Annual Report • Mar 26, 2009
Annual Report
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| Highlights of 2008 1 Shareholder information/Bure in brief 2 |
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| Comments from the President 4 | |
| Bure's history 6 | |
| Creation of Sweden's largest independent | |
| school group 8 | |
| Business mission, targets and strategy 9 | |
| Bure as owner 10 | |
| Bure's share 11 | |
| Valuation of existing holdings/Risk analysis 12 | |
| Five-year overview 13 |
| Portfolio overview 15 Mercuri International 16 SRC 19 EnergoRetea 20 Celemi 22 |
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| Administration report 24 | |
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| Consolidated income statements 29 | |
| Consolidated balance sheets 30 | |
| Parent Company income statements 32 | |
| Parent Company balance sheets 33 | |
| Consolidated statements of changes in equity 35 | |
| Parent Company statements of changes in equity 36 | |
| Cash flow statements 37 | |
| Notes 38 | |
| Audit report 58 |
| Corporate governance report 60 | |
|---|---|
| Board of Directors 63 | |
| Bure's employees 64 | |
| Definitions 65 | |
| Interim report January–March | 28 April |
|---|---|
| Annual General Meeting | 28 April |
| Interim report January–June | 25 August |
| Interim report January–September 22 October |
Bure's annual report is sent by mail to all persons who so request. The quarterly reports are distributed only in electronic form. To subscribe, go to www.bure.se
Jonas Alfredson, +46 (0)31-708 64 00 [email protected]
Read more about Bure's financial instruments on page 11.
| Address: | Box 5419, 402 29 Göteborg |
|---|---|
| Street address: Mässans Gata 8, Göteborg | |
| Phone: | +46 (0)31-708 64 00 |
| Fax: | +46 (0)31-708 64 80 |
| E-mail: | [email protected] |
| Website: | www.bure.se |
The Annual General Meeting will be held on Tuesday, 28 April 2009, 3 p.m. at Chalmers kårhus, conference room RunAn, Chalmersplatsen 1, Göteborg. The doors will open at 2 p.m.
Shareholders who wish to participate in the meeting must be entered in their own names in the register of shareholders maintained by Euroclear Sweden AB (formerly VPC AB) no later than Wednesday, 22 April 2009.
In order to participate in the AGM, shareholders whose shares are registered in the name of a trustee must temporarily re-register the shares in their own names with Euroclear Sweden AB (formerly VPC AB). Shareholders must notify their trustees well in advance to ensure that an entry is made in the register of shareholders by Wednesday, 22 April 2009.
Notice of participation must be received by Bure no later than 12 p.m. on Wednesday, 22 April 2009, via:
Mail: Bure Equity, Box 5419, SE-402 29 Göteborg E-mail: [email protected] Website: www.bure.se Fax: +46 (0)31-708 64 82 Phone: +46 (0)31-708 64 39
The notification should include the shareholder's name, personal/corporate ID number, address and telephone number. Shareholders who wish to be represented by a proxy must submit a dated form of proxy. The original proxy document must be sent to the company at the above address well in advance of the AGM. Persons representing a legal entity must enclose a copy of the registration certificate or other appropriate document.
An entrance card will be sent by mail after Wednesday, 22 April 2009.
Bure is an investment company whose primary emphasis is on long-term ownership of unlisted companies with a strong and stable earning capacity in sectors where Bure has previous experience. The portfolio consists of four investments. The Parent Company has seven employees working from its office in Göteborg.
Martin Henricson, President and CEO
It is with both satisfaction and pride that I look back on 2008 as a very productive and eventful year for Bure.
2008 started with a period of dynamic growth in the general economy. In the first half of the year, Bure's share in net sales of the portfolio companies increased by 20 per cent and EBITA rose by 40 per cent. But Bure's portfolio companies were also affected by rapid changes in the market in the wake of the financial crisis, and were forced to quickly shift their focus from growth to cost-cutting and efficiency.
Bure's share in total net sales of the existing portfolio in 2008 amounted to SEK 1,093M, corresponding to growth of 8 per cent, while the EBITA margin decreased to 3.9 per cent.
Compared to the past few years, the portfolio companies face tougher conditions in 2009 and the market may deteriorate further before it improves. At the same time, this challenging climate is also creating new opportunities and we are currently taking steps to ensure that Bure will emerge even stronger from the market recession. In this respect, our holdings of knowledge-intensive companies in the service sector provide an excellent platform for future development in the long-term trend toward an increasingly knowledgebased economy.
We are continuing to work according to our previously adopted plan with a focus on promoting and realising value growth in the company's investments. In the past year we carried out a number of successful acquisitions and divestitures. The year's exit gains of SEK 982M have further strengthened Bure's financial position and the company is well equipped to take part in continued structural transactions. The target for an essentially debt-free Parent Company was maintained with an equity/assets ratio of 98 per cent at year-end 2008.
On a full-year basis, Bure delivered a very strong result from investments that provided the means for the distribution of close to SEK 2 billion in the form of a capital distribution, the distribution of AcadeMedia shares and a share redemption procedure. In addition, Bure shares were repurchased for a total of SEK 369M.
The stock market year 2008 will go down in history as one of the worst on record. Against this background, the Bure share showed comparatively strong development during the year. Total return on the Bure share was -3 per cent, compared to -39 per cent for NASDAQ OMX Stockholm's SIX Return Index (SIXRX).
In July Bure sold Citat, a provider of services in the communication and information area. Under Bure's management, the company has worked successfully to strengthen its profitability. In connection with the sale of Citat, Appelberg Publishing Group was also sold to an industrial buyer with an ambition to reinforce its offering in this area. These divestitures generated a total capital gain of SEK 196M.
Prior to the sale of Citat, Bure acquired Citat's subsidiary Scandinavian Retail Center (SRC) in June. SRC is a leading consulting company and advertising agency specialised in services for the retail industry.
In late summer Bure sold the textile laundering and services company Textilia. The profitability achievements made by the company in 2008 were the result of a large-scale effi ciency improvement programme launched by Bure in 2005, and the purchase price reflects the success of these efforts. Depending on the company's future development, Bure may receive additional performance-based payments.
In the past year Bure continued its investment strategy in the educational area through the acquisition of additional schools. This was followed by a merger between Bure's two portfolio holdings Anew Learning and AcadeMedia, marking the realisation of Bure's expressed strategy to create Sweden's leading education company. The shares in the merged company, which was given the name of AcadeMedia (publ), were distributed to the shareholders during November.
After concentrating the portfolio and completing the above transactions in 2008, Bure's existing portfolio holdings consist of unlisted companies in the knowledge-intensive service sector. The primary emphasis Bure's investment operations is to be long-term principal owner with a controlling influence
in unlisted companies with strong and stable earnings. Bure exerts its shareholder influence primarily through board representation in the portfolio companies, where the focus is on operating efficiency, growth-enhancing measures, risk levels and the capital structure. Bure formulates an explicit owner agenda for each company and continuously monitors development against goals and key performance indicators (KPIs).
Bure has an impressive track record of creating significant value by building structures based on its holdings. Since the company's formation, around SEK 10 billion has been paid out to the company's shareholders through share redemption procedures, capital distributions and hiving off of companies such as Observer, Capio and AcadeMedia. We are now continuing with the same type of value creation in our existing holdings.
In 2008 Mercuri International developed its offering, among other things through the addition of complementary products in online/e-learning and business simulations. Mercuri also capitalised on its global delivery capacity and increased the share of international cross-border business. At the beginning of 2008 Mercuri worked according to a growth strategy and successfully recruited new consultants. However, capacity utilisation was lower than planned due to weakening of the market in the second half of the year, which had a negative impact on both sales and profit. At the end of 2008 we had the pleasure of appointing Susanne Lithander as the new President of Mercuri International and she took up her new duties at the beginning of 2009.
In 2008 EnergoRetea achieved a significant improvement in both sales and profit through a combination of high organic growth and acquisitions, in line with the long-term plan. In the past year the company strengthened and expanded its offering both geographically and in terms of expertise. The acquisition of CLC Installationsconsult in the summer of 2008 has widened and reinforced the company's existing operations in the Skåne region. We welcome Martin Dahlgren, who took over as the new President of the company at the beginning of 2009, to EnergoRetea and the Bure Group.
SRC won a number of prestigious new contracts during the year. SRC entered 2008 with an aggressive growth strategy and recruited a number of new employees. As the market conditions grew increasingly tough in the second half of the year, SRC's sales and profit fell short of the targeted levels. However, the company has an excellent foundation from which to meet opportunities and challenges.
Celemi delivered strong growth in both sales and profit during 2008. In the past year the company launched several updated versions of its top-selling business simulations and was awarded a large number of new customer contracts.
In February 2009 Bure, together with Altor Equity, signed an agreement with the Swedish National Debt Office to acquire Carnegie Investment Bank AB and Max Matthiessen Holding AB. The intention is to acquire both companies through a jointly owned holding company in which Altor Equity owns 65 per cent and Bure 35 per cent.
After a period of turbulence, Carnegie is now concentrating on reclaiming its position as the Nordic region's leading independent investment bank by continuing to provide its customers with high quality independent advisory services and professional execution of transactions.
Max Matthiessen is Sweden's leading independent provider of advisory services for pension insurance, life insurance and long-term savings. Moving forward, the goal is to further strengthen the market position through innovation and by capitalising on the value of its large customer base.
The acquisition is consistent with Bure's focus on the know ledge-intensive service sector.
The beginning of 2009 has been characterised by continued financial unrest and a global economic downturn. At present, it is difficult to predict both how deep the recession will be and how long it will last. Despite this, we see every reason to look to the future with confidence. Our portfolio companies are well aware of the challenges ahead and are taking steps to prepare for these. Backed by strong finances, Bure has the endurance to weather the trials of a market downcycle and exploit the business opportunities arising in the wake of the financial crisis.
In 2008, during my first year as President and CEO of Bure, I have met many dedicated employees who are working determinedly and professionally to create value for Bure's shareholders. I would especially like to extend my gratitude to the Board of Directors and my staff for their valuable contributions and excellent cooperation. Together, I am convinced that Bure and our portfolio companies will succeed well in an exciting 2009.
Göteborg, February 2009
Martin Henricson
Bure was formed in 1992 following liquidation of the Swedish Wage Earner Funds. At that time, the company was assigned an equity portfolio and cash assets with a market value of SEK 2,200M. The Bure share was listed on the O list of the Stockholm Stock Exchange in October 1993, and Bure was transformed from a management company to an investment company. Today Bure is an investment company with a portfolio of holdings in the knowledge-intensive service sector.
The original portfolio gradually changed and at an early stage Bure concentrated its investments in knowledge-intensive service sectors offering the potential to develop new industry structures and competitive companies.
Between 1994 and 1998 Bure's investments were concentrated in the fast growing sectors of healthcare, IT, infomedia and education. During this period, Bure made numerous investments in new companies and played an active role in consolidation of the healthcare sector.
In 1999 Bure made a strategic change and began shifting its investments towards unlisted companies. To underline its new orientation, the company changed its name to Bure Equity AB. As a step in the concentration on private equity, Bure sold its holdings in Gunnebo, Nobel Biocare and Guide/Framfab.
In 2000 Bure distributed the shares in Capio, a company formed through restructuring in the Healthcare business area, to its shareholders. The shares in Observer were distributed in 2001. In the same year, Bure also carried out an IPO of Dimension and the acquisitions of Carl Bro, Journalistgruppen and Xdin.
In the autumn of 2002 Bure experienced severe negative capital flows due to a number of factors: profitability problems in the portfolio companies following a market recession in 2001–2002, the past few years' many and highly leveraged acquisitions and a challenging exit market.
In the spring of 2003 Bure landed in a financial crisis but was able to meet its acute liquidity needs through a combined issue of shares, warrants and convertible debentures that raised a total of SEK 750M from the shareholders. Powerful interest in the issues gave Bure a well needed capital infusion that ensured its continued freedom of action for ongoing development. The company was also granted bank overdraft facilities of SEK 1,200M.
In 2003 and 2004 the focus was on reducing debt, boosting profitability and generating positive cash flows in the portfolio companies to create a sustainable profitability structure for the future. The Board's goal was to have a debt-free Parent Company. The divestitures of Parere and Xdin in 2004 and Mölnlycke Health Care and Scribona in 2005 made it possible to redeem the convertible debenture and amortise all bank loans.
Thanks to the focus on operating efficiency in the portfolio companies, and aided by a robust economy, Bure achieved strong earnings growth. In 2006 this laid the foundation for exits at attractive price levels in Carl Bro, Cygate and SYSteam. Following these divestitures, Bure had net cash
of approximately SEK 2,200M. In order to adapt the capital structure, a capital distribution of approximately SEK 1,500M was carried out in 2007 through redemption procedures and the buyback of shares and warrants.
A deliberate concentration of holdings in the educational area was started and a number of acquisitions in the independent school sector were carried out in 2007 and 2008. All independent school operations were then gathered in the independent education company Anew Learning. The increasingly specialised portfolio, with two thirds in the educational sector, meant that Bure's business had started to assume a more operating nature.
At the end of 2007 Bure acquired shares in the listed company AcadeMedia. This created the conditions for a merger between Anew Learning and AcadeMedia in the autumn of 2008. The purchase consideration consisted of newly issued shares in AcadeMedia and cash. Bure then decided to
distribute the entire holding in AcadeMedia to its shareholders, enabling the shareholders to quickly and effectively gain access to Sweden's leading independent school group.
The central objective in Bure's business model has always been, and still is, the same – to build value by identifying interesting companies in sectors with good development and growth potential in the knowledge-intensive service sector.
From the original SEK 2,200M that Bure started out with in 1992, Bure has paid out approximately SEK 10 billion to the shareholders through share buybacks, redemption procedures, share distributions and capital distributions. In each case, the goal has been to apply the method most advantageous for the recipients.
Bure's market capitalisation at 31 December 2008 was SEK 2,073M.
Since deregulation of the educational market in 1992, the number of independent schools has risen dramatically. The financial rules for independent schools give market participants the right to a cost-neutral level of compensation relative to the municipal schools. The revenue model is the same for all players, based on a specific amount of compensation per pupil.
The Swedish educational market can be divided into three sub-markets: preschools and compulsory schools, high schools and adult education. The market is estimated at around SEK 200 billion annually, of which the preschool and compulsory school market makes up 65 per cent, the high school market 16 per cent and adult education the remaining 19 per cent.
At the beginning of 1999 Bure invested in Vittra Utbildning, which then became part of the newly established business area Bure Education. At the time of the acquisition, Vittra had annual sales of around SEK 70M, a total of 130 employees and some 1,200 pupils. Since 1999, Bure has pursued a growth-oriented strategy to expand both organically and through acquisitions. In 2006 Bure gathered all independent school operations in the new group Anew Learning. In the autumn of 2008, prior to the merger with AcadeMedia, Anew Learning operated 52 schools with more than 14,000 pupils under strong and well known brands.
Alongside the growth strategy, Anew Learning has prioritised efficiency optimisation and coordination of group-wide functions to create a sound and solid infrastructure. The primary joint functions are administration, purchasing, concept development, IT, finance and accounting, HR and pupil management systems, which has created significant cost synergies.
In October 2007 Bure made a mandatory bid for the shares in the listed company AcadeMedia, one of Sweden's leading providers of web-based learning and communication solutions for high school education, vocational training, adult education and corporate education. The bid was a step in the concentration of Bure's holdings in the educational sector and the formation of Sweden's largest independent education company, covering all three sub-markets.
In September 2008 Bure and AcadeMedia signed an agreement for a merger between Bure's wholly owned independent school group Anew Learning and Bure's associated company AcadeMedia. The merger was effected through AcadeMedia's acquisition of all shares in Anew Learning from Bure. The purchase price consisted of 6.3 million newly issued shares in AcadeMedia and SEK 274M in cash. As a result of the transaction, Bure gained a holding of approximately 70 per cent in AcadeMedia. An Extraordinary General Meeting of Bure then resolved to distribute the newly issued and previously held shares in AcadeMedia to the shareholders in Bure.
Through the merger and "Lex Asea" distribution, Bure's shareholders quickly and effectively gained access to Sweden's largest specialised company in the educational sector.
Bure is an investment company whose primary emphasis is on long-term ownership of unlisted companies with strong and stable earnings in sectors where Bure has previous experience. In its role as assertive principal owner, Bure creates shareholder value by focusing on the business performance, operating efficiency and capital structure of the companies.
Bure's strategy is to create value in the portfolio companies by acting as an assertive principal owner. Through Bure, the shareholders are offered the opportunity to invest in a portfolio of unlisted companies with relatively low sensitivity to the general business cycle. Bure's focus is on creating a portfolio with a well balanced spread of operating and financial risk.
Bure's investments are characterised by an ambition:
The investment strategy is to create a balanced portfolio in terms of business models and market maturities and with low exposure to the general business cycle. We take an opportunistic approach, but preferably seek companies capable of enhancing the existing portfolio.
The following criteria are factors that provide guidance in seeking potential new investments:
In each investment, Bure strives to inject between SEK 200M and SEK 400M in equity over time. Co-investment with other partners is possible, but Bure strives for majority ownership.
Bure uses board representation as its primary platform for involvement in the portfolio companies. The cornerstone of effective board work is to evaluate the earnings potential in a company's strategy compared with other alternative strategies. It is also vital to determine whether a company has chosen the right level of risk in its operations and if the value that is created is in proportion to this level.
Bure's portfolio companies are similarly managed and should all be aware of the proper procedures for board activities and what goals and expectations apply. To facilitate this work, Bure has developed a standardised tool that can be adapted to each company. The work of the Board is governed by a detailed yearly agenda. Based on a well structured business planning process, the Board seeks to maximise the companies' potential for strategic and operational development.
This structured approach, backed up by thorough and clearly defined performance measurement, creates a solid platform for value creation.
Bure's ownership is characterised by clarity and commitment. This means that we clearly communicate our goals and expectations for a company to its board, that we are committed to supporting the companies and that we are clear in our performance measurement. Board and owner agendas are tools for establishing specific and general tasks and current risk scenarios. These are used by the board and owners to secure the long-term business sustainability, development and profitability of the companies.
Some of the owners' key responsibilities are to determine a suitable risk level for the company, to appoint an effective board, to deal with issues such as the company's capital structure and incentive schemes, and to explore the potential for structural transactions.
The Board's general tasks include setting of both quantitative and qualitative targets for a company's operations and deciding on the company's strategy for goal attainment. To follow up attainment of the established targets, the Board also ensures that there are efficient systems for monitoring and control.
One of the Board's specific responsibilities is to outline business priorities based on the current drivers for profitability. Concrete goals and action plans are formulated and key performance indicators (KPIs) are developed to facilitate follow-up.
Development of the portfolio companies is promoted through an approach focused on industrial and financial aspects and stricter demands on the market expertise of the owners, board and management. The advantages of belonging to a corporate group like Bure are visible at the annual conference where individuals from various levels in the portfolio companies come together to talk business, discuss topics of mutual interest and share experiences.
Bure's ownership strategy entails a stronger focus on the business performance, operating efficiency and capital structure of the portfolio companies. Value creation in the portfolio is achieved by developing the companies with an emphasis on securing current earnings and profitability and by building for the future. The portfolio companies' strong earnings performance provides scope for continued investments in growth.
In 2008 the following overall priorities for Bure have been communicated to the boards of the portfolio companies:
Specific goals and expectations have also been communicated to the board and management of each company.
The Bure share was introduced on the Stockholm Stock Exchange in 1993. After transition to the Nordic Stock Exchange in October 2006, the share is traded on the Nordic Mid Cap list.
Bure's share price fell from SEK 37.90 at the beginning of the year to SEK 24.70 at year-end 2008. Total return on the Bure share was -3 per cent, adjusted for the redemption rights exercised during the year of SEK 2.60 per share and the value of the share distribution in AcadeMedia of SEK 8.55 per share. The share's total return can be compared to a decrease of 40 per cent for the OMXSMCGI index. The Bure share thus outperformed the companies on the Mid Cap list by 37 percentage points.
In 2008 a total of 44,370,732 Bure shares (63,372,917) were traded on the stock market for a combined value of SEK 1,578M (2,373), equal to a turnover rate of 48 per cent during the year. A total of 24,505 trades of the Bure share were cleared in 2008.
In 2008 Bure repurchased shares for a total of SEK 369M, equal to 9,309,957 shares. All repurchased shares have been cancelled according to the decision of a General Meeting. The Board currently has an authorisation to acquire treasury shares corresponding to a maximum 10 per cent of all shares outstanding in the company. Bure held no shares in treasury at the end of the year. Bure's average holding of treasury shares during the year amounted to 3,366,263 shares.
Bure's share capital on 31 December 2008 amounted to SEK 300M, and was divided between 83,914,680 shares. All shares grant equal entitlement to the company's assets and profits. Each share has a quota value of approximately SEK 3.58.
A redemption procedure in progress was completed after the end of the year, leading to the redemption of 33,565,872 shares. The number of shares in Bure there after amounts to 50,348,808, equal to a quota value of approximately SEK 5.96.
In 2008 the number of shareholders decreased from 21,179 to 18,000. Foreign investors hold 19.6 per cent (16.7) of the share capital.
| Ten largest shareholders at 31 Jan 2008, % | |
|---|---|
| Skanditek | 19.9 |
| Catella Fonder | 14.5 |
| Nordea Fonder | 5.8 |
| Eikos | 4.6 |
| SEB Fonder | 2.4 |
| Swedbank | 2.3 |
| Lannebo Fonder | 2.1 |
| Skandia Fonder | 1.7 |
| Nordnet Bank | 1.5 |
| J P Morgan Bank | 1.3 |
Bure carries out ongoing cash flow analysis and market valuation of all portfolio companies. The management monitors these valuations on a quarterly basis (impairment testing) to look for any indication of a need to adjust the carrying amounts of the investments. Regardless of whether any indication is found, a complete value assessment of each port folio company is performed twice a year.
A discounted cash flow analysis is carried out by forecasting the anticipated future cash flows generated in a portfolio company's operations. Assumptions are made about the future growth rate, EBITA margins (operating margin before goodwill impairment and amortisation of fair value adjustments), investment levels, depreciation, capital tied up in operations and taxes.
The forecast period is between 5 and 10 years. The longer forecast period is used in cases where the operation in question is expected to grow faster than the economy in general. Thereafter, a perpetual assumption is made based on the above factors which applies to the so-called terminal period, i.e. after the forecast period. The cash flow computed for the forecast and terminal periods is discounted to present value with a return target that is determined individually for each company.
The present value of the cash flow during the forecast and terminal periods is then reduced by the portfolio company's net liability (or increased by its net cash surplus). An adjustment is also made for known commitments that are not included in operating cash flow, such as commitments to pay additional purchase prices, etc.
The return target is calculated on the basis of three components. The first of these is the risk-free interest rate, where Bure has elected to use the interest rate on five-year government bonds which was just over 2 per cent at 31 December 2008.
A general risk premium is then added, which is currently set at 5 per cent. This can be regarded as the lowest acceptable risk premium over the risk-free rate. It does not take companyspecific risks into account.
Finally, a company-specific risk premium is determined based on the risk profile of the respective investment. The risk premium is based on an evaluation of the portfolio company's operating risk, financial risk and other identified risks that are not part of financial or operating risk.
As a complement to discounted cash flow analysis, comparative valuation of Bure's holdings is carried out based on the valuations of similar companies by for example the stock market, etc.
The valuations are performed by using generally accepted performance indicators such as EV/Sales, EV/EBITDA and P/E, on forecasts for both the current and coming year. These comparative analyses are a valuable complement to fundamental cash flow analyses.
The combination of market valuations and fundamental cash flow analyses provides a solid basis for decision on divestitures and acquisitions and gives Bure's organisation a good indication of external valuations.
If a discounted cash flow analysis (impairment test) shows that the value of a holding has fallen below its carrying amount, an impairment loss is normally recognised. Correspondingly, a previously recognised impairment may be reversed if the value of the holding is recovered. For obvious reasons, a more critical assessment is made before deciding to reverse a value. Bure's internal rules place higher demands on reversals than impairments.
Unrealised revaluation gains in excess of cost in unlisted companies are not recognised in Bure's equity.
Valuation of a company involves taking a position on an assessment of future development. Such assessments always contain a degree of uncertainty. The valuations are based on the management's best estimates.
| Data per share 1, 6 | 2004 | 2005 | 2006 | 2007 | 2008 |
|---|---|---|---|---|---|
| Equity (net asset value), SEK2 | 40.17 | 33.36 | 46.73 | 28.02 | 29.14 |
| Equity (net asset value) after full exercise of outstanding warrants, SEK2 |
15.80 | 18.99 | 26.30 | 28.02 | 29.14 |
| Share price, SEK | 17.40 | 23.80 | 33.40 | 37.90 | 24.70 |
| Share price as a percentage of equity | 110 | 125 | 127 | 135 | 85 |
| Parent Company equity per share, SEK | 40.17 | 33.36 | 46.73 | 28.02 | 29.14 |
| Parent Company diluted equity per share, SEK | 15.80 | 18.99 | 26.30 | 28.02 | 29.14 |
| Consolidated equity per share, SEK3 | 32.38 | 32.81 | 43.57 | 29.54 | 29.56 |
| Consolidated diluted equity per share, SEK3 | 13.55 | 18.73 | 24.77 | 29.54 | 29.56 |
| Parent Company earnings per share, SEK | 4.90 | 6.22 | 13.85 | 8.11 | 11.35 |
| Parent Company diluted earnings per share, SEK4 | 1.84 | 3.08 | 6.99 | 6.36 | 11.35 |
| Consolidated earnings per share, SEK | 1.87 | 9.37 | 14.21 | 12.39 | 9.82 |
| Consolidated diluted earnings per share, SEK4 | 0.70 | 4.63 | 7.17 | 9.71 | 9.82 |
| Number of shares, thousands | 37,458 | 60,358 | 62,819 | 93,225 | 83,915 |
| Number of warrants outstanding, thousands | 92,263 | 69,362 | 66,901 | – | – |
| Total number of shares including warrants outstanding, thousands | 129,720 | 129,720 | 129,720 | 93,225 | 83,915 |
| Diluted number of shares according to IAS 33, thousands Average number of shares, thousands |
98,266 36,445 |
115,772 54,172 |
122,836 61,071 |
93,225 84,465 |
83,915 89,782 |
| Average diluted number of shares according to IAS 33, thousands | 97,253 | 109,585 | 121,086 | 107,782 | 89,782 |
| Key figures | |||||
| Dividend paid, SEK per share7 | – | – | – | 1.00 | 8.55 |
| Direct yield, % | – | – | – | 2.64 | 34.63 |
| Total return, % | 67.3 | 36.8 | 40.3 | 16.7 | -2.8 |
| Market capitalisation, SEK M | 652 | 1,437 | 2,098 | 3,533 | 2,073 |
| Diluted market capitalisation, SEK M5 | 2,257 | 3,087 | 4,333 | 3,533 | 2,073 |
| Equity (net asset value), SEK M | 1,505 | 2,014 | 2,935 | 2,612 | 2,445 |
| Return on equity, % | 12.8 | 19.2 | 34.2 | 24.7 | 40.3 |
| Parent Company profit and financial position | |||||
| Exit gains/losses, SEK M | 132.2 | 353.7 | 625.6 | 451.9 | 811.9 |
| Profi t after tax, SEK M | 178.7 | 337.2 | 846.1 | 685.2 | 1,019.2 |
| Total assets, SEK M | 2,586 | 2,109 | 3,112 | 2,695 | 2,498 |
| Equity, SEK M | 1,505 | 2,014 | 2,935 | 2,612 | 2,445 |
| Equity/assets ratio, % | 58.2 | 95.4 | 94.3 | 97.0 | 97.9 |
| Net loan debt (-)/receivable (+) | -512 | 404 | 1,080 | 1,462 | 1,848 |
| Net loan debt (-)/receivable (+) after exercise of outstanding warrants |
33 | 854 | 1,556 | 1,462 | 1,848 |
| Consolidated profit and financial position | |||||
| Net sales, SEK M | 2,148.1 | 2,022.7 | 2,147.1 | 2,647.8 | 1,096.6 |
| Profi t after tax, SEK M | 95.9 | 543.7 | 884.9 | 1,047.1 | 882.6 |
| Total assets, SEK M | 4,505 | 4,032 | 3,885 | 3,747 | 2,995 |
| Equity, SEK M | 1,213 | 1,980 | 2,737 | 2,754 | 2,481 |
| Equity/assets ratio, % | 26.9 | 49.1 | 70.5 | 73.5 | 82.8 |
| Net loan debt (-)/receivable (+) | -1,202 | 201 | 1,178 | 1,514 | 1,892 |
| Net loan debt (-)/receivable (+) after full exercise of outstanding warrants |
-657 | 651 | 1,655 | 1,514 | 1,892 |
All historical data per share have been adjusted for shares in issue with a time-weighting factor as prescribed by IAS 33.
2 Net asset value for the full years 2004–2008 corresponds to equity per share.
The fi gures for the full year 2004 have been retrospectively restated to IFRS. 4
In the event of a negative result, the average number of shares before dilution is also used for calculation after dilution.
Market capitalisation taking into account the total number of shares after full exercise of outstanding warrants multiplied by share price on the closing date for the period in question. 6
All key fi gures per share presented in this report have been recalculated with respect to the 1-for-10 reverse share split, and adjusted by a factor of 10. 7
The dividend for 2008 refers to the distribution of shares in AcadeMedia, equal to SEK 8.55 per share. The Board proposes no dividend for the fi nancial year 2008.
| PARENT COMPANY HOLDINGS AT 31 DECEMBER 2008 | % of capital |
% of votes |
Book value, SEK M |
|---|---|---|---|
| Unlisted holdings | |||
| Mercuri International1 | 100.00 | 100.00 | 358 |
| SRC, Scandinavian Retail Center | 100.00 | 100.00 | 12 |
| EnergoRetea1 | 93.25 | 93.25 | 103 |
| Celemi | 30.13 | 30.13 | 9 |
| Business Communication Group | 100.00 | 100.00 | 19 |
| Sancera | 100.00 | 100.00 | 43 |
| Cindra | 100.00 | 100.00 | 5 |
| CR&T Holding | 100.00 | 100.00 | 30 |
| CR&T Ventures2 | 100.00 | 100.00 | 2 |
| Gårda Äldrevård Holding | 100.00 | 100.00 | 9 |
| Other dormant companies | 2 | ||
| Total | 592 | ||
| Other net assets according to the Parent Company balance sheet | 1,853 | ||
| Equity in the Parent Company | 2,445 | ||
| Equity per share divided between 83,914,680 shares | 29.14 |
1 Ownership diversification programmes have been carried out in the subsidiaries Mercuri and EnergoRetea. See also information about dilution on page 56.
Equity amounts to SEK 40M and is mainly equal to liquidity placements.
Bure's portfolio companies:
The bulk of Bure's investments consist of unlisted holdings, which means that revaluation gains are not recognised. Unlisted companies are carried at book value. The previously used term "net asset value" may be misinterpreted as meaning the market value of Bure's holdings. To avoid any possible misunderstanding, Bure now uses the term "Equity per share". The readers are instead given the opportunity to form their own opinions on the value of the respective holdings based on the provided information about the earnings and fi nancial positions of the individual portfolio companies.
Bure performs ongoing cash fl ow valuations of all its holdings to determine the need for adjustment of book values. If a discounted cash fl ow valuation indicates a value that shows that the market value of a holding has fallen below its carrying amount, an impairment loss is recognised. Correspondingly, a previous impairment loss may be reversed if the value of the holding is recovered. For obvious reasons, a more critical assessment is made before deciding to reverse a value.
Valuation of a company is always uncertain, since it is based on an assessment of future development. The values determined in the cash fl ow valuations are based on the management's estimates of the future cash fl ows generated in the respective portfolio company.
Susanne Lithander, President
Mercuri is an expert at optimising sales performance and realising sales strategies in enterprises worldwide.
"Taking sales to a higher level."
Mercuri's vision is to be the leading provider of professional services for optimised sales and management performance. Mercuri aims to be the preferred choice of international companies for analysis and strategic implementation of sales and manage ment models. Mercuri helps its clients to achieve sustainable and measurable improvements in their sales results.
Mercuri has the strength and endurance to weather the global economic crisis during 2009. Companies need to increase their sales even in a recession, and Mercuri is well equipped to support its clients in meeting the challenges they face. With its resultoriented approach, Mercuri can create immediate effects for its clients. The current economic climate is not ideal, but it is creating new opportunities.
Sales and organic growth are a prioritised area for both large global enterprises and small to mid-sized local businesses. There is a clear trend towards procurement of services on a global basis, which is further highlighting the importance of maintaining a strong inter national presence in order to meet the needs of these clients. Mercuri believes that this is a continuing trend, and sees its global delivery capacity as a significant competitive advantage.
Mercuri International was founded around 50 years ago and is Europe's largest provider of consulting services in its segment. Mercuri is the leader in assisting companies to grow organically through improved sales performance and is represented with more than 600 employees in 40 countries in Europe, Asia, North and South America, the Middle East, South Africa and Australia. Several clients work with Mercuri in up to 20 different countries simultaneously. Every year, Mercuri carries out some 18,000 events with more than 330,000 participants. Mercuri provides an array of services to promote organic growth and helps its customers to improve their sales performance by optimising their sales processes, building their skills and ensuring that new knowledge and tools are implemented in day-to-day activities. Based on individual needs, custom solutions are created to achieve the desired results. Mercuri can offer both targeted initiatives and more adapted and specialised programmes incorporating a combination of different effective methods.
Cont'd on next page ➤
All companies face the challenges of achieving growth and enhancing profitability, and even organisations with a limited capacity for growth need to satisfy shareholder demand for increased returns. Mercuri believes that it is possible to quickly achieve visible improvements in sales performance. In a world where all companies have access to the same technology, solutions and management methods, successful differentiation is increasingly difficult. In addition, rising customer demands and expectations require a higher degree of sales expertise. This means that many companies now see their sales staff as an unique resource and a key differentiator for their business. The development of new or improved sales processes and skills is therefore critical for improved results and successful differentiation. Mercuri has the expertise needed to help organisations rise to these challenges.
BASF Coatings – a division of BASF, a world-leading multinational corporation in the chemical industry – is working with Mercuri International to achieve a significant change in sales of strategic importance for its own operations.
During a three-year project known as STAR (Sales Training Automotive Refinish), more than 1,500 sales managers and other sales staff are being trained in their own native languages by some 60 consultants from Mercuri. The covered regions are Western Europe, Central and Eastern Europe, Asia, Oceania and NAFTA. The current sales value for the project is approximately EUR 10M, which is partly linked to a variable component that is
Maintining a high level of continuity and uniformity in line with BASF's requirements is a critical success factor for the project. Against this background, BASF has decided to continue the collaboration with a two-year follow-up project. The high complexity of the project and the large number of countries, participants and consultants involved, together with variation in the delivered services, demands professional global and regional project management.
monitored against selected KPIs.
➤ Cont'd from previous page
| Bure's holding, % | 100 (for dilution, see Note 32) |
|---|---|
| Book value, SEK M | 358 |
| Year of acquisition | 1998 |
| Board Chairman Board representatives |
Martin Henricson |
| from Bure | Jonas Alfredson, Carl Backman |
| Income statement, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Net sales | 784 | 769 | 715 |
| Operating expenses | -753 | -711 | -667 |
| EBITA before items | |||
| items affecting comparability | 31 | 58 | 48 |
| % | 3,9 | 7,6 | 6,7 |
| Items affecting comparability | -10 | 0 | -1 |
| Share in profi t of associates | 0 | 0 | 1 |
| EBITA | 21 | 58 | 48 |
| % | 2.7 | 7.5 | 6.8 |
| Amort./impairment of surplus values | -15 | 0 | -3 |
| Operating profi t | 6 | 58 | 45 |
| Net fi nancial items | 0 | -5 | -9 |
| Profi t before tax | 6 | 53 | 36 |
| Minority interest and taxes | -23 | -7 | -1 |
| Profi t/loss for the year | -17 | 46 | 35 |
| Key figures, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Growth, % | 2 | 8 | 6 |
| Of which, organic growth, % | -2 | 8 | 3 |
| Operating cash fl ow | -5 | 55 | 30 |
| Equity/assets ratio, % | 48 | 47 | 42 |
| Net loan debt (-)/receivable (+) | -14 | -8 | -48 |
| Average number of employees | 626 | 598 | 601 |
| Value added per employee | 826 | 877 | 821 |
| Balance sheet, SEK M | 2008 | 2007 | 2006 |
| Goodwill | 333 | 314 | 301 |
| Other intangible assets | 3 | 4 | 5 |
| Tangible assets | 24 | 17 | 18 |
| Financial assets | 27 | 39 | 34 |
| Inventories, etc. | 1 | 2 | 1 |
| Current receivables | 190 | 185 | 146 |
| Cash, cash equiv., short-term invest. | 112 | 106 | 87 |
| Total assets | 690 | 667 | 592 |
| Equity | 334 | 314 | 251 |
| Provisions | 48 | 44 | 43 |
| Non-current liabilities | 104 | 96 | 14 * |
| Current liabilities | 204 | 213 | 284 * |
| Total equity and liabilities | 690 | 667 | 592 |
* The company's loan liabilities at year-end 2006 are reported as current in connection with renegotiation of bank agreements.
Ola Dolck, President
Based on its unique retail expertise, SRC delivers creative and profitable concepts for the retail industry and brand suppliers.
To be Sweden's leading retail advertising agency.
SRC's clients consist of retail chains and brand suppliers to the retail industry. The retail chains have a constant need to boost sales by recruiting more customers, optimising their store environments, improving customer relations and increasing the average purchase. Suppliers seek mutually beneficial partnerships with retail chains/ outlets and ways to effectively deliver their brands to end-customers through the retail trade. SRC's offering is especially well suited to meet these needs through its focus on the store environment as a strategic competitive tool and tactical sales promotional advertisements that at the same time contribute to building the brand.
SRC is a consulting company and advertising agency specialised in services for the retailing industry. Services are offered in three focus areas – Retail Concept, Trade Marketing and Action Marketing – all of which are based on trends and consumer behaviour in the retail trade. These areas represent a unique total concept that gives SRC's clients positive long-term effects on both sales and profitability.
Consolidation of operations and a focus on internal development projects in quality assurance, financial control, sales management and key account management. The cost structure will be evaluated and adjusted and the company will introduce an updated graphic indentity during the year.
| Bure's holding, % | 100 |
|---|---|
| Book value, SEK M | 12 |
| Year of acquisition | 1999 |
| Board Chairman | Carl Backman |
| Board representative from Bure | Daniel Utbult |
| Income statement, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Net sales | 37 | 40 | 32 |
| Operating expenses | -36 | -37 | -33 |
| EBITA before items | |||
| items affecting comparability | 1 | 3 | -1 |
| % | 1.4 | 8.1 | -3.3 |
| Items affecting comparability | 0 | 0 | 0 |
| Share in profi t of associates | 0 | 0 | 0 |
| EBITA | 1 | 3 | -1 |
| % | 1.4 | 8.1 | -3.3 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profi t/loss | 1 | 3 | -1 |
| Net fi nancial items | 0 | 0 | 0 |
| Profi t/loss before tax | 1 | 3 | -1 |
| Minority interest and taxes | 0 | 0 | 0 |
| Profi t/loss for the year | 1 | 3 | -1 |
| Key figures, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Growth, % | -9 | 21 | -13 |
| Of which, organic growth, % | -9 | 21 | -13 |
| Operating cash fl ow | 1 | 5 | -4 |
| Equity/assets ratio, % | 44 | 49 | 42 |
| Net loan debt (-)/receivable (+) | 6 | 8 | 3 |
| Average number of employees | 26 | 25 | 25 |
| Value added per employee | 749 | 840 | 638 |
| Balance sheet, SEK M | 2008 | 2007 | 2006 |
| Goodwill | 0 | 0 | 0 |
| Other intangible assets | 0 | 0 | 0 |
| Tangible assets | 0 | 1 | 1 |
| Inventories | 1 | 0 | 0 |
| Current receivables | 8 | 11 | 11 |
| Cash, cash equiv., short-term invest. | 6 | 8 | 3 |
| Total assets | 15 | 20 | 15 |
| Equity | 7 | 10 | 6 |
| Provisions | 0 | 0 | 0 |
| Non-current liabilities | 0 | 0 | 0 |
| Current liabilities | 8 | 10 | 9 |
| Total equity and liabilities | 15 | 20 | 15 |
Martin Dahlgren, President
By listening, analysing and effectively implementing its knowledge, EnergoRetea offers consulting engineering services that create added value for owners and users of properties, networks and infrastructure.
EnergoRetea is an engineering consultancy with unique skills and experience in Energy & Power Networks, Building Automation Systems and ICT (Information & Communication Technology). In close collaboration with its clients, the company helps to secure the supply of electricity from producer to consumer, create efficient living and working spaces with the best possible indoor environment and ensure that people can communicate everywhere.
The company was formed on 1 January 2007 through a merger between the building automation systems consultancy Energo and the consulting engineering firm Retea. In 2008 the group grew additionally through the acquisition of CLC Installationsconsult AB, which has strengthened EnergoRetea's operations in southern Sweden with expertise in energy, HVAC and sanitation, control and fire protection systems, cooling and electrical engineering. EnergoRetea has around 280 employees at 10 offices in Sweden (Sundsvall, Uppsala, Stockholm, Linköping, Kalmar, Växjö, Varberg, Laholm, Malmö and Helsingborg).
EnergoRetea's vision is to be Sweden's leading provider of environmentally-friendly energy solutions.
"The harder, the better"
EnergoRetea has advanced its positions in southern Sweden through the acquisition of CLC Installationsconsult, with a strong position in energy, sanitation, control and fire protection systems, cooling and electrical engineering in Sweden's Skåne province, and now has around 100 consultants active in the region. The company has a leading position in building automation systems in the Stockholm area and the Skåne region. EnergoRetea's establishment of operations in southern Sweden, which began in 2007 with a venture in Energy & Power Networks, was reinforced in 2008 through further expansion in Water & Hydropower, Regional Networks and Electrical Design. Operations in Energy & Power Networks have also been started in Sundsvall.
In close collaboration with its clients, the company helps to secure the supply of electricity from producer to consumer and to create efficient living and working spaces with the best possible indoor environment.
In Energy & Power Networks, EnergoRetea offers end-to-end technical solutions for power sources of all types. For wind and hydropower, the company ensures the highest possible cost-effectiveness, security and efficiency in energy production, distribution and delivery. The company offers consulting services in the following areas:
In the Building Automation Systems area, EnergoRetea works closely with its clients, partners and suppliers to create modern, efficient and well equipped living and working spaces with an optimal indoor climate and a minimum of environmental impact. The company offers services and expertise in:
In the ICT (Information & Communication Technology) area, EnergoRetea offers a large number of services based on long experience and in-depth expertise in IT and telecommunications.
Every year, EnergoRetea helps a large number of private and public sector organisations to optimise their businesses and services and to improve efficiency in their organisations with the help of electronic communications. The company's consultants have broad and in-depth expertise in a range of areas, from organisational development to technical infrastructure.
| Bure's holding, % | 93.3 (for dilution, see Note 32) |
|---|---|
| Book value, SEK M | 103 |
| Year of acquisition | 2001 |
| Board Chairman | Kjell Duveblad |
| Board representative from Bure | Carl Backman |
| Income statement*, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Net sales | 274 | 205 | 71 |
| Operating expenses | -247 | -190 | -61 |
| EBITA before items | |||
| items affecting comparability | 27 | 15 | 10 |
| % | 9.9 | 7.4 | 13.5 |
| Items affecting comparability | -7 | -5 | 0 |
| Share in profi t of associates | 0 | 0 | 0 |
| EBITA | 20 | 10 | 10 |
| % | 7.2 | 4.9 | 13.5 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profi t | 20 | 10 | 10 |
| Net fi nancial items | -2 | -1 | 0 |
| Profi t before tax | 18 | 9 | 10 |
| Minority interest and taxes | -6 | -3 | -3 |
| Profi t for the year | 12 | 6 | 7 |
| Key figures*, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Growth, % | 34 | 191 | 19 |
| Of which, organic growth, % | 22 | 15 | 19 |
| Operating cash fl ow | -14 | 7 | 13 |
| Equity/assets ratio, % | 49 | 56 | 35 |
| Net loan debt (-)/receivable (+) | -54 | -37 | 12 |
| Average number of employees | 281 | 192 | 72 |
| Value added per employee | 712 | 789 | 767 |
| Balance sheet*, SEK M | 2008 | 2007 | 2006 |
| Goodwill | 155 | 130 | 0 |
| Other intangible assets | 2 | 2 | 0 |
| Tangible assets | 12 | 5 | 2 |
| Financial assets | 1 | 0 | 0 |
| Inventories | 20 | 10 | 0 |
| Current receivables | 64 | 49 | 22 |
| Cash, cash equiv., short-term invest. | 9 | 14 | 11 |
| Total assets | 263 | 210 | 35 |
| Equity | 129 | 117 | 12 |
| Provisions | 5 | 2 | 0 |
| Non-current liabilities | 62 | 50 | 0 |
| Current liabilities | 67 | 41 | 23 |
| Total equity and liabilities | 263 | 210 | 35 |
* The figures for 2006 refer only to Retea.
Lars Ynner, President
Celemi helps enterprises worldwide to mobilise people and successfully implement change.
Celemi works globally with companies across all sectors, primarily large organisations like IKEA, BASF, E.ON, HP, IBM, Motorola, Siemens and Skanska. Celemi has offices in Sweden, the USA and China and a extensive partner network of 100 partners in 45 different countries.
Celemi is a provider of consulting services with a full range of consulting and coaching methods based on business simulations and custom learning solutions.
Celemi offers a range of business simulations for development of knowledge and business skills in areas like strategic planning, finance, project management, marketing and sales. The products are sold directly and via a global partner network, Celemi Solution Providers.
When there is a need for fully customised solutions, Celemi's consultants work closely with clients to design specially targeted learning programs that help managers to motivate people and communicate key messages. The goal is to create clarity and build understanding around strategies, visions, corporate culture and values, business ethics, business systems and brands.
| Bure's holding, % | 30.1 |
|---|---|
| Book value, SEK M | 9 |
| Year of acquisition | 2001 |
| Board Chairman | Göran Havander |
| Board representative from Bure | Daniel Utbult |
| Income statement, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Net sales | 57 | 48 | 59 |
| Operating expenses | -48 | -49 | -52 |
| EBITA before items | |||
| items affecting comparability | 9 | -1 | 7 |
| % | 16.4 | -1.6 | 12.2 |
| Items affecting comparability | 0 | 0 | 0 |
| Share in profi t of associates | 0 | 0 | 0 |
| EBITA | 9 | -1 | 7 |
| % | 16.4 | -1.6 | 12.2 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profi t/loss | 9 | -1 | 7 |
| Net fi nancial items | 1 | 0 | -1 |
| Profi t/loss before tax | 10 | -1 | 6 |
| Minority interest and taxes | -1 | 0 | 0 |
| Profi t/loss for the year | 9 | -1 | 6 |
| Key figures, SEK M | 2008 | 2007 | 2006 |
|---|---|---|---|
| Growth, % | 19 | -19 | -20 |
| Of which, organic growth, % | 19 | -19 | -20 |
| Operating cash fl ow | 10 | -6 | 11 |
| Equity/assets ratio, % | 75 | 74 | 66 |
| Net loan debt (-)/receivable (+) | 10 | 1 | 8 |
| Average number of employees | 28 | 30 | 35 |
| Value added per employee | 1 271 | 866 | 988 |
| Balance sheet, SEK M | 2008 | 2007 | 2006 |
| Goodwill | 4 | 4 | 4 |
| Tangible assets | 3 | 2 | 1 |
| Inventories, etc. | 3 | 3 | 3 |
| Current receivables | 20 | 19 | 15 |
| Cash, cash equiv., short-term invest. | 10 | 1 | 10 |
| Total assets | 40 | 29 | 33 |
| Equity | 30 | 21 | 22 |
| Non-current liabilities | 0 | 0 | 2 |
| Current liabilities | 10 | 8 | 11 |
| Total equity and liabilities | 40 | 29 | 35 |
The Board of Directors and the President of Bure Equity AB (publ), corporate identification number 556454-8781, domiciled in Göteborg, Sweden, hereby submit the annual report and consolidated accounts for the 2008 financial year.
Bure Equity AB is an investment company whose primary emphasis is on long-term ownership of unlisted companies with strong stable earnings in sectors where Bure has previous experience. In its role as principal owner, Bure creates share holder value by focusing on operating efficiency, growth-enhancing measures and the capital structure of its portfolio companies.
Bure's strategy is to create value in the portfolio companies by acting as an involved and committed owner. Through Bure, the shareholders are offered the opportunity to invest in a portfolio of unlisted companies with relative low exposure to the general market cycle.
The Parent Company's profit after tax for the full year was SEK 1,019M (685) and included exit gains of SEK 812M (450). A previous impairment loss was reversed in an amount of SEK 170M (202). The entire reversal refers to the shares in Textilia and took place in connection w ith divestiture of the company. Administrative expenses totalled SEK 38M (38), and included project-specific costs of SEK 1M (6). Bonus provisions amounted to SEK 4M (6). Aside from this, a provision of SEK 8M was made in connection with the change of CEO.
Net financial items in the Parent Company amounted to SEK 75M (66), of which SEK 9M refers to a capital gain on the sale of the remaining hedge fund participations. These funds provided a return of 3 per cent in 2008 and together with other investments produced a total return of 4.6 per cent.
Equity in the Parent Company at the end of the period amounted to SEK 2,445M (2,612) and the equity/assets ratio was 98 per cent (97). At 31 December 2008 the Parent Company had cash and cash equivalents and short-term investments of SEK 1,814M (1,423). At the end of the year the Parent Company had a reported net loan receivable of SEK 1,848M (1,462), which had a positive impact on net financial items. The composition of the net loan receivable is shown in the table at right.
Bure may normally place excess liquidity in fixed-income investments secured by collateral with counterparties such as the Swedish Government, Swedish banks or Swedish residential mortgage institutions. Furthermore, an investment advisor appointed by the Bure's Board of Directors may decide on certain alternative investments. At 31 December 2008, SEK 1,190M was placed in short-term deposits and the remaining SEK 624M in bank accounts.
| Net loan receivable/debt | 31 Dec | 31 Dec |
|---|---|---|
| SEK M | 2008 | 2007 |
| Interest-bearing assets | ||
| Receivables from subsidiaries | 43 | 24 |
| Other interest-bearing receivables | 19 | 40 |
| Cash and cash equivalents | 1,814 | 1,423 |
| 1,876 | 1,487 | |
| Interest-bearing liabilities | ||
| Liabilities to subsidiaries | 28 | 25 |
| 28 | 25 | |
| Net loan receivable | 1,848 | 1,462 |
During the year Bure purchased Scandinavian Retail Center, SRC, from the subsidiary Citat at book value, SEK 12M.
In 2008 Bure sold its holding in Anew Learning to AcadeMedia for SEK 671M, of which SEK 274M was received in cash and the remainder in the form of shares in AcadeMedia. The entire holding in AcadeMedia was distributed to Bure's shareholders during the year. The transaction generated a total gain of SEK 681M. In addition, the entire holding in Citat was sold with a capital gain of SEK 124M and the holding in Textilia with a capital loss of SEK 2M after the reversal of a previous impairment loss of SEK 170M. An option agreement for school properties was sold with a capital gain of SEK 8M.
Diluted equity per share at the end of the year was SEK 29.14, compared to SEK 28.02 at year-end 2007.
Consolidated operating profit including discontinued operations for the full year was SEK 859M (986). Consolidated operating profit in continuing operations for the year amounted to SEK 66M (154) and includes exit gains of SEK 8M (123). Of total operating profit, SEK 42M (71) was attributable to profit in the existing subsidiaries, where the comparative figure refers to continuing operations. The remainder consists of the Parent Company's administrative expenses and group adjustments, as well as shares in profit of associates. Consolidated profit after financial items in continuing operations was SEK 141M (219).
Equity at the end of the period amounted to SEK 2,481M (2,754) and the equity/assets ratio was 83 per cent (74). Diluted equity per share was SEK 29.56 (29.54). At 31 December 2008 the Group had a reported net loan receivable of SEK 1,892M (1,514), which consisted of interest-bearing assets of SEK 2,085M (1,871) and interest-bearing liabilities of SEK 193M (357).
The Bure Group had preliminary loss carryforwards of approximately SEK 650M at the end of the year. Of this amount, around SEK 390M refers to the Parent Company and can be offset against taxable profits in certain wholly owned subsidiaries. Since Bure's status as an investment company ceased during the year, tax income that is preliminarily estimated at SEK 20M has reduced the Group's loss carryforwards in a corresponding amount. In addition, the loss carryforwards decreased by SEK 276M in connection with the sale of Anew Learning. Total deferred tax assets in the Group at year-end 2008, based on unutilised loss carryforwards, has been valued at SEK 31M, which corresponds to SEK 112M of the total loss carryforwards of SEK 650M.
The Group currently conducts no research and development activities. R&D expenses have been charged to profit in an amount of SEK 0M (0).
The Parent Company conducts no operations that require permits according to the Swedish Environmental Code. The subsidiary Textilia conducted operations with reporting requirements according to the Swedish Environmental Code SNI 93,01-1. Bure sold Textilia in August 2008.
Information about the average number of employees, salaries and benefits of senior executives is shown in Notes 24, 25 and 36.
Bure's Board of Directors has consisted of five members. The composition of the Board and information about the Board members and President is presented in the corporate governance report for 2008. The Parent Company's CFO Jonas Alfredson has served as Board Secretary during the year. The work of the Board of Directors is governed by a procedural plan that was most recently adopted at the statutory meeting on 23 April 2008. The work of the Board follows a yearly plan with fixed decision points that is adopted every year in connection with the statutory meeting. The Board normally holds six meetings during the year, and meets more frequently when required. In the past financial year the Board held 27 meetings, consisting of 7 scheduled meetings and 20 extra meetings, of which 8 were held per capsulam. The Board formed a quorum at all meetings. Board members Björn Björnsson and Ann-Sofi Lodin were each absent from one scheduled meeting.
Among other things, the procedural plan contains instructions regarding the division of responsibilities between the Board, the Chairman, the President and the Board's committees. According to the procedural plan, the Board is responsible for the company's organisation and management of the company's affairs. The Board continuously monitors the financial situation of the company and the Group, which is reported on a monthly basis so that the Board is able to meet the monitoring obligations required by law, the stock exchange's Rules
for Issuers rules and good board practice. The procedural plan states that the Board must decide on matters that are not part of operating activities or that are of major importance, such as material financial commitments and agreements, as well as any significant changes in the organisation. Every year, Bure's Board of Directors establishes and documents the company's goals and strategies and discusses marketing, strategy and budgetary issues. The Board determines the company's finance policy, right of authorisation and decision-making process. The Board has formulated special instructions regarding the responsibilities and powers of Bure's President and Vice President. Furthermore, the Board has drawn up special reporting instructions for the Executive Management.
Twice a year, the company's auditors attend a Board meeting to report on the year's audit and their evaluation of the company's internal control. The auditors report their observations from the annual audit directly to the Board of Directors. Once a year, the auditors meet with the Board without the presence of any member of the Executive Management.
In 2008 the Board of Directors of Bure Equity AB was paid total fees of SEK 990,000, of which the Chairman received SEK 350,000. Special fees SEK 51,350 have been paid for work on the Board's committees.
The Board's procedural plan contains instructions regarding the compensation committee and the audit committee. The work of both committees is performed by the Board as a whole. The compensation committee discusses and decides on matters relating to remuneration in the form of salary, pensions and bonuses or other terms of employment for the President and staff reporting directly to the President. According to the customary procedure, the proposed principles for compensation to the President and Executive Management will be put before the 2009 AGM for decision. At present, there are no outstanding share or share-price related incentive schemes for the Executive Management or Board of the Parent Company. The role of the audit committee is to continuously support the Board in matters relating to accounting, internal control and auditing of the annual accounts and interim reports.
Bure's Articles of Association contain provisions regarding election of Board members. A nominating committee has been appointed according to the instructions adopted by Bure's 2008 AGM. For more information about the work of the nominating committee, see page 60.
In 2008 Bure repurchased 9,309,957 shares for a total of SEK 369M. All of the repurchased shares have been cancelled according to the decision of the AGM. The 2008 AGM resolved to pay a dividend of SEK 1 per share, equal to a total distribution of SEK 93M. In November the entire holding in AcadeMedia was distributed to Bure's shareholders for a total value of SEK 717M, or SEK 8.55 per share. For every
10 shares in Bure, the shareholders received one share in AcadeMedia. A total of 8,391,468 shares in AcadeMedia were distributed to the shareholders.
In December Bure decided to carry out a voluntary share redemption procedure for a total of SEK 1,007M. For each share in the Bure, the shareholders received one redemption right. Five redemption rights entitled the holder to redeem two shares for a cash amount of SEK 30 each.
| Total capital distributed through February 2009 | 2,186 |
|---|---|
| Voluntary redemption procedure, decided by EGM in Dec. 2008 | 1,007 |
| Total capital distributed in 2008 | 1,179 |
| Distribution of shares in AcadeMedia | 717 |
| Repurchase of shares | 369 |
| Cash dividend, by decision of the AGM | 93 |
The redemption procedure was completed in February 2009 with an outcome equal to 100 per cent of the decided amount.
The current climate of financial unrest in the market is creating widespread uncertainty about future development. In light of high volatility in the financial markets, there is a special emphasis on monitoring the effects of Bure's investments and their valuations. Valuation of the holdings is of decisive importance to the Parent Company.
Sources of uncertainty are the expected level of future earnings and the return requirement, which is determined on the basis of several different parameters. The strong financial position in the Parent Company and restrictive indebtedness in the portfolio companies have given Bure a limited level of risk.
Furthermore, a former President of Bure's subsidiary Mercuri has lodged a claim of SEK 63M pertaining to value development in the company. See also Note 23 for contingent liabilities.
The Bure Group is exposed to a number of different financial risks – currency risk, interest rate risk and general liquidity risk. Bure's overall risk objectives are regulated in the Parent Company's finance policy. Because the subsidiaries are mutually autonomous, each has adopted its own separate finance policy. A more detailed description of financial risk management is provided in Note 26, Financial Instruments.
Bure's results are affected by a number of factors. Those described here should be seen only as indications, and do not to any extent include compensatory measures that can be taken in response to specific events. Bure's sensitivity to financial factors can be broken down into interest rate sensitivity and currency sensitivity. A one per cent change in the interest rate would have a short-term effect of around SEK +/- 9M on reported profit in the Group and SEK +/- 9M in the Parent Company. Sensitivity to different currencies is deemed limited. The most important currency, apart from the Swedish krona, is the euro. A five per cent change in the euro exchange rate would have an estimated effect on profit of less than SEK 2M. The estimated effect on profit of a change in Bure's sales varies, depending on the company to which the change relates. In most of the companies, the short-term marginal effect of a change in sales is fairly high (50 per cent is not unusual), whether an increase or a decrease. This naturally depends on the reason for the change in sales. For example, there is a large difference between a volume effect and a price effect.
Bure is listed on the NASDAQ OMX Nordic Exchange, Stockholm, in the Mid Cap segment. At year-end 2008 Bure had 18,000 shareholders.
| % | |
|---|---|
| Skanditek | 19.9 |
| Catella Fonder | 14.3 |
| Nordea Fonder | 5.9 |
| Eikos | 4.6 |
| SEB Fonder | 2.5 |
| Lannebo Fonder | 2.3 |
| Swedbank | 1.9 |
| Skandia Fonder | 1.7 |
| JP Morgan Bank | 1.5 |
| Andra AP-fonden | 1.0 |
| Total | 55.6 |
The Articles of Association contain no limitations on the right to transfer shares nor, to the Board of Directors' knowledge, is the company party to an significant agreements that will have any impact, be altered or cease to apply if control over the company changes as a result of a public tender offer.
Bure's share capital on 31 December 2008 amounted to SEK 300.1M and was divided between 83,914,680 shares, which corresponds to a quota value of approximately SEK 3.58 each. The redemption procedure was completed after the end of the financial year and resulted in the redemption of 33,565,872 shares. The number of shares outstanding in Bure thereafter is 50,348,808, equal to a quota value of approximately SEK 5.96 each. All issued shares in Bure are of the same class, carry equal voting rights and grant equal entitlement to the company's assets and profits. There are no outstanding warrant or option programmes in Bure with a dilutive effect.
In 2008 Bure repurchased treasury shares for a total of SEK 369M, equal to 9,309,957 shares. All shares repurchased during the year, and those held in treasury at the beginning of the year, have been cancelled by the decision of the AGM. Bure held no treasury shares at the end of the year. On average, Bure's holding of treasury shares has amounted to 3,366,263 shares.
Bure's financials
The Board intends to propose that Bure's AGM approve unchanged principles for salary and other terms of remuneration for senior executives. These principles were most recently adopted by the AGM on 23 April 2008 and are as follows:
The ability to pay a market-based level of remuneration to the company's senior executives is of strategic importance for Bure. The remuneration system should offer competitive terms in an industry with fierce competition for qualified manpower and at the same time enable Bure to retain key employees.
The Board's proposal for resolution regarding principles for remuneration and other terms of employment for senior executives contains the following main points.
Bure shall offer a total compensation package that is marketbased and enables the Company to recruit and retain the top senior executives. Remuneration to senior executives shall consist of fixed salary, variable remuneration, pension and other forms of compensation. Together, these form parts of the individual's overall compensation. In order to encourage key personnel to align their long-term objectives with those of Bure's shareholders, these individuals shall be offered incentives in the form of share-based instruments, in addition to salary, pension and other forms of compensation.
Fixed salary shall take into account the individual's areas of responsibility and experience, and shall be reviewed yearly. Variable remuneration shall be based on simple and transparent models and shall generally not exceed fixed salary. Pension terms shall be comparable to those applicable to equivalent senior executives in the market, and shall be based on defined contribution pension solutions. The combined amount of termination benefits and severance pay shall not exceed 24 monthly salaries for the CEO, or 18 monthly salaries for other senior executives.
The details regarding the parameters for determining the amount of variable remuneration are established every year by the Board of Directors (if applicable, through the compensation committee). These parameters must be well balanced and consistent with the overall interests of the shareholders.
These principles apply to the company's President, Vice President and CFO. The principles also provide guidance for Bure's actions as owner in the portfolio companies with regard to senior executives in these companies.
The beginning of 2009 has been marked by continued financial unrest and a global economic downturn. At present, it is difficult to predict both how deep the recession will be and how long it will last. The focus in the portfolio companies will be on measures to enhance profitability. Despite this, we look to the future with confidence. In view of the strong financial position of both the Group and the Parent Company, we see potential to capitalise on business opportunities arising in the wake of the current financial turbulence. Due to the nature of its operations, Bure's does not issue forecasts.
Bure, together with Altor Equity, has signed an agreement with the Swedish National Debt Office to acquire Carnegie Investment Bank. The purchase price for all of Carnegie amounts to SEK 1,402M plus an additional payment of at least SEK 250M for recovered loans. Carnegie will be acquired via a holding company in which Bure owns 35 per cent and Altor owns 65 per cent. Bure's share of the purchase price for Carnegie will thus be SEK 491M, of which SEK 184M plus interest will be paid by April 2010 at the latest. In addition, Bure's share of the purchase price for recovered loans will amount to at least SEK 88M. The intention is for a wide group of executives in Carnegie to become co-owners in the company, in which case Bure's investment will decrease over time.
Bure, together with Altor Equity, has signed an agreement with the Swedish National Debt Office to acquire Max Matthiessen. The purchase price for Max Matthiessen amounts to SEK 400M plus dividends of SEK 100M to the Debt Office. As in the acquisition of Carnegie, Max Matthiessen will be acquired via a holding company in which Bure owns 35 per cent and Altor owns 65 per cent. Accordingly, Bure's share of the purchase price for Max Matthiessen will be SEK 140M, of which SEK 53M plus interest will be paid by April 2010 at the latest. The intention is for key employees in Max Matthiessen to become co-owners in the company, in which case Bure's investment will decrease over time. Both of the above acquisitions are expected to be completed at the end of April 2009.
The company's annual report will be submitted for adoption by the Annual General Meeting on 28 April 2009. The following funds are at the disposal of the Annual General Meeting according to the Parent Company's balance sheet:
| SEK 2,145,112,092 | |
|---|---|
| Profit for the year | SEK 1,019,174,509 |
| Retained profit | SEK 1,125,937,583 |
The Board proposes that the profit be distributed as follows:
To be carried forward SEK 2,145,112,092
In February 2009, after the end of the financial year, Bure completed the voluntary redemption procedure that was resolved on by the Extraordinary General Meeting in December 2008. The outcome was equal to 100 per cent of the decided redemption amount. Disposable profits after completion of the redemption procedure amount to SEK 1,138,135,192.
The Board currently has authorisation to repurchase shares amounting to no more than 10 per cent of all outstanding shares in the company. The Board will propose that the 2009 AGM grant the Board a new authorisation to repurchase and transfer shares amounting to no more than 10 per cent of all outstanding shares in the company during the period until the 2010 AGM.
The undersigned certify that the consolidated financial statements and the annual report have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use in the European Union, and with the application of generally accepted accounting principles, and give a true and fair view of the financial position and results of the Group and the Parent Company, and that the administration report gives a true and fair view of the development of operations, financial position and results of the Group and the Parent Company and describes the significant risks and uncertainties to which the Group companies are exposed.
Göteborg, 19 February 2009
Patrik Tigerschiöld Björn Björnsson Håkan Larsson Chairman Board member Board member
Ann-Sofi Lodin Kjell Duveblad Martin Henricson Board member Board member President & CEO
Our audit report was submitted on 19 February 2009 Ernst & Young AB
Staffan Landén Authorised Public Accountant
| Group | |||
|---|---|---|---|
| SEK M | Note | 2008 | 2007 |
| Operating income | |||
| Net sales | 2 | 1,096.6 | 1,013.2 |
| Exit gains | 3 | 8.5 | 122.8 |
| Exit losses | 3 | -0.8 | – |
| Other operating income | 19.1 | 4.7 | |
| Shares in profit/loss of associates | 4 | 3.0 | -0.1 |
| Total operating income | 1,126.4 | 1,140.6 | |
| Operating expenses | |||
| Goods for resale | -22.6 | -11.5 | |
| Other external expenses | 8, 9, 19 | -333.3 | -309.4 |
| Personnel costs | 25, 36 | -712.7 | -647.1 |
| Depreciation, amortisation and impairment | 10, 11, 12, 13, 14 | -38.0 | -14.4 |
| Reversal of previously recognised impairment losses in investing activities | 12 | 61.7 | – |
| Other operating expenses | -15.7 | -3.8 | |
| Total operating expenses | -1,060.6 | -986.2 | |
| Operating profit | 65.8 | 154.4 | |
| Interest income and similar profit/loss items | 6 | 91.8 | 80.7 |
| Interest expenses and similar profit/loss items | 6 | -17.1 | -11.8 |
| Profit after financial items | 140.5 | 223.3 | |
| Income tax expense | 7 | -26.9 | 34.5 |
| Profit from continuing operations | 113.6 | 257.8 | |
| Profit from discontinued operations | 29 | 769.0 | 789.3 |
| Profit for the year | 882.6 | 1,047.1 | |
| Profit attributable to minority interests | 0.6 | 0.2 | |
| Profit attributable to equity holders of the Parent Company | 882.0 | 1,046.9 | |
| Total profit for the year | 882.6 | 1,047.1 | |
| Average number of shares, thousands | 27 | 89,782 | 84,465 |
| Average number of shares after dilution, thousands | 27 | 89,782 | 107,782 |
| – attributable to equity holders of the Parent Company in continuing operations | 1.26 | 3.05 | |
| – attributable to equity holders of the Parent Company in discontinued operations | 29 | 8.56 | 9.34 |
| Basic earnings per share, SEK | 9.82 | 12.39 | |
| – attributable to equity holders of the Parent Company in continuing operations | 1.26 | 2.39 | |
| – attributable to equity holders of the Parent Company in discontinued operations | 29 | 8.56 | 7.32 |
| Diluted earnings per share, SEK | 9.82 | 9.71 |
| Group | |||
|---|---|---|---|
| SEK M | Note | 31 Dec 2008 | 31 Dec 2007 |
| NON-CURRENT ASSETS | |||
| Intangible assets | |||
| Patents, licenses, etc. | 10 | 4.9 | 10.9 |
| Goodwill | 11 | 453.5 | 766.9 |
| Total intangible assets | 458.4 | 777.8 | |
| Tangible assets | |||
| Buildings, land and land improvements | 12 | 8.5 | 17.7 |
| Plant and machinery | 13 | 0.0 | 74.3 |
| Equipment, tools, fixtures and fittings | 14 | 66.7 | 175.0 |
| Total tangible assets | 75.2 | 267.0 | |
| Financial assets | |||
| Participations in group companies | 16 | 16.0 | 212.7 |
| Available-for-sale financial assets | 17 | 2.9 | 0.3 |
| Other non-current receivables | 28.6 | 15.7 | |
| Deferred tax assets | 7 | 31.2 | 94.8 |
| Total financial assets | 78.7 | 323.5 | |
| Total non-current assets | 612.3 | 1,368.3 | |
| CURRENT ASSETS | |||
| Inventories, etc. | |||
| Raw materials and consumables | 0.8 | 0.6 | |
| Prepayments to suppliers | 0.1 | 0.5 | |
| Total inventories, etc. | 0.9 | 1.1 | |
| Current receivables | |||
| Trade receivables | 26 | 195.8 | 334.4 |
| Other current receivables | 67.9 | 139.2 | |
| Work in progress, less progress billings | 21.4 | 34.0 | |
| Current tax assets | 11.6 | 17.9 | |
| Accrued income | 18 | 26.2 | 35.8 |
| Total current receivables | 322.9 | 561.3 | |
| Short-term investments | 26 | 1,270.2 | 1,367.4 |
| Cash and cash equivalents | 788.7 | 448.7 | |
| Total current assets | 2,382.7 | 2,378.5 | |
| Non-current assets held for sale | 29 | 0.0 | 0.0 |
| TOTAL ASSETS | 2,995.0 | 3,746.8 |
| Group | |||
|---|---|---|---|
| SEK M | Note | 31 Dec 2008 | 31 Dec 2007 |
| EQUITY | |||
| Share capital | 300.1 | 842.1 | |
| Other contributed capital | 1,720.9 | 1,178.9 | |
| Other reserves | 50.3 | 12.9 | |
| Retained profit including profit for the year | 400.7 | 712.2 | |
| Total equity attributable to equity holders of the Parent Company | 2,472.1 | 2,746.2 | |
| Equity attributable to minority | 8.6 | 7.7 | |
| Total equity | 28 | 2,480.7 | 2,753.9 |
| LIABILITIES | |||
| Non-current liabilities | |||
| Deferred tax liability | 7, 19 | 28.7 | 28.2 |
| Provisions | 19 | 20.7 | 25.3 |
| Liabilities to credit institutions | 26 | 165.1 | 142.4 |
| Liabilities under finance leases | 26 | 0.3 | 81.4 |
| Other non-current liabilities | 0.0 | 50.5 | |
| Total non-current liabilities | 20 | 214.7 | 327.8 |
| of which, interest-bearing | 186.0 | 292.7 | |
| Current liabilities | |||
| Liabilities to credit institutions | 26 | 6.2 | 48.0 |
| Provisions | 19 | 3.0 | – |
| Prepayments from customers | 28.5 | 48.8 | |
| Trade payables | 49.3 | 145.0 | |
| Liabilities under finance leases | 26 | 0.2 | 14.3 |
| Current tax liabilities | 3.3 | 6.9 | |
| Other current liabilities | 58.8 | 105.6 | |
| Accrued expenses and deferred income | 21 | 150.3 | 296.5 |
| Total current liabilities | 299.6 | 665.1 | |
| of which, interest-bearing | 7.6 | 64.2 | |
| Total liabilities | 514.3 | 992.9 | |
| Liabilities directly connected to non-current assets held for sale | 29 | 0.0 | 0.0 |
| of which, interest-bearing | 0.0 | 0.0 | |
| TOTAL LIABILITIES | 514.3 | 992.9 | |
| Total equity and liabilities | 2,995.0 | 3,746.8 | |
| Pledged assets | 22 | 253.4 | 533.2 |
| Contingent liabilities | 23 | – | – |
| Parent Company | ||||
|---|---|---|---|---|
| SEK M | Note | 2008 | 2007 | |
| Operating income | ||||
| Investment operations | ||||
| Exit gains | 3 | 811.9 | 451.9 | |
| Dividends | 35 | – | 3.3 | |
| Reversal of previously recognised impairment losses | 5 | 170.0 | 201.7 | |
| 981.9 | 656.9 | |||
| Administrative expenses | ||||
| Personnel costs | 25, 36 | -27.2 | -21.6 | |
| Other external expenses | 8, 9, 33 | -10.7 | -15.9 | |
| Depreciation of tangible assets | 14 | -0.1 | -0.3 | |
| -38.0 | -37.8 | |||
| Operating profit before financial items | 943.9 | 619.1 | ||
| Financial income and expenses | ||||
| Interest income and similar profit/loss items | 6 | 77.4 | 67.5 | |
| Interest expenses and similar profit/loss items | 6 | -2.1 | -1.4 | |
| Operating profit after net financial items | 1,019.2 | 685.2 | ||
| Profit before tax | 1,019.2 | 685.2 | ||
| Income tax expense | 7 | – | – | |
| Profit for the year | 1,019.2 | 685.2 | ||
| Average number of shares, thousands | 89,782 | 84,465 | ||
| Average number of shares after dilution, thousands | 89,782 | 107,782 | ||
| Basic earnings per share, SEK | 27 | 11.35 | 8.11 | |
| Diluted earnings per share, SEK | 27 | 11.35 | 6.36 | |
| Proposed dividend per share, SEK | – | 1.00 |
| Parent Company | |||||
|---|---|---|---|---|---|
| SEK M | Note | 31 Dec 2008 | 31 Dec 2007 | ||
| NON-CURRENT ASSETS | |||||
| Tangible assets | |||||
| Equipment, tools, fixtures and fittings | 14 | 0.4 | 0.5 | ||
| Total tangible assets | 0.4 | 0.5 | |||
| Financial assets | |||||
| Participations in group companies | 15, 31, 32 | 583.1 | 911.5 | ||
| Participations in associated companies | 16, 34 | 8.5 | 193.6 | ||
| Other financial assets | 17 | 0.5 | 0.3 | ||
| Total financial assets | 592.1 | 1,105.4 | |||
| Other non-current assets | |||||
| Other non-current receivables | 18.9 | – | |||
| Total non-current assets | 611.4 | 1,105.9 | |||
| CURRENT ASSETS | |||||
| Current receivables | |||||
| Receivables from group companies | 43.5 | 121.7 | |||
| Other current receivables | 19.6 | 40.1 | |||
| Current tax assets | 1.2 | 1.2 | |||
| Prepaid expenses and accrued income | 18 | 8.8 | 2.6 | ||
| Total current receivables | 73.1 | 165.6 | |||
| Short-term investments | 26 | 1,190.1 | 1,331.3 | ||
| Cash and cash equivalents | 623.5 | 91.8 | |||
| Total current assets | 1,886.7 | 1,588.7 | |||
| TOTAL ASSETS | 2,498.1 | 2,694.5 |
| Parent Company | ||||
|---|---|---|---|---|
| SEK M | Note | 31 Dec 2008 | 31 Dec 2007 | |
| EQUITY | ||||
| Restricted equity | ||||
| Share capital | 300.1 | 842.1 | ||
| Statutory reserve | – | 671.4 | ||
| Total restricted equity | 300.1 | 1,513.5 | ||
| Non-restricted equity | ||||
| Retained profit | 1,125.9 | 413.8 | ||
| Profit for the year | 1,019.2 | 685.2 | ||
| Total non-restricted equity | 2,145.1 | 1,099.0 | ||
| Total equity | 28 | 2,445.2 | 2,612.4 | |
| LIABILITIES | ||||
| Current liabilities | ||||
| Trade payables | 0.9 | 2.9 | ||
| Liabilities to group companies | 35.3 | 65.5 | ||
| Other current liabilities | 0.7 | 1.0 | ||
| Accrued expenses and deferred income | 21 | 16.0 | 12.7 | |
| Total current liabilities | 52.9 | 82.1 | ||
| of which, interest-bearing | 28.4 | 25.8 | ||
| TOTAL LIABILITIES | 52.9 | 82.1 | ||
| Total equity and liabilities | 2,498.1 | 2,694.5 | ||
| Pledged assets | 22 | – | – | |
| Contingent liabilities | 23 | – | 72.9 |
| SEK M Group |
capital | Other Share contributed capital |
Reserves | Retained profit incl. profit for the year |
Minority share |
Total equity |
|---|---|---|---|---|---|---|
| Opening balance, 1 January 2007 | 471.9 | 1,178.9 | 47.7 | 1,031.3 | 7.0 | 2,736.8 |
| Translation diff. recognised in income statement | – | – | -1.0 | – | – | -1.0 |
| Translation difference | – | – | 15.9 | – | – | 15.9 |
| Provision to reserve for unrealised gains/losses | – | – | 50.1 | – | – | 50.1 |
| Reversal of reserve for unrealised gains/losses | – | – | -99.8 | – | – | -99.8 |
| Income/expense recognised directly in equity | – | – | -34.8 | – | – | -34.8 |
| Profit for the year according to income statement | – | – | 1,046.9 | 0.2 | 1,047.1 | |
| Profit for the year incl. items recog. directly in equity | – | – | -34.8 | 1,046.9 | 0.2 | 1,012.3 |
| Sale to (+)/acquisition from (-) minority | – | – | – | – | 2.9 | 2.9 |
| Sale of Cygate | – | – | – | – | -2.4 | -2.4 |
| Subscription for new shares | 368.5 | – | – | – | – | 368.5 |
| Bonus issue | 106.5 | – | – | -106.5 | – | – |
| Cancellation of treasury shares | -23.5 | – | – | 23.5 | – | – |
| Repurchase of shares | – | – | – | -301.7 | – | -301.7 |
| Repurchase of warrants | – | – | – | -490.2 | – | -490.2 |
| Completed redemption procedure | -81.3 | – | – | -488.2 | – | -569.5 |
| Costs of share issue and redemption procedure | – | – | – | -2.9 | – | -2.9 |
| Equity, 31 December 2007 | 842.1 | 1,178.9 | 12.9 | 712.2 | 7.7 | 2,753.9 |
| Opening balance, 1 January 2008 | 842.1 | 1,178.9 | 12.9 | 712.2 | 7.7 | 2,753.9 |
| Translation differences | – | – | 37.4 | – | -0.2 | 37.2 |
| Income/expense recognised directly in equity | – | – | 37.4 | – | -0.2 | 37.2 |
| Profit for the year according to income statement | – | – | – | 882.0 | 0.6 | 882.6 |
| Profit for the year incl. items recog. directly in equity | – | – | 37.4 | 882.0 | 0.4 | 919.8 |
| Sale to (+)/acquisition from (-) minority | – | – | – | -0.3 | 0.5 | 0.2 |
| Cash dividend (SEK 1 per share) | – | – | – | -92.6 | – | -92.6 |
| Repurchase of shares | – | – | – | -368.9 | – | -368.9 |
| Reduction of share capital | -542.0 | 542.0 | – | – | – | – |
| Cancellation of treasury shares | -77.4 | 77.4 | – | – | – | – |
| Bonus issue | 77.4 | -77.4 | – | – | – | – |
| Distribution of shareholdings | – | – | – | -717.5 | – | -717.5 |
| Costs of new share issue | – | – | – | -0.5 | – | -0.5 |
| Transactions with minority | – | – | – | -13.7 | – | -13.7 |
| Equity, 31 December 2008 | 300.1 | 1,720.9 | 50.3 | 400.7 | 8.6 | 2,480.7 |
See also Note 28 on page 53.
| Fair | Non | ||||
|---|---|---|---|---|---|
| SEK M Parent Company |
Share capital |
Statutory reserve |
value reserve |
restricted equity |
Total equity |
| Opening balance, 1 January 2007 | 471.9 | 671.4 | 49.7 | 1,742.6 | 2,935.6 |
| Change in fair value reserve | – | -49.7 | – | -49.7 | |
| Subscription for new shares | 368.5 | – | – | – | 368.5 |
| Bonus issue | 106.5 | – | – | -106.5 | – |
| Cancellation of treasury shares | -23.5 | – | – | 23.5 | – |
| Costs of redemption procedure | – | – | – | -2.9 | -2.9 |
| Repurchase of shares | – | – | – | -301.7 | -301.7 |
| Repurchase of warrants | – | – | – | -490.2 | -490.2 |
| Completed redemption procedure | -81.3 | – | – | -488.2 | -569.5 |
| Shareholder contributions paid/received | – | – | – | 37.0 | 37.0 |
| Total changes in equity not recognised | 370.2 | – | -49.7 | -1,328.9 | -1,008.4 |
| in the income statement | |||||
| Subtotal | 842.1 | 671.4 | – | 413.7 | 1,927.2 |
| Profit for the year | 685.2 | 685.2 | |||
| Equity, 31 December 2007 | 842.1 | 671.4 | – | 1,098.9 | 2,612.4 |
| Opening balance, 1 January 2008 | 842.1 | 671.4 | – | 1,098.9 | 2,612.4 |
| Reversal of share premium reserve | – | -87.9 | – | 87.9 | – |
| Reversal of statutory reserve | – | -583.5 | – | 583.5 | – |
| Reduction of share capital | -542.0 | – | – | 542.0 | – |
| Repurchase of shares | – | – | – | -368.9 | -368.9 |
| Cancellation of treasury shares | -77.4 | – | – | 77.4 | – |
| Bonus issue | 77.4 | – | – | -77.4 | – |
| Costs of redemption procedure | – | – | – | -0.5 | -0.5 |
| Cash dividend (SEK 1 per share) | – | – | – | -92.6 | -92.6 |
| Distribution of shareholdings | – | – | – | -717.5 | -717.5 |
| Shareholder contributions paid/received | – | – | – | -6.9 | -6.9 |
| Total changes in equity not recognised in the income statement |
-542.0 | -671.4 | – | 27.0 | -1,186.4 |
| Subtotal | 300.1 | – | – | 1,125.9 | 1,426.0 |
| Profit for the year | 1,019.2 | 1,019.2 | |||
| Equity, 31 December 2008 | 300.1 | – | – | 2,145.1 | 2,445.2 |
See also Note 28 on page 53.
| Parent Company | Group | |||||
|---|---|---|---|---|---|---|
| SEK M | Note | 2008 | 2007 | 2008 | 2007 | |
| Operating activities | ||||||
| Profit after financial items | 1,019.2 | 685.2 | 140.5 | 223.3 | ||
| Profit from discontinued operations | – | – | 793.3 | 822.6 | ||
| Depreciation/amortisation and impairments/reversals | -170.0 | -201.7 | 27.3 | 99.2 | ||
| Dividends received from associated companies | – | – | 0.1 | – | ||
| Shares in profit/loss of associated companies | – | – | -14.1 | -5.8 | ||
| Capital gains/losses from investing activities | 3 | -811.9 | -451.9 | -683.8 | -816.7 | |
| Other non-cash items, net | 0.3 | -12.2 | – | -12.3 | ||
| Paid tax | – | – | -23.5 | -25.4 | ||
| Cash flow from operating activities | ||||||
| before changes in working capital | 37.6 | 19.4 | 239.9 | 284.9 | ||
| Cash flow from changes in working capital | ||||||
| Change in inventories | – | – | -20.7 | -0.4 | ||
| Change in current receivables | 80.9 | -17.1 | -16.9 | -104.0 | ||
| Change in provisions | – | – | 14.3 | -5.0 | ||
| Change in current liabilities | -98.8 | -96.1 | 30.2 | 90.4 | ||
| Cash flow from changes in working capital | -17.9 | -113.2 | 6.9 | -19.0 | ||
| Cash flow from operating activities | 19.7 | -93.8 | 246.8 | 265.9 | ||
| Investing activities | ||||||
| Investments in subsidiaries | 15 | -36.7 | -25.0 | -101.1 | -71.2 | |
| Acquisition of other non-current assets | – | -0.1 | -140.6 | -78.4 | ||
| Acquisition of intangible assets | – | – | – | -8.5 | ||
| Investments in associated companies and other shares | -0.1 | -223.6 | 14.8 | -223.6 | ||
| Sale of subsidiaries | 15 | 696.2 | 812.7 | 692.6 | 582.6 | |
| Sale of associated companies and other shares | 9.6 | 770.0 | 18.0 | 796.5 | ||
| Cash flow from investing activities | 669.0 | 1,333.9 | 483.6 | 997.4 | ||
| Financing activities | ||||||
| Loans raised/amortisation of debt | 83.3 | – | -43.0 | -21.1 | ||
| Loans granted/recovery of receivables | 3.2 | – | 3.9 | 4.9 | ||
| Shareholder contributions paid/received | 80.3 | – | – | – | ||
| New share issue | – | 368.5 | – | 368.5 | ||
| Completion of redemption procedure incl. transaction costs | -0.5 | -572.1 | -0.5 | -572.1 | ||
| Repurchase of shares and warrants | -368.9 | -791.9 | -368.9 | -791.9 | ||
| Selling expenses for divested companies | -3.0 | – | – | – | ||
| Capital distribution to the shareholders | -92.6 | – | -92.6 | – | ||
| Payments to minority | – | – | 0.3 | 1.4 | ||
| Cash flow from financing activities | -298.2 | -995.5 | -500.8 | -1,010.3 | ||
| Cash flow for the year | 390.5 | 244.6 | 229.6 | 253.0 | ||
| Cash and cash equivalents at beginning of year | 1,423.1 | 1,166.3 | 1,816.1 | 1,546.7 | ||
| Exchange difference, cash and cash equivalents/value change in hedge funds |
26 | – | 12.2 | 13.2 | 16.4 | |
| Cash and cash equivalents at end of year | 1,813.6 | 1,423.1 | 2,058.9 | 1,816.1 | ||
| Interest paid | -0.7 | -1.4 | -13.9 | -24.4 | ||
| Interest received | 84.5 | 53.6 | 88.9 | 66.3 |
Cash and cash equivalents, the change in which is explained in the cash fl ow statement, also includes short-term investments with a time to maturity of up to three months. Blocked bank accounts in continuing operations in the Group are included in cash and cash equivalents in an amount of SEK 0.0M (5.2). Short-term investments amount to SEK 1,190.1M (1,331.3) in the Parent Company and SEK 1,270.2M (1,367.4) in the Group.
Bure Equity AB (publ), corp. identification no. 556454-8781, domiciled in Göteborg. The address of the head office is Mässans Gata 8, Göteborg, Sweden. The Parent Company is quoted on the NASDAQ OMX Nordic Exchange Stockholm, Mid Cap segment.
These consolidated financial statements were approved by the Board for publication on 19 February 2009.
The consolidated financial statements of the Bure Group are presented in compliance with the International Financial Reporting Standards (IFRS) as endorsed for application in the EU. In addition to IFRS, the Swedish Financial Reporting Board's recommendation RFR 1.1 (Supplementary Accounting Rules for Groups) is applied.
The consolidated financial statements have been prepared according to the purchase method aside from financial assets available for sale and financial assets and liabilities measured at fair value through profit or loss. The preparation of financial statements according to IFRS requires the management to make estimates and assumptions in application of the company's accounting policies. Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 11, and comments are provided in a separate section of the accounting policies.
The consolidated financial statements are presented according to IAS 27, Consolidated and Separate Financial Statements, and with the application of the purchase method as stated in IFRS 3, Business Combinations. The consolidated financial statements include the Parent Company and all companies in which the Parent Company has a controlling influence, normally comprising companies in which Bure directly or indirectly holds more than 50 per cent of the voting rights. Companies acquired during the year are consolidated from the date of acquisition. Companies sold during the year are consolidated until the date of sale. Consolidation of associated companies is carried out according to IAS 28, Investments in Associates. Associated companies are reported according to the equity method, and refer to companies in which Bure holds between 20 and 50 per cent of the votes or otherwise has a significant influence. Under the equity method, the Group's book value for the investment in the associated company, plus the Group's share in profit/loss of the associated company less dividends received, is recognised in the consolidated balance sheet within "Shares in equity of associated companies". In the consolidated income statement, "Shares in profit/loss of associated companies" comprises Bure's share in the net profit/loss of associated companies less any impairment losses on surplus values. Impairment losses on surplus are recognised when indicated and the values are tested for impairment on a regular basis. Bure's share in the changes in equity reported by associated companies is recognised in the statement of changes in equity.
Items included in the financial statements of the Group's subsidiaries are measured using the currency of the primary economic environment in which the subsidiary operates (the functional currency). The consolidated financial statements are presented in million Swedish kronor (SEK M), which is the functional and presentation currency of the Parent Company. Transactions in foreign currencies are translated to the functional currency at the rate of exchange ruling on the transaction date. Foreign exchange gains/losses arising on payment of such transactions and on translation of monetary assets and liabilities denominated in foreign currency at the closing day rate of exchange are recognised in profit or loss. Translation differences on non-monetary items, such as shares classified as available-for-sale financial assets, are taken to the fair value reserve in equity. Goodwill and fair value adjustments arising on acquisition of foreign operations are treated as assets and liabilities of such operations, and are translated to SEK at the closing day rate of exchange. The accounts of foreign operations are translated according to the current method, whereby all assets and liabilities are translated at the closing day rate of exchange and all items in the income statement are translated at the average rate during the year. Any translation differences that arise are recognised directly as a separate component of equity. Goodwill and negative goodwill arising in an acquisition analysis with respect to net assets in foreign currency are translated at the current rate. In cases where the investment in a foreign subsidiary is hedged through borrowing in foreign currency, any translation differences arising on the loan are recognised directly in equity to the extent that they are matched by translation differences attributable to the foreign subsidiary.
Business combinations are reported according to the purchase method, whereby the fair value of net assets in the acquired operation is determined at the acquisition date. These fair values also include the share in net assets attributable to any remaining minority interests in the acquired operation. Identifiable net assets also consist of assets, liabilities and provisions including commitments to and claims from outside parties that are not recognised in the balance sheet of the acquired operation. No provisions are made for planned restructuring measures resulting from the acquisition. The difference between the fair value of consideration given and the fair value of net assets acquired is goodwill, and is recognised as an intangible asset in the balance sheet. Each intangible asset (except for goodwill) is amortised on a straight-line basis over its estimated life, unless the useful life is indefinite. An intangible asset is assessed to have an indefinite life if there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the company. The useful life of goodwill is generally assumed to be indefinite.
Goodwill attributable to acquired subsidiaries is recognised as a fixed asset and is tested for impairment at least two times per year. Impairment testing is carried out according to the following procedure:
Goodwill identified on the date of acquisition is allocated to cash-generating units which are expected to be added through synergy effects arising from the acquisition. Assets and liabilities already existing in the Group on the acquisition date may also be allocated to these cash-generating units. Each such cash flow to which goodwill is allocated corresponds to the lowest level of the Group at which goodwill is monitored by the company's management, and does not represent any large unit of the Group other than a segment. If the recoverable amount of a cash-generating unit falls below its carrying amount, a writedown (impairment loss) is recognised in the income statement. The cash-generating units are companies, which are also classified as the primary business segment.
The historical cost of intangible assets is capitalised when the cost can be measured reliably and it is probable that the future
economic benefits attributable to the asset will flow to the Bure Group. The Group conducts limited research and development activities.
Tangible assets are recognised at historical cost less accumulated depreciation according to plan. Depreciation is calculated on the depreciable amount, normally comprising cost less any estimated residual value at the end of the useful life. Depreciation is carried out on a straight-line basis over the estimated useful life of the asset. Because Bure has subsidiaries whose operations differ widely, it is not practicable to establish general rules for depreciation.
In accordance with IAS 17 Leases, finance leases are recognised as fixed assets or financial liabilities in the consolidated balance sheet. The lease payments are reported in the consolidated income statement within depreciation of the leased asset and within interest expense as if the asset had been acquired directly. Certain minor finance leases are reported as operating leases. For operating leases, the lease payments are recognised in profit/loss for the period in which they arise. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incident to owner ship to the lessee. A lease is classified as an operating lease if it does not substantially transfer these risks and rewards to the lessee.
The Bure Group classifies its financial instruments in the following categories:
Assets in this category are recognised as current assets and are measured at fair value in the income statement. Bure's holdings in hedge funds are designated to this category, since these are part of Bure's investment strategy according to the established finance policy. Spot purchases or sales of fund participations are recognised on the transaction date.
Financial liabilities measured at amortised cost: These liabilities are recognised after deduction of any transaction costs. This category includes liabilities under finance leases, loans with fixed and variable interest, and trade payables. Liabilities with an expected maturity of less than 12 months are recognised as current, in other case as non-current.
At each balance sheet date, the management conducts a review to look for objective evidence that a financial asset may be impaired. For shares classified as available-for-sale assets, only a significant and permanent decrease in fair value below historical cost constitutes an indication of impairment. The difference between fair value and historical cost is then transferred from equity and recognised as a loss in the income statement. Reversals of previously recognised impairment losses on own equity instruments (shares) are not recognised as income in the income statement.
The Bure Group is exposed to a number of different financial risks – currency risk, interest rate risk and general liquidity risk. Bure's overall risk objective is regulated in the Parent Company's finance policy. Because the subsidiaries are mutually autonomous, each has adopted its own separate finance policy. A more detailed description of financial risk management is provided in Note 26, Financial Instruments.
Inventories are stated at the lower of cost and fair value. A deduction has been made for estimated actual obsolescence.
Exchange gains and losses on financial receivables and liabilities are reported among financial items. Exchange gains and losses on operating receivables and liabilities are reported in operating profit/loss.
Commitments which pertain to the financial year and which on closing day were considered likely to occur, but for which the amount or date of payment was uncertain, are reported as provisions within "Liabilities" in the consolidated balance sheet.
Revenue is recognised in accordance with IAS 18, Revenue. Revenue arising from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Income from the sale of services is recognised when it can be measured reliability, when it is probable that the economic benefits associated with the transaction will flow to the company and when the expenses expected to arise as a result of the transaction can be measured reliably. Revenue from contracts is recognised when the total income and expenses in a completed project can be measured reliability and it is probable that the economic benefits associated with the transaction will flow to the company. The stage of completion of a contract is determined by comparing the proportion of contract costs incurred to date with the estimated total contract costs, at the same time that an assessment is made to determine whether the actual contract costs are consistent with the anticipated costs. In accordance with the rules on the percentage of completion method in IAS 18, estimated revenue for work in progress less progress billings is recognised under the heading "Receivables". In cases where the progress billings exceed costs incurred, these are recognised under the heading "Liabilities" as prepayments from customers.
Borrowing costs and are expensed in the period in which they are incurred.
The equity portion of untaxed reserves is included in retained profit. The tax component of untaxed reserves is recognised as a tax liability within non-current liabilities.
Minority interest is that portion of profit/loss and net assets in a partly owned subsidiary that is attributable to other shareholders. Minority interest in profit/loss is included in profit/loss of the Group and minority interest in net assets is included in equity in the consolidated balance sheet. Disclosure is made regarding the amount of each item that is attributable to equity holders in the Parent Company and to the minority. On acquisition of a minority interest where the cost of acquisition exceeds the fair value of acquired net assets, the difference is accounted for as goodwill. On the sale of shares to a minority where the purchase consideration received is less or greater than the recognised value of the sold share of net assets, a gain or loss arises that is recognised in the income statement.
Contributions payable under defined contribution pension plans are recognised as an expense in the period in which they arise. For 2008 these amounted to SEK 47.2M. Defined benefit pension obligations secured through insurance with Alecta have been reported as defined benefit, due to a lack of sufficient information for these to be reported as defined benefit plans. At year-end 2008, Alecta's collective funding ratio was 112 per cent. Aside from Alecta, there are defined benefit plans of insignificant scope in the Group.
A non-current asset/liability or disposal group for which the carrying amount will be recovered primarily through a sale and not through use is reported in a separate category in the balance sheet as "Non-current assets held for sale". A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale according to a co-ordinated plan and represents a separate major line of business or geographical area of operations. The application of IFRS 5 has had no other effect on the prior period financial reports than a change in presentation of the income statement, balance sheet and cash flow statement. This means that profit/loss after tax from discontinued operations is stated on a separate line in the income statement. Non-current assets held for sale/disposal groups where a decision to sell has been made and the sale is highly probable are disclosed separately in the balance sheet with related liabilities.
With regard to IAS 14, Segment Reporting, Bure has chosen companies as it primary segment and geographical markets as its secondary segment. This reflects how Bure managers, reports and monitors its business, and how the company is organised internally.
Deferred tax assets and liabilities are recognised when there is a loss carryforward or temporary difference between the carrying amounts and tax bases of assets and liabilities. Deferred tax assets relating to loss carryforwards are recognised to the extent that these can be offset against future taxable profits. The year's reported tax expense consists of tax payable on the year's taxable profit (actual tax) and deferred tax. Tax on shares in profit of associated companies is included in shares in profit/loss of associated companies.
In the Bure Group, share- and option-based programmes have been issued to senior executives in certain subsidiaries. These are reported in accordance with IFRS 2. The shares and options have been priced at fair market value on the date of grant, for which reason no benefit to the employee has arisen. Consequently, profit for the year was not affected by any expense for the programmes. In addition, one of the owners has issued options on parts of its holding in Bure to two senior executives in Bure.
Cash and cash equivalents refer to bank deposits and shortterm investments with a maturity of less than three months.
In preparing these financial statements, the Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are disclosed below:
The Group tests goodwill for impairment at least annually, according to the accounting policy described under "Goodwill" above. The recoverable amount has been determined through an estimation of value in use. These calculations require the use of certain estimates (see also Note 11, Goodwill).
The Group has substantial loss carryforwards which have been capitalised in certain cases. The estimates are based on future assumptions about earning ability, for which reason the actual outcome may different from these.
Certain parts of the Group apply the percentage of completion method for recognition of revenue from fixed-price service contracts. In the percentage of completion method, estimates are made determine the stage of completion of the projects on the balance sheet date. In cases where adjustments are made in the estimated revenue, costs and stage of completion of a project, a correction is made in the period when the circumstances become known to the company's management. A provision is made for loss risks in a project when the estimated cost of the project are expected to exceed contract revenue.
The applied accounting policies are the same as those used in the previous year with the exception of those shown below. In the past year the Group has applied the following EU endorsed new and changed standards and interpretations from IFRIC with effect from 1 January 2008.
The application of these standards and interpretations has not had any impact on the Group's profit or financial position, but has given rise to additional disclosure requirements, including updating of accounting policies in certain cases.
• IFRS 2 Share-based Payment (revised) – effective 1 January 2009
Bure's financials
* Expected to be approved by the EU in the first quarter of 2009
IFRS 8 – Operating Segments
IASB first published IFRS 8 in November 2006. Once effective, IFRS 8 will replace IAS 14 Segment Reporting. The new standard requires additional disclosures about the Group's operating segments, and replaces the earlier requirement to identify primary and secondary segments for the Group on the basis of business segments and geographical segments. For Bure this will not entail any change, since the operating segments determined according to IFRS 8 are the same as the reporting segments previously identified on the basis of IAS 14, i.e. companies. Disclosures in accordance with IFRS 8 are found in Note 2, including restated comparative figures.
The revised standard requires capitalisation of borrowing costs when these relate to assets that take a substantial period of time to get ready for use or sale. The revised IAS 23 is effective for annual periods starting on or after 1 January 2009.
The amendment to IFRS 1 allows first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The amendment to IAS 27 requires that all dividends from subsidiaries, jointly controlled entities, and associates be recognised as income in the separate financial statements of the investor. Both revisions are effective for annual periods beginning on or after 1 January 2009. The revision to IAS 27 must be applied prospectively. The new requirements affect only the Parent Company's separate financial statements, and have no impact on the consolidated financial statements.
The revised standards were published in January 2008 and are effective for annual periods beginning on or after 1 July 2009. IFRS 3 introduces a number of changes in measurement of business combinations completed after this date, which will affect the amount of reporting goodwill, reported profit or loss in the period of the acquisition and future reported profit or loss. IAS 27R requires that part disposals of shares in a subsidiary and purchases of shares held by non-controlling interests be accounted for as equity transactions. As a result, these transactions will no longer give rise to goodwill or lead to any gains or losses. Furthermore, IAS 27R changes the accounting for losses in subsidiaries, as well as loss of control of a subsidiary. The changes in IFRS 3R and IAS 27R will affect accounting for future business combinations, loss of control of a subsidiary and transactions with non-controlling interests. The revised standards may be applied earlier, but the Group does not intend to exercise this option.
Revised IAS 1 Presentation of Financial Statements
The revised standard is effective for annual periods beginning on or after 1 January 2009. The standard requires that changes in a company's equity resulting from transactions with owners be reported separately from non-owner changes. The presentation of changes in equity will contain only details relating to transactions with owners. Non-owner changes in equity will be presented on a separate line in the presentation of changes in equity. In addition, the standard introduces the "statement of comprehensive income" which shows all items of income and expense for a period, either in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). The revisions will primarily entail changes in the structure and the titles of the financial statements.
Unless otherwise stated, the Parent Company applies the same accounting policies as the Group, with the addition of the Swedish Financial Reporting Board's recommendation RFR 2.1 Accounting for Legal Entities. Any deviations between the policies applied by the Parent Company and the Group are a result of limitations in the scope for IFRS conformity in the Parent Company due to its application of the Swedish Annual Accounts Act. These deviations are specified below under "Financial assets" and "Income taxes".
Shares in unlisted subsidiaries and associated companies are measured in accordance with the purchase method. For un listed holdings, recoverable value is determined through ongoing cash flow and market value analyses. Fair value changes are determined through impairment testing after application of the valuation rules established by the Board.
Bure Equity previously had the tax status of an investment company, which among other things meant that exit gains/ losses were exempt from taxation and that a deduction was permitted for paid cash dividends. The 2008 AGM passed a strategic resolution to change the company's business orientation and as of 2008, Bure is no longer an investment company. As a result of the change of tax status, Bure has been subject to a dissolution tax corresponding to a standard tax credit of approximately SEK 20M, which has reduced the Group's loss carryforwards in a corresponding amount.
Positive and negative goodwill arising on consolidation has been attributed to the respective companies. Transactions between the various segments are insignificant in scope and amount to less than 0.1 per cent of total sales. Dormant companies or companies not classified as portfolio companies are reported under the heading "Other companies". For a description of the respective companies' operations, see pages 15–22.
| Other | Discontinued | Eliminations, | Parent | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SEK M | Mercuri EnergoRetea 2008 2007 2008 |
SRC | 2007 2008 2007 2008 2007 | companies | 2008 | operations 2007 |
etc. 2008 |
2007 2008 2007 2008 2007 | Company | TOTAL | ||||||
| Revenue Total revenue |
784 | 769 | 274 | 205 | 37 | 40 | 7 | 2 | -5 | -4 | 1,097 1,013 | |||||
| Shares in profi t | 3 | 3 | – | |||||||||||||
| Profit/loss | ||||||||||||||||
| Profi t/loss by segment |
6 | 58 | 21 | 10 | 1 | 3 | 1 | -2 | 6 | 34 | 70 | |||||
| Unallocated costs: | -38 | -38 | -38 | -38 | ||||||||||||
| Reversals/impairment losses in investing activities Dividends Exit gains/losses |
-1 | 15 | -108 -803 |
-202 -3 -344 |
170 812 |
202 3 452 |
62 – 8 |
0 0 123 |
||||||||
| Operating profit | 6 | 58 | 20 | 10 | 1 | 3 | 1 | 14 | – | – | -905 | -553 | 944 | 619 | 66 | 154 |
| Net fi nancial items The year's income tax expense |
75 -27 |
69 34 |
||||||||||||||
| Continuing operations | 114 | 258 | ||||||||||||||
| Profit from discontinued operations |
769 | 789 | ||||||||||||||
| Profit for the year | 883 1,047 | |||||||||||||||
| Other disclosures | ||||||||||||||||
| Assets Shares in equity |
683 4 |
647 4 |
212 | 235 | 21 | 25 | 215 | 168 | – | 1,010 8 |
-89 4 |
7 | -234 1,906 1,589 2,947 3,439 9 |
194 | 16 | 213 |
| Unallocated assets | 31 | 95 | ||||||||||||||
| Total assets | 2,995 3,747 | |||||||||||||||
| Liabilities | 196 | 206 | 67 | 41 | 9 | 10 | 52 | 17 | – | 417 | -89 | -83 | 53 | 82 | 287 | 690 |
| Unallocated liabilities | 227 | 303 | ||||||||||||||
| Total liabilities | 514 | 993 | ||||||||||||||
| Investments | 13 | 6 | 4 | 1 | 0 | 0 | 0 | 3 | 0 | 141 | 0 | -5 | 0 | 191 | 17 | 336 |
| Amortisation/depreciation | -9 | -9 | -3 | -3 | 0 | -1 | -6 | -2 | -42 | -78 | -6 | -6 | 0 | 0 | -66 | -99 |
| Rest of North |
Other | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Secondary segment | Sweden | Europe | America | Asia | markets | |||||
| 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |
| Sales by market | 430 | 360 | 611 | 604 | 20 | 18 | 31 | 27 | 5 | 4 |
| Assets by market | 2,461 | 3,533 | 508 | 96 | 10 | 104 | 15 | 2 | 1 | 12 |
| Investments by market | 6 | 331 | 10 | 2 | 0 | 3 | 0 | 0 | 1 | 0 |
Revenue
| Breakdown of revenue by type | Net sales | ||
|---|---|---|---|
| SEK M | 2008 | 2007 | |
| Sale of goods | 14 | 0 | |
| Service contracts | 1,052 | 983 | |
| Other sales | 31 | 30 | |
| Total sales in continuing operations | 1,097 | 1,013 | |
| Other revenue | 30 | 128 | |
| Total revenue in continuing operations | 1,127 | 1,141 | |
| Total revenue in discontinued operations | 1,876 | 2,335 | |
| Total revenue | 3,003 | 3,476 |
Total exit gains in the Group during 2008 amounted to SEK 683.8M (816.7), of which SEK 676.1M (693.9) is attributable to discontinued operations (refers to sale of Citat, Textilia, Anew Learning and AcadeMedia). In the Parent Company, total exit gains in 2008 amounted to SEK 811.9M (451.9). These gains are mainly attributable to the sale of Citat, SEK 124M, and the sale of Anew Learning in connection with the distribution of AcadeMedia, SEK 681M. Furthermore, the company has received option revenue of close to SEK 8M relating to properties in Vittra. The sale of the Textilia group generated a capital loss of SEK 2M after reversal of a previous impairment loss of SEK 170M. The final agreement for the sale of Carl Bro A/S led to a capital gain of SEK 1M.
| Group | ||||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | ||
| Celemi | 2.8 | -0.2 | ||
| Others | 0.2 | 0.1 | ||
| Total | 3.0 | -0.1 | ||
| Discontinued operations | 11.1 | 5.9 | ||
| Total shares in profit | 14.1 | 5.8 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Investing activities, impairment losses | |||||
| Total impairment losses | – | – | – | – | |
| Impairment losses in discontinued operations |
|||||
| -6.5 | – | – | – | ||
| Total impairment losses | -6.5 | – | – | – | |
| Investing activities, reversals | |||||
| Mercuri International Group | – | – | – | 114.0 | |
| CR&T Holding | – | – | – | 22.9 | |
| Länia (Textilia) | – | – | 170.0 | – | |
| Gårda Äldrevård Holding | – | – | – | 8.9 | |
| Sancera | – | – | – | 56.0 | |
| Total reversals | – | – | 170.0 | 201.7 | |
| Net impairment losses/ | |||||
| reversals | -6.5 | – | 170.0 | 201.7 |
The sale of the shares in Textilia in August 2008 provided scope for a reversal of SEK 170M in the semi-annual accounts.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Revenue from fi nancial assets at fair value through profi t or loss |
|||||
| -Fair value change in hedge fund -Dividends |
8.7 – |
13.0 1.6 |
3.6 5.1 |
11.0 1.2 |
|
| Dividends from AFS fi nancial assets |
– | 3.3 | – | – | |
| Option premiums received | – | 0.5 | – | 0.5 | |
| Capital gain on fi nancial items Exchange differences on fi nancial |
-0.4 | – | – | – | |
| receivables/liabilities | 4.0 | -0.4 | – | 0.3 | |
| Interest income Interest expense |
83.5 -21.1 |
62.7 -11.8 |
68.7 -2.1 |
54.5 -1.4 |
|
| Other fi nancial items | – | – | – | – | |
| Total interest and similar profit/loss items |
74.7 | 68.9 | 75.3 | 66.1 | |
| Discontinued operations | 0.1 | -9.0 | |||
| Total interest and similar | |||||
| profit/loss items Operating profi t includes exchange differences on operating receivables and liabilities in the following |
74.8 | 59.9 | |||
| amounts | 5.2 | -0.6 | – | – |
| Group | ||||||
|---|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | ||||
| Current tax | -13.3 | -12.6 | ||||
| Deferred tax | -13.6 | 47.1 | ||||
| Total | -26.9 | 34.5 | ||||
| Tax in discontinued operations | -24.3 | -33.3 |
| Items included in deferred tax SEK M |
2008 | Group 2007 |
|
|---|---|---|---|
| Deferred tax assets: Taxed defi cit |
31.2 | 94.8 | |
| Total | 31.2 | 94.8 | |
| Deferred tax liabilities: | |||
| Untaxed reserves Deferred tax attributable to goodwill on net assets Temporary differences |
4.8 24.4 -0.5 |
0 27.2 1.0 |
|
| Total | 28.7 | 28.2 | |
| Deferred tax, net | 2.5 | 66.6 | |
| Composition of tax expense Reported profi t before tax Effect of associated companies, net |
140.5 -3.0 |
223.3 0.1 |
|
| Reported profit before tax Tax according to the applicable tax rate, 28% |
137.5 -38.5 |
223.4 -62.6 |
|
| Tax effect of non-deductible expenses: Impairment losses on goodwill Other non-deductible expenses |
-4.3 -6.7 |
0 -3.8 |
|
| Tax effect of non-taxable income: Exit gains/losses Deductible tax items |
2.2 4.9 |
34.4 8.4 |
|
| Changed valuation of opening loss carryforwards Non-taxable reversal |
12.4 17.3 |
53.5 0 |
|
| Realised gain on capital investment Effect of uncapitalised loss carryforwards 2008 Effect of different tax rate in foreign country |
-4.1 -9.9 -0.9 |
0 0 0 |
|
| Adjustment in taxes for prior years Other |
-0.8 1.6 |
4.6 0 |
|
| -26.9 | 34.5 |
| At end of year | 2.5 | 66.6 |
|---|---|---|
| Recognised in the income statement | -13.6 | 47.1 |
| Translation differences | -0.4 | -1.5 |
| Reported in sold operations | -6.3 | -25.0 |
| Companies sold | -40.5 | 1.4 |
| Companies acquired | -3.3 | -2.1 |
| At beginning of year | 66.6 | 46.7 |
| Gross change in deferred tax | ||
Bure Equity previously had the tax status of an investment company, which among other things meant that exit gains/ losses were exempt from taxation and that a deduction was permitted for paid cash dividends. The 2008 AGM passed a strategic resolution to change the company's business orientation and as of 2008, Bure is no longer an investment company. As a result of the change of tax status, Bure has been subject to a dissolution tax corresponding to a standard tax credit of approximately SEK 20M, which has reduced the Group's loss carryforwards in a corresponding amount.
The Bure Group reported total deferred tax assets of SEK 31.2M in continuing operations, which is almost exclusively attributable to loss carryforwards in subsidiaries that are expected to be offset against future profits. Furthermore, there are loss carryforwards and temporary differences between carrying amounts and tax values amounting to SEK 538M, for which no deferred tax asset has been recognised since it is currently deemed unlikely that the loss carryforwards can be utilised against future profits in the Group. Of uncapitalised loss carryforwards, SEK 390M refers to the Parent Company. A limited portion of the Group's loss carryforwards is subject to expiration. This is not expected to affect the value of any capitalised loss carryforwards.
| Group | Parent Company | ||||||
|---|---|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |||
| The period's lease payments (operating) | |||||||
| Cars | 15.8 | 12.8 | 0.3 | 0.2 | |||
| Premises | 33.9 | 29.2 | 1.1 | 1.0 | |||
| Other equipment | 4.8 | 4.1 | 0.2 | 0.4 | |||
| Total | 54.5 | 46.1 | 1.6 | 1.6 | |||
| Group | Parent Company | ||||||
| Contracted lease payments | 2009 | 2010–2012 | > 2012 | 2009 | 2010–2012 | > 2012 | |
| Operating leases | |||||||
| Cars | 14.3 | 16.2 | 0.0 | 0.2 | 0.2 | – | |
| Premises | 35.5 | 102.8 | 15.2 | 0.6 | 1.1 | – | |
| Other equipment | 5.6 | 9.5 | 0.0 | 0.3 | 0.1 | – | |
| Total | 55.4 | 128.6 | 15.2 | 1.1 | 1.4 | – | |
| Finance leases | |||||||
| Cars | 0.9 | 0.2 | – | – | – | – | |
| Other equipment | 0.4 | 0.6 | – | – | – | – | |
| Total | 1.3 | 0.8 | – | – | – | – | |
| Interest | -0.1 | -0.1 | 0.0 | – | – | – | |
| Present value of future lease payments: | 1.2 | 0.7 | 0.0 | – | – | – |
The comparative information for 2007 for lease payments has been adjusted for discontinued operations (Citat, Textilia and Anew Learning).
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Fees to Ernst & Young | |||||
| Auditing fees | 2.9 | 2.7 | 0.6 | 0.5 | |
| Consulting fees | 2.5 | 1.2 | 1.8 | 0.5 | |
| Total fees to E & Y | 5.4 | 3.9 | 2.4 | 1.0 |
The comparative information for 2007 has been adjusted for discontinued operations (Citat, Textilia and Anew Learning).
| SEK M | Group Parent Company 2008 2007 |
|||
|---|---|---|---|---|
| 2008 | 2007 | |||
| Fees to other auditors | ||||
| Auditing fees | 0.1 | 0.2 | 0.0 | 0.0 |
| Consulting fees | 0.1 | 0.1 | 0.0 | 0.0 |
| Total fees to other auditors | 0.2 | 0.3 | 0.0 | 0.0 |
| Group | ||||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | ||
| Opening cost | 22.1 | 13.7 | ||
| The year's acquisitions | 1.4 | 8.4 | ||
| Sales/Reclassifi cations | -9.6 | -0.2 | ||
| Translation differences | 0.4 | 0.2 | ||
| Closing cost | 14.3 | 22.1 | ||
| Opening amortisation | -11.2 | -9.0 | ||
| The year's acquisitions | 0.0 | 0.0 | ||
| Sales/Reclassifi cations | 4.0 | 0.2 | ||
| The year's amortisation | -2.0 | -2.3 | ||
| Translation differences | -0.2 | -0.1 | ||
| Closing accumulated amortisation | -9.4 | -11.2 | ||
| Carrying amount | 4.9 | 10.9 |
R&D expenses of SEK 0.0M (0.0) were expensed during the year.
| Group | ||
|---|---|---|
| SEK M | 2008 | 2007 |
| Opening cost | 1,205.8 | 1,196.1 |
| The year's acquisitions | 25.1 | 79.6 |
| Sales/Reclassifi cations | -492.5 | -84.0 |
| Translation differences | 66.9 | 14.1 |
| Closing cost | 805.3 | 1 205.8 |
| Opening amortisation | -173.9 | -186.2 |
| Sales/Reclassifi cations | 66.3 | 13.3 |
| Translation differences | -14.3 | -1.0 |
| Closing accumulated amortisation | -121.8 | -173.9 |
| Group | ||
|---|---|---|
| SEK M | 2008 | 2007 |
| Opening impairment losses | -265.0 | -336.3 |
| Sales/Reclassifi cations | 67.9 | 71.3 |
| The year's impairment losses | -15.3 | – |
| Translation differences | -17.5 | – |
| Closing accumulated impairment losses | -229.9 | -265.0 |
| Carrying amount | 453.6 | 766.9 |
The recoverable amount of the Group's goodwill items is measured by determining value in use. These calculations are based on estimated future cash fl ows with consideration to fi nancial budgets approved by the company's management.
| Growth, % | EBITA, % | |||||
|---|---|---|---|---|---|---|
| Goodwill | Forecast period |
Terminal period |
Forecast period |
Terminal period |
Discount rate, %1 |
|
| Mercuri | 343.7 | 1–7 | 3 | 4–6 | 4 | 10 |
| EnergoRetea | 104.9 | 3–15 | 3 | 3–12 | 7–8 | 10 |
| SRC | 5.0 | -5–2 | 3 | 3–6 | 4 | 10 |
| Total | 453.6 |
Refers to discount rate before tax.
The above valuations do not represent fair market value, but are instead estimated in accordance with IAS 36 to determine the recoverable amount of cash-generating units. Based on the above, the goodwill values in the table can be considered well founded. The forecast period is between fi ve and ten years, and in cases where it exceeds fi ve years this refers to strategic acquired units with growth exceeding that for the general economy.
The recoverable amount exceeds the carrying amount by a wide margin. If, for example, the growth or EBITA assumption should change by one percentage point, there is still a margin for Bure's estimated value of goodwill.
The growth assumption is based on a combination of general economic assumptions and sector-specifi c assumptions.
| Group | ||
|---|---|---|
| SEK M | 2008 | 2007 |
| Opening cost | 96.8 | 97.2 |
| The year's acquisitions | 6.6 | – |
| Sales/Reclassifi cations | -90.1 | -0.7 |
| Translation differences | 1.1 | 0.3 |
| Closing cost | 14.4 | 96.8 |
| Opening amortisation | -17.4 | -15.5 |
| The year's acquisitions | -1.3 | – |
| Sales/Reclassifi cations | 14.6 | 0.2 |
| The year's depreciation | -1.1 | -1.9 |
| Translation differences | -0.7 | -0.2 |
| Closing accumulated amortisation | -5.9 | -17.4 |
| Opening impairment losses | -61.7 | -61.7 |
| Reversal of previous impairment losses | 61.7 | – |
| Closing accumulated impairment losses | 0.0 | -61.7 |
| Carrying amount | 8.5 | 17.7 |
| Tax assessment values, buildings | 2.9 | 51.6 |
| Carrying amount, buildings | 7.8 | 11.6 |
| Tax assessment values, land | 1.0 | 6.5 |
| Carrying amount, land | 0.7 | 6.1 |
Not all buildings have been assigned tax assessment values. The reported values include properties held under fi nance leases attributable to Textilia. Textilia was divested during 2008.
| Opening cost Sales/Reclassifi cations |
90.1 -90.1 |
90.1 – |
|---|---|---|
| Closing cost | 0.0 | 90.1 |
| Opening accumulated depreciation The year's depreciation Sales/Reclassifi cations |
-13.8 – 13.8 |
-12.1 -1.7 – |
| Closing accumulated amortisation | 0.0 | -13.8 |
| Opening accumulated impairment losses Reversal of previous impairment losses |
-61.7 61.7 |
-61.7 – |
| Closing accumulated impairment losses | 0.0 | -61.7 |
| Carrying amount | 0.0 | 14.6 |
There are no commitments for future property investments (SEK 0M).
| Group | ||||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | ||
| Opening cost | 128.6 | 122.7 | ||
| The year's acquisitions | – | 9.4 | ||
| The year's sales | -128.6 | -3.5 | ||
| Closing cost | 0.0 | 128.6 | ||
| Opening amortisation | -54.3 | -43.6 | ||
| Sales/Disposals | 62.9 | 3.1 | ||
| The year's depreciation | -8.6 | -13.8 | ||
| Closing accumulated amortisation | 0.0 | -54.3 | ||
| Carrying amount | 0.0 | 74.3 | ||
| The reported values include machinery held under fi nance leases in the following amounts: |
| 2008 | 2007 | |
|---|---|---|
| Opening cost | 38.6 | 38.6 |
| The year's sales | -38.6 | – |
| Closing cost | 0.0 | 38.6 |
| Opening accumulated depreciation | -15.2 | -10.4 |
| The year's sales | 17.6 | – |
| The year's depreciation | -2.4 | -4.8 |
| Closing accumulated depreciation | 0.0 | -15.2 |
| Carrying amount | 0.0 | 23.4 |
There are no future investment commitments for acquisition of machinery. The discontinued operations refer to Textilia.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Opening cost | 579.2 | 547.9 | 4.8 | 4.9 | |
| The year's acquisitions | 52.0 | 97.9 | 0.1 | 0.1 | |
| Sales/Reclassifi cations | -445.0 | -70.0 | – | -0.1 | |
| Translation differences | 10.0 | 3.4 | – | -0.1 | |
| Closing cost | 186.2 | 579.2 | 4.9 | 4.8 | |
| Opening amortisation | -404.2 | -368.7 | -4.3 | -4.1 | |
| The year's acquisitions | -3.9 | -19.7 | – | – | |
| Sales/Reclassifi cations | 307.4 | 66.3 | – | – | |
| The year's depreciation | -10.7 | -80.1 | -0.1 | -0.3 | |
| Translation differences | -7.7 | -2.0 | -0.1 | 0.1 | |
| Closing accumulated | |||||
| depreciation | -119.1 | -404.2 | -4.5 | -4.3 |
| Group | Parent Company | |||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 |
| Opening impairment losses | – | – | – | – |
| Sales/Reclassifi cations | – | – | – | – |
| The year's depreciation | -0.3 | – | – | – |
| Translation differences | -0.1 | – | – | – |
| Closing accumulated | ||||
| depreciation | -0.4 | 0.0 | – | – |
| Carrying amount | 66.7 | 175.0 | 0.4 | 0.5 |
The reported values include equipment held under fi nance leases in the following amounts:
| Group | ||
|---|---|---|
| SEK M | 2008 | 2007 |
| Opening cost | 62.0 | 62.2 |
| The year's acquisitions | 0.1 | 0.1 |
| Sales/Reclassifi cations | -60.8 | -0.4 |
| Translation differences | 0.0 | 0.1 |
| Closing cost | 1.3 | 62.0 |
| Opening amortisation | -50.1 | -30.0 |
| Sales/Reclassifi cations | 57.2 | -6.3 |
| The year's depreciation | -7.9 | -13.7 |
| Translation differences | -0.2 | -0.1 |
| Closing accumulated | ||
| depreciation | -1.0 | -50.1 |
| Carrying amount | 0.3 | 11.9 |
In 2008 the acquisition of group companies affected cash and cash equivalents in an amount of SEK 78M. The most signifi cant acquisitions were CLC Installationsconsult, Didaktus och UVS Gymnasium.
| SEK M | 2008 |
|---|---|
| Tangible assets | 6.0 |
| Current assets | 9.9 |
| Cash and cash equivalents | 10.2 |
| Total assets | 26.1 |
| Current liabilities | -12.4 |
| Total acquired net assets | 13.7 |
| Goodwill | 25.0 |
| Total purchase price | 38.7 |
| Purchase price paid in cash | 38.0 |
| Unsettled purchase price commitments | – |
| Direct costs arising from the acquisition | 0.7 |
| Effect on the Group's cash and cash equivalents: | |
| Purchase price paid in cash including direct costs | 38.7 |
| Cash and cash equivalents in acquired subsidiary | -10.2 |
| Effect on the Group's cash and cash equivalents, | |
| total net outflow | 28.5 |
| Didaktus | |
| Total value of acquired assets and assumed liabilities during |
the year
| SEK M | 2008 |
|---|---|
| Tangible assets | 6.0 |
| Current assets | 13.1 |
| Cash and cash equivalents | 5.2 |
| Total assets | 24.3 |
| Current liabilities | -21.9 |
| Total acquired net assets | 2.4 |
| Goodwill | 41.9 |
| Total purchase price | 44.3 |
| Purchase price paid in cash | 43.5 |
| Unsettled purchase price commitments | – |
| Direct costs arising from the acquisition | 0.8 |
| Effect on the Group's cash and cash equivalents: | |
| Purchase price paid in cash including direct costs | 44.3 |
| Cash and cash equivalents in acquired subsidiary | -5.2 |
| Effect on the Group's cash and cash equivalents, total net outflow |
39.1 |
| Total value of acquired assets and assumed liabilities during | |||
|---|---|---|---|
| the year: |
| SEK M | 2008 |
|---|---|
| Tangible assets | 1.8 |
| Current assets | 0.6 |
| Cash and cash equivalents | – |
| Total assets | 2.4 |
| Current liabilities | -3.6 |
| Total acquired net assets | -1.2 |
| Goodwill | 11.6 |
| Total purchase price | 10.4 |
| Purchase price paid in cash | 10.4 |
| Unsettled purchase price commitments | 1.6 |
| Direct costs arising from the acquisition | 0.1 |
| Effect on the Group's cash and cash equivalents: | |
| Purchase price paid in cash including direct costs | 10.4 |
| Cash and cash equivalents in acquired subsidiary | – |
Fair value corresponds to carrying amount in the specifi cation above. In the third quarter EnergoRetea acquired CLC Installations consult. The acquisition of CLC is intended to strengthen EnergoRetea's operations in southern Sweden with expertise in energy, HVAC and sanitation, control and fi re protection systems, cooling and electrical engineering. The acquisition will increase Bure's consolidated annual
In the second quarter Anew Learning acquired the Didaktus group and UVS Gymnasium, both of which operate independent schools. In the third quarter, Anew Learning was sold to AcadeMedia.
sales by approximately SEK 54M and profi t by around SEK 5M.
| SEK M | 2007 |
|---|---|
| Tangible assets | 8.8 |
| Financial assets | 0.1 |
| Current assets | 13.6 |
| Cash and cash equivalents | 14.8 |
| Total assets | 37.3 |
| Current liabilities | -24.1 |
| Total acquired net assets | 13.2 |
| Goodwill | 76.5 |
| Total purchase price | 89.7 |
| Purchase price paid in cash | 81.2 |
| Additional purchase price (settled in 2008) | 6.8 |
| Direct costs arising from the acquisition | 1.7 |
| Effect on the Group's cash and cash equivalents: | |
| Purchase price paid in cash including direct costs | 89.7 |
| Cash and cash equivalents in the acquired subsidiaries | -14.8 |
| Effect on the Group's cash and cash equivalents, total net outflow in 2007 and 2008 |
74.9 |
Anew Learning acquired Rytmus, Proteam, Fenestra and Primrose during 2007, at which time the purchase price allocations were stated as preliminary. The purchase price allocations were fi nalised during 2008 with no adjustments.
In the fourth quarter Bure sold the Anew Learning group, which has affected cash and cash equivalents in a total amount of SEK 274M.
Total value of sold assets and liabilities in Anew Learning:
| SEK M | 2008 |
|---|---|
| Intangible assets | 264.9 |
| Tangible assets | 46.3 |
| Current assets | 140.1 |
| Cash and cash equivalents | – |
| Liabilities | -204.5 |
| Capital gain | 563.9 |
| Total purchase price for Anew Learning | 810.7 |
|---|---|
| Cash and cash equivalents in divested subsidiary Purchase price in the form of shares in AcadeMedia |
– -536.3 |
| Effect on the Group's cash and cash equivalents, total net inflow |
274.4 |
In the third quarter Bure also sold the Textilia group, which has affected cash and cash equivalents in a total amount of SEK 145M.
| SEK M | 2008 |
|---|---|
| Tangible assets | 226.1 |
| Current assets | 58.5 |
| Cash and cash equivalents | 18.8 |
| Liabilities | -160.0 |
| Capital gain | 58.2 |
| Total purchase price for Textilia | 201.6 |
| Cash and cash equivalents in divested subsidiary | -18.8 |
| Unsettled purchase price commitments | -37.4 |
| Effect on the Group's cash and cash equivalents, | |
| total net inflow | 145.4 |
In the third quarter Bure sold the Citat group excluding SRC, which has affected cash and cash equivalents in a total amount of SEK 187M.
| SEK M | 2008 |
|---|---|
| Intangible assets | 125.4 |
| Tangible assets | 11.0 |
| Current assets | 101.2 |
| Cash and cash equivalents | 70.1 |
| Liabilities | -75.9 |
| Capital gain | 25.3 |
| Total purchase price for the Citat group | 257.1 |
| Cash and cash equivalents in the divested subsidiary | -70.1 |
| Effect on the Group's cash and cash equivalents, total net inflow |
187.0 |
In the first quarter Citat sold its holding in Appelberg Publishing Group, which affected cash and cash equivalents in a total amount of SEK 65M in 2008.
| SEK M | 2008 |
|---|---|
| Intangible assets | 28.4 |
| Current assets | 12.1 |
| Cash and cash equivalents | 22.9 |
| Liabilities | -18.6 |
| Capital gain | 43.2 |
| Total purchase price all of the year's divested units in the Bure Group |
88.0 |
| Cash and cash equivalents in divested subsidiaries | -22.9 |
| Effect on the Group's cash and cash equivalents, | |
| total net inflow | 65.1 |
In the third quarter, preparations were started for a merger between Bure's wholly owned subsidiary Anew Learning AB and the associated company AcadeMedia AB. The merger was completed in the fourth quarter through AcadeMedia's acquisition of Bure's shares in Anew Learning in exchange for 6,310,000 newly issued shares in AcadeMedia and a cash sum of SEK 274M. Through this transaction, Bure came to own 70 per cent of AcadeMedia. In connection with the transaction the option holders in Anew Learning called for their right to buy shares in Anew Learning. These shares where acquired by Bure at the same time that Bure sold 120,152 shares in AcadeMedia.
Two alternative methods are currently applied within the framework of IAS to recognise the sale of minority interests, since this is not explicitly covered by IAS 27. According to the revised IAS 27, which is effective 1 January 2010, the sale of a minority interest is recognised directly in equity on the condition that control over the company is retained.
After the merger, Bure decided to distribute the entire holding in AcadeMedia to its shareholders. During the brief period that arose between the merger with AcadeMedia and the distribution of shares, Bure treated the shareholding within the framework of non-current assets held for sale, IFRS 5.g.
The net gain on the sale of Anew Learning in the Group amounted to SEK 550M, of which SEK 564M has been recognised in the income statement and SEK -14M, which was attributable to the transaction with minority holders in Anew Learning, has been recognised in equity in accordance with the new rules in IAS 27.
Aside from the above, a number of smaller divestitures took place during the year. A minority holding in EnergoRetea was sold for a capital gain of SEK 1M. EnergoRetea has in turn sold ENS, which resulted in a capital loss of SEK -1M. An additional purchase price for Carl Bro generated a capital gain of SEK 1M for the year. An option premium also provided a capital gain of SEK 8M.
The sale of Bure's former subsidiary Cygate was completed in January 2007, and provided the Group with net proceeds of SEK 536M.
| SEK M | 2007 |
|---|---|
| Intangible assets | 112.1 |
| Tangible assets | 10.1 |
| Financial assets | 0.2 |
| Current assets | 216.6 |
| Cash and cash equivalents | 111.1 |
| Minority interest | -2.4 |
| Liabilities | -196.1 |
| Capital gain | 395.8 |
| Total purchase price for all divestitures in | |
| the Bure Group during the year | 647.4 |
| Cash and cash equivalents in divested subsidiary | -111.1 |
| Shares received in Grontmij | – |
| Effect on the Group's cash and cash, | |
| total net inflow | 536.3 |
Grontmij's shares are quoted on Euronext in Amsterdam. The above value is based on the fair market value on the transaction date.
| SEK M | 2007 |
|---|---|
| Intangible assets | – |
| Tangible assets | 0.4 |
| Financial assets | – |
| Current assets | 21.8 |
| Cash and cash equivalents | 0.4 |
| Minority interest | 1.5 |
| Liabilities | -10.2 |
| Capital gains | 32.6 |
| Total purchase price for other divestitures | |
| in the Bure Group | 46.5 |
| Cash and cash equivalents in divested subsidiaries | -0.4 |
| Receivable from buyer | 0.2 |
| Effect on the Group's cash and cash equiv | |
| alents, total net inflow | 46.3 |
Other divestitures refer primarily to Citat's sale of its subsidiary Dataunit.
| SEK M | No. of shares |
% of capital / votes |
Carrying amount in Parent Company |
Carrying amount in Group |
Corporate ID number |
Domicile |
|---|---|---|---|---|---|---|
| Celemiab Group AB | 258,010 | 30.1 | 8.5 | 12.6 | 556562 - 3997 | Malmö |
| InnovationsKapital Fond 1 AB | 244 | 23.0 | 0.0 | 0.0 | 556541 - 0056 | Göteborg |
| 8.5 | 12.6 | |||||
| Other equity shares | – | 3.4 | ||||
| Carrying amount | 8.5 | 16.0 | ||||
| Of which, AFS fi nancial assets | – | – |
For commitments regarding future share acquisitions, see Note 23. For information about shares in profi t/loss of associated companies, see Note 4.
Other fi nancial information, signifi cant associated companies:
| SEK M | Assets | Liabilities excl. equity | Revenue | Operating profit |
|---|---|---|---|---|
| Celemiab Group AB | 40.5 | 10.2 | 59.0 | 9.3 |
| Parent | |||||
|---|---|---|---|---|---|
| Group | Company | ||||
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Opening cost | 0.3 | 192.6 | 0.3 | 179.9 | |
| The year's acquisitions | 2.2 | – | 0.3 | – | |
| Sales | -0.2 | -192.3 | -0.1 | -179.6 | |
| Discontinued operations | – | – | – | – | |
| Reclassifi cation | 0.2 | – | – | – | |
| Translation differences | 0.4 | – | – | – | |
| Closing cost | 2.9 | 0.3 | 0.5 | 0.3 | |
| Opening revaluation gains/losses | 0.0 | 49.7 | – | 49.7 | |
| Revaluation gains/losses recognised in equity |
– | – | – | – | |
| The year's reversals of revaluation | |||||
| gains/losses | – | -49.7 | – | -49.7 | |
| Closing accumulated | |||||
| revaluation gains/losses | 0.0 | 0.0 | 0.0 | 0.0 | |
| Opening accumulated | |||||
| impairment losses | 0.0 | 0.0 | 0.0 | 0.0 | |
| Carrying amount | 2.9 | 0.3 | 0.5 | 0.3 | |
| Listed shares and | |||||
| participations1 | 2.6 | – | – | – | |
| Unlisted shares and | |||||
| participations | 0.3 | 0.3 | 0.5 | 0.3 | |
| Measured at fair value | – | – | – | – | |
| Measured at amortised cost2 | 0.3 | 0.3 | 0.5 | 0.3 | |
| Total | 2.9 | 0.3 | 0.5 | 0.3 |
The holdings have been classifi ed as available for sale, for which reason revaluation gains/losses are recognised in equity.
Due to the lack of an active market for these instruments, there are no grounds for valuation other than at cost.
| Group | Parent Company | |||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 |
| Accrued interest income Work in progress, less progress |
7.5 | 1.1 | 7.5 | 1.0 |
| billings | 10.1 | 20.6 | – | – |
| Other accrued income | 8.6 | 14.1 | – | – |
| Total | 26.2 | 35.8 | 7.5 | 1.0 |
| Discontinued operations | – | – | ||
| Total | 26.2 | 35.8 |
| Changes in the restructuring reserve SEK M |
2008 | Group 2007 |
|---|---|---|
| Opening restructuring reserve | 0.0 | 2.5 |
| The year's increase in connection with restructuring in subsidiary |
||
| Mercuri | 2.4 | – |
| Total | 2.4 | – |
| Dissolved during the year according to plan | ||
| Textilia | – | -2.5 |
| Mercuri | – | – |
| Total | – | -2.5 |
| Translation differences | – | – |
| Closing restructuring reserve | 2.4 | 0.0 |
| Change in deferred tax liability | Group | |
| 2008 | 2007 | |
| Opening deferred tax liability | 28.2 | 22.8 |
| The year's increase in connection with acquisi | ||
| tions | ||
| EnergoRetea | 2.5 | – |
| Anew Learning Total |
– 2.5 |
3.4 3.4 |
| Provisions made/increased during the year Citat |
– | 0.9 |
| EnergoRetea | 1.2 | – |
| Other | – | 0.2 |
| Total | 1.2 | 1.1 |
| Dissolved/utilised during the year | ||
| EnergoRetea | -1.1 | – |
| Translation differences | 3.3 | 0.9 |
| Closing deferred tax liability | 28.7 | 28.2 |
| Change in pension provisions | 2008 | Group 2007 |
||
|---|---|---|---|---|
| Opening pension provisions | 24.7 | 24.0 | ||
| Provisions made during the year | ||||
| Mercuri | 0.2 | 0.2 | ||
| Textilia | – | 0.7 | ||
| Total | 0.2 | 0.9 | ||
| Dissolved/utilised during the year | ||||
| Total | -1.7 | -0.5 | ||
| Total | -1.7 | -0.5 | ||
| Discontinued operations | -2.0 | – | ||
| Translation differences | -0.5 | -0.3 | ||
| Closing pension provisions | 20.7 | 24.7 |
| Change in other provisions | 2008 | Group 2007 |
Parent Company 2008 |
2007 |
|---|---|---|---|---|
| Opening other provisions | 0.6 | 3.9 | – | – |
| The year's provisions Mercuri |
– | 0.1 | – | – |
| Total | 0.0 | 0.1 | – | – |
| Dissolved/utilised during the year Gårda Äldrevård Mercuri |
– – |
-3.4 – |
– – |
– – |
| Other | – | – | – | – |
| Total | 0.0 | -3.4 | – | – |
| Discontinued operations | – | – | – | – |
| Translation differences | – | – | – | – |
| Closing other provisions | 0.6 | 0.6 | – | – |
| Estimated reversal of |
| provisions in the Group | 2009 | 2010 | 2011 | >2011 |
|---|---|---|---|---|
| Restructuring reserve | 2.4 | – | – | – |
| Pension provisions | – | – | – | 20.7 |
| Deferred tax liability | – | – | – | 28.7 |
| Other provisions | 0.6 | – | – | – |
| Total | 3.0 | – | – | 49.4 |
| SEK M | 2008 | Group 2007 |
Parent Company 2008 |
2007 |
|---|---|---|---|---|
| Total non-current liabilities of which, non-current liabilities directly connected to AFS fi nancial assets |
214.7 – |
327.8 – |
– – |
– – |
| of which, maturing later than fi ve years after the balance sheet date |
2.4 | 16.2 | – | – |
| SEK M | 2008 | Group 2007 |
Parent Company 2008 |
2007 |
|---|---|---|---|---|
| Accrued vacation pay | 25.9 | 40.4 | 1.4 | 0.8 |
| Accrued social security expenses | 34.8 | 41.7 | 3.2 | 3.3 |
| Prepaid income | 83.6 | 17.4 | – | – |
| Other accrued expenses | 6.0 | 92.7 | 11.4 | 8.6 |
| Total | 150.3 | 192.2 | 16.0 | 12.7 |
| Discontinued operations | – | 104.3 | ||
| Total | 150.3 | 296.5 |
| Group | Parent Company | |||
|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 |
| To secure own liabilities and provisions | ||||
| For liabilities to credit institutions | ||||
| Floating charges Shares in subsidiaries/ |
12.2 | 3.1 | – | – |
| associated companies | 239.7 | 200.6 | – | – |
| Blocked bank accounts | 1.5 | 1.1 | – | – |
| Pledged trade receivables | – | – | – | – |
| Pledged properties | – | 76.3 | – | – |
| Other | – | – | – | – |
| Total pledged assets | 253.4 | 281.1 | – | – |
| Discontinued operations | – | 252.1 | ||
| Total | 253.4 | 533.2 | – | – |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Guarantees | – | – | – | – | |
| Surety on behalf of subsidiaries | – | – | – | 6.8 | |
| Other contingent liabilities | – | – | – | 66.1 | |
| Total | – | – | – | 72.9 | |
| Discontinued operations | – | – | |||
| Total | – | – |
There are no additional purchase prices in the Group that have not already been capitalised. Bure has no remaining commitments to acquire additional shares in subsidiaries.
A former president of Mercuri, active between 2002 and 2004, has lodged a claim of SEK 63M on the grounds that he is entitled to 10 per cent of value growth in the company. The claim has been rejected by the company and will be resolved by an arbitration board during 2009. The company has made the assessment that no funds will be utilised to satisfy the claim, and has consequently made no provision for this amount.
| 2008 No. of employees |
Of whom women |
No. of employees |
2007 Of whom women |
|
|---|---|---|---|---|
| Parent Company | 9 | 2 | 9 | 3 |
| Subsidiaries | 930 | 353 | 790 | 304 |
| Total Group | 939 | 355 | 799 | 307 |
| Geographical breakdown of employees: | ||||
| Parent Company Sweden |
9 | 2 | 9 | 3 |
| Subsidiaries | ||||
| Sweden | 395 | 137 | 274 | 92 |
| Denmark | 33 | 14 | 33 | 14 |
| England | 43 | 16 | 40 | 15 |
| Finland | 91 | 38 | 93 | 40 |
| Norway | 30 | 8 | 31 | 7 |
| Germany Other countries |
30 308 |
9 131 |
28 291 |
9 127 |
| Total Group | 939 | 355 | 799 | 307 |
The average number of employees in discontinued operations during 2007 was 1,884 (not included above).
| 2008 | 2007 | ||||||
|---|---|---|---|---|---|---|---|
| SEK M | Salary and other remuneration |
Social security expenses |
Pension costs1 |
Salary and other remuneration |
Social security expenses |
Pension expenses1 |
|
| Parent Company Subsidiaries |
17.7 493.2 |
7.4 104.7 |
2.9 44.3 |
13.5 422.2 |
4.4 92.3 |
3.1 31.0 |
|
| Total Group | 510.9 | 112.1 | 47.2 | 435.7 | 96.7 | 34.1 | |
| Board and President |
(of which, bonuses) |
Other employees |
Board and President |
(of which, bonuses) |
Other employees |
||
| Parent Company | |||||||
| Sweden Subsidiaries |
9.5 | 0.7 | 8.2 | 5.5 | 1.9 | 8.0 | |
| Sweden Denmark |
6.8 2.6 |
0.4 | 168.8 25.4 |
5.5 1.7 |
0.9 | 131.4 21.7 |
|
| England Finland |
1.4 2.2 |
0.7 | 27.1 64.3 |
1.5 2.1 |
0.6 0.6 |
28.7 59.9 |
|
| Norway Germany |
1.3 5.8 |
0.7 | 18.4 18.9 |
1.4 6.0 |
0.5 | 22.2 18.4 |
|
| Other countries Total Group |
25.1 54.7 |
4.2 6.7 |
125.1 456.1 |
20.7 44.4 |
4.5 9.0 |
101.0 391.3 |
The Annual General Meeting in 2008 resolved that the Board of Directors would be paid total fees of SEK 990,000 (990,000). Of this amount, the Chairman received SEK 350,000 and the other Board members received SEK 160,000 each. No member of the Board is employed in the company. Special fees for work on the Board committees were paid in an amount of SEK 51,350 (0).
1 Of the Parent Company's pension costs, SEK 1.7M (0.9) is attributable to the Board and President, and refers to both the current and outgoing President.
Pension costs are stated including payroll tax, broken down by country and between the Board and President and other employees. For additional information, see Note 36 for "Remuneration of senior executives".
The Group is exposed to a number of different fi nancial risks through its operations. Bure is an investment company with an important overall objective that is regulated in the Parent Company's fi nance policy. The Parent Company shall be free from indebtedness and the subsidiaries shall have independent fi nancing to ensure their fi nancial autonomy from the Parent Company and other group companies. Consequently, the subsidiaries shall also be able to independently manage their own liquidity risk. A separate fi nance policy has been established for each individual subsidiary. The policy document provides guidelines for management of cash, surplus liquidity, debt fi nancing, currency and interest rate risk. However, since the operations of the subsidiaries vary, the objectives of the respective subsidiary may also differ.
Bure can manage its capital structure among other things through new share issues, dividends, redemption procedures or share buybacks. In 2008 Bure carried out several capital distributions that are described in more detail on page 25. Bure also has an authorisation for the repurchase and resale of treasury shares, see page 27.
The Parent Company Bure has a strong fi nancial position and the portfolio companies have a restricted level of debt, for which reason fi nancial risk is limited. The net loan receivable at 31 December 2008 was SEK 1,892M for the Group (1,514) and SEK 1,848M for the Parent Company (1,462). See also page 24.
Currency risk refers to the risk that the Group's commercial fl ows (transaction risk) and monetary assets and liabilities (translation risk) will be affected by exchange rate fl uctuations. Transaction risk in the Group is limited, since nearly all income is matched by expenses in the same currency. Because the Bure Group has investments outside Sweden via
its subsidiaries, the Group's balance sheet and income statement are exposed to translation risk arising on the translation of the fi nancial statements of foreign subsidiaries to Swedish kronor (SEK). This risk is normally not hedged. The most signifi cant currency aside from SEK is the euro. A change of +/- 5 per cent in the euro rate would have an impact on profi t before tax of approximately SEK 2M. In Mercuri Group, there are loans to a wholly owned subsidiary that are denominated in euro. Mercuri has hedged this receivable by taking up a corresponding share of its fi nancing through loans in euro.
The Group is exposed to interest rate risk through changes in the interest rate on liabilities with variable interest due to movements in market rates. Fixed interest liabilities are also exposed to interest rate risk, but to a signifi cantly lesser degree since the interest rate changes when the loans mature and are extended on new terms. In view of the amount distributed in connection with the redemption programme in February 2009, a change of +/- 1 per cent in the interest rate for the Group would have a short-term impact of SEK 9M on consolidated profi t before tax. Interest rate risk in borrowings can be maintained at a desired level through the use of derivatives such as swaps, forwards and options. At present, there are no hedges of interest rate risk.
Credit risk is the risk that Bure's counterparties will be unable to meet their payment obligations and that any collateral furnished will not cover the amount due, thereby causing Bure to incur a fi nancial loss. Bure's policy is to carry out a credit assessment of all customers with which it does business. The maximum credit exposure on the balance sheet date was SEK 311M (see table on page 53, fair value of fi nancial instruments). There are no signifi cant concentrations of credit risk in the Group.
| Age analysis of trade receivables (SEK M) | ||
|---|---|---|
| -- | ------------------------------------------- | -- |
| 2008 Net |
Secured by | 2007 Net |
Secured by | |||||
|---|---|---|---|---|---|---|---|---|
| Receivables | Reserves | receivable | collateral | Receivables | Reserves | receivable | collateral | |
| Not yet due | 156.5 | 0.0 | 156.5 | – | 96.8 | 0.2 | 96.6 | – |
| Overdue 1–30 days | 46.0 | 0.2 | 45.8 | – | 54.9 | – | 54.9 | – |
| Overdue 31–60 days | 14.8 | 0.1 | 14.7 | – | 16.0 | 0.1 | 15.9 | – |
| Overdue 61–90 days | 9.0 | 0.0 | 9.0 | – | 10.9 | 0.8 | 10.1 | – |
| Overdue 91–180 days | 4.9 | 1.2 | 3.7 | – | 3.2 | – | 3.2 | – |
| Overdue >180 days | 15.2 | 2.7 | 12.5 | – | 2.6 | 2.5 | 0.1 | – |
| Total | 246.4 | 4.2 | 242.2 | – | 184.4 | 3.6 | 180.8 | – |
| 2008 | 2007 | |
|---|---|---|
| Opening balance | 3.7 | 0.7 |
| The year's provisions | 3.7 | 3.1 |
| Amount written off | -1.9 | -0.1 |
| Reversal of unutilised reserves | -0.9 | – |
| Foreign exchange gains/losses | -0.1 | – |
| Total at 31 December | 4.5 | 3.7 |
Provisions to the reserve for bad debt losses are made after individual assessment of each customer's ability to pay.
Liquidity risk is the risk that the Group will be unable to fi nance loan payments and other liquidity fl ows as they fall due either with its own funds or with new fi nancing. In order to maintain suffi cient liquidity, Bure maintains a liquidity reserve that is at least adequate to cover one year's forecasted liquidity requirement and other liquidity needs in the existing company structure. The liquidity reserve consists of available cash and cash equivalents, bank overdraft facilities and committed unutilised credit facilities. That portion of the liquidity reserve that exceeds the liquidity requirement as defi ned above, and which may according to Bure's policy be invested over a longer investment horizon, can be distributed to the shareholders or used in a buyback programme. Decisions regarding the use of excess liquidity within the framework of the fi nance policy are made by the President on the basis of recommendations from the CFO.
The table below shows the Bure Group's fi nancial liabilities at 31 December 2008 and 31 December 2007.
| Financial items with fixed interest | <1 month | <3 months | 3–12 months | 1–5 years | > 5 years | Total |
|---|---|---|---|---|---|---|
| Borrowings | – | – | – | 49.3 | 2.4 | 51.7 |
| Total | – | – | – | 49.3 | 2.4 | 51.7 |
| Financial items with variable interest | <1 month | <3 months | 3–12 months | 1–5 years | > 5 years | Total |
|---|---|---|---|---|---|---|
| Liabilities under fi nance leases | – | – | 0.2 | 0.3 | – | 0.5 |
| Other borrowings | – | – | 6.2 | 113.4 | – | 119.6 |
| Total | – | – | 6.4 | 113.7 | – | 120.1 |
| <1 month | <3 months | 3–12 months | 1–5 years | > 5 years | Total | |
|---|---|---|---|---|---|---|
| Trade payables | 35.4 | 13.9 | – | – | – | 49.3 |
| Accrued expenses | 29.6 | – | 37.1 | – | – | 66.7 |
| Other fi nancial liabilities | – | 13.2 | – | – | – | 13.2 |
| Total | 65.0 | 27.1 | 37.1 | – | – | 129.2 |
| Liquidity reserve (SEK M) | Group | Parent Company | ||||
|---|---|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |||
| Investments | 1,270.2 | 781.4 | 1,190.0 | 775.0 | ||
| Hedge funds | 0.1 | 586.0 | 0.1 | 556.3 | ||
| Bank deposits | 788.7 | 448.7 | 623.5 | 91.8 | ||
| Unutilised committed credits | 29.9 | 205.1 | – | 100.0 | ||
| Total | 2,088.9 2,021.2 | 1,813.6 1,523.1 |
Short-term investments consist primarily of the Parent Company's investments of SEK 1,190M. These are made up partly of bank deposits with an interest rate of approximately 4.0 per cent on the balance sheet date. On the balance sheet date, these investments had an average remaining maturity of 47 days.
The investments have been measured at amortised cost.
The table below shows the carrying amounts and fair values of Bure's fi nancial instruments.
| 2008 | 2007 | ||||
|---|---|---|---|---|---|
| Financial assets (SEK M) | Carrying amount | Fair value | Carrying amount | Fair value | |
| Held-for-trading (HFT) fi nancial assets measured at fair value | |||||
| through profi t or loss | |||||
| - Hedge fund | 0.1 | 0.1 | 586.0 | 586.0 | |
| Available-for-sale (AFS) fi nancial assets | 2.9 | 2.9 | 0.3 | 0.3 | |
| Loans and receivables | |||||
| - Other long-term receivables | 18.9 | 18.9 | 15.7 | 15.7 | |
| - Trade receivables | 195.8 | 195.8 | 171.6 | 171.6 | |
| - Work in progress, less progress billings | – | – | 5.0 | 5.0 | |
| - Other current receivables | 1.3 | 1.3 | 17.3 | 17.3 | |
| - Accrued income | 26.2 | 26.2 | 16.8 | 16.8 | |
| - Cash and cash equivalents and short-term investments | 2,058.9 | 2,058.9 | 1,073.9 | 1,073.9 | |
| Total financial assets | 2,304.1 | 2,304.1 | 1,886.6 | 1,886.6 |
| 2008 | 2007 | ||||
|---|---|---|---|---|---|
| Financial liabilities (SEK M) | Carrying amount | Fair value | Carrying amount | Fair value | |
| Other fi nancial liabilities measured at amortised cost | |||||
| Non-current liabilities | |||||
| - Liabilities to credit institutions | 165.1 | 165.1 | 95.7 | 95.7 | |
| - Liabilities under fi nance leases | 0.3 | 0.3 | 0.6 | 0.6 | |
| - Other non-current liabilities | – | – | 50.3 | 50.3 | |
| Current liabilities | |||||
| - Liabilities to credit institutions | 6.2 | 6.2 | 5.0 | 5.0 | |
| - Trade payables | 49.3 | 49.3 | 41.8 | 41.8 | |
| - Liabilities under fi nance leases | 0.2 | 0.2 | 0.2 | 0.2 | |
| - Other current liabilities | 23.3 | 23.3 | 20.6 | 20.6 | |
| - Accrued expenses | 66.7 | 66.7 | 118.2 | 118.2 | |
| Total financial liabilities | 311.1 | 311.1 | 332.4 | 332.4 |
Bure reports earnings per share in accordance with IAS 33 Earnings Per Share. Earnings per share are reported both before and after dilution. Earnings per share are calculated by dividing net profi t/loss by the weighted average number of shares outstanding during the year. In the Group, profi t attributable to equity holders of the Parent Company is used for calculation of earnings per share. Diluted earnings per share are calculated by dividing profi t/loss by the sum of the weighted average number of shares outstanding during the year and the number of shares added through the so-called scrip element. The number of shares added through the scrip element is calculated according to IAS 33, whereby price development for both the share and the warrant is taken into account.
In the event of a negative result, the net loss is divided only by the weighted average number of shares outstanding.
| Specification of applied parameters | 2008 | 2007 |
|---|---|---|
| Parent Company net profi t, SEK M Consolidated net profi t excl. minority, SEK M |
1,019.2 882.0 |
685.2 1,046.9 |
| Average number of shares, thousands Scrip element, no. of shares, thousands Average number of shares after full dilution, |
89,782 – |
84,465 23,317 |
| thousands | 89,782 | 107,782 |
According to the Articles of Association, the share capital shall amount to no less than SEK 100,000,000 and no more than SEK 400,000,000. Each share grants equal rights to the company's profi ts and assets. All shares are fully paid up.
Information about changes in equity is provided is provided below. For other changes in the equity of the Group and the Parent Company, see statements of changes in equity on pages 35 and 36.
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| No. of shares | Quota value | Share capital | No. of shares | Quota value Share capital | ||
| Number of registered shares | ||||||
| Registered number on 1 January | 98,377,837 | 8.56 | 84.1 | 629,186,056 | 0.75 | 471.9 |
| Exercise of warrants | 491,383,614 | 0.75 | 368.5 | |||
| Cancellation of treasury shares | -14,463,157 | -77.4 | -31,332,000 | -23.5 | ||
| Reduction of share capital | -542.0 | |||||
| Bonus issue | 77.4 | 23.5 | ||||
| Reverse share split, 1-for-10 | -980,313,903 | 0.75 | ||||
| Bonus issue | – | 83.0 | ||||
| Redemption procedure | -10,545,930 | -81.3 | ||||
| Registered number on 31 December | 83,914,680 | 3.58 | 300.1 | 98,377,837 | 8.56 | 842.1 |
| Treasury shares | ||||||
| Treasury shares on 1 January | -5,153,200 | -1,000,000 | ||||
| Reverse share split, 1-for-10 | 900,000 | |||||
| Share buybacks in 2008 | -9,309,957 | -5,053,200 | ||||
| Cancellation of treasury shares | 14,463,157 | |||||
| Outstanding treasury shares on | ||||||
| 31 December | 0 | -5,153,200 | ||||
| Shares outstanding on 31 December | 83,914,680 | 3.58 | 300.1 | 93,224,637 |
In previous years Bure has repurchased a total of 82,264,000 shares (after reverse split). In 2008 Bure repurchased 9,309,957 shares, of which all were cancelled.
According to Swedish law, shareholders' equity must be divided into non-restricted and restricted equity, of which restricted equity is not available for distribution to the shareholders. Restricted equity in the Parent Company consists of the share capital, statutory reserve and revaluation reserve. In Bure's case, the statutory reserve consists of capital contributed in connection with the company's formation. The statutory reserve also includes the former share premium reserve, which must be transferred to the statutory reserve in accordance with the new Swedish Companies Act.
Non-restricted equity includes retained profi t and net profi t for the year, which are available for distribution to the shareholders.
Consolidated equity consists of the share capital, contributed capital, other reserves and retained profi t including net profi t for the year.
Other contributed capital refers to capital contributed by the shareholders. Other reserves consists of translation reserves, which include all exchange differences arising on translation of the fi nancial statements of foreign operations. Furthermore, other reserves also include a fair value reserve which refers to unrealised value gains/losses on shares and participations. Retained profi t including net profi t for the year includes earned profi ts in the Parent Company and its subsidiaries. Accumulated translation differences in equity were reset to zero at the IFRS transition date.
| Fair value | Translation | ||
|---|---|---|---|
| Change in other reserves, SEK M | reserve | reserve | Total |
| Opening balance 2007 | 51.4 | -3.7 | 47.7 |
| Reversal of fair value reserve | -49.7 | – | -49.7 |
| Translation differences recognised in income statement | – | -1.0 | -1.0 |
| Translation differences | – | 15.9 | 15.9 |
| Other adjustments | -1.7 | 1.7 | – |
| Reserves at 31 December 2007 | 0.0 | 12.9 | 12.9 |
| Translation differences | – | 37.4 | 37.4 |
| Reserves at 31 December 2008 | 0.0 | 50.3 | 50.3 |
| SEK M | 2008 | 2007 |
|---|---|---|
| Net sales Exit gains/losses |
676.1 | 1,188.8 1,634.6 693.9 |
| Shares in profi t Other income |
11.1 0.6 |
5.9 1.1 |
| Total operating income | 1,876.6 2,335.5 | |
| Raw materials and consumables Goods for resale Other external expenses Personnel costs Amortisation/depreciation and impairment losses Other operating expenses |
-31.8 -90.6 -338.9 -577.6 -44.5 – |
-60.2 -97.6 -456.6 -810.0 -78.3 -1.2 |
| Total operating expenses | -1,083.4 -1,503.9 | |
| Operating profi t | 793.2 | 831.6 |
| Net fi nancial items | 0.1 | -8.9 |
| Profit after financial items | 793.3 | 822.7 |
| Income tax expense | -24.3 | -33.3 |
| Profit from discontinued operations | 769.0 | 789.3 |
| Basic earnings per share Diluted earnings per share Cash fl ow from operating activities Cash fl ow from investing activities Cash fl ow from fi nancing activities |
8.56 8.56 110.8 482.1 -56.3 |
9.35 7.32 230.4 847.9 -43.9 |
| Net cash flow from discontinued operations Average basic number of shares Average diluted number of shares |
536.6 89,782 89,782 |
1,034.4 84,465 107,782 |
Discontinued operations in 2008 refer to the sale of the subsidiaries Citat, Textilia, Anew Learning and AcadeMedia. In 2007 these include exit gains on the sale of Systeam and Cygate
| SEK M | 2008 | Parent Company 2007 |
|---|---|---|
| Opening cost | 1,507.2 | 2,086.0 |
| The year's acquisitions/additions | 48.6 | 25.0 |
| Repayment of shareholder contributions | -100.8 | -20.0 |
| Sales | 90.2 | -583.8 |
| Distribution of shareholdings | -711.3 | – |
| Reclassifi cations | 175.0 | – |
| Closing cost | 1,008.8 | 1,507.2 |
| Opening impairment losses | -595.7 | -797.4 |
| Reversal of previous impairment losses | 170.0 | 201.7 |
| Closing accumulated impairment losses | 425.7 | 595.7 |
| Carrying amount | 583.1 | 911.5 |
The reversal in 2008 refers to the holding in Länia Material (Textilia) in connection with the sale of the company.
The reclassifi cation refers to the holding in AcadeMedia that was previously classifi ed as participations in associated companies. The distribution of shares refers to the holding in AcadeMedia.
| SEK M | Number of shares |
% of capital/ votes |
Carrying amount in Parent Company |
Corporate ID number |
Domicile |
|---|---|---|---|---|---|
| Portfolio company | |||||
| Mercuri International Group AB2 | 1,000 | 100.00 | 357.7 | 556518 - 9700 | Göteborg |
| Scandinavian Retail Center SRC AB | 6,780 | 100.00 | 12.4 | 556573 - 0263 | Helsingborg |
| EnergoRetea Group AB1, 2 | 932,500 | 93.25 | 102.6 | 556551 - 7355 | Stockholm |
| 472.7 | |||||
| Dormant companies | |||||
| Bure Hälsa och Sjukvård AB | 1,000 | 100.00 | 0.1 | 556548 - 1230 | Göteborg |
| Bure Tillväxt AB | 1,000 | 100.00 | 0.2 | 556566 - 4512 | Göteborg |
| Bure Utvecklings AB | 10,000 | 100.00 | 1.2 | 556472 - 7112 | Göteborg |
| Business Communication Group Scandinavia AB | 113,907 | 100.00 | 19.2 | 556548 - 1297 | Göteborg |
| Sancera AB | 1,000 | 100.00 | 42.5 | 556551 - 6910 | Göteborg |
| Cindra AB | 1,000 | 100.00 | 5.1 | 556542 - 7415 | Göteborg |
| Cintera AB | 1,000 | 100.00 | 0.1 | 556554 - 6958 | Göteborg |
| CR&T Holding AB | 363,180 | 100.00 | 30.9 | 556524 - 3176 | Göteborg |
| CR&T Ventures AB | 100,000 | 100.00 | 2.0 | 556597 - 1149 | Göteborg |
| Gårda Äldrevård Holding AB | 1,000 | 100.00 | 9.0 | 556548 - 8144 | Göteborg |
| Investment AB Bure | 1,000 | 100.00 | 0.1 | 556561 - 0390 | Göteborg |
| 110.4 | |||||
| Total | 583.1 |
1 EnergoRetea Group owns 100 per cent of the subsidiaries Energo and Retea.
2 See disclosures on next page regarding options/warrants issued on the holdings in EnergoRetea and Mercuri.
The following information is provided as a disclosure regarding the dilutive effects in the companies where Bure carried out ownership diversifi cation programmes:
| EnergoRetea | Mercuri |
|---|---|
| 2.1 | 23.3 |
| Aug 2011 | |
| 176 | 443 |
| May 2012 |
| Exercise price for premature exercise of subscription rights on different dates2 |
Period | EnergoRetea | Mercuri |
|---|---|---|---|
| Exercise price calculated on 100% of the company, SEK M2 | 31 Dec. 2008 | 333 | |
| 31 Dec. 2009 | 140 | 366 | |
| 31 Dec. 2010 | 154 | 403 | |
| 31 Dec. 2011 | 170 | ||
| 31 May 2012 | 176 |
1 The specifi ed percentage refers to the number of warrants/options sold to date. Further dilution may thus arise. Subscription rights may be exercised prematurely in certain situations, e.g. in connection with an exit. The exercise price then varies with respect to the date.
The exercise price will be indexed, normally by 10 per cent annually, with adjustment of the exercise price monthly.
| Textilia Anew Learning | EnergoRetea1 | Mercuri | Citat | ||
|---|---|---|---|---|---|
| No. of options/warrants outstanding at beginning of period | 99 | 390 | 16,000 | 234.0 | 720,654 |
| No. of options/warrants granted during the period | 0 | 0 | 4,500 | 5.9 | 0 |
| No. of options/warrants exercised during the period | -99 | -390 | 0 | -5.9 | -720,654 |
| No. of options/warrants outstanding at end of period | 0 | 0 | 20,500 | 234.0 | 0 |
| No. of exercisable options/warrants at end of period | – | – | 0 | 0 | – |
1 Aside from the outstanding options/warrants, in 2008 Bure acquired 10,000 shares with option rights.
Skanditek (due to board representation and share ownership), Board members and companies closely related to them, Bure's subsidiaries, associated companies and the executive management in the Parent Company.
Services related to production of the annual report have been purchased from the former subsidiary Citat. Services have also been purchased from EnergoRetea in connection with modifi cation of properties. The purchases have been carried out at market-based prices and are minor in scope.
For the salaries and remuneration of senior executives, see Note 36.
Aside from fees from the Parent Company, the elected Board members in the Parent Company have also received total fees of SEK 0.2M from subsidiaries in the Group.
Purchases and sales between the Parent Company and group companies are insignifi cant in scope. Net profi t in the Parent Company includes intra-group interest income of SEK 2.9M (2.0) and intragroup interest expenses of SEK 2.1M (1.4).
The principal owner Skanditek has issued stock options for a total of 400,000 shares in Bure to senior executives and employees in the company.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2008 | 2007 | 2008 | 2007 | |
| Opening cost | 270.8 | 467.5 | 251.7 | 434.2 | |
| The year's acquisitions | – | 186.7 | – | 186.7 | |
| Shares in profi t | 14.1 | 5.8 | – | – | |
| Sales | – -389.2 | _ | -369.2 | ||
| Translation differences | -0.5 | – | – | – | |
| Reclassifi cations | -210.3 | – | -185.2 | – | |
| Closing cost | 74.1 | 270.8 | 66.5 | 251.7 | |
| Opening impairment losses | -58.1 | -58.5 | -58.1 | -58.5 | |
| The year's impairment losses | -6.5 | – | – | – | |
| Reversal of previous impairment losses | – | 0.4 | – | 0.4 | |
| Reclassifi cations | 6.5 | – | – | – | |
| Closing accumulated | |||||
| impairment losses | -58.1 | -58.1 | -58.1 | -58.1 | |
| Carrying amount | 16.0 | 212.7 | 8.5 | 193.6 |
No dividends were received during the year.
Bure's financials
| 2008 SEK M |
Fixed annual/ salary/Board fees |
Variable remun./bonus |
Other benefits1 |
Pension costs |
Other remuneration |
Total |
|---|---|---|---|---|---|---|
| Board Chairman | 0.4 | – | – | – | – | 0.4 |
| Other Board members | 0.6 | – | – | – | 0.1 | 0.7 |
| President | 1.7 | 0.7 | 0.0 | 0.4 | – | 2.8 |
| President, outgoing | 0.9 | – | 0.2 | 1.0 | 5.2 | 7.3 |
| Vice President | 1.3 | 1.5 | 0.1 | 0.3 | – | 3.1 |
| Other senior executives | 1.0 | 0.3 | 0.1 | 0.3 | – | 1.7 |
| 5.9 | 2.4 | 0.4 | 2.1 | 5.3 | 16.0 | |
| 2007 SEK M |
Fixed annual/ salary/Board fees |
Variable remun./bonus |
Other benefits1 |
Pension costs |
Other remuneration |
Total |
| Board Chairman | 0.3 | – | – | – | – | 0.3 |
| Other Board members | 0.6 | – | – | – | – | 0.6 |
| President | 2.7 | 1.9 | 0.1 | 0.7 | – | 5.4 |
| Other senior executives | 1.9 | 2.0 | 0.1 | 0.7 | – | 4.7 |
| 5.6 | 3.9 | 0.2 | 1.4 | – | 11.1 |
Other benefi ts refer to company car and meal benefi ts.
The 2008 AGM resolved that the Board of Directors would be paid total fees of SEK 990,000 (990,000). Of this amount, the Chairman received SEK 350,000 and the other Board members received SEK 160,000 each. Special fees were paid for committee work in an amount of SEK 51,350.
The incoming President Martin Henricson has an annual salary of SEK 2.7M. Bonuses have been paid in an amount of SEK 0.7M. Pension premiums are of the defi ned contribution type and correspond to 25 per cent of pension-qualifying salary, which consists of basic salary. The retirement age for the President is 60 years. Bonuses may be paid in a maximum amount of 50 per cent of annual salary. Bonus payments are not pensionqualifying. The President has the right to a term of notice of 12 months in the event of termination by the company and 6 months in the event of his resignation. The President is entitled to termination benefi ts corresponding to 6 monthly salaries. Termination benefi ts are not payable in the event of retirement or death. Board fees have been deducted from salary in an amount of SEK 0.1M. Decisions regarding the salary and benefi ts of the President are made by the Board of Directors on the recommendations of the Board's appointed remuneration committee.
The outgoing President Mikael Nachemson, who left his post on 30 April 2008, had an annual salary of SEK 3.1M. For the contractual term of notice, Bure has made total provisions of SEK 8M for termination costs including social security expenses and pension costs.
Other senior executives refer to the Vice President and CFO. The Vice President's salary has been reduced by SEK 0.2M in respect of board fees received from group companies, and the corresponding amount for other senior executives is SEK 0.1M. Bure applies individual pension plans for senior executives. The pension premiums are of the defi ned contribution type and correspond to a maximum of 25 per cent of annual salary. The pension cost refers to the cost excluding payroll tax that has been charged to the year's profi t. The retirement age for the Vice President and other senior executives is 65 years. Bonuses for other senior executives may be paid in a maximum amount of 50–150 per cent of annual salary. Other senior executives have a term of notice of 6 months in the event of termination by the company and 6 months in the event of their own resignation. Other senior executives are entitled to termination benefi ts corresponding to 6–12 monthly salaries, and one senior executive is also entitled to termination benefi ts corresponding to 6 monthly salaries in the event of his resignation. Termination benefi ts are not payable in the event of retirement or death. Decisions regarding the salary of other senior executives are made by the President after consultation with the remuneration committee.
In 2008 Bure had a variable compensation system for all employees in which the maximum variable salary component was equal to 10–100 per cent of fi xed salary. 70 per cent of the bonus was based on quantitative targets related to share price development and operating profi t in the portfolio companies and the remaining 30 per cent was based on discretionary assessment.
For information about the preparatory and decision-making process applied by the company, see "Administration report".
The proposed principles for remuneration and other terms of employment of senior executives in 2009 will be put before the AGM for approval.
Martin Henricson, President, 22,600 shares. Carl Backman, Vice President, 7,040 shares,162,500 stock options and 8,618 shares held through an insurance-like solution. Jonas Alfredson, 0 shares.
| Parent Company 2008 |
2007 | |
|---|---|---|
| Total number of women on Board of Directors | 1 | 1 |
| Total number of women in Executive Management | – | – |
| Total number of men on Board of Directors | 4 | 4 |
| Total number of men in Executive Management | 3 | 3 |
| Total number of people in Board of Directors | 5 | 5 |
| Total number of people in Executive Management | 3 | 3 |
In the subsidiaries, 23 per cent (21) of the board members, presidents and senior executives are women. The comparative fi gure has been adjusted for the share in discontinued operations.
Not reported due to the exemption rule in the applicable legislation which states that no information shall be given if the number of employees in the group is fewer than ten or if the information can be related to a single individual. By group is meant both gender and age group.
To the Annual General Meeting of Bure Equity AB (publ), corporate identification number 556454-8781
We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the Board of Directors and the President of Bure Equity AB (publ) for the financial year 2008. The company's annual report and consolidated annual report are included in this document on pages 24–57. These accounts and the administration of the company as well as the application of the Annual Accounts Act when preparing the annual accounts and the application of International Financial Reporting Standards IFRS as adopted by the EU and the Annual Accounts Act when preparing the consolidated accounts are the responsibility of the Board of Directors and the President. Our responsibility is to express an opinion on the annual accounts, the consolidated accounts and the administration based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we plan and perform the audit to obtain reasonable but not absolute assurance that the annual accounts and the consolidated accounts are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the accounts. An audit also includes assessing the accounting principles used and their application by the Board of Directors and the President and significant estimates made by the Board of Directors and the President when preparing the annual accounts and consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the consolidated accounts.
As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and circumstances of the company in order to be able to determine the liability, if any, to the company of any Board member or the President. We also examined whether any Board member or the President has, in any other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a reasonable basis for our opinion set out below.
The annual accounts have been prepared in accordance with the Annual Accounts and give a true and fair view of the company's financial position and results of operations in accordance with generally accepted accounting principles in Sweden. The consolidated accounts have been prepared in accordance with the International Financial Reporting Standards, IFRS, adopted by the EU and the Annual Accounts Act and give a true and fair view of the Group's financial position and results of operations. The statutory administration report is consistent with the other parts of the annual accounts and the consolidated accounts.
We recommend to the Annual General Meeting of shareholders that the income statements and balance sheets of the Parent Company and the Group be adopted, that the profit of the Parent Company be dealt with in accordance with the proposal in the administration report and that the members of the Board of Directors and the President be discharged from liability for the financial year.
Göteborg, 19 February 2009 Ernst & Young AB, Göteborg
Staffan Landén Auditor in Charge Authorised Public Accountant
Corporate governance in Bure is regulated by Swedish law, primarily the Swedish Companies Act and the NASDAQ OMX Nordic Exchange's Rules for Issuers. Bure is quoted on the Mid Cap list of the NASDAQ OMX Nordic Exchange, and is therefore subject to compliance with the Swedish Code of Corporate Governance ("the Code") as of 1 July 2005. These rules are being applied successively to the extent prescribed in the Code and in pace with the issuance of statements and recommendations by advisory organisations (such as the Swedish Corporate Governance Board) on specific issues related to the Code. This report on Bure's corporate governance in 2008 has not been examined by the company's auditors.
On 25 September 2008 Bure announced the composition of the nomination committee, which consists of the following representatives for the largest shareholders in Bure:
The nomination committee has been appointed according to the instructions adopted by Bure's 2008 AGM. These state that the Board Chairman, not later than at the end of the third quarter of each year, shall ensure that the company's three largest shareholders are given the opportunity to each appoint one member to the nomination committee. Should any of these three shareholders waive its right to appoint a member, the shareholder next in order of voting power will be contacted to appoint a member to the committee. The mandate period is one year. Furthermore, the Board Chairman shall be a member of the nomination committee.
Bure's Board of Directors has consisted of five members. The composition of the Board and the roles of its members and the President are presented at the end of the corporate governance report. The company's CFO Jonas Alfredson has served as Secretary of the Board.
The work of the Board of Directors is governed by a procedural plan that was most recently adopted at the statutory meeting on 23 April 2008. The work of the Board follows a yearly plan containing fixed decision points that is adopted every year in connection with the statutory meeting. The Board normally holds six meetings during the year, and meets more frequently when required. In the past financial year, the Board held 27 meetings, consisting of 7 scheduled and 20 extra meetings, of which 8 were held per capsulam. The Board formed a quorum at all meetings. Board members Björn Björnsson and Ann-Sofi Lodin were both absent from one scheduled meeting. Among other things, the
Board's procedural plan contains instructions regarding the division of responsibilities between the Board, the Chairman, the President and the Board's committees.
According to the procedural plan, the Board is responsible for the company's organisation and management of the company's affairs. The Board continuously monitors the financial situation of the company and the Group, which is reported on a monthly basis, so that the Board is able to meet the monitoring obligations required by law, NASDAQ OMX Nordic Exchange's Rules for Issuers and good board practice. The procedural plan states that it is the responsibility of the Board to decide on matters that are not part of operating activities or that are of major importance, such as material financial commitments and agreements, as well as any significant changes in the organisation. Once a year, the Board carries out a systematic evaluation of its performance in order to develop the work of the Board and to provide the nomination committee with a relevant basis for decision ahead of the AGM.
Every year, Bure's Board of Directors establishes and documents the company's goals and strategies and discusses marketing, strategic and budgetary issues. The Board establishes the company's finance policy, right of authorisation and decision-making procedure. The Board has formulated specific instructions regarding the responsibilities and powers of Bure's President and Vice President, as well as special reporting instructions for the Executive Management.
The company's auditors attend two Board meetings every year to report on the year's audit and their evaluation of the company's internal control system. The auditors present their observations from the annual audit directly to the Board. Once a year, the auditors meet with the Board without the presence of any member of the Executive Management.
In 2008 the Board of Directors of Bure Equity AB was paid total fees of SEK 990,000, of which the Chairman received SEK 350,000. Special fees of SEK 51,350 were paid for work on the Board's committees.
The Board's procedural plan contains instructions regarding the compensation committee and audit committee. The work of both the compensation committee and the audit committee is performed by the Board as a whole.
The compensation committee discusses and decides on matters relating to remuneration in the form of salary, pensions and bonuses or other terms of employment for the President and staff reporting directly to the President. Proposed principles for compensation to the President and Executive Management will be put before the 2009 AGM for decision. At present, there are no outstanding sharebased or share price-based incentive schemes for the Board or Executive Management.
The role of the audit committee is to continuously support the Board in matters relating to auditing, internal control and review of the annual accounts and interim reports.
Bure's financial reporting is based on the applicable laws, regulations, rules, agreements and recommendations for companies listed on the NASDAQ OMX Nordic Exchange. A more detailed description of the accounting policies is provided on pages 38–41 of the annual report. The audit report for the financial year is found on page 58 of the annual report. The Board and the auditors communicate on an ongoing basis. The Board continuously ensures that the company's finance and accounting organisation is properly dimensioned and has adequate resources. The Board is provided with monthly reports on the development of the portfolio companies, the Parent Company and the Group. Every year, the Parent Company issues instructions regarding the financial information to be reported by the subsidiaries. This information includes income statements, balance sheets, cash flow statements and financial key ratios. A more extensive reporting package is required in connection with the annual closing of the books.
According to section 10.6 of the Code, the Board of Directors is required to evaluate the need for a special audit function on a yearly basis. The Board's assessment is that Bure has no need for this function under the present circumstances. At the same time, the Board has clear instructions and continuously ensures that the responsible individuals in the organisation have requisite the expertise and resources to fulfil their duties in the preparation of financial reports. The evaluation of the need for an internal audit function will be reassessed in 2009.
Since the time of the AGM, the Board of Directors has consisted of five members. The President is not a member of the Board. Of the company's five Board members, all except the Chairman Patrik Tigerschiöld and Björn Björnsson are independent in relation to the company's major shareholders.
Board member Kjell Duveblad was also chairman and a member of the board of the subsidiary EnergoRetea Group AB in 2008. Board member Ann-Sofi Lodin was also a member of the board of Textilia's parent company, Länia Material AB, during the period from January to August and a member of the board of Anew Learning AB during the period from January to October.
Patrik is 44 years old, M.B.A., and President of Skanditek Industri förvaltning AB, the company's largest shareholder. Elected to the Board in 2004. Previously employed by SEB and former President of SEB Allemansfonder.
Håkan is 61 years old, M.B.A. Previously President of Rederi AB Transatlantic and employed by the Schenker Group. Elected to the Board in 2002. Håkan is independent in relation to the company, its management and the company's major shareholders.
Ann-Sofi is 46 years old, M.Pol.Sc. and economist. COO of the healthcare company Global Health Partner. Previously employed by the healthcare group Capio, in positions such as General Director of Capio Sjukvård Norden and General Director of Capio Lundby Sjukhus. Elected to the Board in 2006. Ann-Sofi is independent in relation to the company, its management and the company's major shareholders.
Björn is 62 years old, M.Pol.Sc., and operates his own financial consulting business. Elected to the Board in 2002. Björn is independent in relation to the company and its management and dependent in relation to the company's major shareholders.
Kjell is 54 years old, M.B.A, and operates his own management and IT consulting business. Previously employed by IBM and as Regional Manager of Oracle in Sweden, the Nordic region and the Baltic countries. Elected to the Board in 2005. Kjell is dependent in relation to the company and its management and independent in relation to the company's major shareholders.
Martin is 47 years old, B.A. Former President of Mercuri International Group AB. Martin is independent in relation to the company's major shareholders. Holdings in Bure at 19 February 2009: 13,560 shares. Other assignments: Board member and chairman of Mercuri Inter national Group AB and board member of AcadeMedia AB, Implema AB, TradeDoubler AB, Yallotrade AB.
A description of the Board member's shareholdings and other assignments are shown on page 63.
The principles for remuneration and other terms of employment, and information about shareholdings, etc., for the President and other senior executives are shown in Note 36 of the annual report.
Ernst & Young AB has been elected as Bure's auditing firm. Ernst & Young has appointed Staffan Landén, 45 years old, as Auditor in Charge. Staffan Landén is auditor of several listed companies, such as Alfa Laval, Lindab and AcadeMedia.
As stated in the Swedish Companies Act and the Swedish Code of Corporate Governance, the Board of Directors is responsible for the company's internal control. This report has been prepared in accordance with the Swedish Code of Corporate Governance, sections 10.5 and 10.6, and is thereby limited to internal control over financial reporting. This description is not part of the formal annual report.
The procedural plan for the Board and instructions for the President ensure a clearly defined division of roles and responsibilities that promotes effective management of the company's risks. Furthermore, the Board has established a number of normative documents for internal control, and among other things emphasises the importance of having clear and written instructions and policies that also apply to the Group's subsidiaries. The Executive Management regularly reports to the Board according to established routines and is responsible for the system of internal controls that is necessary for management of significant risks in day-to-day operations. This includes guidelines that promote an understanding and awareness among the various executives for the importance of their respective roles in maintaining good internal control.
In assessing the risk for irregularities in the company's financial reporting, Bure has developed a model in which a number of areas with a heightened risk for errors have been identified. Special attention has been given to the creation of controls to prevent and detect deficiencies in these areas. Areas where material deficiencies are noted are dealt with immediately.
Significant guidelines, manuals, policies, etc., of relevance for financial reporting are continuously updated and communicated to the appropriate employees. There are both formal and information communication paths to the Executive Management and Board for significant information from the employees. For external communication, there are guidelines to ensure that the company lives up to the highest demands regarding complete and accurate information to the market.
The Board continuously monitors and evaluates the information provided by the Executive Management. This includes ensuring that action is taken with respect to any deficiencies or recommendation identified in internal and external audits.
The Board has not found reason to set up an internal audit function. The Board's opinion is that there is no need for this function in the company and that it is not financially justifiable in an organisation as small as Bure's. The Board has clear instructions and continuously ensures that the responsible individuals in the organisation have the requisite expertise and resources to fulfil their duties in the preparation of financial reports. The evaluation of the need for an internal audit function will be reassessed in 2009.
This report has not been examined by the company's auditors.
Patrik Tigerschiöld
Stockholm, born in 1964 Board member and Chairman since 2004
President and board member of Skanditek Industriförvaltning AB
Chairman of Vitrolife AB AcadeMedia AB CMA Microdialysis AB The Chimney Pot AB MYDATA automation AB Partnertech AB
Board member of H. Lundén Kapitalförvaltning AB
Shareholding in Bure, own and held by related parties: 12,690*
Göteborg, born in 1947 Vice Chairman, Board member since 2002
Chairman of Consafe Logistics AB Nimbus Boats Holding AB Inpension Asset Management AB Nordic Tile Holding AS Schenker AB
Board member of Chalmers University of Technology Ernströmgruppen AB Handelsbanken Region Väst Stolt-Nielsen AS. Rederi AB Transatlantic Walleniusrederierna AB
Shareholding in Bure, own and held by related parties: 0*
Björn Björnsson Stockholm, born in 1946 Board member since 2002
Operates own financial consulting business
President and board member of Trustor AB
Board member of AcadeMedia AB H. Lundén Kapitalförvaltning AB Skanditek Industriförvaltning AB
Shareholding in Bure, own and held by related parties: 10,000*
Göteborg, born in 1962 Board member since 2006 COO of the healthcare company Global Health Partner
Chairman of GHP Spine Centre Göteborg AB, Orthocenter Göteborg AB, Orthocenter Stockholm AB, and other locations
Board member of AcadeMedia AB Global Health Partner Swe AB S:t Eriks Ögonsjukhus AB Stockholm Spine Center AB Richard C. Malmsten Memorial Foundation Stockholm Arrhythmia Center AB
Shareholding in Bure, own and held by related parties: 5,050*
Stockholm, born in 1954 Board member since 2005
Operates own management and IT consulting business
Chairman of EnergoRetea Group AB Madeo Sourcing Group AB Remium Holding AB Trio Enterprise AB
Board member of Enea AB Financial Systems FS AB Nuport AB Teleopti AB 3L System AB
Shareholding in Bure, own and held by related parties: 120,000*
* at 19 February 2009
Carl Backman Vice President/ Investment Manager
Pia-Lena Olofsson Group Accounting Manager Bertil Carlsson Accounting Manager
Agneta Erneholm Executive Assistant
Kristofer Hammar Financial Analyst (until December 2008)
Martin Henricson President & CEO
Daniel Utbult Investment Manager
Jonas Alfredson Chief Financial Officer
Proposed dividend divided by the share price at 31 December and extra dividends paid during the year.
Profi t/loss after taxes divided by the average number of shares outstanding during the year. For the Group, net profi t less minority share in profi t for the year.
Operating profi t before goodwill impairment and amortisation of surplus values arising on consolidation.
Equity in relation to total assets. As of the transition to IFRS on 1 January 2005, minority interest is included in total equity. The comparative fi gures for 2004 have been restated according to this standard, and therefore also the equity/assets ratio for this period.
Equity in the Parent Company divided by the number of shares outstanding. After transition to IFRS on 1 January 2005, minority interest is included in total equity. The comparative fi gure for 2004 has been restated.
Earnings per share divided by the average number of share outstanding during the year after dilution. For the Group, net profi t less minority share in profi t for the year is used. The average number of shares after dilution is calculated according to the rules in IFRS, IAS 33 Earnings per Share.
Increase in net sales in relation to net sales for the previous year. The key fi gure thus includes both organic and acquisition-driven growth.
Share price multiplied by the total number of shares outstanding.
The net asset value discount/premium consists of the difference between the share price and reported equity per share in the Parent Company, divided by reported equity per share. It is important to be aware that reported equity per share does not include revaluation gains/losses in Bure's holdings.
Same defi nition as net loan receivable, but is used when interestbearing liabilities exceed interest-bearing assets.
Financial interest-bearing assets minus interest-bearing liabilities.
Profi t/loss after tax divided by average equity.
For several years, Swedish companies have been permitted to repurchase up to ten per cent of their own outstanding shares, provided that this is approved by the Annual General Meeting within the framework of non-restricted equity.
The total of the year's share price growth and dividend paid divided by the share price on 1 January.
This annual report has been produced by Bure. Art direction, illustrations and layout: Citat Marcom AB. Translation: GH Language Solutions AB. Cover photo: © Laurence Mouton/Matton. Photos of Bure representatives: Rob Vanstone. Paper: Scandia 2000. Printing: Prinfo Alfredssons.
Bure Equity AB (publ), Box 5419, SE-402 29 Göteborg, Phone +46 (0)31-708 64 00, Fax +46 (0)31-708 64 80, www.bure.se
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