presented to the Board. med genomtänkt riskhantering och väl sammansatt styrelse
During the year the Board also worked with developing Investor's role as an active owner within Listed Core Investments and strengthening the processes relating thereto.
The Board devoted time to both internal and external presentations of the financial markets. The Board discussed the development and the effects on industries, markets and individual companies, paying particularly close attention to Investor's holdings and the long-term strategies of such holdings. The CEO of Atlas Copco has presented a company presentation.
An important part of the Board's work is the financial reports presented at every regular Board meeting, including those prior to the year-end, the interim report, and the interim management statements. The Board also receives regular reports on the company's financial position. At regular Board meetings, reports are delivered on the ongoing operations in the business areas, together with in-depth analyses and proposed actions regarding one or more of the company's holdings.
Committee work is an important task performed by the Board. For a description of the work conducted by the Committees during 2015, see page 32.
During the year, the company's Management presented value creation plans for Listed Core Investments, including analyses of the holdings' operations and development potential in the business areas where they are active. These analyses and their implications were discussed and assessed by the Board with a focus on the individual companies as well as in the context of overall strategic discussions. The Board reviewed and approved these value creation plans for all listed core investments. The Board also discussed the overall strategy thoroughly at the yearly strategy review.
The Board received and discussed reports on the composition of portfolios and developments within Patricia Industries and Investor's involvement in EQT. For a description of the work within Patricia Industries and EQT, see page 32.
In addition to participating in meetings of the Audit and Risk Committee, the company's auditor also attended a Board meeting during which Board members had the opportunity to pose questions to the auditor without representatives of the company's Management being present.
In order to increase the efficiency of its work and enable a more detailed analysis of certain issues, the Board has formed Committees. During the year the two committees, the Audit Committee and the Finance and Risk Committee, have merged into one committee, the Audit and Risk Committee. The Board Committees are, after the merger, the Audit and Risk Committee and the Remuneration Committee. The members of the Committees are appointed for a maximum of one year at the statutory Board meeting. The Committee's duties and decision making authorities are regulated in the instruction presented to each Committee annually.
The primary objective of the Committees is to provide preparatory and administrative support to the Board. The issues considered at Committee meetings are recorded in minutes and reported at the next Board meeting. Representatives from the company's specialist functions always participate in Committee meetings.
The Audit and Risk Committee is responsible for assuring the quality of the financial reporting and the efficiency in the internal control system. The Audit and Risk Committee ensures also that the company's compliance efforts are effective and monitor risk exposure and financial strategies. The Audit and Risk Committee is the primary way in which the Board and the company's auditor communicate with each other.
The responsibilities of the Remuneration Committee are, among other things, to evaluate and prepare guidelines for salary and other remuneration and to decide remuneration to the members of the Management Group, except for the President for whom the Board as a whole sets the remuneration.
| Board Committees' work 2015 | ||
|---|---|---|
| Audit and Risk Committee | Remuneration Committee | |
| Members | Grace Reksten Skaugen (Chairman) Gunnar Brock Magdalena Gerger Jacob Wallenberg |
Jacob Wallenberg (Chairman) Tom Johnstone, CBE Lena Treschow Torell |
| Number of meetings |
8 (of which 2 in the previous Finance- and Risk Committee) | 8 |
| Focus areas in 2015 |
• Analyzed each interim report, interim management state ment and the year-end report for completeness and accuracy. • Evaluated accounting and valuation principles of each busi ness area. • Assessed structural and specific tax related issues. • Followed-up Audit reports. • Followed-up on the internal control in connection with process changes. • Evaluated the auditor performance and presented to the Nomination Committee. • Followed-up on limits, mandates and risk exposure for each business area. • Approved updates of Group policies. • Assessed the effect on Investor regarding new and coming regulations. • Assessed the reported work accomplished by the Security function regarding information security. |
• Evaluated and approved remuneration structures for person nel and salary reviews for Management. • Evaluated and assessed the President's goals and terms and conditions for remuneration, which were then approved by the Board. • Discussed strategic personnel and compensation related issues. • Monitored and evaluated guidelines for salary and other remuneration including the long-term variable remuneration programs, both ongoing and those that have ended during the year. • Monitored and evaluated the application of guidelines for sal ary and other remuneration that were approved by the AGM. • Proposed to the Board to submit to the AGM 2016 a long term variable remuneration program which is substantially the same as the approved program for 2015. |
The President's responsibilities include among other things ongoing investments and divestments, personnel, finance and accounting issues and regular contact with the company's stakeholders, such as public authorities and the financial market. The President ensures that the Board is provided with the requisite material for making well-informed decisions.
On May 12, 2015 Johan Forssell was appointed as new President and CEO. The new Management group consisting of Helena Saxon, CFO, Daniel Nodhäll, Head of Listed Core Investments, Petra Hedengran, General Counsel and Head of Corporate Governance and Compliance, and Stefan Stern, Head of Corporate Relations, Sustainability and Communications, was effective as of the same date. For more information about the President and Management Group, see page 37.
The Management Group holds meetings focused on the company's strategy four to five times a year, including risk assessment.
The Management Group regularly works with specific business transactions. During the year the Management Group focused among other things on the formation of the new business area Patricia Industries and the acquisition of additional shares in ABB and in Wärtsilä. Other topics that have been addressed include sustainability issues and the potential impact from technology shifts on Investor's holdings. The Management Group also worked proactively to ensure the company's financial flexibility. The Management Group regularly monitors the organization to ensure that it has the right competences given the company's strategy, goals and challenges.
The Management Group works actively with engaging all employees to develop the corporate culture and act accordingly. For information on Investor's role as employer and owner regarding sustainable business, see page 23 and 24.
Investor's analysts within Listed Core Investments work in business teams with focus on analyzing the holdings, the sector, the market development and competitors to identify value creating initiatives, risks and the companies' return potential. In the Listed Core Investments, see page 12, Investor exercises its active ownership through Board representation.
The Board of Investor decides on capital commitments in the EQT funds, see page 17. Investor invests as a limited partner in each EQT fund and has no influence on the activities within the EQT funds. As also being a sponsor of EQT, Investor receives carried interest and fee surplus on top of the returns from the limited partnership. Johan Forssell is a board member in the holding company of EQT, EQT AB.
Investor's new business area, Patricia Industries, is governed by a mandate given by the Board of Investor. Within this mandate the Board of Patricia Industries independently makes investment and management decisions regarding the companies within Patricia Industries. Patricia Industries' business is divided in a Nordic organization and a North America organization, see page 18. Börje Ekholm is the CEO of Patricia Industries. The partner owned company, 3 Scandinavia, and the wholly-owned operating subsidiaries are governed through Patrica Industries' representation on the Boards of those companies. The board representatives are responsible for ensuring that the Board of Patricia Industries and Investor's Board of Directors are provided
| Attendance record and Board remuneration in 2015 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Audit and Remu Risk neration Committee |
Board fee excl. Committee fees |
Committee fees | ||||||||
| ■ Member ■ Chairman |
Committee | Attendance record, Board Meetings |
Attendance record, Committee Meetings |
Cash, SEK t |
Value of synthetic shares, SEK t1) |
Number of synthetic shares1,2) |
Audit and Risk Commit tee, SEK t |
Remune ration Commit tee, SEK t |
Total Board Remunera tion incl. synthetic shares, SEK t1) |
|
| Jacob Wallenberg | ■ | ■ | 100% | 94% | 2,340 | 0 | 0 | 165 | 155 | 2,660 |
| Marcus Wallenberg | 100% | 625 | 0 | 0 | 625 | |||||
| Josef Ackermann | 70% | 313 | 313 | 946 | 625 | |||||
| Gunnar Brock | ■ | 100% | 100% | 313 | 313 | 946 | 165 | 790 | ||
| Johan Forssell | 100% | |||||||||
| Magdalena Gerger | ■ | 100% | 100% | 313 | 313 | 946 | 165 | 790 | ||
| Tom Johnstone, CBE | ■ | 100% | 100% | 313 | 313 | 946 | 78 | 703 | ||
| Grace Reksten Skaugen | ■ | 90% | 88% | 625 | 0 | 0 | 250 | 875 | ||
| Hans Stråberg | 100% | 313 | 313 | 946 | 625 | |||||
| Lena Treschow Torell | ■ | 100% | 100% | 313 | 313 | 946 | 78 | 703 | ||
| Sara Öhrvall | 100% | 313 | 313 | 946 | 625 | |||||
| Total | 5,778 | 2,188 | 6,620 | 745 | 311 | 9,021 |
1) At point of allocation.
2) The synthetic shares are valued in connection with allocation after the Annual General Meeting 2015 and shall be based on an average market price of Investor shares of class B during a measurement period in conjunction with the allocation, see note 9, Employees and personnel costs.
For total value of the Board fee including synthetic shares and dividends at year-end, see note 9, Employees and personnel costs.
with relevant information on the companies. The Board of Patricia Industries consists of Gunnar Brock, Sune Carlsson, Johan Forssell, Jacob Wallenberg and Marcus Wallenberg. During 2015 the Board of Patricia Industries has among other things focused on the acquisition of the new subsidiary, BraunAbility, and the refinancing of Mölnlycke Health Care.
Corporate support functions on group level are governed by approved policies and instructions. Investor's Trading function is governed by mandates and limits set by the Board of Investor.
Using the risk policy approved by the Board as framework, the Risk Control function identifies and monitors the major risks that Investor is exposed to. This function is responsible for coordinating the internal reporting of Investor's significant risks at the aggregate level. The Risk Control function reports to the Audit and Risk Committee.
The Compliance function supports Investor's compliance with laws and regulations, and maintains internal regulatory systems and education to this end. The Compliance function reports to the Audit and Risk Committee.
The review function, Internal Control, provides objective support to the Board on matters relating to the internal control structure, partly by investigating major areas of risk and partly by performing reviews and follow-ups in selected areas. The Internal Control function plans its work in consultation with the Audit and Risk Committee, the Management Group and the external auditor. It also regularly provides reports on its work to the Audit and Risk Committee during the year.
The total remuneration to the Board approved by the AGM 2015 was SEK 9,021 t. Information on specific compensation is provided in the table above and in note 9, Employees and personnel costs.
The Nomination Committee believes it is to the advantage of the company and its shareholders if Board members are either shareholders in the company or have similar exposure to changes in the price of Investor's share over the long term. Since the 2008 AGM, it is possible for Board members to receive a portion of their compensation in the form of synthetic shares.
At the statutory Board meeting in May 2015, the Board adopted, as in 2011-2014, a policy stating that Board members, who do not already have such holdings, are expected to, over a five-year period, acquire an ownership in Investor shares (or a corresponding exposure to the Investor share, e.g. in the form of synthetic shares) with a market value equivalent to at least one year's Board remuneration, before taxes, excluding remuneration for Committee work.
The total remuneration for the President is determined by the Board. Remuneration issues concerning other members of the Management Group are decided by the Remuneration Committee, after which the Board is informed. Investor's policy is for the Management Group to own shares in Investor corresponding to a market value of at least one year's gross salary for the President and at least half of one year's gross salary for the other members of the Management Group.
The development of the programs for long-term variable remuneration is evaluated on a continuous basis throughout the year. The Remuneration Committee also regularly carries out a more thorough evaluation of the programs. The long-term variable remuneration program proposed by the Board and decided by the AGM in 2015 was substantially the same as the program from 2014.
Investor has during 2015 modernized and better adapted the company's pension and insurance plan to market conditions. The main consequence of the revision is that the defined benefit BTP plan has been replaced with a defined contribution pension and insurance plan. The change will lead to predictable and lower costs for the company as well as the same or better insurance coverage and pension earnings for the employees.
The Board of Directors' proposal, set out below, regarding guidelines for salary and other remuneration for the President and other Members of the Management Group to the AGM 2016 comply with the guidelines for remuneration decided by the AGM 2015, however, with the exception that it is now proposed that pension benefits shall consist of a premium based
pension plan, of which the ratio of pension provisions to fixed cash salary depends on the age of the executive. Further, in order for the new defined contribution pension plan to result in unchanged pension earnings for new Management Group members, the Board has used the possibility, when particular grounds exist, to deviate from the guidelines decided at the Annual General Meeting 2015, where the pension benefit for the Management Group now consists of a premium based pension plan on all parts of the fixed salary (previously on parts of salary above 20 basic income amounts). The combined effects of the changes of the company's pension plans result in unchanged pension earnings for Management Group members, however with predictable and lower costs for the company.
See note 9, Employees and personnel costs, page 54, and on the website, for the most recently approved guidelines on remuneration to senior executives and for a description on the longterm variable remuneration programs. See also the website for the information and evaluation that have to be reported according to the Code.
Investor shall strive to offer a total remuneration in line with market conditions which will enable Investor to recruit and retain the most suitable senior executives. Comparative studies of relevant industries and markets are carried out annually in order to determine what constitutes a total level of remuneration in line with market conditions and in order to evaluate current remuneration levels. The total remuneration shall be based on factors such as position, performance and individual qualification.
The total remuneration to the Management Group shall consist of
Fixed cash salary, variable cash salary and longterm variable remuneration together comprise the total salary for an employee.
The fixed cash salary shall be reviewed annually, and constitutes the basis for calculation of the variable salary.
The short-term variable cash salary is dependent upon the individual's achievement to meet annually set goals. The outcome of the short-term variable cash salary is reviewed annually. For the Management Group, the highest possible shortterm variable cash salary shall vary due to the position held and employment agreements and shall, for the Members of the Management Group, generally amount to 10-75 percent of the fixed cash salary. For the current President, the short-term variable cash salary amounted to maximum 30 percent in 2015. The total short-term variable cash salary before tax for all current Members of the Management Group, can vary between SEK 0 and SEK 7.0 m. during 2016, depending on whether the goals have been met. The short-term variable cash salary might exceed this amount in the event that the Management Group is expanded. The outcome should only be related to the fulfillment of the individual's goals and thus the remuneration is clearly related to the work contributions and performance of the individual. The goals shall be both qualitative and quantitative and be based on factors which support the company's long-term strategy.
Long-term variable remuneration according to decision by the AGM. The Board has decided to propose to the AGM 2016 a long-term variable remuneration program which is substantially the same as the approved program for 2015. See note 9, Employees and personnel costs, and the website for a description on the long-term variable remuneration programs.
Pension benefits shall consist of a premium based pension plan of which the ratio of pension provisions to fixed cash salary depends on the age of the executive. In respect of employees working abroad, pension benefits shall be adjustable in line with local pensions practice. The age of retirement for the President and other Members of the Management Group shall be 60 years.
Non-monetary benefits and other remuneration shall be on market terms and shall contribute to facilitating the executive's discharge of his or her duties.
Investor and Members of the Management Group may mutually terminate employment contracts subject to a six months' notice. Fixed cash salary during the notice period and severance pay shall, for Members of the Management Group with employment contracts entered into after the AGM 2010, in aggregate not exceed the fixed cash salary for two years. For Members of the Management Group employed before the AGM of 2010 the contracts already entered into shall apply. For these Members a mutual termination period of six month applies and severance payment is maximized to 24 months of fixed cash salary.
The Board of Directors may, where particular grounds exist in the individual case, decide to deviate from the guidelines.
The Board has the ultimate responsibility of the internal control for the financial reporting.
Investor's system of internal control and risk management, with regard to financial reporting, is designed to manage risks involved in the processes related to financial reporting and ensure a high level of reliability in the financial reporting. It is also designed to ensure compliance with the applicable accounting requirements and other requirements that Investor must meet as a listed company. Investor's main business is the management of financial transactions and the company's internal control over financial reporting is focused primarily on ensuring efficient and reliable management of, and accounting for, purchases, sales and accurate evaluation of securities. Correct consolidation of the operating subsidiaries is also a priority.
Investor's wholly-owned operating subsidiaries have separate internal control structures in place for their operational activities. The Board of each of these companies is responsible for ensuring the efficiency of the operating subsidiary's internal regulations, internal controls, risk management and financial reporting, as well as reporting on these items to respective company's Board of Directors. Patricia Industries' Board representatives provide this information to Patricia Industries investment organization, where analysis and follow-up take place. Patricia Industries' Board ensures that Investor's Board receives relevant information on the companies. Uppföljning av åtgärder samt löpande riskrapportering Ledningsgruppen utvärderar
The control environment is built around an organization with clear decision-making channels, powers and responsibilities that are defined by explicit instructions and a corporate culture based on shared values. It also requires each individual's awareness of his/her role in maintaining effective internal control. Affärsmål och strategi Riskseminarier hålls i organisationen Uppdatering av riskkartan samt prioritering Åtgärder för att reducera Kontinuerlig hantering och kontroll av riskerna
The corporate culture at Investor is based on four core values: Create value, Continuous improvement, Contribute your view and Care for people. av åtgärdsplaner identifierade risker
All of Investor's business areas have policies, instructions and detailed process descriptions for the various phases of each business flow. These documents establish rules on responsibilities for specific tasks, mandates and powers and how validation is to be carried out. The governing documents are presented on the intranet for all employees. The documents are updated yearly or when needed to ensure that they always reflect current legislation, regulations and changes in processes. The Compliance function educates and informs the organization continuously about internal policies and instructions. During 2015 the Compliance function has continued the follow up on how the subsidiaries work with their steering documents. Instructions regarding the new business area, Patricia Industries, have been issued and approved.
Risk assessment, i.e. identifying and evaluating risks that could prevent the company from achieving its business goals and having reliable financial reporting, is conducted continuously in the day to day business at Investor. The Board, via the Audit and Risk Committee, is responsible for identifying and managing significant financial risks and any risks of material weaknesses in the financial reporting. The Board follows up frequently on limits and risk exposure to ensure the ability to reach business strategies and goals.
The CEO is responsible for ensuring that the organization complies with the Risk policy and for the continuous management of all risks within the business. The Board's and the Management's support function for managing and identifying risks and activities required, is the Risk Control Function.
Patricia Industries' Board representative in the subsidiaries ensures that Investor's Board is informed about any issue in the financial reporting, that could affect Investor's business or financial reporting.
Risk measurement is performed daily regarding the Treasury and Trading businesses and provided to the Management Group. The financial reports are compiled monthly and provided to the Management Group.
Risk assessment is carried out yearly in the form of a self-evaluation and includes the establishment of action plans to mitigate identified risks. Risk assessment encompasses the entire organization and all of its processes. It takes into consideration such things as systems, control activities and key individuals. During 2015 there has been a focus on process risks related to the establishment of the new business area Patricia Industries. Also information security has a major focus in the risk assessments. When needed, action plans were implemented to minimize the probability and impact of identified risks. The identified risks are compiled in a company-wide risk map. Conclusions drawn from the risk assessments are reported to the Management Group
and to the Board. The CEO and Management Group follow up on the implementation of action plans and report back to the Board.
Using each business area's risk assessment as a starting point, the Audit and Risk Committee determines which of the identified risks for the financial reporting should be prioritized by the Internal Control function. Focus is placed on risks of material weaknesses in the financial reporting for significant Income Statement and Balance Sheet items, which have a higher risk because of the complexity of the process, or where there is a risk that the effects of potential weaknesses may become significant because of the high transaction values involved. Actions such as improved control routines are implemented when needed. The Audit and Risk Committee follows up on the measures in place for dealing with other risks.
For a more detailed description of Investor's risks, see note 3, Risks.
To ensure that business is conducted efficiently and that financial reporting gives a true and fair picture on each reporting date, every process incorporates a number of control activities. These involve all levels of the organization, from the Board and company Management to other employees.
At Investor, control activities include approval of business transactions, reconciliation with external counterparties, daily monitoring of risk exposure, daily account reconciliation, monthly custody reconciliation, performance monitoring and analytical monitoring of decisions. During 2015 the controls in the outsourced processes have been verified. Controls in the new processes with Patricia Industries have been defined and documented in instructions.
Investor's financial reports are analyzed and validated by the company's control function within Finance. The validation process consists of both automatic checks, including deviation reporting, and manual checks such as analysis and reasonability assessment of reported values. The effectiveness of the
automatic checks in the IT systems is monitored on the basis of information received from system administrators in the business process. Suggestions for improvements are identified and implemented on an ongoing basis.
Investor's Board has adopted a Communication policy for the purpose of ensuring that the external information is correct and complete. Within the company, there are also instructions regarding information security and how to communicate financial information between the Board, Management and other employees.
Investor has an established process for whistleblowing, accessible for all employees. It can be used anonymously.
During 2015 the process for information flow between Patricia Industries and Investor has been set. Continued focus has also been on developing efficient processes for reporting of the financial information from the subsidiaries, including the new subsidiary BraunAbility.
Both the Board and the Management Group regularly follow up on the compliance and effectiveness of the company's internal controls to ensure the quality of internal processes. Investor's financial situation and strategy regarding the company's financial position are discussed at every Board meeting and the Board is furnished with detailed monthly reports on the financial situation and development of the business to this end. The Board reviews the interim reports before publishing.
The Audit and Risk Committee plays an important role in ensuring and monitoring that control activities are in place for important areas of risk inherent in the processes for financial reporting and regularly reports the results from the committee work to the Board. The Audit and Risk Committee, Management Group and Internal Control function regularly follow up reported deviations.
Born 1971 President and CEO Member of the Management Group since 2006 Employed in 1995
Board assignments Director: Atlas Copco, EQT AB, Patricia Industries, Saab
Head of Core Investments, Investor Project Director: Aleris Head of Research, Head of Capital Goods and Healthcare sector, Head of Capital Goods sector and Analyst, Core Holding: Investor
Education M. Sc. In Economics and Business Administration, Stockholm School of Economics
Shares in Investor 1) 69,000
Born 1964 General Counsel, and Head of Corporate Governance and Compliance Member of the Management Group since 2007 Employed 2007
Director: The Association for Generally Accepted
Director: EQT Partners, Lindorff Group Partner and Head of Banking and Financing Group: Advokatfirman Lindahl Legal Counsel and General Counsel: ABB Financial Services, Nordic Region Assistant Judge: Stockholms Tingsrätt Associate: Gunnar Lindhs Advokatbyrå
Bachelor of Laws, Stockholm University Shares in Investor 1)
16,150
Born 1978 Head of Listed Core Investments Member of the Management Group since 2015 Employed in 2002 Board assignments Director: Husqvarna Work experience
Investment Manager, Head of Capital Goods: Investor Education M.Sc., Stockholm School of Economics Shares in Investor 1) 11,000
Born 1970 Chief Financial Officer Member of the Management Group since 2015 Employed in 1997
Board assignments Director: Sobi
Director: Aleris, Gambro, Mölnlycke Health Care Investment manager: Investor CFO: Hallvarsson & Halvarsson Financial analyst: Goldman Sachs
Education M.Sc in Finance, Stockholm School of Economics, IMD, INSEAD
Shares in Investor 1) 5,396
Born 1970 Head of Corporate Relations, Sustainability and Communications Member of the Management Group since 2015 Employed in 2013
Director: Demoskop
State Secretary on Energy and Sustainability, Ministry of Sustainable Development: Government of Sweden Deputy Party Secretary and Group Secretary: (S) in Swedish Parliament Senior Advisor: Investor, Magnora CEO: Swedish District Heating Association Executive Vice President: Silver Life Head of Planning, Prime Minister's Office: Government Offices of Sweden Head of Planning and Communication, Ministry of Enterprise: Government Offices of Sweden Information Officer, Ministry of Health and Social Affairs: Government Offices of Sweden
Political science, Stockholm University Shares in Investor 1) 3,000
See note 9, Employees and personnel costs, for shares and share-related instruments held by Management Group members.
1) Includes holdings of close relatives and legal entities.
Helena Saxon Stefan Stern
Born 1956, Chairman since 2005 Vice Chairman 1999-2005 Director since 1998 Chairman: Remuneration Committee Member: Audit and Risk Committee
Vice Chairman: ABB, Ericsson, FAM, Patricia Industries, SAS
Director: The Knut and Alice Wallenberg Foundation, Stockholm School of Economics Member: IBLAC (Mayor of Shanghai's International Business Leaders Advisory Council), The European Round Table of Industrialists (ERT), The Confederation of Swedish Enterprise, The Royal Swedish Academy of Engineering Sciences (IVA)
Chairman: SEB Vice Chairman: Atlas Copco, Stora President and CEO: SEB Director: The Coca Cola Company, Electrolux, Stockholm Chamber of Commerce, Stora, WM-data Executive VP and CFO: Investor
B.Sc. in Economics and M.B.A., Wharton School, University of Pennsylvania Reserve Officer, Swedish Navy
Independent/Dependent 1)
462,241, Synthetic shares: 15,612
Born 1956, Vice Chairman since 2015 Director since 2012
Other board assignments Chairman: FAM, Patricia Industries, Saab, SEB Director: AstraZeneca, The Knut and Alice Wallenberg Foundation, Temasek Holding
Chairman: Electrolux, International Chamber of Commerce (ICC), LKAB President and CEO: Investor Executive VP: Investor Director: EQT Holdings, SEB (Stockholm, London), Stora Feldmühle, Stora Enso
B. Sc of Foreign Service, Georgetown University, Washington D.C.
Lieutenant, Royal Swedish Naval Academy Independent/Dependent 1)
Shares in Investor 2) 552,223
Born 1948, Director since 2012
Other board assignments Chairman: Bank of Cyprus Honorary Chairman: St. Gallen Foundation for International Studies Director: Renova Management Director International Advisory Board: Akbank
Chairman: Zurich Insurance Group Chairman Management Board and the Group Executive Committee: Deutsche Bank President Executive Board: Schweizerische Kreditanstalt
Education
Dr. oec, economics and social sciences, University of St. Gallen
0, Synthetic shares: 5,668
Born 1950, Director since 2009 Member: Audit and Risk Committee
Chairman: Mölnlycke Health Care, Rolling Optics, Stora Enso Director: Patricia Industries, Stena, Stockholm School of Economics, Syngenta, Total Member: The Royal Swedish Academy of Engineering Sciences (IVA)
Work experience CEO: Alfa Laval, Atlas Copco, Tetra Pak Group of Companies, Thule International Director: SOS Children's Villages
M.Sc. in Economics and Business Administration, Stockholm School of Economics
Independent/Dependent 1)
Shares in Investor 2) 0, Synthetic shares: 7,926
Director since 2015 See more information on page 37
Born 1964, Director since 2014 Member: Audit and Risk Committee
Current position President and Chief Executive Officer: Systembolaget
Director: Husqvarna, The Research Institute of Industrial Economics (IFN), The Royal Swedish Academy of Engineering Sciences (IVA)
Chairman: IQ-initiativet Director: IKEA (Ingka Holding), Svenska Spel Vice President, responsible for Fresh Dairy, Marketing and Innovation: Arla Foods Management consultant: Futoria Category Director: Nestlé UK Marketing Director: ICI Paints
M.B.A. Stockholm School of Economics M.B.A. exchange, McGill University, Montreal M. Econ., Stockholm School of Economics
Shares in Investor 2) 4,400, Synthetic shares: 2,138
Assignments and number of shares as of December 31, 2015. Updated information will be reported on Investor's website. 1) See page 30, table Board of Directors 2015.
2) Includes holdings of close relatives and legal entities. For more information about synthetic shares see note 9, Employees and personnel costs.
Tom Johnstone, CBE
Born 1955, Director since 2010 Member: Remuneration Committee
Chairman: Combient, Husqvarna Director: Volvo Cars, Wärtsilä
President and CEO: SKF Director: The Association of Swedish Engineering Industries, Electrolux, SKF Executive Vice President: SKF President, Automotive Division: SKF
Independent/Dependentv1) Shares in Investor 2)
0, Synthetic shares: 7,926
Born 1953, Director since 2006 Chairman: Audit and Risk Committee
Chairman: Norwegian Institute of Directors Deputy Chairman: Orkla Director: Lundin Petroleum
Chairman: Entra Eiendom, Ferd Deputy chairman: Statoil Director: Atlas Copco, Corporate Finance Enskilda Securities (Oslo), Opera Software, Renewable Energy Corporation, Storebrand, Tandberg
M.B.A., BI Norwegian School of Management, Careers in Business Program, New York University, Ph.D., Laser Physics, Imperial College of Science and Technology, London
Shares in Investor 2) 2,000
Born 1957, Director since 2011 Other board assignments
Chairman: Atlas Copco, CTEK, Nikkarit, Orchid, Roxtec Director: Hedson, Mellbygård, N Holding, The Royal Swedish Academy of Engineering Sciences (IVA), Stora Enso
President and CEO: Electrolux Chief Operating Officer: Electrolux Various positions with Electrolux
M.Sc. in Engineering, Chalmers University of Technology, Gothenburg Reserve Officer, The Swedish Army
Shares in Investor 2) 8,300, Synthetic shares: 7,926
Born 1946, Director since 2007 Member: Remuneration Committee
Chairman: Euro-CASE Chairman and President: Royal Swedish Academy of Engineering Sciences (IVA) Vice Chairman: ÅF Research Director: Joint Research Centre, European Commission (Brussels) Professor in Physics: Chalmers University of Technology, Uppsala University Director: Ericsson, Gambro, Getinge, Micronic Mydata
Ph.D., Physics, University of Gothenburg Docent, Physics, Chalmers University of Technology, Gothenburg
Shares in Investor 2) 2,500, Synthetic shares: 7,926
Born 1971, Director since 2015 Current position
Co-Founder and Senior Advisor: MindMill Network Other board assignments
Director: Bonnier News (including the Board of Expressen, DN and DI), Bonnier Books, Bisnode, Kicks, Nobel Museum, Umeå University
Chairman: Newsmill, Workey, Feber Director: Adlibris, Mag+, SF Bio, Dagens Industri, TV4, Lunarstorm
Senior Vice President and member of the Management Group: Bonnier (Stockholm, San Francisco) Founder and Chief Executive Officer: Ninety Concept Development
Partner and Chief Executive Officer: Differ
Niche Concepts Manager: Volvo Cars (Brussels) Market Area Manager, China, Hong Kong and Taiwan: Volvo Car Asia (Singapore)
Project Manager: Toyota Motor (Tokyo)
Executive Management Program, Duke University, New York, London
Architecture and Design, Parson School of Design, New York
Philosophy, New York University, New York M. Sc in International Business, Umeå University
Independent/Dependent 1) Shares in Investor 2)
0, Synthetic shares: 946
Assignments and number of shares as of December 31, 2015. Updated information will be reported on Investor's website. 1) See page 30, table Board of Directors 2015.
2) Includes holdings of close relatives and legal entities. For more information about synthetic shares see note 9, Employees and personnel costs.
The Board of Directors propose that the unappropriated earnings in Investor AB:
| Total available funds for distribution | To be allocated as follows: | ||
|---|---|---|---|
| Retained earnings | 201,343,234,973 | Dividend to shareholders, SEK 10.00 per share | 7,671,750,3001) |
| Net profit for the year | 8,360,128,116 | Funds to be carried forward | 202,031,612,789 |
| Total SEK | 209,703,363,089 | Total SEK | 209,703,363,089 |
The consolidated accounts and annual accounts have been prepared in accordance with the international accounting standards in Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of July 19, 2002 on the application of international accounting standards and generally accepted accounting standards in Sweden and give a true and fair view of the Group's and Parent Company's financial position and results of operations. The Administration Report for the Group and the Parent Company gives a true and fair view of the operations, position and results, and describes significant risks and uncertainty factors that the Parent Company and Group companies face. The annual accounts and the consolidated financial statements were approved for release by the Board of Directors and the President on March 21, 2016. The consolidated Income Statement and Balance Sheet, and the Income Statement and Balance Sheet of the Parent Company, will be presented for adoption by the Annual General Meeting on May 10, 2016.
| Dividend to shareholders, SEK 10.00 per share | 7,671,750,3001) |
|---|---|
| Funds to be carried forward | 202,031,612,789 |
| Total SEK | 209,703,363,089 |
The proposed dividend amounts to SEK 7,672 m. The Group's equity attributable to the shareholders of the Parent Company was SEK 271,801 m. as of December 31, 2015, and unrestricted equity in the Parent Company was SEK 209,703 m. Unrestricted equity includes SEK 125,508 m. attributable to unrealized changes in value according to a valuation at fair value. With reference to the above, and to other information that has come to the knowledge of the Board, it is the opinion of the Board that the proposed dividend is defendable with reference to the demands that the nature, scope and risks of Investor's operations place on the size of the company's and the Group's equity, and the company's and the Group's consolidation needs, liquidity and position in general.
1) Calculated on the total number of registered shares. No dividend is paid for the Parent Company's holding of own shares, whose exact number is determined on the record date for cash payment of the dividend. On December 31, 2015, the Parent Company's holding of own shares totaled 5,270,322.
Stockholm, March 21, 2016
Jacob Wallenberg Chairman
Magdalena Gerger Grace Reksten Skaugen Hans Stråberg Lena Treschow Torell
Director Director Director Director
Josef Ackermann Gunnar Brock Tom Johnstone, CBE
Chief Executive Officer
Director Director Director
Marcus Wallenberg Sara Öhrvall Johan Forssell Vice Chairman Director President and
Our Audit Report was submitted on March 22, 2016
Deloitte AB
Thomas Strömberg Authorized Public Accountant
| STATEMENTS FOR THE GROUP 42-45 |
||||
|---|---|---|---|---|
| Notes, Group | ||||
| Note 1 | Significant accounting policies | 46 | ||
| Note 2 | Critical estimates and key judgments | 47 | ||
| Note 3 | Risks | 47 | ||
| Note 4 | Business combinations | 51 | ||
| Note 5 | Operating Segments | 52 | ||
| Note 6 | Changes in value | 53 | ||
| Note 7 | Operating costs | 53 | ||
| Note 8 | Revenues | 54 | ||
| Note 9 | Employees and personnel costs | 54 | ||
| Note 10 | Auditor's fees and expenses | 61 | ||
| Note 11 | Operating leases | 61 | ||
| Note 12 | Shares and participations in associates | 61 | ||
| Note 13 | Net financial items | 63 | ||
| Note 14 | Income tax | 63 | ||
| Note 15 | Earnings per share | 65 | ||
| Note 16 | Intangible assets | 65 | ||
| Note 17 | Buildings and land | 67 | ||
| Note 18 | Long-term receivables and other receivables | 68 | ||
| Note 19 | Inventories | 68 | ||
| Note 20 | Machinery and equipment | 69 | ||
| Note 21 | Prepaid expenses and accrued income | 69 | ||
| Note 22 | Other financial investments, short-term investments and cash and cash equivalents |
69 | ||
| Note 23 | Equity | 70 | ||
| Note 24 | Interest-bearing liabilities | 71 | ||
| Note 25 | Provisions for pensions and similar obligations | 71 | ||
| Note 26 | Other provisions | 73 | ||
| Note 27 | Other long-term and short-term liabilities | 74 | ||
| Note 28 | Accrued expenses and deferred income | 74 | ||
| Note 29 | Financial instruments | 74 | ||
| Note 30 | Pledged assets and contingent liabilities | 80 | ||
| Note 31 | Related party transactions | 81 | ||
| Note 32 | Subsequent events | 81 |
STATEMENTS FOR THE PARENT COMPANY 82-85
| Note P1 | Accounting policies | 86 |
|---|---|---|
| Note P2 | Operating costs | 86 |
| Note P3 | Results from other receivables that are non-current assets |
86 |
| Note P4 | Interest expenses and similar items | 86 |
| Note P5 | Participations in Group companies | 87 |
| Note P6 | Participations in associates | 88 |
| Note P7 | Intangible assets | 88 |
| Note P8 | Property, plant and equipment | 88 |
| Note P9 | Other long-term holdings of securities | 89 |
| Note P10 | Receivables from Group companies | 89 |
| Note P11 | Prepaid expenses and accrued income | 89 |
| Note P12 | Provisions for pensions and similar obligations | 89 |
| Note P13 | Other provisions | 90 |
| Note P14 | Interest-bearing liabilities | 90 |
| Note P15 | Accrued expenses and deferred income | 90 |
| Note P16 | Financial instruments | 91 |
| Note P17 | Pledged assets and contingent liabilities | 93 |
| Note P18 | Related party transactions | 93 |
| SEK m. | Note | 2015 | 2014 |
|---|---|---|---|
| Dividends | 8 | 7,821 | 7,228 |
| Other operating income | 8 | 58 | 177 |
| Changes in value | 6 | 8,538 | 41,960 |
| Net sales | 8 | 25,365 | 21,200 |
| Cost of goods and services sold | 7,9,11,16,17,20 | –15,985 | –13,529 |
| Sales and marketing costs | 7,9,11,16,17,20 | –3,147 | –3,171 |
| Administrative, research and development and |
|||
| other operating costs | 7,9-11,16,17,20 | –2,880 | –2,175 |
| Management costs | 7,9-11,16,17,20 | –483 | –496 |
| Share of results of associates | 12 | 360 | 903 |
| Operating profit/loss | 19,647 | 52,097 | |
| Financial income | 13 | 961 | 1,172 |
| Financial expenses | 13 | –2,434 | –2,961 |
| Net financial items | –1,473 | –1,789 | |
| Profit/loss before tax | 18,174 | 50,308 | |
| Tax | 14 | –740 | 380 |
| Profit/loss for the year | 5 | 17,434 | 50,688 |
| Attributable to: | |||
| Owners of the Parent Company | 17,433 | 50,656 | |
| Non-controlling interest | 1 | 32 | |
| Profit/loss for the year | 17,434 | 50,688 | |
| Basic earnings per share, SEK | 15 | 22.89 | 66.55 |
| Diluted earnings per share, SEK | 15 | 22.82 | 66.40 |
| SEK m. | Note | 2015 | 2014 |
|---|---|---|---|
| Profit/loss for the year | 17,434 | 50,688 | |
| Other comprehensive income for the year, including taxes |
|||
| Items that will not be recycled to profit/loss for the year |
|||
| Revaluation of property, plant and equipment |
190 | 252 | |
| Remeasurements of defined benefit plans |
84 | –173 | |
| Items that may be recycled to profit/loss for the year |
|||
| Cash flow hedges | 145 | –119 | |
| Foreign currency translation adjustment |
–201 | 2,191 | |
| Share of other comprehensive income of associates |
–48 | –182 | |
| Total other comprehensive income for the year |
170 | 1,969 | |
| Total comprehensive income for the year |
17,604 | 52,657 | |
| Attributable to: | |||
| Owners of the Parent Company | 17,603 | 52,625 | |
| Non-controlling interest | 1 | 32 | |
| Total comprehensive income for the year |
23 | 17,604 | 52,657 |
| SEK m. | Note | 12/31 2015 | 12/31 2014 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 16 | 29,062 | 27,417 |
| Other intangible assets | 16 | 12,386 | 11,268 |
| Buildings and land | 17 | 4,123 | 3,576 |
| Machinery and equipment | 20 | 2,360 | 2,125 |
| Shares and participations recognized at fair value |
12, 29 | 250,700 | 243,772 |
| Shares and participations in associates |
12 | 3,336 | 3,051 |
| Other financial investments | 22 | 6,665 | 3,283 |
| Long-term receivables | 18 | 4,587 | 5,568 |
| Deferred tax assets | 14 | 964 | 1,173 |
| Total non-current assets | 314,183 | 301,233 | |
| Current assets | |||
| Inventories | 19 | 2,509 | 1,785 |
| Tax assets | 111 | 162 | |
| Trade receivables | 3,393 | 2,837 | |
| Other receivables | 18 | 380 | 363 |
| Prepaid expenses and accrued income |
21 | 935 | 769 |
| Shares and participations in trading operation |
18 | 68 | |
| Short-term investments | 22 | 1,881 | 2,827 |
| Cash and cash equivalents | 22 | 13,180 | 13,443 |
| Total current assets | 22,407 | 22,254 | |
| TOTAL ASSETS | 336,590 | 323,487 |
| SEK m. | Note | 12/31 2015 | 12/31 2014 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity Share capital |
23 | 4,795 | 4,795 |
| Other contributed equity | 13,533 | 13,533 | |
| Reserves | 2,528 | 2,482 | |
| Retained earnings, including profit/loss for the year |
250,945 | 240,153 | |
| Equity attributable to share holders of the Parent Company |
271,801 | 260,963 | |
| Non-controlling interest | 176 | 30 | |
| Total equity | 271,977 | 260,993 | |
| Liabilities | |||
| Non-current liabilities | |||
| Long-term interest-bearing liabilities |
24 | 50,120 | 51,096 |
| Provisions for pensions and similar obligations |
25 | 743 | 853 |
| Other provisions | 26 | 312 | 218 |
| Deferred tax liabilities | 14 | 3,800 | 3,527 |
| Other long-term liabilities | 27 | 1,253 | 1,193 |
| Total non-current liabilities | 56,228 | 56,887 | |
| Current liabilities | |||
| Current interest-bearing liabilities |
24 | 2,413 | 240 |
| Trade payables | 1,677 | 1,532 | |
| Tax liabilities | 244 | 227 | |
| Other liabilities | 27 | 708 | 725 |
| Accrued expenses and prepaid income |
28 | 3,186 | 2,747 |
| Provisions | 26 | 157 | 136 |
| Total current liabilities | 8,385 | 5,607 | |
| Total liabilities | 64,613 | 62,494 | |
| TOTAL EQUITY AND LIABILITIES | 336,590 | 323,487 |
For information regarding pledged assets and contingent liabilities see note 30, Pledged assets and contingent liabilities.
| Equity attributable to shareholders of the Parent Company | Non controlling interest |
Total equity |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| SEK m. Note 23 |
Share capital |
Other contri buted equity |
Trans lation reserve |
Revaluation reserve |
Hedging reserve |
Retained earnings, incl. profit/loss for the year |
Total | ||
| Opening balance 1/1 2015 | 4,795 | 13,533 | 1,416 | 768 | 298 | 240,153 | 260,963 | 30 | 260,993 |
| Profit/loss for the year | 17,433 | 17,433 | 1 | 17,434 | |||||
| Other comprehensive income for the year | –264 | 190 | 142 | 102 | 170 | 0 | 170 | ||
| Total comprehensive income for the year |
–264 | 190 | 142 | 17,535 | 17,603 | 1 | 17,604 | ||
| Release of revaluation reserve due to amortization of revalued amount |
–22 | 22 | |||||||
| Dividend | –6,856 | –6,856 | –6,856 | ||||||
| Change in non-controlling interest | 145 | 145 | |||||||
| Stock options exercised by employees | 57 | 57 | 57 | ||||||
| Equity-settled share-based payment transactions |
34 | 34 | 34 | ||||||
| Closing balance 12/31 2015 | 4,795 | 13,533 | 1,152 | 936 | 440 | 250,945 | 271,801 | 176 | 271,977 |
| Equity attributable to shareholders of the Parent Company | Non controlling interest |
Total equity |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK m. | Note 23 | Share capital |
Other contri buted equity |
Trans lation reserve |
Revaluation reserve |
Hedging reserve |
Retained earnings, incl. profit/loss for the year |
Total | ||
| Opening balance 1/1 2014 | 4,795 | 13,533 | –589 | 537 | 413 | 196,728 | 215,417 | 549 | 215,966 | |
| Profit/loss for the year | 50,656 | 50,656 | 32 | 50,688 | ||||||
| Other comprehensive income for the year | 2,005 | 252 | –115 | –173 | 1,969 | 1,969 | ||||
| Total comprehensive income for the year |
2,005 | 252 | –115 | 50,483 | 52,625 | 32 | 52,657 | |||
| Release of revaluation reserve due to amortization of revalued amount |
–21 | 21 | ||||||||
| Dividend | –6,089 | –6,089 | –6,089 | |||||||
| Change in non-controlling interest | –1,084 | –1,084 | 11 | –1,073 | ||||||
| Reclassification of non-controlling interest | –562 | –562 | ||||||||
| Stock options exercised by employees | 61 | 61 | 61 | |||||||
| Equity-settled share-based payment transactions |
33 | 33 | 33 | |||||||
| Closing balance 12/31 2014 | 4,795 | 13,533 | 1,416 | 768 | 298 | 240,153 | 260,963 | 30 | 260,993 |
| Operating activities Dividends received 7,953 7,233 Cash receipts 25,672 21,607 Cash payments –21,522 –18,026 12,103 10,814 Interest received1) 48 537 Interest paid1) –1,323 –2,148 Income tax paid –325 –227 10,503 8,976 Investing activities Acquisitions –8,370 –12,927 Divestments 10,113 12,931 Increase in long-term receivables –46 –2,928 Decrease in long-term receivables 987 2,576 Acquisitions of subsidiaries, net effect on cash flow –4,543 –1,572 Increase in other financial investments –8,429 –5,324 Decrease in other financial investments 4,973 3,812 Net changes, short-term investments 905 –874 Acquisitions of property, plant and equipment –1,046 –1,045 7 5 –5,449 –5,346 Financing activities Borrowings 7,978 9,845 Repayment of borrowings –6,405 –4,612 Dividend –6,856 –6,089 –5,283 –856 Cash flow for the year –229 2,774 Cash and cash equivalents at beginning of the year 13,443 9,783 Exchange difference in cash –34 886 13,180 13,443 22 |
SEK m. | Note | 2015 | 2014 |
|---|---|---|---|---|
| Cash flow from operating activities before net interest and income tax | ||||
| Cash flow from operating activities | ||||
| Proceeds from sale of other investments | ||||
| Net cash used in investing activities | ||||
| Net cash used in financing activities | ||||
| Cash and cash equivalents at year-end |
1) Gross flows from interest swap contracts are included in interest received and interest paid.
The most significant accounting policies applied in this annual report are presented in this note and, where applicable, in the following notes to the financial statements. Significant accounting policies for the Parent Company can be found on page 86.
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. In addition the Swedish rules, RFR 1 Supplementary Accounting Policies for Groups, was applied.
The financial statements are presented in SEK, which is the functional currency of the Parent Company. All amounts, unless otherwise stated, are rounded to the nearest million (SEK m.). Due to rounding, numbers presented throughout these consolidated financial statements may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
The majority of the consolidated assets are financial assets and the majority of these as well as the majority of the property within the Group are measured at fair value. Other assets and liabilities are in essence measured at historical cost.
Non-current assets and non-current liabilities consist primarily of amounts that are expected to be settled more than 12 months from the Balance Sheet date. Other assets and liabilities are presented as current assets and current liabilities.
The accounting policies have been consistently applied to all periods presented in the financial statements, unless otherwise noted. The accounting policies have also been consistently applied to the reporting and consolidation of the Parent Company, subsidiaries and associates.
Certain comparative figures have been reclassified in order to conform to the presentation of the current year's financial statements. In cases where reclassifications pertains to significant amounts, special information has been provided.
The following is a description of the revised accounting policies applied by the Group and Parent Company as of January 1, 2015. Other new or revised IFRSs and interpretations from the IFRS Interpretations Committee have had no material effect on the profit/loss, financial position or disclosures for the Group or Parent Company. New or amended standards that will come into effect in forthcoming years, have not been adopted early when preparing these financial statements.
Changes in accounting policies due to new or amended IFRS New or revised IFRSs and interpretations from the IFRS Interpretations Committee, with effective date from January 1, 2015, have had no material effect on the accounting for the Group or Parent Company.
The new or revised standards described below will be applied from when application is mandatory. Earlier application is not planned.
IFRS 9 Financial Instruments will replace IAS 39 Financial Instruments Recognition and Measurement: with mandatory effective date of January 1, 2018, subject to EU approval. IFRS 9 presents a model for classification and measurement of financial instruments, an expected loss model for the impairment of financial assets and significantly revised requirements related to hedge accounting. The changes are not expected to have any substantial effects on amounts reported in the consolidated financial statements, since the majority of the Group's financial assets are reported in accordance with the fair value option.
IFRS 15 Revenue from Contracts with Customers is a new standard for revenue that will replace all existing standards and interpretations about revenue. Revenue shall be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Mandatory effective date is January 1, 2018, subject to EU approval. Investor is assessing the impact of the new standard.
IFRS 16 Leases is a new standard that concerns the accounting of rental and lease agreements for both lessors and lessees. Effective date is expected to be January 1, 2019, subject to EU approval. Investor is assessing the impact of the new standard.
Other known changes to IFRS and IFRIC to be applied in the future are not expected to have any significant impact on the Group's reporting.
The consolidated financial statements comprise of the Parent Company, subsidiaries and associates.
Intra-group receivables, payables and transactions as well as gains arising from transactions with associates, that are consolidated using the equity method, are eliminated when preparing the consolidated financial statements.
Foreign currency transactions are translated at the exchange rate in existence on the date of the transaction. Assets and liabilities in foreign currency are translated at the exchange rate in existence on the balance sheet date, except for non-monetary assets and liabilities which are recognized at historical cost using the exchange rate in existence on the date of the transaction. Exchange differences arising on translation are recognized in the income statement with the exception of effects from cash-flow hedges, see Note 29, Financial Instruments.
Assets and liabilities of foreign operations, including goodwill and other consolidated surpluses/deficits are translated to SEK using the exchange rate in existence on the balance sheet date. Revenues and expenses in a foreign operation are translated to SEK using an average exchange rate that approximates the exchange rates on the dates of the transactions. Translation differences arising when translating foreign operations are recognized directly in other comprehensive income and are accumulated in the translation reserve, which is a separate component of equity.
The following symbols IS and BS show which amounts in the notes that can be found in the Income Statement or Balance Sheet.
In order to close the books and prepare the financial statements in accordance with IFRS, management must make estimates and assumptions that affect the application of the accounting policies and the amounts recognized for assets, liabilities, income and expenses.
Estimates and judgments are based on historical experience, market information and assumptions that management considers to be reasonable based on the circumstances prevailing at the time. Changes in assumptions may result in adjustments to reported values and the actual outcome may differ from the estimates and judgments that were made.
Judgments in relation to the application of accounting policies Within the scope of IFRS, there are some instances where management must either choose between accounting policies, or choose whether to apply a particular accounting policy, in order to provide a fair view of the Group's activities. The development relating to accounting and the choice of policies are discussed in the Audit and Risk Committee.
Significant items for which a special judgment has been made in order to define the Group's accounting policies are presented below.
| Judgments | See note | |
|---|---|---|
| Participations in Group companies |
Control over investment or not | Note P5 |
| Participations in associates | Fair value or equity method | Note 12 |
| Owner-occupied property | Revaluation or cost model | Note 17 |
| Interest-bearing liabilities and related derivatives |
Application of hedge accounting | Note 29 |
The most significant estimation uncertainties in relation to the preparation of the consolidated financial statements are presented below. Changes in assumptions may result in material effects on the financial statements and the actual outcome may differ from estimated values. For more detailed descriptions of the judgments and assumptions, please refer to the specific notes referenced below.
| Estimates and assumptions | See note | |
|---|---|---|
| Valuation of unlisted holdings |
Appropriate valuation method, comparable companies, EBITDA multiples and sales multiples |
Note 29 |
| Valuation of interest bearing liabilities and derivatives |
Yield curve for valuation of financial instruments for which trading is limited and duration is long-term |
Note 29 |
| Valuation of owner occupied property |
Comparable properties, long-term inflation rate, projected cash flows, real interest rate and risk premium |
Note 17 |
| Impairment test of intangible assets |
Projected cash-flows, growth rate, margins and discount factor |
Note 16 |
| Reporting of deferred tax assets |
Future possibilities to benefit from tax loss carry forwards |
Note 14 |
| Valuation of pension liabilities |
Discount rate and future salary increase |
Note 25 |
| Purchase Price Allocation | Valuation of acquired intangible assets | Note 4 |
In its business, the Investor group is exposed to commercial risks, financial risks including market risks such as share price risk, liquidity and financing risks, credit risks. Investor is also exposed to operational, political, legal and regulatory risks. Investor's most significant risk is share price risk.
Risk management is part of the Board's and management's governance and follow-up of the business. At Investor, risk management is an integral part of the Group's processes, meaning that control and responsibility for control is close to the business operations. Investor's Board decides on risk levels, mandates and limits for the Investing activities and Investor's different operations, while the Boards of the operating subsidiaries decide on policies that have been adapted to manage the risks in their respective businesses. For further information on the risk assessment process, see the Corporate Governance Report page 35.
Investor's Risk policy sets measurement and mandates for market risks for the short-term trading, excess liquidity and financing activities. The policy also outlines principles for foreign exchange risk management in connection with investments and cash flows in foreign currency, measurements and limits for credit risks and principles to minimize legal, regulatory and operational risks in the business.
There has been no significant change in the measurement and follow-up of risks compared with the preceding year.
Maintaining long-term ownership in Core Investments and a flow of investments and divestments in Financial Investments involves commercial risks. These risks include, for instance, having a high exposure to a certain sector or an individual holding, changed market conditions for finding attractive investment candidates and barriers that arise and prevent exits from a holding at the chosen time. In order to manage its various commercial risks, Investor focuses on such factors as diversification of the company portfolio, process development and development of knowledge, experience and expertise.
Investor's subsidiaries operate within the healthcare sector on different geographical markets for products and services. To remain competitive, all business units need to continuously develop innovative products and services that satisfy customer needs in a cost efficient way. New products, services and techniques developed and promoted by competitors can also affect the ability to achieve business plans and objectives. An important component of the subsidiaries' strategies for growth is to make strategic acquisitions and enter strategic alliances that complement their current businesses. A subsidiary's failure to identify appropriate targets for strategic acquisitions, or unsuccessfully integrate its acquisitions, could have a negative impact on competitiveness and profitability.
The main category of financial risks that the Investor Group is exposed to is market risks. These are primarily risks associated with fluctuations in share prices, as well as interest rate risks and foreign exchange rate risks.
Derivative instruments are used to manage financial risks. All derivative transactions are handled in accordance with established guidelines and limits stated in financial policies. The financial risks in the subsidiaries are managed by each subsidiary's Treasury function.
Market risks refer to the risk of a change in value of a financial instrument because of changes in share prices, exchange rates or interest rates.
Investor's most significant risk is share price risk. The majority of Investor's share price risk exposure is concentrated to Core Investments. At year-end 2015, Listed Core Investments accounted for 78 percent of total assets (77). For further information about Listed Core Investments, see pages 11-16. The companies and their share prices are analyzed and continuously monitored by Investor's analysts. Through committed ownership, which is exercised through Board representation and in other ways, Investor influences a company's strategy and decisions. Thus, a large portion of share price exposure in a Core Investment does not necessarily lead to any action. It is the long-term commitment that lays the groundwork for Investor's strategic measures. Investor does not have defined goals for share price risks, as share prices are affected by short term fluctuations. The share price risk for Listed Core Investments is not hedged.
The EQT fund investments are partly exposed to share price risk. EQT accounted for 5 percent of total assets (5) as per year-end 2015.
Patricia Industries including operating subsidiaries but excluding Patricia Industries' cash, 3 Scandinavia and financial investments accounted for 18 percent of total assets (18). There is no share price risk associated with the operating subsidiaries. However, profit/loss and change in equity of the consolidated subsidiaries and 3 Scandinavia have a direct impact on Investor's net assets.
If the market value of Listed Core Investments was to decline by 10 percent, the impact on income and equity would be SEK –22.4 bn. (–21.8). Should the market value and the valuation parameters, in accordance with the guidelines of the International Private Equity and Venture Capital Association, decline with 10 percent, the impact on the values of the EQT fund investments would be SEK –1.3 bn. (–1.4).
Investor has a trading operation for the purpose of executing Core Investments transactions and obtaining market information. The trading operation conducts short-term equity trading and deals in equity derivatives (primarily for hedging market risk in the portfolio). The market risk in this activity is measured and monitored in terms of cash delta. Limits on gross, net and maximum position size are measured as well as liquidity risk. At year-end 2015, the trading operation accounted for less than 0.5 percent of total assets (0.5). If the market value of the assets belonging to the trading operation were to decline by 10 percent, the impact on income and equity would be SEK –2 m. (–4).
If the market value of listed holdings in all business areas were to decline by 10 percent, the impact on income and equity would be SEK –23.1 bn. (–22.1), which equals 8.5 percent of Investor's net asset value (8.5). Market risks associated with listed stocks constitute the greatest risk for Investor.
Currency exposure arises from cash flows in foreign currencies (transaction exposure), the translation of Balance Sheet items to foreign currencies (Balance Sheet exposure) and the translation of foreign subsidiaries' Balance Sheets and Income Statements to the Groups accounting currency (translation exposure).
Since the majority of Listed Core Investments are listed in SEK, there is a limited direct exchange rate risk that affects Investor's Balance Sheet. However, Investor is indirectly exposed to exchange rate risks in Listed Core Investments that are listed on foreign stock exchanges or that have foreign currency as their pricing currency. In addition, there are indirectly exchange rate risks since the majority of the companies in the Listed Core Investments business area are active in several markets. These risks have a direct impact on the company's Balance Sheet and Income Statement, which indirectly affects valuation of the shares.
The operating subsidiaries are exposed to exchange rate risks in business and investments made in foreign companies. Also the EQT fund investments are exposed to exchange rate risks.
There is no regular hedging of foreign currency since the investment horizon is more than three years and currency fluctuations are expected to equal out over time. This hedging policy is subject to continuous evaluation and deviations from the policy may be allowed if judged beneficial from a market economic perspective.
Exchange rate risks for investments in the trading operation are minimized through currency derivative contracts at the portfolio level.
Total currency exposure for the Investor Group is provided in the table below. If the SEK were to appreciate 10 percent against the EUR (holding all other factors constant), the impact on income and equity would be SEK –2.0 bn. (–2.6). If the SEK were to appreciate 10 percent against the USD (holding all other factors constant), the impact on income and equity would be SEK –2.4 bn. (–2.2).
| Gross exposure in | Gross assets | Gross liabilities | ||
|---|---|---|---|---|
| foreign currencies, SEK m. | 12/31 2015 | 12/31 2014 | 12/31 2015 | 12/31 2014 |
| EUR | 48,799 | 52,437 | –36,166 | –34,319 |
| USD | 28,617 | 23,335 | –5,691 | –2,944 |
| Other European | ||||
| currencies | 15,203 | 9,264 | –8,920 | –11,486 |
| Asian currencies | 5,396 | 2,799 | –2,448 | –2,033 |
| Total | 98,016 | 88,194 | –53,226 | –50,782 |
Exchange rate risk in excess liquidity resulting from investments in foreign currency is managed through currency derivative contracts.
Exchange rate risk arising in connection with loans in foreign currency is managed by, among other things, exchanging the loans to SEK through currency swap contracts. The objective is to minimize the exchange rate risk in excess liquidity and the debt portfolio. This strategy is applied if there is a high level of net exposure, having considered the holdings in foreign currency.
The net exposure in foreign currencies after hedge is presented in the table below:
| Net exposure in foreign currencies after hedge, SEK m. | 12/31 2015 | 12/31 2014 |
|---|---|---|
| EUR | 19,645 | 25,675 |
| USD | 24,088 | 21,520 |
| Other European currencies | 13,696 | 5,784 |
| Asian currencies | 4,939 | 2,595 |
| Total | 62,367 | 55,575 |
The net exposure decrease in EUR is primarily explained by the divestment of the remaining interest in Lindorff, the refinancing of Mölnlycke Health Care and changes in EQT fund investments. The increase in USD net exposure relates mainly to the acquisition of BraunAbility. The increased net exposure in other European currencies relates to the CHF and acquired shares in ABB. The increase in Asian currencies relates to value change in Patricia Industries' Asian holdings.
Investor AB's guideline is, for future known cash flows in foreign currency exceeding the equivalent of SEK 50 m., to be hedged through forward exchange contracts, currency options or currency swaps.
Mölnlycke's operational cash flows in foreign currency are estimated at the equivalent of EUR 409 m. (398), corresponding to SEK 3.8 bn. (3.6), for the next 12 months. Only exposures expected to generate cash flow transactions within 12 months are hedged. As of December 31, 2015, 55 percent (71) of the forecasted net transaction flows in foreign currency for the next 12 months were hedged. For outstanding currency hedging as of December 31, 2015, an immediate 10 percent rise in the value of each currency against the EUR would impact net income by EUR 6.4 m. during the next 12 month period (–0.5). The impact on equity from valuation of the financial derivatives that are recognized in hedge accounting would be EUR –15.6 m. (–19.9).
Permobil's operational cash flows in foreign currency are estimated to SEK 993 m. for the coming 12 months (764). An immediate 10 percent rise in the value of each currency against the SEK would impact net income and equity for Permobil by SEK 99 m. the coming 12 months (–26).
Currency exposure associated with net investments in foreign operations Currency exposure associated with investments made in independent foreign entities is considered as a translation risk and not an economic risk. The exposure arises when the foreign net investment is translated to SEK on the balance sheet date and it is recognized in the translation reserve under equity. Net investments are partly neutralized by loans in foreign currencies. Currency exposure due to net investments in foreign operations is normally not hedged. The table below show the exposure, in main currencies, arising from net investments in foreign subsidiaries (in investment currency).
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| DKK m. | 170 | 172 |
| EUR m. | 3,673 | 1,683 |
| GBP m. | 148 | 158 |
| NOK m. | 615 | 407 |
| USD m. | 2,011 | 1,527 |
The increase of EUR equity is related to subsidiaries having converted the equity and accounting currency from SEK to EUR during 2015. The increase of USD equity is related to the acquisition of BraunAbility. If the SEK were to appreciate by 10 percent this would decrease equity by SEK –5.5 bn. due to translation effects of currency exposure in net investments in foreign subsidiaries (–2.1).
The Group's interest rate risk is primarily associated with long-term borrowings. In order to minimize the effects of interest rate fluctuations, limits and instructions have been established for example regarding fixed interest rate periods.
Investor AB's Treasury manages interest rate risks, exchange rate risks, liquidity risks and financing risks associated with the administration of the excess liquidity portfolio and financing activities.
For excess liquidity exposed to interest rate risks, the goal is to limit interest rate risks while maximizing return within the established guidelines of the risk policy. High financial flexibility is also strived for in order to satisfy future liquidity needs. Investments are therefore made in interest-bearing securities of short duration and high liquidity. For further information, see note 22, Other financial investments, short-term investments and cash and cash equivalents. A one percentage point parallel movement upward of the yield curve would reduce the value of the portfolio and affect the Income Statement by SEK –114 m. (–91).
On the liability side, Investor strives to manage interest rate risks by having an interest rate fixing tenor within the established limits and instructions of the Risk Policy. Fixed rates are established to provide flexibility to change the loan portfolio in step with investment activities and to minimize loan costs and volatility in the cash flow over time. A parallel movement of the yield curve downwards by one percentage point would increase the reported value of the hedged portion of loans by SEK 1.2 bn. (1.3). The amount is reduced to 0.2 bn. when hedging derivatives are included (0.2). The interest cost effect for the non-hedged loans would be SEK –1.9 bn. (–2.3), with a movement of the yield curve downwards with one percentage point.
Investor uses derivatives to hedge against interest rate risks (related to both fair value and cash flow fluctuations) in the debt portfolio. Some derivatives do not qualify for hedge accounting, but are still grouped together with loans since the intention of the derivative is to achieve the desired fixed-interest term for each loan. The subsidiaries Aleris and Permobil do not apply hedge accounting.
As per year-end the fair value hedge derivatives related to the hedged loans amounted accumulated to SEK 1,837 m. (2,178). Corresponding value change of the hedged loans at the same time was SEK –1,599 m. (–2,051). The total outstanding carrying amount of hedged loans, including fair value, was at year-end SEK 17,955 m. (20,530).
The effect of fair value hedges is recognized in the Income Statement. The remaining maturities of fair value hedges vary between 1 and 22 years. For further information on the maturity structure, see schedule, "Investor AB's debt maturity profile", page 50.
In the case of cash flow hedges, hedging instruments are valued on each balance sheet date and the change in value is recognized in other comprehensive income. The remaining maturities for cash flow hedges are below 2 years.
During the year, the impact of cash flow hedges on other comprehensive income was SEK 13 m. (–49). With a parallel movement of the yield curve by one percentage point, the cash flow hedges effect on other comprehensive income would be SEK –19 m. (–101).
Future cash flows from cash flow hedged transactions
Because the operating subsidiaries are ring-fenced, a sensitivity analysis is also presented for the larger subsidiaries. For Mölnlycke, a one percentage point increase in interest rates for all currencies, calculated on the Group's net debt as of December 31, 2015, would impact income during the subsequent 12-month period by EUR 1.4 m. (0.8). Framtida kassaflöden från kassaflödessäkrade transaktioner
For Aleris, the total interest rate risk exposure associated with assets amounts to SEK 238 m. (398). A parallel movement of the yield curve upwards by one percentage point would reduce value by SEK 2 m. (3). Interest rate risk exposure associated with liabilities amounts to SEK 1,684 m. (1,308). A parallel movement downward of the yield curve by one percentage point would impact income and the equity by SEK 13 m. (10). Mkr –400 –200 0
For Permobil, the total interest rate risk exposure associated with liabilities amounts to SEK 2,889 m. (1,792) and a parallel movement of the yield curve upwards by one percentage point would impact the income statement and equity by SEK –29 m. (–18). –1 000 –800 –600
For BraunAbility the total interest rate risk exposure associated with liabilities amounts to USD 109 m. A parallel movement of the yield curve upwards would impact the income statement and equity by USD –1 m. –1 200 < 6 månader 6-12 månader 1-2 år 2-5 år > 5 år
Liquidity risk refers to the risk that a financial instrument cannot be divested without considerable extra costs, and to the risk that liquidity will not be available to meet payment commitments.
Liquidity risks are reduced in Treasury operations by keeping the maturity of short-term cash investments up to two years and by always maintaining a higher than 1:1 ratio between cash and credit commitments/current liabilities. Liquid funds are invested in deposit markets and short-term interest-bearing securities with low risk and high liquidity. In other words, they are invested in a well-functioning second-hand market, allowing conversion to liquid funds when needed. Liquidity risk in the trading operations is restricted via limits established by the Board.
Financing risks are defined as the risk that financing can not be obtained, or can only be obtained at increased costs as a result of changed conditions in the capital market. To reduce the effect of refinancing risks, limits are set regarding average maturities for loans. In order to minimize financing risks, Treasury works actively to ensure financial preparedness by establishing loan and credit limits for both long-term and short-term borrowing. Financing risks are further reduced by allocating loan maturities evenly over time (please refer to the chart below) and by diversifying sources of capital. An important aspect, in this context, is the ambition to have a long borrowing profile. Furthermore, proactive liquidity-planning efforts also help limit both liquidity and financing risk.
Investor's funding is primarily done through long-term loan programs in the Swedish and European capital markets. Investor has a European Medium Term Note Program (EMTN), which is a loan program intended for long-term financing. The program is for EUR 5.0 bn. (SEK 45.7 bn.), of which EUR 3.5 bn. (SEK 32.4 bn.) has been utilized. For short-term financing, Investor has an uncommitted Swedish and a European Commercial Paper program (CP/ECP) for SEK 10.0 bn. and USD 1.5 bn. (SEK 12.5 bn.), respectively. At year-end 2015 these facilities were unutilized.
Investor has a committed syndicated bank loan facility of SEK 10.0 bn. 100 percent of this revolving credit facility is available until 2016, 95 percent until 2017 and 90 percent until 2018. This facility was unutilized at year-end. In contrast to an uncommitted credit facility, a committed loan program is a formalized commitment from the credit grantor. There are no financial covenants in any of Investor AB's loan contracts, meaning that Investor does not have to meet special requirements with regard to key financial ratios for the loans it has obtained.
The operating subsidiaries ensure their financial preparedness by keeping credit facilities, should there be a need for additional working capital or minor acquisitions. As of December 31, 2015, Mölnlycke had a total credit facility of EUR 1,195 m. (1,118), of which EUR 995 m. was utilized (918). At the same time, Aleris had total credit facilities amounting to SEK 2,091 m. (1,560) of which SEK 1,566 m. (1,260) had been utilized. Also at year-end 2015, Permobil had total credit facilities of SEK 2,983 m. (1,651) of which 2,889 m. was used (1,651). Vectura had a total credit facility of SEK 1,284 m. (1,555), of which none was used as per year-end (1,510). BraunAbility had a total credit facility of USD 175 m., of which USD 120 m. was used. The terms of the credit facilities require the companies to meet a number of key financial ratios. The subsidiaries fulfilled all financial ratios during 2015.
With an equity/assets ratio of 81 percent at year-end (81), Investor has considerable financial flexibility, since leverage is low and most assets are highly liquid.
The following table shows the Group's contracted cash flow of loans including other financial payment commitments and derivatives.
| 12/31 2015 | 12/31 2014 | ||||
|---|---|---|---|---|---|
| Cash flow of financial liabilities and derivatives1), SEK bn. |
Loans and other financial debts and commitments |
Derivatives | Loans and other financial debts and commitments |
Derivatives | |
| < 6 months | –5.1 | 0.0 | –2.6 | 0.0 | |
| 6-12 months | –0.8 | 0.2 | –0.8 | 0.2 | |
| 1-2 years | –3.2 | 0.3 | –4.1 | 0.2 | |
| 2-5 years | –13.3 | 0.8 | –18.4 | 0.7 | |
| > 5 years | –46.2 | 2.8 | –41.1 | 2.6 |
1) Interest payments included.
Exposure from guarantees and other contingent liabilities also constitutes a liquidity risk. For such exposure as per December 31, 2015, see note 30, Pledged assets and contingent liabilities.
Credit risk is the risk of a counterparty or issuer being unable to repay a liability to Investor. Investor is exposed to credit risks primarily through investments of excess liquidity in interest-bearing securities. Credit risks also arise as a result of positive market values in derivative instruments (mainly interest rate, currency swaps). In order to limit credit risks, there are specified limits for exposure to single counterparties, with the exception of government debt instruments guaranteed by AAA/Aaa rated sovereigns.
Investor AB's debt maturity profile
Investor applies a wide-ranging limit structure with regard to maturities, issuers and counterparties in order to control credit risks. With a view to further limiting credit risks in interest rate and currency swaps, and other derivative transactions, agreements are established with counterparties in accordance with the International Swaps and Derivatives Association, Inc. (ISDA), as well as netting agreements. Credit risk is monitored daily and the agreements with various counterparties are continuously analyzed. The following diagram shows the credit risk exposure in interest-bearing securities, by rating category, as of December 31, 2015. Mkr 5 000 6 000 7 000 Förfallostruktur för Investor AB:s lån År
| 3 000 2 000 Instrument |
Nominal amount, SEK m. |
Average remaining maturity, months |
Number of counter parties |
6 Percentage of 4 the credit risk exposure 2 |
|---|---|---|---|---|
| 1 000 Swedish government |
0 | |||
| 0 papers (AAA) |
2,100 | 2.0 | 1 | 9 |
| 2016201720182019 202120222023 AAA |
2029 8,000 |
2034 2036 2033 15.0 |
2037 6 |
2044 34 |
| AA | 3,881 | 1.1 | 32 | 17 |
| A | Förfallostruktur, nominellt värde, Mkr 7,131 |
0.1 | Genomsnittligt förfall, år 80 |
30 |
| Lower than A | 2,225 | 2.8 | 7 | 10 |
| Total | 23,336 | 5.8 | 126 | 100 |
The total credit risk exposure related to the fair value reported items at the end of 2015 amounted to SEK 23,336 m. (21,525). As of December 31, 2015, the credit risks resulting from positive market values for derivatives amounted to SEK 1,910 m. (2,053), which have been reported in the Balance Sheet.
The credit risk in the operating subsidiaries relates mainly to trade account receivables. Mölnlycke's, Aleris' and Permobil's credit risks are limited due to the fact that a significant portion of their customers are public hospitals/care institutions. The maximum exposure related to commercial credit risk corresponds to the carrying amount of trade receivables.
The following diagram shows the aging of trade receivables and other short-term receivables within the Group.
| 12/31 2015 | 12/31 2014 | |||||
|---|---|---|---|---|---|---|
| Aging of receivables, SEK m. | Gross carrying amount |
Impair ment |
Net | Gross carrying amount |
Impair ment |
Net |
| Not past due | 3,031 | 0 | 3,031 | 2,470 | –1 | 2,469 |
| Past due 0-30 days | 394 | 0 | 394 | 363 | 0 | 363 |
| Past due 31-90 days | 162 | –2 | 160 | 163 | –1 | 162 |
| Past due 91-180 days | 92 | –4 | 88 | 82 | –4 | 78 |
| Past due 181-360 days | 71 | –6 | 65 | 72 | –3 | 69 |
| More than 360 days | 68 | –33 | 35 | 93 | –34 | 59 |
| BS Total | 3,818 | –45 | 3,773 | 3,243 | –43 | 3,200 |
Concentrations of risk are defined as individual positions or areas accounting for a significant portion of the total exposure to each area of risk. Because of the global nature of its business and sector diversification, the Group does not have any specific customers representing a significant portion of receivables.
The concentration of credit risk exposure related to fair value reported items, is presented in table. The secured bonds issued by Swedish mortgage institutions have the primary rating category of AAA. The proportion of AAArated instruments accounted for 43 percent of the total credit risk portfolio's nominal value (31).
Investor is exposed to sustainability risks in all parts of its business operations. Sustainability risks imply that unethical or unsustainable behaviour leads to negative impact on Investor's financial position and reputation. Sustainability risks within the Group are identified, analyzed and mitigated within the daily operations. Most of the risks are derived from operations in Investor's holdings. When holdings operate in emerging markets, the holdings have an increased focus on sustainability related risks such as the risk of bribery and corruption. Investor has clear expectations that the holdings always act responsibly and ethically, and it is the responsibility of each holding and its management to analyze and take systematic action to reduce these risks.
The Group is also exposed to political risks. To a large extent, spending on healthcare products and services is regulated by various governments. This applies to most markets around the world. Funds are made available or withdrawn from healthcare budgets due to different types of political decisions. In most of the major markets, pricing of the Group's products and services is controlled by decisions made by government authorities. Activities within Health care companies are also heavily regulated. Examples of such laws are the Health and Medical Service Act, the Social Services Act and environmental legislation.
There is a high awareness of legal and regulatory risks within the Investor Group. Risks associated with selling and operating healthcare services are dealt with by the different levels of management for each area of operations. Continuous quality improvement is performed in accordance with ISOstandards.
Property risks, liability risks and interruption risks are covered by insurance policies. Up to this date, very few incidents have occurred.
Follow-up on processes is performed on an ongoing basis to determine and strengthen appropriate control measures aimed at reducing operational risks.
In connection with a business combination, the group's acquisition cost is established through a purchase price allocation. In the analysis, the fair value of the identifiable assets and the assumed liabilities is determined. For business combinations where the cost exceeds the net carrying amount of the acquired identifiable assets and the assumed liabilities, the difference is reported as goodwill in the Balance Sheet. The purchase price allocation identifies assets and liabilities that are not reported in the acquired company, such as trademarks and customer contracts. Identified intangible assets that have been identified when making the purchase price allocation are amortized over the estimated useful life. Goodwill and strong trademarks are considered to have an indefinite useful life and are therefore tested annually for impairment, or whenever there is any indication of impairment.
Consideration that is contingent upon the outcome of future events is valued at fair value and the change in value is recognized in the Income Statement.
The financial statements of subsidiaries are reported in the consolidated financial statements as of the acquisition date and until the time when a controlling interest no longer exists.
At the time of an acquisition, the Group must choose to either recognize non-controlling interest at fair value, meaning that goodwill is included in the non-controlling interest or recognize the non-controlling interest as the share of the net identifiable assets. The choice between the two methods is made individually for each acquisition.
If a business combination achieved in stages results in a controlling influence, the prior acquired shares are revalued at fair value and the resulting profit or loss is recognized in the Income Statement. Acquisitions that are made subsequent to having obtained a controlling influence and divestments that do not result in a loss of the controlling influence are reported under equity as a transfer between equity attributable to the Parent Company's shareholders and non-controlling interests.
On October 30, 2015, Patricia Industries, a division within Investor AB, acquired 95 percent of the U.S. family-owned company BraunAbility. BraunAbility is the world´s leading manufacturer of wheelchair accessible vehicles and wheelchair lifts for both personal use and commercial applications. With Investor´s long-term value creation objectives and experience within both healthcare and mobility, Investor is well positioned to support BraunAbility in its continued progress. The consideration amounted to SEK 2,820 m. and was paid in cash.
In the preliminary purchase price allocation, goodwill amounts to SEK 1,351 m. The goodwill recognized for the acquisition corresponds to BraunAbilitys position to accelerate the rate of brand and continued expansion into global markets benefiting from Patricia Industries infrastructure. The goodwill recognized is not expected to be deductible for income tax purpose.
| Preliminary | |
|---|---|
| SEK m. | Purchase Price Allocation |
| Intangible assets | 1,567 |
| Property, plant and equipment | 121 |
| Financial assets | 132 |
| Inventory | 577 |
| Accounts receivables | 280 |
| Other current assets | 37 |
| Cash and cash equivalents | 234 |
| Non-current liabilities and provisions | –1,026 |
| Current liabilities | –301 |
| Net identifiable assets and liabilities | 1,621 |
| Non-controlling interest | –152 |
| Consolidated goodwill | 1,351 |
| Consideration | 2,820 |
Transaction related costs amounted to SEK 34 m. and derives from external legal fees and due diligence expenses. The costs have been included in the item Administrative, research and development and other operating costs in the Group´s consolidated Income Statement.
For the two-month period from the acquisition date until December 31, 2015, BraunAbility contributed net sales of SEK 558 m. and profit of SEK 16 m. to the Group´s result. If the acquisition had occurred on January 1, 2015, management estimates that consolidated net sales for the Investor Group would have increased by SEK 2,806 m. and consolidated profit for the period would have increased by SEK 157 m.
On April 27, 2015, Permobil acquired The ROHO Group, Inc., the global leader in skin protection and positioning solutions for wheelchair users, based in Belleville, Illinois, U.S. The acquisition marks the next important step in Permobil´s strategy to become a leading healthcare company, providing innovative advanced rehablilitation solutions for people with disabilities. The consideration amounted to SEK 1,036 m.
In the preliminary purchase price allocation, goodwill amounts to SEK 651 m. The goodwill recognized for the acquisition corresponds to the combined company's opportunities for synergies and sales growth due to ROHO´s strong market position in the U.S. and Permobil´s sales network. The goodwill recognized is not expected to be deductible for income tax purposes.
| SEK m. | Preliminary Purchase Price Allocation |
|---|---|
| Intangible assets | 272 |
| Property, plant and equipment | 132 |
| Inventory | 95 |
| Accounts receivables | 39 |
| Cash and cash equivalents | 9 |
| Deferred tax liabilities | –110 |
| Current liabilities | –52 |
| Net identifiable assets and liabilities | 385 |
| Consolidated goodwill | 651 |
| Consideration | 1,036 |
Transaction related costs amounted to SEK 17 m. and derives from external legal fees and due diligence expenses. The costs have been included in the item Administrative, research and development and other operating costs in the Group´s consolidated Income Statement.
For the eight month period from the acquisition date until December 31, 2015, ROHO contributed net sales of SEK 285 m. and profit of SEK 50 m. to the Group´s result. If the acquisition had occurred on January 1, 2015, management estimates that consolidated net sales for the Investor Group would have increased by SEK 121 m. and consolidated profit for the period would have decreased by SEK 9 m.
On November 2, 2015, Aleris acquired the healthcare provider, Teres Medical Group. The acquisition enables Aleris to strengthen its position as the leading private healthcare provider in Scandinavia. Through the acquisition, Aleris adds experience, competence and broader range of high quality within different surgical services in Scandinavia. In the preliminary purchase price allocation, goodwill amounts to SEK 700 m.
On August 6, 2015, Permobil acquired Seating Dynamics Pty Ltd, a leading distributor of quality solutions for pressure care, mobility and positioning in the Australian market. The acquisition marks the next important step in Permobil´s strategy to provide innovative advanced rehabilitation solutions for people with disabilities.
Investor is divided into operating segments based on how operations are reviewed and evaluated by the CEO. Investor's presentation of operating segments corresponds to the internal structure for management and reporting.
As of the second quarter 2015, Investor's presentation of operating segments has been changed. The change is due to a new internal structure for management and reporting. Previously the operations were divided into the two business areas Core Investments and Financial Investments, which had different investment strategies and goals. In the new structure, the operations are divided into the three business areas Listed Core Investments, EQT and Patricia Industries.
Listed Core Investments consists of listed holdings, see page 12.
The business area EQT consists of the holdings in EQT, se page 17.
Patricia Industries includes the operating subsidiaries, 3 Scandinavia and the former IGC portfolio and all other financial investments, except EQT and Investor's trading portfolio, see page 18.
The reported items in the operating segment profit/loss for the year, assets and liabilities, are presented according to how they are reviewed by the CEO. In the operating segment presentation, items directly attributable and items that can be reliably and fairly allocated to each respective segment are included. Non-allocated items are presented in Investor Groupwide and are related to the investing activities and consist, within profit/loss, of management costs, net financial items and components of tax. Assets and liabilities within investing activities are included in Investor Groupwide as well. Market prices are used for any transactions that occur between operating segments.
For information about goods, services and geographical areas, see note 8, Revenues.
| Listed Core | Patricia | Investor | |||
|---|---|---|---|---|---|
| Performance by business area 2015 | Investments | EQT | Industries | Groupwide | Total |
| Dividends | 7,681 | 116 | 20 | 3 | 7,821 |
| Other operating income | 58 | 58 | |||
| Changes in value | 1,209 | 4,407 | 2,926 | –31) | 8,538 |
| Net sales | 25,365 | 25,365 | |||
| Cost of goods and services sold | –15,985 | –15,985 | |||
| Sales and marketing costs | –3,147 | –3,147 | |||
| Administrative, research and development and other operating costs | –7 | –2,864 | –8 | –2,880 | |
| Management costs | –86 | –8 | –268 | –121 | –483 |
| Share of results of associates | –5 | 364 | 1 | 360 | |
| IS Operating profit/loss | 8,804 | 4,503 | 6,469 | –128 | 19,647 |
| Net financial items | –576 | –897 | –1,473 | ||
| Tax | –680 | –59 | –740 | ||
| IS Profit/loss for the year | 8,804 | 4,503 | 5,212 | –1,085 | 17,434 |
| Non-controlling interest | –1 | –1 | |||
| Net profit/loss for the period attributable to the Parent Company | 8,804 | 4,503 | 5,211 | –1,085 | 17,433 |
| Dividend | –6,856 | –6,856 | |||
| Other effects on equity2) | –507 | –356 | 1,125 | 262 | |
| Contribution to net asset value | 8,804 | 3,995 | 4,855 | –6,816 | 10,838 |
| Net asset value by business area 12/31 2015 | |||||
| Shares and participations | 224,143 | 13,208 | 16,652 | 51 | 254,054 |
| Other assets | 60,809 | 756 | 61,565 | ||
| Other liabilities | –187 | –26,366 | –1,372 | –27,925 | |
| Net debt/-cash3) | 14,616 | –30,508 | –15,892 | ||
| Total net asset value including net debt/-cash | 224,143 | 13,021 | 65,711 | –31,073 | 271,801 |
| Shares in associates reported according to the equity method | 5,795 | 31 | 5,826 | ||
| Cash flow for the year | 3,053 | 5,701 | 3,957 | –12,940 | –229 |
| Non-current assets by geographical area4) | |||||
| Sweden | 34,101 | 15 | 34,116 | ||
| Europe excl. Sweden | 4,715 | 4,715 | |||
| Other countries | 6,131 | 3 | 6,134 | ||
1) Includes proceeds from the trading operation amounting to SEK 2,520 m.
2) Refers mainly to revaluation reserve, effects of long-term share-based remuneration, changes in non-controlling interest and changes in the hedging and translation reserves. 3) Net debt/-cash refers to other financial investments, short-term investments, cash and cash equivalents, interest-bearing liabilities with related derivatives
and defined benefit pensions within investing activities.
4) Non-current assets consists of intangible and tangible assets. Information regarding associates by geographical area is not presented because Investor, as a minority owner, can not access information that can be compiled in a meaningful way.
| Performance by business area 2014 | Listed Core Investments |
EQT | Patricia Industries |
Investor Groupwide |
Total |
|---|---|---|---|---|---|
| Dividends | 6,227 | 977 | 22 | 1 | 7,228 |
| Other operating income | 177 | 177 | |||
| Changes in value | 35,084 | 3,363 | 3,282 | 2311) | 41,960 |
| Net sales | 21,200 | 21,200 | |||
| Cost of goods and services sold | –13,529 | –13,529 | |||
| Sales and marketing costs | –3,171 | –3,171 | |||
| Administrative, research and development and other operating costs | –9 | –2,167 | –2,175 | ||
| Management costs | –102 | –8 | –257 | –129 | –496 |
| Share of results of associates | 37 | 950 | –84 | 903 | |
| IS Operating profit/loss | 41,209 | 4,360 | 6,507 | 20 | 52,097 |
| Net financial items | –471 | –1,318 | –1,789 | ||
| Tax | 449 | –69 | 380 | ||
| IS Profit/loss for the year | 41,209 | 4,360 | 6,484 | –1,366 | 50,688 |
| Non-controlling interest | –32 | –32 | |||
| Net profit/loss for the period attributable to the Parent Company | 41,209 | 4,360 | 6,452 | –1,366 | 50,656 |
| Dividend | –6,089 | –6,089 | |||
| Other effects on equity2) | 4 | –238 | 1,214 | 979 | |
| Contribution to net asset value | 41,209 | 4,364 | 6,214 | –6,242 | 45,546 |
| Net asset value by business area 12/31 2014 | |||||
| Shares and participations | 218,396 | 13,706 | 14,688 | 101 | 246,891 |
| Other assets | 58,150 | 789 | 58,939 | ||
| Other liabilities | –184 | –23,079 | –1,151 | –24,414 | |
| Net debt/-cash3) | 10,380 | –30,833 | –20,453 | ||
| Total net asset value including net debt/-cash | 218,396 | 13,522 | 60,139 | –31,094 | 260,963 |
| Shares in associates reported according to the equity method | 6,310 | 22 | 6,332 | ||
| Cash flow for the year | –2,855 | 678 | 7,790 | –2,839 | 2,774 |
| Non-current assets by geographical area4) | |||||
| Sweden | 35,846 | 22 | 35,868 | ||
| Europe excl. Sweden | 3,462 | 3,462 | |||
| Other countries | 5,054 | 2 | 5,056 |
1) Includes proceeds from the trading operation amounting to SEK 3,066 m.
2) Refers mainly to revaluation reserve, effects of long-term share-based remuneration, changes in non-controlling interest and changes in the hedging and translation reserves. 3) Net debt/-cash refers to other financial investments, short-term investments, cash and cash equivalents, interest-bearing liabilities with related derivatives
and defined benefit pensions within investing activities.
4) Non-current assets consists of intangible and tangible assets. Information regarding associates by geographical area is not presented because Investor,
as a minority owner, can not access information that can be compiled in a meaningful way.
Changes in value consist of realized and unrealized result from long-term and short-term holdings in shares and participations, transaction costs, profitsharing costs and management fees for fund investments.
For shares and participations that were realized during the period, the changes in value consist of the difference between the consideration received and the value at the beginning of the period. Profit or loss from the divestment of a holding is recognized when the risks and benefits associated with owning the instrument are transferred to the buyer and the Group no longer has control over the instrument.
| 2015 | 2014 | |
|---|---|---|
| Realized and unrealized results from long-term | ||
| and short-term investments | 8,876 | 39,133 |
| Realized result from associates valued at equity method | – | 3,275 |
| Other | –338 | –448 |
| IS Total | 8,538 | 41,960 |
| Total | 22,495 | 19,371 |
|---|---|---|
| Other operating expenses | 6,092 | 4,628 |
| Depreciation, amortization and impairment | 1,123 | 1,743 |
| Personnel costs | 9,527 | 8,200 |
| Raw materials and consumables | 5,753 | 4,800 |
| 2015 | 2014 |
Cost related to research and development amounts to SEK 477 m. (378).
Revenues included in operating profit are dividends, other operating income and net sales.
Dividends received are recognized when the right to receive payment has been established. Other operating income consists primarily of interest on shareholder loans to associates and it is calculated using the effective interest rate method.
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer. Services provided as part of healthcare activities are sold via multi-year operating contracts and, in some cases, framework agreements. Revenue from services is recognized based on the stage of completion on balance sheet date. Completion is determined by an assessment of the work done, on the basis of performed examinations.
Revenue is not recognized if it is probable that economic benefits will not flow to the Group. No revenue is recognized if there is significant uncertainty regarding the payment, associated costs or the risk of returns. Neither is revenue recognized if the seller remains involved in day-to-day management activities that are typically associated with ownership. Revenue is recognized at the fair value of consideration received or expected to be received, less any discounts. Revenue shall be recognized when the amount of revenue can be measured reliably.
A provision is made for the risk of loss if the total directly attributable costs during the entire term of the contract are expected to exceed the total revenues, including indexation.
| By category: | 2015 | 2014 |
|---|---|---|
| Sales of products | 16,125 | 12,801 |
| Sales of services | 9,077 | 8,276 |
| Other income | 162 | 123 |
| IS Total | 25,365 | 21,200 |
| By field of operation: | 2015 | 2014 |
| Health care equipment | 16,125 | 13,066 |
| Health care services | 8,621 | 7,580 |
| Hotel | 597 | 538 |
| Real estate | 22 | 16 |
| IS Total | 25,365 | 21,200 |
| By geographical market: | 2015 | 2014 |
| Sweden | 6,082 | 5,516 |
| Scandinavia, excl. Sweden | 4,684 | 4,174 |
| Europe, excl. Scandinavia | 7,309 | 6,682 |
| U.S. | 5,780 | 3,715 |
| North America, excl. U.S. | 330 | 288 |
| South America | 64 | 43 |
| Africa | 188 | 42 |
| Australia | 446 | 377 |
| Asia | 482 | 363 |
| IS Total | 25,365 | 21,200 |
External revenues are presented on the basis where the customer is resident. Net sales are attributable to operating subsidiaries. No customer exceeds 10 percent of total net sales.
Accounting policies on employee benefits such as short-term benefits, termination benefits and share-based payment transactions are presented below. Post-employment benefits are presented in note 25, Provisions for pensions and similar obligations.
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related services are provided. A provision is made for the anticipated cost of variable cash salary and profit-sharing contracts when the Group has a current obligation to make such payments (because services have been provided by employees) and when the obligation can be reliably estimated.
The cost of termination benefits is recognized only if the company is demonstrably committed (without any realistic possibility of withdrawing the commitment) by a formal plan to prematurely terminate an employee's employment.
Investor AB has issued equity-settled stock option and share programs and cash-settled (synthetic) shares.
The fair value of stock options and share programs issued is determined at the grant date in accordance with the Black & Scholes valuation model, taking into consideration the terms and conditions that are related to the share price. The value is recognized in the income statement as a personnel cost allocated over the vesting period with a corresponding increase in equity. The amount charged to the income statement is reversed in equity each time of the income statement charge. The recognized cost corresponds to the fair value of the estimated number of options and shares that are expected to vest. This cost is adjusted in subsequent periods to reflect the actual number of vested options and shares. However, no adjustment is made when options and shares expire only because share-price related conditions do not reach the level needed for the options to vest.
When equity-settled programs are exercised, shares are delivered to the employee. The delivered shares are treasury shares that are repurchased when needed. When exercised, the payment of the exercise price that was received from the employee is reported as an increase in equity.
Equity-settled programs issued to employees in Group companies In the Parent Company, the value of equity instruments, which is offered to employees of other companies belonging to the Group, is reported as a capital contribution to subsidiaries. The value of participations in subsidiaries increases simultaneously to the Parent Company's reporting of an increase in equity. The costs related to employees in companies concerned are invoiced to the subsidiaries. The cash settlement of the invoices then neutralizes the increase of participations in subsidiaries.
Cash-settled (synthetic) shares result in an obligation that is valued at fair value and recognized as an expense with a corresponding increase in liabilities. Initial fair value is calculated and the grant value is recognized over the vesting period as a personnel cost, which is similar to the recognition of equity-settled programs. However, cash settled programs are revalued at fair value every balance sheet date and at final settlement. All changes in the fair value as a result of changes in share price are recognized in the financial net with a corresponding change in liabilities.
When cash-settled programs are exercised, the liability to the holder of the synthetic shares is settled.
share-based payment transactions
Social security expenses attributable to share-based remuneration are recognized and amortized in accordance with the same policies as the costs for synthetic shares.
| 2015 | 2014 | |||
|---|---|---|---|---|
| Total | Of which women |
Total | Of which women |
|
| Parent Company, Sweden | 71 | 38 | 75 | 41 |
| Sweden, excl. Parent Company | 6,023 | 4,611 | 5,688 | 4,303 |
| Europe excl. Sweden | 5,337 | 3,644 | 5,021 | 3,418 |
| North- and South America | 1,464 | 462 | 957 | 338 |
| Asia | 3,663 | 2,758 | 3,757 | 2,771 |
| Australia | 144 | 70 | 62 | 43 |
| Total Group | 16,702 | 11,583 | 15,560 | 10,914 |
| 2015 | 2014 | ||||
|---|---|---|---|---|---|
| Men | Women | Men | Women | ||
| Gender distribution in percent | |||||
| Board of the Parent Company | 64 | 36 | 77 | 23 | |
| Management Group of the Parent Company | |||||
| incl. the President | 60 | 40 | 60 | 40 | |
| Boards in the Group1) | 71 | 29 | 75 | 25 | |
| Management Groups in the Group | 60 | 40 | 65 | 35 |
1) Based on all Group companies including small, internal companies with minor activity.
Investor's Remuneration Committee is appointed each year by the Board. The Committee's main purpose is "to enable an independent and thorough review of all aspects of Investor's total remuneration program and to make decisions about executive remuneration in the company". The Remuneration Committee submits a recommendation to the Board concerning the President and Chief Executives Officer's remuneration and decides on the remuneration for the other members of the Management Group.
Remuneration to the President and other members of the Management Group is based on the Guidelines adopted at the AGM.
The Management Group consists of President Johan Forssell (who became President May 13, 2015), Helena Saxon (who became a member March 1, 2015), Daniel Nodhäll (who became a member May 13, 2015), Petra Hedengran and Stefan Stern (who became a member May 13, 2015). Susanne Ekblom was a member of the Management Group during the period January 1 – February 28, 2015 and Börje Ekholm and Lennart Johansson were members of the Management Group during the period January 1 – May 12, 2015.
Investor strives to offer a total remuneration that is competitive and in line with market conditions, thereby enabling it to attract (and retain) the right type of expertise to the company. The total remuneration should be based on factors such as position, performance and individual qualifications.
The total remuneration for the Management Group shall consist of: basic salary, variable cash salary, long-term share-based remuneration, pension and other remuneration and benefits.
Basic salary is reviewed annually for all Investor employees. Basic salary constitutes the basis for calculating variable salary.
Investor's employees have a portion of their salary as variable cash salary. The variable portion of salary differs between business areas. For the President Johan Forssell, it amounts to a maximum of 30 percent of basic salary (the former President had a maximum variable cash salary of 10 percent of basic salary). For other employees, the maximum variable salary ranges between 10 and 80 percent of their basic salary, although for a very limited number of key personnel, the variable portion of salary can be a maximum of 100 percent of their basic salary. The President may award additional variable salary to company employees who he feels have made an exceptional contribution during the year. However, any such additional variable salary must be approved by Investor's Remuneration Committee.
The established goals must also be reached in order to receive the variable salary. Goals are reviewed at the end of the year. The focus of the President's goals for the year is determined through a dialog between the President and the Chairman of the Board. The goals for the President are proposed by the Remuneration Committee and later approved by the Board. Goals for other employees are established by each employee's manager.
For long-term variable remuneration programs, it is the Board's ambition to create a structure that results in employee commitment and is based on the long-term development of Investor. As a result, part of the remuneration to employees is related to the long-term performance of Investor and the Investor share, which exposes the employee to both increases and decreases of the share price. In 2006, a Stock Matching Plan was introduced for Investor employees, as well as a performance based share program for Senior Management. "Senior Management" is defined as the President, other members of the Management Group and a maximum of 20 other senior executives. The structure of the programs for 2007-2015 correspond in all material aspects to the program for 2006. The employee is required to invest his or her own funds, or commit shares, in order to participate in the program. For more details regarding the programs, see page 57.
The pension and insurance plan for the Parent Company and four smaller subsidiaries within investing activities has been revised in order to modernize and better adapt the plan to market conditions. The main consequence of the revision is that the defined benefit BTP plan has been replaced with a defined contribution pension and insurance plan. In the long term, this change will lead to predictable and lower costs for the included companies as well as the same or better insurance coverage and pension earnings for the employees. The pension for the President and Management Group had during 2015
two components:
Profit-sharing program for the trading operation
This program includes participants both from the trading organization and the investment organization. The participants in this program receive, in addition to their base salary, a variable salary equivalent to 20 percent of the trading function's net result. The program includes a clawback principle by which 50 percent of the variable salary allotment is withheld for one year and will only be paid out in full if the trading result for that year is positive. In order to receive full allotment, two consecutive profitable years are thus required. Approximately 10-15 employees in total participate in the program.
A mutual six-month term of notice applies between the President and the Company. If the Company terminates the employment, the President will receive severance pay corresponding to 12 months of basic salary. If no new employment has been obtained after one year, the President is entitled to a maximum of 6 months' additional severance pay. The terms and conditions regarding notice and severance pay for other members of the Management Group are the same, provided that the employment contract for that person was entered into before the 2010 Annual General Meeting. If the employment contract was entered into subsequent to the 2010 Annual General Meeting, then the fixed cash salary during the notice period plus the severance pay may not exceed two years' fixed cash salary.
Investor allows Management Group members to keep any fees that they have received for work done on the Boards of the Company's Listed Core Investments. One reason for allowing this practice is that the employee assumes personal responsibility by having a Board position. Fees received for Board work are taken into account by Investor when determining the employee's total remuneration.
Investor offers Management Group members and other employees a variety of non-monetary benefits, including corporate health service, health insurance, subsidized lunches, employee fitness programs and the possibility to rent vacation homes. Managers and employees with young children are also offered in-home services in the form of cleaning and baby-sitting.
| Change | Long-term share-based |
Own investment 2015 in long-term |
Own investment, | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Year | Basic salary | Vacation remuneration |
Variable salary for the year |
Total cash salary |
of vacation pay liability |
Pension premiums |
Benefits | remuneration value at grant date |
Total | share based remuneration |
% of CEO basic salary pre-tax |
| 20151) | 4,251 | 62 | 1,116 | 5,429 | –227 | 1,698 | 91 | 4,224 | 11,215 | 1,608 | 37.8 |
1) Johan Forssell was appointed Preseident and CEO May 13, 2015. Remuneration and benefits from this date is specified in the table.
The amounts in the table below are calculated according to the accruals concept, in which the terms basic salary and variable salary refer to expensed amounts, including any changes to the reserve for variable salary, vacation pay provisions, etc. Variable salary refers to the approved variable salary for the current financial year, unless specified otherwise.
| Total remuneration 2015 (SEK t.) | Basic salary |
Vacation remu neration |
Change of vacation pay liability |
Variable salary for the year |
Cost of long-term share-based remuneration1) |
Total | Pension costs2) | Other remuneration and benefits |
Total expensed remuneration |
|---|---|---|---|---|---|---|---|---|---|
| Current President and CEO4) | 4,251 | 62 | –227 | 1,116 | 3,348 | 8,550 | 1,698 | 91 | 10,339 |
| Former President and CEO5) | 3,301 | 6,744 | –6,020 | 325 | 1,530 | 5,880 | 1,423 | 899 | 8,2023) |
| Management Group, excl. the President | 11,840 | 170 | –789 | 4,860 | 4,504 | 20,586 | 7,890 | 420 | 28,896 |
| Total | 19,392 | 6,976 | –7,036 | 6,302 | 9,382 | 35,016 | 11,011 | 1,410 | 47,437 |
| Total remuneration 2014 (SEK t.) | |||||||||
| President and CEO | 8,650 | 125 | 1,028 | 744 | 10,977 | 21,524 | 3,560 | 1,522 | 26,6063) |
| Management Group, excl. the President | 13,960 | 202 | 429 | 6,200 | 9,171 | 29,962 | 7,650 | 1,113 | 38,725 |
| Total | 22,610 | 327 | 1,457 | 6,944 | 20,148 | 51,486 | 11,210 | 2,635 | 65,331 |
1) There is a deviation from the value at grant date according to the previous table, in the table above the cost is calculated based on the principles in IFRS 2 and allocated over the vesting period. The calculation is also adjusted for the actual outcome of allotted performance shares, whereas in the previous table the value is based on an assumed allotment.
2) There are no outstanding pension commitments for the Management Group.
3) Of which expensed in subsidiaries; basic salary SEK 542 t. (1,218), pension SEK 25 t. (42), as well as other remuneration and benefits SEK 333 t. (697).
4) Johan Forssell was appointed President and CEO May 13, 2015. Salaries and other remuneration for the period before May 13, 2015 are included in the row Management Group, excl. the President.
5) Börje Ekholm resigned as President and CEO May 12, 2015. The salaries and other remunerations stated are what Börje Ekholm recieved in his capacity as President and CEO.
| 2015 | 2014 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total remuneration (SEK m.), Group |
Basic salary1) |
Variable salary |
Long-term share-based remuneration |
Pension cost |
Cost for employee benefits |
Social security contribu tions |
Total | Basic salary1) |
Variable salary |
Long-term share-based remuneration |
Pension cost |
Cost for employee benefits |
Social security contribu tions |
Total |
| Parent Company | 91 | 20 | 31 | –24 | 9 | 51 | 178 | 86 | 19 | 39 | 31 | 12 | 92 | 279 |
| Subsidiaries | 6,368 | 517 | 7 | 529 | 186 | 1,361 | 8,968 | 5,482 | 382 | 2 | 457 | 152 | 1,267 | 7,742 |
| Total | 6,459 | 537 | 38 | 505 | 195 | 1,4122) 9,146 | 5,568 | 401 | 41 | 488 | 164 | 1,3592) 8,021 |
1) Includes vacation remuneration and change of vacation pay liability.
2) Of which SEK 81 m. refers to social security contribution for long-term share-based remuneration (68).
| 2015 | 2014 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Remuneration (SEK m.), Group | Salary Senior executives, Presidents and Boards in subsidiaries1, 2) |
Of which variable salary1) |
Other employees |
Total | Salary senior executives, Presidents and Boards in subsidiaries1, 2) |
Of which variable salary1) |
Other employees |
Total | |
| Parent Company | 34 | 6 | 77 | 111 | 39 | 7 | 66 | 105 | |
| Subsidiaries | 56 | 21 | 6,829 | 6,885 | 37 | 14 | 5,827 | 5,864 | |
| Total | 90 | 27 | 6,906 | 6,996 | 76 | 21 | 5,893 | 5,969 |
1) The number of people in the Parent Company is 15 (17) and in subsidiaries 43 (27).
2) Pension costs relating to senior executives, Presidents and Boards in subsidiaries amount to SEK 18 m. and are in addition to the amounts presented in the table (16).
Through the long-term variable remuneration programs, part of the remuneration to employees becomes linked to the long-term performance of the Investor share. The program consists of the following two components:
Through the Stock Matching Plan, an employee could acquire or commit shares in Investor at the market price during a period (determined by the Board) subsequent to the release of Investor's first quarterly report for each year, respectively (the "Measurement Period"). After a three-year vesting period, two options (Matching Options) are granted for each Investor share acquired or committed by the employee, as well as a right to acquire one Investor share (Matching Share) for SEK 10. The Matching Share may be acquired during a four-year period subsequent to the vesting period. Each Matching Option entitles the holder to purchase one Investor share, during the corresponding period, at a strike price corresponding to 120 percent of the average volume-weighted price paid for Investor shares during the Measurement Period.
The President, other members of the Management Group and a maximum of 20 other senior executives ("Senior Management") are obligated to invest at least 5 percent of their basic salary in Investor shares according to the Stock Matching Plan. Other employees are not obligated to invest, but they are still entitled to invest to the extent that the value of the allotted Matching Options and Matching Shares amounts to a maximum of either 10 or 15 percent of their basic salary. Senior Management has the right to invest to such an extent that the value of the allotted Matching Options and Matching Shares amounts to a maximum between 10 and 27 percent of their respective basic salary. In order to participate fully in the Stock Matching Plan for 2015, the President had to invest or commit approximately 31 percent of his basic salary in Investor shares. If the President, through the investment mentioned above, participates fully in the Stock Matching Plan, the theoretical value of the right to receive a Matching Share and two Matching Options per acquired share under the Stock Matching Plan is 27 percent of the basic salary.
Senior Management has, in addition to the Stock Matching Plan, the right (and obligation) to participate in a Performance-Based Share Program. Under this program, which presumes participation in the Stock Matching Plan, Senior Management, after a three-year vesting period, has the right during four years to acquire additional Investor shares ("Performance Shares") for a price that corresponds to, in 2015 year's program, 50 percent of the price of the shares acquired by the employee ("Acquisition Price"). This right is conditional upon whether certain financial goals related to the total return of the Investor share are met during the vesting period.
Total return is measured over a three-year qualification period. The average annual total return (including reinvested dividends) must exceed the interest on 10-year government bonds by more than 10 percentage points in order for Senior Management to be entitled to acquire the maximum number of Performance Shares that they were allotted. If the total return does not exceed the 10-year interest on government bonds by at least 2 percentage points, Senior Management is not entitled to acquire any shares. If the total return is between the 10-year interest on government bonds plus 2 percentage points and the 10-year interest on government bonds plus 10 percentage points, a proportional (linear) calculation of the number of shares that may be acquired is made. The total return is measured quarterly on running 12-month basis during the qualification period, where the total outcome is estimated as the average total return during the three-year period based on 9 measurement points.
At the time when Matching Shares and Performance Shares are acquired, employees are entitled to remuneration for dividends paid during the vesting period and up until the acquisition date. This is done so that the program will not be affected by dividends and to avoid the risk that a decision on dividends is affected by the long-term variable remuneration program.
Investor's policy is to implement measures to minimize the effects on equity from the programs in the event of an increase in Investor's share price. For programs implemented in 2006 and later, Investor has been repurchasing its own shares in order to guarantee delivery.
Participation/incentive programs in Investor Growth Capital (IGC) Within IGC, selected senior staff and other senior executives are, to a certain extent, allowed to make parallel investments with Investor, or else receive profit-sharing. For more information regarding the programs see note 31, Related party transactions.
Board members and senior executives in unlisted investments, including Mölnlycke Health Care (Mölnlycke), Aleris, Permobil and BraunAbility are offered the opportunity to invest in the companies through management participation programs. For more information regarding the programs see note 31, Related party transactions.
Matching Shares 2006-2015
| Total | 887,468 | 392,261 | 9,948 | 2,835 | 71,296 | 365,749 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 95,497 | 12,065 | 350 | 12,415 | 109.19 | 121.34 | 10.00 | 12/31 20125) | 3 | |||
| 2007 | 70,194 | 11,276 | 327 | 11,603 | 150.91 | 168.48 | 10.00 | 12/31 20135) | 3 | |||
| 2008 | 88,075 | 14,513 | 421 | 14,934 | 332.83 | – | 116.71 | 130.40 | 10.00 | 12/31 2014 | 3 | |
| 2009 | 134,540 | 31,253 | 729 | 7,719 | 320.61 | 24,263 | 97.64 | 109.01 | 10.00 | 12/31 20155) | 3 | |
| 2010 | 124,543 | 40,090 | 1,073 | 1,887 | 5,466 | 321.23 | 33,810 | 114.91 | 128.33 | 10.00 | 12/31 20165) | 3 |
| 2011 | 88,959 | 48,794 | 1,235 | 7,754 | 326.29 | 42,275 | 127.15 | 141.66 | 10.00 | 12/31 2017 | 3 | |
| 2012 | 120,160 | 110,596 | 2,297 | 33,100 | 312.93 | 79,793 | 109.60 | 122.17 | 10.00 | 12/31 2018 | 3 | |
| 2013 | 72,378 | 69,795 | 1,984 | 225 | 1,806 | 322.43 | 69,7484) | 167.90 | 187.33 | 10.00 | 12/31 2019 | 3 |
| 2014 | 55,451 | 53,879 | 1,532 | 723 | 517 | 324.99 | 54,1714) | 219.51 | 244.29 | 10.00 | 12/31 2020 | 3 |
| 2015 | 37,671 | 37,6714) | 293.33 | 326.18 | 10.00 | 12/31 2021 | 3 | |||||
| Year issued |
Number of Matching Shares granted |
Number at the beginning of the year |
Adjustment for dividend |
Matching Shares for feited in 2015 |
Matching Shares exer cised in 2015 |
Weighted aver age share price on exercise |
Number of Matching Shares at year-end |
Theoretical value1), SEK |
Fair value2), SEK |
Strike price, SEK |
Maturity date | Vesting period (years)3) |
1) The value of Matching Shares on the grant date was based on a theoretical value calculated in accordance with the Black & Scholes valuation model.
2) The fair value on the grant date was calculated in accordance with IFRS 2, which was also used for calculating recognized value. See page 58 for specification of the basis of calculation. 3) Under certain circumstances, in conjunction with the end of employment, Matching Shares can be exercised before the end of the vesting period. Matching Shares that have already vested must be exercised within three months from the end of employment if the employment lasted less than four years and 12 months if the holder has been employed longer. 4) Matching Shares not available for exercise at year-end.
5) The former President Börje Ekholm is entitled to exercise Matching Shares during the period from March 1, 2016 through February 28, 2017.
| Year issued |
Number of Matching Options granted |
Number at the beginning of the year |
Matching Options for feited in 2015 |
Number of Matching Options exercised in 2015 |
Weighted aver age share price on exercise |
Number of Matching Options at year-end |
Theoretical value1), SEK |
Fair value2), SEK |
Strike price, SEK |
Maturity date | Vesting period (years)3) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 75,342 | 75,3424) | 38.77 | 44.76 | 403.30 | 12/31 2021 | 3 | ||||
| 2014 | 110,902 | 107,757 | 1,432 | 1,035 | 325.47 | 105,2904) | 29.86 | 34.41 | 304.50 | 12/31 2020 | 3 |
| 2013 | 144,756 | 135,098 | 526 | 3,492 | 318.42 | 131,0804) | 22.63 | 24.97 | 236.10 | 12/31 2019 | 3 |
| 2012 | 240,320 | 205,680 | 55,776 | 312.09 | 149,904 | 14.70 | 16.87 | 157.80 | 12/31 2018 | 3 | |
| 2011 | 177,918 | 98,206 | 7,706 | 315.98 | 90,500 | 19.78 | 22.82 | 180.30 | 12/31 2017 | 3 | |
| 2010 | 249,086 | 93,532 | 22,252 | 322.51 | 71,280 | 17.44 | 19.73 | 164.60 | 12/31 20165) | 3 | |
| 2009 | 269,080 | 65,428 | 26,254 | 317.74 | 39,174 | 14.52 | 16.68 | 141.50 | 12/31 20155) | 3 | |
| 2008 | 176,150 | 23,088 | 23,088 | 354.03 | – | 16.41 | 18.98 | 166.20 | 12/31 2014 | 3 | |
| 2007 | 140,388 | 17,304 | 17,304 | 22.80 | 18.84 | 212.00 | 12/31 20135) | 3 | |||
| 2006 | 190,994 | 17,984 | 17,984 | 15.62 | 12.47 | 155.90 | 12/31 20125) | 3 | |||
| Total | 1,774,936 | 764,077 | 1,958 | 139,603 | 697,858 |
1) The value of Matching Options on the grant date was based on a theoretical value calculated in accordance with the Black & Scholes valuation model.
2) The fair value on the grant date was calculated in accordance with IFRS 2, which was also used for calculating recognized values. See below for specification of the basis of calculation. 3) Under certain circumstances, in conjunction with the end of employment, Matching Options can be exercised before the end of the vesting period. Matching Options that have already
vested must be exercised within three months from end of employment if employment lasted less than four years and within 12 months if the holder has been employed longer. 4) Matching Options not available for exercise at year-end.
5) The former President Börje Ekholm is entitled to exercise Matching Options during the period from March 1, 2016 through February 28, 2017.
Performance Shares 2006-2015
| Year issued |
Maximum number of Performance Shares granted |
Number at the beginning of the year |
Adjustment for dividend |
Performance Shares, for feited in 2015 |
Performance Shares exercised in 2015 |
Weighted aver age share price on exercise |
Number of Per formance Shares at year-end |
Theoretical value1), SEK |
Fair value2), SEK |
Strike price, SEK |
Maturity date | Vesting period (years) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 163,585 | 163,5853) | 80.59 | 89.84 | 168.07 | 12/31 2021 | 3 | |||||
| 2014 | 258,017 | 258,017 | 7,107 | 706 | 264,4183) | 62.79 | 70.03 | 126.89 | 12/31 2020 | 3 | ||
| 2013 | 320,473 | 328,035 | 9,036 | 668 | 336,4033) | 49.33 | 54.26 | 95.42 | 12/31 2019 | 3 | ||
| 2012 | 457,517 | 467,442 | 11,377 | 59,084 | 310.60 | 419,735 | 32.69 | 36.41 | 61.55 | 12/31 2018 | 3 | |
| 2011 | 663,784 | 577,239 | 13,279 | 94,633 | 313.20 | 495,885 | 20.56 | 23.14 | 134.48 | 12/31 2017 | 3 | |
| 2010 | 799,197 | 527,497 | 12,311 | 119,581 | 329.28 | 420,227 | 18.34 | 20.34 | 118.74 | 12/31 20165) | 3 | |
| 2009 | 870,373 | 333,878 | 8,876 | 26,121 | 318.07 | 316,633 | 15.45 | 17.26 | 99.11 | 12/31 20155) | 3 | |
| 2008 | 269,6404) | 15,755 | 565 | 16,320 | 313.80 | – | 40.04 | 42.98 | 69.29 | 12/31 2014 | 3 | |
| 2007 | 139,3804) | 7,020 | 204 | 7,224 | 77.78 | 82.55 | 10.00 | 12/31 20135) | 3 | |||
| 2006 | 187,1984) | 8,630 | 250 | 8,880 | 52.35 | 57.03 | 10.00 | 12/31 20125) | 3 | |||
| Total | 4,129,164 | 2,523,513 | 63,005 | 1,374 | 315,739 | 2,432,990 |
1) The value of Performance Shares on the grant date was based on a theoretical value calculated in accordance with the Black & Scholes valuation model.
2) The fair value on the grant date was calculated in accordance with IFRS 2, which was also used for calculating recognized values. See below for specification of the basis of calculation. 3) Performance Shares not available for exercise at year-end.
4) Refers to the maximum number of granted performance shares, regardless of the program's vesting outcome.
5) The former President Börje Ekholm is entitled to exercise Performance Shares during the period from March 1, 2016 through February 28, 2017.
The difference between the theoretical value and fair value is mainly due to the fact that the anticipated personnel turnover is taken into consideration when determining the theoretical value. When estimating the fair value in
accordance with IFRS 2, personnel turnover is not taken into account; instead the anticipated number of vested shares or options is adjusted. The adjustment is based on average historical outcome.
The calculation of the fair value on the grant date, according to IFRS 2, was based on the following conditions:
| 2015 | ||||||
|---|---|---|---|---|---|---|
| Matching Share |
Matching Option |
Performance Share |
Matching Share |
Matching Option |
Performance Share |
|
| Averaged volume-weighted price paid for Investor B shares | 336.13 | 336.13 | 336.13 | 253.77 | 253.77 | 253.77 |
| Strike price | 10.00 | 403.30 | 168.07 | 10.00 | 304.50 | 126.89 |
| Assumed volatility1) | 30% | 30% | 30% | 30% | 30% | 30% |
| Assumed average term2) | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years |
| Assumed percentage of dividend3) | 0% | 3.0% | 0% | 0% | 3.5% | 0% |
| Risk-free interest | 0.09% | 0.09% | 0.09% | 1.07% | 1.07% | 1.07% |
| Expected outcome4) | 50% | 50% |
1) The assumed volatility was based on future forecasts based on the historical volatility of Investor B shares, in which the term of the instrument is an influencing factor.
The historical volatility has been in the interval of 15 to 30 percent.
2) The assumption of average term for the instruments at grant is based on historical exercise patterns and the actual term of the instruments within each remuneration program.
3) The dividend for Matching Shares and Performance Shares is compensated for by increasing the number of shares.
4) Probability to achieve the performance criteria is calculated based on historic data and verified externally.
| Year issued | Number of granted Shares |
Number of shares at the beginning of the year |
Fair value, SEK1) | Number of Shares exercised 2015 |
Number of Shares at year-end |
Maturity date2) |
Vesting period (years) |
|---|---|---|---|---|---|---|---|
| 2005 | 58,331 | 9,612 | 97.04 | – | 9,612 | 1/21 2010 | 5 |
| 2004 | 74,000 | 3,200 | 77.00 | – | 3,200 | 1/20 2009 | 5 |
| Total | 132,331 | 12,812 | – | 12,812 |
1) The fair value on the grant date was calculated in accordance with IFRS 2, which was also used for calculating recognized values. 2) The former President Börje Ekholm is entitled to exercise Restricted Stocks during the period from March 1, 2016 through February 28, 2017.
At the 2015 Annual General Meeting (AGM), it was decided that Board remuneration should total SEK 9,021 t., of which SEK 7,965 t. would be in the form of cash and synthetic shares and SEK 1,056 t. would be distributed as cash remuneration for committee work done by the Board of Directors.
As of 2008, Board members may choose to receive a part of their gross remuneration, excluding committee fees, in synthetic shares. AGM's decision regarding synthetic shares 2015 is essentially identical to the decision of the AGM 2014. In 2015, Board Members were entitled to receive 50 percent of the proposed remuneration before tax, excluding remuneration for committee work, in the form of synthetic shares and 50 percent in cash (instead of receiving 100 percent of the remuneration in cash). A synthetic share carries the same economic rights as a class B Investor share, which means that the value of the Board of Director's remuneration in synthetic shares, just like for class B shares, is dependent upon value fluctuations as well as the amount of dividends during the five-year period until 2020, when each synthetic share entitles the Board member to receive an amount corresponding to the share price, at the time, of a class B Investor share.
At the statutory meeting in May 2015 the Board approved, as in 2014, establishment of a policy pursuant to which members of the Board (who do not already have such holdings) are expected to, over a five-year period, acquire ownership in Investor shares (or a corresponding exposure to the Investor share, for example in synthetic shares) for a market value that is expected to correspond to at least one year's remuneration for board work, before taxes and excluding remuneration for committee work.
The Director's right to receive payment occurs after the publications of the year-end report and the three interim reports, respectively, during the fifth year following the general meeting which resolved on the allocation of the Synthetic Shares, with 25 percent of the allocated Synthetic Shares on each occasion. In case the Director resigns as Board Member prior to a payment date the Director has a right, within three months after the Director's resignation, to request that the time of payment shall be brought forward, and instead shall occur, in relation to 25 percent of the total number of allocated Synthetic Shares, after the publications of each of the year-end report and the three interim reports, respectively, which are made during the year after the year when such request was received by the Company.
| Total remuneration for 2015 (SEK t.) |
Cash Board fee |
Value of Synthetic Shares as at grant date |
Commit tee fee |
Total Board fee as at grant date |
Effect from change in market value of previous years Synthetic Shares |
Effect from change in market value of Synthetic Shares issued 2015 |
Effect from exercised 2015 |
Total fee, actual cost |
Number of Synthetic Shares at the beginning of the year |
Number of Synthetic Shares granted 20151) |
Adjust ment for dividend |
Exercised Synthetic Shares, 2015 |
Number of Synthetic Shares on December 31, 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jacob Wallenberg | 2,340 | 320 | 2,660 | 553 | 394 | 3,607 | 23,125 | 630 | 8,144 | 15,612 | |||
| Marcus Wallenberg | 625 | 625 | 625 | ||||||||||
| Josef Ackermann | 313 | 313 | 625 | 167 | –17 | 776 | 4,597 | 946 | 125 | 5,668 | |||
| Gunnar Brock2) | 313 | 313 | 165 | 790 | 247 | –17 | 105 | 1,126 | 8,909 | 946 | 243 | 2,172 | 7,926 |
| Sune Carlsson5) | 148 | 105 | 253 | 6,167 | 168 | 2,172 | 4,163 | ||||||
| Börje Ekholm5) Johan Forssell4) |
|||||||||||||
| Magdalena Gerger | 313 | 313 | 165 | 790 | 42 | –17 | 815 | 1,160 | 946 | 32 | 2,138 | ||
| Tom Johnstone, CBE | 313 | 313 | 78 | 703 | 247 | –17 | 105 | 1,039 | 8,909 | 946 | 243 | 2,172 | 7,926 |
| Carola Lemne3) | 205 | 105 | 310 | 7,749 | 211 | 2,172 | 5,788 | ||||||
| Grace Reksten Skaugen O. Griffith Sexton5) |
625 | 250 | 875 | 875 | |||||||||
| Hans Stråberg | 313 | 313 | 625 | 247 | –17 | 856 | 6,795 | 946 | 185 | 7,926 | |||
| Lena Treschow Torell | 313 | 313 | 78 | 703 | 247 | –17 | 105 | 1,039 | 8,909 | 946 | 243 | 2,172 | 7,926 |
| Peter Wallenberg Jr.5) | 247 | 105 | 352 | 8,909 | 243 | 2,172 | 6,980 | ||||||
| Sara Öhrvall4) | 313 | 313 | 625 | –17 | 608 | 946 | 946 | ||||||
| Total | 5,778 | 2,188 | 1,056 | 9,021 | 2,353 | –118 | 1,024 | 12,279 | 85,230 | 6,620 | 2,321 | 21,174 | 72,997 |
1) Based on weighted average stock price for Investor B in the period May 15 to May 21 2015: SEK 330.45.
2) Additional remunerations of SEK 1,703 t. to Gunnar Brock have been expensed in the subsidiaries.
3) Member of the Board until 5/6 2014.
4) Member of the Board as of 5/13 2015.
5) Member of the board until 5/12 2015.
| Total remuneration for 2014 (SEK t.) |
Cash Board fee |
Value of Synthetic Shares as at grant date |
Commit tee fee |
Total Board fee as at grant date |
Effect from change in market value of previous years Synthetic Shares |
Effect from change in market value of Synthetic Shares issued 2014 |
Effect from exercised 2014 |
Total fee, actual cost |
Number of Synthetic Shares at the beginning of the year |
Number of Synthetic Shares granted 20141) |
Adjust ment for dividend |
Exercised Synthetic Shares, 2014 |
Number of Synthetic Shares on December 31, 2014 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jacob Wallenberg | 2,175 | 358 | 2,533 | 1,624 | 264 | 4,421 | 31,629 | 1,012 | 9,516 | 23,125 | |||
| Sune Carlsson | 580 | 215 | 795 | 434 | 70 | 1,299 | 8,434 | 270 | 2,537 | 6,167 | |||
| Josef Ackermann | 290 | 290 | 580 | 241 | 40 | 861 | 3,330 | 1,160 | 107 | 4,597 | |||
| Gunnar Brock2) | 290 | 290 | 72 | 652 | 545 | 40 | 70 | 1,307 | 9,967 | 1,160 | 319 | 2,537 | 8,909 |
| Börje Ekholm | |||||||||||||
| Magdalena Gerger3) | 290 | 290 | 580 | 40 | 620 | 1,160 | 1,160 | ||||||
| Tom Johnstone, CBE | 290 | 290 | 580 | 545 | 40 | 1,165 | 7,508 | 1,160 | 241 | 8,909 | |||
| Carola Lemne4) | 545 | 545 | 7,508 | 241 | 7,749 | ||||||||
| Grace Reksten Skaugen | 580 | 286 | 866 | 866 | |||||||||
| O. Griffith Sexton | 580 | 72 | 652 | 652 | |||||||||
| Hans Stråberg | 290 | 290 | 580 | 396 | 40 | 1,016 | 5,460 | 1,160 | 175 | 6,795 | |||
| Lena Treschow Torell | 290 | 290 | 72 | 652 | 545 | 40 | 70 | 1,307 | 9,967 | 1,160 | 319 | 2,537 | 8,909 |
| Marcus Wallenberg | 580 | 580 | 580 | ||||||||||
| Peter Wallenberg Jr.2) | 290 | 290 | 143 | 723 | 545 | 40 | 70 | 1,378 | 9,967 | 1,160 | 319 | 2,537 | 8,909 |
| Total | 6,525 | 2,030 | 1,218 | 9,773 | 5,420 | 282 | 546 | 16,017 | 93,770 | 8,122 | 3,001 19,664 | 85,230 |
1) Based on weighted average stock price for Investor B in the period May 8 to May 14, 2014: SEK 249.93.
2) Additional remunerations of SEK 970 t. to Gunnar Brock and SEK 303 t. to Peter Wallenberg Jr. have been expensed in the subsidiaries.
3) Member of the Board as of 5/6 2014. 4) Member of the board until 5/6 2014.
| Costs relating to share-based payment transactions, SEK m. | 2015 | 2014 |
|---|---|---|
| Group | ||
| Costs relating to equity-settled share-based payment transactions |
33 | 32 |
| Costs relating to cash-settled share-based payment transactions |
5 | 9 |
| Social security and other costs relating to share-based payment transactions |
81 | 68 |
| Total | 119 | 109 |
| Parent Company | ||
| Costs relating to equity-settled share-based payment transactions |
25 | 30 |
| Costs relating to cash-settled share-based payment transactions |
5 | 9 |
| Social security and other costs relating to share-based payment transactions |
78 | 66 |
| Total | 108 | 105 |
| Other effects of share-based payment transactions, SEK m. | 2015 | 2014 |
| Group and Parent Company | ||
| Effect on equity relating to Stock-Options exercised by employees |
57 | 61 |
| Carrying amount of liability relating to cash-settled instruments |
30 | 31 |
| 2015 | 2014 | |
|---|---|---|
| Auditor in charge | Deloitte | Deloitte |
| Auditing assignment | 22 | 21 |
| Other audit activities | 1 | 1 |
| Tax advice | 4 | 3 |
| Other assignments | 4 | 1 |
| Total Auditor in charge | 30 | 26 |
| Other auditors | ||
| Auditing assignment | 1 | 1 |
| Total other auditors | 1 | 1 |
| Total | 31 | 27 |
Note 11. Operating leases
Costs related to operating leases are recognized in the Income Statement on a straight-line basis over the lease term.
Operating leases mainly consist of rent of premises, leasing of company cars and office furniture.
| 2015 | 2014 | |
|---|---|---|
| Less than 1 year from balance sheet date | –687 | –585 |
| 1-5 years from balance sheet date | –1,367 | –1,058 |
| More than 5 years from balance sheet date | –374 | –449 |
| Total | –2,428 | –2,092 |
| Costs for the year | ||
| Minimum lease payments | –673 | –576 |
| Contingent rent | –3 | 0 |
| Total | –676 | –576 |
| 2015 | 2014 | |
|---|---|---|
| Less than 1 year from balance sheet date | 18 | 96 |
| 1-5 years from balance sheet date | 43 | 39 |
| More than 5 years from balance sheet date | 25 | 11 |
| Total | 86 | 146 |
| Revenue for the year | ||
| Minimum lease revenue | 19 | 2 |
| Contingent rent | 2 | 0 |
| Total | 21 | 2 |
Associates are companies in which Investor, directly or indirectly, has a significant influence, typically between 20 and 50 percent of the votes. Accounting for associates is dependent on how Investor controls and monitors the companies' operations. The Group applies the equity method for unlisted holdings in those cases where Investor is significantly involved in the associate's operations.
Unlisted associates of Investor Growth Capital and all listed associates are controlled and monitored based on fair value and are accounted for as financial instruments at fair value through profit/loss, according to IAS 39 and IAS 28 p.18-19.
Associates are reported in the consolidated financial statements as of the date when significant influence was obtained. When applying the equity method, the carrying amount of the investments in associates that is reported in the consolidated financial statements, corresponds to the Group's share of the associates' equity, consolidated goodwill, and any consolidated surpluses/ deficits.
In the consolidated Income Statement, the Group's share of the associates' profit/loss that is attributable to the owners of the Parent Company (adjusted for any depreciation, impairment losses or reversals of acquired surpluses/deficits) is recognized as "share of results of associates". These shares of profit/ loss (less any dividends received from associates) are the primary component of the change in reported value of participations in associates. The Group's share of other comprehensive income in associates is reported as a separate component of other comprehensive income.
Upon acquisition of an associate, any difference between the cost of the holding including transaction costs and the investor's share of the net fair value of the associate's identifiable assets and liabilities is reported as goodwill corresponding to principles for acquisition of subsidiaries.
If the Group's share of reported losses in the associate exceeds the carrying amount of the participations in the Group, the value of the participations is reduced to zero. Losses are also offset against long-term financial receivables without collateral, the economic substance of which is comprised of part of the investor's net investment in the associate. Continuing losses are not recognized, unless the Group has an obligation to cover the losses incurred by the associate. The equity method is applied until such time when the Group no longer has significant influence.
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| At the beginning of the year | 3,051 | 6,129 |
| Acquisitions | 112 | 82 |
| Divestments | – | –2,832 |
| Reclassification | –1 | – |
| Payment of escrow | – | –1,047 |
| Share of results of associates | 360 | 903 |
| Exchange rate differences, etc. | –186 | –184 |
| BS Carrying amount at year-end | 3,336 | 3,051 |
Hi3G Holdings AB, Stockholm, 556619-6647
3 Scandinavia is an operator providing mobile voice and broadband services in Sweden and Denmark. Investor's share of votes are 40 percent and the investment is included in Patricia Industries.
3 Scandinavia is consolidated using the equity method and no dividends are distributed to Investor for 2014 or 2015. However during 2015, SEK 987 m. was distributed to Patricia Industries as repayment of shareholder loans. Investor guarantees SEK 0.7 bn of 3 Scandinavia's external debt.
| Material associates | Hi3G Holdings AB | Total | |||
|---|---|---|---|---|---|
| 12/31 2015 | 12/31 2014 | 12/31 2015 12/31 2014 | |||
| Ownership capital/votes, % Net sales Profit/loss for the year Total other comprehensive income for the year |
40/40 10,831 1,221 –155 |
40/40 11,398 1,485 350 |
10,831 1,221 –155 |
11,398 1,485 350 |
|
| Total comprehensive income for the year | 1,066 | 1,835 | 1,066 | 1,835 | |
| Investor's share of total comprehensive income for the year | 426 | 734 | 426 | 734 | |
| Total share of total comprehensive income | 426 | 734 | 426 | 734 | |
| Non-material associates Share of profit/loss for the year Share of total other comprehensive income Share of total comprehensive income for the year Gains/losses from sale of shares in associates Total share of total comprehensive income Material associates Total non-current assets |
14,770 | 15,433 | –128 –124 –252 – 174 14,770 |
298 –313 –15 –1,047 –328 15,433 |
|
| Total current assets | 8,500 | 3,380 | 8,500 | 3,380 | |
| Total non-current liabilities Total current liabilities |
–6,187 –9,186 |
–8,539 –3,444 |
–6,187 –9,186 |
–8,539 –3,444 |
|
| Total net assets (100 %) | 7,896 | 6,830 | 7,896 | 6,830 | |
| Investor's share of total net assets | 3,158 | 2,732 | 3,158 | 2,732 | |
| Carrying amount of material associates Carrying amount of non-material associates |
3,158 | 2,732 | 3,158 178 |
2,732 319 |
|
| BS Carrying amount of associates at year-end valued using the equity method |
3,336 | 3,051 |
| Investor's share of | 100% of reported values of the associate | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 12/31 2015 Company, Registered office, Registration number |
Ownership capital/votes (%) |
Carrying amount1) |
Dividends received |
Net sales | Profit/loss for the year |
Other comprehensive income for the year |
Total comprehensive income for the year |
Total assets | Total liabilities |
| SEB, Stockholm, 552032-9081 | 21/21 | 40,826 | 2,167 | 44,148 | 16,581 | 2,219 | 18,800 | 2,495,964 | 2,353,166 |
| Atlas Copco, Stockholm, 556014-2720 | 17/22 | 43,100 | 1,241 | 102,161 | 11,723 | –540 | 11,183 | 103,010 | 56,260 |
| Ericsson, Stockholm, 556016-0680 | 5/22 | 14,086 | 595 | 246,920 | 13,673 | –1,311 | 12,362 | 284,363 | 136,997 |
| Electrolux, Stockholm, 556009-4178 Swedish Orphan Biovitrum AB, |
16/30 | 9,860 | 311 | 123,511 | 1,568 | –1,263 | 305 | 83,471 | 68,466 |
| Stockholm, 556038-9321 | 40/40 | 14,514 | – | 3,228 | 68 | 53 | 122 | 8,311 | 3,621 |
| Saab, Linköping, 556036-0793 | 30/40 | 8,535 | 156 | 27,186 | 1,402 | 600 | 2,002 | 35,088 | 22,176 |
| Husqvarna, Jönköping, 556000-5331 | 17/33 | 5,428 | 160 | 36,170 | 1,888 | –3 | 1,885 | 29,669 | 16,608 |
| Total participations in material associates valued at fair value |
136,350 | 4,630 | 557,742 | 45,873 | –245 | 46,659 3,039,876 | 2,657,295 |
| Investor's share of 100% of reported values of the associate |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| 12/31 2014 Company, Registered office, Registration number |
Ownership capital/votes (%) |
Carrying amount1) |
Dividends received |
Net sales | Profit/loss for the year |
Other comprehensive income for the year |
Total comprehensive income for the year |
Total assets | Total liabilities |
| SEB, Stockholm, 552032-9081 | 21/21 | 45,407 | 1,825 | 46,936 | 19,219 | 1,030 | 20,249 | 2,641,246 | 2,506,670 |
| Atlas Copco, Stockholm, 556014-2720 | 17/22 | 44,972 | 1,138 | 93,721 | 12,175 | 4,663 | 16,838 | 105,281 | 54,528 |
| Ericsson, Stockholm, 556016-0680 | 5/21 | 15,807 | 525 | 227,983 | 11,143 | 1,566 | 12,709 | 293,558 | 148,249 |
| Electrolux, Stockholm, 556009-4178 | 15/30 | 10,952 | 311 | 112,143 | 2,242 | 1,681 | 3,923 | 85,688 | 69,220 |
| Swedish Orphan Biovitrum AB, | |||||||||
| Stockholm, 556038-9321 | 40/40 | 8,532 | – | 2,607 | –268 | 5 | –263 | 6,371 | 1,848 |
| Saab, Linköping, 556036-0793 | 30/40 | 6,624 | 148 | 23,527 | 1,168 | –1,320 | –152 | 29,556 | 18,183 |
| Husqvarna, Jönköping, 556000-5331 | 17/31 | 5,598 | 146 | 32,838 | 824 | 796 | 1,620 | 29,176 | 17,088 |
| Total participations in material associates valued at fair value |
137,892 | 4,093 | 539,755 | 46,503 | 8,421 | 54,924 | 3,190,876 | 2,815,786 |
1) Carrying amount for associates valued at fair value, equals the quoted market price for the investment.
Financial income and financial expenses consists mainly of interest, exchange rate differences on financial items and changes in the value of financial investments, liabilities and derivatives used to finance operations.
Interest is calculated using the effective interest rate method. The effective interest rate is the rate that discounts estimated future payments or receipts throughout the expected life of the financial instrument to the net carrying amount of the financial asset or liability. Transaction costs, including issuing costs, are expensed at the same point in time that receivables or payables are measured at fair value through profit/loss. When valued at amortized cost, amortization takes place over the remaining life using the effective interest rate. Borrowing costs are recognized in profit/loss using the effective interest rate method except to the extent that they are directly attributable to the acquisition, construction or production of assets that take considerable time to prepare for their intended use or sale. In such cases, they are included in the acquisition cost of the asset. Costs related to unused credit facilities are recognized as interest and are amortized on a straight-line basis over the term of the facilities. Other financial items consist mainly of changes in the value of derivatives and loans that are subject to fair value hedging, and foreign currency result.
| 2015 | 2014 | |
|---|---|---|
| Interest | ||
| Interest income | 58 | 91 |
| Interest expense | –1,471 | –1,472 |
| Total interest | –1,412 | –1,381 |
| Other financial items | ||
| Changes in value, income | 218 | 15 |
| Changes in value, expenses | –10 | –123 |
| Realized results from loans/swaps | –69 | –150 |
| Exchange gain | 685 | 1,066 |
| Exchange loss | –685 | –942 |
| Other items | –200 | –274 |
| Total other financial items | –61 | –408 |
| IS Net financial items | –1,473 | –1,789 |
Other financial items consists of unrealized market value changes and realized results of financial items excluding interest. Net financial items include the changes in value attributable to long-term share-based remuneration SEK –73 m. (–64) and revaluations established with valuation techniques totaling SEK 208 m. (–108). Liabilities accounted for as hedges have been revalued by SEK 269 m. (–1,541) and the associated hedging instruments have been revalued by SEK –158 m. (1,671). Derivatives included in cash flow hedges are not recognized in the Income Statement but have affected Other Comprehensive income by SEK 184 m. (–140). For more information see note 29, Financial instruments.
The amount reported as the Group's total income tax for the year consists of current tax and deferred tax. Current tax is tax that must be paid or refunds that will be received for the current year and adjustments to current tax attributable to earlier periods. Deferred tax is based on the temporary differences between the tax base of an asset or liability and its carrying amount. Temporary differences attributable to goodwill are not recognized. Furthermore, temporary differences attributable to investments in subsidiaries or associates are not recognized unless they are expected to reverse within the foreseeable future. The valuation of deferred tax is based on the extent to which underlying assets and liabilities are expected to be realized or settled. Deferred tax is calculated using the tax rates and tax regulations that have been decided or announced at year-end. If the calculations result in a deferred tax asset, it will only be reported as such if it is probable that it will be realized.
Income taxes are reported in the Income Statement unless the underlying transaction is reported as part of Other Comprehensive income or as a component of equity. In such cases, the associated tax effect is also reported as part of Other Comprehensive income or as a component of equity.
Part of the difference between the effective tax rate and the Parent Company's tax rate that occurs upon reconciliation is due to the fact that the Parent Company is taxed in accordance with the rules that apply to industrial holding companies.
For a description of matters relating to tax contingencies, see note 30, Pledged assets and contingent liabilities.
| IS Total | –740 | 380 |
|---|---|---|
| Deferred tax expense relating to changes in temporary differences and losses carry-forward |
–361 | 705 |
| Current tax expense | –379 | –325 |
| 2015 | 2014 |
Income tax for the year in Other Comprehensive income
| 2015 | 2014 | |
|---|---|---|
| Current tax expense | –39 | 49 |
| Total | –39 | 49 |
Information about the connection between tax expense for the period and reported income before tax
| 2015 (%) | 2015 | 2014 (%) | 2014 | |
|---|---|---|---|---|
| Reported loss/profit before taxes | 18,174 | 50,308 | ||
| Tax according to applicable tax rate | 22.0 | –3,998 | 22.0 –11,070 | |
| Effect of other tax rates | ||||
| for foreign subsidiaries | –0.1 | 15 | 0.2 | –84 |
| Tax from previous years | 0.0 | –4 | 0.1 | –26 |
| Tax effect of non-taxable income | –45.7 | 8,299 | –28.9 | 14,538 |
| Tax effect status as an industrial | ||||
| holding company1) | –2.6 | 472 | –0.9 | 437 |
| Tax effect non-deductible expenses | 29.1 | –5,294 | 7.9 | –3,993 |
| Tax effect impairment of goodwill | 0.0 | –8 | – | – |
| Standard interest on | ||||
| tax allocation reserves | 0.0 | 0 | 0.0 | –2 |
| Current year loss, | ||||
| not recognized as deferred tax asset | 0.0 | –6 | 0.0 | 1 |
| Recognition and utilization of prior years | ||||
| not recognized losses carry-forward | 1.0 | –184 | –1.2 | 609 |
| Controlled foreign company taxation | 0.1 | –16 | 0.0 | –15 |
| Other | 0.1 | –16 | 0.0 | –15 |
| Reported tax expense | 4.1 | –740 | –0.8 | 380 |
1) For tax purposes, industrial holding companies may deduct the dividend approved at the Annual General Meeting.
Deferred taxes refer to the following assets and liabilities
| Deferred tax asset | Deferred tax liability | Net | ||||
|---|---|---|---|---|---|---|
| 12/31 2015 | 12/31 2014 | 12/31 2015 | 12/31 2014 | 12/31 2015 | 12/31 2014 | |
| Intangible assets | 44 | 42 | –2,815 | –2,859 | –2,771 | –2,817 |
| Property, plant and equipment | 7 | 3 | –568 | –468 | –561 | –465 |
| Financial assets | 0 | 0 | –472 | –200 | –472 | –200 |
| Inventory | 145 | 140 | – | 0 | 145 | 140 |
| Interest-bearing liabilities | 8 | 8 | – | 0 | 8 | 8 |
| Pension provisions | 219 | 206 | –11 | – | 208 | 206 |
| Provisions | 28 | 30 | –1 | –3 | 27 | 27 |
| Losses carry-forward | 667 | 744 | 0 | – | 667 | 744 |
| Tax allocation reserves | – | – | –90 | –83 | –90 | –83 |
| Other | 80 | 107 | –77 | –21 | 3 | 86 |
| Total deferred tax assets and liabilities | 1,198 | 1,280 | –4,034 | –3,634 | –2,836 | –2,354 |
| Net of deferred tax assets and liabilities1) | –234 | –107 | 234 | 107 | – | – |
| BS Net deferred tax | 964 | 1,173 | –3,800 | –3,527 | –2,836 | –2,354 |
1) Deferred tax assets and tax liabilities are offset if a legal right exists for this.
Taxes relating to deductible temporary differences for which deferred tax assets have not been recognized amounted to SEK 84 m. on December 31, 2015 (83). The amount refers to unrecognized losses carry-forward and pension provisions. The amount does not include the Parent Company due to its status as an industrial holding company for tax purposes.
Change in deferred taxes related to temporary differences and losses carry-forward
| 12/31 2015 | Amount at the beginning of the year |
Business combinations |
Recognized in the Income Statement |
Recognized in Other Comprehensive income |
Amount at year-end |
|---|---|---|---|---|---|
| Intangible assets | –2,817 | –98 | 111 | 33 | –2,771 |
| Property, plant and equipment | –465 | –60 | –33 | –3 | –561 |
| Financial assets | –200 | 0 | –261 | –11 | –472 |
| Inventory | 140 | –10 | 11 | 3 | 145 |
| Interest-bearing liabilities | 8 | – | 0 | – | 8 |
| Pension provisions | 206 | 4 | 7 | –9 | 208 |
| Provisions | 27 | –3 | 4 | –1 | 27 |
| Losses carry-forward | 744 | 93 | –148 | –22 | 667 |
| Tax allocation reserves | –83 | –1 | –6 | – | –90 |
| Other | 86 | –4 | –46 | –36 | 3 |
| Total | –2,354 | –79 | –361 | –46 | –2,836 |
| 12/31 2014 | Amount at the beginning of the year |
Business combinations |
Recognized in the Income Statement |
Recognized in Other Comprehensive income |
Amount at year-end |
|---|---|---|---|---|---|
| Intangible assets | –2,867 | –109 | 289 | –130 | –2,817 |
| Property, plant and equipment | –347 | –76 | –19 | –23 | –465 |
| Financial assets | –93 | – | –78 | –29 | –200 |
| Inventory | 107 | – | 22 | 11 | 140 |
| Interest-bearing liabilities | 0 | – | 8 | – | 8 |
| Pension provisions | 162 | – | 11 | 33 | 206 |
| Provisions | 11 | – | 16 | 0 | 27 |
| Losses carry-forward | 301 | – | 409 | 34 | 744 |
| Tax allocation reserves | –160 | –1 | 78 | 0 | –83 |
| Other | 90 | – | –31 | 27 | 86 |
| Total | –2,796 | –186 | 705 | –77 | –2,354 |
The calculation of basic earnings per share is based on the profit/loss for the year attributable to shareholders of the Parent Company and on the weighted average number of shares outstanding during the year. When calculating diluted earnings per share, the average number of shares is adjusted to take into account the effects of dilutive potential ordinary shares, originating during the reported periods from stock option and share programs that have been offered to employees. Dilutions from stock option and share programs affect the number of shares and only occur when the strike price is less than the share price. The potential ordinary shares are not viewed as dilutive if they would result in better earnings per share after dilution, which occurs when net income is negative.
| 2015 | 2014 | |
|---|---|---|
| Profit/loss for the year attributable to the holders of ordinary shares in the Parent Company, SEK m. |
17,433 | 50,656 |
| Weighted average number of ordinary shares outstanding during the year, millions |
761.8 | 761.1 |
| IS Basic earnings per share, SEK | 22.89 | 66.55 |
| Change in the number of outstanding shares, before dilution, millions |
2015 | 2014 |
| Total number of outstanding shares at beginning of the year, millions Repurchase of own shares during the year, millions Sales own shares during the year, millions |
761.4 0.0 0.5 |
760.9 0.0 0.5 |
| Total number of outstanding shares at year-end, millions |
761.9 | 761.4 |
| Diluted earnings per share | ||
| 2015 | 2014 | |
| Profit for the year attributable to the holders of ordinary shares in the Parent Company, diluted, SEK m. |
17,433 | 50,656 |
| Weighted average number of outstanding ordinary shares, millions |
761.8 | 761.1 |
| Effect of issued: Employee share and stock option programs, millions |
2.1 | 1.7 |
| Number of shares used for the calculation of diluted earnings per share, millions |
763.8 | 762.9 |
| IS Diluted earnings per share, SEK | 22.82 | 66.40 |
Outstanding options and shares in long-term share-based programs are to be considered dilutive only if earnings per share was less after than before dilution. Some options are out of money due to a lower average share price (SEK 318.32) compared to exercise price and potential value per option to be expensed in accordance to IFRS 2. Finally there are Performance Shares for which performance terms and conditions are to be met before they can be dilutive. There have been no changes in the number of outstanding shares after the balance sheet date. See note 9, Employees and personnel costs, for exercise price and a description of performance terms and conditions.
Intangible assets, except for goodwill and trademarks with indefinite life, are reported at cost after a deduction for accumulated amortization or any impairment losses. Goodwill and trademarks have an indefinite life and are reported at cost after any impairment losses.
Goodwill arises when the acquisition cost in a business combination exceeds the fair value of acquired assets and liabilities according to the purchase price allocation.
Trademarks are valued as part of the fair value of businesses acquired from a third party. The trademark must have long-term value and it must be possible to sell it separately. Otherwise, the trademark may arise through a contract or legal rights.
Costs attributable to the development of qualifying assets are capitalized as a component of the asset's acquisition cost. An internally generated intangible asset is reported by the Group only if all of the following apply; it is possible to identify the asset that was created, it is both technically and financially feasible to complete the asset, there is both intent and ability to use the asset, it is likely that the asset will generate future economic benefits and it is possible to calculate the expenses in a reliable way. Amortization of the asset begins as soon as it is put into use. All other expenditure is immediately recognized in the Income Statement.
Proprietary technology consists of assets such as patents and licenses and is valued as part of the fair value of acquired businesses.
Customer contracts and relations are valued as part of the fair value of acquired businesses (less any amortization or impairment losses). The useful life of these assets are sometimes long, which reflects the long-term nature of the underlying business. Customer contracts and relations are based on the period of time over which net payments are expected to be received from the contract, as well as legal and financial factors.
Costs for software intended for own administrative use are recognized as an asset in the Balance Sheet when the costs are expected to generate future economic benefits in the form of more efficient processes. Capitalized expenditure for software is amortized from the date it became available for use.
Amortizations are made linearly over the asset's estimated useful life. Goodwill and trademarks have an indefinite useful life and are not amortized.
| Estimated useful lives: | |
|---|---|
| Capitalized development expenditure | 3-8 years |
| Proprietary technology | 5-20 years |
| Customer contracts and relations | 3-30 years |
| Software and other | 3-5 years |
The recoverable amount of an asset is calculated whenever there is an indication of impairment. The recoverable amount is calculated once per year or more often if there are any indications of impairment for goodwill, trademarks and other intangible assets with an indefinite useful life and intangible assets that are not yet available for use. The recoverable amount is the higher of the fair value less selling expenses and the value-in-use. When determining the value-in-use, future cash flows are discounted using a discount rate that takes into account the risk-free interest rate and risk associated with the specific asset. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The loss is reported in the Income Statement.
| 12/31 2015 | Goodwill | Trademarks | Capitalized development expenditure |
Proprietary technology |
Customer contracts and relations |
Software and other |
Total |
|---|---|---|---|---|---|---|---|
| Accumulated costs | |||||||
| Opening balance | 28,357 | 6,708 | 595 | 1,997 | 6,456 | 404 | 44,517 |
| Business combinations | 2,734 | 318 | 30 | 59 | 1,431 | 4,572 | |
| Internally generated intangible assets | 110 | 6 | 116 | ||||
| Acquisitions | 0 | 1 | 44 | 45 | |||
| Disposals | –80 | –54 | –33 | –6 | –23 | –196 | |
| Reclassifications | 5 | 23 | 28 | ||||
| Exchange rate differences | –1,009 | –208 | 0 | –69 | –141 | 2 | –1,425 |
| At year-end | 30,002 | 6,818 | 686 | 1,954 | 7,741 | 456 | 47,657 |
| Accumulated amortization and impairment losses | |||||||
| Opening balance | –940 | 0 | –128 | –438 | –4,099 | –227 | –5,832 |
| Disposals | 0 | 4 | 19 | 23 | |||
| Amortizations | –6 | –88 | –112 | –283 | –68 | –557 | |
| Reclassifications | –1 | –1 | |||||
| Exchange rate differences | –1 | 0 | 18 | 140 | 1 | 158 | |
| At year-end | –940 | –7 | –216 | –528 | –4,242 | –276 | –6,209 |
| BS Carrying amount at year-end | 29,062 | 6,811 | 470 | 1,426 | 3,499 | 180 | 41,448 |
| Allocation of amortization and impairment in Income Statement |
|||||||
| Costs of goods and services sold | 0 | 0 | –120 | –14 | –134 | ||
| Sales and marketing costs | –71 | –30 | 0 | –101 | |||
| Administrative, research and development | |||||||
| and other operating costs | –6 | –88 | –41 | –133 | –50 | –318 | |
| Management costs | –4 | –4 | |||||
| Total | –6 | –88 | –112 | –283 | –68 | –557 |
| 12/31 2014 | Goodwill | Trademarks | Capitalized development expenditure |
Proprietary technology |
Customer contracts and relations |
Software and other |
Total |
|---|---|---|---|---|---|---|---|
| Accumulated costs | |||||||
| Opening balance | 26,759 | 6,357 | 515 | 1,911 | 5,872 | 340 | 41,754 |
| Business combinations | 246 | 37 | 353 | 1 | 637 | ||
| Internally generated intangible assets | 130 | 130 | |||||
| Acquisitions | 69 | 0 | 47 | 116 | |||
| Disposals | –39 | –9 | –48 | ||||
| Reclassifications | –12 | –36 | 12 | 21 | –15 | ||
| Exchange rate differences | 1,283 | 314 | 1 | 122 | 219 | 4 | 1,943 |
| At year-end | 28,357 | 6,708 | 595 | 1,997 | 6,456 | 404 | 44,517 |
| Accumulated amortization and impairment losses | |||||||
| Opening balance | –940 | 0 | –97 | –318 | –2,865 | –185 | –4,405 |
| Disposals | 26 | 8 | 34 | ||||
| Impairment loss | –49 | –49 | |||||
| Amortizations | 0 | –56 | –106 | –993 | –62 | –1,217 | |
| Reclassifications | 0 | 11 | –11 | 13 | 13 | ||
| Exchange rate differences | –1 | –25 | –181 | –1 | –208 | ||
| At year-end | –940 | 0 | –128 | –438 | –4,099 | –227 | –5,832 |
| BS Carrying amount at year-end | 27,417 | 6,708 | 467 | 1,559 | 2,357 | 177 | 38,685 |
| Allocation of amortization and impairment in Income Statement |
|||||||
| Costs of goods and services sold | 0 | –167 | –12 | –179 | |||
| Sales and marketing costs | –69 | –759 | –4 | –832 | |||
| Administrative, research and development | |||||||
| and other operating costs | –56 | –37 | –116 | –42 | –251 | ||
| Management costs | –4 | –4 | |||||
| Total | 0 | –56 | –106 | –1,042 | –62 | –1,266 |
Goodwill and other intangible assets with an indefinite useful life originating from acquisitions are divided between four cash-generating entities; Mölnlycke Health Care, Aleris, Permobil and BraunAbility. Investor makes regular tests to determine that the carrying values of these assets do not exceed the value in use. The method for impairment testing is based on a discounted cash flow forecast to determine the value in use. Various assumptions are used to suit the different companies and its business. The calculated value in use is then compared to the carrying amount.
Value in use is calculated as Investors share of present value of future estimated cash flow generated from the subsidiaries. The estimate of future cash flows is based upon reasonable assumptions and best knowledge of the company and future economic conditions. The base for the estimate is an assumption of the future growth rate, budgets and forecasts. The chosen discount factor reflects specific risks that are assignable to the asset and marketable assessments of the time value of money. The base for calculation of the discount rate is the company's weighted average cost of capital, where the assumption of the risk free interest rate, market risk premium, leverage, cost of debt and relevant tax rate are important components. The ambition is to use a discount rate which is not dependent on short term market sentiment, but instead reflects a long-term cost of capital corresponding to Investor's long term investment horizon.
Impairment testing of goodwill and trade names for Mölnlycke is based on a calculation of value in use in which assumptions of future growth and operating margins are important components. The estimated value is based on the budget for 2016 and financial forecasts until year-end 2020. A growth rate of 2.1 percent has been used to extrapolate the cash flows for the years beyond 2020 (2.2), which is considered reasonable given the company's historical growth, geographical positioning and industry fundamentals. Estimated cash flows have been discounted using a discount rate of 10.1 percent pre tax (10.0). No impairment requirement has been identified since the carrying value is lower than calculated value in use. The assessment is that no reasonably possible change in any key assumption will lead to a calculated recoverable amount that is lower than the carrying amount. Trademarks of SEK 4,961 m. is included in intangible assets (5,167). Mölnlycke's trademarks, which have a long history, have an indefinite useful life as Mölnlycke has a strong position on all its core markets and will continue to actively use them, expecting continued growth with increased net profit margins. Consolidated goodwill attributable to Mölnlycke amounts to SEK 19,938 m. (20,842).
Impairment testing of goodwill for Aleris is based on a value in use calculation in which assumptions of future growth rate and operating margins are important components. The estimated value in use is based on the budget for 2016 and financial forecasts until year-end 2020. A growth rate of 1.6 percent has been used to extrapolate the cash flows for the years beyond 2020 (2.8), which is based on the company's historical growth and the sector's long term growth drivers, such as demographics and lifestyle aspects. Estimated cash flows have been discounted using a discount rate of 10.2 percent pre tax (9.6). No impairment requirements has been identified since the carrying value is lower than calculated value in use. However, a reasonably possible change in any key assumption indicate a calculated recoverable amount which is lower than the carrying amount. Consolidated goodwill attributable to Aleris amounts to SEK 4,803 m. (4,240).
Impairment testing of goodwill for Permobil is based on a calculation of value in use in which assumptions of future growth and operating margins are important components. The estimated value is based on the budget for 2016 and financial forecasts until year-end 2020. A growth rate of 1.7 percent has been used to extrapolate the cash flows for the years beyond 2020 (2.4), which is considered reasonable given the company's historical growth, the market structure and industry fundamentals. Estimated cash flows have been discounted using a discount rate of 10.6 percent pre tax (10.5). No impairment requirement has been identified since the carrying value is lower than calculated value in use. The assessment is that no reasonably possible change in any key assumption will lead to a calculated recoverable amount that is lower than the carrying amount. Consolidated goodwill attributable to Permobil amounts to SEK 2,891 m. (2,229).
Impairment testing of goodwill for newly acquired BraunAbility is based on a calculation of value in use in which assumptions of future growth and operating margins are important components. The estimated value is based on the budget for 2016 and financial forecasts until year-end 2020. A growth rate of 2.2 percent has been used to extrapolate the cash flows for the years beyond 2020 (–), which is considered reasonable given the company's historical growth, the underlying market fundamentals and the companiy´s market position. Estimated cash flows have been discounted using a discount rate of 11.2 percent pre tax (–). No impairment requirement has been identified since the carrying value is lower than calculated value in use. Consolidated goodwill attributable to BraunAbility amounts to SEK 1,325 (–) m.
Note 17. Buildings and land
The majority of owner occupied property within the Group is reported according to the revaluation model less accumulated depreciation and revaluation adjustments. Industrial property is reported at cost less accumulated depreciation and any impairment losses.
Owner-occupied property has been categorized based on their characteristics: Hotel property Revaluation model
Care property Revaluation model Office property Revaluation model Industrial property Cost model
Cost includes the original purchase price and directly attributable costs, including borrowing costs, required to bring the asset to working condition for its intended use. Property consist of parts with different useful lives (such as the framework, roof and basic installations), the parts are treated as separate components of property.
Subsequent expenditure is capitalized only if it is probable that future economic benefits associated with the asset will flow to the company and if the cost can be measured reliably. All other subsequent costs are expensed in the period they arise.
Any undepreciated carrying amount of replaced components, or parts of components, are retired and expensed in connection with the exchange. Repairs are expensed as incurred.
Owner-occupied property is recognized according to the revaluation model less accumulated depreciation and revaluation adjustments. Property is revalued with sufficient regularity to ensure that the carrying amount does not differ materially from the amount established as fair value on the balance sheet date. When an asset's carrying amount is increased as a result of a revaluation, the increase is reported in Other Comprehensive income and accumulated in a separate component of equity, called the Revaluation Reserve. When an asset's carrying amount is decreased as a result of a revaluation and there is a balance in the revaluation reserve attributable to the asset, the decrease in value is recognized in Other Comprehensive income and the amount in the revaluation reserve is also decreased. The difference between depreciation based on the revalued amount, and depreciation based on the original cost, is transferred from the revaluation reserve to retained earnings.
At the time of a revaluation the accumulated depreciation is recalculated in proportion to the change in the asset's increased cost so that the carrying amount of the asset (the net of the adjusted cost and adjusted depreciation) after revaluation corresponds to the revalued amount. When an asset is divested, the value attributable to the asset in the revaluation reserve is transferred to retained earnings, without having any effect on profit/loss or Other Comprehensive income.
Depreciation is made linearly over the asset's estimated useful life. Land is not depreciated.
Estimated useful lives: Frameworks 25-100 years Land improvements 20-40 years Building components 5-40 years
The recoverable amount of an asset is calculated whenever there is an indication of impairment. An impairment loss is recognized in the income statement if the carrying amount exceeds the recoverable amount and there is no value relating to the asset to release from the revaluation reserve.
Owner-occupied property recognized with the revaluation model is classified in level 3, according to the definition in IFRS 13. Property valuations are regularly conducted by external appraisers. Fair value has been determined based on current market prices for comparable property and by using a return model based on a calculation of the present value of future cash flows.
The discount rate has been estimated at 5.5-6.95 percent and consists of an estimated long-term inflation rate of 2 percent, a risk-free long-term real rate of interest and a risk premium. Payments for operations and maintenance have been assessed following the rate of inflation during the calculation period.
The residual value has been assessed by the long-term, normalized net operating income for the year after the calculation period divided by an estimated long-term yield. The long-term yield requirement has been assessed to be in a span of 4.15 percent to 8.0 percent. Value determined on an earnings basis nominal development during the calculation period will then be around 2 percent.
All valuations in level 3 are based on assumptions and judgments that management consider to be reasonable based on the circumstances prevailing at the time. Changes in assumptions may result in adjustments to reported values and actual outcome may differ from the estimates and judgments that were made. The valuation of owner-occupied property recognized with the revaluation model is dependent on the level of the discount rate and the long-term yield requirement. A 0.5 percent change of the discount rate would have an effect on the value of the owner-occupied property recognized with the revaluation model of approximately SEK 132 m. Respectively a 0.5 percent change of the long-term yield requirement would have an effect on the value of approximately SEK 245 m.
The majority of the properties was revalued during 2015. The Hotel properties and some Office properties have been revalued by December 31, 2015.
| 12/31 2015 | 12/31 2014 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revaluation model | Cost model | Revaluation model | Cost model | |||||||
| Buildings | Land | Buildings | Land | Total | Buildings | Land | Buildings | Land | Total | |
| Revalued cost | ||||||||||
| Opening balance | 2,235 | 1,186 | 854 | 58 | 4,333 | 2,129 | 628 | 676 | 50 | 3,483 |
| Business Combinations | 74 | 4 | 78 | 79 | 37 | 38 | 154 | |||
| Other acquisitions | 127 | 12 | 69 | 23 | 231 | 258 | 4 | 49 | 0 | 311 |
| Sales and disposals | –1 | 0 | –1 | –6 | –1 | –1 | –8 | |||
| Reclassifications | 2 | –9 | 125 | 118 | –278 | 269 | 6 | –3 | ||
| Effect of revaluations on revaluation reserve | 140 | 121 | 261 | 53 | 249 | 302 | ||||
| Exchange rate differences | 0 | –18 | 1 | –17 | 86 | 8 | 94 | |||
| At year-end | 2,503 | 1,310 | 1,104 | 86 | 5,003 | 2,235 | 1,186 | 854 | 58 | 4,333 |
| Accumulated depreciation | ||||||||||
| Opening balance | –597 | 0 | –159 | 0 | –756 | –546 | 0 | –118 | 0 | –664 |
| Sales and disposals | 0 | 0 | 2 | 2 | ||||||
| Depreciation for the year | –82 | 0 | –34 | 0 | –116 | –60 | –1 | –28 | 0 | –89 |
| Reclassifications | 3 | –20 | –17 | 9 | 9 | |||||
| Exchange rate differences | 9 | 9 | –15 | 0 | –15 | |||||
| At year-end | –676 | 0 | –204 | 0 | –880 | –597 | –1 | –159 | 0 | –757 |
| BS Carrying amount at year-end | 1,827 | 1,310 | 900 | 86 | 4,123 | 1,638 | 1,185 | 695 | 58 | 3,576 |
| Carrying amount if acquisition cost | ||||||||||
| model had been used | 1,145 | 356 | 900 | 86 | 2,487 | 1,067 | 351 | 695 | 58 | 2,171 |
Note 18. Long-term receivables and other receivables
1) Refers to shareholder loans including capitalized interest.
Accounting policies
Note 19. Inventories
Inventory is valued at the lower of net realizable value (NRV) and cost. The cost of finished goods and work-in-progress includes a reasonable portion of the indirect costs based on normal capacity utilization. The cost of inventories is calculated using the FIFO (first in, first out) method.
Net realizable value is based on the estimated sales price in the ordinary course of business less the estimated costs to bring about a sale.
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Raw materials and consumables | 1,167 | 561 |
| Work in progress | 86 | 97 |
| Finished goods | 1,215 | 1,089 |
| Supplies | 41 | 38 |
| BS Total | 2,509 | 1,785 |
The Group's inventories are valued at cost.
Items of machinery and equipment are reported at cost after a deduction for accumulated depreciation and any impairment losses.
Depreciation is made linearly over the assets estimated useful life: Machinery 3-15 years Furniture, fixtures and fittings 3-10 years Expenditure on leased property 7-20 years or over the remaining lease period if shorter
| 12/31 2015 | 12/31 2014 | |||||||
|---|---|---|---|---|---|---|---|---|
| Machinery | Furniture, fixtures and fittings |
Expenditure on leased property |
Total | Machinery | Furniture, fixtures and fittings |
Expenditure on leased property |
Total | |
| Accumulated costs | ||||||||
| Opening balance | 1,167 | 1,938 | 396 | 3,501 | 927 | 1,509 | 327 | 2,763 |
| Business combinations | 64 | 103 | 49 | 216 | 0 | 23 | – | 23 |
| Other acquisitions | 69 | 572 | 28 | 669 | 77 | 438 | 51 | 566 |
| Sales and disposals | –12 | –172 | –29 | –213 | –3 | –122 | –8 | –133 |
| Reclassifications | 108 | –207 | –36 | –135 | 59 | –8 | 20 | 71 |
| Exchange rate differences | –58 | –36 | –15 | –109 | 107 | 98 | 6 | 211 |
| At year-end | 1,338 | 2,198 | 393 | 3,929 | 1,167 | 1,938 | 396 | 3,501 |
| Accumulated depreciation and impairment | ||||||||
| Opening balance | –367 | –781 | –228 | –1,376 | –255 | –477 | –184 | –916 |
| Sales and disposals | 7 | 144 | 22 | 173 | 2 | 73 | 7 | 82 |
| Reclassifications | – | 2 | – | 2 | 7 | –69 | –15 | –77 |
| Depreciation | –115 | –300 | –35 | –450 | –98 | –257 | –33 | –388 |
| Exchange rate differences | 43 | 30 | 9 | 82 | –23 | –51 | –3 | –77 |
| At year-end | –432 | –905 | –232 | –1,569 | –367 | –781 | –228 | –1,376 |
| BS Carrying amount at year-end | 906 | 1,293 | 161 | 2,360 | 800 | 1,157 | 168 | 2,125 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Interest | 470 | 410 |
| Other financial receivables | 4 | 13 |
| Other | 461 | 346 |
| BS Total | 935 | 769 |
Other financial investments and short-term investments consists of interestbearing securities which are recognized at fair value through profit/loss. Short-term investments with a maturity of three months or less from the
date of acquisition have been classified as cash and cash equivalents provided that:
• there is an insignificant risk of changes in value
• they are readily convertible to cash
For more information regarding accounting policies, see note 29, Financial instruments.
Excess liquidity is to be invested for maximum return within the framework of given limits for foreign exchange, interest rate, credit and liquidity risks, see note 3, Risks.
| BS Total | 13,443 | 857 | 1,970 | 3,283 | 19,553 |
|---|---|---|---|---|---|
| Other financial investments | 3,283 | 3,283 | |||
| Cash and bank | 7,168 | 7,168 | |||
| Short-term investments | 6,275 | 857 | 1,970 | 9,102 | |
| 12/31 2014 | 0–3 months |
4–6 months |
7–12 months |
13–24 months |
Total carrying amount |
| BS Total | 13,180 | 423 | 1,458 | 6,665 | 21,726 |
| Cash and bank Other financial investments |
7,097 | 6,665 | 7,097 6,665 |
||
| Short-term investments | 6,083 | 423 | 1,458 | 7,964 | |
| 12/31 2015 | 0–3 months |
4–6 months |
7–12 months |
13–24 months |
Total carrying amount |
Of the total carrying amount, SEK 19,062 m. is available for investments (15,598).
Share capital in the Parent Company.
Refers to equity contributed by shareholders. It also includes premiums paid in connection with new stock issues.
The translation reserve includes all foreign exchange differences arising on the translation of financial statements from foreign operations reported in a currency different from the reporting currency of the Group. The translation reserve also comprises exchange rate differences arising in conjunction with the translation of swap contracts reported as hedging instruments of a net investment in a foreign operation. Changes in translation reserve had no impact on reported tax.
The revaluation reserve includes changes in value relating to owner-occupied property and related taxes.
The hedging reserve includes the effective component of the accumulated net change of fair value and related taxes, of an instrument used for a cash flow hedge, relating to hedging transactions not yet accounted for in the Profit/ loss.
| Specification of reserves in equity | 12/31 2015 12/31 2014 | |
|---|---|---|
| Translation reserve | ||
| Opening balance | 1,416 | –589 |
| Translation differences for the year, subsidiaries | –202 | 2,191 |
| Change for the year, associates | –62 | –186 |
| 1,152 | 1,416 | |
| Revaluation reserve | ||
| Opening balance | 768 | 537 |
| Revaluation of non-current assets for the year | 244 | 305 |
| Tax relating to revaluations for the year | –54 | –53 |
| Release of revaluation reserve due to | ||
| depreciation of revalued amount | –22 | –21 |
| 936 | 768 | |
| Hedging reserve | ||
| Opening balance | 298 | 413 |
| Cash flow hedges: | ||
| Change in fair value of cash flow hedges for the year | 170 | –90 |
| Change in Income Statement | 12 | –49 |
| Tax relating to changes in fair value of | ||
| cash flow hedges for the year | –38 | 20 |
| Change for the year, associates | –2 | 4 |
| 440 | 298 | |
| Total reserves | ||
| Opening balance | 2,482 | 361 |
| Change in reserves for the year: | ||
| Translation reserve | –264 | 2,005 |
| Revaluation reserve | 168 | 231 |
| Hedging reserve | 142 | –115 |
| Carrying amount at year-end | 2,528 | 2,482 |
Repurchased shares included in retained earnings under equity, including profit/loss for the year
| Number of shares | Amounts affecting equity, SEK m. |
|||
|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | |
| Opening balance, repurchased own shares Sales/repurchases for the year |
5,796,960 –526,638 |
6,293,360 –496,400 |
–895 571) |
–956 611) |
| Balance at year-end, repurchased own shares |
5,270,322 | 5,796,960 | –838 | –895 |
1) In connection with transfer of shares and options within Investors' long-term variable remuneration program, the payment of strike price has had a positive effect on equity.
Repurchased shares include the cost of acquiring own shares held by the Parent Company. On December 31, 2015, the Group held 5,270,322 of its own shares (5,796,960). Repurchases of own shares are reported as a deduction from equity. Cash proceeds from the sale of such equity instruments are reported as an increase in unrestricted equity. Any transaction costs are recognized directly under equity.
After the balance sheet date, the Board of Directors proposed a dividend for 2015 amounting to SEK 7,672 m. (SEK 10.00 per share). The dividend is subject to the approval of the Annual General Meeting on May 10, 2016. The dividend for 2014 amounted to SEK 6,856 m. (SEK 9.00 per share) and the dividend for 2013 amounted to 6,089 m. (SEK 8.00 per share). Dividends paid out per share for 2014 and 2013 correspond to proposed dividend per share. Dividends are recognized as a liability as soon as the Annual General Meeting has approved the dividend for the year.
In order to be able to act upon business opportunities at any point in time, it is vital for Investor to maintain financial flexibility. The Group's goal is to have leverage (net debt as a percentage of total assets) of 5-10 percent over an economic cycle. The ceiling for Investor's leverage has been set at a maximum of 25 percent, which may only be exceeded on a short-term basis. Investors' leverage at the beginning of the year was 7.3 percent and at the end of the period 5.5 percent. The change is mainly due to cash flows arising from dividends from Listed Core Investments, investments in ABB, proceeds from EQT, the divestment of the remaining interest in Lindorff, the aquistion of BraunAbility and dividends paid to shareholders. For more information, see the Administration Report page 6-7.
The Group's total shareholder return objective (sum of the share price change and dividend) is to exceed the risk-free interest rate plus a risk premium, i.e. 8-9 percent. The total shareholder return for 2015 was 13 percent. Capital is defined as total recognized equity.
| Equity | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Attributable to shareholders of the Parent Company | 271,801 | 260,963 |
| Attributable to non-controlling interest | 176 | 30 |
| BS Total | 271,977 | 260,993 |
Non-controlling interest are presented in the equity separately from the equity attributable to the shareholders of the Parent Company. In the Consolidated Income Statement and Consolidated Statement of Comprehensive Income, the part attributable to the non-controlling interest are included and separately disclosed in conjunction with the statements.
For more information regarding non-controlling interests, see note P5, Participation in Group companies.
Agreements with non-controlling interests exists, that obliges Investor to purchase shares in subsidiaries if the counterparty wants to divest them. The agreement, put option, is a contract to purchase the group's own equity instruments and thus gives rise to a financial liability. The liability is included in Other long-term liabilities, see note 27, Other long-term and short-term liabilities. When the redemption amount corresponds to the fair value of the shares at the time of the divestment, the put option is valued to the present value of the shares part of the estimated fair value for the subsidiary. At remeasurement of the liability, the change of value is recognized in net financial items.
At initial recognition of the put option as a liability, equity is reduced by an amount corresponding to its fair value. Firstly equity attributable to the noncontrolling interests are reduced and if this is insufficient in retained earnings attributable to shareholders of the Parent Company.
For more information relating to accounting policies for financial liabilities see note 29, Financial instruments.
In the consolidated financial statements, leases are classified as either finance or operating leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership to the lessee. Assets that are classified as financial leases are reported as assets in the Consolidated Balance Sheet. Obligations to pay future lease payments are reported as a liability. Leased assets are depreciated according to plan, whereas the leasing payments are apportioned between the finance charge and a reduction of the outstanding liability.
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Long-term interest-bearing liabilities | ||
| Bond loans | 42,758 | 37,180 |
| Bank loans | 6,465 | 12,981 |
| Interest rate derivatives with negative value | 756 | 796 |
| Finance lease liabilities | 120 | 121 |
| Other long-term interest-bearing liabilities | 20 | 18 |
| BS Total | 50,120 | 51,096 |
| Short-term interest-bearing liabilities | ||
| Bond loans | 2,247 | – |
| Bank loans | 42 | 134 |
| Interest rate derivatives with negative value | 92 | 53 |
| Finance lease liabilities | 18 | 22 |
| Other short-term interest-bearing liabilities | 13 | 31 |
| BS Total | 2,413 | 240 |
| Total interest-bearing liabilities and derivatives | 52,532 | 51,336 |
| Long-term interest rate derivatives positive value | –1,894 | –2,053 |
| Short-term interest rate derivatives positive value | –16 | – |
| Total | –1,909 | –2,053 |
| Total interest-bearing liabilities and derivatives | 50,623 | 49,283 |
| Maturity, 12/31 2015 | Future minimum lease payments |
Interest | Present value of mini mum lease payments |
|---|---|---|---|
| Less than 1 year from | |||
| balance sheet date | 25 | –7 | 18 |
| 1-5 years from balance sheet date | 52 | –21 | 31 |
| More than 5 years from | |||
| balance sheet date | 122 | –32 | 89 |
| Total | 199 | –60 | 138 |
| Maturity, 12/31 2014 | |||
| Less than 1 year from | |||
| balance sheet date | 30 | –7 | 22 |
| 1-5 years from balance sheet date | 54 | –21 | 33 |
| More than 5 years from | |||
| balance sheet date | 122 | –35 | 88 |
| Total | 206 | –63 | 143 |
Defined contribution plans
Defined contribution plans are plans under which the company's obligations are limited to the premium of fixed contributions. In such cases, the size of the employee's pension depends on the contributions the company makes to the plan, or to an insurance company, along with the return that the capital contributions generate. Consequently, the employee carries both the actuarial risk (i.e. the risk that benefits will be lower than expected) and the investment risk (i.e. the risk that invested assets will be insufficient for providing the expected benefits). The company's obligations to pay contributions to defined contribution plans are recognized as an expense in the Income Statement at the rate that employees provide services to the company during a period.
In defined benefit pension plans, payments are made to employees and former employees based on their salary at the time of retirement and the number of years of service. The Group carries the risk for making the payments. The net obligation under defined benefit plans is measured separately for each plan, by estimating the future benefits earned, including taxes, by the employees, in current and prior periods.
This benefit is discounted to a present value with a discount rate representing the closing day rate on high quality corporate bonds, mortgage backed bonds or government bonds with a life corresponding to the duration of the pension obligations. The measurement is made by a qualified actuary using the projected unit credit method. The fair value of any plan assets is calculated on the closing date.
When determining the present value of the obligation and the fair value of plan assets, actuarial gains and losses may arise. This is either because the actual outcome differs from the previous assumption or because the assumptions have changed. Remeasurements of defined benefit obligations are recognized as income or expenses in other comprehensive income.
The value presented in the Balance Sheet for pensions and similar commitments corresponds to the obligation's present value at year-end, less the fair value of plan assets. When the calculation results in a Group asset, the carrying amount of the asset is limited to the present value of future repayments from the plan or decreased future payments to the plan (asset ceiling).
The net of the interest on pension liabilities and the yield on adherent management assets is recognized in net financial items. Other components are recognized in operating profit/loss.
The defined benefit obligation is calculated using discount rates with references to, for example, corporate bond yields. If assets in funded plans under perform this yield, it will increase the amount of deficit. Allocation of assets among different categories is important to reduce the portfolio risk. The time horizon for the investments is also an important factor.
A decrease in corporate bond yields will increase the value of the defined benefit obligation for accounting purposes.
The majority of the obligations are to provide benefits for the life of the plan member, so increases in life expectancy will result in an increase in the defined benefit obligation.
The majority of the obligations are to provide benefits for plan members based on annual salaries. If salaries increase faster than has been assumed, this will result in an increase in the defined benefit obligation.
Employees in Group companies have various kinds of pension benefits. These benefits are either defined contribution plans or defined benefit plans. In Sweden the total retirement benefit package is often a mixed solution with some parts being defined contribution pension plans and others being defined benefit pension plans. Salaried employees' plans comprise of the defined benefit plan ITP and the additional defined contribution plan ITPK.
The ITP plan is secured with the insurance company Alecta. Since the information provided by Alecta is not sufficient to be able to account for as a defined benefit plan, the Alecta plan has been reported as a defined contribution plan (multi-employer plan).
The ITP plan has contracts with a premium, where benefits continue unchanged until retirement. This means that premiums can not be changed to the policyholder's or the insured's disadvantage.
The Group operates defined contribution plans in Sweden, Australia, Canada, the Czech Republic, Denmark, Finland, Malaysia and the UK. The plans imply that the Group obtains pension insurances or makes cash payments to foundations.
62 percent of the Group's defined benefit plans exist in Sweden. Other defined benefit plans exist in the U.S., Belgium, Germany, the Netherlands, Thailand, Italy, Norway, France and Austria. The plans in Belgium, the U.S. and the Netherlands are funded. In Sweden and Norway there are funded and unfunded plans and the plans in other countries are unfunded.
Components of defined benefit cost (gain –) 2015 2014 Current service cost 62 41 Past service cost and gains/losses from settlements –59 –21 Other values 2 3 Total operating cost 5 23 Net interest expense 20 21 Exchange rate differences –7 0 Other values – – Total financial cost 13 21 Components recognized in profit/loss 18 44 Remeasurement on the net defined benefit liability (gain –) 2015 2014 Return on plan assets (excl. amounts in interest income) 6 –44 Actuarial gains/losses, demographic assumptions –80 25 Actuarial gains/losses, financial assumptions –26 226 Actuarial gains/losses, experience adjustments 12 –5 Components in Other Comprehensive income –88 202
| The amount included in the consolidated Balance Sheet arising from defined benefit plans |
12/31 2015 | 12/31 2014 |
|---|---|---|
| Present value of funded or partly funded obligations Present value of unfunded obligations |
711 489 |
860 607 |
| Total present value of defined benefit obligations | 1,200 | 1,467 |
| Fair value of plan assets | –457 | –620 |
| NPV of obligations and fair value of plan assets | 743 | 847 |
| Restriction on asset ceiling recognized | – | 6 |
| BS Net liability arising from defined benefit obligations |
743 | 853 |
| Changes in the obligations for defined benefit plans | ||
|---|---|---|
| recognized during the year | 12/31 2015 | 12/31 2014 |
| Defined benefit plan obligations, opening balance | 1,467 | 1,162 |
| Current service cost | 72 | 52 |
| Interest cost | 30 | 44 |
| Remeasurement of defined benefit obligations | ||
| Actuarial gains/losses, demographic assumptions | –80 | 25 |
| Actuarial gains/losses, financial assumptions | –26 | 226 |
| Actuarial gains/losses, experience adjustments | 12 | –5 |
| Contributions to the plan from the employer | 1 | 2 |
| Past service cost and gains/losses from curtailments | –59 | –21 |
| Liabilities extinguished on settlements | –221 | 0 |
| Liabilities assumed in a business combination | 68 | – |
| Benefit paid | –21 | –45 |
| Other Exchange rate difference |
– –43 |
–1 28 |
| Obligations for defined benefit plans at year-end | 1,200 | 1,467 |
| Changes in fair value of plan assets during the year | 12/31 2015 | 12/31 2014 |
| Fair value of plan assets, opening balance | 620 | 525 |
| Interest income | 12 | 21 |
| Remeasurement of fair value plan assets | ||
| Return on plan assets (excl. amounts in interest income) | –6 | 44 |
| Contributions from the employer | 37 | 38 |
| Contributions from plan participants | 5 | 1 |
| Assets distributed on settlements | –221 | – |
| Assets acquired in a business combination | 51 | – |
| Exchange differences on foreign plans | –22 | –1 |
| Benefit paid | –10 | –17 |
| Other | –2 | –1 |
| Exchange rate difference | –7 | 10 |
| Fair value of plan assets at year-end | 457 | 620 |
| The fair value of the plan asset at the end of the reporting period for each category are as follows |
12/31 2015 | 12/31 2014 |
| 127 | 134 |
|---|---|
| 31 | 37 |
| 205 | 349 |
| 76 | 87 |
| 18 | 13 |
1) The Majority of the debt investments represents of Swedish government bonds.
2) Includes insurance contracts from countries where the liabilities are insured (the Netherlands, Belgium and Norway). There are no split of the underlying assets available.
| Changes asset ceiling, OCI | –61) | 11) |
|---|---|---|
| Interest net | 0 | 0 |
| Restriction asset ceiling, opening balance | 6 | 5 |
| Changes in restriction asset ceiling in the current year | 12/31 2015 | 12/31 2014 |
Restriction asset ceiling at year-end – 6
1) The changes of asset ceiling in current year is netted out in OCI with the actuarial gain/ losses from the present value on the obligation and the FV of the plan assets.
The Group estimates that SEK 50 m. will be paid to defined benefit plans during 2016.
Note 25. cont'd Provisions for pensions and similar obligations Note 26. Other provisions
| Assumptions for defined benefit obligations 2015 |
Sweden | Norway | Other (weighted average) |
|---|---|---|---|
| Discount rate | 3.3 | 2.5 | 2.5 |
| Future salary growth | 2.5 | 2.5 | 2.7 |
| Future pension growth | 2.0-2.5 | 1.5-2.25 | 1.2 |
| Mortality assumptions used | DUS14, PRI | K2013, K2013BE Local mortality tables | |
| Assumptions for defined benefit obligations 2014 |
Sweden | Norway | Other (weighted average) |
| Discount rate | 3.2 | 3 | 2.4 |
Future salary growth 2.5-3.0 3.25 2.9 Future pension growth 2.0-2.5 2.23-3.0 1.2 Mortality assumptions used DUS14, PRI K2013, K2013BE Local mortality tables
The discount rate has been set separately for each country by reference to market rates on high quality corporate bonds with a duration and currency that is consistent with the duration and currency of the defined benefit obligation. This may involve interpolation of bond yield curves where there is no direct match for duration or the market is not deep for matching bond durations. The market for high quality Swedish and Norwegian mortgage backed bonds is considered to be deep and thereby fulfills the requirements of high quality corporate bonds according to IAS 19. Swedish and Norwegian mortgage backed bonds have therefore served as reference when determining the discount rate used for the calculation of the defined benefit obligations in Sweden and Norway. In countries where there is no deep market for high quality corporate bonds, government bonds are used as a reference when determining the discount rate.
| Maturity profile | 0-3 year | 4-6 year | 7-15 year Over 15 year | Total | |
|---|---|---|---|---|---|
| Cash flows | 20 | 42 | 101 | 271 | 4341) |
1) Based on 78 percent of the Groups total defined benifit obligation.
The Swedish ITP plan is secured with the insurance company Alecta, which is a mutual life insurance company, owned by its customers, i.e. businesses and their employees. The company form means that any surplus in operations is returned to the customers and the insured population is responsible for any deficit. For the fiscal year the Investor Group did not have access to information that would make it possible to recognize it as a defined benefit plan. The ITP pension plan secured through insurance from Alecta is therefore recognized as a defined contribution plan. The premium for the defined benefit pension plan is calculated individually and depends on salary, pension already earned and expected remaining period of service. For 2016, the Investor Group expect to pay SEK 147 m. for premiums to Alecta. Alecta's total premiums per year for defined benefit pensions is about SEK 15 bn.
A measure of the financial strength of a mutual insurance company is the solvency margin, which shows the relationship between the assets and the total insurance undertaking. The funding ratio is based on the market value of Alecta's assets as a percentage of insurance obligations calculated using Alecta's actuarial assumptions, which do not conform to IAS 19. Alecta aims to have a solvency margin varying between 125 and 155 percent, with a target level of 140 percent. The assets that exceed the insurance undertaking are a surplus to policyholders' behalf. Surplus can be used to increase future pensions, reduce future premiums or reimbursement for already-made premium payments. The solvency margin in Alecta was 153 percent December 31, 2015.
| Defined contribution plans | 2015 | 2014 |
|---|---|---|
| Expenses for defined contribution plans | 256 | 442 |
Valuation of provision for pensions and similar obligations are estimates of present and future values. There are always uncertainty involved. Alternative assumptions will give different present values.
The sensitivity analysis below shows for example the impact of discount rate changes, from the current rate of 3.3 percent assumptions.
| Discount rate | 1 percent increase |
1 percent decrease |
|---|---|---|
| Present value of defined benefit obligations | 927 | 1,109 |
| Current service cost | 23 | 39 |
| Interest expense | 23 | 17 |
The Group reports a provision in the Balance Sheet when there is a formal or informal obligation as a result of a past event for which it is probable that an outflow of resources will be needed to settle the obligation and when a reliable estimate of the amount can be made.
A restructuring provision is recognized when the Group has a detailed, formal plan for the restructuring, and the restructuring plan has commenced or has been publicly announced.
For medical care and health care operations, a provision is made for the risk of loss if the total directly attributable costs during the entire term of the contract are expected to exceed the total revenues, including indexation. Provisions are reviewed at each balance sheet date.
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Provisions expected to be paid after more than 12 months | ||
| Reserve related to business combinations | – | 17 |
| Restructuring reserve | 1 | 21 |
| Provision for social security contributions for LTVR | 176 | 130 |
| Other | 135 | 50 |
| BS Total non-current other provisions | 312 | 218 |
| Provisions expected to be paid within 12 months | ||
| Reserve related to business combinations | 30 | 4 |
| Restructuring reserve | 37 | 124 |
| Provision for social security contributions for LTVR | 0 | 0 |
| Other | 90 | 8 |
| BS Total current other provisions | 157 | 136 |
| Total other provisions | 469 | 354 |
Reserves related to business combinations
In connection to acquisitions of subsidiaries in Group companies, provisions has been made for acquisition related costs. These are expected to be stated and paid during 2016.
Provision for social security contributions for long-term share-based remuneration (LTVR)
Investor operates LTVR programs which are offered to all employees. Provision is made for social security contributions connected to these programs. The provision will be used during the years 2016-2022.
Mainly provisions for guarantees that have been considered immaterial to specify and intend to be settled with SEK 90 m. in 2016, SEK 54 m. in 2017 and SEK 81 m. in 2018 or later.
| Reserve related to business combinations |
Restruc turing reserve |
Social security LTVR |
Other | Total other provi sions |
|---|---|---|---|---|
| 21 | 145 | 130 | 58 | 354 |
| 302 | ||||
| –1 | –143 | –1 | –42 –187 | |
| 30 | 38 | 176 | 225 | 469 |
| 10 | 36 | 47 | 209 |
| Carrying amount at year-end | 21 | 145 | 130 | 58 | 354 |
|---|---|---|---|---|---|
| Reversals for the year | – | –43 | –1 | –32 | –76 |
| Provisions for the year | 4 | 115 | 51 | 20 | 190 |
| Opening balance | 17 | 73 | 80 | 70 | 240 |
| 12/31 2014 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Acquisition related liabilities | 252 | 225 |
| Non controlling interest1) | 755 | 740 |
| Other | 246 | 228 |
| BS Total other long-term liabilities | 1,253 | 1,193 |
| 1) Fair value of issued put options over non-controlling interest. | ||
| Derivatives | 118 | 191 |
| Shares on loan | – | 31 |
| Incoming payments | 49 | 2 |
| VAT | 131 | 156 |
| Personnel-related | 232 | 229 |
| Other | 178 | 116 |
BS Total other current liabilities 708 725
| BS Total | 3,186 | 2,747 |
|---|---|---|
| Other | 861 | 703 |
| Personnel-related expenses | 1,340 | 1,186 |
| Interest | 985 | 858 |
| 12/31 2015 | 12/31 2014 |
Financial instruments recognized in the consolidated Balance Sheet include assets such as the following: shares and participations recognized at fair value, other financial investments, loan receivables, trade receivables, short-term investments, cash and cash equivalents, and derivatives. Liabilities recognized in the Balance Sheet include the following: loans, shares on loan, trade payable and derivatives.
A financial asset or financial liability is recognized in the Balance Sheet when the Group becomes party to the instrument's contractual terms.
Trade receivables and trade payables are recognized in the Balance Sheet when an invoice is sent or received.
A financial asset or part thereof is derecognized in the Balance Sheet when the rights in the agreement have been realized, upon maturity, or when the Group loses control over them. A financial liability or part thereof is derecognized in the Balance Sheet when the obligations in the contract have been fulfilled or no longer exist for some other reason.
A financial asset and liability are offset against one another and the net amount is reported in the Balance Sheet only when there is a legally enforceable right and an intention to set off the recognized amounts.
A purchase or sale of financial assets is recognized on the trade date, which is the date that an entity commits itself to purchase or sell an asset.
Financial instruments are allocated to different categories. A financial instrument is classified upon initial recognition based on the purpose for which it was acquired. The classification determines how the financial instrument is measured after initial recognition, as described below.
Financial instruments belonging to the category, "Financial assets recognized at fair value through profit/loss", are initially recognized at fair value (excluding transaction costs). Other financial instruments are initially recognized at cost, which corresponds to the instrument's fair value (including transaction costs).
Cash and cash equivalents consists of cash and demand deposits in banks and similar institutions and short-term investments with a maturity of three months or less from the acquisition date, which are subject to an insignificant risk of changes in value.
This category consists of two subcategories: financial assets that are initially placed in this category (via the fair value option) and held-for-trading financial assets. Financial assets in this category are continuously measured at fair value and value changes are reported in the Income Statement.
Financial assets recognized in accordance with the fair value option This category primarily includes short-term investments, other financial assets and shares/participations recognized at fair value. In this category, the Group has chosen, on initial recognition, to designate financial assets that are managed and measured on the basis of fair values, in accordance with the risk management and investment strategies.
Shares and participations belonging to the trading operation are recognized as held-for-trading financial assets. The same applies to derivatives with a positive fair value (except for derivatives identified as effective hedging instruments).
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. These assets are recognized at amortized cost. Trade receivables are recognized at net realizable value less any deductions for bad debts, which are assessed on an individual basis. Trade receivables are short term in nature, which is why they are reported at nominal amounts without any discounting.
To the available-for-sale financial assets category, Investor has allocated a few financial assets that do not belong to any of the other categories.
Financial liabilities at fair value through profit/loss
This category includes financial liabilities held for trading. For example, this includes shares on loan in the trading operation. When shares on loan are sold, an amount corresponding to the fair value of the shares is recorded as a liability. The category also include any derivatives with a negative fair value (except for identified derivatives that are effective hedge instruments).
This category includes loans and other financial liabilities. Loans are recognized at amortized cost, except when they are used for fair value hedging. For more information, see the heading below, "Hedging of the Group's interest rate exposures - fair value hedges". Amortized cost is calculated based on the effective interest that was determined when the loan was obtained. This means that surpluses/deficits, as well as direct issuing costs, are amortized over the life of the liability. Trade payables are short-term in nature, which is why they are recognized at nominal amounts without any discounting.
Derivatives, such as forwards, options and swaps, are used to offset the risks associated with fluctuations in exchange rates and share prices, as well as the exposure to interest rate risks. Derivatives are initially recognized at fair value through profit/loss, which means that transaction costs are charged to profit/ loss for the period. In the following periods, the derivative instrument is recognized at fair value and changes in the value are recognized in the Income Statement as income or expense (part of operating profit) or as part of net financial items. Where they are reported is based on the purpose of the derivative and whether its use is related to an operating item or a financial item. The interest rate coupon from an interest rate swap is recognized as interest and value changes are recognized as other financial items as a component of financial net, provided that the interest rate swap is not part of a cash flow hedge, which is accounted for according to the description below.
Investor applies hedge accounting in order to reduce fluctuations in profit/ loss related to hedging of interest rate risks and currency risks. When hedge accounting is applied, value changes related to the hedging instrument is presented in profit/loss at the same time as the result from the hedged item. The effective part of the hedge is presented in the same component of the income statement as the hedged item.
Currency derivatives are used to hedge receivables and liabilities against foreign exchange rate risks. Hedge accounting is not used to protect against foreign exchange risk since an economic hedge has already been reflected in the financial statements. This occurs by recognizing the underlying receivable or liability at the closing rate and the hedge instrument at fair value in the Income Statement.
In order to hedge currency risks from forecast transactions, derivatives are used. These derivatives are often subject to hedge accounting. The derivatives are recognized at fair value in the Balance Sheet. Changes in value for the period are recognized in Other Comprehensive income and the accumulated changes in value are recognized in the Hedging Reserve until the hedged cash flow affects profit for the period, whereas the accumulated value changes of the hedging instrument are recycled to profit/loss for the period.
The Group uses interest rate swaps to control the uncertainty of future interest rate fluctuations for loans with a variable interest rate. In the Balance Sheet, interest rate swaps are valued at fair value. The interest rate coupon is recognized on an on-going basis in the Income Statement as a component of interest expense. Unrealized changes to the fair value of interest rate swaps are recognized in Other Comprehensive income and are included as a component of the hedging reserve until the hedged item has an effect on the Income Statement and as long as the criteria for hedge accounting and effectiveness are met. The gain/loss attributable to the ineffective component of the unrealized value changes on interest rate swaps is recognized in the Income Statement.
Hedging of the Group's interest rate exposure– fair value hedges The Group uses interest rate swaps to hedge the risk of changes in the fair value of its own borrowings that have a fixed rate of interest. The interest rate swaps are recognized at fair value in the Balance Sheet and the hedged item is recalculated at the fair value of the hedged risk (the risk-free interest rate). Changes in the fair value of the derivative and hedged item are recognized in the Income Statement.
The interest rate coupon is recognized on an on-going basis in the Income Statement as a component of interest expense.
In the consolidated Balance Sheet, investments in foreign operations are reported as net assets in subsidiaries. To a certain extent, currency risks associated with such investments are reduced by entering into forward contracts in the same currency as the net investments. In order to match the translation differences relating to the net investments in the hedged foreign operations, the effective component of the period's exchange rate fluctuations for hedging instruments is reported under Other Comprehensive income, and the cumulative changes are reported under Translation Reserve. The amount in the Translation Reserve, which is related to currency changes in both the net investment and the hedging instrument is reversed and recognized in the Income Statement when a foreign operation is divested. When hedging has not been effective, the ineffective component is recognized in the Income Statement.
On each reporting date, an assessment of the need for impairment of a financial asset or group of assets is performed. Since the majority of the Group's assets are included in the category "Financial assets at fair value through profit/loss", most negative changes in value affect the Income Statement on an on-going basis. If any event has occurred that might have a negative impact on the collectability of assets belonging to the category "Loans and Receivables", the recoverable amount is calculated. The recoverable amount is calculated as the present value of future cash flows discounted at the effective interest rate upon initial recognition of the asset. Assets with short maturities are not discounted. Impairment losses are reported in the Income Statement.
Impairment losses on loans and trade receivables (which are recognized at amortized cost) are reversed if the prior reasons for the impairment no longer exist and full payment is expected.
Financial guarantee contracts commit the Group to reimburse the holder of a debt instrument for the losses incurred when a specified debtor fails to make payment when due, in accordance with the contract terms. Financial guarantee contracts are initially recognized at fair value less the fair value of contracted guarantee fees. However, an asset will not be reported in the Balance Sheet if the difference is positive.
Subsequent to initial recognition, financial guarantee contracts are continuously recognized at the higher of:
Following is a description of the methods and assumptions used to determine the fair value of financial assets and liabilities shown in this Annual Report.
Listed holdings Listed holdings are valued on the basis of their share price (bid price, if there is
Shares and participations in level 2 consist of holdings in listed shares for which the classes are not actively traded. The measurement of these shares is based on the market price for the most traded class of shares for the same holding.
Derivatives in level 2 consist mainly of currency and interest rate swaps for which the valuation is based on discounted future cash flows according to the terms and conditions in the agreement and based on the market rate of interest for similar instruments with different durations.
Unlisted holdings and fund holdings
Unlisted holdings are measured on the basis of the "International Private Equity and Venture Capital Valuation Guidelines". For directly owned holdings (i.e. those owned directly by a company in the Investor Group), an overall evaluation is made to determine the measurement method that is appropriate for each specific holding. It is first taken into account whether a recent financing round or "arm's length transaction" has been made. As a secondary measure, a valuation is made by applying relevant multiples to the holding's key ratios (for example, EBITDA), derived from a relevant sample of comparable companies, with deduction for individually determined adjustments as a consequence of, for example, the size difference between the company being valued and the sample of comparable companies. In those cases when other measurement methods better reflect the fair value of a holding, this value is used.
Unlisted holdings in funds are measured at Investor's share of the value that the fund manager reports for all unlisted fund holdings (Net Asset Value) and is normally updated when a new valuation is received. If Investor's assessment is that the fund manager's valuation does not sufficiently take into account factors that affect the value of the underlying holdings, or if the valuation is considered to deviate considerably from IFRS principles, the value is adjusted.
When estimating the fair value market conditions, liquidity, financial condition, purchase multiples paid in other comparable third-party transactions, the price of securities of other companies comparable to the portfolio company, and operating results and other financial data of the portfolio company are taken in consideration as applicable. Representatives from Investor's management participate actively in the valuation process within Investor Growth Capital (IGC) and evaluate the estimated fair values for holdings in IGC and the EQT funds in relation to their knowledge of the development of the portfolio companies and the market. Listed holdings in funds are measured in the same way as listed holdings, as described above.
The valuation of currency interest rate swaps with long duration and limited liquidity is based on discounted cash flows according to the terms and conditions of the agreement and based on an estimated market rate for similar instruments with diverse durations.
The value of unlisted options is calculated in accordance with the Black & Scholes valuation model.
The fair value would be classified in level 3 and is based on market prices and generally accepted methods, in which future cash flows have been discounted at the current interest rate, including Investor's current credit rating, for the remaining life.
The carrying amounts of loans, trade receivables and trade payables are considered to reflect their fair value.
The table below indicates which valuation technique and which important unobservable input that has been used in order to estimate the carrying amounts of financial instruments in level 3. The inputs in the table below are not indicative of all the unobservable inputs that may have been used for an individual investment.
| 12/31 2015 | Fair value | Valuation technique | Input | Range |
|---|---|---|---|---|
| Shares and participations | 19,406 | Last round of financing Comparable companies Comparable companies Comparable transactions |
N/A EBITDA multiples Sales multiples Sales multiples |
N/A 2.1-7.8 0.9-5.3 1.4-5.7 |
| NAV | N/A | N/A | ||
| Long-term receivables Long-term interest bearing liabilities Other long-term liabilities |
1,640 38 1,194 |
Present value computation Present value computation Discounted cash flow |
Market interest rate Market interest rate |
N/A N/A N/A |
All valuations in level 3 are based on assumptions and judgments that management consider to be reasonable based on the circumstances prevailing at the time. Changes in assumptions may result in adjustments to reported values and the actual outcome may differ from the estimates and judgments that were made.
The unlisted part of Financial Investments portfolio companies, corresponds to 48 percent of the portfolio value. Part of the unlisted portfolio is valued based on comparable companies, and the value is dependent on the level of
the multiples. The mulitple ranges provided in the note show the minimum and maximum value of the actual multiples applied in these valuations. A 10 percent change of the multiples would have an effect on the Financial Investments portfolio value of approximately SEK 200 m.
For the derivatives, a parallel shift of the interest rate curve upwards by one percentage point would affect the value positively by approximately SEK 1,100 m.
| Financial assets and liabilities measured at fair value through profit/loss |
||||||||
|---|---|---|---|---|---|---|---|---|
| 12/31 2015 | Fair value option | Held for trading |
Derivatives used in hedge accounting |
Loans and receivables |
Financial assets available-for-sale |
Other financial liabilities |
Total carrying amount |
Fair value |
| Financial assets | ||||||||
| Shares and participations | ||||||||
| recognized at fair value | 250,693 | 5 | 2 | 250,700 | 250,700 | |||
| Other financial investments | 6,648 | 18 | 6,665 | 6,665 | ||||
| Long-term receivables | 1,894 | 2,694 | 4,587 | 4,587 | ||||
| Accrued interest income | 470 | 470 | 470 | |||||
| Trade receivables | 3,394 | 3,394 | 3,394 | |||||
| Other receivables | 18 | 82 | 280 | 380 | 380 | |||
| Shares and participations in | ||||||||
| trading operation | 18 | 18 | 18 | |||||
| Short-term investments | 1,881 | 1,881 | 1,881 | |||||
| Cash and cash equivalents | 13,180 | 13,180 | 13,180 | |||||
| Total | 272,401 | 36 | 1,976 | 6,860 | 2 | – | 281,274 | 281,274 |
| Financial liabilities | ||||||||
| Long-term interest-bearing liabilities | 545 | 211 | 49,363 | 50,120 | 52,6491) | |||
| Other long-term liabilities | 1,194 | 59 | 1,253 | 1,253 | ||||
| Current interest-bearing liabilities | 17 | 75 | 2,320 | 2,413 | 2,4151) | |||
| Trade payables | 1,677 | 1,677 | 1,677 | |||||
| Other current liabilities | 75 | 44 | 589 | 708 | 708 | |||
| Accrued interest expenses | 986 | 986 | 986 | |||||
| Total | – | 1,831 | 330 | – | – | 54,996 | 57,157 | 59,689 |
| Financial assets and liabilities measured at fair value through profit/loss |
||||||||
|---|---|---|---|---|---|---|---|---|
| 12/31 2014 | Fair value option | Held for trading |
Derivatives used in hedge accounting |
Loans and receivables |
Financial assets available-for-sale |
Other financial liabilities |
Total carrying amount |
Fair value |
| Financial assets Shares and participations |
||||||||
| recognized at fair value | 243,651 | 116 | 5 | 243,772 | 243,772 | |||
| Other financial investments | 3,281 | 2 | 3,283 | 3,283 | ||||
| Long-term receivables | 2,053 | 3,515 | 5,568 | 5,568 | ||||
| Accrued interest income | 410 | 410 | 410 | |||||
| Trade receivables | 2,837 | 2,837 | 2,837 | |||||
| Other receivables | 79 | 28 | 256 | 363 | 363 | |||
| Shares and participations in | ||||||||
| trading operation | 68 | 68 | 68 | |||||
| Short-term investments | 2,827 | 2,827 | 2,827 | |||||
| Cash and cash equivalents | 13,443 | 13,443 | 13,443 | |||||
| Total | 263,202 | 147 | 2,081 | 7,136 | 5 | – | 272,571 | 272,571 |
| Financial liabilities | ||||||||
| Long-term interest-bearing liabilities | 636 | 160 | 50,300 | 51,096 | 55,7651) | |||
| Other long-term liabilities | 1,145 | 48 | 1,193 | 1,193 | ||||
| Current interest-bearing liabilities | 89 | 151 | 240 | 240 | ||||
| Trade payables | 1,532 | 1,532 | 1,532 | |||||
| Other current liabilities | 152 | 69 | 504 | 725 | 725 | |||
| Accrued interest expenses | 858 | 858 | 858 | |||||
| Total | – | 1,933 | 318 | – | – | 53,393 | 55,644 | 60,313 |
1) The Groups loans are valued at amortized cost. Fair value on loans are presented. For other assets and liabilities
there are no differences between carrying amount and fair value.
| Financial assets and liabilities measured at fair value through profit/loss |
||||||
|---|---|---|---|---|---|---|
| 2015 | Fair value option | Held for trading | Derivatives used in hedge accounting |
Loans and receivables |
Other financial liabilities |
Total |
| Operating profit/loss | ||||||
| Dividends | 7,818 | 2 | 7,821 | |||
| Other operating income | 58 | 58 | ||||
| Changes in value, including currency | 9,017 | –3 | 9,013 | |||
| Cost of sales, distribution expenses | –182 | 262 | 80 | |||
| Net financial items | ||||||
| Interest | 40 | –195 | 469 | 25 | –1,752 | –1,412 |
| Changes in value | –10 | 106 | –158 | 202 | 139 | |
| Exchange rate differences | –26 | –76 | –190 | –659 | 952 | 0 |
| Total | 16,839 | –348 | 120 | –314 | –598 | 15,699 |
| at fair value through profit/loss | Other financial liabilities |
|||||
|---|---|---|---|---|---|---|
| 2014 | Fair value option | Held for trading | Derivatives used in hedge accounting |
Loans and receivables |
Total | |
| Operating profit/loss | ||||||
| Dividends | 7,227 | 1 | 7,228 | |||
| Other operating income | 177 | 177 | ||||
| Changes in value, including currency | 38,828 | 4 | –122 | 38,710 | ||
| Cost of sales, distribution expenses | –123 | 195 | 72 | |||
| Net financial items | ||||||
| Interest | 41 | –311 | 338 | –37 | –1,608 | –1,577 |
| Changes in value | 15 | –214 | 1,671 | –1,541 | –69 | |
| Exchange rate differences | 27 | 905 | 1,064 | –1,872 | 124 | |
| Total | 46,111 | –616 | 2,914 | 1,399 | –5,143 | 44,665 |
Financial assets and liabilities measured
The table below indicates how fair value is measured for the financial instruments recognized at fair value in the Balance Sheet.
The financial instruments are categorized on three levels, depending on how the fair value is measured:
Level 1: According to quoted prices (unadjusted) in active markets for identical instruments
Level 2: According to directly or indirectly observable inputs that are not included in level 1
Level 3: According to inputs that are unobservable in the market
| 12/31 2015 | Level 1 | Level 2 | Level 3 | Other1) | Total |
|---|---|---|---|---|---|
| Financial assets | |||||
| Shares and participations recognized at fair value | 229,262 | 2,025 | 19,406 | 7 | 250,700 |
| Other financial instruments | 6,648 | 18 | 6,665 | ||
| Long-term receivables | 254 | 1,640 | 2,694 | 4,587 | |
| Other receivables | 100 | 280 | 380 | ||
| Shares and participations in trading operation | 18 | 18 | |||
| Short-term investments | 1,881 | 1,881 | |||
| Cash and cash equivalents | 13,180 | 13,180 | |||
| Total | 250,988 | 2,379 | 21,046 | 2,999 | 277,411 |
| Financial liabilities | |||||
| Long-term interest-bearing liabilities | 718 | 38 | 49,363 | 50,120 | |
| Other long-term liabilities | 1,194 | 59 | 1,253 | ||
| Short-term interest-bearing liabilities | 92 | 2,321 | 2,413 | ||
| Other current liabilities | 118 | 589 | 708 | ||
| Total | – | 929 | 1,232 | 52,332 | 54,494 |
1) To enable reconciliation with balance sheet items, financial instruments not valued at fair value as well as other assets and liabilities
that are included within balance sheet items have been included within Other.
| 12/31 2014 | Level 1 | Level 2 | Level 3 | Other1) | Total |
|---|---|---|---|---|---|
| Financial assets | |||||
| Shares and participations recognized at fair value | 219,696 | 2,083 | 21,869 | 124 | 243,772 |
| Other financial instruments | 3,281 | 2 | 3,283 | ||
| Long-term receivables | 671 | 1,382 | 3,515 | 5,568 | |
| Other receivables | 107 | 256 | 363 | ||
| Shares and participations in trading operation | 68 | 68 | |||
| Short-term investments | 2,827 | 2,827 | |||
| Cash and cash equivalents | 13,443 | 13,443 | |||
| Total | 239,315 | 2,861 | 23,251 | 3,897 | 269,324 |
| Financial liabilities | |||||
| Long-term interest-bearing liabilities | 748 | 48 | 50,300 | 51,096 | |
| Other long-term liabilities | 1,145 | 48 | 1,193 | ||
| Current interest-bearing liabilities | 89 | 151 | 240 | ||
| Other current liabilities | 31 | 190 | 504 | 725 | |
| Total | 31 | 1,027 | 1,193 | 51,003 | 53,254 |
1) To enable reconciliation with balance sheet items, financial instruments not valued at fair value as well as other assets and liabilities that are included within balance sheet items have been included within Other.
The table below shows a reconciliation between opening and closing balance for the financial instruments recognized at fair value in the Balance Sheet derived from a valuation technique of unobservable input (level 3). No transfers have been made between level 1 and 2.
| 12/31 2015 | Shares and participations recognized at fair value |
Long-term receivables |
Total financial assets |
Long-term interest bearing liabilities |
Other long-term liabilities |
Total financial liabilities |
|---|---|---|---|---|---|---|
| Opening balance | 21,869 | 1,382 | 23,251 | 48 | 1,145 | 1,193 |
| Total gains or losses | ||||||
| in profit/loss | 3,856 | 258 | 4,114 | –9 | 46 | 37 |
| in other comprehensive income | 399 | 399 | –21 | –21 | ||
| Acquisitions | 2,143 | 2,143 | 24 | 24 | ||
| Divestments | –7,826 | –7,826 | ||||
| Transfers to level 3 | 6 | 6 | ||||
| Transfers from level 3 | –1,041 | –1,041 | ||||
| Carrying amount at year-end | 19,406 | 1,640 | 21,046 | 38 | 1,194 | 1,232 |
| Total gains or losses for the period included in profit/loss for assets and liabilities held at the end of the period (unrealized results) |
||||||
| Changes in value | 1,093 | 1,093 | –3 | –3 | ||
| Net financial items | 258 | 258 | 9 | –43 | –34 | |
| Total | 1,093 | 258 | 1,351 | 9 | –46 | –37 |
| 12/31 2014 | Shares and participations recognized at fair value |
Long-term receivables |
Total financial assets |
Long-term interest bearing liabilities |
Other long-term liabilities |
Total financial liabilities |
|---|---|---|---|---|---|---|
| Opening balance | 19,973 | – | 19,973 | 345 | 93 | 438 |
| Total gains or losses | ||||||
| in profit/loss | 3,566 | 1,382 | 4,948 | –297 | 468 | 171 |
| in other comprehensive income | 1,043 | 1,043 | ||||
| Acquisitions | 2,909 | 2,909 | ||||
| Divestments | –6,028 | –6,028 | ||||
| Reclassifications | 584 | 584 | ||||
| Transfers to level 3 | 1,6461) | 1,646 | ||||
| Transfers from level 3 | –1,240 | –1,240 | ||||
| Carrying amount at year-end | 21,869 | 1,382 | 23,251 | 48 | 1,145 | 1,193 |
| Total gains or losses for the period included in profit/loss for assets and liabilities held at the end of the period (unrealized results) |
||||||
| Changes in value Net financial items |
3,446 | 1,382 | 4,828 | 297 | –312 –156 |
–15 –156 |
| Total | 3,446 | 1,382 | 4,828 | 297 | –468 | –171 |
1) Transfer between 'Shares and participations in associates' to 'Shares and participations recognized at fair value' due to the divestment of Lindorff.
No financial assets and liabilities have been set off in the Balance Sheet.
| 12/31 2015 | 12/31 2014 | ||||
|---|---|---|---|---|---|
| SEK m. | Financial assets | Financial liabilities | Financial assets | Financial liabilities | |
| Gross and net amount Not set off in the balance sheet |
2,109 –779 |
929 –779 |
2,379 –837 |
1,029 –837 |
|
| Cash collateral recieved/pledged | – | – | – | – | |
| Net amounts | 1,3311) | 1502) | 1,5421) | 1922) |
1) Shares SEK 116 m. (188) and Derivatives SEK 1,215 m. (1,354).
2) Derivatives SEK 150 m. (192).
The Groups derivatives are covered by ISDA agreements. For repurchase agreements GMRA agreements exist and for securities lending there are GMSLA agreements. According to the agreements the holder has the right to set off the derivatives and keep securities when the counterparty does not fulfill its commitments.
A contingent liability exists when there is a possible obligation depending on whether some uncertain future event occurs, or, when there is a present obligation, but payment is not probable or the amount cannot be measured reliably. A provision must be recognized if and only if a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event), the payment is probable (more likely than not), and the amount can be estimated reliably.
| Pledged assets | 12/31 2015 | 12/31 2014 |
|---|---|---|
| In the form of pledged securities for liabilities and provisions Real estate mortgages Shares etc.1) |
412 1,956 |
385 4,199 |
| Other pledged and equivalent collateral Real estate mortgages |
107 | 221 |
| Total pledged assets | 2,475 | 4,805 |
1) Pledged shares for loans in subsidiaries.
| Contingent liabilities | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Guarantee commitments to FPG/PRI | 1 | 1 |
| Guarantees on behalf of associates | 700 | 700 |
| Other contingent liabilities | 1,197 | 299 |
| Total contingent liabilities | 1,899 | 1,000 |
Contingent liabilities increased due to contingent liabilties in a subsidiary aquired during 2015 and an appeal regarding deducted interest expenses. The credit facilities within the operating subsidiaries are subject to financial covenants.
In addition, the Group's share of contingent liabilities related to the associated companies amounts to SEK – m. (–).
The following additional information about related parties is being provided in addition to what has been reported in other notes to the financial statements.
The Wallenberg foundations have significant influence over Investor (in accordance with the definition in IAS 24 Related Party Disclosures). The largest of these foundations are the Knut and Alice Wallenberg Foundation, the Marianne and Marcus Wallenberg Foundation and the Marcus and Amalia Wallenberg Memorial Fund.
Investor's support functions provide a limited scope of services for FAM AB and Foundation Administration Management Sweden AB, which are owned by the Wallenberg foundations. Transactions with these companies are priced according to market terms.
In addition to the above-noted relations with related parties, there are a number of companies in which Investor and the company have common board members. Information has not been provided in this note because these situations are either not considered to involve influence of the type described in IAS 24, or the transactions refer to non material amounts.
Transactions with related parties are priced according to market terms, for information about the Parent Company see note P18, Related party transactions.
See note 9, Employees and personnel costs for information about salaries and other compensation, costs and commitments regarding pensions and similar benefits, and severance payment agreements for the board, President and other senior executives.
Participation/incentive programs IGC
Within Investor Growth capital (IGC), selected senior staff and other senior executives have had the opportunity for a number of years to make parallel investments to some extent with Investor. The plans are designed in accordance with market practice in the venture capital market and are evaluated periodically against similar programs in Europe, the U.S. and Asia. Carried interest plans provide an economic incentive for managers and encourage personal commitment to analysis and investment work since the result is directly connected to the financial performance of the business.
Carried interest plans are linked to realized growth in the value of holdings, after deduction for costs, seen as a portfolio. This means that when an investment is realized with a profit, each parallel investor receives his or her share of the profit, after provisions for any unrealized declines in value or write-downs of other investments. The plans allow a maximum share of 16 percent that can be given to parallel investors, which is in line with practice in the venture capital market.
During the year, a total of SEK 43 m. was paid out from these programs (60). The provision (not paid out) on unrealized gains amounted to SEK 1,000 m. at year-end (539). Expensed amounts were reported in the item "Changes in Value" in the Income Statement.
Due to the restructuring of IGC, a limited number of employees also participate in a profit sharing program that is better adapted to reflect the decision to restructure IGC. This program is linked to the realized proceeds of holdings, where the share that can be credited to program participants is set with the holding's market value taken into account.
In accordance with agreements made in 2005 between the board of Investor AB and Börje Ekholm, when he was appointed CEO of Investor AB, relating to his prior participation in investment plans as Head of Investor Growth Capital (1998-2005), a supplementary payment of USD 2.4 m. has been paid to Börje Ekholm.
Board members and senior executives in unlisted investments, including Mölnlycke Health Care (Mölnlycke), Aleris, Permobil and BraunAbility are offered the opportunity to invest in the companies through management participation programs. The terms of the programs are based on market valuations and are designed to yield lower return to the participants than that of the owners if the investment plan is not reached but higher return to the participants than that of the owners if the plan is exceeded.
Related party transactions
| Associates | Other related party1) | |||
|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | |
| Sales of products/services | 19 | 26 | 2 | 1 |
| Purchase of products/services | 4 | 7 | ||
| Financial expenses | 259 | 336 | ||
| Financial income | 5 | 631 | ||
| Dividends/redemptions | 4,688 | 10,364 | ||
| Capital contributions | – | 82 | ||
| Receivables | 5,662 | 2,130 | ||
| Liabilities | 2,365 | 2,291 |
1) Wallenberg foundations
No major events to report.
| SEK m. | Note | 2015 | 2014 |
|---|---|---|---|
| Dividends | 7,182 | 6,033 | |
| Changes in value | P6, P9 | –2,582 | 32,568 |
| Net sales | 9 | 9 | |
| Operating costs | P2 | –347 | –361 |
| Result from participations in Group companies |
4,083 | 3,050 | |
| Result from participations in associated companies |
– | 653 | |
| Operating profit/loss | 8,345 | 41,952 | |
| Profit/loss from financial items | |||
| Results from other receivables that are non-current assets |
P3 | 1,390 | 4,531 |
| Interest income and similar items | 9 | –6 | |
| Interest expenses and similar items | P4 | –1,384 | –4,579 |
| Profit/loss after financial items | 8,360 | 41,898 | |
| Tax | P1 | – | – |
| Profit/loss for the year | 8,360 | 41,898 |
| SEK m. | 2015 | 2014 |
|---|---|---|
| Profit/loss for the year | 8,360 | 41,898 |
| Other Comprehensive income for the year, net taxes |
||
| Items that will not be recycled to profit/loss for the year |
||
| Remeasurements of defined benefit plans |
72 | –79 |
| Items that may be recycled to profit/loss for the year |
||
| Change in fair value of cash flow hedges for the year |
– | – |
| Total Other Comprehensive income for the year |
72 | –79 |
| Total Comprehensive income for the year |
8,432 | 41,819 |
| SEK m. | Note | 12/31 2015 | 12/31 2014 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | |||
| Capitalized expenditure for software |
P7 | 2 | 5 |
| Property, plant and equipment | |||
| Equipment | P8 | 13 | 17 |
| Financial assets | |||
| Participations in Group companies |
P5 | 56,967 | 53,611 |
| Participations in associates | P6 | 136,350 | 137,892 |
| Other long-term holdings of securities |
P9 | 65,295 | 63,128 |
| Receivables from Group companies |
P10 | 31,679 | 37,911 |
| Total non-current assets | 290,306 | 292,564 | |
| Current assets | |||
| Trade receivables | 1 | 1 | |
| Receivables from Group companies |
2,849 | 665 | |
| Receivables from associates | 0 | 0 | |
| Tax assets | 15 | 14 | |
| Other receivables | 2 | 2 | |
| Prepaid expenses and accrued income |
P11 | 51 | 62 |
| Cash and cash equivalents | 0 | 0 | |
| Total current assets | 2,918 | 744 | |
| TOTAL ASSETS | 293,224 | 293,308 |
| SEK m. | Note | 12/31 2015 | 12/31 2014 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Restricted equity | |||
| Share capital | 4,795 | 4,795 | |
| Statutory reserve | 13,935 | 13,935 | |
| 18,730 | 18,730 | ||
| Unrestricted equity | |||
| Accumulated profit/loss | 201,343 | 166,140 | |
| Profit/loss for the year | 8,360 | 41,898 | |
| 209,703 | 208,038 | ||
| Total equity | 228,433 | 226,768 | |
| Provisions | |||
| Provisions for pensions and similar | |||
| obligations | P12 | 85 | 213 |
| Other provisions | P13 | 271 | 142 |
| Total provisions | 356 | 355 | |
| Non-current liabilities | |||
| Interest-bearing liabilities | P14 | 31,500 | 34,593 |
| Liabilities to Group companies | 13,666 | 1,159 | |
| Total non-current liabilities | 45,166 | 35,752 | |
| Current liabilities | |||
| Interest-bearing liabilities | 2,229 | – | |
| Trade payables | 13 | 13 | |
| Liabilities to Group companies | 16,267 | 29,630 | |
| Liabilities to associates | 0 | 0 | |
| Tax liabilities | – | 0 | |
| Other liabilities | 5 | 9 | |
| Accrued expenses and deferred income |
P15 | 755 | 781 |
| Total current liabilities | 19,269 | 30,433 | |
| TOTAL EQUITY AND | |||
| LIABILITIES | 293,224 | 293,308 | |
| PLEDGED ASSETS AND CONTINGENT LIABILITIES |
|||
| Pledged assets | P17 | 6 | 71 |
| Contingent liabilities | P17 | 772 | 700 |
| Restricted equity | Unrestricted equity | Total equity | |||
|---|---|---|---|---|---|
| SEK m. | Share capital | Statutory reserve |
Accumulated profit/loss |
Profit/loss for the year |
|
| Opening balance 1/1 2015 | 4,795 | 13,935 | 208,038 | 226,768 | |
| Profit/loss for the year | 8,360 | 8,360 | |||
| Other Comprehensive income for the year | 72 | 72 | |||
| Total Comprehensive income for the year | 72 | 8,360 | 8,432 | ||
| Dividend | –6,856 | –6,856 | |||
| Stock options exercised by employees | 57 | 57 | |||
| Equity-settled share-based payment transactions | 32 | 32 | |||
| Closing balance 12/31 2015 | 4,795 | 13,935 | 201,343 | 8,360 | 228,433 |
| Restricted equity | Unrestricted equity | ||||
|---|---|---|---|---|---|
| SEK m. | Share capital | Statutory reserve |
Accumulated profit/loss |
Profit/loss for the year |
|
| Opening balance 1/1 2014 | 4,795 | 13,935 | 172,214 | 190,944 | |
| Profit/loss for the year | 41,898 | 41,898 | |||
| Other Comprehensive income for the year | –79 | –79 | |||
| Total Comprehensive income for the year | –79 | 41,898 | 41,819 | ||
| Dividend | –6,089 | –6,089 | |||
| Stock options exercised by employees | 61 | 61 | |||
| Equity-settled share-based payment transactions | 33 | 33 | |||
| Closing balance 12/31 2014 | 4,795 | 13,935 | 166,140 | 41,898 | 226,768 |
The Parent Company's share capital on December 31, 2015, as well as on December 31, 2014, consists of the following numbers of shares with a quota of SEK 6.25 per share.
| Share in % of | ||||
|---|---|---|---|---|
| Share class | Number of shares | Number of votes | Capital | Votes |
| A 1 vote B 1/10 vote |
311,690,844 455,484,186 |
311,690,844 45,548,418 |
40.6 59.4 |
87.2 12.8 |
| Total | 767,175,030 | 357,239,262 | 100.0 | 100.0 |
For information regarding repurchased own shares, see the Corporate Governance Report page 29.
| SEK m. | 2015 | 2014 |
|---|---|---|
| Operating activities | ||
| Dividends received | 7,183 | 6,033 |
| Cash payments to suppliers and employees | –323 | –273 |
| Cash flow from operating activities before net interest and income tax | 6,860 | 5,760 |
| Interest received | 1,831 | 1,710 |
| Interest paid | –1,426 | –1,503 |
| Income tax paid | –8 | –3 |
| Cash flow from operating activities | 7,257 | 5,964 |
| Investing activities | ||
| Share portfolio | ||
| Acquisitions | –5,622 | –4,028 |
| Divestments | 2,494 | 108 |
| Other items | ||
| Divestment of subsidiary | 14,675 | 6,010 |
| Liquidation of subsidiary | – | 930 |
| Capital contributions to subsidiaries | –13,948 | –3,716 |
| Acquisitions of property, plant and equipment/intangible assets |
–1 | –4 |
| Net cash used in investing activities | –2,401 | –700 |
| Financing activities | ||
| Borrowings | – | 4,835 |
| Change, intra-group balances | 2,000 | –4,010 |
| Dividends paid | –6,856 | –6,089 |
| Net cash used in financing activities | –4,856 | –5,264 |
| Cash flow for the year | 0 | 0 |
| Cash and cash equivalents at beginning of the year | 0 | 0 |
| Cash and cash equivalents at year-end | 0 | 0 |
The Parent Company does not report cash and cash equivalents since liquidity needs are covered by funds in the joint bank account for the Group. These funds are reported as balances with the Group's internal bank, AB Investor Group Finance.
The Annual Accounts Act and RFR 2 Accounting for Legal Entities has been applied for the Parent Company. The Parent Company applies the same accounting policies as the Group unless otherwise noted. Any differences between the accounting policies of the Parent Company and those of the Group are caused by limitations to the application of IFRS in the Parent Company because of the Swedish Annual Accounts Act. Significant accounting policies for the Parent Company that differs from the Group are presented in this note. Other significant accounting policies are presented in note 1, Significant accounting policies on page 46, and in connection to respective note to the consolidated financial statements.
Subsidiaries are companies in which Investor AB is able to exert a controlling influence. Controlling influence is the power to, either directly or indirectly, govern the financial and operating policies of an entity in order to obtain economic benefits from its activities.
In the Parent Company, participations in Group companies are recognized in accordance with the cost method and in legal entities, transaction costs attributable to business combinations will be included in the acquisition cost.
Contingent consideration is valued based on the likelihood that the consideration will be paid. Any changes to the provision/receivable result in an increase/decrease in the cost of acquisition. On each balance sheet date, the carrying amounts are reviewed to determine if there are any indications of impairment. Dividends from subsidiaries are included in the Parent Company's operating profit/loss.
Shareholders' contributions are recognized directly in equity by the receiver and are capitalized in participations by the giver to the extent that no impairment loss is required.
Participations in associates are recognized at cost or fair value in accordance with IAS 39. The method is dependent on how Investor controls and monitors the companies' operations. For further information see note 12, Shares and participations in associates. On each balance sheet date, the carrying amounts are reviewed to determine if there are any indications of impairment.
In the Parent Company, borrowing costs are charged to profit/loss during the period they pertain to. Borrowing costs are not capitalized.
The Parent Company's financial guarantee contracts consist primarily of guarantees on behalf of subsidiaries and associates.
The Parent Company applies RFR 2 IAS 39 item 2, to account for financial guarantee contracts issued on behalf of associates, which is somewhat more lenient than the rules in IAS 39, due to the relationship between accounting and taxation. The Parent Company recognizes financial guarantee contracts as a provision in the Balance Sheet when the company has a commitment for which payment will most likely be required.
The Parent Company is taxed in accordance with the Swedish rules for certain holding companies. The purpose of these rules is to allow re-allocations of its holdings without tax consequences. To be eligible for these rules, the company should, almost exclusively, manage an equity portfolio providing the shareholders risk allocation. The regulations for industrial holding companies imply that capital gains on shares are not taxable and corresponding capital losses are non-deductible. Dividends received and interest income are both taxable items, while administrative costs, interest expenses and dividend paid are all deductible. Moreover, the Parent Company declares a standard income of 1.5 percent on the market value of listed shares when the voting rights at the beginning of the year are less than 10 percent, or when they exceed 10 percent but, at the beginning of the year, had been owned for less than one year. As a consequence of these tax regulations, the Parent Company typically does not pay income tax. For the same reason, the Parent Company does not report deferred tax attributable to temporary differences. The regulations for industrial holding companies also imply that the Parent Company may neither give nor receive Group contributions.
Operating costs includes amortizations and depreciation of SEK 8 m. (8) of which SEK 4 m. relates to property, plant and equipment (4) and SEK 4 m. to other intangible assets (4).
Expensed wages, salaries and other remunerations amounted to SEK 190 m. (279), of which social costs SEK 62 m. (92). The pension and insurance plan for the Parent Company has during 2015 been revised. The main consequence of the revision is that the defined benifit BTP plan has been replaced with a defined contribution pension and insurance plan. The positive effect in the Parent Company amounts to SEK 55 m. Therefore the total pension income amounted 2015 to SEK 24 m (–30).
The average number of employees 2015 was 72 (75). For more information see note 9, Employees and personnel costs on page 54.
Auditor's fees and expenses
| 2015 | 2014 | |
|---|---|---|
| Auditor in charge | Deloitte | Deloitte |
| Auditing assignment | 1 | 1 |
| Total | 1 | 1 |
| Operating leases | ||
| Non-cancellable future lease payments | 2015 | 2014 |
| Less than 1 year from balance sheet date 1-5 years from balance sheet date |
11 – |
11 – |
| Total | 11 | 11 |
| Costs for the year | ||
| Minimum lease payments | –14 | –15 |
| Total | –14 | –15 |
Note P3. Results from other receivables
that are non-current assets
| 2015 | 2014 | |
|---|---|---|
| Interest income from Group companies | 1,836 | 1,922 |
| Changes in value | 189 | 818 |
| Other interest income | 39 | 63 |
| Exchange rate differences | –674 | 1,728 |
| IS Total | 1,390 | 4,531 |
Note P4. Interest expenses and similar items
| 2015 | 2014 | |
|---|---|---|
| Interest expenses to Group companies | –501 | –464 |
| Changes in value | –162 | –801 |
| Changes in value attributable to long-term | ||
| share-based remuneration | –73 | –62 |
| Net financial items, internal bank1) | 12 | –212 |
| Interest expenses, other borrowings | –1,431 | –1,390 |
| Exchange rate differences | 797 | –1,615 |
| Other | –26 | –35 |
| IS Total | –1,384 | –4,579 |
1) Settlement of net financial items between the Parent Company and the Group's internal bank company, AB Investor Group Finance. From May 2015 no such settlement will be made anymore.
Specification of the Parent Company's direct holdings of participations in Group companies
| Ownership interest in %1) | Carrying amount | ||||
|---|---|---|---|---|---|
| Subsidiary, Registered office, Registration number | Number of participations | 12/31 2015 | 12/31 2014 | 12/31 2015 | 12/31 2014 |
| Investor Holding AB, Stockholm, 556554-1538 | 1,000 | 100.0 | 100.0 | 21,293 | 21,293 |
| Patricia Industries AB, Stockholm, 556752-6057 | 100,000 | 100.0 | 100.0 | 19,639 | 9,485 |
| Invaw Holding AB, Stockholm, 556904-1212 | 50,000 | 100.0 | 100.0 | 9,880 | 9,880 |
| Patricia Industries II AB, Stockholm, 556619-6811 | 1,000 | 100.0 | 100.0 | 3,432 | 6 |
| Innax AB, Stockholm, 556619-6753 | 1,000 | 100.0 | 100.0 | 2,669 | 2,669 |
| AB Investor Group Finance, Stockholm, 556371-99872) | 100,000 | 100.0 | 100.0 | 54 | 54 |
| Vectura Fastigheter AB, Stockholm, 556903-0587 | – | – | 100.0 | – | 262 |
| The Grand Group AB, Stockholm, 556302-9650 | – | – | 100.0 | – | 204 |
| Duba AB, Stockholm, 556593-5508 | – | – | 100.0 | – | 2 |
| Rotca AB, Stockholm, 556693-6661 | – | – | 100.0 | – | 6,798 |
| Intre Holding AB, Stockholm, 556981-3065 | – | – | 100.0 | – | 2,337 |
| Indap Invest AB, Stockholm, 556690-7084 | – | – | 100.0 | – | 621 |
| BS Carrying amount | 56,967 | 53,611 |
1) Refers to share of equity, which also corresponds to the share of voting power.
2) The Group's internal bank.
| Ownership interest in %1) | ||
|---|---|---|
| Subsidiary, Registered office | 12/31 2015 | 12/31 2014 |
| Investor Growth Capital AB, Stockholm2) | 100.0 | 100.0 |
| Investor Investment Holding AB, Stockholm3) | 100.0 | 100.0 |
| Mölnlycke AB, Gothenburg | 98.8 | 98.8 |
| Aleris Group AB, Stockholm | 100.0 | 100.0 |
| Permobil Holding AB, Timrå | 94.4 | 94.4 |
| Braun Holdings Inc., Indiana | 94.6 | – |
1) Refers to share of equity.
2) Holding company of Investor Growth Capital.
3) Holding company of EQT.
The Investor Group consists of 6 wholly owned subsidiaries to Investor AB, see table above, and a number of indirect holdings of which the material indirect holdings in subsidiaries are stated in the table above. In the subgroups Mölnlycke Health Care, Permobil and BraunAbility non-controlling interests exists. None of these are considered material for Investor. Investor have assessed control over all subsidiaries due to the high ownership interest and Investor
| Changes in participations in Group companies | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Accumulated costs | ||
| Opening balance | 54,751 | 52,589 |
| Acquisitions and capital contributions | 13,948 | 10,408 |
| Liquidation of Group company | – | –392 |
| Divestments and repaid capital contributions | –10,592 | –7,854 |
| At year-end | 58,107 | 54,751 |
| Accumulated impairment losses | ||
| Opening balance | –1,140 | –1,140 |
| Impairment losses | – | – |
| At year-end | –1,140 | –1,140 |
| BS Carrying amount at year-end | 56,967 | 53,611 |
AB having direct or indirect power of the companies and has the right and ability to affect the returns. Investor also continuously assess whether it controls companies with ownership interests below 50 percent. The assessment is based on whether Investor has the practical ability to direct relevant activities unilaterally either through the boards or the annual general meetings of the companies. No companies where de facto control exists have been identified.
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Accumulated costs | ||
| Opening balance | – | 6,182 |
| Acquisitions and capital contributions | – | 82 |
| Divestments and transfers | – | –6,264 |
| At year-end | – | – |
| Accumulated impairment losses | ||
| Opening balance | – | –4,580 |
| Reversed impairment losses for the year | – | 4,580 |
| At year-end | – | – |
| Carrying amount at year-end | – | – |
| Carrying amount at year-end | 136,350 | 137,892 |
|---|---|---|
| Revaluations disclosed in Income Statement | –301 | 24,762 |
| Divestments | –1,241 | –101 |
| Acquisitions | – | 108 |
| Opening balance | 137,892 | 113,123 |
| 12/31 2015 | 12/31 2014 |
| 12/31 2015 | 12/31 2014 | |||||||
|---|---|---|---|---|---|---|---|---|
| Investor's share of | Investor's share of | |||||||
| Company, Registered office, Registration number | Number of shares | Ownership capital/votes (%) |
Carrying amount1,2) |
Equity3) | Profit/loss for the year4) |
Carrying amount1,2) |
Equity3) | Profit/loss for the year4) |
| Listed Core Investments: | ||||||||
| SEB, Stockholm, 552032-9081 | 456,198,927 | 21/21 | 40,826 | 28,384 | 2,492 | 45,407 | 27,980 | 3,996 |
| Atlas Copco, Stockholm, 556014–2720 | 206,895,611 | 17/22 | 43,100 | 7,854 | 1,969 | 44,972 | 8,540 | 2,049 |
| Ericsson, Stockholm, 556016-0680 | 175,047,348 | 5/21 | 14,086 | 7,810 | 725 | 15,807 | 7,696 | 590 |
| Electrolux, Stockholm, 556009-4178 | 47,866,133 | 15/30 | 9,860 | 2,326 | –61 | 10,952 | 2,552 | 347 |
| Swedish Orphan Biovitrum, Stockholm, 556038-9321 | 107,594,165 | 40/40 | 14,514 | 1,837 | –98 | 8,532 | 1,797 | –104 |
| Saab, Linköping, 556036-0793 | 32,788,098 | 30/40 | 8,535 | 3,465 | 88 | 6,624 | 3,415 | 351 |
| Husqvarna, Jönköping, 556000-5331 | 97,052,157 | 17/33 | 5,428 | 2,222 | 357 | 5,598 | 2,049 | 140 |
| Total participations in associates valued at fair value | 136,350 | 137,892 | ||||||
| BS Total participations in associates | 136,350 | 137,892 |
1) Carrying amount includes acquisition cost, additional investments and divestments for the period and value changes due to write-downs to correspond with the fair value of the investments valued at cost and fair value for participations in associates valued at fair value, respectively.
2) Carrying amount for associates valued at fair value, equals the quoted market price for the investment.
3) Equity refers to the ownership interest in the equity of a company including the equity component in untaxed reserves and after adjustments to Investor's accounting policies. 4) Profit/loss for the year refers to the share of the company's results after tax including the equity component in the change for the year in untaxed reserves after adjustments to Investor's accounting policies.
| Capitalized expenditure for software | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Accumulated costs | ||
| Opening balance | 29 | 27 |
| Acquisitions | 1 | 2 |
| At year-end | 30 | 29 |
| Accumulated amortization and impairment losses | ||
| Opening balance | –24 | –20 |
| Amortizations | –4 | –4 |
| At year-end | –28 | –24 |
| BS Carrying amount at year-end | 2 | 5 |
| Allocation of amortizations in Income Statement | ||
| Operating costs | –4 | –4 |
| Total | –4 | –4 |
| Equipment | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Accumulated costs | ||
| Opening balance | 46 | 46 |
| Acquisitions | – | 2 |
| Sales and disposals | –9 | –2 |
| At year-end | 37 | 46 |
| Accumulated depreciation and impairment | ||
| Opening balance | –29 | –27 |
| Sales and disposals | 9 | 2 |
| Depreciation for the year | –4 | –4 |
| At year-end | –24 | –29 |
| BS Carrying amount at year-end | 13 | 17 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Opening balance | 63,128 | 51,491 |
| Acquisitions | 5,615 | 3,824 |
| Divestments | –1,253 | – |
| Revaluations disclosed in Income Statement | –2,195 | 7,813 |
| BS Carrying amount at year-end | 65,295 | 63,128 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Opening balance | 37,911 | 34,321 |
| New lending | 1,729 | 4,634 |
| Divestments/due/redeemed | –4,988 | –3,587 |
| Reclasification | –2,281 | – |
| Unrealized change in value | –692 | 2,543 |
| BS Carrying amount at year-end | 31,679 | 37,911 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Interest | 31 | 34 |
| Other financial receivables | 4 | 13 |
| Other | 16 | 15 |
| BS Total | 51 | 62 |
For more information see note 25, Provision for pensions and similar obligations.
The pension and insurance plan for the Parent Company has been revised in order to modernize and better adapt the plan to market conditions. The main consequence of the revision is that the defined benefit BTP plan has been replaced with a defined contribution pension and insurance plan. For the Parent Company the effect of not having any formal obligation regarding the defined benefit plan, BTP, is recognized in operating income under Operating costs.
| Components of defined benefit cost (gain – ) | 2015 | 2014 |
|---|---|---|
| Current service cost Past service cost and gains/losses from settlements |
– –55 |
5 – |
| Total operating cost | –55 | 5 |
| Net interest expense Exchange rate differences Other values |
2 – – |
5 – – |
| Total financial cost | 2 | 5 |
| Components recognized in profit or loss | –53 | 10 |
cont'd Provisions for pensions and similar obligations
| Remeasurement on the net defined benefit liability (gain –) | 2015 | 2014 |
|---|---|---|
| Return on plan assets (excl. amounts in interest income) | – | –6 |
| Actuarial gains/losses, demographic assumptions | –80 | 20 |
| Actuarial gains/losses, financial assumptions | –1 | 58 |
| Actuarial gains/losses, experience adjustments | 10 | 7 |
| Adjustment for restrictions, defined benefit asset | – | 0 |
| Components in Other Comprehensive income | –71 | 79 |
| The amount included in the Balance Sheet arising from defined | ||
|---|---|---|
| benefit plan | 12/31 2015 | 12/31 2014 |
| Present value of funded or partly funded obligations | – | 282 |
| Present value of unfunded obligations | 85 | 146 |
| Total present value of defined benefit | ||
| obligations | 85 | 428 |
| Fair value of plan assets | – | –221 |
| NPV of obligations and fair value of plan assets | 85 | 207 |
| Restriction on asset recognized | – | 6 |
| BS Net liability arising from defined benefit | ||
| obligations | 85 | 213 |
Changes in the obligations for defined benefit plans during the year 12/31 2015 12/31 2014 Defined benefit plan obligations, opening balance 428 350 Current service cost – 4 Interest cost 2 13 Remeasurement of defined benefit obligations Actuarial gains/losses, demographic assumptions –80 20 Actuarial gains/losses, financial assumptions –1 58 Actuarial gains/losses, experience adjustments 10 7 Contributions to the plan from the employer – 0 Past service cost incl gains/losses on curtailments –55 – Liabilities extinguished on settlements –221 – Exchange difference on foreign plans 6 5 Benefit paid –5 –29 Other 1 0 Obligations for defined benefit plans at year-end 85 428
| Changes in fair value of plan assets | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Fair value of plan assets, opening balance | 221 | 208 |
| Interest income | – | 8 |
| Remeasurement of fair value plan assets | ||
| Return on plan assets (excl. amounts in interest | ||
| income) | – | 6 |
| Contributions from the employer | – | 7 |
| Assets distributed on settlements | –221 | – |
| Benefit paid | – | –8 |
| Fair value of plan assets at year-end | – | 221 |
| The fair value of the plan asset at the end of the reporting period for each category are as follows: |
12/31 2015 | 12/31 2014 |
| Equity investments | – | 27 |
| Debt investment | – | 181 |
| Properties | – | 13 |
| Total fair value plan assets | – | 221 |
| Changes in restriction asset ceiling in the current year | 12/31 2015 | 12/31 2014 |
| Restriction asset ceiling, opening balance | 6 | 5 |
| Changes asset ceiling, OCI | –61) | 11) |
| Restriction asset ceiling at year-end | – | 6 |
1) The changes of asset ceiling in current year is netted out in Other Comprehensive income with the actuarial gain/losses from the present value on the obligation and the FV of the plan assets.
cont'd Provisions for pensions and similar obligations
| Assumptions for defined benefit obligations | 12/31 2015 | 12/31 2014 |
|---|---|---|
| Discount rate | 3.3 | 3.2 |
| Future salary growth | – | 3.0 |
| Future pension growth | 2.0 | 2.0 |
| Mortality assumption used | DUS14 | DUS14 |
In the Parent Company Swedish mortgage backed bonds have been used as reference when determining the discount rate used for the calculation of the defined benefit obligation. The market for high quality Swedish mortgage backed bonds is considered to be deep and thereby fulfill the requirements of high quality corporate bonds according to IAS 19.
| Defined contribution plans | 2015 | 2014 |
|---|---|---|
| Expenses for defined contribution plans | – | 32 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Provisions expected to be paid after more than 12 months | ||
| Provision for social security contributions for LTVR | 171 | 125 |
| Other | 80 | 14 |
| Total non-current other provisions | 251 | 139 |
| Provisions expected to be paid within 12 months | ||
| Restructuring reserve | – | – |
| Other | 20 | 3 |
| Total current provisions | 20 | 3 |
| BS Total other provisions | 271 | 142 |
Provision for social security contributions for long-term share-based remuneration (LTVR)
Investor operates LTVR programs which are offered to all employees. Provision is made for social security contributions connected to these programs. The provision will be used during the years 2016-2022.
Provisions that have been considered immaterial to specify are included in other and intend to be settled with SEK 20 m. in 2016 and SEK 80 m. in 2019.
| 12/31 2015 | Restructuring reserve |
Social security LTVR |
Other | Total other provisions |
|---|---|---|---|---|
| Opening balance | – | 125 | 17 | 142 |
| Provisions for the year | – | 46 | 86 | 132 |
| Reversals for the year | – | – | –3 | –3 |
| Carrying amount at year-end | – | 171 | 100 | 271 |
| 12/31 2014 | ||||
| Opening balance | 11 | 78 | 12 | 101 |
| Provisions for the year | – | 47 | 6 | 53 |
| Reversals for the year | –11 | – | –1 | –12 |
| Carrying amount at year-end | – | 125 | 17 | 142 |
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Interest-bearing liabilities | ||
| Long-term interest-bearing liabilities | 31,296 | 34,431 |
| Related interest rate derivatives with negative value | 204 | 162 |
| BS Total | 31,500 | 34,593 |
| 12/31 2015 | 12/31 2014 | |
| Carrying amounts | ||
| Maturity, 1–5 years from balance sheet date | 5,688 | 8,214 |
| Maturity, more than 5 years from balance sheet date | 25,812 | 26,379 |
| BS Total | 31,500 | 34,593 |
Note P15. Accrued expenses and deferred income
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Interest | 642 | 665 |
| Other financial receivables | 56 | 43 |
| Other | 57 | 73 |
| BS Total | 755 | 781 |
For accounting policies see note 29, Financial instruments, page 74.
| Financial assets and liabilities measured at fair value through profit/loss |
|||||||
|---|---|---|---|---|---|---|---|
| 12/31 2015 | Fair value option | Held for trading | Derivatives used in hedge accounting |
Loans and receivables |
Other assets and liabilities |
Total carrying amount |
Fair value |
| Financial assets Other long-term holdings of securities Participations in associates Receivables from Group companies (non-current) Accrued interest income Trade receivables Receivables from Group companies (current) Receivables from associates Other receivables |
65,295 136,350 |
423 | 31,256 31 1 2,849 0 2 |
65,295 136,350 31,679 31 1 2,849 0 2 |
65,295 136,350 31,679 31 1 2,849 0 2 |
||
| Total | 201,645 | – | 423 | 34,139 | – | 236,207 | 236,207 |
| Financial liabilities Loans (non-current) Liabilities to Group companies (non-current) Loans (current) Trade payables Liabilities to Group companies (current) Liabilities to associates (current) Accrued interest expenses Other liabilities |
204 | 1,384 | 31,296 12,282 2,229 13 16,267 0 642 5 |
31,500 13,666 2,229 13 16,267 0 642 5 |
38,6621) 13,666 2,2491) 13 16,267 0 642 5 |
||
| Total | – | 204 | 1,384 | – | 62,734 | 64,322 | 71,504 |
| through profit/loss | |||||||
|---|---|---|---|---|---|---|---|
| 12/31 2014 | Fair value option | Held for trading | Derivatives used in hedge accounting |
Loans and receivables |
Other assets and liabilities |
Total carrying amount |
Fair value |
| Financial assets | |||||||
| Other long-term holdings of securities | 63,128 | 63,128 | 63,128 | ||||
| Participations in associates | 137,892 | 137,892 | 137,892 | ||||
| Receivables from Group companies (non-current) | 191 | 37,720 | 37,911 | 37,911 | |||
| Accrued interest income | 34 | 34 | 34 | ||||
| Trade receivables | 1 | 1 | 1 | ||||
| Receivables from Group companies (current) | 665 | 665 | 665 | ||||
| Receivables from associates | 0 | 0 | 0 | ||||
| Other receivables | 2 | 2 | 2 | ||||
| Total | 201,020 | – | 191 | 38,422 | – | 239,633 | 239,633 |
| Financial liabilities | |||||||
| Loans (non-current) | 162 | 34,431 | 34,593 | 42,0101) | |||
| Liabilities to Group companies (non-current) | 1,159 | 1,159 | 1,159 | ||||
| Trade payables | 13 | 13 | 13 | ||||
| Liabilities to Group companies (current) | 29,630 | 29,630 | 29,630 | ||||
| Liabilities to associates (current) | 0 | 0 | 0 | ||||
| Accrued interest expenses | 665 | 665 | 665 |
Other liabilities 9 9 9 Total – 162 1,159 – 64,748 66,069 73,486
Financial assets and liabilities measured at fair value
1) The Parent company's loans are valued at amortized cost, fair value on loans are presented in the table.
For other assets and liabilities there are no differences between carrying amount and fair value.
| Financial assets and liabilities measured at fair value through profit/loss |
||||||
|---|---|---|---|---|---|---|
| 2015 | Fair value option | Held for trading | Derivatives used in hedge accounting |
Loans and receivables |
Other financial liabilities |
Total |
| Operating profit/loss Dividends Changes in value, including currency |
7,182 –2,582 |
7,182 –2,582 |
||||
| Net financial items Interest Changes in value Exchange rate differences |
10 –10 –32 |
–40 8 0 |
1,733 76 –794 |
–1,766 –119 949 |
–63 –45 123 |
|
| Total | 4,600 | –32 | –32 | 1,015 | –936 | 4,615 |
| 2014 | Fair value option | Financial assets and liabilities measured at fair value through profit/loss |
Loans and receivables |
Other financial liabilities |
Total | |
| Operating profit/loss Dividends Changes in value, including currency |
6,033 32,568 |
Held for trading | hedge accounting | 6,033 32,568 |
||
| Net financial items Interest Changes in value Exchange rate differences |
21 | 10 –15 –57 |
–39 –172 0 |
1,812 446 1,902 |
–1,920 –304 –1,738 |
–116 –45 107 |
| Total | 38,622 | –62 | –211 | 4,160 | –3,962 | 38,547 |
The table below indicates how fair value is measured for the financial instruments recognized at fair value in the Balance Sheet.
The financial instruments are categorized on three levels, depending on how the fair value is measured:
Level 1: According to quoted prices (unadjusted) in active markets for identical instruments
Level 2: According to directly or indirectly observable inputs that are not included in level 1
Level 3: According to inputs that are unobservable in the market
| 12/31 2015 | Level 1 | Level 2 | Level 3 | Other1) | Total |
|---|---|---|---|---|---|
| Financial assets | |||||
| Participations associates Receivables from Group companies (non-current) Other long-term holdings of securities |
134,325 65,293 |
2,025 | 423 2 |
31,256 | 136,350 31,679 65,295 |
| Total | 199,618 | 2,025 | 425 | 31,256 | 233,324 |
| Financial liabilities | |||||
| Liabilities to Group companies (non-current) Interest-bearing liabilities (non-current) |
204 | 1,384 | 12,282 31,296 |
13,666 31,500 |
|
| Total | – | 204 | 1,384 | 43,578 | 45,166 |
| 12/31 2014 | Level 1 | Level 2 | Level 3 | Other1) | Total |
| Financial assets | |||||
| Participations associates Receivables from Group companies (non-current) Other long-term holdings of securities |
135,809 61,462 |
2,083 | 191 1,666 |
37,720 | 137,892 37,911 63,128 |
| Total | 197,271 | 2,083 | 1,857 | 37,720 | 238,931 |
| Financial liabilities | |||||
| Liabilities to Group companies (non-current) Interest-bearing liabilities (non-current) |
162 | 1,159 | 34,431 | 1,159 34,593 |
|
| Total | – | 162 | 1,159 | 34,431 | 35,752 |
1) To enable reconciliation with balance sheet items, financial instruments not valued at fair value as well as
The table below shows a reconciliation between opening and closing balance for the financial instruments recognized at fair value in the Balance Sheet derived from a valuation technique of unobservable input (level 3). No transfers have been made between level 1 and 2.
| 12/31 2015 | Other long-term holdings of securities |
Long-term receivables |
Total financial assets |
Long-term interest bearing liabilities |
Total financial liabilities |
|---|---|---|---|---|---|
| Financial assets and liabilities | |||||
| Opening balance | 1,666 | 191 | 1,857 | 1,159 | 1,159 |
| Total gains or losses | |||||
| in profit/loss | –413 | 232 | –181 | 225 | 225 |
| Acquisitions | 2 | 2 | |||
| Divestments | –1,253 | –1,253 | |||
| Carrying amount at year-end | 2 | 423 | 425 | 1,384 | 1,384 |
| Total gains or losses for the period included in profit/loss for assets and liabilities held at the end of the period (unrealized results) |
|||||
| Changes in value | – | 232 | 232 | 225 | 225 |
| Total | – | 232 | 232 | 225 | 225 |
| 12/31 2014 | Other long-term holdings of securities |
Long-term receivables |
Total financial assets |
Long-term interest bearing liabilities |
Total financial liabilities |
| Financial assets and liabilities | |||||
| Opening balance | 796 | 796 | |||
| Total gains or losses | |||||
| in profit/loss | –1 | 191 | 190 | 363 | 363 |
| Acquisitions | 1,667 | 1,667 | |||
| Carrying amount at year-end | 1,666 | 191 | 1,857 | 1,159 | 1,159 |
| Total gains or losses for the period included in profit/loss for assets and liabilities held at the end of the period (unrealized results) |
|||||
| Changes in value | –1 | 191 | 190 | 363 | 363 |
| Total | –1 | 191 | 190 | 363 | 363 |
Note P17. Pledged assets and contingent liabilities
| 12/31 2015 | 12/31 2014 | |
|---|---|---|
| Pledged assets | ||
| In the form of pledged securities for liabilities and provisions |
||
| Shares | 6 | 71 |
| BS Total pledged assets | 6 | 71 |
| Contingent liabilities | ||
| Guarantees on behalf of Group companies | 72 | – |
| Guarantees on behalf of associates | 700 | 700 |
| BS Total contingent liabilities | 772 | 700 |
The Parent Company is related with its subsidiaries and associated companies
see note P5, Participations in Group companies and note P6, Participations in associates.
In addition to the above stated information, guarantees on behalf on the associate 3 Scandinavia amounts to SEK 0.7 bn. (0.7).
For more information about related party transaction see note 31, Related party transactions.
| Group companies | Associates | Other related party1) | ||||
|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |
| Sales of | ||||||
| products/services | 3 | 1 | 4 | 8 | 2 | 1 |
| Purchase of | ||||||
| products/services | 9 | 9 | 3 | 6 | ||
| Financial expenses | 501 | 464 | 18 | 18 | ||
| Financial income | 1,836 | 1,922 | ||||
| Dividends/redemptions | 4,630 | 4,092 | ||||
| Capital contributions | 13,948 | 6,053 | 82 | |||
| Receivables | 34,528 | 38,576 | 4 | |||
| Liabilities | 29,933 | 30,767 |
1) Wallenberg foundations
CORP. ID 556013-8298
We have audited the annual accounts and consolidated accounts of Investor AB (publ) for the financial year ended December 31, 2015. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 6-7, 11, and 23-93.
The Board of Directors and the President are responsible for the preparation and fair presentation of these annual accounts in accordance with the Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts 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 about whether the annual accounts and consolidated accounts are free from material misstatement.
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 judgement, 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 assessments, 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 internal 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 opinions.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 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 31 December 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. A Corporate Governance report has been prepared. The statutory administration report and the Corporate Governance report are consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.
In addition to our audit of the annual accounts and consolidated accounts, we have also examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the President of Investor AB (publ) for the financial year ended December 31, 2015.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the President are responsible for administration under the Companies Act.
Our responsibility is to express an opinion with reasonable assurance 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 supporting 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 significant decisions, actions taken and circumstances of the company in order 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 Accounts 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 opinions.
We recommend to the annual meeting of shareholders that the profit be appropriated in accordance 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 financial year.
Stockholm, 22 March, 2016 Deloitte AB
Thomas Strömberg Authorized Public Accountant
| average growth |
|||||||
|---|---|---|---|---|---|---|---|
| SEK m. | 2011 | 2012 | 2013 | 2014 | 2015 | 5 years, % | |
| Net asset value1) Core Investments Listed Subsidiaries |
118,016 18,400 |
141,456 21,291 |
175,174 29,531 |
218,396 31,922 |
Net asset value2) Listed Core Investments EQT Patricia Industries |
224,143 13,021 51,095 |
|
| Financial Investments Other assets and liabilities |
37,215 –651 |
35,144 –428 |
32,256 1,560 |
35,506 –29 |
Other assets & liabilities Total assets |
–565 287,695 |
|
| Total assets Net debt (–)/Net cash (+) Net asset value Change in net asset value with |
172,980 –16,910 156,070 |
197,463 –22,765 174,698 |
238,521 –23,104 215,417 |
285,795 –24,832 260,963 |
Net cash (+) / Net debt (–) Of which Patricia Industries cash Net asset value Change in net asset value with |
–15,892 14,616 271,801 |
|
| dividend added back, % Condensed Balance Sheet |
–6 | 15 | 26 | 24 | dividend added back, % Condensed Balance Sheet |
7 | 10 |
| Shares and participations Other Balance Sheet total |
148,991 64,616 213,607 |
164,431 65,214 229,645 |
202,859 64,291 267,150 |
246,891 76,596 323,487 |
Shares and participations Other Balance Sheet total |
254,054 82,536 336,590 |
|
| Profit and loss Profit/loss for the year attributable to |
Profit and loss Profit/loss for the year attributable to |
||||||
| Parent Company shareholders Comprehensive income |
–9,229 –9,553 |
24,226 23,857 |
45,165 46,161 |
50,656 52,657 |
Parent Company shareholders Comprehensive income |
17,433 17,604 |
|
| Dividends Dividends received of which from Core Investments Listed |
4,330 3,998 |
5,177 4,782 |
6,052 5,441 |
7,228 6,227 |
Dividends Dividends received of which from Listed Core Investments |
7,821 7,681 |
19 |
| Contribution to NAV1) Contribution to NAV, Core Investments Listed Total return, Listed Core Investments, % |
–17,889 –13 |
23,312 20 |
38,433 27 |
41,311 24 |
Contribution to NAV2) Contribution to NAV, Listed Core Investments Total return, Listed Core Investments, % |
8,804 4 |
|
| Contribution to NAV, Core Investments Subsidiaries Contribution to NAV, Financial Investments, Partner-owned Contribution to NAV, IGC and EQT |
87 5,475 4,201 |
–194 57 305 |
668 4,109 3,788 |
2,386 4,221 6,543 |
Contribution to NAV, EQT Contribution to NAV, Patricia Industries |
3,995 4,855 |
|
| Transactions Investments, Listed Core Investments |
5,104 | 2,762 | 719 | 8,233 | Transactions2) Investments, Listed Core Investments |
5,783 | |
| Divestments & redemptions, Listed Core Investments Investments, Core Investments Subsidiaries Divestments, Core Investments Subsidiaries |
1,057 1,019 – |
– 3,386 – |
– 7,558 – |
101 1,121 1,197 |
Divestments & redemptions, Listed Core Investments Draw-downs, EQT Proceeds, EQT |
1,241 1,590 6,086 |
|
| Investments, Partner-owned financial investments Divestments, Partner-owned financial investments Investments, IGC and EQT 6) Divestments, IGC and EQT 6) |
55 – 3,6523) 4,1933) |
376 80 2,0343) 4,0673) |
15 7,646 1,914 5,005 |
3,011 8,712 2,389 5,737 |
Investments, Patricia Industries Divestments, Patricia Industries Distributions to Patricia Industries |
4,176 2,896 5,089 |
|
| Key figures per share Net asset value, SEK Basic earnings, SEK Diluted earnings, SEK Equity, SEK |
205 –12.14 –12.14 206 |
230 31.85 31.83 230 |
283 59.35 59.25 284 |
343 66.55 66.40 343 |
Key figures per share Net asset value, SEK Basic earnings, SEK Diluted earnings, SEK Equity, SEK |
357 22.89 22.82 357 |
|
| Key ratios Leverage, % Equity/assets ratio, % Return on equity, % Discount to reported net asset value, % Management costs, % of net asset value |
10 73 –6 39 0.3 |
12 76 15 27 0.2 |
10 81 23 23 0.2 |
9 81 21 17 0.1 |
Key ratios Leverage, % Equity/assets ratio, % Return on equity, % Discount to reported net asset value, % Management costs, % of net asset value |
6 81 7 13 0.2 |
|
| Share data Total number of shares, million Holding of own shares, million |
767.2 6.7 |
767.2 6.2 |
767.2 6.3 |
767.2 5.8 |
Share data Total number of shares, million Holding of own shares, million |
767.2 5.3 |
|
| Share price on December 31, SEK 4) Market capitalization on December 31 Dividend paid to Parent Company shareholders |
128.4 96,028 4,603 |
170.0 128,048 5,331 |
221.3 166,451 6,089 |
284.7 215,705 6,856 |
Share price on December 31, SEK 4) Market capitalization on December 31 Dividend paid to Parent Company shareholders |
312.6 236,301 7,672 |
17 |
| Dividend per share, SEK Dividend payout ratio, % Dividend yield, % |
6.00 115 4.7 |
7.00 112 4.1 |
8.00 112 3.6 |
9.00 110 3.2 |
Dividend per share, SEK Dividend payout ratio, % Dividend yield, % |
10.005,6) 1005) 3.25) |
15 |
| Total annual turnover rate, Investor shares, % 4) Total return, Investor shares, %4) SIXRX (return index), % OMXS30 index, % Foreign ownership, capital, % |
112 –8 –14 –15 33 |
78 38 16 12 33 |
62 35 28 21 34 |
58 33 16 10 34 |
Total annual turnover rate, Investor shares, % 4) Total return, Investor shares, %4) SIXRX (return index), % OMXS30 index, % Foreign ownership, capital, % |
66 13 10 –1 35 |
21 11 5 |
1) This business area reporting was implemented in 2011.
2) New business area reporting as of 2015. 3) From July 1, 2011, invested includes a capital contribution from Investor to IGC of SEK 1 137 m. (2011) and SEK 750 m. (2012). Divested includes dividends from IGC to Investor of SEK 674 m. (2011) and SEK 607 m. (2012).
4) Pertains to class B shares.
5) Proposed dividend of SEK 10.00/share.
6) Based on the total number of registered shares.
Annual
Profit/loss for the year attributable to the Parent Company's shareholders in relation to the weighted average number of shares outstanding.
Profit/loss for the year attributable to the Parent Company's shareholders, plus interest expenses after tax related to convertible debenture loans, in relation to the weighted average number of shares outstanding after full conversion and adjusted for the effect of share-based payments.
The difference between net asset value and market capitalization as a percentage of net asset value. If market capitalization is lower than net asset value, the share is traded at a discount. If market capitalization is higher, it is traded at a premium.
Dividends paid in relation to dividends received from Listed Core Investments.
Dividend per share in relation to share price on the Balance Sheet date.
Earnings before interest and taxes.
Earnings before interest, taxes, depreciation and amortization.
Shareholders' equity and convertible debenture loans as a percentage of the balance sheet total.
Equity including convertible debenture loans in relation to the number of shares on the Balance Sheet date after full conversion.
A company that offers shareholders the possibility to spread their risks and get attractive returns through long-term ownership of a well-distributed holdings of securities. Its shares are typically owned by a large number of individuals.
Net debt/Net cash as a percentage of total assets.
Risk-free interest rate plus the market's risk premium.
A method for determining the current value of a company by examining and comparing the financial ratios of relevant peer groups.
The market value of total assets less net debt (corresponds to equity).
Interest-bearing current and long-term liabilities, including pension liabilities, less cash and cash equivalents, short-term investments and interest-bearing current and long-term receivables.
Profit/loss for the year as a percentage of average shareholders' equity.
The interest earned on an investment in government bonds. In calculations, Investor has used SSVX 90 days.
The surplus yield above the risk-free interest rate that an investor requires to compensate for the higher risk in an investment in shares.
A Swedish all shares total return index calculated on share price change and reinvested dividends.
All assets and liabilities not included in net debt or net cash, which is the same as the Balance Sheet total less asset items included in net debt or net cash and less non-interest-bearing liabilities.
Change in equity during the period resulting from transactions and other events, other than those changes resulting from transactions with the owners in their capacity as owners.
Number of shares traded during the year as a percentage of the total number of shares outstanding.
Financial information about Investor can be accessed and ordered (information by sms, e-mail or printed annual report) on our website: www.investorab.com, or by calling +46 8 614 2131.
Printed annual reports are distributed to shareholders that have requested it. All new shareholders will receive a letter asking how they would like to receive information.
Magnus Dalhammar: +46 8 614 2130 [email protected]
IR Group: +46 8 614 2131 www.investorab.com
Investor AB invites shareholders to participate in the Annual General Meeting on Tuesday, May 10, 2016, at 3:00 p.m. at the City Conference Centre, Barnhusgatan 12-14, in Stockholm.
Shareholders who would like to attend the Annual General Meeting must be recorded in the register of shareholders maintained by Euroclear Sweden AB on Tuesday, May 3, 2016, and must notify the Company of their intention to attend the Meeting no later than Tuesday, May 3, 2016.
Shareholders can give their notice of participation by:
Notice convening the Annual General Meeting and proxy forms are available on Investor's website, www.investorab.com.
The Board and President propose a dividend to the shareholders of SEK 10.00 per share for fiscal year 2015. Thursday, May 12, 2016, has been proposed as the record date. If the proposal is approved by the Annual General Meeting, the dividend is expected to be distributed by Euroclear Sweden AB on Tuesday, May 17, 2016.
NORDIC ECOLABEL 3041 0001
As a long-term owner, we actively support the building and development of best-in-class companies.
SE-103 32 Stockholm Sweden Visiting address: Arsenalsgatan 8C Phone: +46 8 614 2000 Fax: +46 8 614 2150
www.investorab.com
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