Annual Report • Mar 1, 2012
Annual Report
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Mekonomen's formal A nnual Report comprises pages 20 –78. Only the formal annual report has been reviewed by the company's auditors. A more detailed description of Mekonomen's operations and additional, regularly updated financial information are presented on Mekonomen's website: www.mekonomen.se
• In early April 2012, a reorganisation was implemented aimed at better adapting Mekonomen's organisation for further expansion.
*) Net sales for Sørensen og Balchen have been restated for 12 months.
| 2011 | 2010 | 2009 | |
|---|---|---|---|
| Revenues, SEK M | 4,237 | 3,447 | 3,206 |
| EBIT, SEK M | 536 | 485 | 325 |
| EBIT margin, % | 13 | 14 | 10 |
| Profit for the year, SEK M | 380 | 351 | 237 |
| Earnings per share, SEK | 11.39 | 10.95 | 7.38 |
| Cash flow* per share, SEK | 7.98 | 11.60 | 9.38 |
| Dividend**, SEK | 8.00 | 8.00 | 7.00 |
| Return on shareholders' equity, % | 27 | 37 | 27 |
| Equity/assets ratio, % | 51 | 55 | 59 |
*) From continuing operations.
**) Board's proposal to the 2012 Annual General Meeting.
Mekonomen is the leading spare-parts chain in the Nordic region, with our own wholesale operations, more than 300 stores and 1,600 workshops operating under Mekonomen's brands. At the end of 2011, the Mekonomen Group had 334 stores, of which 230 wholly owned and 104 partnerships. The number of affiliated workshops was 1,686, of which 21 were wholly owned. Of these workshops, 1,036 operate under the Mekonomen Service Centre concept, 420 under MekoPartner, 219 under BilXtra and 11 under Speedy.
*) The Board's proposal for 2011. Of which, extraordinary dividend of SEK 5.00 for 2007 and SEK 7.00 for 2006.
**) At the end of the financial year.
With innovative concepts, high quality and an efficient logistics chain, Mekonomen offers consumers and companies' solutions for an easier CarLife.
We are the first choice for drivers and strive for an easier CarLife.
The Group shall develop with continued healthy profitability and thus generate value growth for shareholders.
Annual sales increase of 10 per cent. Expansion shall occur with retained financial stability.
Mekonomen assumes responsibility by contributing to a more sustainable automotive industry, with reduced environmental and climate impact and increased traffic safety.
Customers are demanding products that take the environment into consideration and offering environmentally adapted car service and care provides Mekonomen with a competitive edge in the market in which it operates. Accordingly, Mekonomen's product range includes environmentally labelled products and the company offers products made from recycled materials and imposes demands on its suppliers.
Mekonomen also focuses on developing a motivated organisation whose composition largely reflects society and aims to play an active role in creating a society where everyone's potential is utilised.
Information on the number of stores and workshops pertains to 31 December 2011.
Mekonomen shall be associated with the concepts of good value, turnkey solutions, innovation, competency and high quality. These concepts shall permeate everything Mekonomen does to achieve the vision of being car owners' first choice and striving for an easier CarLife.
The brand is one of Mekonomen's key assets. Work to develop and preserve the brand is central to Mekonomen's strategic effort.
All types of concept development and communication are based on strengthening the direction of the brand to enable Mekonomen to make CarLife easier for consumers and companies.
The Mekonomen Group has slightly more than 2,000 employees. The operation is based on common values that are summarised into five principles: customer-orientation, business-like, responsibility, competency and flexibility. Mekonomen's employees are its primary ambassadors and brand bearers.
At the central warehouse in Strängnäs, there are approximately 67,000 articles for some 9,000 car models, as well as a broad range of marine spare parts, accessories for leisure boats and spare parts for snowmobiles. In Norway, Sørensen og Balchen has a central warehouse in Oslo, with about 61,000 articles covering essentially all common car models and a broad range of accessories. Through cooperation with contract suppliers that deliver directly to the stores, the Mekonomen Group has access to an additional 500,000 products.
2011 was an eventful year for Mekonomen, with continued expansion and increased profitability, despite a weak market trend in the Nordic region. Revenues rose 23 per cent to SEK 4,237 M and EBIT increased 11 per cent to SEK 536 M. Mekonomen's ability to capture additional market shares and boost its earnings in a weak market is proof that we have strengthened our position and that our concept is appreciated by customers.
In March, Mekonomen acquired Sørensen og Balchen, a Norwegian spare-parts and accessories chain with 73 wholly owned and partnership stores and more than 200 workshops under the BilXtra brand. Sørensen og Balchen is operated as a separate group within Mekonomen, using the company's existing concept and brands. This arrangement has been highly successful and is appreciated by both our customers and the employees of Sørensen og Balchen. Since the acquisition, we have also succeeded in retaining all key employees. Synergy gains have been realised in the areas of purchasing and logistics and successful integration has been performed ahead of schedule.
In October, Mekonomen signed an agreement to acquire Meca, a spare-parts chain with operations
in Sweden and Norway. However, the acquisition is conditional upon approval from the Norwegian Competition Authority and a final decision is expected by June 2012 at the latest.
I am pleased to announce that the level of activity at Mekonomen remained high throughout the year. Several factors contributed to this success: a strong brand, attractive offerings and skilled employees, combined with efficient cooperation at all levels – from stores and workshops that make CarLife easier for our customers to wholesale operations and central support functions.
Competence and service level are crucial competitive tools in our industry. Accordingly, it is vital for Mekonomen's future expansion that we continue to retain and develop our skilled employees and leaders and that we are able to recruit and convert additional workshops to our successful workshop chains. Mekonomen's ventures in recent years have significantly bolstered our appeal. This is evident in many areas, particularly in our ability to attract the best mechanics, also from branded dealerships, to Mekonomen.
An increasing number of workshops are interested in joining Mekonomen. At year-end, the Group comprised approximately 1,700 affiliated workshops, up 26 per cent compared with 2010, including the workshops gained through the acquisition of Sørensen og Balchen. The expansion of Mekonomen's Medium and Mega units also continued during 2011, bringing the total number of units to 98 at year-end. At Gärdet in Stockholm, we opened Europe's most complete Mega facility, where we offer our customers a comprehensive concept including a store, vehicle inspections, car care, a car wash, a café and a workshop that is open around the clock and naturally services all car models. The Fleet concept, which offers service agreements for company vehicle fleets, performed well and Fleet took a major step during the year from operating solely in Sweden to initiating activities in the rest of the Scandinavian market. Our efficiency-enhancement efforts in Denmark continued successfully and resulted in an improved EBIT margin.
Mekonomen has chosen to assume responsibility by playing an active role in the automotive sector's transition to a more sustainable
industry. This is being achieved through an active environmental and climate effort throughout the organisation, with a focus on environmental certification of the Group's units and employee training. The central environmental issues for Mekonomen are transport, energy consumption and chemicals. In 2011, Mekonomen decided to support the UN Global Compact, which entails establishing a stricter Code of Conduct in the Group. The Code of Conduct was introduced in our purchasing operations in 2011 and will be fully implemented on a continuous basis during 2012.
That Mekonomen with its ambitious initiatives and focused effort could grow in markets which otherwise showed a lacklustre performance during 2011 is a clear sign that we have a winning strategy and that our concepts and offerings are appreciated by our customers.
We now increase our speed further.
With our recent expansion, Mekonomen has transformed from a medium-sized business to a large company, which means that there are greater expectations on us. During the spring of 2012 we
have therefore adjusted our organisation for a future expansion and have adapted to the new structure, which is an effect of our acquisitions. This new organisation has provided us with a structure that better reflects the size of our company and the journey we have ahead of us.
In order for Mekonomen to grow while simultaneously boosting its profitability, it is important that all of our employees see us as an enterprising company with opportunities for professional and personal development. Accordingly, we plan to continue investing in broad training initiatives, with the Mekonomen Academy playing a central role.
In conclusion, I would like to thank everyone at Mekonomen for outstanding contributions during 2011. Thanks to your efficient teamwork, we have successfully strengthened our position in the market, while maintaining the strength to enter into new ventures.
Mekonomen's successful journey continues.
Kungens Kurva, April 2012
Håkan Lundstedt President and CEO
When Mekonomen acquired the spare-parts wholesaler Sørensen og Balchen in March 2011, It also assumed ownership of two new chains – BilXtra Store and BilXtra Workshop. For Mekonomen, it immediately became clear that these two prior competitors should continue competing for customers in Norway.
"From an industrial and business perspective, BilXtra and Mekonomen fit together perfectly," says Morten Birkeland, CEO of Sørensen og Balchen.
"Both companies are known for their broad ranges, high level of logistical expertise and active marketing. In other words, the corporate cultures were largely the same."
The advantages of operating the businesses as separate, competing companies under the same group were clear: coordinated purchasing would result in larger volumes and more efficient logistics would generate significant synergy effects.
"And this has, in fact, been the case," says Morten Birkeland.
In the past, the BilXtra brand was used exclusively for stores, while workshops were operated under the name Quickpartner. As of 2009, the workshops also adopted the BilXtra brand. The name change became a major success and contributed to a significant increase in car owners' familiarity with BilXtra.
Sørensen og Balchen has a long history. The wholesale operations commenced in 1904 and its range of spare parts and accessories for cars has been developed since 1907.
The company has undergone a rapid expansion in recent years. Since BilXtra was launched as a workshop brand three years ago, the number of workshops has increased from about 125 to 219. The company operates 77 stores, of which 35 are wholly owned.
"BilXtra covers all of Norway," explains Morten Birkeland. "Nevertheless, we are still focusing on being able to expand while maintaining favourable profitability."
"Establishing a connection with Mekonomen has strengthened our competitiveness, which will ultimately benefit car owners in Norway."
Like Mekonomen, Sørensen og Balchen and BilXtra have always been known for their efficient logistics and speedy product deliveries to both stores and workshops. Another similarity between the companies is their highly active approach to marketing.
"Our communications with car owners is based on direct advertising in a catalogue delivered to more than 800,000 households 11 times a year.
"To supplement this advertising, we also use
TV and radio as channels for conveying our products and message, and our online activities are naturally also an important component of our marketing."
Sørensen og Balchen was consolidated by Mekonomen as of March 2011. Integration of the company has proceeded quickly and the synergy gains have been achieved. EBIT for the period from 11 March to 31 December 2011 amounted to SEK 88 M.
"This is a satisfactory performance," says Morten Birkeland. "The market was relatively weak in 2011, a trend that was perhaps most clearly reflected in the distribution of sales.
"In times of economic decline, demand for spare parts increases, while sales of accessories decline. And this is exactly what we experienced in Norway in 2011.
"Both Sørensen og Balchen and BilXtra's stores have given their thumbs-up to Mekonomen as the new owner and we managed to demonstrate during 2011 that their high expectations of the company would be met.
"This bodes well for the future."
Imagine a facility specially suited to drivers and boat owners, with a full range of spare parts and accessories, a workshop open around the clock, vehicle inspections, car hire services, car care and a café.
This is a fitting description of Mekonomen's new flagship facility at Gärdet in Stockholm.
"Creating a facility that is open around the clock is a wonderful idea and difficult challenge," says Hans Thörner, Manager at Mekonomen's new facility.
After running a Mekonomen store in Östersund, Hans Thörner assumed responsibility for establishing a new Mega facility in the same town. When the launch was completed, he handed over the keys and travelled to Stockholm.
Just five months after the move, it was time for the opening of Mekonomen's new flagship at Tegeluddsvägen at Frihamnen, Gärdet. On 15 April 2011, Europe's first full-service facility, with a round-the-clock workshop, store with automotive and marine product ranges, vehicle inspection, car hire and car care opened. The facility also offers a café where customers may enjoy a cup of coffee
or have lunch when they leave their vehicles for service or repairs.
"And more than that, we are also open every day, all year round," emphasises Hans.
Mekonomen at Gärdet was an immediate success. The Service Centre has been fully booked since it opened and many new customers to Mekonomen have found smart accessories for both cars and boats.
A total of 22 individuals are employed at Mekonomen's flagship. The facility is operated by
Mekonomen, but to further strengthen the offering at Gärdet, strategic alliance partners were carefully selected to join Mekonomen in offering customers a full-service facility of more than 5,000 square meters of space.
"It is important for us to have professional alliance partners who not only deliver quality but also have the strong sense of service required to be successful," says Hans Thörner.
Flexibility and service, around the clock, has attracted commercial traffic to Mekonomen at Gärdet. The Police Authority in Stockholm, as well as a number of taxi companies and delivery companies are a few examples of commercial traffic that currently take their vehicles to Gärdet.
"We have filled a gap in the market here," says Hans Thörner.
"By offering 24-hour service, we provide commercial traffic with the opportunity to be more efficient in their work." At nights, most delivery vehicles are at a standstill and for them it is perfect for the vehicles to be repaired by the workshop during the night, so they are ready when they are needed the most.
The major interest from customers in Stockholm for the 24-hour-open facility has generated a great deal of energy in all employees.
"The facility's turnkey offering is unique and our customers show their appreciation daily for the high level of service available at Gärdet. This generates positive energy in the work teams and makes employees look forward to going to work. It is of course very gratifying to be the first workshop chain in Europe to offer 24-hour-open workshop. We are the leaders and have no intention of letting go," says Hans Thörner.
Mekonomen's vision is to be car owners' first choice. As a leading player, Mekonomen also wants to contribute to a more sustainable automotive industry, with reduced environmental and climate impact and increased traffic safety.
Mekonomen focuses on several parts of the sustainability concept. The product range includes environmentally labelled products, we offer products made from recycled materials and we impose demands on our suppliers. We focus on developing a motivated organisation that reflects the composition of society and we want to play an active role in creating a society where everyone's potential is utilised.
In 2011, Mekonomen decided to support the UN Global Compact, which will entail establishing a stricter Code of Conduct in the Group. The Code of Conduct was introduced in our purchasing operations in 2011 and will be fully implemented on a continuous basis during 2012.
The basis for Mekonomen's Code of Conduct is in our values.
We generate excellent financial results, with a balance between short and long-term earnings. We are perceived as affordable by the customer.
We assume responsibility for our business surroundings, joint resources and the environment. Our customers associate us with high quality. We have confidence in our employees' qualifications and abilities.
We have high professional qualification within the areas in which we operate. We are perceived as reliable and competent by customers.
We are continuously searching for new ideas and changing, to meet requirements from existing
and future customers. We are perceived as innovative by our customers.
We place the customer first and satisfy our customers' expectations. Our customers perceive that we have a comprehensive view.
Mekonomen's products and services are largely about extending the service life of cars, contributing to safe driving, reducing the impact on the environment and facilitating high comfort. This will enable Mekonomen to contribute to a more sustainable automotive industry.
Since 2009, Mekonomen sells environmentally labelled products and products with reduced negative environmental impact, which is found in the range that is marketed under Mekonomen's proprietary brand. We know that customers request environmentally adapted products and that these requests will increase further with stricter environmental legislations, better environmental options and higher awareness and knowledge. To become car owners' first choice in the future market, Mekonomen must be able to satisfy these requirements and wishes.
For Mekonomen, the environment and quality are very important and prioritised areas. Customers demand products that take the environment into consideration and offering environmentally adapted car service and care provides Mekonomen with a competitive edge in the market in which it operates. Mekonomen's strong brand entails obligations, and as such environmental issues are of strategic significance to business, which is high on the company's agenda.
For several years, Mekonomen has been conducting active environmental and quality work throughout the organisation, where the most important issues involved focusing on transport, energy consumption and chemicals. There is strong support and interest in environmental issues in all parts of the Group and in the past two years, extensive investments have been made in environmental certification and training. The efforts were primarily directed at proprietary operations, but also at franchise owners. The longterm goal is for all companies within Mekonomen to have a so-called multi-site certificate, which means certification according to ISO 14001, OHSAS 18001 and ISO 9001 (environment, work environment and quality).
Today, there are quantative goals entailing that 100 per cent of the distribution vehicles, van models, shall have a lower CO2 emission than 200 g/km, and that not less than 30 per cent of the chemical products marketed by Mekonomen must be environmentally labelled.
Since mid-2010, comprehensive work has been in progress aimed at certifying Mekonomen's operation in accordance with ISO 14001, OHSAS 18001 and ISO 9001.
The objective is to integrate the management system in the ordinary operation to facilitate and streamline work. During 2011, all 150 stores in Sweden, as well as a number of workshops participated in training in all certification areas. Today, 52 units are certified. The goal is for all stores and 50 workshops to be certified before the end of 2012 and an additional 100 workshops will be certified by 2014.
Specific training initiatives were implemented during the year, with a focus on chemical issues. It is partly driven by the EU's chemical project, which impacts the entire value chain. Employees participated in training in the transport of hazardous goods and chemical management in stores. Furthermore, work is in progress to prepare a specific chemical policy and product managers have been trained in procedures to prevent hazardous substances from being included in Mekonomen's products. During 2011, products were removed from the range since they did not fulfil Mekonomen's internal requirements.
Transport and logistics are a prioritised area, where continuous work is done to achieve higher efficiency and lower environmental impact. The effort also generated a positive financial effect on the Group. When Mekonomen procures transport services, there is high demand on efficiency by, for example, increasing the degree of utilisation and minimising the number of reloading to thus reduce the number of transports and also fuel consumption.
From Mekonomen, it is imperative to arouse interest in environmental issues and generate excellent prerequisites for the workshops that operate under our brand. They are offered support by regional managers and through Mekonomen's training unit. Mekonomen also has specific instructions, for example, managing hazardous waste. These instructions are integrated in Mekonomen's business data system, accessible for all employees in stores and workshops.
Mekonomen is a purchase-intense organisation, with an extensive supplier chain and a large number of products. To reduce risks and ensure high quality, we decided to purchase from major " We want our employees to view Mekonomen as a long-term employer, with opportunities for both professional and personal development. We want our employees to have the opportunity to be able to utilise their full potential. "
suppliers in the automotive industry. Mekonomen believes that it is an efficient purchasing method for a suppliers, which still has a small purchase volume compared to the global automotive industry, although we are expanding significantly as a buyer of spare parts for the aftermarket.
By being a customer to major and recognised suppliers to the automotive industry, with excellent references, Mekonomen will be capitalising on the strict demands on follow-ups placed by these players. In this manner, Mekonomen will be guaranteed that the suppliers have management systems for quality (ISO 9001), security (TS), environment (ISO 14001), as well as health and safety (OHSAS 18001), and that the management system is reviewed regularly.
The absolute majority of the purchases are made from suppliers in Europe.
Mekonomen has a central purchasing organisation, distributed in two different categories of suppliers: accessories and spare parts. Both these categories of suppliers are found among the major players in the automotive industry. For accessories, there are slightly more small suppliers and, when dealing with this group, Mekonomen has defined more clearly and placed demands on the issues pertaining to the environment, quality, respect for human rights and good working conditions.
During 2011, Mekonomen decided to support the UN's Global Compact and introduced a Code of Conduct, which is attached to all agreements. Mekonomen's earlier demands in this respect have now been replaced by demands for compliance with Mekonomen's Code of Conduct and respecting the UN's Global Compact.
In agreements and the systematic procurement process, there are also other functions and procedures to drive the supplier's quality and safety work. We will continue to develop the work with suppliers pertaining to responsible business and increase the control of the products that we offer. Mekonomen also intends to develop the model for risk assessment and classification of suppliers. It is part of the effort to optimise the supply of goods, streamline procurement and increase control.
Mekonomen's organisation is responding to change quickly and is pragmatic, with great belief in the ability of individuals. We are an entrepreneurial company characterised by a team environment, where all employees feel that they contribute and are able to influence.
We want our employees to view Mekonomen as a long-term employer, with opportunities for both professional and personal development. We want our employees to have the opportunity to be able to utilise their full potential.
Mekonomen has grown rapidly in recent years and has developed a strong brand. It makes us committed and generates new opportunities. During 2011, several projects were implemented to further systematise work pertaining to employee issues, and to develop the organisation within Human Resources Management.
During 2011, Mekonomen introduced a new HR strategy, which will contribute to Mekonomen achieving the overall goal of increased growth and the vision of becoming car owners' first choice. In addition, a Code of Conduct was prepared with
associated whistleblowing system, which will be launched within the organisation in 2012.
Since 2007, annual employee surveys have been conducted, which is an important tool to document and measure employees' view of Mekonomen as an employer. The purpose of the employee surveys is to secure opinions from all employees and thus gain a satisfactory basis for implementing improvements in the company, both overall and individual groups/units. Based on the results, we will then be able to work on preserving our strengths and developing the areas where there is potential for improvements. The result is followed-up in Group management.
Talent Management is one of the most important employee issues for Mekonomen. We regard good leadership in the company that is able to attract, develop and motivate employees as key to success.
When planning for competency and development efforts within Mekonomen, it is important that we not only satisfy current requirements but also look to the horizon to prepare ourselves for future challenges. This is how we will secure future competitiveness for both the company and individual employees. At Mekonomen, we have decided to develop an internal Mekonomen Academy, where all company training efforts have been concentrated, both internal and external. The training offering is communicated to all employees and it is the responsibility of individual employees, together with their managers, to participate in the training efforts. Another way in which to create development is to drive cross-functional projects, where employees have the opportunity to work away from traditional assignments, together with
colleagues from other departments. Being part of such a project is a valuable practical experience and an effort that is appreciated by employees.
Within Mekonomen, there are Leader guides and Employee guides. These are efficient channels for informing employees throughout the organisation and make it easy for them to get the information they need to control their work and development. To secure continuous communication within Mekonomen, the personnel magazine, HR-Nytt, is published on a monthly basis.
Mekonomen's organisation shall be diverse and reflect the society in which we live. As Mekonomen's product and service offering expands and new target groups are defined, the need for diversity will increase further, including the proportion of females. It is easier for Mekonomen to attract male employees than female, which is a general pattern in the automotive industry. For Mekonomen, is it an important target that 30 per cent of employees in stores are female.
During 2012, Mekonomen will systemise efforts for employees' health and well-being by classifying this year as a Health Year. Through an internal platform, employees will have the opportunity to register and report exercise initiatives performed within the framework for a competition.
The competition is based on employees choosing various forms of exercise from an extensive list, which contains everything from judo and cycling to all types of ball games, running, jogging and walking and will receive points for their efforts.
Every month winners will be announced in the various categories, who will receive prizes.
Within the framework for the Health Year, there are also lots of tips and inspiration on how food, exercise and stress management do not have to be time consuming.
Already during the first quarter, more than 700 employees registered as participants in the Health Year 2012.
" Mekonomen's operation focuses on high quality in products and services, which is why conscientious efforts for a responsible Mekonomen result in increased legitimacy of quality in everything we undertake. By clearly indicating that we are continuing to develop a responsible Mekonomen, value is added to our brand. "
In efforts to increase diversity and to continuously raise the organisation's competency, Mekonomen also cooperates with the Public Employment Services and is a member of Diversity Charter. To facilitate young people's entrance into the labour market, Mekonomen participates in several collaborations.
In the cooperation with Telge Tillväxt, which commenced in 2010, the goal is to create job opportunities for young people, with the objective to half youth unemployment in Södertälje within three years.
Mekonomen's cooperation with Farsta High School, jointly with the Swedish Trade Federation and Axel Johnson, involves reducing unemployment among young people by offering trainee positions in our stores. Mekonomen is also one of the companies cooperating with the Stockholm School of Economics and the Centre for Retail programme, a three-year university programme aimed at creating a knowledge centre with a focus on retail. In addition, there is a partnership with various vehicle technology courses through contributions of equipment and trainee positions.
During 2011, the cooperation with Telge Tillväxt and Centre for Retail resulted in new recruitments at Mekonomen.
During 2011, for the second consecutive year, Mekonomen was one of the main sponsors for the Cancer Fund's Pink Ribbon campaign, which takes place annually in October.
Mekonomen's own campaign, which was connected to the Cancer Fund's Pink Ribbon campaign, was called Våga Fråga (Dare to Ask). With this, Mekonomen wanted to encourage Swedish car owners to dare ask about issues pertaining to the car and CarLife without feeling that the question is too insignificant or unnecessary. In addition, Mekonomen wanted to encourage questions to the Cancer Fund about cancer, and mainly about breast cancer.
Mekonomen donated SEK 200 for each Pink service conducted during the month at Mekonomen's Service Centres and SEK 1 for each call to Mekonomen Direkt.
Mekonomen also presented five new products for sale at Mekonomen's stores during the campaign period: pink steering-wheel glove, pink windshield-washer fluid, pink towline, pink rearview mirror dices, and engine oil with pink labels. Contributions to the Pink Ribbon were SEK 5–50 for each product sold, depending on the product.
In addition, a design competition was organised via Facebook and the vagafraga.se campaign site. The competition involved designing an air-freshener that can be hung on the rear-view mirror in the car. The winner was Anneli Persson from Örebro, with her "Ängeln Victoria" contribution. The winning air-freshener was sold in all Mekonomen's stores and 10 per cent of the revenue was donated to the Cancer Fund's Pink Ribbon campaign.
The total amount contributed by Mekonomen to the Pink Ribbon in 2011 totalled slightly more than SEK 2.6 M.
Mekonomen's operation focuses on high quality in products and services, which is why conscientious efforts for a responsible Mekonomen result in increased legitimacy of quality in everything we undertake. By clearly indicating that we are continuing to develop a responsible Mekonomen, value is added to our brand.
Focusing on a responsible Mekonomen will particularly strengthen the Group internally by attracting the best talents, who, in turn, will improve our competitiveness. That we are perceived externally as reliable, stable and attractive business partner is also beneficial to all existing and potentially new business relations. Finally, Mekonomen's assuming responsibility generates high credibility for our customers, both in stores and workshops, which increases customer loyalty.
| SEK M | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Net sales | 4,140 | 3,374 | 3,129 | 2,646 | 2,530 |
| Other revenues | 97 | 73 | 77 | 45 | 20 |
| Goods for resale | –1,866 | –1,607 | –1,530 | –1,317 | –1,294 |
| Other expenses | –1,835 | –1,355 | –1,352 | –1,123 | –1,007 |
| EBIT | 536 | 485 | 325 | 251 | 250 |
| Profit after financial items | 523 | 485 | 323 | 261 | 418 |
| Tax on profit for the year | –143 | –134 | –86 | –72 | –70 |
| PROFIT FOR THE YEAR | 380 | 351 | 237 | 189 | 348 |
| SEK M | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| ASSETS | |||||
| Intangible assets | 1,116 | 348 | 278 | 254 | 206 |
| Other fixed assets | 302 | 207 | 180 | 148 | 109 |
| Inventories | 934 | 680 | 620 | 602 | 554 |
| Accounts receivables | 411 | 287 | 265 | 217 | 201 |
| Other current assets | 225 | 162 | 126 | 116 | 120 |
| Cash and cash equivalents | 67 | 74 | 60 | 85 | 290 |
| TOTAL ASSETS | 3,054 | 1,758 | 1,529 | 1,423 | 1,481 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders equity, Parent Company's shareholders | 1,539 | 955 | 877 | 833 | 978 |
| Non-controlling interest | 17 | 19 | 18 | 18 | 18 |
| Long-term liabilities | 511 | 24 | 29 | 42 | 44 |
| Current liabilities | 988 | 760 | 605 | 530 | 441 |
| SEK M | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Cash flow from operating activities | 259 | 358 | 289 | 209 | 320 |
| Cash flow from investing activities | –512 | –184 | –92 | –93 | 448 |
| Cash flow from financing activities | 246 | –160 | –222 | –321 | –574 |
| CASH FLOW FOR THE YEAR | –7 | 14 | –25 | –205 | 194 |
| Amounts in SEK per share, if not otherwise stated | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Profit | 11.39 | 10.95 | 7.38 | 5.84 | 11.03 |
| Cash flow | 7.98 | 11.60 | 9.38 | 6.77 | 10.32 |
| Shareholders' equity | 46.9 | 30.9 | 28.4 | 27.0 | 31.7 |
| Dividends* | 8 | 8 | 7 | 6 | 11 |
| Share of profit paid, % | 69 | 73 | 95 | 103 | 100 |
| Share price at the end of the year | 225 | 223 | 155 | 70 | 146 |
| Share price, highest for the year | 257.5 | 228 | 159.5 | 151 | 154.5 |
| Share price, lowest for the year | 157 | 131 | 71.75 | 58.25 | 100 |
| Direct yield, % | 3.6 | 3.6 | 4.5 | 8.6 | 7.5 |
| P/E ratio at the end of the year, multiple | 19.8 | 20.4 | 21.0 | 12.0 | 13.2 |
| Average number of shares after dilution effects | 32,436,258 | 30,868,822 | 30,868,822 | 30,868,822 | 30,868,822 |
| Number of shares at the end of the period | 32,814,605 | 30,868,822 | 30,868,822 | 30,868,822 | 30,868,822 |
| Number of shareholders at the end of the year | 7,735 | 8,024 | 7,430 | 6,559 | 6,199 |
* Board proposal for 2011. Of which, extraordinary dividend SEK 5.00 for 2007.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Sales growth, % | 23 | 8 | 19 | 6 | 4 |
| Gross margin,% | 55 | 52 | 51 | 50 | 49 |
| EBIT margin, % | 13 | 14 | 10 | 9 | 10 |
| Profit margin, % | 12 | 14 | 10 | 10 | 16 |
| Capital employed, SEK M | 2,203 | 1,060 | 925 | 905 | 1,002 |
| Operating capital, SEK M | 2,136 | 986 | 865 | 820 | 712 |
| Return on capital employed, % | 29 | 49 | 36 | 28 | 39 |
| Return on operating capital, % | 34 | 52 | 39 | 33 | 27 |
| Return on equity, % | 27 | 37 | 27 | 20 | 36 |
| Return on total capital, % | 20 | 30 | 22 | 19 | 27 |
| Equity/assets ratio, % | 51 | 55 | 59 | 60 | 67 |
| Net debt/equity ratio, multiple | 0.37 | 0 | neg | neg | neg |
| Interest-coverage ratio, multiple | 26 | 151 | 66 | 33 | 47 |
| Net indebtedness, SEK M | 580 | 12 | neg | neg | neg |
| AVERAGE NUMBER OF EMPLOYEES | |||||
| Sweden | 1,076 | 850 | 789 | 732 | 687 |
| Norway | 267 | 251 | 243 | 233 | 202 |
| Sørensen og Balchen | 208 | – | – | – | – |
| Denmark | 392 | 358 | 398 | 397 | 382 |
| Finland | 15 | 3 | – | – | – |
| GROUP | 1,958 | 1,462 | 1,430 | 1,363 | 1,271 |
* For information on definition of key figures, refer to page 79.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| NUMBER OF STORES/of which wholly owned | |||||
| Sweden | 144/114 | 141/111 | 134/103 | 123/103 | 114/93 |
| Norway | 53/36 | 47/32 | 47/31 | 44/29 | 42/25 |
| Sørensen og Balchen | 77/35 | – | – | – | – |
| Denmark | 54/40 | 40/37 | 39/38 | 39/39 | 38/38 |
| Finland | 3/3 | 2/2 | – | – | – |
| Iceland | 1/0 | – | – | – | – |
| Marinshopen | 1/1 | – | – | – | – |
| M by Mekonomen | 1/1 | 1/1 | – | – | – |
| GROUP | 334/230 | 231/183 | 220/172 | 206/171 | 194/156 |
| NUMBER OF MEKONOMEN SERVICE CENTRES | |||||
| Sweden | 438 | 426 | 401 | 363 | 337 |
| Norway | 380 | 352 | 331 | 320 | 305 |
| Denmark | 215 | 195 | 178 | 169 | 136 |
| Finland | 3 | 2 | – | – | – |
| GROUP | 1,036 | 975 | 910 | 852 | 778 |
| NUMBER OF MEKOPARTNERS | |||||
| Sweden | 128 | 128 | 117 | 75 | – |
| Norway | 78 | 63 | 53 | 38 | – |
| Denmark | 214 | 172 | 126 | 86 | – |
| GROUP | 420 | 363 | 296 | 199 | – |
| NUMBER OF BILXTRA WORKSHOPS | |||||
| Norway | 219 | – | – | – | – |
| GROUP | 219 | – | – | – | – |
| NUMBER OF SPEEDY WORKSHOPS | |||||
| Sweden | 11 | 11 | – | – | – |
| GROUP | 11 | 11 | 0 | 0 | – |
| Full-year 2011 |
Q4 2011 | Q3 2011 | Q2 2011 | Q1 2011 | Full-year 2010 |
Q4 2010 | Q3 2010 | Q2 2010 | Q1 2010 | |
|---|---|---|---|---|---|---|---|---|---|---|
| NET SALES, SEK M | ||||||||||
| Mekonomen Sweden | 1,747 | 434 | 440 | 467 | 405 | 1,708 | 455 | 422 | 451 | 381 |
| Mekonomen Norway | 808 | 206 | 208 | 217 | 177 | 817 | 202 | 199 | 221 | 194 |
| Sørensen og Balchen | 603 | 176 | 190 | 199 | 39 | – | – | – | – | – |
| Mekonomen Denmark | 759 | 190 | 187 | 195 | 187 | 777 | 184 | 185 | 204 | 204 |
| Other | 223 | 68 | 61 | 64 | 30 | 72 | 31 | 16 | 16 | 10 |
| GROUP | 4,140 | 1,074 | 1,086 | 1,142 | 838 | 3,374 | 872 | 822 | 892 | 789 |
| EBIT, SEK M | ||||||||||
| Mekonomen Sweden | 323 | 78 | 89 | 89 | 67 | 310 | 78 | 91 | 87 | 55 |
| Mekonomen Norway | 132 | 31 | 36 | 40 | 25 | 144 | 32 | 40 | 44 | 28 |
| Sørensen og Balchen | 88 | 25 | 25 | 37 | 2 | – | – | – | – | – |
| Mekonomen Denmark | 63 | 1 | 18 | 26 | 17 | 45 | 7 | 12 | 20 | 6 |
| Other | –70 | –30 | –5 | –19 | –16 | –14 | –7 | –2 | –7 | 1 |
| GROUP | 536 | 104 | 163 | 173 | 95 | 485 | 110 | 141 | 144 | 90 |
| EBIT MARGIN, % | ||||||||||
| Mekonomen Sweden | 18 | 18 | 20 | 18 | 16 | 18 | 17 | 21 | 19 | 14 |
| Mekonomen Norway | 16 | 15 | 17 | 18 | 14 | 18 | 16 | 20 | 20 | 14 |
| Sørensen og Balchen | 15 | 14 | 13 | 18 | 4 | – | – | – | – | – |
| Mekonomen Denmark | 8 | 1 | 10 | 13 | 9 | 6 | 4 | 6 | 10 | 3 |
| GROUP | 13 | 10 | 15 | 15 | 11 | 14 | 12 | 17 | 16 | 11 |
| QUARTERLY DATA, GROUP | ||||||||||
| Net financial items, SEK M | –13 | -4 | –2 | –6 | 0 | 0 | 1 | –1 | 0 | 1 |
| Profit before tax, SEK M | 523 | 100 | 161 | 167 | 95 | 485 | 111 | 140 | 143 | 91 |
| Tax, SEK M | –143 | –29 | –44 | –45 | –25 | –134 | –33 | –40 | –37 | –24 |
| Profit after tax, SEK M | 380 | 71 | 118 | 122 | 70 | 351 | 78 | 100 | 107 | 67 |
| Gross margin,% | 55 | 56 | 55 | 54 | 54 | 52 | 53 | 54 | 53 | 50 |
| Earnings per share, SEK | 11.39 | 2.16 | 3.53 | 3.67 | 2.12 | 10.95 | 2.52 | 3.07 | 3.29 | 2.08 |
Mekonomen is the leading automotive spare parts chain in the Nordic region, with proprietary wholesale operations, 334 stores and 1,686 workshops operating under the Mekonomen brands. The Parent Company conducts its operations in the limited liability legal form and has its registered office in Stockholm. The address of the head office is Smista Allé 11, SE-141 70 Segeltorp, Sweden. The Parent Company's share is listed on Nasdaq OMX Mid-Cap list. The three largest owners in the Parent Company are the Axel Johnson AB Group, with 29 per cent, Eva Fraim Påhlman with 6.1 per cent and Otto Olsen Invest AS with 5.9 per cent.
The 2011 financial year was characterised by weak market growth, primarily pertaining to consumer and accessories sales. However, Mekonomen reported stronger growth than the total market in the Nordic region, primarily due to successful marketing efforts, with an 11 per cent increase in operating profit and 23 per cent increase in revenue.
In March, Mekonomen acquired Sørensen og Balchen, which operates the BilXtra automotive spareparts chain. Through the acquisition of Sørensen og Balchen, 73 stores and more than 200 BilXtra workshops have been added. At the end of the financial year, there were 77 stores and 219 affiliated BilXtra workshops. In Sweden, Marinshopen was acquired at the beginning of the year as a step in the venture in the marina market. During the year, Mekonomen
BilLivet was also acquired. During the acquisition in April, BilLivet comprised eight workshops that earlier operated in collaboration with Svenska Bil. Most of the workshops are located in Mega facilities. At the end of the year, Mekonomen BilLivet acquired three additional workshops.
The number of affiliated workshops continues to increase and as of 31 December 2011 amounted to 1,686 (1,349), of which the number of proprietary workshops was 21.
The effort on the Mega facilities continued during the year. This includes the opening of a Mega facility in April at Gärdet in Stockholm, where customers are offered a turnkey concept, such as store, workshop, vehicle inspection, car care, car wash, car hire and a café in the 5,000 square-metre facility. A new feature is also that the facility is the first in Europe to offer 24-hour workshop service.
During the year, in addition to continued efforts in new Mega facilities, several ventures were implemented, for example, the establishment in Finland, the marine venture, proprietary workshops, as well as the integration of Sørensen og Balchen.
Mekonomen's concept and venture aimed at female drivers, M by Mekonomen, was elected Retail Store of the Year 2011, when Market magazine organised the Major Retail Day in May.
In October, an agreement was signed to acquire Meca Scandinavia. The acquisition of Meca has been approved by the Swedish Competition Authority and is conditional upon approval from the Norwegian Competition Authority.
The number of stores in the chain increased by 103, of which the number of proprietary stores rose by 47. The total number of stores in the chain at the end of the year was 334 (231), of which the number of proprietary stores was 230 (183).
Revenues for the full-year increased 23 per cent to SEK 4,237 M (3,447). Other revenue includes exchange-rate gains of SEK 14 M (18), and rental revenue, property-related revenue, licenses, etc. The organic growth, which means the increase in net sales adjusted for acquisitions, currency effects and the number of workdays, was 2 per cent (7) during 2011.
EBIT amounted to SEK 536 M (485) and the EBIT margin to 13 per cent (14). Costs for investments, as well as acquisition and integration costs, amounted to SEK 58 M (10) for the full-year.
Profit after financial items amounted to SEK 523 M (485). Net financial expense amounted to SEK 13 M (0). Net interest expense amounted to SEK 14 M (income: 2) and other financial items was SEK 1 M (expense: 2). Profit after financial items was impacted by currency effects totalling SEK 2 M (–2).
Profit for the year amounted to SEK 380 M (351)
and earnings per share to SEK 11.39 (10.95). Of the year's profit, SEK 370 M (338) is attributable to the Parent Company's shareholders and SEK 10 M (13) to non-controlling interest.
Net sales (external) rose 2 per cent to SEK 1,747 M (1,708). The underlying net sales increased 2 per cent. Sales to BilLivet workshops acquired in 2011 were managed in 2011 as internal and thus generated a negative impact on sales in the Swedish segment compared with 2010. The year was characterised by weak market growth, primarily pertaining to sales to consumers and accessories sales.
EBIT amounted to SEK 323 M (310) and the EBIT margin to 18 per cent (18). The number of stores amounted to 144 (141), of which 114 (111) are proprietary.
Net sales (external) fell 1 per cent to SEK 808 M (817). Underlying net sales increased 2 per cent (12). New establishments during the year had a negative impact on earnings.
EBIT amounted to SEK 132 M (144) and the EBIT margin to 16 per cent (18). The number of stores amounted to 53 (47), of which 36 (32) are proprietary.
Net sales (external) totalled SEK 603 M and the operating profit amounted to SEK 88 M, with an operating margin of 15 per cent. Sørensen og Balchen was acquired in March 2011 and sales and profit pertained to the 11 March–31 December 2011 period. The positive effects of the integration effort since the acquisition contributed to an improvement in earnings during the year. The number of stores amounted to 77, of which 35 are proprietary.
Net sales (external) in Denmark amounted to SEK 759 M (777). Currency effects were negative and underlying net sales increased by 4 per cent. EBIT improved to SEK 63 M (45) and the EBIT margin to 8 per cent (6). The number of stores amounted to 54 (40), of which 40 (37) are proprietary.
During 2011, Mekonomen continued its investment in Finland and a new store located in Lahti was opened during the year. The number of stores amounted to 3 (2), of which all are proprietary.
At the beginning of the year, Mekonomen acquired Sørensen og Balchen, which operates the BilXtra automotive spare-parts chain. Through the acquisition of Sørensen og Balchen, 77 stores and 219 BilXtra workshops have been added to the Norwegian market. During the year, Sørensen og Balchen acquired a store in Hadeland and one in Ski.
During the year, Mekonomen BilLivet was acquired. BilLivet consists of eight workshops that were previously driven in cooperation with Svenska Bil.
During 2011, Mekonomen Sweden opened a Mega facility at Gärdet in Stockholm. A new workshop centre was opened in Luleå and a store in Gislaved. A partner store was acquired in Bollnäs and one in Häggvik. Partner stores in Avesta and Vårby Backe were affiliated and non-controlling
interests were acquired in Swedish stores. The stores in Lund were merged into one unit.
In Mekonomen Norway, two new stores were opened located in Rakkestad and Orkanger, and in October, a new Mega facility was opened in Trondheim. Furthermore, a partner store was acquired in Hadeland and partner stores were affiliated in Åsane and Røros.
During 2011, Mekonomen Denmark opened two new stores located in Maribo and Valby, and a partner store was also affiliated in Helsingør.
Marinshopen was acquired at the beginning of the year as a step in the venture in the marina market.
One partner store was opened in Iceland during the year.
During the fourth quarter, Mekonomen signed an agreement to acquire the spare-parts chain Meca. Meca's sales forecast for 2011 amounted to approximately SEK 1,500 M and EBIT to about SEK 180 M. Annual synergies, as a direct result of the acquisition, are estimated at SEK 80 M from 2013. Mekonomen and Meca will continue to operate as separate companies under existing brands.
Payment will comprise 3,086,882 new share issues through a non-cash issue, and SEK 1,246 M in cash. The dilution effect for existing shareholders amounted to approximately 8.6 per cent.
The acquisition is conditional upon approval from the Norwegian and Swedish Competition Authorities. Approval from the Swedish Competition Authority was received in December 2011. The decision from the Norwegian Competition Authority is expected not later than 11 June 2012.
During the year, investments in fixed assets amounted to SEK 95 M (68). In addition to this, investments in new IT systems amounted to SEK 39 M (29) during the year.
Company and business acquisitions amounted to SEK 917 M (79) during the year. Acquired assets in these acquisitions totalled SEK 372 M (48) and acquired liabilities totalled SEK 127 M (26). In addition to goodwill, which amounted to SEK 496 M (48), intangible assets were identified pertaining to brands SEK 56 M (5), franchise contracts SEK 47 M (0) and customer relations SEK 136 M (0). In addition, an adjustment to the fair value of longterm liabilities was implemented totalling SEK –10 M (0). The deferred tax liability attributable to the net of these surplus values amounted to SEK 64 M (1). In addition to this, surplus values pertaining to acquired non-controlling interest totalling SEK 11 M (10) were recognised directly in shareholders' equity.
Cash and cash equivalents and current investments at the end of the year amounted to SEK 67 M, compared with SEK 74 M as of 31 December 2010. Unutilised short-term credits as of 31 December 2011 amounted to SEK 192 M (194). The equity/assets ratio was 51 per cent (55). At the end of the year, interest-bearing liabilities amounted to SEK 647 M (86) and net indebtedness amounted to SEK 580 M, compared with SEK 12 M at 31 December 2010.
Cash flow at the end of the year was a negative
SEK 7 M (pos: 14). A dividend was paid to shareholders totalling SEK 276 M (227). Cash flow from operating activities amounted to SEK 259 M (358). The change between the years was primaily due to higher tax payments and increased restriction in operating capital compared with the preceding year.
The number of employees at the end of the period was 2,029 (1,575) and the average number of employees during the period was 1,958 (1,462).
Remuneration to senior executives is presented in Note 5. The Board of Directors will propose the following guidelines for remuneration to senior executives to the Annual General Meeting.
The company shall strive to offer its senior executives market-based remuneration, that the criteria shall accordingly be based on the significance of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts:
The Board's proposal for principles agrees with the previous years' remuneration principles and is based on agreements already entered into between the company and senior executives. The distribution between basic salary and variable remuneration shall be in proportion to the senior executive's responsibilities and authorities. The variable remuneration for the President and
other senior executives is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of 60 per cent of the basic salary for the President and a maximum of 33 per cent of the basic salary for other senior executives. Senior executives refer, in addition to the President, to the eight (8) members who jointly with the President comprise Group management. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. For the President, pension provisions according to the employment agreement are paid in an amount corresponding to 29 per cent of the basis salary. Pensionable salary refers to the basic salary. Severance pay in termination from the company's side can amount to a maximum of one year's basic salary. In addition, a special bonus program extends for three years and is based on the Group's earnings for the 2011-2013 financial years. The bonus program, in its entirety, as a total expense for the company, shall amount to a maximum of SEK 24 M for the period. The criteria for the size of an individual bonus shall be determined by the Board of the company.
Mekonomen's earnings are impacted by a number of factors, such as sales volumes, currency fluctuations on imported goods and sales to foreign subsidiaries, margins on purchased goods, salary changes, etc. As a result of the acquisition of Sørensen og Balchen, currency exposure in NOK and exposure to the interest-rate market increased during 2011. Import occurs nearly exclusively from Europe, where the currencies largely consist
of EUR, SEK and NOK. Purchases in EUR and NOK comprise approximately 34 and 13 per cent, respectively, of the purchase volumes. Due to the high correlation between DKK and EUR, sales and purchase in these currencies may match; the table below shows the currency effects on the net flow for each currency. NOK and DKK pertain to internal sales from Mekonomen Grossist AB to each country, and earnings for the year in Norway and Denmark. Hedging pertaining to the net flows and internal receivables were implemented during the year.
| TAX, SEK M | Change | Impact*) |
|---|---|---|
| Sales volume Exchange-rate |
+1% | SEK 23 M |
| fluctuations | ||
| NOK | +1% | SEK 7 M |
| EUR | +1% | SEK –1 M |
| DKK | +1% | SEK 0 M |
| Gross margin | plus 1 %-unit | SEK 41 M |
| Personnel expenses | +1% | SEK –10 M |
| Deposit rate**) | +1% | SEK –6 M |
*) All things being equal, profit before tax for the 2011 financial year.
**) Effect based on the Group's net debt as of 31 December 2011.
The market trend for 2011 was characterised by weak market growth, primarily pertaining to consumer and accessories sales.
Mekonomen's primary competitors are players in the so-called brand-dependent segment, which traditionally had a high market share in the aftermarket for passenger cars.
Competition in spare-parts sales to workshops is major from both brand-dependent and brandindependent players. In the brand-independent
trade in Sweden, there are slightly more than 400 stores, where the five largest players, of which Mekonomen is one, all have a range that covers most vehicle brands. The situation is similar in both Norway and Denmark with a few large players with a comprehensive range but with competition from a number of smaller players. Brand-dependent players also compete with Mekonomen in this market. In this market, accessibility is very important, which means that the rate of delivery is a key competitive factor. Consequently, Mekonomen attaches great importance to logistics and related optimisation activities, as well as developing Mekonomen's brand and offering to end customers.
In terms of accessories, Mekonomen competes with a large number of players from various industries, such as petrol stations, convenience goods trade, stores for products for children, stores for accessories for pets, electronic chains, etc.
Within the company, there is high awareness that the increasingly centralised IT structure could provide the Group with major advantages and improved opportunities. Consequently, major emphasis is placed on preventive work and the organisation for this is well-developed, as is planning for continuity in operations in the event of unforeseen circumstances.
The Group's fire prevention effort places major emphasis on a well-functioning fire organisation and a regular internal control, as well as internal training.
Mekonomen's centralised warehouse is a key factor in the logistics flow and, accordingly, great emphasis is placed in preventive work to reduce the risk of damage in the centralised warehouse.
Mekonomen has Group-wide insurance solutions. The insurance protection covers property, outages, transport, Board of Directors and President.
Mekonomen strives for the same level of solutions for security services, security systems and cash management for all companies in the Group.
Within Mekonomen, work with shrinkage is continuously in progress to define what is scrapping, internal consumption and actual theft. The activities to combat shrinkage are based on the idea that it is important to focus on all types of shrinkage, for example, by reviewing order procedures, delivery checks and unpacking of goods. This will improve knowledge on procedures for managing shrinkage, while providing a basis for increased vigilance of goods that are particularly theft-prone.
Mekonomen's financial policy regulates how various types of risks shall be managed and states the risk exposure that the operation can accept. The main focus is to aim at a low risk profile. The policy identifies risks pertaining to value management, cash management and capital procurement. Refer also to Note 31 for a description of the financial risks identified and managed by Mekonomen.
The Parent Company's operations comprise Group management and Group-wide functions, as well as finance management. The loss after net financial items was SEK 18 M (loss: 4), excluding dividends and Group contributions from subsidiaries. The average number of employees was 76 (58).
The Group does not conduct any operations that require permits according to the Swedish Environmental Code. The Group complies with an environmental plan that was adopted in 2010 as part of the operational policy.
Environmental activities are concentrated on the best and most efficient way to adapt operations environmentally in terms of the management of chemicals and other hazardous goods, distribution and sorting of packaging material. During 2011, a tremendous training effort was implemented to certify as many stores and workshops as possible. We also performed a large number of internal and external audits, where we checked compliance with the prevailing legislation and that we live up to the expectations placed on us by our management system. Our certification also comprises ISO9001 quality and OHSAS 18001 work environment, in addition to ISO14001 environment. At the centralised warehouse and store warehouses, fireproof rooms for chemicals and petroleum products are being constructed and when procuring transport services, considerable emphasis is placed on high efficiency and less reloading to minimise the transport distances.
In early April 2012, a reorganisation was implemented aimed at better adapting Mekonomen's organisation for further expansion. The reorganisation signified that Mekonomen's former CFO, Gunilla Spongh, was appointed Head of the Group's international business and Per Hedblom, previously in charge of Group acquisitions, was appointed the new CFO. Petter Torp, former President of Mekonomen Norway, was appointed President of Mekonomen Nordic, consisting of Mekonomen Norway, Mekonomen Sweden, Mekonomen Finland, Mekonomen Fleet/Marine and Mekonomen Grossist. Frankk Bekken was appointed the new President of Mekonomen Norway. Lars From, President of Mekonomen Denmark, will continue to report to the CEO Håkan Lundstedt.
During the financial year, a new share issue was implemented in connection with the acquisition of Sørensen og Balchen. The new share issue signifies an increase of SEK 5 M in the share capital and an increase of 1,945,783 in the number of shares. As of 31 December 2011, Mekonomen's share capital amounted to SEK 82 M and consists of 32,814,605 shares at a quotient value of SEK 2.50 per share. Each share carries one vote at the Annual General Meeting and all shares carry equal entitlement to a share in the company's profits and assets. Each shareholder is entitled to vote for all their shares with no restrictions and the shares are not included in any transfer restrictions.
Axel Johnson AB represents 29 per cent of the voting rights. For information about the ten largest shareholders as of 31 December 2011, refer to the table on page 26.
The Annual General Meeting resolved on 14 April 2011 to authorise the Board, for the period until the next Annual General Meeting, on one or more occasions, with or without preferential rights for shareholders, to make decisions on new share issues of not more than 3,086,882 shares. The decision on new share issues may include provisions that the issued shares may be paid in kind, through offsetting or generally include terms and conditions pursuant of Chapter 13, Section 5, Paragraph 6 of the Swedish Companies Act. The Board of Directors was also authorised to make decisions pertaining to general terms and conditions for the new share issue. The purpose of the authorisation was to allow the company to issue shares as purchase-consideration payment in connection with acquisition of other companies and/or assets deemed by the Board to be of value to Mekonomen's operation.
At the end of the financial year, no new shares were issued supported by the above authorisation.
It is the Board's intention that Mekonomen will pay dividend corresponding to not less than 50 per cent of the profit after tax. When determining future dividends, investment needs will be a primary priority, but also other factors deemed significant by Mekonomen's Board of Directors.
As far as the Board of Mekonomen is aware, no shareholder agreements exist or other agreements between Mekonomen's shareholders aimed at joint influence over the company. As far as the Board of Mekonomen is aware, there are no agreements or corresponding that may result in a change in control of the company.
The Board proposes a dividend of SEK 8.00 (8.00) based on earnings per share for the year.
At the Annual General Meeting in April 2011, it was resolved that the Board shall comprise seven ordinary members with no deputy members. All existing Board members, Fredrik Persson, Marcus Storch, Antonia Ax:son Johnson, Kenny Bräck, Anders G Carlberg, Wolff Huber and Helena Skåntorp were re-elected. Fredrik Persson was elected Chairman of the Board.
During 2011, the Board held ten (11) meetings, of which one was a statutory meeting. At the Board meetings, it was primarily the company's financial development, the launch of new concepts and major acquisitions that were addressed.
Within Mekonomen's Board, there is a Remuneration Committee, which focuses on remuneration of Company Management. This Committee, which held four meetings in 2011, comprise Fredrik Persson, Marcus Storch and Anders G Carlberg. Other matters are handled by the Board in its entirety.
The auditor for the company is elected annually at the Annual General Meeting. According to a resolution of the Annual General Meeting, auditors' fees are paid against approved invoices. The company's auditor participates in Board meetings in conjunction with the third-quarter report and at the Board meeting when year-end reports are presented and in this connection submits the report from the audit of the company's financial position and internal control. At the 2011 Annual General Meeting, the auditing firm of Deloitte AB, with Authorised Public Accountant Thomas Strömberg as the Auditor in Charge, was elected for the period ending with the 2012 Annual General Meeting.
The following profit is available for distribution by the Annual General Meeting, SEK 000s:
| Profit brought forward | 450,782 |
|---|---|
| Share premium reserve | 462,123 |
| Profit for the year | 289,297 |
| TOTAL | 1,202,202 |
Board of Directors and President proposes that profits be distributed as follows:
| TOTAL | 1,202,202 |
|---|---|
| To be carried forward | 939,685 |
| Dividend to shareholders (SEK 8/share) | 262,517 |
Following the proposed dividend, the Parent Company's equity/assets ratio will amount to 56 per cent and the Group's equity/assets ratio to 42 per cent calculated on the balance-sheet date, 31 December 2011. The equity/assets ratio is satisfactory considering that the company's and the Group's operations continue to operate profitably, which means that the equity/assets ratio following dividend payment in May 2012 will exceed the above-stated levels. It is estimated that cash and cash equivalents in the company and the Group will remain at a satisfactory level.
The Board is of the opinion that the proposed dividends do not prohibit the Parent Company or other Group companies from fulfilling their obligations in the short or long term. Neither do the dividends influence the Group's ability to implement required investments. Accordingly, the proposed dividend can be justified by what is stated in the prudence principle, Chapter 17, Section 3, Paragraphs 1-3 of the Swedish Companies Act.
For further information regarding the company's and the Group's earnings, refer to the following income statement, balance sheet, cash-flow statements and accompanying notes.
This report was prepared in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance.
If companies included in the Code in no way apply the Code, this must be clearly stated and the reasons explained. Mekonomen's possible deviations from the Code and explanations are reported in the running text.
The share capital amounted to SEK 82,036,513 on 31 December 2011, represented by 32,814,605 shares. Each share represents one voting right at the Annual General Meeting. The total market value for the company on 31 December 2011 amounted to SEK 7.4 billion, based on the closing price of SEK 225.
The number of shareholders on 31 December 2011 was 7,735. At the same date, the ten largest shareholders controlled 61.8 per cent of the capital and voting rights and the participation of foreign owners accounted for 33.5 per cent of the capital and voting rights.
The ten largest shareholders at 31 December 2011, according to SIS Ownership Data Corp.
| Shareholders | Number of shares |
% of votes and capital |
|---|---|---|
| Axel Johnson AB with subsidiaries |
9,516,235 | 29.0 |
| Eva Fraim Påhlman | 2,009,176 | 6.1 |
| Otto Olsen Invest AS | 1,945,783 | 5.9 |
| Kempen European Participations N.V. |
1,595,066 | 4.9 |
| Capital Group Funds | 1,406,309 | 4.3 |
| Ing-Marie Fraim Sefastsson | 1,000,000 | 3.0 |
| Swedbank Robur Funds | 966,981 | 2.9 |
| SHB Funds | 689,425 | 2.1 |
| Enter Funds | 597,712 | 1.8 |
| T Rowe Price Funds | 550,000 | 1.7 |
| TOTAL | 20,276,687 | 61.8 |
The Annual General Meeting is Mekonomen's highest governing body, at which every shareholder is entitled to participate. The Annual General Meeting shall be held within six months of the close of the financial year. The Annual General Meeting approves the income statement and balance sheet, the appropriation of the company's profit, decides on discharge from liability, elects the Board of Directors and auditors, and approves fees, addresses other statutory matters as well as makes decisions pertaining to proposals from the Board and shareholders. The company announces the date and location of the Annual General Meeting as soon as the Board has made its decision, but not later than in connection with the third-quarter report. Information pertaining to the location and time is available on the company's website. Shareholders that are registered in Euroclear's shareholders register
on the record date and have registered participation in adequate time are entitled to participate in the Annual General Meeting and vote according to their shareholdings. All information concerning the company's meetings, such as registration, entitlement for items to be entered in the agenda in the notification, minutes, etc., are available on the company's website.
With regard to participation in the Annual General Meeting, the Board has deemed it not financially justifiable at present to allow shareholders to participate in the Annual General Meeting through any means other than physical presence. It is the company's ambition that the Annual General Meeting shall be a consummate body for shareholders, in accordance with the intentions of the Swedish Companies Act, which is why the objective is that the Board in its entirety, the representative of the Nomination Committee, the President, auditors and other management executives must always be present at the Annual General Meeting.
In accordance with a resolution at the Annual General Meeting on 14 April 2011, Mekonomen has established a Nomination Committee. The Nomination Committee shall prepare and submit proposals to the Annual General Meeting on 23 May 2012 pertaining to:
The Nomination Committee, prior to the 2012 Annual General Meeting, consists of Göran Ennerfelt, representing the Axel Johnson AB Group, Eva Fraim Påhlman, representing own shareholdings, Johan Lannebo, representing Lannebo Funds and Åsa Nisell representing Swedbank Robur Funds. The Nomination Committee elected Göran Ennerfelt as its Chairman. Mekonomen's Chairman, Fredrik Persson, has been co-opted to the Nomination Committee.
The Nominating Committee is entitled to charge the company with such costs as recruitment consultants and other consultants required to allow the Nominating Committee to fulfil its assignments. The Nominating Committee shall, in connection with its assignments otherwise, fulfil the tasks that rest upon the Nominating Committee in accordance with the Swedish Code for Corporate Governance.
Mekonomen has not established any specific age limit for Board meetings or time limits pertaining to the length of time Board members may sit on the Board. Auditors are elected annually when the matter is submitted to the Annual General Meeting.
According to the Articles or Association, the Board of Directors shall comprise three to seven members and not more than three deputy members. The Board of Directors shall be elected annually at the Annual General Meeting. At the Annual General Meeting on 14 April 2011, it was decided that the Board shall comprise seven ordinary members with no deputy members.
All existing Board members, Fredrik Persson, Marcus Storch, Antonia Ax:son Johnson, Kenny Bräck, Anders G Carlberg, Wolff Huber and Helena Skåntorp were re-elected. Fredrik Persson was elected Chairman of the Board.
All ordinary members are independent in relation to the company and its management in accordance with the definition in the Swedish Code of Corporate Governance. Three of the Board members are independent also in relation to major shareholders. The President is not a member of the Board and neither is any other member of the Management Group.
It is the opinion of the Nomination Committee that the Board's structure in terms of competency, experience and background is compatible with the company's operations, development phase and circumstances.
The Chairman of the Board, Fredrik Persson, is not employed by the company and does not have any assignments for the company beyond his chairmanship. It is the opinion of the Board that Fredrik Persson ensures that the Board conducts its assignments efficiently and also fulfils its duties in accordance with applicable laws and regulations.
The Board is responsible for the company's organisation and management and shall also make decisions pertaining to strategic issues. During 2011, the Board held ten meetings, of which one was a statutory
meeting. The minutes of the meetings were recorded by the Board's secretary, who is the company's CFO. Relevant meeting documentation was sent to all members prior to each meeting, which were then held in accordance with the approved agenda. On occasions, other senior executives have participated in the Board Meetings in a reporting capacity, as necessary. No deviating views to be recorded in the minutes were expressed at any of the meetings during the year. Matters of high significance that were discussed during the year primarily concerned the company's financial development, the launch of new concepts and major acquisitions.
In accordance with the requirements of the Code, the Board's ambition was to devote particular attention to establishing overall goals for the operation and decide on strategies by which to achieve the said goals, and in part to continuously evaluate the operating management, with the aim of securing the company's governance, management and control. The Board strives to ensure that there are functioning systems for the monitoring and control of the company's financial position in relation to the established goals, that control of compliance with laws and other regulations is implemented and that the provision of external information is open, objective and relevant.
There are written instructions that regulate the distribution of assignments between the Board and the President, and for the reporting process. The instructions are reviewed annually and are primarily:
• the rules of procedure for the Board's work,
The Board evaluates its work every year and it is the duty of the Chairman of the Board to ensure that this is done. The evaluation involves individual meetings between the Chairman of the Board and all Board members. The collective opinion is that the Board's work during 2011 functioned well and that the Board fulfilled the requirements of the Code pertaining to the Board's assignment.
The Annual General Meeting resolved, in accordance with the proposal from the Nomination Committee, to allocate Board fees amounting to SEK 1,700,000, of which SEK 400,000 to the Chairman of the Board and SEK 300,000 to the Deputy Chairman, with the remaining amount to be distributed equally among the other Board members.
Board of Directors
The entire Board of Mekonomen assumes responsibility for ensuring that the Group has acceptable procedures for internal control and high-quality and correct financial reporting. Twice per year, in connection with preparation of the financial accounting for the third quarter and annual financial statements, the company's auditors report on how the company ensured that accounting, management and financial control functioned. Following the formal report, the President and CFO leave the Board meeting to allow Board members to discuss with auditors without the participation of company officials.
The Board of Directors has a Remuneration Committee comprising Fredrik Persson as Chairman, Marcus Storch and Anders G Carlberg. The work of the Remuneration Committee is based on resolutions by the Annual General Meeting pertaining to guidelines for remuneration to senior executives. Four meetings were held during the year and all members were present at these meetings. In addition, the President of the company, Håkan Lundstedt, was present at these meetings.
independent * Board member since
The President is appointed and may be discharged by the Board and his/her work is continuously evaluated by the Board, which occurs without the presence of Company Management. Mekonomen's President and CEO, Håkan Lundstedt, is also a member of the Board of Vanna AB, Dialect AB, as well as the foundation En Frisk Generation and has no shareholdings or ownership in companies with significant business ties with Mekonomen.
A presentation of the company Management is found on pages 34–35.
Mekonomen's Remuneration Committee makes decisions pertaining to remuneration of the President. Håkan Lundstedt has a basic salary per month and a variable salary portion, which is based on the company's profits and can amount to a maximum of 60 per cent of the basic annual salary. Under the pension terms, payment of pension premiums is made in the amount corresponding to 29 per cent of the basic salary. Other benefits consist of a company car. The period of notice is 12 months if termination is on the part of the company and six months on the part of the employee. If termination is initiated by the company, severance pay amounting to six months' salary is paid.
Issues pertaining to remuneration to other senior executives are also prepared by the Remuneration Committee. The principle for remuneration is based on the senior executives being offered market-based
| Fredrik Persson, Chairman | 10/10 | D | August 2006 |
|---|---|---|---|
| Marcus Storch, Vice Chairman | 10/10 | D | August 2006 |
| Wolff Huber | 9/10 | I | August 2006 |
| Kenny Bräck | 9/10 | I | May 2007 |
| Anders G Carlberg | 10/10 | D | August 2006 |
| Helena Skåntorp | 9/10 | I | May 2004 |
| Antonia Ax:son Johnson | 8/10 | D | August 2006 |
Dependent/
*) According to the definition in the Swedish Code of Corporate Governance.
All Board members are independent of the company and its management.
I = Board members concidered independent of major shareholders in the company.
Present at Board meetings
D = Board members concidered dependent of major shareholders in the company.
remuneration. The criteria shall accordingly be based on the significance of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts:
The distribution between basic salary and variable remuneration shall be in proportion to the senior executive's responsibilities and authorities. The variable remuneration for senior executives is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of four months' salary. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. Pensionable salary refers to the basic salary. Severance pay for termination on the part of the company may amount to one annual salary. At the 2011 Annual General Meeting, it was also resolved that company management may receive a cash bonus from the company. The bonus will be profit-based and calculated on the Group's profit for the 2011-2013 financial years. The bonus program, in its entirety, as a total expense for the company, shall amount to a maximum of SEK 24 M for the period. The criteria for the size of an individual bonus shall be determined by the Board of Directors.
The Board has not made any decisions pertaining to share or share-price based incentive programs for Company Management.
The auditors are appointed at the Annual General Meeting and are charged with reviewing the company's financial reporting and the Board's and President's management of the company. Deloitte AB, which has an organisation comprising broad and specialised competency that is well-suited to Mekonomen's operations, has been the company auditor since 1994. At the 2011 Annual General Meeting, Deloitte AB, with Authorised Public Accountant Thomas Strömberg as Auditor in Charge, was appointed the auditing firm until the 2012 Annual General Meeting. In addition to Mekonomen, Thomas Strömberg is also the auditor of Karolinska Development and Rezidor Hotel Group AB. Thomas Strömberg has no assignments in companies that are closely related to Mekonomen's major shareholders or President.
| Remuneration to Deloitte, SEK M | 2011 2010 | ||
|---|---|---|---|
| Remuneration for audit assignments |
6.0 | 5.6 | |
| Audit related services other than the audit assignment |
0.0 | 0.1 | |
| Tax advice | 0.0 | 0.1 | |
| Other services | 0.0 | 0.1 |
The Board supervises the quality of the financial reporting through Instructions to the President. Jointly with the CFO, the President's assignment is to review and quality-assure all external financial reporting including financial statements, interim reports, annual reports and press releases with financial content,
as well as presentation material in connection with meetings with the media, shareholders and financial institutions.
The entire Board of Mekonomen assumes responsibility for ensuring that the audit, in an efficient manner, establishes that the Group has acceptable procedures for internal control and high-quality and correct financial reporting. With regard to the preparation of the Board's work, the Board estimates that quality assurance of the financial reporting, which is conducted within the framework of the company's own internal control, corresponds to current requirements. The company's auditors personally present their plans, risk assessments and controls, as well as findings from the audit at two Board meetings during the year, which additionally secures the Board's information requirement. At these meetings, the President and CFO leave after presenting their formal reports to enable Board members to conduct discussions with auditors without the participation of company officials. The Board continuously evaluates the need to elect a specific Audit Committee.
In accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance, the Board of Directors is responsible for internal control. This report was prepared in accordance with the Swedish Code of Corporate Governance, and FAR's guidance to the Swedish Code of Corporate Governance. The report is limited to address internal control
pertaining to financial reporting and Mekonomen has elected to only submit a description of how internal control is organised.
The control environment represents the basis for the internal control pertaining to financial reporting. An important part of the control environment is that decision paths, authorities and responsibilities must be clearly defined and communicated between various levels in the organisation and that the control documents are available in the form of internal policies, handbooks, guidelines and manuals. Thus, a key part of the Board's assignment is to prepare and approve a number of fundamental policies, guidelines and frameworks. These include the Board's working procedures, instructions for the President, investment policies, financial policies and the insider policy. The aim of these policies is to create a basis for sound internal control. Furthermore, the Board focuses on ensuring that the organisational structure provides distinct roles, responsibilities and processes that benefit the effective management of the operation's risks and facilitate target fulfilment. Part of the responsibility structure includes an obligation for the Board to evaluate the operation's performance and results on a monthly basis, through appropriate report packages containing income statements, balance sheets, analyses of important key ratios, comments pertaining to the business status of each operation and also quarterly forecasts for future periods. As a contribution to strengthening the internal control, Mekonomen prepared a financial handbook that provides an overall picture of existing policies, rules and regulations and procedures within the financial area. This is a living document, which will
be updated continuously and adapted to changes within the Mekonomen operation. In addition to the financial handbook, there are instructions that provide guidance for the daily work in stores and the rest of the organisation, for example, pertaining to stock taking and cash-register reconciliation, etc.
Mekonomen conducts continuous surveys of the Group's risks. During these surveys, a number of items were identified in the income statement and balance sheet in which the risks of errors in the financial reporting are elevated. The company works continuously on these risks by strengthening controls. Furthermore, risks are addressed in a special forum, including questions related to start-ups and acquisitions.
The Group's control structure is formed to manage risks that the Board deems significant for the internal control of the financial reporting. The aim of the appropriate control activities is to discover, prevent and correct errors and deviations in the reporting. The control activities include reconciliation of accounts, analytic follow-up, comparison between income statements and balance sheets and control stock-taking in warehouses and stores.
Mekonomen has an internal audit department, which is an independent and objective hedging and advice unit that generates value and improves the Group's operations. This is done by evaluating and proposing improvement in such areas as risk management, compliance with policies and efficiency in the internal control of financial reporting. The
function works throughout the Group. The Head of the internal audit reports to the Board of Directors, the CEO and CFO and informs management in each business area and other units on the results of the audits performed.
Policies and guidelines are particularly important for accurate accounting, reporting and dissemination of information. Within Mekonomen, policies and guidelines are continuously updated pertaining to the financial process. This occurs primarily within respective Group functions aimed at the various operations through e-mails, but also in connection with quarterly control meetings in which all financial managers/controllers participate. For communication with internal and external parties, there is a communications policy that states guidelines for conducting communication. The aim of the policy is to ensure that all information obligations are complied with in a correct and complete manner.
The Board continuously evaluates the information submitted by Company Management and auditors. The CEO and CFO hold monthly reviews with individual Heads of Operations pertaining to the financial position. Group accounting also cooperates closely with the subsidiaries' controllers on matters pertaining to accounts and reporting. The follow-up and feedbacks concerning possible deviations arising in the internal controls are a key part of the internal control work since this is an efficient manner for the company to ensure that errors are corrected and that the control is further strengthened.
Chairman of the Board. Born 1968. Graduate in Business Administration, the Stockholm School of Economics and studies at Wharton School in the US. Other assignments: Chairman of the Board of Axfood AB, Axstores AB and Svensk Bevaknings-Tjänst AB. Deputy Chairman of Martin & Servera AB and Svensk Handel. Board member of Axel Johnson International AB, AxFast AB, NovAx AB, Lancelot Asset Management, Svenska Handelsbanken Region Stockholm, the Confederation of Swedish Enterprise and Electrolux AB. Furthermore, Fredrik Persson is also President of Axel Johnson AB. Shares in Mekonomen: 1,000. Board member since 2006.
Born 1943. B.Sc., University of Stockholm.
Other assignments: Chairman of the Board of Axel Johnson AB, as well as the Axel and Margaret Ax:son Johnson's Foundation. Deputy Chairman of Nordstjernan AB. Board member of Axel Johnson Holding AB, Axel Johnson Inc., Axfast AB, Axfood AB, Axel and Margareta Ax:son Johnson's Foundation for Public Service, Nordstjernan Holding AB, Nordstjernan Kultur och Media AB, Axess Publishing AB, NCC AB, the Royal Swedish Academy of Engineering Sciences (IVA) and Antonia Ax:son Johnson's Foundation for Environment and Development. Shares in Mekonomen: 9,516,235 through com-
panies. Board member since 2006.
Vice Chairman of the Board Born 1942. Graduate Engineer, Royal Swedish Institute of Technology, Stockholm, Medicine Dr h.c. Other assignments: Chairman of the Board of the Nobel Foundation, the foundation Min Stora Dag and KEBRIS AB. Vice Chairman of Axel Johnson AB and Axfood AB. Board member of Nordstjernan AB, Storch & Storch AB, as well as member of the Royal Swedish Academy of Sciences and the Royal Swedish Academy of Engineering Sciences (IVA). Shares in Mekonomen: 0. Board member since 2006.
Born 1966. Upper Secondary School Education. Other assignments: Own company and previously professional racing car driver. Shares in Mekonomen: 1,000. Board member since 2007.
Born 1943. MBA Economics, Lund.
Other assignments: Chairman of the Board of Höganäs AB and Herenco AB, Deputy Chairman of Sapa AB, as well as Board member of Sweco AB (publ), AxFast AB, Beijer Alma AB, Axel Johnson Inc., SSAB AB, Investmentaktiebolaget Latour, Erik Penser Bankaktiebolag, Recipharm AB (publ), Smilbandsbolaget AB and Åda Golfintressenter AB. Shares in Mekonomen: 1,000. Board member since 2006.
Born 1942. Other assignments: Previously President of Bil Sweden, Volvo Car Europe and IBM Svenska AB. Shares in Mekonomen: 0. Board member since 2006.
Born 1960. Graduate in Business Administration, University of Stockholm. Other assignments: Board member of ÅF AB (publ), 2E Group AB and President of Lernia AB. Furthermore, Helena Skåntorp is also Chairman of the Board for a number of Lernia AB's subsidiaries, as well as Chairman of the Board and President of Skåntorp & Co AB. Shares in Mekonomen: 2,000. Board member since 2004.
All shareholdings are reported at 31 December 2011.
President and CEO Born 1966.
Experience: President of Lantmännen AXA AB, Cerealia Foods AB and Kungsörnen AB. Founder and Chairman of the Board of Gooh AB. Other assignments: Board member of Vanna AB, Dialect AB and the foundation En Frisk Generation.
Shares in Mekonomen: 46,600. Employed 2007.
Establishment Manager. Born 1951.
Experience: President of Tillbryggerier Umeå AB, Administrative Manager of the Tillbryggeri Group, President of Åreliftarna AB, President of Bilbolaget Trucks & Buses, President of Bilbolaget Passenger Cars, General Manager of Bilia, Personnel Manager Bilia. Shares in Mekonomen: 1,300. Employed 2005.
Head of Retail operations in Sweden. Born 1969. Experience: Sales Director of Alcro-Beckers AB, Sales Manager of Skogaholm SE, Sales Manager of Lantmännen AXA AB. Shares in Mekonomen: 3,365. Employed 2010.
Head of the Retail in Denmark. Born 1965. Experience: Export Director of SBS, Segment Manager of Vestfrost. Other assignments: Board member of Dansea Holding AS. Shares in Mekonomen: 1,200. Employed 2009.
Marcus Larsson Executive Vice President Born 1970. Experience: Sales Manager, Business Development Manager of the Volkswagen Group. Other assignments: Board member of Telge Inköp AB. Shares in Mekonomen: 1,000. Employed 2003.
Head of Fleet. Born 1973. Experience: President of GoGreen AB, Market Area Director at Cerealia Foods AB, Logistics Manager at Kungsörnen AB. Shares in Mekonomen: 300. Employed 2008.
CFO Born 1966.
Experience: Finance Director of CashGuard AB, Finance Director of Enea AB, Vice President of Finance & Controlling Fresenius Kabi Parenteral Nutrition, Finance Manager of Electrolux Professional AB, Financial Manager of Electrolux Storkök AB. Other assignments: Board member of Infranord AB. Shares in Mekonomen: 6,000. Employed 2007.
HR Manager Born: 1961. Experience: HR Director at Samsung Electronics Nordic, HR Director at Danfoss Heat Pumps AB. HR/competency development at Rolls-Royce AB. Shares in Mekonomen: 0 Employed 2010.
| SEK M Note |
2011 | 2010 |
|---|---|---|
| Net sales 2 |
4,140 | 3,374 |
| Other operating revenue | 97 | 73 |
| TOTAL REVENUES | 4,237 | 3,447 |
| OPERATING EXPENSES | ||
| Goods for resale | –1,866 | –1,607 |
| Other external costs 4 |
–786 | –565 |
| Personnel expenses 5 |
–966 | –741 |
| Depreciation/amortisation of tangible and intangible fixed assets 6 |
–83 | –49 |
| EBIT | 536 | 485 |
| FINANCIAL INCOME AND EXPENSES | ||
| Income from divestment of subsidiaries | 2 | 0 |
| Interest income | 7 | 5 |
| Interest expenses | –21 | –3 |
| Other financial items | –1 | –2 |
| PROFIT AFTER FINANCIAL ITEMS | 523 | 485 |
| Tax on profit for the year 9 |
–143 | –134 |
| PROFIT FOR THE YEAR | 380 | 351 |
| Profit for the year attributable to: | ||
| Parent Company's shareholders | 370 | 338 |
| Non-controlling interest | 10 | 13 |
| Profit for the year | 380 | 351 |
| Earnings per share before dilution attributable to Parent Company's shareholders, SEK* |
11.39 | 10.95 |
*) No dilution is applicable.
| SEK M | 2011 | 2010 |
|---|---|---|
| Profit for the year | 380 | 351 |
| Other comprehensive income | ||
| Exchange-rate difference from translation of foreign subsidiaries | 16 | –35 |
| Actuarial gains | 1 | – |
| Other comprehensive income/expense, net after tax | 17 | –35 |
| PROFIT FOR THE YEAR | 397 | 316 |
| Comprehensive income for the period attributable to | ||
| Parent Company's shareholders | 387 | 303 |
| Non-controlling interest | 10 | 13 |
| 397 | 316 |
| SEK M | Note | 2011 | 2010 |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Profit after financial items | 523 | 485 | |
| Adjusted for items not affecting liquidity | 27 | 78 | 49 |
| 601 | 534 | ||
| Tax paid | –161 | –99 | |
| CASH FLOW FROM OPERATING ACTIVITIES | |||
| BEFORE CHANGE IN WORKING CAPITAL | 440 | 435 | |
| CASH FLOW FROM CHANGES IN WORKING CAPITAL | |||
| Decrease(+)/increase(–) of inventories | –69 | –64 | |
| Decrease(+)/increase(–) of receivables | –115 | –82 | |
| Decrease(–)/increase(+) of liabilities | 3 | 69 | |
| INCREASE(–)/DECREASE(+) RESTRICTED WORKING CAPITAL | –181 | –77 | |
| CASH FLOW FROM OPERATING ACTIVITIES | 259 | 358 | |
| INVESTMENTS | |||
| Acquisition (–) of subsidiaries | 28 | –383 | –79 |
| Divestment(+)/acquisition(–) of subsidiaries | 28 | 8 | 1 |
| Acquisition of fixed assets | –135 | –97 | |
| Divestment of tangible fixed assets | 5 | 1 | |
| Increase(–)/decrease(+) of long-term lending*) | –7 | –10 | |
| CASH FLOW FROM INVESTING ACTIVITIES | –512 | –184 | |
| FINANCING ACTIVITIES | |||
| Loan repayment (–)/loans raised (+) | 522 | 67 | |
| Dividends paid | –276 | –227 | |
| CASH FLOW FROM FINANCING ACTIVITIES | 246 | –160 | |
| CASH FLOW FOR THE YEAR | –7 | 14 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 74 | 60 | |
| Exchange-rate difference in cash and cash equivalents | 0 | 0 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 18 | 67 | 74 |
*) Compared with the 2010 Annual Report, a reclassification was conducted pertaining to the cash-flow statement for 2010, of SEK 10 M between cash flow from investing activities and cash flow from financing activities. The reclassification had no impact on cash flow for the year.
Interest received amounted to SEK 7 M (5) and interest paid amounted to SEK 21 M (3).
| SEK M | Note | 31 Dec. 2011 |
31 Dec. 2010 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| INTANGIBLE ASSETS | 13 | ||
| Goodwill | 789 | 281 | |
| Brands | 63 | 5 | |
| Franchise contracts | 44 | – | |
| Customer relationships | 128 | – | |
| Capitalised expenditure for IT systems | 92 | 62 | |
| TOTAL INTANGIBLE ASSETS | 1,116 | 348 | |
| TANGIBLE FIXED ASSETS | |||
| Improvement costs, third-party property | 10 | 41 | 26 |
| Equipment and transport | 12 | 191 | 139 |
| Leased equipment and transport | 12 | 3 | 3 |
| TOTAL TANGIBLE FIXED ASSETS | 235 | 168 | |
| FINANCIAL FIXED ASSETS | |||
| Other long-term receivables | 15 | 67 | 36 |
| TOTAL FINANCIAL FIXED ASSETS | 67 | 36 | |
| Deferred tax assets | 14 | 0 | 3 |
| TOTAL FIXED ASSETS | 1,418 | 555 | |
| CURRENT ASSETS | |||
| Goods for resale | 934 | 680 | |
| Properties held for sale | 10 | – | 3 |
| Current receivables | 16, 17 | 636 | 446 |
| Cash and cash equivalents | 18 | 67 | 74 |
| TOTAL CURRENT ASSETS | 1,637 | 1,203 | |
| TOTAL ASSETS | 3,054 | 1,758 |
| SEK M | Note | 31 Dec. 2011 |
31 Dec. 2010 |
|---|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | 25 | ||
| Share capital, 32,814,605 (30,868,822) shares | 82 | 77 | |
| Other capital contributions | 805 | 343 | |
| Translation reserve | 0 | –16 | |
| Profit brought forward including profit for the year | 652 | 551 | |
| TOTAL SHAREHOLDERS EQUITY ATTRIBUTABLE TO PARENT COMPANY'S SHAREHOLDERS |
1,539 | 955 | |
| Non-controlling interest | 17 | 19 | |
| TOTAL SHAREHOLDERS' EQUITY | 1,556 | 974 | |
| LONG-TERM LIABILITIES | |||
| Liabilities to credit institutions, interest-bearing | 19 | 449 | 1 |
| Deferred tax liabilities | 14 | 53 | 21 |
| Provisions | 20 | 9 | 2 |
| TOTAL LONG-TERM LIABILITIES | 511 | 24 | |
| CURRENT LIABILITIES | |||
| Liabilities to credit institutions, interest-bearing | 19, 21 | 198 | 85 |
| Tax liabilities | 83 | 75 | |
| Other current liabilities, non-interest-bearing | 21, 22 | 707 | 600 |
| TOTAL CURRENT LIABILITIES | 988 | 760 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,054 | 1,758 | |
| MEMORANDUM ITEMS | |||
| Pledged assets | 23 | None | 92 |
| Contingent liabilities | 23 | 20 | 20 |
| SEK M | Note | 2011 | 2010 |
|---|---|---|---|
| 1 | |||
| Net sales | 2, 29 | 129 | 115 |
| Other operating revenue | 46 | 39 | |
| TOTAL REVENUES | 175 | 154 | |
| OPERATING EXPENSES | |||
| Goods for resale | –21 | –18 | |
| Other external costs | 4 | –90 | –75 |
| Personnel expenses | 5 | –72 | –64 |
| Depreciation/amortisation and impairment of tangible and intangible fixed assets | 6 | –13 | –10 |
| EBIT | –21 | –13 | |
| FINANCIAL INCOME AND EXPENSES | |||
| Dividend on shares in subsidiaries | 146 | 100 | |
| Group contributions received | 228 | 285 | |
| Income from divestment of shares in subsidiaries | 1 | 1 | |
| Interest income | 24 | 12 | |
| Interest expenses | –22 | –4 | |
| PROFIT AFTER FINANCIAL ITEMS | 356 | 381 | |
| Appropriations | 7 | –13 | –2 |
| Tax on profit for the year | 9 | –53 | –75 |
| PROFIT FOR THE YEAR | 290 | 304 |
| SEK M | 2011 | 2010 |
|---|---|---|
| Profit for the year | 290 | 304 |
| PROFIT FOR THE YEAR | 290 | 304 |
| SEK M | Note | 2011 | 2010 |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Profit after financial items | 356 | 381 | |
| Adjusted for items not affecting liquidity | 27 | –215 | –303 |
| 141 | 77 | ||
| Tax paid | –58 | –50 | |
| CASH FLOW FROM OPERATING ACTIVITIES BEFORE | |||
| CHANGES IN WORKING CAPITAL | 83 | 27 | |
| CASH FLOW FROM CHANGES IN WORKING CAPITAL | |||
| Decrease(+)/increase(-) of inventories | 0 | 0 | |
| Decrease(+)/increase(-) of receivables | 93 | 237 | |
| Decrease(-)/increase(+) of liabilities | 8 | 9 | |
| INCREASE(-)/DECREASE(+) RESTRICTED WORKING CAPITAL | 101 | 246 | |
| CASH FLOW FROM OPERATING ACTIVITIES | 184 | 273 | |
| INVESTMENTS | |||
| Divestment(+)/acquisition(-) of subsidiaries | –326 | –32 | |
| Acquisition of fixed assets | –40 | –35 | |
| Divestment of tangible fixed assets | 0 | 0 | |
| CASH FLOW FROM INVESTING ACTIVITIES | –366 | –67 | |
| FINANCING ACTIVITIES | |||
| Loan repayment (-)/loans raised (+) | 458 | – | |
| Increase(-)/decrease(+) of long-term lending | –12 | – | |
| Dividends paid | –263 | –216 | |
| CASH FLOW FROM FINANCING ACTIVITIES | 183 | –216 | |
| CASH FLOW FOR THE YEAR | 1 | –10 | |
| CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR | 0 | 10 | |
| CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 18 | 1 | 0 |
Interest received amounted to SEK 24 M (12) and interest paid amounted to SEK 22 M (4).
| SEK M | Note | 31 Dec. 2011 |
31 Dec. 2010 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| INTANGIBLE FIXED ASSETS | 13 | ||
| Capitalised expenditure for IT systems | 92 | 62 | |
| 92 | 62 | ||
| TANGIBLE FIXED ASSETS | |||
| Buildings | 1 | 2 | |
| Equipment and transportation | 12 | 7 | 8 |
| 8 | 10 | ||
| FINANCIAL FIXED ASSETS | |||
| Participation in Group companies | 24 | 1,120 | 280 |
| Receivables in Group companies | 12 | – | |
| 1,132 | 280 | ||
| TOTAL FIXED ASSETS | 1,232 | 352 | |
| CURRENT ASSETS INVENTORIES |
|||
| Goods for resale | 1 | 1 | |
| CURRENT RECEIVABLES | |||
| Accounts receivables | 14 | 10 | |
| Receivables in Group companies | 690 | 574 | |
| Other receivables | 2 | 0 | |
| Prepaid expenses and accrued income | 17 | 106 | 93 |
| TOTAL CURRENT RECEIVABLES | 812 | 677 | |
| Cash and cash equivalents | 18 | 1 | 0 |
| TOTAL CURRENT ASSETS | 814 | 678 | |
| TOTAL ASSETS | 2,046 | 1,030 |
| SEK M | Note | 31 Dec. 2011 |
31 Dec. 2010 |
|---|---|---|---|
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | 25 | ||
| RESTRICTED SHAREHOLDERS' EQUITY | |||
| Share capital, 32,814,605 (30,868,822) shares | 82 | 77 | |
| Statutory reserve | 3 | 3 | |
| TOTAL RESTRICTED SHAREHOLDERS' EQUITY | 85 | 80 | |
| NON-RESTRICTED SHAREHOLDERS' EQUITY | |||
| Profit brought forward | 912 | 409 | |
| Profit for the year | 290 | 304 | |
| TOTAL NON-RESTRICTED SHAREHOLDERS' EQUITY | 1,202 | 713 | |
| TOTAL SHAREHOLDERS' EQUITY | 1,287 | 793 | |
| UNTAXED RESERVES | 159 | 146 | |
| PROVISIONS | 20 | 2 | 2 |
| LONG-TERM LIABILITIES | |||
| Liabilities to credit institutions | 19 | 445 | – |
| TOTAL LONG-TERM LIABILITIES | 445 | – | |
| CURRENT LIABILITIES | |||
| Liabilities to credit institutions | 19 | 60 | – |
| Accounts payable | 22 | 27 | |
| Liabilities to Group companies | 28 | 3 | |
| Tax liabilities | 17 | 22 | |
| Other liabilities | 8 | 8 | |
| Accrued expenses and deferred income | 22 | 18 | 29 |
| TOTAL CURRENT LIABILITIES | 153 | 89 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 2,046 | 1,030 | |
| MEMORANDUM ITEMS | |||
| Pledged assets | 23 | None | 92 |
| Contingent liabilities | 23 | 20 | 20 |
| Other capital | Translation | Profit brought | Total attributable to Parent |
Of which, non-control |
Total sha reholders' |
||
|---|---|---|---|---|---|---|---|
| SEK M | Share capital | contributions | reserve | forward | Company owners | ling interest | equity |
| OPENING BALANCE ON 1 JANUARY 2010 | 77 | 343 | 19 | 438 | 877 | 18 | 895 |
| Translation difference pertaining to foreign operations | –35 | –35 | 0 | –35 | |||
| Profit for the year | 338 | 338 | 13 | 351 | |||
| COMPREHENSIVE INCOME FOR THE YEAR | –35 | 338 | 303 | 13 | 316 | ||
| Dividends | –216 | –216 | –11 | –227 | |||
| Acquisition/divestment of non-controlling interest | –9 | –9 | –1 | –10 | |||
| CLOSING BALANCE ON 31 DECEMBER 2010 | 77 | 343 | –16 | 551 | 955 | 19 | 974 |
| OPENING BALANCE ON 1 JANUARY 2011 | 77 | 343 | –16 | 551 | 955 | 19 | 974 |
| Translation difference pertaining to foreign operations | 16 | 16 | 0 | 16 | |||
| Actuarial gains | 1 | 1 | 0 | 1 | |||
| Profit for the year | 370 | 370 | 10 | 380 | |||
| COMPREHENSIVE INCOME FOR THE YEAR | 16 | 371 | 387 | 10 | 397 | ||
| Dividends | –263 | –263 | –13 | –276 | |||
| New share issue | 5 | 462 | 467 | 0 | 467 | ||
| Acquisition/divestment of non-controlling interest | –7 | –7 | 1 | –6 | |||
| CLOSING BALANCE ON 31 DECEMBER 2011 | 82 | 805 | 0 | 652 | 1,539 | 17 | 1,556 |
Number of shares at 31 December 2011 amounted to 32,814,605 (30,868,822).
| SEK M | Share capital | Statutory reserve |
Profit brought forward |
Total sharehol ders' equity |
|---|---|---|---|---|
| OPENING BALANCE ON 1 JANUARY 2010 | 77 | 3 | 625 | 705 |
| Dividends | –216 | –216 | ||
| Comprehensive income for the year | 304 | 304 | ||
| CLOSING BALANCE ON 31 DECEMBER 2010 | 77 | 3 | 713 | 793 |
| Dividends | –263 | –263 | ||
| New share issue | 5 | 462 | 467 | |
| Comprehensive income for the year | 290 | 290 | ||
| CLOSING BALANCE ON 31 DECEMBER 2011 | 82 | 3 | 1,202 | 1,287 |
The consolidated accounts were prepared in accordance with International Financial Reporting Standards (IFRS) as approved by the EU and interpretations issued by IFRS' Interpretations Committee for application as of 1 January 2011 or later. Furthermore, the Swedish Financial Reporting Board's recommendation RFR 1, Supplementary Accounting Regulations for Groups, has been applied.
The functional currency of the Parent Company is Swedish kronor (SEK), which is also the Group's reporting currency. All amounts are stated in SEK M, unless otherwise indicated.
The items in the Annual Report are measured at cost, with the exception of certain financial instruments, which are measured at fair value.
The Parent Company's accounts were prepared in accordance with the Annual Accounts Act and RFR 2, Accounting for legal entities.
A description of the principal accounting policies is found below.
None of the IFRS or IFRIC interpretations that are mandatory for the first time for the financial year beginning on 1 January 2011 has had any significant impact on the Mekonomen Group's financial reports for 2011.
The new or amended standards and interpretation statements that will come into effect in 2012 have not been applied in advance in the preparation of these financial reports. New or amended standards that will be applicable after the 2012 financial year are not planned for advance application. They have been deemed not to have
any material effect on the Mekonomen Group's income statement, balance sheets, cash-flow statements and shareholders' equity. New and amended standards and interpretations that will come into effect in 2013 and later have not been approved for application within the EU. The effects they may have are yet unknown.
The consolidated accounts include the Parent Company and all companies over which the Parent Company has a controlling influence. Controlling influence refers to companies in which Mekonomen has a right to formulate financial and operational strategies. This normally occurs through ownership and voting rights of more than 50 per cent. The existence and effect of potential voting rights, which are currently available for exercise or conversion, are taken into account when an assessment is made of whether the Group can exercise controlling influence over another company. Subsidiaries are included in the consolidated accounts from the point in time at which controlling influence is achieved and excluded from the consolidated accounts from the point in time at which the controlling influence is lost.
The purchase method was used for reporting Group business acquisitions. The purchase consideration for the acquisition of a subsidiary is measured at fair value on transferred assets, liabilities arising in the Group from previous owners of the acquired company and the shares issued by the Group. The purchase consideration also includes the fair value of all assets or liabilities resulting from an agreement on conditional purchase consideration. Identifiable acquired assets and overtaken liabilities in a business acquisition are initially measured at fair value on the date of
acquisition. For each acquisition - meaning, acquisition by acquisition - the Group decides whether the non-controlling interests in the acquired company are recognised at fair value or proportionate to the holding's share of the carrying amount of the acquired company's identifiable net assets.
Acquisition-related costs are recognised in profit or loss as they arise.
If the business acquisition is implemented in several steps, the earlier equity shares in the acquired company are re-measured to its fair value on the date of acquisition. Any profit or loss arising is recognised in the profit or loss statement.
Each conditional purchase consideration to be transferred by the Group will be recognised at fair value on the date of acquisition. The subsequent changes in fair value of a conditional purchase consideration are recognised in the profit or loss. Conditional purchase consideration classified as shareholders' equity is not re-measured and the subsequent adjustment is recognised in shareholders' equity.
Goodwill is initially measured at the amount by which the total purchase consideration and fair value for the non-controlling interests exceeds the fair value of identifiable acquired assets and overtaken liabilities. If the purchase consideration is lower than the fair value of the acquired company's net assets, the difference is recognised directly in profit or loss.
When necessary, subsidiaries' accounting is adjusted to comply with the same policies applied by the other Group companies. All internal transactions between Group companies and Group intermediaries are eliminated when preparing the consolidated financial statements.
Transactions with non-controlling interests that will not result in a loss of control are recognised as shareholders' equity transactions - meaning, transactions with shareholders in their roles as owners. In acquisitions from non-controlling interests, the difference between the fair value of purchase consideration paid and the actual acquired portion of the carrying amount of the subsidiary's net assets is recognised in shareholders' equity. Profit or losses on divestments to non-controlling interests are also recognised in shareholders' equity.
Transactions in foreign currencies are translated into Swedish Kronor (SEK) based on the exchange rate on the date of the transaction. Monetary items (assets and liabilities) in foreign currencies are translated into SEK according to the exchange rate on the closing date. Exchangerate gains and losses that arise in connection with such translations are recognised in profit or loss as Other operating revenue and/or Other operating expenses. Exchange-rate differences that arise in foreign long-term loans and liabilities are recognised in financial income and expenses.
When the consolidated accounts were prepared, the Group's foreign operations' balance sheets were translated from their functional currencies to SEK based on the exchange rates on the closing date. The income statements and other comprehensive income were translated at the average exchange rate for the period. Translation differences that arose were recognised through other comprehensive income against the translation reserve in shareholders' equity. The accumulated translation differences were transferred and recognised as part of capital gains or capital losses in cases where foreign operations were divested. Goodwill and adjustments to fair values attributable to acquisitions of operations using functional currencies other than SEK are treated as assets and liabilities in
the acquired operations' currencies and translated at the exchange rates on the closing date.
The Mekonomen Group uses geographic regions as segments, since the Group's organisation and control is based on geographical division. This division is the basis used by the chief operating decision-maker to monitor the organisation. The areas comprise the countries involved, Sweden, Norway and Denmark. Since the first quarter of 2011, the acquired Sørensen og Balchen Group has been a new operating segment within Mekonomen. Other segments comprise the Parent Company, Mekonomen Fleet AB, Speedy Autoservice AB, Marinshopen, Mekonomen Finland, Mekonomen BilLivet, as well as Group-wide and eliminations.
Profit/loss for each segment includes the contribution received by the segment through wholesale operations. This is to facilitate comparison between segments. There are no adjustments made to bonus in inventories for each segment relating to this contribution.
Sales of goods are recognised at delivery/handover of products to the customer, in accordance with conditions of sale. Sales are recognised net after deduction of discounts and value-added tax. Sales from the centralised warehouse to stores occur in the currency of the receiving country. Consequently, exchange-rate fluctuations only affect wholesale operations. Intra-Group sales are eliminated in the consolidated accounts.
Interest revenues are recognised on an accruals basis over the term by applying the effective interest method.
A financial leasing contract is an agreement according to which the financial risks and benefits that are connected to ownership of an object are essentially transferred from the lessor to the lessee. The leasing object refers primarily to company vehicles, distribution vehicles and forklift trucks.
The Group's operational lease contracts consist primarily of leased premises.
Assets held under financial leasing agreements are recognised as fixed assets in the consolidated balance sheets at fair value at the beginning of the leasing period or at the present value of minimum leasing fees if this is lower. The liability that the lessee has to the lessor is recognised in the balance sheet under the heading "Lease agreement" divided into long-term and short-term liabilities. Leasing payments are divided between interest and amortisation of debt. Interest is divided over the leasing period so that each reporting period is charged with an amount corresponding to a fixed interest rate of the liability recognised during each period. Interest expenses are recognised directly in profit or loss. Lease fees that are paid during operating lease agreements are systematically expensed over the leasing period.
The Group has both defined-contribution and defined-benefit pension plans. A defined-benefit pension plan is a pension plan whereby the Group guarantees an amount, which the employee receives as pension benefits upon retirement, normally based on several different factors, for example, salary and period of service. A definedcontribution pension plan is a pension plan in which the Group, after having paid its pension premium to a separate legal entity, has fulfilled its commitments towards the employee.
Defined-contribution plans are recognised as an expense in the period to which the premiums paid are attributable.
Pension expenses for defined-benefit plans are calculated using the Projected Unit Credit Method whereby expenses are distributed over the employee's period of employment. These commitments, meaning the liabilities that are recognised, are measured at the present value of expected future payments, taking estimated future salary increases into account, applying a discount rate corresponding to the interest on first-class corporate bonds issued in the same currency as the pension is to be paid in, with a remaining duration that is comparable to the current commitment and with deductions for the fair value of plan assets. In countries where there are no functioning markets for corporate bonds, a discount rate corresponding to the interest rate on government bonds is used. Consequently, a discount rate established by referring to the interest rate on government bonds is used for the Group's defined-benefit pension plans in Norway. Should a net asset arise, this will be recognised only to the extent that it represents future financial benefits, for example, in the form of repayments or reduced future premiums.
One of the Group's defined-benefit pension plans comprises a so-called multi-employer defined-benefit pension plan (ITP plan in Alecta). In accordance with Mekonomen's accounting policies, a multi-employer defined-benefit plan is recognised based on the rules of the plans and recognises its proportional share of the definedbenefit pension obligations and of plan assets and expenses related to the plan in the same manner as for any other similar defined-benefit pension plan. However, Alecta has not been able to present sufficient information to facilitate reporting as a defined-benefit plan, which is why the ITP plan is recognised as a defined-contribution plan in accordance with IAS 19.30.
In addition to the defined-benefit pension plans via Alecta described above, additional defined-benefit pension plans have been added in the Group during the financial year due to the acquisition of Sørensen og Balchen. Calculation and measurement according to the Projected Unit Credit Method was done on the date of acquisition and taken into account in the acquisition assessment. Actuarial gains and losses arising thereafter are recognised in their entirety in other comprehensive income/expense during the period in which they arose.
Remuneration in connection with termination of employment can be paid when an employee has been served notice of termination prior to the expiration of the normal pension date or when an employee accepts voluntary retirement. The Group recognises liabilities and expenses in connection with a termination of employment, when Mekonomen is unquestionably obligated to either terminate employment prior to the normal termination date or to voluntarily pay remuneration to encourage early retirement.
Mekonomen recognises a liability and an expense for bonuses when there are legal or informal obligations, based on earlier practice, to pay bonuses to employees.
The Group's total tax expense comprises current tax and deferred tax. Current tax is tax that shall be paid or received pertaining to the current year and adjustments of prior years' current tax. Deferred tax is calculated based on the difference between the carrying amounts and the values for tax purposes of company assets and liabilities. Deferred tax is recognised according to the balance sheet method. Deferred tax liabilities are recognised in principle on all taxable temporary differences, while deferred tax assets are reported to the extent that is probable that the amount can be utilised against future taxable surplus.
The carrying amount on deferred tax assets
is assessed at each accounting year-end and reduced to the extent that it is no longer probable that sufficient taxable surplus will be available to be utilised either in its entirety or partially against the deferred tax asset.
Deferred tax is calculated based on the tax rates that are expected to apply for the period when the asset is recovered or the debt settled. Deferred tax is recognised as revenues or expenses in profit or loss, except in cases when it pertains to transactions or events that are recognised against other comprehensive income or directly against shareholders' equity. The deferred tax is then also recognised against other comprehensive income or directly against shareholders' equity. Deferred tax assets and tax liabilities are offset when they are attributable to income tax that is debited by the same authority and when the Group intends to pay the tax with a net amount.
Goodwill comprises the amount by which the cost exceeds the fair value of the Group's portion of the acquired subsidiary's identifiable net assets on the date of acquisition. If in conjunction with the acquisition, the fair value of the acquired assets, liabilities and contingent liabilities exceeds the cost, the surplus is recognised directly as income in profit or loss. Goodwill has an indefinite useful life and is recognised at cost less any accumulated impairments. In the divestment of an operation, the portion of goodwill attributable to this operation is recognised in the calculation of gain or loss on the divestment.
Expenditure for the development and implementation of IT systems can be capitalised if it is probable that future financial benefits will accrue the company and cost for the asset can be calculated in a reliable manner.
Brands, customer relations and franchise contracts acquired through business acquisitions are recognised at fair value on the date of acquisition.
Acquired brands have an indefinite useful period and are recognised at cost less any accumulated impairment losses. Customer relations, franchise contracts and strategic IT investments have definite useful periods and are recognised at cost less accumulated amortisation. Amortisation is applied according to the straight-line method across the assets' estimated useful period. The estimated useful period for each asset is stated in Note 13.
Tangible fixed assets are recognised as assets in the balance sheets if it is probable that future financial benefits will be accrued to the company and the cost of the asset can be calculated in a reliable manner. Tangible fixed assets, primarily comprising equipment, computers and means of transport, are recognised at cost with deduction for accumulated depreciation and any impairment. Depreciation of tangible fixed assets is recognised as an expense so that the asset's value is depreciated according to the straight-line method over its estimated useful life. The following percentages were applied for depreciation:
| FIXED ASSETS | Per cent |
|---|---|
| Land improvements and permanent equipment in buildings |
5–10 |
| Equipment | 10–20 |
| Vehicles | 20 |
| Servers | 20 |
| Workplace computers | 33 |
Assets with an indefinite useful period, for example, goodwill and brands, are not impaired but are tested annually for any impairment requrements. Assets that are impaired are assessed with respect to value decline whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
If this occurs, a calculation of the asset's recoverable value is done. The recoverable value comprises the highest of the useful value of the asset in the operation and the value that would be received if the asset was divested to an independent party, net realisable value. The useful value comprises the present value of all in and out payments attributable to the asset during the period it is anticipated to be used in the operation, plus the present value of the net realisable value at the end of the useful period. If the assessed recovery value falls below the carrying amount, an impairment is done to the asset's recoverable value. The impairment is recognised in profit or loss in the period it is determined.
With regard to goodwill items, a so-called impairment test is conducted at least once a year. Refer also to Note 13 for information on how this test is performed.
Previously recognised impairments are reversed only if there has been a change with respect to the assumption that served as the basis for determining the recovery value in connection with the impairment. If this is the case, a reversal will be conducted to increase the carrying amount of the impaired asset to its recovery value. A reversal of an earlier impairment occurs in an amount that does not allow the new carrying amount to exceed what would have been the carrying amount (after impairment) if the impairment had not taken place. Impairment pertaining to goodwill is never reversed.
Fixed assets that Mekonomen has offered for sale, which are also immediately available for sale and for which the carrying amount will largely be recovered through the sale, are recognised as current assets. Such assets are measured and thereby recognised at the lowest of the carrying amount and fair value after deductions for selling expenses.
Inventories are recognised at the lower of the cost and net realisable value. The cost is established by using the first in/first out principle (FIFO).
A provision for estimated obsolescence in inventories is established when there is an objective basis to assume that the Group will be unable to receive the carrying amount when inventories are sold in the future. The size of the provision amounts to the difference between the asset's carrying amount and the value of expected future cash flows. The reserved amount is recognised in profit or loss. The inventory value was reduced by the value included in the inter-company profit from goods sold from the wholesaler to the company's own stores on the goods that are still in stock. Furthermore, the inventory value was also reduced by the value of the remaining portion of the supplier bonus on goods that are still in stock.
Financial assets recognised as assets in the balance sheet include loan receivables, accounts receivable and cash and cash equivalents. Liabilities in the balance sheet include long-term and short-term loans and accounts payable. A currency derivative is recognised either as an asset or liability, depending on changes in the exchange rate. A financial asset or financial liability is recognised in the balance sheet when the company becomes party to the contractual conditions. Accounts receivable are recognised when an invoice is sent and accounts payable are recognised when an invoice has been received. With the exception of cash and cash equivalents, only an insignificant portion of the financial assets is interest-bearing, which is why interest exposure is not recognised. The maximum
credit risk corresponds to the carrying amount of the financial assets. The terms for long-term and short-term loans are stated in separate note disclosures; other financial liabilities are non-interest-bearing. A financial asset, or portion thereof, is eliminated when the rights contained in the contract are realised or mature. A financial liability, or portion thereof, is eliminated as it is regulated when the commitment in the agreement has been fulfilled or has been terminated in another manner.
When establishing the fair value of derivatives, official market listings on the balance-sheet date are used. If no such information is available, a measurement is conducted applying established methods, such as discounting future cash flows to the quoted market rate for each term. Translation to SEK is based on the quoted exchange rate on the balance-sheet date.
Long-term receivables comprise primarily deposits and lease-purchase agreements. These are recognised at the accrued cost.
Accounts receivable are recognised net after provisions for possible bad debts. The expected term of accounts receivable is short, which is why the amount is recognised at nominal value without discounting in accordance with the method for accrued cost. A provision for possible bad debts on accounts receivable is made when there are objective indications to assume that the Group will not be able to receive all the amounts that are due for payment in accordance with the receivables' original conditions. The size of the provision consists of the difference between the asset's carrying amount and the value of estimated future cash flows. The reserved amount is recognised in profit or loss.
Cash and cash equivalents comprise cash funds held at financial institutions and current liquid investments with a term from the date of acquisition of less than three months, which are exposed to only an insignificant risk of fluctuations in value. Cash and cash equivalents are recognised at nominal value.
Mekonomen applies hedge accounting with regard to receivables in foreign currencies. Hedging is conducted using forward contracts with a maximum term of three months. Hedged receivables in foreign currencies are recognised at the interest rate applying on the balance-sheet date and hedging instruments are recognised separately at fair value in the balance sheet and the change in value is recognised in profit or loss.
The expected term for accounts payable is short, which is why the debt is recognised at nominal value without discounting according to the method for accrued cost.
Liabilities to credit institutions, overdraft facilities and other liabilities (loans) are initially recognised at fair value net after transaction costs. Thereafter, loans are recognised at accrued cost. Possible transaction costs are distributed over the loan period applying the effective interest method. Longterm liabilities have an estimated term longer than one year while short-term liabilities have a term of less than one year.
Ordinary shares are classified as share capital. Transaction costs in connection with a new
rights issue are recognised as a deduction, net after tax, from proceeds from the rights issue.
The cash-flow statement was prepared in accordance with the indirect method. The recognised cash flow comprises only transactions that result in inward and outward payments.
The Parent Company complies with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2, Reporting of Legal Entities. Application of RFR 2 means that the Parent Company shall, in the annual accounts for a legal entity, apply all of the IFRS and statements that have been approved by the EU where this is possible within the framework of the Swedish Annual Accounts Act and the law on safeguarding of pension commitments and taking into account the link between accounting and taxation. The recommendation specifies which exceptions and additions shall be made from IFRS. The differences between the Group's and the Parent Company's accounting policies are stated below.
The policies have been applied consistently for all years presented, unless otherwise stipulated.
The amendments in RFR 2 Accounting for Legal Entities, which gained legal force and apply for the 2011 financial year, entailed that Group contributions may no longer be recognised against shareholders' equity. Group contribution that the Parent Company receives from a subsidiary is recognised according to the same policies as normal dividends from subsidiaries and recognised as financial income. Group contribution paid from the Parent Company to subsidiaries is recognised in profit or loss as a financial item. The comparative year 2010 has been recalculated.
Other amendments to RFR 2 have not had any material impact on the Parent Company's financial statements.
Participations in subsidiaries are recognised in the Parent Company according to the cost method. Acquisition-related costs for subsidiaries, expensed in the consolidated accounting, are included as part of the cost for participations in subsidiaries.
Conditional purchase considerations are measured based on the probability that the purchase consideration will be paid. Any changes in the provision/receivable will be added/deducted from the cost. In the consolidated accounting, conditional purchase consideration is recognised at fair value with value changes in profit or loss. The carrying amount for participations in subsidiaries is tested pertaining to any impairment requirements when there are indications of impairment needs.
The amounts reserved as untaxed reserves consist of taxable temporary differences. Due to the link between accounting and taxation, the deferred tax liabilities that are attributable to the untaxed reserves, are not recognised separately in a legal entity. The changes in untaxed reserves are recognised in accordance with Swedish practice in profit or loss for individual companies under the heading "Appropriations." The accumulated value of provisions are recognised in the balance sheet under the heading "Untaxed reserves," of which 26.3 per cent is regarded as deferred tax liabilities and 73.7 per cent as restricted shareholders' equity.
Shareholders' contribution paid is recognised as an increase in the value of shares and participations. An assessment is then conducted as to whether impairment requirements exist for the value of the shares and participations in question.
A Group contribution received by a Parent Company from a subsidiary must be recognised in the Parent Company according to the same policies as normal dividends from subsidiaries. This means that the Group contribution must be recognised as financial income. Tax on Group contribution is recognised according to IAS 12 in profit or loss.
For Group contributions paid, the Parent Company applies the permitted option in RFR 2 to recognise the Group contribution as an expense in profit or loss. The tax effect is recognised according to IAS 12 in profit or loss.
Defined-benefit and defined-contribution pension plans are recognised in accordance with the present Swedish accounting standard, which is based on the regulations in the law on safeguarding of pension commitments.
All leasing agreements, regardless whether they are financial or operational, are recognised as operational leasing agreements (rental agreements), which means that the leasing charges are distributed according to the straight-line method across the leasing period.
The financial reports are stated in SEK M, unless otherwise stipulated. Rounding off may result in some tables not being summarised.
| Sweden | Sørensen og Denmark Balchen Other* |
Norway | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
| REVENUES | ||||||||||||
| External net sales | 1,747 | 1,708 | 808 | 817 | 759 | 777 | 603 | – | 223 | 73 | 4,140 | 3,374 |
| Internal revenues | 794 | 724 | 4 | 1 | 11 | 0 | 6 | – | –815 | –725 | 0 | – |
| Other revenues | 48 | 32 | 9 | 7 | 0 | 0 | 4 | – | 36 | 33 | 97 | 73 |
| TOTAL REVENUES | 2,589 | 2,464 | 821 | 825 | 770 | 777 | 613 | – | –556 | –619 | 4,237 | 3,447 |
| EBIT | 323 | 310 | 132 | 144 | 63 | 45 | 88 | – | –70 | –14 | 536 | 485 |
| Financial items, net | –13 | 0 | ||||||||||
| PROFIT BEFORE TAX | 523 | 485 | ||||||||||
| Assets | 1,128 | 864 | 326 | 220 | 448 | 353 | 1,057 | – | –108 | –96 | 2,852 | 1,341 |
| Undistributed assets | 202 | 417 | 202 | 417 | ||||||||
| TOTAL ASSETS | 1,128 | 864 | 326 | 220 | 448 | 353 | 1,057 | – | 95 | 321 | 3,054 | 1,758 |
| Liabilities | 1,026 | 873 | 168 | 95 | 216 | 183 | 79 | – | –306 | –297 | 1,183 | 854 |
| Unallocated liabilities | 315 | –70 | 315 | –70 | ||||||||
| TOTAL LIABILITIES | 1,026 | 873 | 168 | 95 | 216 | 183 | 79 | – | 9 | –366 | 1,498 | 784 |
| Investments, tangible assets | 48 | 47 | 11 | 6 | 27 | 8 | 4 | – | 5 | 10 | 95 | 68 |
| Investments, IT systems | 39 | 29 | 39 | 29 | ||||||||
| Depreciation (tangible assets) | 29 | 22 | 5 | 6 | 12 | 12 | 5 | – | 7 | 5 | 58 | 44 |
| Amortisation (intangible assets) | – | – | – | – | – | – | 15 | – | 10 | 5 | 25 | 5 |
| Average number of employees for the period |
857 | 774 | 267 | 251 | 392 | 358 | 208 | – | 234 | 79 | 1,958 | 1,462 |
| Number of own stores | 114 | 110 | 36 | 32 | 40 | 37 | 35 | – | 4 | 3 | 229 | 182 |
| Number of partnership stores | 30 | 30 | 17 | 15 | 14 | 3 | 42 | – | 2 | 105 | 48 | |
| NUMBER OF STORES IN THE CHAIN |
144 | 140 | 53 | 47 | 54 | 40 | 77 | – | 6 | 3 | 334 | 230 |
| KEY FIGURES | ||||||||||||
| EBIT margin, %* | 18 | 18 | 16 | 18 | 8 | 6 | 15 | – | 13 | 14 | ||
| Sales increase, % | 2 | 6 | –1 | 12 | –2 | –5 | – | – | 23 | 8 | ||
| Sales/employee, SEK 000s (converted into one-year balance) |
3,021 | 3,183 | 3,075 | 3,287 | 1,946 | 2,170 | 2,947 | – | – | 2,164 | 2,358 | |
| Operating profit/loss per employee, SEK 000s (converted into one-year balance) |
377 | 408 | 494 | 586 | 161 | 131 | 423 | – | – | 274 | 334 |
*) When calculating the EBIT margin for the segments, internal sales were excluded.
**) Sales and revenue pertain to the 11 March – 31 December 2011 period and were entirely attributable to the operation in Norway.
***) Others comprise Mekonomen AB, Mekonomen Fleet AB, Speedy Autoservice AB, Mekonomen Finland, Marinshopen, Mekonomen BilLivet, as well as Group-wide and eliminations.
Group has no individual customers that account for 10 per cent or more of the Group's revenue.
The preparation of the annual accounts and application of various accounting standards are based to a certain extent on management's assessments or assumptions and appreciations that are considered reasonable under the circumstances. These assumptions and appreciations are frequently based on historic experience but also on other factors, including expectations on future events. The results could differ if other assumptions and appreciations were used and the actual outcome will, in terms of definition, rarely agree with the estimated outcome. The assumptions and appreciations made by Mekonomen in the 2011 annual accounts, and which had the greatest impact on results and assets and liabilities, are discussed below.
In assessing the impairment requirement of goodwill, appreciations and assessments are conducted on the relevant company's future earnings capacity and growth, as well as discount-rate assumptions. These assumptions are described in detail in Note 13, Intangible fixed assets.
In conjunction with acquisitions, analyses are prepared in which all identifiable assets and liabilities, including intangible assets, are identified and measured at fair value at the acquisition date. In accordance with IFRS 3, acquired identifiable intangible assets, for example, customers, brands
and customer relations, shall be separated from goodwill. This applies if these fulfil the criteria as assets, meaning, they are possible to separate or are based in contractual or other formal rights, and that their fair values can be established in a reliable manner.
An examination is conducted at each acquisition. The remaining surplus value is allocated to goodwill. Measuring of identifiable assets and liabilities in acquisition assessments is subject to important estimations and assessments.
| Group | Parent Company | |||
|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | |
| DELOITTE AB | ||||
| Audit assignment | 6 | 6 | 1 | 1 |
| Audit related services other than the audit assignment |
0 | 0 | 0 | 0 |
| Tax advice | 0 | 0 | 0 | 0 |
| Other services | 0 | 0 | 0 | 0 |
| TOTAL | 6 | 6 | 1 | 1 |
| 2011 | 2010 | |||
|---|---|---|---|---|
| AVERAGE NUMBER OF EMPLOYEES | No. of employees | Of whom, men % | No. of employees | Of whom, men % |
| PARENT COMPANY | ||||
| Sweden | 76 | 75 | 58 | 76 |
| TOTAL IN PARENT COMPANY | 76 | 75 | 58 | 76 |
| SUBSIDIARIES | ||||
| Sweden | 1,000 | 80 | 792 | 79 |
| Denmark | 392 | 84 | 358 | 85 |
| Norway | 475 | 85 | 251 | 84 |
| Finland | 15 | 80 | 3 | 75 |
| TOTAL IN SUBSIDIARIES | 1,882 | 82 | 1,404 | 82 |
| GROUP TOTAL | 1,958 | 82 | 1,462 | 81 |
| SALARIES, REMUNERATION, ETC., SEK 000s | Salaries and other remuneration |
Soc. security expenses (of which pension costs) |
Salaries and other remuneration |
Soc. security expenses (of which pension costs |
| Parent Company | 46,362 | 21,396 | 39,802 | 19,650 |
| (5,325) | (4,978) | |||
| Subsidiaries | 722,748 | 170,952 | 549,125 | 130,203 |
| (37,942) | (32,426) | |||
| GROUP TOTAL | 769,110 | 192,348 | 588,927 | 149,853 |
| (43,267) | (37,404) | |||
| Board and Pre | Board and Pre | |||
| SALARIES AND OTHER REMUNERATION DISTRIBUTED BETWEEN THE PRESIDENT AND BOARD MEMBERS AND OTHER EMPLOYEES, SEK 000s |
sident* (of which bonus, etc.) |
Other employees |
sident* (of which bonus, etc.) |
Other employees |
| PARENT COMPANY | ||||
| Mekonomen AB | 7,786 | 38,576 | 7,454 | 32,348 |
| (1,200) | (1,032) | (2,010) | (2,754) | |
| TOTAL IN PARENT COMPANY | 7,786 | 38,576 | 7,454 | 32,348 |
| (1,200) | (1,032) | (2,010) | (2,754) | |
| SUBSIDIARIES IN SWEDEN | 26,568 | 312,871 | 25,631 | 236,149 |
| (2,719) | (2,517) | (2,706) | (2,577) | |
| SUBSIDIARIES ABROAD Denmark |
1,796 | 149,130 | 2,572 | 162,024 |
| (53) | (0) | (255) | (0) | |
| Norway | 22,682 | 205,399 | 17,625 | 104,155 |
| (1,688) | (2,787) | (329) | (1,400) | |
| Finland | – | 4,302 | – | 969 |
| (–) | (–) | (–) | (–) | |
| TOTAL IN SUBSIDIARIES | 51,046 | 671,702 | 45,828 | 503,297 |
| (4,460) | (5,304) | (3,290) | (3,977) | |
| GROUP TOTAL | 58,832 | 710,278 | 53,282 | 535,645 |
| (5,660) | (6,336) | (5,300) | (6,731) |
*) Remuneration to the Board of Directors and President includes the Parent Company and, where appropriate, subsidiaries in each country.
Fees are paid to the Chairman of the Board and Board members in accordance with the resolution of the Annual General Meeting. The annual Board fee totalling SEK 1,700,000 (1,360,000) was established in accordance with the resolution of the 2011 Annual General Meeting. From this, SEK 400,000 (320,000) represents fees to the Chairman of the Board and SEK 300,000 (240,000) to the Vice Chairman, as well as SEK 200,000 (160,000) to each of the remaining Board members.
No fees are paid to the Boards of other subsidiaries.
The President, Håkan Lundstedt, has a basic salary of SEK 400,000 per month and a variable salary portion, which is based on the company's profits and can amount to a maximum of 60 per cent of the basic annual salary. Pension provisions are paid in an amount corresponding to 29 per cent of the basis salary.
Other benefits consist of a company car. The period of notice is 12 months if termination is initiated by the company and six months if initiated by the employee. If termination is initiated by the company, severance pay amounting to six months' salary is paid. For other senior executives, remuneration follows the policies adopted at the 2011 Annual General Meeting. This means that the company shall strive to offer its senior executives market-based remuneration, that the criteria shall accordingly be based on the significance
of assignments, competency requirements, experience and performance and that remuneration shall comprise the following parts: fixed basic salary, variable remuneration, pension benefits, other benefits and termination terms. The variable remuneration for other senior executives, excluding the President, is based partly on the Group's profit and partly on individual qualitative parameters and can amount to a maximum of four months' salary. Other benefits refer primarily to company cars. Pension premiums are paid in an amount that is based on the ITP plan or a corresponding system for employees abroad. Pensionable salary refers to the basic salary. Severance pay for termination on the part of the company can total a maximum of one annual salary. Matters pertaining to remuneration to Board members shall be prepared and resolved by the Board of Directors. At the 2011 Annual General Meeting, it was also resolved, upon approval by the Board of Directors, that company management may receive a cash bonus from the company. The bonus shall be profit-based and calculated on the consolidated profit for the 2011–2013 financial years. The bonus programme shall, in its entirety, as a total expense for the company, amount to a maximum of SEK 24 M for the period. No bonus was reserved as at 31 December 2011 pertaining to this bonus programme. The criteria for the size of an individual bonus shall be determined by the Board of Directors.
The Board has not made any decisions pertaining to share or share-price based incentive programs for Company Management.
Commitments for old-age pension and family pension for salaried employees in Sweden are secured through insurance with Alecta. According to a statement from the Swedish Financial Reporting Board, UFR 3, this is a defined-benefit plan that comprises several employers. In the 2011 financial year, the company did not have access to such information that made it possible to report this plan as a defined-benefit plan. ITP pension plans that are secured through insurance with Alecta are therefore reported as defined-contribution plans. The annual fees for pension policies signed with Alecta amounted to SEK 2 M (2). Alecta's surplus can be distributed to policyholders and/or the insured. At the end of 2011, Alecta's surplus, in the form of the collective consolidation level, amounted to 113 per cent (143). The collective consolidation level comprises the market value of Alecta's assets as a percentage of insurance commitments calculated according to Alecta's actuarial calculation commitments, which are not in agreement with IAS 19.
| EXECUTIVES/OCCUPATION CATEGORY | Basic salary 2011 (2010) |
Bonus 2011 (2010) |
Board fees 2011 (2010) |
Other benefits 2011 (2010) |
Pension premiums 2011 (2010) |
|---|---|---|---|---|---|
| Fredrik Persson, Chairman of the Board | 400 (320) | ||||
| Marcus Storch, Vice Chairman of the Board | 300 (240) | ||||
| Antonia Ax:son Johnson, Board member | 200 (160) | ||||
| Kenny Bräck, Board member | 200 (160) | ||||
| Anders G Carlberg, Board member | 200 (160) | ||||
| Wolff Huber, Board member | 200 (160) | ||||
| Helena Skåntorp, Board member | 200 (160) | ||||
| President | 4,886 (4,084) | 1,200 (2,010) | 71 (66) | 1,370 (1,166) | |
| Other senior executives, 8 (8) * | 11,725 (11,338) | 1,612 (1,754) | 818 (593) | 2,243 (2,594) | |
| TOTAL | 16,611 (15,422) | 2,812 (3,764) | 1,700 (1,360) | 889 (659) | 3,613 (3,760) |
* During the comparative year 2010, the management group consisted of a total of ten individuals, in addition to the President. The average number of individuals in the management group, in addition to the President, amounted to eight in 2010.
Of all the company's officers and senior executives, two are women. The number of senior executives was nine, who also comprised the
Group's management team. In addition to the President, they are the Executive Vice President, HR Manager, CFO, Establishment Manager, as
well as Head of Operations for Norway, Denmark, Sweden and Mekonomen Fleet.
| Group | Parent Company | |||
|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | |
| Planned depreciation of tangible fixed assets | 58 | 44 | 4 | 5 |
| Amortisation, brands | 1 | 0 | – | – |
| Amortisation customer relationships | 11 | – | – | – |
| Amortisation franchise contracts | 4 | – | – | – |
| Amortisation of capitalised expenditure for IT systems | 9 | 5 | 9 | 5 |
| TOTAL DEPRECIATION/AMORTISATION ACCORDING TO PLAN |
83 | 49 | 13 | 10 |
| Parent Company | ||
|---|---|---|
| 2011 | 2010 | |
| Reversal of tax allocation reserve | – | 9 |
| Changes in excess depreciation/amortisation | –13 | –11 |
| TOTAL APPROPRIATIONS | –13 | –2 |
| Group | Parent Company | |||
|---|---|---|---|---|
| NET PROFIT/NET LOSS | 2011 | 2010 | 2011 | 2010 |
| Of which, financial instruments categorised as: | ||||
| Holdings for trading, derivatives | 1 | 6 | 0 | 6 |
| Accounts receivable, impairments | –5 | –1 | 0 | 0 |
| Group | Parent Company | |||
|---|---|---|---|---|
| CURRENT TAX | 2011 | 2010 | 2011 | 2010 |
| Sweden | –75 | –99 | –53 | –75 |
| Other countries | –77 | –44 | ||
| TOTAL CURRENT TAX | –152 | –143 | –53 | –75 |
| Changes in deferred tax temporary differences | 9 | 9 | ||
| RECOGNISED TAX EXPENSES | –143 | –134 | –53 | –75 |
| TAX ON PROFIT FOR THE YEAR | ||||
| Recognised profit before tax | 523 | 485 | 343 | 379 |
| Tax according to applicable tax rate | –139 | –130 | –90 | –100 |
| Tax on standard interest on tax allocation reserves | –1 | –1 | –1 | –1 |
| Tax effects on expenses that are not tax deductible | ||||
| Other non-deductible expenses | –7 | –3 | –1 | 0 |
| Other non-taxable revenue | 1 | 0 | 39 | 26 |
| Effects on adjustments from the preceding year | 3 | – | – | – |
| RECOGNISED TAX EXPENSES | –143 | –134 | –53 | –75 |
| Improvement costs, third-party property | |||
|---|---|---|---|
| Group | Parent Company | ||
| OPENING COST, 1 JANUARY 2010 | 13 | – | |
| Purchase, rebuilding and extensions, conversions | 19 | 2 | |
| OPENING COST, 1 JANUARY 2011 | 32 | 2 | |
| Purchase, rebuilding and extensions, conversions | 21 | 0 | |
| CLOSING COST, 31 DECEMBER 2011 | 53 | 2 | |
| OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2010 | –2 | – | |
| Depreciation for the year | –3 | – | |
| OPENING ACCUMULATED DEPRECIATION, 1 JANUARY 2011 | –5 | – | |
| Depreciation for the year | –7 | –1 | |
| CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2011 | –12 | –1 | |
| CLOSING CARRYING AMOUNT 31 DECEMBER 2011 | 41 | 1 |
The improvement amounts are depreciated by 5–10 per cent based on the calculated financial service life or based on the length of the lease contract.
| Loan | |||||
|---|---|---|---|---|---|
| receivables and accounts |
Other | Derivative | Non-financial assets/ |
||
| receivables | liabilities | instrument | liabilities | Total | |
| Amortised | Amortised | Fair | |||
| cost | cost | value | |||
| ASSETS | |||||
| Intangible fixed assets | – | – | – | 1,116 | 1,116 |
| Tangible fixed assets | – | – | – | 235 | 235 |
| Deposits paid | 7 | – | – | – | 7 |
| Hire-purchase contract | 59 | – | – | – | 59 |
| Other financial fixed assets | 1 | – | – | 0 | 1 |
| Inventories | – | – | – | 934 | 934 |
| Accounts receivables | 411 | – | – | – | 411 |
| Other current receivables | – | – | – | 26 | 26 |
| Other assets (derivatives) | – | – | 0 | – | 0 |
| Prepaid expenses and accrued income | – | – | – | 199 | 199 |
| Cash and cash equivalents | 67 | – | – | – | 67 |
| TOTAL ASSETS | 545 | 0 | 0 | 2,510 | 3,054 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders' equity | – | – | – | 1,556 | 1,556 |
| Provisions | – | – | – | 9 | 9 |
| Long-term liabilities to credit institutions | – | 449 | – | – | 449 |
| Deferred tax liabilities | – | – | – | 53 | 53 |
| Current liabilities | – | – | – | 60 | 60 |
| Current liabilities to credit institutions | – | 198 | – | – | 198 |
| Accounts payable | – | 438 | – | – | 438 |
| Current tax liabilities | – | – | – | 83 | 83 |
| Other liabilities (derivatives) | – | – | – | – | 0 |
| Accrued expenses and deferred income | – | – | – | 209 | 209 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 0 | 1,085 | 0 | 1,970 | 3,054 |
| Loan | |||||
|---|---|---|---|---|---|
| receivables and accounts |
Other | Derivative | Non-financial assets/ |
||
| receivables | liabilities | instrument | liabilities | Total | |
| Amortised cost |
Amortised cost |
Fair value |
|||
| ASSETS | |||||
| Intangible fixed assets | – | – | – | 348 | 348 |
| Tangible fixed assets | – | – | – | 168 | 168 |
| Deposits paid | 5 | – | – | – | 5 |
| Hire-purchase contract | 30 | – | – | – | 30 |
| Deferred tax assets | – | – | – | 3 | 3 |
| Inventories | – | – | – | 680 | 680 |
| Accounts receivables | 287 | – | – | – | 287 |
| Other current receivables | – | – | – | 18 | 18 |
| Properties for sale | – | – | – | 3 | 3 |
| Other assets (derivatives) | – | – | 0 | – | 0 |
| Prepaid expenses and accrued income | – | – | – | 141 | 141 |
| Cash and cash equivalents | 74 | – | – | – | 74 |
| TOTAL ASSETS | 396 | 0 | 0 | 1,361 | 1,758 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||||
| Shareholders' equity | – | – | – | 974 | 974 |
| Provisions | – | – | – | 2 | 2 |
| Long-term liabilities | – | – | – | 22 | 22 |
| Current liabilities | – | – | – | 44 | 44 |
| Liabilities to credit institutions | – | 85 | – | – | 85 |
| Accounts payable | – | 374 | – | – | 374 |
| Current tax liabilities | – | – | – | 75 | 75 |
| Other liabilities (derivatives) | – | – | 0 | – | 0 |
| Accrued expenses and deferred income | – | – | – | 182 | 182 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 0 | 459 | 0 | 1,299 | 1,758 |
| Group | |||
|---|---|---|---|
| Equipment, transport |
Leasing | Total | |
| OPENING COST, 1 JANUARY 2010 | 385 | 25 | 410 |
| Purchases | 48 | 4 | 52 |
| Purchase in connection with acquired operation | 8 | 8 | |
| Sales/disposals | –21 | –21 | |
| Exchange-rate fluctuations | –16 | –16 | |
| CLOSING ACCUMULATED COST, 31 DECEMBER 2010 | 404 | 29 | 433 |
| Purchases | 74 | 4 | 78 |
| Purchase in connection with acquisition of operation | 32 | 32 | |
| Sales/disposals | –21 | –21 | |
| Exchange-rate fluctuations | –1 | –1 | |
| CLOSING ACCUMULATED COST, 31 DECEMBER 2011 | 488 | 33 | 521 |
| OPENING DEPRECIATION, 1 JANUARY 2010 | –253 | –22 | –275 |
| Sales/disposals | 17 | 17 | |
| Exchange-rate fluctuations | 8 | 8 | |
| Depreciation for the year | –37 | –4 | –41 |
| OPENING DEPRECIATION, 1 JANUARY 2011 | –265 | –26 | –291 |
| Sales/disposals | 14 | 14 | |
| Exchange-rate fluctuations | 1 | 1 | |
| Depreciation for the year | –47 | –4 | –51 |
| CLOSING ACCUMULATED DEPRECIATION, 31 DECEMBER 2011 | –297 | –30 | –327 |
| CARRYING AMOUNT, 31 DECEMBER 2011 | 191 | 3 | 194 |
Leasing contracts refer to the leasing of distribution vehicles in Sweden and Norway and fork-lifts in Denmark.
| 2011 | 2010 | |
|---|---|---|
| Leasing expenses for the year | 12 | 10 |
| FUTURE LEASING FEES FOR IRREVOCABLE LEASING CONTRACTS FALLING | ||
|---|---|---|
| DUE FOR PAYMENT: | 2011 | 2010 |
| Within one year | 224 | 153 |
| Later than one year but within five years | 593 | 412 |
| After five years | 216 | 163 |
| 1,033 | 728 |
Of the future leasing fees, leased premises represent SEK 1,013 M (714).
| Parent Company | ||
|---|---|---|
| EQUIPMENT AND TRANSPORT | 2011 | 2010 |
| OPENING COST | 47 | 43 |
| Purchases | 2 | 4 |
| Sales/disposals | –1 | 0 |
| CLOSING ACCUMULATED COST | 48 | 47 |
| Opening depreciation | –38 | –33 |
| Sales/disposals | 0 | 0 |
| Depreciation for the year | –3 | –5 |
| CLOSING ACCUMULATED DEPRECIATION | –41 | –38 |
| CARRYING AMOUNT | 7 | 8 |
| Goodwill | Brands | Franchise contracts |
Customer relations |
IT investments in Parent Company |
Total | |
|---|---|---|---|---|---|---|
| OPENING COST, 1 JANUARY 2010 | 241 | – | – | – | 54 | 296 |
| Acquisitions | 48 | 5 | – | – | 29 | 83 |
| Divestments | – | – | – | – | – | – |
| Translation differences, currency | –8 | – | – | – | – | –8 |
| OPENING COST, 1 JANUARY 2011 | 281 | 5 | – | – | 84 | 371 |
| Acquisitions | 500 | 57 | 47 | 136 | 39 | 779 |
| Divestments | – | – | 0 | 0 | 0 | 0 |
| Translation differences, currency | 8 | 1 | 1 | 3 | 0 | 13 |
| CLOSING ACCUMULATED COST, 31 DECEMBER 2011 | 789 | 64 | 48 | 139 | 123 | 1,163 |
| OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2010 | – | – | 0 | 0 | –17 | –17 |
| Amortisation for the year | – | – | 0 | 0 | –5 | –5 |
| OPENING ACCUMULATED AMORTISATION, 1 JANUARY 2011 | – | – | 0 | 0 | –22 | –22 |
| Amortisation for the year | – | –1 | –4 | –11 | –9 | –25 |
| Translation differences, currency | – | 0 | 0 | 0 | 0 | 0 |
| CLOSING ACCUMULATED AMORTISATION, 31 DECEMBER 2011 | – | –1 | –4 | –11 | –31 | –47 |
| CLOSING PLANNED RESIDUAL VALUE, 31 DECEMBER 2011 | 789 | 63 | 44 | 128 | 92 | 1,116 |
The carrying amount of goodwill is partly attributable to the wholesale operation and partly to Mekonomen's stores in Sweden, Norway and Denmark and the acquisition of Speedy. The increase during the year was primarily attributable to the acquisition of Sørensen og Balchen and the acquisition of Mekonomen BilLivet and Marinshopen. The amount is distributed as SEK 40 M attributable to the wholesale operation, SEK 227 M to Mekonomen stores in Sweden, Norway and Denmark, SEK 27 M to Speedy, SEK 458 M to Sørensen og Balchen, SEK 29 M to BilLivet and SEK 9 M to Marinshopen. The division of SEK 227 M according to countries is as follows: Sweden SEK 144 M, Norway SEK 60 M and Denmark SEK 22 M. The increase for the year pertaining to brands, franchise contracts and customer relations is entirely attributable to the acquisition of Sørensen og Balchen. The brands have indefinite useful periods, franchise contracts, customer relations and strategic IT investments are deemed to have useful periods of ten years.
The assessment of the value of the Group's goodwill items was based on the value in use of the cash-generating units. Cash-generating units are identified individually or in groups depending on the situation and prerequisites, which are based on the lowest level on which management monitors goodwill for internal purposes. For larger acquisitions, for example, Sørensen og Balchen, an assessment is conducted at segment level. In the regions where operations work closely together, for example, with respect to customers, employees and other resource distribution, goodwill is monitored on a regional level. In other respects, goodwill is monitored for individual stores.
The value in use is based on the cash flow that the unit is expected to generate in the Group in the future. The future cash flow used in the calculation of each unit's value in use is based on the 2012 business plan for each unit. Thereafter, the cash flows are based on the unit's plan, which extends to 2015. Forecasts after 2015 are based on a growth of 2 per cent. Forecasts for Sørensen og Balchen after 2015 are based on an annual growth of 2.5 per cent. The present value of the forecasted cash flows is calculated by applying a discount rate of 10 per cent after tax. The conditions that apply for the various markets in which Mekonomen is active do not deviate significantly from each other, which is why the same rate is used for all units. With a discount factor of 10 per cent after tax, the value in use for all of the units will exceed the carrying amount. In this type of calculation, assessments and assumptions from company management are included. The future cash flows of several units are based on similar assumptions. Important assumptions, which
when changed have a major impact on the cash flow, are assumptions on future price and volume developments. In the plans that are the basis for cash flows, company management assumes that the price trend will amount to only a few per cent annually. The volume trend is calculated to be between 2.0 and 5.0 per cent annually up to 2015, meaning a more cautious assumption than Mekonomen's target of 10 per cent growth. Price and volume developments vary a total of between 2 and 5 per cent. Assessments are conducted taking into account the trends in the most recent years. Company management estimates that, even taking into account reasonable deviations from assumed prerequisites, the recoverable value will not decrease to such an extent that it is less than the carrying amount.
The table below states the Group's deferred tax assets and tax liabilities for each category. The deferred tax liabilities are reported after deduction of any tax assets if sub-items can be offset.
| Opening balance, |
Reported as income |
Other changes |
Closing balance |
|
|---|---|---|---|---|
| TAX ASSETS, LOSS CARRYFORWARDS | 1 Jan. 2010 | during 2010 | in 2010 | 31 Dec. 2010 |
| Deferred tax assets, Norway | 5 | – | –4 | 1 |
| Estimated tax on reversed net asset goodwill | –1 | –1 | – | –2 |
| Adjustment to prior years | – | – | 4 | 4 |
| Translation differences, currency | 1 | – | 0 | 0 |
| TOTAL TAX ASSETS, 31 DECEMBER 2010 | 6 | –1 | 0 | 3 |
| TAX ASSETS, LOSS CARRYFORWARDS | 1 Jan. 2011 | 2011 | 2011*) | 31 Dec. 2011 |
| Deferred tax assets, Norway | 1 | –1 | 0 | |
| Estimated tax on reversed net asset goodwill | –2 | 0 | 2 | 0 |
| Adjustment to prior years | 4 | –4 | 0 | |
| Translation differences, currency | 0 | 0 | 0 | |
| TOTAL TAX ASSETS, 31 DECEMBER 2011 | 3 | 0 | –3 | 0 |
| TAX LIABILITIES | 1 Jan. 2010 | 2010 | 2010 | 31 Dec. 2010 |
| Untaxed reserves | 55 | –11 | – | 44 |
| Estimated tax on reversed net asset goodwill | 14 | 1 | – | 15 |
| Deferred tax asset, deficit, Denmark | –1 | 1 | – | 0 |
| Temporary tax benefits from inter-company profits | –25 | –5 | – | –30 |
| Other | –17 | 9 | – | –8 |
| TOTAL TAX LIABILITIES, 31 DECEMBER 2010 | 26 | –5 | 0 | 21 |
| TAX LIABILITIES | 1 Jan. 2011 | 2011 | 2011 | 31 Dec. 2011 |
| Untaxed reserves | 44 | 4 | – | 48 |
| Surplus value in fixed assets (through acquisition) | 0 | –4 | 64 | 60 |
| Estimated tax on reversed net asset goodwill | 15 | 3 | 2 | 20 |
| Deferred tax asset, deficit, Norway | 0 | 1 | –1 | 0 |
| Temporary tax benefits from inter-company profits | –30 | –9 | –9 | –48 |
| Other | –8 | –4 | –16 | –28 |
| Translation differences, currency | 0 | 0 | 1 | 1 |
| TOTAL TAX LIABILITIES, 31 DECEMBER 2011 | 21 | –9 | 41 | 53 |
*) Other changes in 2011 pertain to deferred tax through acquisitions, as well as reclassification of opening deferred tax assets where part-items can be offset.
Estimated tax on reversed net asset goodwill arises during the reversal of amortisation on net asset goodwill in the Group.
| Group | ||
|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | |
| Rental deposits paid | 7 | 6 |
| Hire-purchase contract | 59 | 30 |
| Other receivables | 1 | 0 |
| TOTAL OTHER LONG-TERM RECEIVABLES | 67 | 36 |
Impairment of long-term receivables amounted to SEK 0 M (0) during the year.
| Group | ||
|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | |
| Accounts receivables | 411 | 287 |
| Other receivables | 26 | 18 |
| Prepaid expenses and accrued income | 199 | 141 |
| TOTAL | 636 | 446 |
| Accounts receivables | ||
|---|---|---|
| ACCOUNTS RECEIVABLES, GROUP | 31 Dec. 2011 | 31 Dec. 2010 |
| Accounts receivables | 437 | 308 |
| Provisions for bad debts | –26 | –21 |
| TOTAL ACCOUNTS RECEIVABLES | 411 | 287 |
| Provisions for bad debts | ||
|---|---|---|
| 2011 | 2010 | |
| Provision for bad debts at the beginning of the year | –21 | –22 |
| Incurred through acquisition | –4 | – |
| Net change in provision | –5 | –2 |
| Recovered prior impairment losses | 4 | 3 |
| TOTAL PROVISIONS FOR BAD DEBTS | –26 | –21 |
| RECEIVABLES THAT ARE DUE BUT NOT IMPAIRED | 31 Dec. 2011 | 31 Dec. 2010 |
|---|---|---|
| Accounts receivables | ||
| Receivables due between 0–30 days | 50 | 79 |
| Receivables due between 31–60 days | 12 | 7 |
| Receivables due longer than 61 days | 13 | 5 |
| 75 | 91 |
Interest income on accounts receivables during the year was SEK 5 M (5).
| NOTE 17 Prepaid expenses and accrued income | |
|---|---|
| -- | --------------------------------------------- |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 | |
| Prepaid rents | 41 | 27 | 2 | 2 |
| Prepaid leasing fees | 0 | 0 | – | – |
| Prepaid insurance | 4 | 2 | 0 | 0 |
| Accrued supplier bonus | 92 | 80 | 84 | 73 |
| Other interim receivables | 62 | 32 | 20 | 18 |
| TOTAL | 199 | 141 | 106 | 93 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 | |
| Cash and bank balances | 67 | 74 | 1 | 0 |
| CASH AND CASH EQUIVALENTS | 67 | 74 | 1 | 0 |
| Group | Parent Company | |||
|---|---|---|---|---|
| Long-term | 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 |
| Liabilities to credit institutions, bank borrowing | 448 | 0 | 445 | 0 |
| Liabilities to leasing companies | 1 | 1 | – | – |
| TOTAL LONG-TERM LIABILITIES, INTEREST-BEARING | 449 | 1 | 445 | 0 |
| Current | 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 |
|---|---|---|---|---|
| Liabilities to credit institutions, bank borrowing | 61 | 0 | 60 | 0 |
| Overdraft facility | 135 | 83 | 0 | 0 |
| Liabilities to leasing companies | 2 | 2 | – | – |
| TOTAL CURRENT LIABILITIES, INTEREST-BEARING | 198 | 85 | 60 | 0 |
| TOTAL BORROWING | 647 | 86 | 505 | 0 |
| Overdraft facility limit | 277 | 277 | 277 | 277 |
| of which, utilised portion | 142 | 194 | 277 | 277 |
All interest rates are variable or have a maximum commitment period of three months. During the financial year, the interest level varied within the 3–4 per cent interval.
Due dates for total borrowing are as follows:
| Group | Parent Company | |||
|---|---|---|---|---|
| Liabilities to credit institutions | 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 |
| 1–12 months | 198 | 85 | 60 | – |
| 1–2 years | 63 | 1 | 60 | – |
| 2–3 years | 386 | 0 | 385 | – |
| TOTAL | 647 | 86 | 505 | 0 |
In the above duration analysis, future interest payments were not included. The Group's long-term borrowing occurs mainly under credit frameworks with long-term lines of credits, but with short-term fixed-interest periods. The Group's interest payments pertaining to borrowing amounted to SEK 20 M (3) in 2011. Existing overdraft facilities are in SEK, NOK and DKK. Other loans are entirely In SEK.
Refer also to the sensitivity analysis pertaining to interest-rate risks in the sensitivity analysis section in the Administration Report.
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 | |
| Provision guarantees for divested properties | 2 | 2 | 2 | 2 |
| Provision for pensions | 2 | – | – | – |
| Provisions for supplementary purchase considerations | 5 | – | – | – |
| TOTAL | 9 | 2 | 2 | 2 |
In conjunction with the divestment of the Group's properties in 2007, a guarantee provision totalling SEK 3 M was made in the Parent Company pertaining to consulting responsibility for property inspections performed. In 2009, this provision was reduced by SEK 1 M and amounted to SEK 2 M at 31 December 2011. Mekonomen's guarantee commitment totalled SEK 22 M and the remaining SEK 20 M is reported as a contingent liability in memorandum items.
| Group | ||
|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | |
| Overdraft facility | 135 | 83 |
| Short-term portion of bank borrowing | 61 | – |
| Liabilities to leasing companies | 2 | 2 |
| TOTAL CURRENT LIABILITIES, INTEREST-BEARING | 198 | 85 |
| Accounts payable | 438 | 374 |
| Other liabilities | 60 | 44 |
| Accrued expenses and deferred income | 209 | 182 |
| TOTAL CURRENT LIABILITIES, NON-INTEREST-BEARING | 707 | 600 |
| Group | Parent Company | |||
|---|---|---|---|---|
| 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 | |
| Accrued salaries | 12 | 22 | 4 | 16 |
| Accrued holiday pay | 98 | 71 | 5 | 4 |
| Accrued social security contributions | 39 | 36 | 7 | 8 |
| Accrued bonus/contract expense | 28 | 20 | – | – |
| Accrued interest expenses | 1 | – | 1 | – |
| Other interim liabilities | 31 | 33 | 1 | 1 |
| TOTAL | 209 | 182 | 18 | 29 |
| Group | Parent Company | |||
|---|---|---|---|---|
| PLEDGED ASSETS | 31 Dec. 2011 | 31 Dec. 2010 | 31 Dec. 2011 | 31 Dec. 2010 |
| Chattel mortgages, subsidiaries | – | 92 | – | 92 |
| TOTAL | – | 92 | – | 92 |
| CONTINGENT LIABILITIES | ||||
| Guarantee commitment, Mekonomen AB | 20 | 20 | 20 | 20 |
The guarantee commitment refers to a guarantee pertaining to consulting responsibility for inspections performed by an external consulting company in connection with the sale of the Group's properties in Denmark and Sweden. The guarantee extends for 10 years calculated from July 2007 when the properties were divested.
| NAME OF COMPANY/REGISTERED OFFICE, SWEDEN | Corp. Reg. No. |
Share of equity, % |
No. of stores |
Carrying amount, 31 Dec. 2011 |
Carrying amount, 31 Dec.2010 |
|---|---|---|---|---|---|
| Mekonomen Grossist AB/Stockholm | 556062-4875 | 100 | 40 | 40 | |
| Mekonomen Detaljist AB/Stockholm | 556157-7288 | 100 | 5 | 5 | |
| Mekonomen Finans AB/Stockholm | 556179-9676 | 100 | 1 | 1 | |
| Mekonomen Fleet AB/Stockholm | 556720-6031 | 100 | 2 | 2 | |
| Speedy Autoservice AB/Malmö | 556575-9858 | 100 | 31 | 31 | |
| Mekonomen Nya Affärer AB | 556821-5981 | 100 | 0 | – | |
| Mekonomen Vilande Sex AB/Stockholm | 556724-9254 | 100 | 0 | 0 | |
| NAME OF COMPANY/REGISTERED OFFICE | |||||
| Mekonomen Suomi Oy/Helsinki | 2259452-4 | 100 | 0 | 0 | |
| NAME OF COMPANY/REGISTERED OFFICE, DENMARK | |||||
| Mekonomen Danmark A/S/Odense | 30 07 81 28 | 100 | 37 | 177 | 177 |
| NAME OF COMPANY/REGISTERED OFFICE, NORWAY | |||||
| Mekonomen Norge AS/Oslo | 980 748 669 | 100 | 24 | 24 | |
| Sørensen og Balchen AS/Oslo | 916 591 144 | 100 | 840 | – | |
| PARTICIPATIONS IN GROUP COMPANIES, TOTAL | 1,120 | 280 |
| INDIRECT PARTICIPATIONS IN SUBSIDIARIES | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| FINLAND | |||
| Mekonomen Viiki Oy | 2359722-5 | 100 | 1 |
| Mekonomen Kallio Oy | 2359731-3 | 100 | 1 |
| Ränkomäki Oy/Helsinki | 2429678-2 | 100 | 1 |
| Mekonomen Grossist Oy/Helsinki | 2445185-0 | 100 | – |
| 3 |
| Name of company/registered office | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| SWEDEN | |||
| Mekonomen Akalla AB/Stockholm | 556729-1439 | 100 | 1 |
| Mekonomen Alingsås AB/Alingsås | 556596-3690 | 91 | 1 |
| Mekonomen Anderstorp AB/Anderstorp | 556775-9849 | 100 | 1 |
| Mekonomen Arvika AB/Arvika | 556528-3750 | 80 | 2 |
| Mekonomen B2C AB/Stockholm | 556767-7405 | 100 | – |
| Mekonomen Backaplan AB/Gothenburg | 556226-1338 | 91 | 1 |
| Mekonomen Barkarby AB/Stockholm | 556758-7679 | 100 | 1 |
| Mekonomen Bilverkstad AB/Stockholm | 556607-1493 | 100 | – |
| Mekonomen Bollnäs AB/Bollnäs | 556827-3675 | 91 | 1 |
| Mekonomen Boländerna AB/Uppsala | 556767-8916 | 100 | 1 |
| Mekonomen Borås City AB/Borås | 556078-9447 | 91 | 3 |
| Mekonomen Bromma AB/Stockholm | 556230-5101 | 100 | 1 |
| Mekonomen BV Härlöv AB/Kristianstad | 556758-7646 | 100 | – |
| Mekonomen Enköping AB/Enköping | 556264-2636 | 91 | 1 |
| Mekonomen Eskilstuna AB/Eskilstuna | 556613-5637 | 91 | 1 |
| Mekonomen Falkenberg AB/Falkenberg | 556213-1622 | 91 | 1 |
| Mekonomen Falköping AB/Falköping | 556272-1497 | 100 | 1 |
| Mekonomen Falun AB/Falun | 556559-3927 | 100 | 2 |
| Mekonomen Farsta AB/Stockholm | 556528-4766 | 100 | 1 |
| Mekonomen FKV AB/Stockholm | 556775-9831 | 75 | – |
| Mekonomen Flen AB/Flen | 556769-8542 | 75 | 2 |
| Mekonomen Gislaved AB/Gislaved | 556261-4676 | 100 | 1 |
| Mekonomen Globen AB/Stockholm | 556794-8905 | 100 | 1 |
| Mekonomen Gränby AB/Uppsala | 556821-6062 | 100 | 1 |
| Mekonomen Gärdet AB/Stockholm | 556821-6104 | 100 | 1 |
| Mekonomen Gärdet Café AB/Stockholm | 556840-9436 | 100 | – |
| Mekonomen Gävle AB/Gävle | 556353-6803 | 91 | 1 |
| Mekonomen Göteborg Ringön AB/Gothenburg | 556561-6751 | 100 | 1 |
| Mekonomen Hedemora AB/Hedemora | 556308-8011 | 100 | 1 |
| Mekonomen Helsingborg AB/Helsingborg | 556044-4159 | 75 | 1 |
| Mekonomen Helsingborg Södra AB/ | |||
| Helsingborg | 556613-6007 | 100 | 1 |
| Mekonomen Hudiksvall AB/Hudiksvall | 556428-1102 | 100 | – |
| Mekonomen Häggvik AB/Stockholm | 556840-9410 | 100 | 1 |
| Mekonomen Härnösand AB/Härnösand | 556217-2261 | 80 | 1 |
| Mekonomen Hässleholm AB/Hässleholm | 556678-0622 | 91 | 1 |
| Mekonomen Infra City AB/Stockholm | 556840-4437 | 60 | 1 |
| Mekonomen Järfälla AB/Stockholm | 556660-3196 | 100 | 1 |
| Mekonomen Jönköping AB/Jönköping | 556237-5500 | 100 | 2 |
| Mekonomen Kalmar AB/Kalmar | 556236-8349 | 91 | 1 |
| Mekonomen Karlshamn AB/Karlshamn | 556649-9090 | 100 | 1 |
| Mekonomen Karlskoga AB/Karlskoga | 556196-2605 | 100 | 1 |
| Mekonomen Karlskrona AB/Karlskrona | 556649-9082 | 91 | 1 |
| Name of company/registered office | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| Mekonomen Karlstad AB/Karlstad | 556786-9457 | 100 | 1 |
| Mekonomen Katrinelund AB/Malmö | 556530-7237 | 100 | 1 |
| Mekonomen Kramfors AB/Kramfors | 556496-1810 | 91 | 1 |
| Mekonomen Kristianstad AB/Kristianstad | 556171-9203 | 100 | 1 |
| Mekonomen Landskrona AB/Landskrona | 556646-4813 | 100 | 1 |
| Mekonomen Lidköping AB/Lidköping | 556761-3012 | 75 | 1 |
| Mekonomen Linköping AB/Linköping | 556202-9545 | 100 | 1 |
| Mekonomen Ljungby Odlaren AB/Ljungby | 556111-9719 | 100 | 1 |
| Mekonomen Ljusdal AB/Ljusdal | 556786-1066 | 51 | 2 |
| Mekonomen Ludvika AB/Ludvika | 556470-4210 | 91 | 1 |
| Mekonomen Luleå AB/Luleå | 556338-4071 | 100 | 1 |
| Mekonomen Verkstadscenter Luleå AB/Luleå | 556770-0033 | 100 | – |
| Mekonomen Lund AB/Lund | 556531-0108 | 91 | 1 |
| Mekonomen Lycksele AB/Lycksele | 556687-8095 | 75 | 1 |
| Mekonomen Malmö Fosie AB/Malmö | 556493-7018 | 91 | 1 |
| Mekonomen Mariestad AB/Mariestad | 556261-0179 | 75 | 1 |
| Mekonomen Mjölby AB/Mjölby | 556362-0565 | 75 | 1 |
| Mekonomen Mora AB/Mora | 556363-2487 | 80 | 1 |
| Mekonomen Motala AB/Motala | 556311-8750 | 91 | 1 |
| Mekonomen Märsta AB/Sigtuna | 556596-3674 | 91 | 1 |
| Mekonomen Nacka AB/Nacka | 556204-0294 | 100 | 1 |
| Mekonomen Norrköping AB/Norrköping | 556376-2797 | 75 | 2 |
| Mekonomen Norrtull AB/Stockholm | 556821-6088 | 100 | 1 |
| Mekonomen Norrtälje AB/Stockholm | 556178-9719 | 60 | 1 |
| Mekonomen Nyköping AB/Nyköping | 556244-0650 | 75 | 1 |
| Mekonomen Nässjö AB/Nässjö | 556187-8637 | 100 | 1 |
| Mekonomen Osby AB/Osby | 556408-8044 | 91 | 1 |
| Mekonomen Oskarshamn AB/Oskarshamn | 556631-8589 | 75 | 1 |
| Mekonomen Partille AB/Gothenburg | 556731-1401 | 91 | 1 |
| Mekonomen Piteå AB/Piteå | 556659-8966 | 75 | 1 |
| Mekonomen Ronneby AB/Ronneby | 556649-9017 | 91 | 1 |
| Mekonomen Sandviken AB/Sandviken | 556201-1295 | 91 | 1 |
| Mekonomen Segeltorp AB/Huddinge | 556580-2351 | 91 | 1 |
| Mekonomen Sisjön AB/Gothenburg | 556509-7861 | 100 | 1 |
| Mekonomen Skellefteå AB/Skellefteå | 556389-4095 | 91 | 1 |
| Mekonomen Skåne Ystad AB/Ystad | 556565-3085 | 100 | 1 |
| Mekonomen Sollefteå AB/Sollefteå | 556216-9424 | 80 | 1 |
| Mekonomen Sollentuna AB/Sollentuna | 556462-0416 | 100 | – |
| Mekonomen Solna AB/Stockholm | 556213-3073 | 100 | 1 |
| Mekonomen Sundsvall Birsta AB/Sundsvall | 556201-1675 | 100 | 1 |
| Mekonomen Sundsvall Nacksta AB/Sundsvall | 556777-4863 | 100 | 1 |
| Mekonomen Söderhamn AB/Söderhamn | 556509-4132 | 75 | 1 |
| Mekonomen Södertälje AB/Södertälje | 556405-5498 | 91 | 2 |
| Mekonomen Sölvesborg AB/Sölvesborg | 556216-4250 | 75 | 1 |
| Name of company/registered office | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| Mekonomen Torslanda AB/Gothenburg | 556583-3893 | 91 | 2 |
| Mekonomen Tranås AB/Tranås | 556770-0041 | 100 | 1 |
| Mekonomen Trollhättan AB/Trollhättan | 556515-0298 | 100 | 2 |
| Mekonomen Täby AB/Täby | 556632-9958 | 91 | 1 |
| Mekonomen Uddevalla AB/Uddevalla | 556550-5004 | 100 | 1 |
| Mekonomen Umeå AB/Umeå | 556483-3084 | 81.8 | 1 |
| Mekonomen Upplands Väsby AB/ Upplands-Väsby |
556777-4871 | 100 | – |
| Mekonomen Uppsala AB/Uppsala | 556092-4218 | 100 | 2 |
| Mekonomen Varberg AB/Varberg | 556261-0161 | 75 | 1 |
| Mekonomen Vetlanda AB/Vetlanda | 556653-4219 | 91 | 1 |
| Mekonomen Vilande Tjugo AB/Stockholm | 556840-9444 | 100 | – |
| Mekonomen Vilande Tjugoett AB/Stockholm | 556840-9410 | 100 | – |
| Mekonomen Vilande Tjugotvå AB/Stockholm | 556840-9428 | 100 | – |
| Mekonomen Vimmerby AB/Vimmerby | 556232-5877 | 91 | 1 |
| Mekonomen Vårby AB/Huddinge | 556594-1951 | 100 | – |
| Mekonomen Vänersborg AB/Vänersborg | 556770-0058 | 91 | 1 |
| Mekonomen Värnamo Norra AB/Värnamo | 556530-9266 | 75 | 1 |
| Mekonomen Västberga AB/Stockholm | 556192-0314 | 91 | 1 |
| Mekonomen Västerås AB/Västerås | 556344-5492 | 75 | 2 |
| Mekonomen Växjö AB/Växjö | 556192-0439 | 60 | 1 |
| Mekonomen Åkersberga AB/Österåker | 556632-9966 | 91 | 1 |
| Mekonomen Älvsjö AB/Huddinge | 556758-7661 | 100 | 1 |
| Mekonomen Örebro AB/Örebro | 556344-0717 | 91 | 2 |
| Mekonomen Örnsköldsvik AB/Örnsköldsvik | 556465-6287 | 91 | 1 |
| Mekonomen Östersund AB/Östersund | 556296-5243 | 100 | 2 |
| Primexxa Strängnäs AB/Stockholm | 556422-3872 | 100 | 1 |
| Meko Fleet System AB/Stockholm | 556791-8643 | 80 | – |
| Marinshopen RM AB/Stockholm | 556829-5066 | 100 | 1 |
| Total Sweden | 115 | ||
| SWEDEN - BilLivet | |||
| Mekonomen BilLivet AB/Stockholm | 556845-2196 | 100 | – |
| Mekonomen BilLivet Bromma AB/Stockholm | 556864-3455 | 100 | – |
| Mekonomen BilLivet Infra City AB/Stockholm | 556864-3471 | 100 | – |
| Mekonomen BilLivet Sisjön AB/Gothenburg | 556863-9909 | 100 | – |
| Mekonomen BV Hisingen AB/Gothenburg | 556756-1146 | 100 | – |
| Mekonomen BV Värtan AB/Stockholm | 556821-6047 | 91 | – |
| Mekonomen BilLivet Vilande 2 AB/Stockholm | 556864-3448 | 100 | – |
| Promotor i Åkersberga AB/Åkersberga | 556241-8698 | 70 | – |
| Total Sweden - BilLivet | – |
| Name of company/registered office | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| NORWAY | |||
| Mekonomen Arendal AS/Arendal | 982 434 696 | 100 | 1 |
| Mekonomen Alta AS/Alta | 945 481 668 | 51 | 1 |
| Mekonomen Askim AS/Askim | 974 209 772 | 100 | 1 |
| Mekonomen Björkelangen AS/Björkelangen | 989 903 551 | 100 | 1 |
| Mekonomen Bodö AS/Bodö | 986 489 576 | 100 | 1 |
| Mekonomen Drammen AS/Drammen | 924 843 543 | 100 | 1 |
| Mekonomen Elverum AS/Elverum | 993 562 629 | 100 | 1 |
| Mekonomen Fredrikstad AS/Fredrikstad | 881 509 032 | 100 | 1 |
| Mekonomen Grenland AS/Porsgrund | 984 690 703 | 100 | 1 |
| Mekonomen Hadeland AS/Hadeland | 996 446 956 | 100 | 1 |
| Mekonomen Hamar AS/Hamar | 984 006 047 | 100 | 1 |
| Mekonomen Harstad AS/Harstad | 982 952 379 | 100 | 1 |
| Mekonomen Haugesund AS/Haugesund | 983 509 622 | 100 | 1 |
| Mekonomen Horten AS/Horten | 990 815 798 | 100 | 1 |
| Mekonomen Jessheim AS/Jessheim | 987 696 109 | 100 | 1 |
| Mekonomen Kongsberg AS/Kongsberg | 937 161 786 | 75 | 1 |
| Mekonomen Kongsvinger AS/Kongsvinger | 992 102 217 | 100 | 1 |
| Mekonomen Lillestrøm AS/Lillestrøm | 993 561 428 | 100 | 1 |
| Mekonomen Molde AS/Molde | 985 793 417 | 100 | 1 |
| Mekonomen Moss AS/Moss | 939 161 260 | 100 | 1 |
| Mekonomen Oslo AS/Oslo | 938 215 103 | 100 | 2 |
| Mekonomen Sandefjord AS/Sandefjord | 990 815 844 | 100 | 1 |
| Mekonomen Sandnes AS/Sandnes | 992 302 577 | 100 | 1 |
| Mekonomen Sandvika AS/Sandvika | 982 707 862 | 100 | 1 |
| Mekonomen Sarpsborg AS/Sarpsborg | 910 155 520 | 100 | 2 |
| Mekonomen Ski AS/Ski | 983 098 525 | 100 | 1 |
| Mekonomen Stavanger AS/Stavanger | 983 935 214 | 100 | 1 |
| Mekonomen Steinkjer AS/Steinkjer | 984 318 677 | 100 | 1 |
| Mekonomen Sörlandsparken AS/Kristiansand | 981 508 939 | 100 | 1 |
| Mekonomen Tromsö AS/Tromsö | 942 591 322 | 100 | 1 |
| Mekonomen Trondheim AS/Trondheim | 979 462 026 | 100 | 3 |
| Mekonomen Tönsberg AS/Tönsberg | 934 256 867 | 75 | 1 |
| Fleet Norge AS/Oslo | 895 917 052 | 100 | – |
| Total Norway | 36 |
| Name of company/registered office | Corp. Reg. No. |
Share of equity, % |
No. of stores |
|---|---|---|---|
| NORWAY - Sørensen og Balchen | |||
| Rønneberg Autoindustri AS | 981 015 150 | 100 | 6 |
| Bilvarehusene Nor AS | 880 553 852 | 100 | 9 |
| BilXtra AS | 983 032 133 | 100 | 6 |
| BilXtra Kristiansand AS | 979 438 761 | 100 | 1 |
| Bilutstyr Arendal AS | 961 171 067 | 100 | 1 |
| Østfold Bilutstyr AS | 987 586 788 | 100 | 1 |
| Telemark Bilutstyr AS | 986 980 415 | 100 | 1 |
| Rogaland Rekvisita AS | 936 043 119 | 100 | 2 |
| Jahre Motor Hamar | 935 614 031 | 100 | 1 |
| Askim Bilrekvisita AS | 885 049 702 | 100 | 1 |
| Steglet Bilutstyr AS | 988 210 196 | 100 | 1 |
| Jøntvedt Bilutstyr AS | 887 813 752 | 100 | 1 |
| Oppland Bilutstyr AS | 987 600 659 | 100 | 1 |
| Høistad Bildeler AS | 981 015 142 | 100 | 1 |
| Vest Bilutstyr AS | 980 281 450 | 100 | 1 |
| Autoproducts AS | 995 080 125 | 50 | 1 |
| Total Norway - Sørensen og Balchen | 35 | ||
| DENMARK | |||
| Mekonomen Brønderslev ApS/Odense | 34 05 53 86 | 51.25 | 1 |
| Mekonomen Kolding A/S/Odense | 33 49 47 85 | 70 | 1 |
| Mekonomen Retail ApS/Odense | 33 24 49 67 | 100 | – |
| Mekonomen Valby ApS/Odense | 33 37 78 86 | 100 | 1 |
| Mekonomen OE dele ApS/Padborg | 32 88 08 43 | 51.25 | – |
| BilXtra A/S/Odense | 33 49 46 45 | 100 | – |
| Mekonomen Grossist Danmark A/S/Odense | 33 38 01 27 | 100 | – |
Fleet Danmark A/S/Odense 33 25 63 96 100 – Total Denmark 3
TOTAL NUMBER OF STORES 229
The share capital amounted to SEK 82 M and consists of 32,814,605 shares at a quotient value of SEK 2.50 per share.
Other capital contributions include contributions the company received from shareholders and which are not recognised as share capital.
The purpose of the statutory reserve is to allocate profits to cover any future losses.
Comprises prior years' profits brought forward after any provisions to statutory reserves and after dividends. Profit for the year is included in this amount. The Parent Company's Profit brought forward represents the basis for the
resolution of the Annual General Meeting for dividends for the year.
The Board of Directors proposes a dividend of SEK 8.00 per share, which gives a total dividend of SEK 262,516,840.
| TRANSLATION DIFFERENCES, FOREIGN SUBSIDIARIES | 2011 | 2010 |
|---|---|---|
| Accumulated translation differences in Norway | 35 | 18 |
| Accumulated translation differences in Denmark | –35 | –34 |
| 0 | –16 |
Mekonomen manages its capital to ensure that the units in the Group can continue to operate, while dividends to shareholders are maximised through a good balance between liabilities and shareholders' equity. The Group's capital comprises shareholders' equity, as well as short and long-term borrowing. The proportions of shareholders' equity and changes during the year are described in the Group's changes in shareholders' equity on page 44 and Note 25, Shareholders' equity. At least once per year, the Board of Directors reviews the capital structure and takes this into account when making decisions on, for example, dividends or raising new loans.
| NOTE 27 Adjustments for items not affecting liquidity | ||||
|---|---|---|---|---|
| -- | ------------------------------------------------------- | -- | -- | -- |
| Group | Parent Company | |||
|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | |
| Depreciation/amortisation | 83 | 50 | 13 | 10 |
| Group contribution received | – | – | –228 | –285 |
| Exchange-rate differences | 0 | 1 | – | – |
| Dividend not paid from subsidiaries | – | – | – | –26 |
| Capital gain/loss from divestment of fixed assets | –5 | –1 | – | –1 |
| Other items not affecting liquidity | 0 | –1 | – | –1 |
| 78 | 49 | –215 | –303 |
| ACQUISITIONS DURING 2011 | Sørensen og Balchen |
Other acquisitions |
Total acquisitions |
|---|---|---|---|
| VALUE OF ACQUIRED ASSETS AND LIABILITIES | |||
| Tangible fixed assets | 19 | 13 | 32 |
| Intangible fixed assets | 4 | 1 | 5 |
| Financial fixed assets | 31 | – | 31 |
| Deferred tax assets | 21 | – | 21 |
| Inventories | 158 | 36 | 194 |
| Current receivables | 72 | 3 | 75 |
| Cash and cash equivalents | 13 | 1 | 14 |
| Long-term liabilities | –5 | – | –5 |
| Current liabilities | –94 | –28 | –122 |
| ACQUIRED NET ASSETS | 219 | 26 | 245 |
| Brands | 56 | – | 56 |
| Franchise contracts | 47 | – | 47 |
| Customer relations | 136 | – | 136 |
| Goodwill | 442 | 54 | 496 |
| Deferred tax liabilities | –64 | – | –64 |
| Other long-term liabilities | –10 | – | –10 |
| Acquired non-controlling interest, surplus value recognised against shareholders' equity |
– | 11 | 11 |
| TOTAL IDENTIFIABLE NET ASSETS | 826 | 91 | 917 |
| Total purchase price | 826 | 91 | 917 |
| - of which cash portion of purchase consideration | 311 | 86 | 397 |
| Cash and cash equivalents in the acquired companies | 13 | 1 | 14 |
| IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS | 298 | 85 | 383 |
| and share of | |
|---|---|
| ACQUIRED SUBSIDIARIES/OPERATIONS 2011 Country Acquisition date voting rights |
Object |
| Mekonomen partner store Bollnäs Sweden January 100 Assets and liabilities |
|
| Marinshopen RM AB Sweden February 100 Assets and liabilities |
|
| Mekonomen partner store, Hadeland Norway February 100 Assets and liabilities |
|
| Mekonomen Kolding A/S Denmark February 70 Assets and liabilities |
|
| Sørensen og Balchen AS/Oslo Norway March 100 |
Company |
| BilLivet AB Sweden April 100 Assets and liabilities |
|
| Acquired store, Ski Norway April 100 Assets and liabilities |
|
| Acquired store, Gislaved Sweden May 100 Assets and liabilities |
|
| Acquired store, Hadeland Norway September 100 Assets and liabilities |
|
| Acquired workshop, Bromma Sweden November 100 Assets and liabilities |
|
| Acquired workshop, Åkersberga Sweden November 100 Assets and liabilities |
|
| Acquired workshop, Sisjön Sweden December 100 |
Company |
| Mekonomen partner store, Häggvik Sweden December 100 Assets and liabilities |
|
| Mekonomen Brønderslev ApS Denmark December 51.25 Assets and liabilities |
| VALUE OF ACQUIRED ASSETS AND LIABILITIES | |
|---|---|
| Tangible fixed assets | 8 |
| Inventories | 26 |
| Current receivables | 7 |
| Cash and cash equivalents | 8 |
| Long-term liabilities | –6 |
| Current liabilities | –20 |
| ACQUIRED NET ASSETS | 23 |
| Brands | 5 |
| Goodwill | 48 |
| Acquired non-controlling interest, surplus value recognised against shareholders' equity | 10 |
| TOTAL IDENTIFIABLE NET ASSETS | 87 |
| Total purchase price | 87 |
| Cash and cash equivalents in the acquired companies | 8 |
| IMPACT ON THE GROUP'S CASH AND CASH EQUIVALENTS | 79 |
| Shareholding and share of |
||||
|---|---|---|---|---|
| ACQUIRED SUBSIDIARIES/OPERATIONS 2010 | Country | Acquisition date | voting rights | Object |
| Speedy Autoservice AB | Sweden | October | 100 | Company |
| FG Scandinavia | Sweden | April | 100 | Assets and liabilities |
| Mekonomen partner store, Globen | Sweden | June | 100 | Assets and liabilities |
| Mekonomen partner store, Akalla | Sweden | June | 100 | Assets and liabilities |
| Mekonomen partner store, Täby | Sweden | June | 100 | Assets and liabilities |
| Mekonomen partner store, Sisjön | Sweden | June | 100 | Assets and liabilities |
| Mekonomen partner store, Södertälje | Sweden | June | 100 | Assets and liabilities |
| Autodelar Syd | Denmark | April | 51 | Company |
| Motor Norge AS | Norway | February | 51 | Company |
| Høy&Rodum AS | Norway | June | 100 | Company |
| Mekonomen partner store, Karlstad | Sweden | April | 100 | Assets and liabilities |
| AD-stores, Ljusdal, Hudiksvall | Sweden | July | 51 | Assets and liabilities |
The amount for 2010 and 2011 includes acquisition of companies and operations, as well as the acquisition of non-controlling interest in Swedish store companies. During the year, the acquired companies impacted net sales by SEK 730 M (87), and operating profit by SEK 78 M (3), excluding acquisition costs of SEK 15 M.
Had the acquisition of Sørensen og Balchen been implemented on 1 January 2011, the impact on the Group's net sales would have been SEK 726 M and SEK 90 M on the operating profit. Other acquired units have been deemed to not have any significant difference to the Group's net sales and operating profit if they had been consolidated from 1 January 2011.
Payment for the shares in Sørensen og Balchen
will comprise 1,945,783 new share issues through a non-cash issue, and NOK 273 M in cash. The final purchase consideration totalled SEK 826 M.
In addition to Sørensen og Balchen, as reported separately, information on company acquisitions is submitted in aggregated form, since not every individual acquisition is deemed large enough to warrant separate reporting. In addition to goodwill, which amounted to SEK 496 M (48), intangible surplus values were identified pertaining to brands SEK 56 M (5), franchise contracts SEK 47 M (0) and customer relations SEK 136 M (0). In addition, an adjustment to the fair value of longterm liabilities was implemented totalling SEK –10 M (0). The deferred tax liability attributable to the net of these surplus values amounted to SEK 64
M (1). In addition to this, surplus values pertaining to acquired non-controlling interest totalling SEK 11 M (10) were recognised directly in shareholders' equity. The brand has an indefinite useful life; franchise contracts and customer relations are estimated to have a useful life of ten years. Goodwill is primarily attributable to future synergies.
Acquisition-related costs of SEK 15 M are included in the administrative costs in the consolidated income statement for the 2011 financial year.
In Sweden, 8 (2) store managers signed on as partners in individual store companies. Their shareholding amounts to 9 per cent per store company. The total purchase consideration for these shareholdings amounted to SEK 7 M (0.4).
During the year, Mekonomen AB sold products and services to Group companies totalling SEK 108 M (98). Receivables from Group companies amounted to SEK 702 M (574) on balance-sheet date and liabilities to Group companies amounted to SEK 28 M (3).
For information on remuneration to senior executives, refer to Note 5.
The annual accounts and consolidated accounts were approved for issue by the Board of Directors on 17 April 2012. The consolidated income statement, the statement of comprehensive income and balance sheet and the Parent Company's income statement, statement of
comprehensive income and balance sheet will be subject to approval by the Annual General Meeting on 23 May 2012.
Mekonomen AB is exposed to risks in terms of currency, credit, interest rates and liquidity through its operations. The management of these risks is regulated in accordance with the finance policy adopted by the Board of Directors.
Exchange-rate risks occur when exchangerate fluctuations have a negative impact on the Group's profit and shareholders' equity. Currency exposure arises in connection with cash flows in foreign currencies (transaction exposure) as well as in translation of loans/receivables in foreign currencies and in the translation of foreign subsidiaries' balance sheets and income statements into SEK (translation exposure). During 2011, exchange-rate fluctuations had a positive impact on the Group's income before tax totalling SEK 2 M (neg: 2). The most important currency in terms of transaction exposure is EUR, which represents slightly less than 40 per cent of imports as well as NOK and DKK pertaining to internal sales from the Grossist company to Norway and Denmark. Due to the acquisition of Sørensen og Balchen, currency exposure in NOK rose during 2011. NOK and DKK are the most important currencies in terms of translation exposure. For more detailed information on currency exposure, refer also to the sensitivity analysis section in the Administration Report. The finance policy permits hedging of the net currency flows using external financial contracts. Since negative exchange-rate fluctuations are expected to be offset in customer pricing within one to three months, the hedging horizon shall not exceed three months. With regard to financial assets and liabilities, the policy states that internal loans and investments in foreign currencies shall be matched by external loans and investments in the same currency.
If for some reason matching is not achieved, hedging shall be implemented using foreignexchange forward contracts. With regard to foreign shareholders' equity, the principal rule is that Mekonomen shall not hedge this exposure. However, if major foreign investments are made that require separate financing, the decision can be made to recognise all or part of the financing in the acquisition currency.
The Group's financial transactions give rise to credit risks in relation to financial counterparties. Credit risks or counterparty risks refer to the risk of loss if the counterparty does not fulfil its commitments. Mekonomen's credit risks primarily comprise accounts payable, which are distributed over a large number of counterparties and a small portion of long-term instalment contracts. For each new customer, or in the event an existing customer wants to increase the credit limit, a credit rating is conducted according to the Group's established policies. The credit rating is conducted with the assistance of external players. The maximum credit risk corresponds to the carrying amount of financial assets. Specifications pertaining to impairment of accounts payable for the year are found in Note 16.
Interest-rate risks refer to the risk that changes in market interest rates will have a negative impact on the Group's net interest income/expense. The speed at which interest rate changes affect the net interest income/expense depends on the period of fixed interest for the loan. During the 2011 financial year, interest-bearing liabilities rose compared with the low levels in prior financial years. This increase was primarily attributable to the acquisition of Sørensen og Balchen. According to the financial policy, Mekonomen shall maintain an average fixed-interest term of a maximum of three months. Within this time frame, it is estimated that increased financial expenses, as an effect of changed interest rates, could be offset through changes in retail prices. In order to manage possible interest-rate risks, relevant instruments in the market can be used.
Financing risk is seen as the risk of the cost being higher and financing opportunities limited when loans are renewed and that the ability to pay cannot be met as a result of insufficient liquidity or difficulties in securing financing. According to the financial policy, refinancing risks shall be managed by signing long-term and flexible credit agreements. At the end of 2010, the Group had no utilised long-term credit facilities. In connection with the acquisition of Sørensen og Balchen, the Group raised a loan totalling SEK 600 M, extending over a three year period. The Group's cash and cash equivalents are invested short term and any excess liquidity shall primarily be used for amortising loans. Investments may be made in SEK, NOK and DKK with the objective of matching future loans that mature, or large disbursements. In cases where the company is not aware of any large disbursements, the maturity period for investments shall not exceed one month. Investments may occur at or in securities issued by the Swedish Government or Swedish and foreign banks with not less than an A rating, according to the definition of Standard & Poor's (S&P).
No financial assets or liabilities were recognised at a value that significantly deviated from fair value.
The Board of Directors and President hereby certify that the annual report was prepared in accordance with the Annual Accounts Act and RFR 2 and provides a true and fair view of the company's financial position and results and that the Administration Report provides a true and fair view of the development of the Group's operations, position and results and describes significant risks and uncertainties facing the company.
The Board of Directors and President hereby certify that the consolidated accounts were prepared in accordance with International Financial Reporting Standards (IFRS), as approved by the EU, and provide a true and fair view of the Group's financial position and results and that the Administration Report for the Group gives a true and fair view of the development of the Group's operations, position and results and describes significant risks and uncertainties facing the companies included in the Group.
Stockholm 17 april 2012
Fredrik Persson Chairman of the Board
Antonia Ax:son Johnson Board member
Marcus Storch Vice Chairman of the Board
Kenny Bräck Board member
Wolff Huber Board member
Anders G Carlberg Board member
Helena Skåntorp Board member
Håkan Lundstedt President and CEO
Our Auditors' Report was submitted on 17 April 2012 Deloitte AB
Thomas Strömberg Authorised Public Accountant
To the annual meeting of the shareholders of Mekonomen AB Corporate identity number 556392-1971
We have audited the annual accounts and consolidated accounts of Mekonomen AB for the financial year 2011-01-01 – 2011-12-31, with the exception of the Corporate Governance Report on pages 26–30. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 20–25 and 36–76.
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Managing Director 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 Managing Director, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2011 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act, and 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 2011 and of their financial performance and cash flows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts. Our opinion does not include the Corporate Governance Report on pages 26–30.
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 examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Managing Director of Mekonomen AB for the financial year 2011-01-01 –2011-12-31. We have also performed a statutory review of the Corporate Governance Report.
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 Managing Director are responsible for administration under the Companies Act and and for ensuring that the Corporate Governance Report on pages 26–30 has been prepared in accordance with the Annual Accounts 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 Managing Director is liable to
the company. We also examined whether any member of the Board of Directors or the Managing Director 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 opinion.
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 Managing Director be discharged from liability for the financial year.
A Corporate Governance Report has been prepared and its statutory information is compliant with the provisions of the Companies Act and the other features of the annual accounts and consolidated accounts.
Stockholm, 17 april 2012 Deloitte AB
Thomas Strömberg Authorized Public Accountant
The Annual General Meeting will be held on 23 May 2012 at 4:00 p.m. at Kungsträdgården in Stockholm.
Shareholders registered in the shareholders' register on the record day and who have informed Mekonomen of their intention to attend in advance are entitled to participate in the Annual General Meeting.
Shareholders' must be registered in the shareholders' register maintained by Euroclear Sweden AB not later than Wednesday 16 May. Shareholders whose shares are registered in
the name of a nominee must have temporarily registered their shares in their own name with Euroclear, to be able to participate at the Annual General Meeting.
This means that shareholders wishing such reregistration must inform the nominee in adequate time before 16 May 2012.
Shareholders wishing to participate at the Annual General Meeting should register not later than 5:00 p.m. on Friday 18 May at:
Mekonomen's Annual General Meeting Box 7842 SE-103 98 Stockholm Tel: +46 (0)8-402 90 47, or Mekonomen' website: www.mekonomen.se.
The Board of Directors proposes a dividend of SEK 8.00 (8.00) per share. As record date for the dividend, the Board proposes 28 May 2012. If the Annual General Meeting adopts the proposal, the dividend is expected to be paid on 31 May 2012.
| Interim report January–March | 11 May |
|---|---|
| Interim report April–June | 30 August |
| Interim report July–September | 8 November |
| Year-end report for the entire | |
| financial year 2012: | 14 February 2013 |
Average full-year employees during the year.
The average of the number of shares adjusted for splits, bonus issues and full dilution of the convertible loans, taking into account the date on which the changes occurred during the year.
Total assets reduced by non-interest-bearing provisions and liabilities, including deferred tax liability.
Cash flow from operating activities adjusted for interest on convertibles, in relation to the average number of shares.
Dividend per share in relation to earnings per share attributable to the Parent Company's shareholders.
Earnings per share Profit after tax in relation to the average number of shares.
EBIT margin EBIT as a percentage of total revenues.
Shareholders' equity including non-controlling interest as a percentage of total assets.
Gross profit, meaning net sales less expenses for goods for resale, as a percentage of net sales.
Interest-coverage ratio Profit after net financial items plus interest expenses divided by interest expenses.
Net debt/equity ratio Net Indebtedness divided by shareholders' equity including non-controlling interest.
Net indebtedness Interest-bearing liabilities less cash and cash equivalents and short-term investments.
Return on capital employed Profit after net financial items plus interest expenses as a percentage of average capital employed.
Return on equity, % Profit for the year as a percentage of average shareholders' equity, excluding non-controlling interest.
Return on operating capital, % EBIT as a percentage of average operating capital.
Return on total capital, % Profit for the year as a percentage of the average total assets.
Capital employed reduced by cash and cash equivalents and short-term investments.
Organic growth Net sales increase adjusted for acquired stores, currency effect and the number of workdays.
Increase in total revenues as a percentage of the preceding year's total revenues.
Sales in relation to the average number of employees.
Shareholders' equity excluding non-controlling interest, adjusted for convertible debentures, in relation to the number of shares at the end of the year.
Underlying net sales
Sales adjusted for the number of comparable working days and currency effects.
Profit margin
Profit after net financial items as a percentage of the total revenues.
Mekonomen has a total of 1,686 affiliated workshops in the Nordic region.
Mekonomen's store network comprises a total of 334 stores in the Nordic region.
Mekonomen Årsredovisning 2008
Mekonomen AB Box 6077 SE-141 06 Kungens Kurva Tel +46 8-464 00 00 Fax +46 8-464 00 66 Visiting address: Smista allé 11 SE-141 70 Kungens Kurva www.mekonomen.se
Mekonomen Grossist AB Box 542 SE-645 25 Strängnäs Tel +46 152 -229 00 Fax +46 152-229 41 Visiting address: Fjädervägen 20 SE- 645 47 Strängnäs
Mekonomen Fleet AB Box 6077 SE-141 06 Kungens Kurva Tel +46 8-464 00 00 Fax +46 8-464 00 66 Visiting address: Smista allé 11 SE-141 70 Kungens Kurva
Mekonomen Detaljist AB Box 6077 SE-141 06 Kungens Kurva Tel +46 8-464 00 00 Fax +46 8-464 00 66 Visiting address: Smista allé 11 SE-141 70 Kungens Kurva
Speedy Autoservice AB Cypressvägen 10 A SE-213 63 MALMÖ Tel +46 40-22 40 40 Fax +46 40-22 40 44
Marinshopen RM AB Box 43 SE-125 21 ÄLVSJÖ Tel +46 8-642 93 00 Fax +46 8-644 20 55 Visiting address: Grossistvägen 1–5 SE- 125 30 Älvsjö
Mekonomen BilLivet AB Stockholmsvägen 37 A SE-194 54 Upplands Väsby Tel +46 8-59 09 00 80
Mekonomen AS Postboks 524 Bedriftssenteret NO-14 11 Kolbotn Tel +47 66-81 76 90 Fax +47 66-99 11 51 Visiting address: Rosenholmveien 25 NO-14 14 Trollåsen www.mekonomen.no
Sørensen og Balchen A/S Postboks 134 Holmlia 1203 Oslo Tel: +47 22 76 44 00. Fax: +47 22 61 073 52 Visiting address: Rosenholmveien 12 NO-1252 Oslo
Mekonomen A/S Handelsvej 30 DK-5260 Odense S Tel +45 65-43 43 43 Fax +45 65-43 42 01 www.mekonomen.dk
Mekonomen Oy Neljäs linja 3-5 FI-00530 Helsinki +358 (0)9 8568 4000
Mekonomen Direkt Norway Tel: 055 66 Sweden Tel: 0771-72 00 00 Denmanrk Tel: 70 140 140
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