Annual Report • Apr 21, 2008
Annual Report
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| Highlights of 2007 |
|---|
| Shareholder information/Bure in brief |
| Comments from the President |
| Business mission, targets and strategy |
| Bure as owner |
| Risk analysis |
| Bure's share |
| Valuation of existing holdings |
| Five-year overview |
| Portfolio overview 13 | |
|---|---|
| Anew Learning 14 | |
| Mercuri International 18 | |
| Citat 22 | |
| EnergoRetea 24 | |
| Textilia 26 | |
| Celemi 27 | |
| AcadeMedia 28 | |
| Administration report 31 | |
|---|---|
| Consolidated income statements 35 | |
| Consolidated balance sheets 36 | |
| Parent Company income statements 38 | |
| Parent Company balance sheets 39 | |
| Statements of changes in equity 41 | |
| Cash flow statements 42 | |
| Notes 43 | |
| Audit report 62 | |
| Corporate governance report 64 |
|---|
| Board report on internal control66 |
| Board of Directors 67 |
| Employees 68 |
| Definitions 69 |
| Interim report January – March | 23 April |
|---|---|
| Annual General Meeting | 23 April |
| Interim report January – June | 27 August |
| Interim report January – September | 24 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/alertmeeng
Jonas Alfredson, +46 (0)31-708 64 00 [email protected]
Read more about Bure's financial instruments on pages 9 and 56.
| Address: | Box 5419, SE-402 29 Göteborg |
|---|---|
| Street address: Mässans Gata 8, SE-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 Wednesday, 23 April 2008, 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 VPC AB (the Nordic Central Securities Depository) no later than Thursday, 17 April 2008.
To participate in the Meeting, shareholders whose shares are registered in the name of a trustee must temporarily re-register the shares in their own names with VPC AB. Shareholders must notify their trustees well in advance to ensure that an entry is made in the register of shareholders by Thursday, 17 April 2008.
Notice of participation must be received by Bure no later than 12 p.m. on Thursday, 17 April 2008, via: Mail: Bure Equity, Box 5419, SE-402 29 Göteborg E-mail: [email protected] 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.
A confirmation will be sent by mail after Thursday, 17 April.
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 seven investments. The Parent Company has nine employees working from its office in Göteborg.
Mikael Nachemson, President and CEO
We can look back with satisfaction on a year of continued positive development when Bure grew both organically and through acquisitions under steady profitability. Furthermore, in 2007 we carried out a capital distribution of nearly SEK 1.5 billion to our shareholders through a combination of buybacks and voluntary redemption procedures.
Bure's share in net sales of the portfolio companies rose by 26 per cent during the year, to SEK 2,651M, of which 9 per cent represented organic growth. Operating profit improved by 76 per cent to SEK 193M excluding the sale of Dataunit. Aside from strong earnings growth in Anew Learning and Mercuri, I would also like to highlight the impressive turnaround achieved by Textilia and the fine performance by Citat.
In the past year the Stockholm All Share Index (OMXSPI) fell by 6 per cent, while the Bure share gained 17 per cent adjusted for the completed redemption programme. All in all, this improvement in earnings and share price growth are an excellent testimonial to all the employees whose hard work and commitment to quality have made this possible.
At the beginning of 2007 Bure sold the IT consultancy SYSteam and the network integrator Cygate, thereby strengthening the company's cash position by close to SEK 1.1 billion. The listed holdings in Grontmij and Jeeves were also divested during the year.
We have made a number of new acquisitions in the edu cational sector. One such example is Bure's investment in AcadeMedia, a provider of independent high school and vocational education, corporate education and adult education. In addition, Anew Learning was further expanded through the acquisitions of Proteam, Rytmus, Fenestra and Primrose and now operates in four focus areas: Montessoriinspired Vittra, IT-Gymnasiet with a strong IT profile, the vocationally-oriented Framtidsgymnasiet and the Rytmus music high school.
Bure has not hastily involved itself in the educational sector for reasons of short-term profit. We have nearly ten years of experience in establishing and operating schools and helping companies to optimise their sales performance through education and customised consulting services. During this time we have allocated significant sums to areas such as development of educational models, creation of joint platforms, ongoing employee training and property improvements. After many years of losses and long-term investments in our independent schools these have started to show a profit, all of which has been reinvested in operations.
With an increasingly specialised portfolio, of which two thirds are concentrated in the educational sector, Bure is successively taking on more of an operating role. The gathering and coordination of Bure's educational units into a pure-play educational group is a top priority for 2008.
At present, our educational activities are conducted primarily through Anew Learning, Mercuri and AcadeMedia, three companies whose operations span the entire spectrum from independent schools to vocational training and corporate education. So far these holdings have been based on a portfolio approach with a correspondingly adapted spread of risk. Today we have built up a portfolio of companies with varying business models, geographic coverage and a focus on different target groups.
In a focused and market-leading educational group, we will have the credibility to build and develop cutting-edge educational models and the necessary resources to invest in the technology of the future. All this will enable us to conduct educational activities with optimised efficiency while at the same time delivering high quality to the users. We continuously challenge the model both through internal benchmarking and implementation of external best practices.
We see potential for scale economies in several areas – in everything from property-related matters and development of educational models to administrative systems and methods. There is also scope to offer many interesting options in connection with educational operations, such as tutoring, evening classes and summer courses.
There are major opportunities for growth in the educational area – both in Sweden and abroad – and the industry is in the first stage of a structural transformation. Aside from municipally-owned operations, the sector has been characterised by a number of skilled entrepreneurs. These have played a prominent role in charting the course so far, but now there is a need for long-term industrial owners to take over and drive development forward.
Bure's investment in AcadeMedia represents the first decisive step toward realising the envisaged advantages of specialisation. Aside from points of contact between our high school operations, we have supplemented our offering with new features as adult education and distance learning. This will provide sufficient critical mass to give us a leading-edge position with regard to the level of development and innovation in the areas where we operate, and to realise scale economies. At the same time, we see opportunities to maintain the high rate of growth.
Against this background, we welcome political proposals in favour of rating the schools and their ability to convey knowledge. We also advocate ratings on the basis of factors like well-being, security, study climate and school environment.
Knowledge is central, but personal well-being during the sensitive childhood years is at least equally important. It is during this time that much of the individual's self-image and self-worth are established. Being seen, acknowledged and validated are all decisive for a pupil's development. Wellbeing, security, a positive study climate and an inspiring school environment are cornerstones of the educational approach used by Bure and its portfolio companies.
The concentration on Bure's educational companies does not detract from our confidence in, and expectations for, the other holdings. The value creation agendas that have been adopted by each of their boards still apply.
When I stepped in as President and CEO at the beginning of 2005, Bure was a company with a diversified portfolio, an unclear strategy and a net debt of around SEK 500M. Profitability in the portfolio companies was generally low and the portfolio had a high exposure to business cycle-sensitive operations in the IT sector with hourly billing.
Bure's foremost goals and priorities during my time in office were to reduce debt and improve profitability and cash flows in the existing portfolio companies in order to create a sustainably profitable structure for the future. One important underlying factor behind this successful development, aside from a robust economy, has been a structured and goal-oriented approach to corporate governance. We have carried out ownership diversification programmes, focused on manage ment issues and identified the drivers for profitability and value creation. We have worked with a combined structural/strategic, operational and financial focus.
Today Bure is a considerably more streamlined and focused company with profitable portfolio companies and net cash of close to SEK 1.5 billion. The current portfolio is made up of businesses with relatively low sensitivity to the business cycle and emphasis on education, a sector that will now become Bure's main focus under the new strategy. All holdings in the IT sector have been divested.
The first months of 2008 have been marked by turmoil in the capital markets. Signals from the global economy indicate increased pessimism and a generally slowing trend, although this has not yet affected Bure's operations. We will continue investing in our portfolio companies during 2008 to achieve continued growth in our operations without compromising on profitability. We are by no means unmindful of the growing uncertainty in the world around us, but realise that with Bure's strong financial position this can also lead to increased business opportunities. In its new incarnation, Bure will be one of the Nordic region's largest companies in the educational area.
As announced earlier, 2008 will be my last year as President and CEO of Bure. My task to develop and streamline the company, and thereby create new value for Bure's shareholders, is now essentially completed. I will be succeeded by a new President and CEO in the second half of 2008. My work has been made possible by the invaluable support of the Board of Directors and excellent contribution from my colleagues in the Group. I would like to thank you all for this successful and very rewarding time together.
Göteborg, February 2008
Mikael Nachemson
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 exposure to the general business cycle. Bure's focus is on creating a portfolio with a well balanced spread of operating and financial risk.
As earlier, Bure's business priorities are:
The investment strategy is to create a balanced portfolio in terms of business models, market maturities and cyclical patterns. Bure plans to make a number of new acquisitions. We take an opportunistic approach, but preferably seek companies capable of balancing business risk in the existing portfolio.
The following criteria provide guidance in seeking potential new investments:
In each investment, Bure strives to inject SEK 200–400M 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 the company's strategy compared with other alternative strategies. It is also vital to determine whether the 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 the company's operations and deciding on the company's strategy for goal attainment. To follow up the established targets, the Board also ensures that there are efficient systems for monitoring and control.
One of the Board's specific tasks 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.
An approach focused on industrial and financial aspects and stricter demands on the market expertise of the owners, board and management will promote the development of the portfolio companies. The advantages of belonging to a corporate group like Bure are visible at the recurring annual gathering 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 development provides scope for continued investments in growth.
In 2007 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.
Bure has a number of basic principles for management of risks. Bure's finance policy states that the Parent Company shall be essentially debt-free. Furthermore, each portfolio company shall be financially independent from the Parent Company, which means that the Parent Company is not financially liable for obligations in the portfolio companies and that the portfolio companies are responsible for making their own financing arrangements. Financing of the portfolio companies shall be well adapted to each company's individual situation, where total risk is managed through a balanced spread between operating and financial risk.
At year-end 2007, Bure (the Parent Company) had a net loan receivable of just under SEK 1,500M.
In order to ensure the mutual financial autonomy of Bure's portfolio companies, the finance policy states that these must be financially independent from their owners. To achieve this, the companies must be capable of meeting their own financing requirements.
Determined efforts to increase the independence of the portfolio companies were started in 2003. Today, all of the port folio companies are assessed to have a solid capital structure. In a few cases, the level of debt is low and provides scope to finance acquisitions directly over the subsidiaries' own balance sheets.
This independence also means that Bure will not furnish guarantees or similar commitments on behalf of the portfolio companies.
The Parent Company's equity/assets ratio at year-end 2007 was 97 per cent (94). The Parent Company has no bank liabilities.
Bure has announced plans to concentrate the portfolio in its largest area of operation, the educational sector, over the next 12-month period. Depending on the chosen approach, this will have consequences for the capital structure of the Group once the process is completed. It is possible that this could also lead to consequences for Bure's finance policy and relationship to the subsidiaries.
As mentioned earlier, the goal is for each of the portfolio companies to have a balanced total risk, with an optimal spread between operating and financial risk.
The risk profile varies between the portfolio companies. In a company with low business risk, the level of financial risk may be higher in order to generate a better return on investment. In cases where business risk is higher, this is offset by a lower level of financial risk. The holdings in Bure's current portfolio consist mainly of service companies with varying sensitivity to the business cycle. It is deemed to be low in Anew Learning and Textilia, but higher in the other companies.
Most of the Group's revenue is denominated in Swedish kronor, which means that exchange rate movements have a limited impact on Bure's profit and financial position. The underlying cost is normally generated in the same currency as the revenue. Another important currency in the Group is euro, which refers mainly to subsidiaries within Mercuri.
The following table illustrates financial risk in the portfolio companies in relation to the level of earnings generated in 2007. The table indicates a generally low level of risk in the companies.
| Portfolio company SEK M |
EBITA 2007 |
Net loan receiv able/debt(-) 31 Dec. 2007 |
|---|---|---|
| Anew Learning | 70 | 70 |
| Mercuri | 58 | -8 |
| Citat* | 73 | 64 |
| EnergoRetea | 10 | -37 |
| Textilia | 14 | -81 |
| Celemi | -1 | 1 |
* Including capital gain of SEK 31M
The Bure share was introduced on the OMX Nordic Exchange Stockholm in October 1993 and moved to the A list in 1995. After transition to the Nordic Stock Exchange in October 2006, the share is traded on the Nordic Mid Cap list.
In 2007 Bure's share price grew from 33.40 SEK at the beginning of the year to SEK 37.90 at year-end. Total return on the Bure share was 17 per cent, adjusted for the redemption rights exercised during the year. The average trade value of Bure's redemption right was equal to SEK 1.04 per share. The share's total return can be compared with a decrease of 6 per cent for the OMX All Share Index. The Bure share thus outperformed the stock market by 23 percentage points.
In 2007 a total of 63,372,917 Bure shares were traded (recalculated for the reverse share split) on the OMX Nordic Exchange for a combined value of SEK 2,373M, representing a turnover rate of 68 per cent during the year. A trading lot in Bure amounts to 200 shares.
Bure's equity capital on 31 December 2007 amounted to SEK 842M, as was divided between 98,377,837 shares. All shares grant equal entitlement to the company's assets and profits. Each share has a quota value of approxi mately SEK 8.56.
Of the total number of shares at the end of the year, 5,153,200 were held in treasury. Following an additional share buyback in January 2008, Bure's holding of treasury shares amounts to 5,738,200.
In 2007 the number of shareholders decreased from 26,653 to 21,179. Foreign investors hold 16.7 per cent (14.9).
| Skanditek | 17.6 | ||
|---|---|---|---|
| Catella Fonder | 14.0 | ||
| Nordea Fonder | 6.1 | ||
| Radar | 4.2 | ||
| Eikos | 3.6 | ||
| SEB Fonder | 3.1 | ||
| Lannebo Fonder | 1.6 | ||
| Sjunde AP-fonden | 1.5 | ||
| JP Morgan Bank | 1.4 | ||
| Öresund Investment AB | 1.4 |
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 portfolio 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 for 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 4 per cent at 31 December 2007.
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 company-specific 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 | 2003 | 2004 | 2005 | 2006 | 2007 |
|---|---|---|---|---|---|
| Equity (net asset value), SEK2 | 38.64 | 40.17 | 33.36 | 46.73 | 28.02 |
| Equity (net asset value) after full exercise | |||||
| of outstanding warrants, SEK2 | 14.01 | 15.80 | 18.99 | 26.30 | 28.02 |
| Share price, SEK | 10.40 | 17.40 | 23.80 | 33.40 | 37.90 |
| Share price as a percentage of equity | 74 | 110 | 125 | 127 | 135 |
| Parent Company equity per share, SEK | 38.64 | 40.17 | 33.36 | 46.73 | 28.02 |
| Parent Company fully diluted equity per share, SEK | 14.01 | 15.80 | 18.99 | 26.30 | 28.02 |
| Consolidated equity per share, SEK3 | 30.55 | 32.38 | 32.81 | 43.57 | 29.54 |
| Consolidated fully diluted equity per share, SEK3 | 11.92 | 13.55 | 18.73 | 24.77 | 29.54 |
| Parent Company earnings per share, SEK | 3.10 | 4.90 | 6.22 | 13.85 | 8.11 |
| Parent Company fully diluted earnings per share, SEK 4 | 1.17 | 1.84 | 3.08 | 6.99 | 6.36 |
| Consolidated earnings per share, SEK | -7.70 | 1.87 | 9.37 | 14.21 | 12.39 |
| Consolidated fully diluted earnings per share, SEK 4 | -7.70 | 0.70 | 4.63 | 7.17 | 9.71 |
| Number of shares, thousands | 33,487 | 37,458 | 60,358 | 62,819 | 93,225 |
| Number of warrants outstanding, thousands | 95,838 | 92,263 | 69,362 | 66,901 | – |
| Total number of shares including warrants outstanding, thousands | 129,326 | 129,720 | 129,720 | 129,720 | 93,225 |
| Fully diluted number of shares according to IAS 33, thousands | 68,836 | 98,266 | 115,772 | 122,836 | 93,225 |
| Average number of shares, thousands | 24,148 | 36,445 | 54,172 | 61,071 | 84,465 |
| Average fully diluted number of shares according to IAS 33, thousands |
63,521 | 97,253 | 109,585 | 121,086 | 107,782 |
| Key figures | |||||
| Dividend paid, SEK per share | – | – | – | – | – |
| Direct yield, % | – | – | – | – | – |
| Total yield, % | -85.5 | 67.3 | 36.8 | 40.3 | 16.6 |
| Market capitalisation, SEK M | 348 | 652 | 1,437 | 2,098 | 3,533 |
| Fully diluted market capitalisation 5 , SEK M |
1,345 | 2,257 | 3,087 | 4,333 | 3,533 |
| Equity (net asset value), SEK M | 1,294 | 1,505 | 2,014 | 2,935 | 2,612 |
| Return on equity, % | 6.5 | 12.8 | 19.2 | 34.2 | 24.7 |
| Parent Company profit and financial position | |||||
| Exit gains/losses, SEK M | 157.7 | 132.2 | 353.7 | 625.6 | 451.9 |
| Profi t after tax, SEK M | 74.6 | 178.7 | 337.2 | 846.1 | 685.2 |
| Total assets, SEK M | 2,986 | 2,586 | 2,109 | 3,112 | 2,695 |
| Equity, SEK M | 1,294 | 1,505 | 2,014 | 2,935 | 2,612 |
| Equity/assets ratio, % | 43.3 | 58.2 | 95.4 | 94.3 | 97.0 |
| Net loan debt (-)/receivable (+) | -594 | -512 | 404 | 1,080 | 1,462 |
| Net loan debt (-)/receivable (+) after full | |||||
| exercise of outstanding warrants | -76 | 33 | 854 | 1,556 | 1,462 |
| Consolidated profit and financial position | |||||
| Net sales, SEK M Profi t after tax, SEK M |
3,767.8 -186.9 |
2,148.1 95.9 |
2,022.7 543.7 |
2,147.1 884.9 |
2,647.8 1,047.1 |
| Total assets, SEK M | 4,440 | 4,505 | 4,032 | 3,885 | 3,747 |
| Equity, SEK M | 1,023 | 1,213 | 1,980 | 2,737 | 2,754 |
| Equity/assets ratio, % | 23.0 | 26.9 | 49.1 | 70.5 | 73.5 |
| Net loan debt (-) / receivable (+) | -1,405 | -1,202 | 201 | 1,178 | 1,514 |
| Net loan debt (-) / receivable (+) after full exercise of | |||||
| outstanding warrants | -887 | -657 | 651 | 1,655 | 1,514 |
| 1 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 2003–2007 corresponds to equity per share.
3 The fi gures for the full year 2004 have been retrospectively restated to IFRS. The comparative information for prior periods has not been restated. As of 1 January 2004, minority interest in equity is included in total equity.
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.
| PARENT COMPANY HOLDINGS AT 31 DECEMBER 2007 | % of | % of | Book value, |
|---|---|---|---|
| capital | votes | SEK M | |
| Unlisted holdings | |||
| Anew Learning1 | 100.00 | 100.00 | 95 |
| Mercuri International1 | 100.00 | 100.00 | 358 |
| Citat1 | 100.00 | 100.00 | 191 |
| EnergoRetea1, 5 | 93.40 | 93.40 | 103 |
| Textilia1 | 100.00 | 100.00 | 20 |
| Celemi | 30.13 | 30.13 | 9 |
| Business Communication Group | 100.00 | 100.00 | 19 |
| Sancera/Bure Kapital2 | 100.00 | 100.00 | 77 |
| Cindra | 100.00 | 100.00 | 5 |
| CR&T Holding3 | 100.00 | 100.00 | 31 |
| CR&T Ventures4 | 100.00 | 100.00 | 2 |
| Gårda Äldrevård Holding | 100.00 | 100.00 | 9 |
| Other dormant companies | 2 | ||
| Total | 921 | ||
| Listed holdings | |||
| AcadeMedia (248,525 A shares, 1,953,095 B shares) | 38.28 | 49.78 | 185 |
| Total | 1,106 | ||
| Other net assets according to the Parent Company balance sheet | 1,507 | ||
| Parent Company equity | 2,612 | ||
| Equity per share divided between 93,224,637 shares | 28.02 | ||
| 1 Ownership diversification programmes exist in the subsidiaries Anew Learning, Mercuri, Citat, EnergoRetea and Textilia. See also information about dilution on page 60. |
A reversal of SEK 56M has been made due to group contributions received.
A reversal of SEK 23M has been made in respect of the sale of the shares in Spotfire by the indirectly owned Carlstedt Research & Technology.
4 Equity amounts to SEK 36M, and is equal to liquidity placements.
5 In 2007, EnergoRetea acquired the former subsidiary Retea at market value, giving rise to an internal capital gain of SEK 53M. The book value of the acquired company EnergoRetea has not been correspondingly reduced, since the transaction was carried out at market value.
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 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 financial positions of the individual portfolio companies.
Bure performs ongoing cash flow valuations of all its holdings to determine the need for adjustment of book values. If a discounted cash flow 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 flow valuations are based on the management's estimates of the future cash flows generated in the respective portfolio company.
Fredrik Mattsson, President
Anew Learning is Sweden's leading operator of independent preschools, compulsory schools and high schools. The group is made up of Vittra, IT-Gymnasiet, Framtidsgymnasiet and Rytmus, and has approximately 1,100 employees. All in all, the schools are responsible for more than 11,000 pupils between the ages of 1 and 19 years. Anew Learning was formed in 2007 to gather all of Bure's operations in the independent school area.
Bure has experience of owning and operating independent schools since 1999, when Bure acquired the independent school group Vittra. At an early stage, Bure identified the potential to make a difference in the educational area for the benefit of both individuals and society. The industry is relatively insensitive to the business cycle and Bure's assessment is that independent schools will continue to play an increasingly important role for development in the educational sector.
From both a quality and cost standpoint, companies that choose to build up structural capital and invest in both educational and administrative processes will be an attractive partner for society in general and for the individual pupils in particular. Bure has successively invested to build up and develop these operations and will continue to do so, also through acquisitions. All surpluses generated in this business have been continuously reinvested to improve quality and provide the means for ongoing growth.
Anew Learning's vision is to become Sweden's leading educational company by offering children and adults the best possible conditions for learning and development.
As in any business based on professional services, it is imperative that quality always be a central focus for Anew Learning. Satisfied parents and pupils are critical for the schools' survival. The goal is for our schools to be recommended by more than 90 per cent of our pupils and their parents. In addition, our schools should score above the average for Swedish schools in national tests and in relevant quality surveys.
From a financial perspective, we expect these operations to continue expanding at the same pace as earlier. This will take place through a combination of organic growth and acquisitions under sustained profitability.
Vittra strives to prepare children and young people for the society of the future.
Swedish preschools, compulsory schools and high schools represent annual sales of SEK 170 billion. Around 11 per cent of all children and pupils attend schools that are run by independent operators, with the highest penetration for preschools and high schools. These operators include everything from independent cooperatives to mid-sized corporate groups.
The financial rules for independent schools permit a costneutral level of compensation relative to the municipal schools.
The assessment is that independent operators will continue to increase their share of the total market. In addition, there is a growing need to find new ownership for schools built up by entrepreneurs who are now in the process of shedding their involvement. In this structural transformation, Anew Learning will play an important role as a large player than can contribute to greater continuity and stability.
Vittra strives to prepare children and young people for the society of the future based on its funda mental idea – to enhance the individual's life opportuni ties during the various phases of development through education and learning.
The company has grown quickly since its establishment in 1993 and is now entrusted with the development of around 8,800 children and teens between the ages of 1–19 years. Vittra has close to 800 employees.
Vittra has developed a unique educational model that rests on three core values:
The model is supported by well designed structures and methods, as well as ground rules and attitudes based on Vittra's three guiding principles:
Bure's portfolio
IT-Gymnasiet offers educational programmes in IT, electronics and the natural sciences supported by modern pedagogical methods and new technology focusing on the knowledge and skills required by the business sector and higher education.
IT-Gymnasiet Sverige was founded in 1998 as Sweden's first high school with a focus on information technology. New technology and modern pedagogical methods offer pupils a unique learning environment that is designed to prepare the pupils for higher studies at the university level and/or to move on to a professional career in the IT industry.
IT-Gymnasiet has independent high schools at six locations in Sweden, with a total of around 1,600 pupils and 140 employees.
Framtidsgymnasiet offers educational programmes in engineering and the natural sciences that are continuously developed to meet industrial requirements and expectations. The focus is on participation and personal attention, and all pupils are offered employment after completing their studies.
Framtidsgymnasiet accepted its first pupils in Göteborg in the mid-1990s. In 2007 Anew Learning acquired the technical high school Proteam, which will be coordinated with the school in Göteborg and change name to Framtidsgymnasiet. The two high schools offer a vocationally-oriented education through their industrial, electrical and engineering/natural science programmes, and collaborate closely with the business sector through a mandatory work experience course.
Framtidsgymnasiet currently operates four high schools in Göteborg, Östergötland and Sörmland with around 600 pupils and some 50 employees.
Rytmus offers unique opportunities for pupils interested in developing their musical talents, to prepare for a career as a professional musicians or to pursue more advanced studies in the musical area.
Rytmus is Sweden's leading music high school and has contributed to the development of many known musicians and artists since its establishment in 1993. The school is based in Stockholm and currently has some 380 pupils. Rytmus offers an educational programme in which the focus is on contemporary pop and rock music. The programme also provides a solid theoretical foundation for admission to university studies.
16, BURE'S ANNUAL REPORT 2007
Anew Learning aims to be Sweden's leading educational company by offering children and adults the best possible conditions for learning and development.
Satisfied parents and pupils are essential for the survival of these operations.
| Bure's holding, % | 100 (dilution, see Note 32) |
|---|---|
| Book value, SEK M | 95 |
| Year of acquisition | 1999 |
| Board Chairman | Mikael Nachemson |
| Board representative | |
| from Bure | Anders Mörck |
| Income statement, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 841 | 534 | 486 |
| Operating expenses | -763 | -499 | -460 |
| EBITA before | |||
| one-time items | 78 | 35 | 26 |
| % | 9.3 | 6.6 | 5.4 |
| One-time items | -8 | -8 | 24 |
| Share in profit of associates | 0 | 0 | 0 |
| EBITA | 70 | 27 | 50 |
| % | 8.3 | 5.1 | 10.3 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profit | 70 | 27 | 50 |
| Net financial items | 2 | 2 | -5 |
| Profit before tax | 72 | 29 | 45 |
| Minority interest and taxes | -21 | -8 | -5 |
| Net profit | 51 | 21 | 40 |
| Key figures, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | 58 | 10 | 8 |
| Of which, organic growth, % | 11 | 10 | 8 |
| Operating cash flow | 103 | 36 | 53 |
| Equity/assets ratio, % | 42 | 53 | 48 |
| Net loan debt (-) / receivable (+) | 70 | 103 | 66 |
| Average number of employees | 1,099 | 630 | 598 |
| Value added per employee | 424 | 438 | 473 |
| Balance sheet | 2007 | 2006 | 2005 |
| Goodwill | 185 | 43 | 43 |
| Other intangible assets | 5 | 0 | 0 |
| Tangible assets | 40 | 22 | 25 |
| Financial assets | 5 | 0 | 3 |
| Current receivables | 110 | 46 | 46 |
| Cash, cash equiv., short-term invest. | 73 | 112 | 86 |
| Total assets | 418 | 223 | 203 |
| Equity | 175 | 119 | 98 |
| Provisions | 4 | 1 | 0 |
| Long-term liabilities | 2 | 2 | 9 |
| Current liabilities | 237 | 101 | 96 |
| Total equity and liabilities | 418 | 223 | 203 |
Martin Henricson, President
Mercuri is an expert at optimising sales performance and realising sales strategies in enterprises worldwide.
Bure has had an ownership interest in Mercuri since 1998. With its unique concepts and longstanding experience of sales and management consulting, Mercuri is well positioned for continued successful development. Business cycle sensitivity in Mercuri is deemed to be lower than for corporate education in general, since sales performance is a prioritised area for companies even in a market slump or recession.
In 2006 Bure carried out a large-scale ownership diversification programme in which some 70 consultants in Mercuri have been offered a share equal to 25 per cent of value development in the company through share options. The ownership diversification programme is a way of ensuring alignment between the interests of shareholders and individual key staff.
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 management models. Mercuri helps its clients to achieve sustainable and measurable improvements in their sales results.
In the next few years the company will supplement its existing business model, which at present is largely based on billable hours among the consultants, with alternative models such as blended learning (teacher-led instruction in combination with e-learning or other aids) and business simulations. These alternative business models will be critical tools for strengthening the future profit margin. By 2010, international cross-border business will be increased to 20 per cent and blended learning/business simulations to 10 per cent of total sales.
From a financial standpoint, we anticipate further organic growth. In order to accelerate the pace of supplementation with new business models, acquisitions are also possible. However, 2008 is expected to be a transitional year with significant investments in structural capital.
Mercuri International is represented in 40 countries in Europe, Asia, North and South America, South Africa and Australia.
Many companies now see their sales staff as a unique resource and a key differentiator for their business.
The total market for corporate education in the USA and Europe is estimated at approximately SEK 230 billion. According to the research institute IDC, this market is expected to grow by around 5–6 per cent annually. The segment where Mercuri is active, sales and leadership, makes of roughly 20 per cent of the total market, and is assessed to be less sensitive to the business cycle than other types of corporate education.
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 international 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 in 40 countries in Europe, Asia, North and South America, the Middle East, South Africa and Australia. The group has more than 600 employees. Mercuri is the chosen partner of some 15,000 organisations, several of which have relationships extending back for more than 15 years. Many of these work with the company in up to 20 different countries simultaneously. 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.
Mercuri's goal is to be the preferred choice of every company that has a sales challenge. All companies face the challenges of achieving growth and enhancing profit ability, and even organisations with a limited capacity for growth need to satisfy shareholder demand on increased returns. Mercuri's experience in enhancing the sales performance of leading companies shows that in many cases, the sales staff do not understand or accept their company's sales strategy. Frequently, less than 20 per cent of the strategy is known and implemented. In addition, a recent Mercuri survey revealed that only 17 per cent of the available time is typically spent on direct customer activity. Mercuri knows that short-term measurable improvement in sales performance is possible.
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 a 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 by "Taking Sales To A Higher Level".
One typical example is Metso Minerals, which turned to Mercuri for help in analysing the efficiency of its process for global sales activities. The project has analysed the needs for targeting, support and motivation of the sales organisations in different countries. This has resulted in a whole new sales process, developed in collaboration between Mercuri's consultants and the company, at the same time that a new sales matrix has been developed for all sales staff and their manage ment. Trial implementation has been carried out and a rollout of the entire concept is now underway at Metso Minerals.
Mercuri's working method
Mercuri is an expert at optimising sales performance and realising sales strategies for enterprises worldwide.
| Bure's holding, % | 100 (dilution, see Note 32) |
|---|---|
| Book value, SEK M | 358 |
| Year of acquisition | 1998 |
| Board Chairman | Mikael Nachemson |
| Board representative | |
| from Bure | Anders Mörck |
| Income statement, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 769 | 715 | 672 |
| Operating expenses | -711 | -667 | -634 |
| EBITA before | |||
| one-time items | 58 | 48 | 38 |
| % | 7.6 | 6.7 | 5.7 |
| One-time items | 0 | -1 | 0 |
| Share in profit of associates | 0 | 1 | 1 |
| EBITA | 58 | 48 | 39 |
| % | 7.5 | 6.8 | 5.8 |
| Amort./impairment of reval. gains | 0 | -3 | -1 |
| Operating profit | 58 | 45 | 38 |
| Net financial items | -5 | -9 | -3 |
| Profit before tax | 53 | 36 | 35 |
| Minority interest and taxes | -7 | -1 | -9 |
| Net profit | 46 | 35 | 26 |
| Key figures, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | 8 | 6 | 6 |
| Of which, organic growth, % | 8 | 3 | 4 |
| Operating cash flow | 55 | 30 | 36 |
| Equity/assets ratio, % | 47 | 42 | 39 |
| Net loan debt (-) / receivable (+) | -8 | -48 | -54 |
| Average number of employees | 598 | 601 | 577 |
| Value added per employee | 877 | 821 | 799 |
| Balance sheet | 2007 | 2006 | 2005 |
| Goodwill | 314 | 301 | 309 |
| Other intangible assets | 4 | 5 | 5 |
| Tangible assets | 17 | 18 | 21 |
| Financial assets | 39 | 34 | 28 |
| Inventories, etc. | 2 | 1 | 1 |
| Current receivables | 185 | 146 | 132 |
| Cash, cash equiv., short-term invest. | 106 | 87 | 83 |
| Total assets | 667 | 592 | 579 |
| Equity | 314 | 251 | 228 |
| Provisions | 44 | 43 | 45 |
| Long-term liabilities | 96 | 14 * |
109 |
| Current liabilities | 213 | 284 * |
197 |
| Total equity and liabilities | 667 | 592 | 579 |
* The company's loan liabilities at year-end 2006 are reported as current in connection with renegotiation of bank agreements.
Dan Sehlberg, President
As the leading communications production group, Citat makes day-to-day work easier for marketing and communications departments through a combination of production, consulting services and outsourcing.
Citat's aims to become Europe's leading communications production company.
Communication budgets are subject to increasingly tough demands on cost-efficiency, quality and transparency, not least in production and day-to-day activities. Citat is well positioned as the leading communications production company in the Nordic region, where the group's size, breadth and in-depth expertise set it apart from the competitors. Interest in outsourcing is being fuelled by the higher level of performance expected from communications and marketing departments. This is providing excellent scope for major assignments, long-term contracts and close partnerships in an expanding global market. The forecast for 2008 indicates a continued upswing with stable demand for media space, and advertisers are expected to continue raising the investments during the period.
Citat offers a comprehensive range of marketing and communication services such as:
All of the group's services are designed to support, reinforce and develop its clients' marketing and communication departments. Citat has around 400 employees at its offices in Stockholm, Göteborg, Lund, Helsingborg and Helsinki.
Citat's offering in the Marketing Services business area includes operational advertising, market adaptation, catalogue production, photography and advanced retouching, Web advertising and a number of support systems for different marketing processes, such as Citat MarketStore. The companies in this business area function as an extension of the client's marketing department and work in close contact with the client organisations and their strategic agencies.
Campaign for Dagens Nyheter announcing the launch of the DN mobile phone in Sweden.
In 2007 Citat Journalistgruppen took over production of a real estate industry magazine through an outsourcing contract.
Clients in this area include Dagens Nyheter, Fritidsresor, Nobel Biocare, Telenor, Unilever, Volvo, and others.
Operations in Citat's Editorial Services business area are dominated by production of magazines, newsletters, websites, etc., targeting corporate customers/employees and members of organisations. Citat is the leader in the Swedish editorial communications market following the Citat Journalistgruppen's acquisition of Appelberg Publishing in the first quarter of 2007. Clients in this business area include Ericsson, the Swedish Property Federation, KPMG, the Swedish Red Cross, SEB, SSAB, Trygg-Hansa and Vattenfall.
Citat is the Nordic leader in business process and functional outsourcing, with a track record of 11 outsourcing contracts to date. By entrusting all or parts of their marketing or communications to a specialist, the clients can concentrate on their core businesses, communication strategies and process control. Citat takes responsibility for developing the outsourced functions while at the same time reducing the clients' production costs. A few notable outsourcing clients are Ericsson, Fritidsresor, Manpower, Telenor and Unilever.
In 2007 the Swedish Property Federation was added as an outsourcing client, and Citat is now responsible for production of the real estate magazine Fastighetstidningen. Agency revenue from Citat's outsourcing assignments in 2007 amounted to SEK 115M, representing organic growth of 27 per cent.
| Bure's holding, % | 100 (dilution, see Note 32) |
|---|---|
| Book value, SEK M | 191 |
| Year of acquisition | 1996 |
| Board Chairman | Jan Stenberg |
| Board representative | |
| from Bure | Carl Backman |
| Income statement, SEK M | 2007 | Pro forma * 2006 |
Pro forma * 2005 |
|---|---|---|---|
| Net sales | 511 | 451 | 450 |
| Operating expenses | -468 | -420 | -418 |
| EBITA before | |||
| one-time items | 43 | 31 | 32 |
| % | 8.3 | 6.9 | 7.1 |
| One-time items | 31 ** |
3 | -1 |
| Share in profit of associates | 0 | 0 | 0 |
| EBITA | 74 | 34 | 31 |
| % | 14.4 | 7.6 | 6.8 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profit | 74 | 34 | 31 |
| Net financial items | 0 | -1 | -2 |
| Profit before tax | 74 | 33 | 29 |
| Minority interest and taxes | -12 | -12 | -7 |
| Net profit | 62 | 21 | 22 |
| Key figures, SEK M | 2007 | * Pro forma 2006 |
* Pro forma 2005 |
|---|---|---|---|
| Growth, % | 13 | 0 | 8 |
| Of which, organic growth, % | 13 | 0 | 8 |
| Operating cash flow | 33 | 12 | 31 |
| Equity/assets ratio, % | 53 | 59 | 60 |
| Net loan debt (-) / receivable (+) | 64 | 10 | 5 |
| Average number of employees | 399 | 356 | 347 |
| Value added per employee | 819 | 794 | 794 |
| Balance sheet | 2007 | 2006 | 2005 |
| Goodwill | 103 | 103 | 103 |
| Tangible assets | 14 | 11 | 11 |
| Financial assets | 0 | 0 | 5 |
| Current receivables | 138 | 129 | 90 |
| Cash, cash equiv., short-term invest. | 77 | 28 | 28 |
| Total assets | 332 | 271 | 237 |
| Equity | 177 | 161 | 141 |
| Provisions | 1 | 0 | 0 |
| Long-term liabilities | 8 | 13 | 18 |
| Current liabilities | 146 | 97 | 78 |
| 332 | 271 | 237 |
Does not apply to balance sheet or key figures: equity/assets ratio and net loan debt/receivable.
**Refers to exit gain on the sale of Dataunit Systemkonsult AB.
Mikael Vatn, 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 competency 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 2007 the company reported net sales of SEK 205M. EnergoRetea has offices in Stockholm (Kungsholmen and Nacka Strand), Växjö, Uppsala, Linköping, Malmö, Laholm, Varberg and Kalmar.
"The harder, the better"
Energo Network Services AB (ENS) is a wholly owned subsidiary of EnergoRetea. ENS is a consulting company specialised in IT-related systems and solutions for properties, buildings and people. The company also offers technical services in BUS/control networks and information systems.
EnergoRetea's vision is to be Sweden's leading provider of environmentally-friendly energy solutions.
EnergoRetea operates primarily in central Sweden, with the majority of customers in Stockholm county and the Mälardalen region. In Building Automation Systems, it is Stockholm's largest consulting company in the segment, with around 120 active consultants. The newly opened Malmö office has customers in southern Sweden, mainly in Småland, Skåne and Halland. In Water and Hydropower, the company also has customers in northern Sweden. In addition, EnergoRetea has customers in Norway, Denmark and Malta.
Demand for the company's services grew during the year and around 70 new employees were hired. A new office was opened in Malmö for Region South, covering Malmö, Växjö, Kalmar, Laholm and Varberg. The unit already has some 30 consultants active primarily in Energy & Power Networks. An Energy & Power Networks office was also opened in Linköping during the year. EnergoRetea has approximately 220 employees.
The past year saw increased demand in all business areas, particularly Building Automation Systems (electrical engineering, HVAC, sanitation and control) which won contracts in several large and complex products for clients like Akademiska Hus, Arcona, the Swedish Civil Aviation Administration, Locum and Specialfastigheter. The business area has expanded in pace with rising demand and showed strong organic growth during the year.
In 2007 EnergoRetea was qualified by the national accreditation body SWEDAC for energy performance certification of buildings. This means that the Energy & Environment group in EnergoRetea's Building Automation Systems business area can now perform certifications according to the National Board of Housing, Building and Planning's regulations.
EnergoRetea offers consulting engineering services in three areas:
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 customers, 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.
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, % | 93.4 (dilution, see Note 32) |
|---|---|
| Book value, SEK M | 103 |
| Year of acquisition | 2001 |
| Board Chairman | Östen Innala |
| Board representatives | |
| from Bure | Mikael Nachemson, Carl Backman |
| Income statement*, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 205 | 71 | 59 |
| Operating expenses | -190 | -61 | -49 |
| EBITA before | |||
| one-time items | 15 | 10 | 10 |
| % | 7.4 | 13.5 | 16.1 |
| One-time items | -5 | 0 | 0 |
| Share in profit of associates | 0 | 0 | 0 |
| EBITA | 10 | 10 | 10 |
| % | 4.9 | 13.5 | 16.1 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profit | 10 | 10 | 10 |
| Net financial items | -1 | 0 | 0 |
| Profit before tax | 9 | 10 | 10 |
| Minority interest and taxes | -3 | -3 | -2 |
| Net profit | 6 | 7 | 8 |
| Key figures*, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | 191 | 19 | 29 |
| Of which, organic growth, % | 15 | 19 | 29 |
| Operating cash flow | 7 | 13 | 7 |
| Equity/assets ratio, % | 56 | 35 | 28 |
| Net loan debt (-) / receivable (+) | -37 | 12 | 10 |
| Average number of employees | 192 | 72 | 60 |
| Value added per employee | 789 | 767 | 781 |
| Balance sheet *, SEK M | 2007 | 2006 | 2005 |
| Goodwill | 130 | 0 | 0 |
| Other intangible assets | 2 | 0 | 0 |
| Tangible assets | 5 | 2 | 1 |
| Inventories | 10 | 0 | 0 |
| Current receivables | 49 | 22 | 18 |
| Cash, cash equiv., short-term invest. | 14 | 11 | 10 |
| Total assets | 210 | 35 | 29 |
| Equity | 117 | 12 | 8 |
| Provisions | 2 | 0 | 0 |
| Long-term liabilities | 50 | 0 | 0 |
| Current liabilities | 41 | 23 | 21 |
| Total equity and liabilities | 210 | 35 | 29 |
| *The figures for 2005 and 2006 refer only to Retea. |
BURE'S ANNUAL REPORT 2007, 25
Tomas Bergström, President
Textilia offers professional and cost-effective laundering and textile services that contribute to higher quality and resource flexibility for its customers, primarily in the medical and health care sector.
Textilia's visions is firstly to defend its position as the privatelyowned quality alternative for public sector customers seeking a modern, reliable and environmentally responsible textile service partner, and secondly to selectively target profitable textile service segments in the hotel and industrial sectors and entrance mats.
The Swedish market for business-to-business textile services is worth approximately SEK 2.5 billion annually, of which some SEK 1 billion is estimated to come from the public sector (primarily county councils), around SEK 600M each from the hotel and industrial sectors and the remainder of around SEK 300M from entrance mats and other. Of the portion attributable to the public sector, countyoperated enterprises have an estimated market share of around 50 per cent, while Textilia has an assessed market share of around 15 per cent.
With four laundry facilities in Långsele, Rimbo, Örebro and Karlskrona, Textilia is Sweden's leading provider of textile services to the public sector. The county councils of Västerbotten, Västernorrland, Jämtland, Dalarna, Stockholm, Kronoberg and Blekinge are all Textilia customers, as are a large number of municipalities and many parts of the Swedish Armed Forces. Textilia's operations are based on decentralised management, where each laundry develops its own customer relationships in local and regional partnership. The head office in Örebro is responsible for central accounting, purchasing, human resources and IT.
In 2008 Textilia will continue its efficiency improvement and business development efforts to raise the company to a higher level of profitability. The focus remains on the public sector, but with an ambition to advance Textilia's position as the private quality alternative.
| Bure's holding, % | 100 (dilution, see Note 32) |
|---|---|
| Book value, SEK M | 20 |
| Year of acquisition | 1996 |
| Board Chairman | Mikael Nachemson |
| Board representative | |
| from Bure | Kristofer Hammar |
| Income statement, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 323 | 325 | 357 |
| Operating expenses | -302 | -336 | -354 |
| EBITA before | |||
| one-time items | 21 | -11 | 3 |
| % | 6.4 | -3.4 | 0.9 |
| One-time items | -7 | 0 | 0 |
| Share in profit of associates | 0 | 0 | 1 |
| EBITA | 14 | -11 | 4 |
| % | 4.2 | -3.3 | 1.1 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profit/loss | 14 | -11 | 4 |
| Net financial items | -5 | -3 | -2 |
| Profit before tax | 9 | -14 | 2 |
| Minority interest and taxes | 0 | 0 | -2 |
| Net profit/loss | 9 | -14 | 0 |
| Key figures, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | -1 * |
-9 | 7 |
| Of which, organic growth, % | -1 | -9 | 7 |
| Operating cash flow | 27 | -40 | -9 |
| Equity/assets ratio, % | 43 | 36 | 40 |
| Net loan debt (-) / receivable (+) | -81 | -106 | -61 |
| Average number of employees | 387 | 443 | 502 |
| Value added per employee | 415 | 340 | 366 |
| * Adjusted for sold units growth 2007 amounted to 1,3 per cent. Balance sheet |
2007 | 2006 | 2005 |
| Tangible assets | 140 | 158 | 137 |
| Financial assets | 20 | 20 | 20 |
| Current receivables | 64 | 69 | 82 |
| Cash, cash equiv., short-term invest. | 6 | 0 | 20 |
| Total assets | 230 | 247 | 259 |
| Equity | 98 | 89 | 104 |
| Provisions | 2 | 4 | 11 |
| Long-term liabilities | 39 | 60 | 56 |
| Current liabilities | 91 | 94 | 88 |
| Total equity and liabilities | 230 | 247 | 259 |
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 BASF, E.ON, HP, IBM, IKEA, Motorola, Siemens and Skanska. Celemi has offices in Sweden, the USA and China and a extensive partner network spanning 40 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.
Celemi's consultants work closely with clients to design custom 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, % | 30.13 |
|---|---|
| Book value, SEK M | 9 |
| Year of acquisition | 2001 |
| Board Chairman | Göran Havander |
| Board representative | |
| from Bure | Daniel Utbult |
| Income statement, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 48 | 59 | 74 |
| Operating expenses | -49 | -52 | -76 |
| EBITA before | |||
| one-time items | -1 | 7 | -2 |
| % | -1.6 | 12.2 | -2.7 |
| One-time items | 0 | 0 | -2 |
| Share in profit of associates | 0 | 0 | 0 |
| EBITA | -1 | 7 | -4 |
| % | -1.6 | 12.2 | -5.5 |
| Amort./impairment of surplus values | 0 | 0 | 0 |
| Operating profit/loss | -1 | 7 | -4 |
| Net financial items | 0 | -1 | -1 |
| Profit before tax | -1 | 6 | -5 |
| Minority interest and taxes | 0 | 0 | -2 |
| Net profit/loss | -1 | 6 | -7 |
| Key figures, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | -19 | -20 | -6 |
| Of which, organic growth, % | -19 | -20 | -6 |
| Operating cash flow | -6 | 11 | -3 |
| Equity/assets ratio, % | 74 | 66 | 29 |
| Net loan debt (-) / receivable (+) | 1 | 8 | -7 |
| Average number of employees | 30 | 35 | 45 |
| Value added per employee | 866 | 988 | 829 |
| Balance sheet | 2007 | 2006 | 2005 |
| Goodwill | 4 | 4 | 5 |
| Tangible assets | 2 | 1 | 2 |
| Inventories, etc. | 3 | 3 | 3 |
| Current receivables | 19 | 15 | 18 |
| Cash, cash equiv., short-term invest. | 1 | 10 | 7 |
| Total assets | 29 | 33 | 35 |
| Equity | 21 | 22 | 10 |
| Long-term liabilities | 0 | 2 | 14 |
| Current liabilities | 8 | 11 | 11 |
| Total equity and liabilities | 29 | 33 | 35 |
Marcus Strömberg, President
AcadeMedia's educational offering is designed to develop the potential of people and companies through the use of modern educational models and technology to create measurable gains for the customer.
AcadeMedia's vision is to secure a leading position in the education industry for both private and public sector organisations by playing an active role in restructuring of the educational sector. AcadeMedia is working to change the way people learn on the job as a means for enhancing the competitiveness and future prospects of its customers.
AcadeMedia delivers services and products for skills and competence development. The company caters to customers in both the private and public sectors. AcadeMedia estimates the total sales volume in its targeted market at around SEK 30 billion.
AcadeMedia is one of Sweden's largest private education companies with a wide portfolio of services for both private and public sector customers. AcadeMedia has several strong brands and works in the following areas:
AcadeMedia has four different school profiles operating under the brand names NTI-Gymnasiet, Mikael Elias Teoretiska Gymnasium, LBS-gymnasiet and Drottning Blankas Gymnasieskola. AcadeMedia has obtained permission to open Handelsgymnasiet, which will be the com pany's fifth profile. Handelsgymnasiet will offer a vocationally-oriented programme based on an apprenticeship model for the retail and service sectors.
AcadeMedia offers both classroom-based and distance education, the latter of which is provided under the brand name NTI-distans.
AcadeMedia has schools in different stages of development, from fully developed schools to those that are in the build-up phase, as well as completed and planned school start-ups. An overview of AcadeMedia's independent schools is provided in the table below.
| Stockholm | Göteborg Malmö |
Sundsvall | Karlskrona Luleå |
Lund | Falun | Eskilstuna Borås |
Halmstad | Kungsbacka | Trollhättan Varberg |
Kristianstad Gotland |
Kalmar | Nyköping | Norrköping | Sollentuna | Södertälje Uppsala |
Örnsköldsvik Umeå |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NTI-Gymnasiet | |||||||||||||||||
| METG | |||||||||||||||||
| LBS-Gymnasiet | |||||||||||||||||
| DBG | |||||||||||||||||
| Handelsgymnasiet |
METG, Mikael Elias Teoretiska Gymnasium DBG, Drottning Blankas Gymnasieskola
Under the brand name AcadeMedia Masters, some 23 vocational training courses are offered in nine locations.
AcadeMedia offers labour market education and private job placement services.
This business area offers a number of concepts for customised e-learning and develops business skills through the use of simulation tools.
AcadeMedia published the following outlook for 2008 in its year-end report for 2007:
"AcadeMedia expects net sales for 2008 to exceed SEK 600M and to see a gradual improvement in operating margin. This indicates an operating profit of SEK 65-75M for the full year 2008. The company's interest-bearing liabilities at 31 December 2007 amounted to SEK 188M, with an average annual interest expense of around SEK 10.5M. Cash and cash equivalents on the same date totalled SEK 64.2M. The strong anticipated earnings trend and limited need for investment in operations, with the exception of possible acquisitions, will provide a positive cash flow before amortisation of the company's liabilities."
Bure's portfolio
Book value, SEK M 185 Year of acquisition 2007 Board Chairman Anders Nilsson Board representative from Bure –
Bure's holding, % 38.28 of share capital 49.78 of votes
| Income statement, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Net sales | 489 | 222 | 226 |
| Operating expenses | -445 | -211 | -244 |
| Operating profit | 44 | 11 | -18 |
| Net financial items | -7 | 0 | 1 |
| Profit before tax | 37 | 11 | -17 |
| Minority interest and taxes | -10 | -1 | 5 |
| Net profit | 27 | 10 | -12 |
| Key figures, SEK M | 2007 | 2006 | 2005 |
|---|---|---|---|
| Growth, % | 121 | -2 | 43 |
| Operating cash flow | 48 | -4 | -11 |
| Equity/assets ratio, % | 45 | 67 | 63 |
| Net loan debt (-) / receivable (+) | 124 | -27 | -31 |
| Average number of employees | 640 | 227 | 275 |
| Balance sheet | 2007 | 2006 | 2005 |
| Goodwill and other intangible assets | 338 | 9 | 10 |
| Tangible assets | 20 | 3 | 3 |
| Financial assets | 48 | 43 | 44 |
| Current receivables | 91 | 62 | 49 |
| Cash, cash equiv., short-term invest. | 64 | 27 | 32 |
| Total assets | 561 | 144 | 138 |
| Equity | 254 | 97 | 87 |
| Long-term liabilities | 149 | 2 | 2 |
| Current liabilities | 158 | 45 | 49 |
| Total equity and liabilities | 561 | 144 | 138 |
30, BURE'S ANNUAL REPORT 2007
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 2007 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 shareholder value by focusing on the operating effi ciency, 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 that would not otherwise be available on the open stock market.
The Parent Company's profi t after tax for the full year was SEK 685M (846) and included exit gains of SEK 450M (626). Reversals of previous impairment losses amounted to SEK 203M (218), and consisted of SEK 114M in Mercuri, SEK 23M in CR&T Holding and SEK 56M in Sancera. The holding in CR&T Holding has been reversed in respect of the sale of the indirectly held shares in Spotfi re and the holding in Sancera has been reversed due to valuation of loss carryforwards.
Administrative expenses totalled SEK 38M (38) and included project-specifi c costs of SEK 6M (6) and bonus provisions of SEK 6M (7). The Parent Company's net fi nancial items amounted to SEK 66M, of which SEK 54M refers to interest and SEK 12M to value growth in the company's hedge fund participations. Return on the average net loan receivable is equal to 3.3 per cent annually (7).
Equity in the Parent Company at the end of the period amounted to SEK 2,612M (2,935) and the equity/assets ratio was 97 per cent (94). At 31 December 2007 the Parent Company had cash and cash equivalents and shortterm investments of SEK 1,423M (1,166) and a reported net loan receivable of SEK 1,462M (1,080), which had a positive impact on net fi nancial items. The composition of the net loan receivable is shown in the table at right.
Bure may normally place excess liquidity in fi xed-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. Of the total cash surplus at 31 December 2007, SEK 1,331M was placed in a portfolio of established Swedish hedge funds and the remaining SEK 775M in short-term bank deposits.
| Net loan receivable/debt SEK M |
31 Dec 2007 |
31 Dec 2006 |
|---|---|---|
| Interest-bearing assets | ||
| Receivables from subsidiaries | 24 | 12 |
| Other interest-bearing receivables | 40 | 7 |
| Cash and cash equivalents | 1,423 | 1,166 |
| 1,487 | 1,185 |
| Liabilities to subsidiaries | 25 | 105 |
|---|---|---|
| 25 | 105 | |
| Net loan receivable | 1,462 | 1,080 |
| Net loan receivable, full exercise1 | 1,462 | 1,556 |
Adjusted for the full exercise of outstanding warrants, which took place in June 2007.
1
In the fi rst quarter of 2007 Bure invested in shares in the education company AcadeMedia, equal to approximately 8.5 per cent of the share capital and 25.1 per cent of the votes in the company at 30 September 2007. In October 2007 Bure acquired additional shares, after which Bure held 26.3 per cent of the share capital and 42.1 per cent of the votes and was thus put in a mandatory bid situation. In light of this, Bure made a mandatory bid for AcadeMedia and offered a cash price of SEK 90.00 for each share of class A and class B. After completion of the bid, Bure's holding at 31 December 2007 had increased to 38.28 per cent of the share capital and 49.78 per cent of the votes in AcadeMedia.
In 2007 Bure received dividends of SEK 3M from Grontmij and a smaller amount of dividends from Jeeves.
The sales of Cygate and SYSteam were completed in the first quarter. The sale of Cygate to TeliaSonera generated proceeds of approximately SEK 647M and a capital gain of around SEK 175M. The corresponding figures on the sale of SYSteam to ErgoGroup were proceeds of SEK 450M and a capital gain of SEK 120M. The Parent Company has sold Retea to EnergoRetea for SEK 80M, providing an internal capital gain of around SEK 53M. In addition, IT-Gymnasiet i Sverige and Framtidsgymnasiet i Göteborg were sold to the subsidiary Anew Learning for a price equal to historical cost (SEK 81M). During the year, 2.6 per cent of EnergoRetea Group was sold to senior executives in that company according to the decision of the AGM. The sale was made at assessed market value. Also in 2007, all of the shares in Grontmij were sold for a total price of SEK 267M and a capital gain of around SEK 99M. The entire holding in Jeeves was also sold for SEK 10M.
Equity per share at the end of the period was SEK 28.02, compared to SEK 26.30 at year-end 2006.
Consolidated operating profi t including discontinued operations for the full year 2007 was SEK 986M (885). Consolidated operating profi t in continuing operations, before goodwill impairment, was SEK 323M (143) and included exit gains of SEK 154M (69). Profi t for the period was affected by no reversals of previously recognised impairment losses on shares (0). Of total operating profi t, SEK 225M (108) was attributable to profi t in the existing subsidiaries, where the comparative fi gure refers to continuing operations. The remainder consists of the Parent Company's administrative expenses and group adjustments, as well as shares in profi t of associates. Consolidated profi t after fi nancial items in continuing operations was SEK 383M (152).
Equity at the end of the period amounted to SEK 2,754M (2,737) and the equity/assets ratio was 74 per cent (70). Fully diluted equity per share was SEK 29,54 (24.77). The net loan receivable at 31 December 2007 was SEK 1,514M (1,178), consisting of interest-bearing assets of SEK 1,871M (1,574) and interest-bearing liabilities of SEK 357M (396).
At year-end 2007 the Bure Group had total loss carryforwards of SEK 1,143M. Of this amount, SEK 368M refers to the Parent Company and can be offset against taxable profi ts in certain wholly owned subsidiaries in the event that Bure's tax status as an investment company ceases. The deferred tax asset based on these loss carryforwards is valued at SEK 95M, which corresponds to a valuation of SEK 325M of the total loss carryforward. These loss carryforwards will increase by an additional SEK 93M if Bure's AGM approves the Board's proposed dividend.
The Group has limited R&D activities for which the expenses have been charged to profi t 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 conducts operations that must be reported according to the Swedish Environmental Code SNI 93, 01-1.
Information about the average number of employees, salaries and benefi ts of senior executives is shown in Notes 24, 25 and 36.
Bure's Board of Directors consists of fi ve members. The composition of the Board and information about the Board members and President is presented in the corporate governance report for 2007. The Parent Company's CFO Anders Mörck has served as Board Secretary during the year.
The work of the Board of Directors is governed by a procedural plan which was most recently adopted at the statutory meeting on 26 April 2007. The work of the Board follows a yearly plan
with fi xed 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 fi nancial year, the Board held 15 meetings, consisting of 7 scheduled meetings and 8 extra meetings, of which 4 were held per capsulam and 3 by telephone. In connection with one of the meetings, Bure's Board met with the presidents of the portfolio companies. The Board formed a quorum at all meetings. Board member Björn Björnsson was 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 fi nancial 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 listing 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 fi nancial commitments and agreements, as well as any signifi cant 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 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, strategy and budgetary issues. The Board determines the company's fi nance policy, right of authorisation and decision-making process. The Board has formulated a specifi c instruction regarding the responsibilities and powers of Bure's 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 auditor meet with the Board without the presence of any member of the Executive Management.
In 2007 the Board of Directors of Bure Equity AB was paid total fees of SEK 990,000, of which the Chairman received SEK 350,000. No compensation has been paid other than that resolved on by the AGM.
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. Proposed principles for compensation to the President and Executive Management will be put before the 2007 AGM for decision. At present, there are no outstanding share or share-price related incentive schemes for the Board or Executive Management. It should be noted that the main owner Skanditek has set out call options in total of 400 000 shares in Bure to senior management and employees in 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 held 5,153,200 of its own (treasury) shares at the end of 2007. Following the repurchase of an additional 585,000 shares in January 2008, Bure now holds 5,738,200 treasury shares. On average Bure´s holding of treasury shares has amounted to 2,789,140 shares.
In the autumn of 2006 Bure announced plans to carry out a non-recurring capital distribution amounting to approximately SEK 900M to the shareholders during 2007. In addition, the anticipated proceeds of around SEK 500M from the exercise of the outstanding subscription warrants would be transferred to the shareholders. A large number of shares and warrants were repurchased in the fi rst half of 2007. Together with the voluntary redemption programme for SEK 569M that was completed at the beginning of November 2007, a total of SEK 1,390M was distributed. In November and December 2007 an additional buyback of shares was started. In total, shares for a further SEK 102M were repurchased in November and December 2007.
| Total capital distribution in 2007 | 1,492 |
|---|---|
| Voluntary redemption programme | 569 |
| repurchased warrants (SEK 0.75 each) | 131 |
| Lost proceeds from the exercise of | |
| Subscription warrants | 490 |
| Shares | 302 |
| Repurchase | |
In January 2008 Bure repurchased shares for an additional SEK 20M. At year-end 2007 Bure held 5,153,200 treasury shares. Following the share buyback in January 2008, the holding of treasury shares amounts to 5,738,200. The warrants held by the company expired and became void when the subscription period for the warrants ended on 15 June 2007, after which Bure holds no treasury warrants.
Valuation of the holdings is of major importance to the Parent Company. Sources of uncertainty in this context are the expected level of future earnings and the return requirement, which are determined on the basis of several different para meters. Aside from this, Bure has a remaining risk after the sale of Carl Bro through an obligation to compensate the buyer Grontmij in the event of a loss in a dispute regarding HCC. See also Note 23.
The Bure Group is exposed to a number of different fi nancial risks – currency risk, interest rate risk and general liquidity risk. Bure's overall risk objective is regulated in the Parent Company's fi nance policy. Because the subsidiaries are mutually autonomous, each has adopted its own separate fi nance policy. A more detailed description of fi nancial 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 specifi c events. Bure's sensitivity to fi nancial 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 +/- 15M on reported profi t in the Group and SEK +/- 15M in the Parent Company. Sensitivity to different currencies is deemed limited. The most important currency, apart from the Swedish krona, is the euro. A fi ve per cent change in the euro exchange rate would have an estimated effect on profi t of less that SEK 2M. The estimated effect on profi t 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.
The fi nancial situation of both the Parent Company and the Group has improved signifi cantly in recent years, with strong growth in earnings. The Board of Directors and management anticipate sustained good profi tability in the markets where Bure is active.
In January 2008 it was announced that Bure's President and CEO Mikael Nachemson would be leaving the company in the autumn of 2008. A process to recruit a new President and CEO has been started. At the same time, Bure announced ambitions to concentrate its holdings in the educational sector over the coming 12-month period.
The Board intends to propose that the AGM votes in favour of unchanged principles for salary and other terms of remuneration for senior executives. These principles were most recently adopted by the AGM on 26 April 2007 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 fi erce competition for qualifi ed 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 are marketbased and enables the Company to recruit and retain leading senior executives. Remuneration to senior executives shall consist of fi xed 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 fi xed salary. Pension terms shall be comparable to those applicable to equivalent senior executives in the market, and shall be based on defi ned contribution pension solutions. The combined amount of termination benefi ts and severance pay shall not exceed 24 monthly salaries for the CEO, or 12 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 remuneration committee). These parameters must be well balanced and consistent with the overall interests of the shareholders. These principles apply to the company's President, CFO and other individuals (one at present) in the company's executive management. The principles also provide guidance for Bure's actions as owner in the portfolio companies with regard to senior executives in these companies.
The company's annual report will be submitted for adoption by the Annual General Meeting on 23 April 2008. The following funds are at the disposal of the Annual General Meeting according to the Parent Company's balance sheet:
| Retained profit | SEK | 413,808,037 |
|---|---|---|
| Net profit for the year | SEK | 685,201,014 |
| SEK 1,099,009,051 |
The Board of Directors proposes that the profi t be distributed as follows:
| SEK 1,099,009,051 | ||
|---|---|---|
| To be carried forward | SEK 1,006,369,414 | |
| a dividend of SEK 1.00 per share | SEK | 92,639,637 |
| To be paid to the shareholders as |
The total distribution has been calculated on 98,377,837 registered shares, excluding treasury shares which do not grant the right to dividends. The number of treasury shares was at 22 February 2008 5,738,200. All issued shares are of the same class and grant equal right to votes and capital in the company. The Articles of Association contain no limitations on the right to transfer shares nor, to the Board of Directors' knowledge, are there any agreements between shareholders that limit this right. The shareholders that hold more than one tenth of the capital in the company are Skanditek with 17.6 per cent and Catella Fonder with 14.0 per cent.
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 furthermore propose that the AGM extend its earlier authorisation to repurchase and resell shares amounting to no more than 10 per cent of all outstanding shares in the company during the period until the next Annual General Meeting.
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 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, 22 February 2008
Patrik Tigerschiöld Björn Björnsson Håkan Larsson
Chairman Board member Board member
Board member Board member President & CEO
Ann-Sofi Lodin Kjell Duveblad Mikael Nachemson
Our audit report was submitted on 22 February 2008 Ernst & Young AB
Björn Grundvall Staffan Landén
Authorised Public Accountant Authorised Public Accountant
| Group | ||||
|---|---|---|---|---|
| SEK M | Note | 2007 | 2006 | |
| Operating income | ||||
| Net sales | 2 | 2,647.8 | 2,147.1 | |
| Exit gains | 3 | 154.1 | 69.1 | |
| Exit losses | 3 | 0 | -0.1 | |
| Other operating income | 5.8 | 6.3 | ||
| Shares in profit/loss of associated companies | 4 | 5.8 | 3.1 | |
| Total operating income | 2,813.5 | 2,225.5 | ||
| Operating expenses | ||||
| Raw materials and consumables | -81.8 | -82.0 | ||
| Goods for resale | -109.1 | -168.3 | ||
| Other external expenses | 8, 9, 19 | -725.0 | -519.9 | |
| Personnel costs | 25, 36 | -1,457.1 | -1,192.7 | |
| Depreciation, amortisation and impairment | 10, 11, 12, 13, 14 | -99.2 | -103.1 | |
| Impairment losses in investing activities | 5 | 0.0 | 0.0 | |
| Reversal of previously recognised impairment losses in investing activities | 5 | 0.0 | 0.0 | |
| Other operating expenses | -17.9 | -19.9 | ||
| Total operating expenses | -2,490.1 | -2,085.9 | ||
| Operating profit | 323.4 | 139.6 | ||
| Interest income and similar profit/loss items | 6 | 84.7 | 31.2 | |
| Exchange differences on financial assets and liabilities | 6 | 0.0 | -1.9 | |
| Interest expenses and similar profit/loss items | 6 | -24.8 | -16.7 | |
| Profit after financial items | 383.3 | 152.2 | ||
| Income tax expense | 7 | 1.2 | 28.4 | |
| Profit from continuing operations | 384.5 | 180.6 | ||
| Profit from discontinued operations | 29 | 662.6 | 704.3 | |
| Net profit for the year | 1,047.1 | 884.9 | ||
| Profit attributable to minority interests | 0.2 | 17.3 | ||
| Profit attributable to equity holders of the Parent Company | 1,046.9 | 867.6 | ||
| Total profit for the year | 1,047.1 | 884.9 | ||
| Average number of shares, thousands | 27 | 84,465 | 61,071 | |
| Average number of shares after full dilution, thousands | 27 | 107,782 | 121,086 | |
| – attributable to equity holders of the Parent Company in | ||||
| continuing operations | 4.55 | 2.67 | ||
| – attributable to equity holders of the Parent Company in discontinued operations |
29 | 7.84 | 11.53 | |
| Basic earnings per share, SEK | 12.39 | 14.21 | ||
| – attributable to equity holders of the Parent Company in continuing operations |
3.56 | 1.35 | ||
| – attributable to equity holders of the Parent Company in discontinued operations |
29 | 6.15 | 5.83 | |
| Fully diluted earnings per share, SEK | 9.71 | 7.17 |
| Group | |||||
|---|---|---|---|---|---|
| SEK M | Note | 31 Dec 2007 | 31 Dec 2006 | ||
| FIXED ASSETS | |||||
| Intangible assets | |||||
| Patents, licenses, etc. | 10 | 10.9 | 4.7 | ||
| Goodwill | 11 | 766.9 | 673.6 | ||
| Total intangible assets | 777.8 | 678.3 | |||
| Tangible assets | |||||
| Buildings, land and land improvements | 12 | 17.7 | 20.0 | ||
| Plant and machinery | 13 | 74.3 | 79.1 | ||
| Equipment, tools, fixtures and fittings | 14 | 175.0 | 179.2 | ||
| Total tangible assets | 267.0 | 278.3 | |||
| Financial assets | |||||
| Participations in group companies | 16 | 212.7 | 21.9 | ||
| Available-for-sale financial assets | 17 | 0.3 | 242.3 | ||
| Other long-term receivables | 15.7 | 13.8 | |||
| Deferred tax asset | 7 | 94.8 | 69.5 | ||
| Total financial assets | 323.5 | 347.5 | |||
| Total fixed assets | 1,368.3 | 1,304.1 | |||
| CURRENT ASSETS | |||||
| Inventories, etc. | |||||
| Raw materials and consumables | 0.6 | 0.8 | |||
| Work in progress | 10.5 | 9.6 | |||
| Prepayments to suppliers | 0.5 | 0.1 | |||
| Total inventories, etc. | 11.6 | 10.5 | |||
| Current receivables | |||||
| Accounts receivable | 334.4 | 290.8 | |||
| Other current receivables | 55.2 | 23.8 | |||
| Work in progress, less progress billings | 23.5 | 18.7 | |||
| Current tax asset Prepaid expenses and accrued income |
18 | 17.9 119.8 |
12.5 105.9 |
||
| Total current receivables | 550.8 | 451.7 | |||
| Short-term investments | 26 | 1,367.4 | 1,183.6 | ||
| Cash and cash equivalents | 448.7 | 252.0 | |||
| Total current assets | 2,378.5 | 1,897.8 | |||
| Non-current assets held for sale | 29 | 0.0 | 683.0 | ||
| TOTAL ASSETS | 3,746.8 | 3,884.9 |
| Group | |||
|---|---|---|---|
| SEK M | Note | 31 Dec 2007 | 31 Dec 2006 |
| EQUITY | |||
| Share capital | 842.1 | 471.9 | |
| Other contributed capital | 1,178.9 | 1,178.9 | |
| Other reserves | 12.9 | 47.7 | |
| Retained profit/loss | 712.2 | 1,031.3 | |
| Total equity attributable to equity holders of the Parent Company | 2,746.2 | 2,729.8 | |
| Equity attributable to minority | 7.7 | 7.0 | |
| Total equity | 28 | 2,753.9 | 2,736.8 |
| LIABILITIES | |||
| Long-term liabilities | |||
| Deferred tax liability | 7, 19 | 28.2 | 22.8 |
| Provisions | 19 | 25.3 | 24.0 |
| Liabilities to credit institutions | 26 | 142.4 | 76.9 |
| Liabilities under finance leases | 26 | 81.4 | 96.4 |
| Other long-term liabilities | 50.5 | 0.6 | |
| Total long-term liabilities | 20 | 327.8 | 220.7 |
| of which, interest-bearing | 292.7 | 192.1 | |
| Current liabilities | |||
| Liabilities to credit institutions | 26 | 48.0 | 166.5 |
| Provisions | 19 | – | 6.4 |
| Prepayments from customers | 48.8 | 43.7 | |
| Accounts payable | 145.0 | 107.9 | |
| Liabilities under finance leases | 26 | 14.3 | 19.6 |
| Current tax liabilities | 6.9 | 8.1 | |
| Other current liabilities | 105.6 | 124.6 | |
| Accrued expenses and deferred income | 21 | 296.5 | 245.8 |
| Total current liabilities | 665.1 | 722.6 | |
| of which, interest-bearing | 64.2 | 191.7 | |
| Total liabilities | 992.9 | 943.3 | |
| Liabilities directly connected to non-current assets held for sale | 29 | 0.0 | 204.8 |
| of which, interest-bearing | 0.0 | 11.8 | |
| TOTAL LIABILITIES | 992.9 | 1,148.1 | |
| Total equity and liabilities | 3,746.8 | 3,884.9 | |
| Pledged assets | 22 | 533.2 | 1,513.0 |
| Contingent liabilities | 23 | – | 13.4 |
| Parent Company | |||||
|---|---|---|---|---|---|
| SEK M | Note | 2007 | 2006 | ||
| Operating income | |||||
| Investment operations | |||||
| Exit gains | 3 | 451.9 | 625.6 | ||
| Exit losses | 3 | – | – | ||
| Dividends | 35 | 3.3 | 18.6 | ||
| Impairment losses | 5 | – | -3.8 | ||
| Reversal of previously recognised impairment losses | 5 | 201.7 | 218.1 | ||
| 656.9 | 858.5 | ||||
| Administrative expenses | |||||
| Personnel costs | 25, 36 | -21.6 | -22.0 | ||
| Other external expenses | 8, 9, 33 | -15.9 | -15.9 | ||
| Amortisation/depreciation | 14 | -0.3 | -0.4 | ||
| -37.8 | -38.3 | ||||
| Operating profit before financial items | 619.1 | 820.2 | |||
| Financial income and expenses | |||||
| Interest income and similar profit/loss items | 6 | 67.5 | 28.0 | ||
| Interest expenses and similar profit/loss items | 6 | -1.4 | -2.1 | ||
| Operating profit after net financial items | 685.2 | 846.1 | |||
| Profit before tax | 685.2 | 846.1 | |||
| Income tax expense | 7 | – | – | ||
| Net profit for the year | 685.2 | 846.1 | |||
| Average number of shares, thousands | 84,465 | 610,711 | |||
| Average number of shares after full dilution, thousands | 107,782 | 1,210,885 | |||
| Earnings per share, SEK | 27 | 8.11 | 1.39 | ||
| Fully diluted earnings per share, SEK | 27 | 6.36 | 0.70 | ||
| Proposed dividend per share, SEK | 1.00 | 0.00 |
| Parent Company | |||
|---|---|---|---|
| SEK M | Note | 31 Dec 2007 | 31 Dec 2006 |
| FIXED ASSETS | |||
| Tangible assets | |||
| Equipment, tools, fixtures and fittings | 14 | 0.5 | 0.8 |
| Total tangible assets | 0.5 | 0.8 | |
| Financial assets | |||
| Participations in group companies | 15, 16, 17, 32 | 911.5 | 1,288.6 |
| Participations in associated companies | 16, 34 | 193.6 | 375.7 |
| Available-for-sale financial assets | 17 | 0.3 | 229.6 |
| Total financial assets | 1,105.4 | 1,893.9 | |
| Total fixed assets | 1,105.9 | 1,894.7 | |
| CURRENT ASSETS | |||
| Current receivables | |||
| Receivables from group companies | 121.7 | 39.7 | |
| Other current receivables | 40.1 | 7.9 | |
| Tax asset | 1.2 | 1.1 | |
| Prepaid expenses and accrued income | 18 | 2.6 | 2.6 |
| Total current receivables | 165.6 | 51.3 | |
| Short-term investments | 26 | 1,331.3 | 1,143.5 |
| Cash and cash equivalents | 91.8 | 22.8 | |
| Total current assets | 1,588.7 | 1,217.6 | |
| TOTAL ASSETS | 2,694.5 | 3,112.3 |
| Parent Company | ||||||
|---|---|---|---|---|---|---|
| SEK M | Note | 31 Dec 2007 | 31 Dec 2006 | |||
| EQUITY | ||||||
| Restricted equity | ||||||
| Share capital | 842.1 | 471.9 | ||||
| Statutory reserve | 671.4 | 671.4 | ||||
| Total restricted equity | 1,513.5 | 1,143.3 | ||||
| Non-restricted equity | ||||||
| Retained profit | 413.8 | 946.2 | ||||
| Net profit for the year | 685.2 | 846.1 | ||||
| Total non-restricted equity | 1,099.0 | 1792.3 | ||||
| Total equity | 28 | 2,612.4 | 2,935.6 | |||
| LIABILITIES | ||||||
| Current liabilities | ||||||
| Accounts payable | 2.9 | 3.6 | ||||
| Liabilities to group companies | 65.5 | 122.4 | ||||
| Other current liabilities | 1.0 | 38.5 | ||||
| Accrued expenses and deferred income | 21 | 12.7 | 12.2 | |||
| Total current liabilities | 82.1 | 176.7 | ||||
| of which, interest-bearing | 25.8 | 105.0 | ||||
| TOTAL LIABILITIES | 82.1 | 176.7 | ||||
| Total equity and liabilities | 2,694.5 | 3,112.3 | ||||
| Pledged assets | 22 | – | 1,021.5 | |||
| Contingent liabilities | 23 | 72.9 | 92.6 |
| Other | Attrib | |||||
|---|---|---|---|---|---|---|
| SEK M Group |
Share capital |
Contributed capital |
reserves (Note 28) |
Retained profit |
utable to minority |
Total equity |
| Opening balance, 2006 | 453.4 | 1,178.9 | 60.9 | 163.7 | 123.3 | 1,980.2 |
| Translation diff. recognised in income statement | -4.4 | -4.4 | ||||
| Translation differences | -20.5 | -2.3 | -22.8 | |||
| Provision to reserve for unrealised gains/losses | 49.7 | 49.7 | ||||
| Reversal of reserve for unrealised gains/losses | -38.0 | -38.0 | ||||
| Income/expense recog. directly in equity | -13.2 | -2.3 | -15.5 | |||
| Profit for the year according to income statement Net profit for the year |
-13.2 | 867.6 867.6 |
17.3 15.0 |
884.9 869.4 |
||
| Sale to (+)/acquisition from (-) minority | -2.4 | -2.4 | ||||
| Sale of Carl Bro | -128.9 | -128.9 | ||||
| Subscription for new shares | 18.5 | 18.5 | ||||
| Equity, 31 December 2006 | 471.9 | 1,178.9 | 47.7 | 1,031.3 | 7.0 | 2,736.8 |
| Opening balance, 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 differences Provision to reserve for unrealised gains/losses |
15.9 50.1 |
15.9 50.1 |
||||
| Reversal of reserve for unrealised gains/losses | -99.8 | -99.8 | ||||
| Income/expense recog. directly in equity | -34.8 | -34.8 | ||||
| Profit for the year according to income statement | 1,046.9 | 0.2 | 1,047.1 | |||
| Net profit for the year | -34.8 | 1,046.9 | 0.2 | 1,047.1 | ||
| Sale to (+)/acquisition from (-) minority | 2.9 | 2.9 | ||||
| Sale of Cygate Subscription for new shares |
368.5 | -2.4 | -2.4 368.5 |
|||
| 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 programme Costs of share issue and redemption programme |
-81.3 | -488.2 -2.9 |
-569.5 -2.9 |
|||
| Equity, 31 December 2007 | 842.1 | 1,178.9 | 12.9 | 712.2 | 7.7 | 2,753.9 |
| Fair | Reval- | Non | ||||
| SEK M | Share | Statutory | value | uation restricted | Total | |
| Parent Company | capital | reserve | reserve | reserve | equity | equity |
| Opening balance, 2006 | 453.4 | 671.4 | – | – | 889.0 | 2 013.8 |
| Change in fair value reserve | 49.7 | 49.7 | ||||
| Subscription for new shares | 18.5 | 18.5 | ||||
| Repayment of shareholder contrib. from subsidiaries | 7.5 | 7.5 | ||||
| Total changes in equity not recognised in the income statement |
18.5 | – | – | – | 7.5 | 75.7 |
| Subtotal | 471.9 | 671.4 | 49.7 | – | 896.5 | 2,089.5 |
| Net profit for the year | 846.1 | 846.1 | ||||
| Equity, 31 December 2006 | 471.9 | 671.4 | 49.7 | – | 1,742.6 | 2,935.6 |
| Opening balance, 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 share issue and redemption programme | -2.9 | -2.9 | ||||
| Repurchase of shares Repurchase of warrants |
-301.7 -490.2 |
-301.7 -490.2 |
||||
| Completed redemption programme | -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 |
| Net profit for the year | 685.2 | 685.2 |
| Parent Company | Group | ||||
|---|---|---|---|---|---|
| SEK M | Note | 31 Dec 2007 | 31 Dec 2006 | 31 Dec 2007 | 31 Dec 2006 |
| Operating activities | |||||
| Profit after financial items | 685.2 | 846.1 | 383.3 | 152.2 | |
| Profit from discontinued operations | – | – | 662.6 | 742.2 | |
| Depreciation/amort. and impairments/reversals | -201.7 | -214.3 | 99.2 | 125.4 | |
| Dividends received from associated companies | – | – | – | 8.2 | |
| Shares in profit/loss of associated companies | – | – | -5.8 | -12.9 | |
| Capital gains/losses from investing activities | -451.9 | -625.6 | -816.7 | -687.4 | |
| Other non-cash items, net | -12.2 | -14.1 | -12.3 | -0.8 | |
| Paid tax | – | – | -25.4 | -37.6 | |
| Cash flow from operating activities | |||||
| before changes in working capital | 19.4 | -7.9 | 284.9 | 289.3 | |
| Cash flow from changes in working capital | |||||
| Change in inventories | – | – | -0.4 | 36.3 | |
| Change in current receivables | -17.1 | 1.0 | -104.0 | -65.9 | |
| Change in provisions | – | – | -5.0 | 14.3 | |
| Change in current liabilities | -96.1 | 63.7 | 90.4 | -45.3 | |
| Cash flow from changes in working capital | -113.2 | 64.7 | -19.0 | -60.6 | |
| Cash flow from operating activities | -93.8 | 56.8 | 265.9 | 228.7 | |
| Investing activities | |||||
| Investments in subsidiaries | 15 | -25.0 | -220.1 | -71.2 | -139.5 |
| Acquisition of other fixed assets | -0.1 | -0.2 | -78.4 | -111.2 | |
| Acquisition of intangible assets | – | – | -8.5 | -3.1 | |
| Investments in associated companies and other shares | -223.6 | – | -223.6 | -9.9 | |
| Sale of properties | – | – | – | 228.9 | |
| Sale of subsidiaries | 15 | 812.7 | 852.6 | 582.6 | 648.2 |
| Sale of associated companies and other shares | 770.0 | 21.9 | 796.5 | 38.8 | |
| Cash flow from investing activities | 1,333.9 | 654.2 | 997.4 | 652.2 | |
| Financing activities | |||||
| Loans raised/amortisation of debt | – | – | -21.1 | -240.6 | |
| Loans granted/recovery of receivables | – | – | 4.9 | 0.2 | |
| New share issue | 368.5 | 18.5 | 368.5 | 18.5 | |
| Completion of redemption prog. incl. transaction costs | -572.1 | – | -572.1 | ||
| Repurchase of shares and warrants Payments to/from minority |
-791.9 – |
– | -791.9 1.4 |
-4.9 | |
| Cash flow from financing activities | -995.5 | 18.5 | -1,010.3 | -226.8 | |
| Cash flow for the year | 244.6 | 729.5 | 253.0 | 654.1 | |
| Cash and cash equivalents at beginning of year | 1,166.3 | 433.1 | 1,546.7 | 891.8 | |
| Exchange difference, cash and cash equivalents/ value change in hedge fund |
26 | 12.2 | 3.7 | 16.4 | 0.8 |
| Cash and cash equivalents at end of year | 1,423.1 | 1,166.3 | 1,816.1 | 1,546.7 | |
| Interest paid | -1.4 | -2.1 | -24.4 | -12.5 | |
| Interest received | 53.6 | 24.4 | 66.3 | 28.5 |
Cash and cash equivalents, the change in which is explained in the cash flow statement, also includes short-term investments with a time to maturity of up to three months. Total cash and cash equivalents in the Group includes deposits of SEK 5.2M (17.1) in blocked bank accounts. Short-term investments amount to SEK 1,143.5M (400.0) in the Parent Company and SEK 1,183,6M (420.6) in the Group.
Bure Equity AB (publ), corp. reg. 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 Mid Cap list of the OMX Nordic Exchange.
These consolidated financial statements have been approved by the Board for publication on 22 February 2008. The consolidated financial statements of Bure Equity AB are presented in compliance with the International Financial Reporting Standards (IFRS) that have been endorsed by the European Commission for application in the EU.
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 financial statements of the Parent Company are presented in accordance with Swedish law and with the application of the Swedish Financial Reporting Board's recom mendation RFR 2.1 (Accounting for Legal Entities). This means that IFRS valuation and disclosure requirements are applied with the exceptions stated in the section on the Parent Company's accounting policies.
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 goodwill. Write-down of surplus values take place when needed and evalu ation of the values are made on a regular basis. Bure's share in the changes in equity reported by associated companies are 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 in the Group at which goodwill is monitored by the company's management, and may not represent any large unit of the Group other than a segment. If the recoverable amount of a cash-generating unit falls below its book value, a write-down (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 set fixed 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 ownership to the lessee. All other leases are classified as operating leases.
In the consolidated financial statements, financial assets are measured at fair value in accordance with the rules in IAS 39.
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.
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. Bure applies the rules in IAS 18, Revenue, for valuation of completed service contracts. Valuation of service contracts in progress is calculated based on the degree of completion on the closing date (percentage of completion). According to the recommendation, service contracts where the value of recognised income exceeds progress billings are reported as work in progress under "Receivables". In cases where progress billings exceed recognised income, these are reported as prepayments from customers under "Liabilities".
Exchange gains and losses on financial receivables and liabilities are reported among financial items. Exchange gains and losses on operating items 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. Revenue in educational operations is allocated over that part of the year in which education and planning of education takes place.
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 long-term 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 consolidated equity. 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 con sideration 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 2007, these amounted to SEK 95,4M. 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 2007, Alecta's collective funding ratio was 152 per cent. Aside from Alecta, there are defined benefit plans of insignificant scope in the Group.
A fixed 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 "Discontinued operations" or "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 carry ing 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 havebeen 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.
The Group applies IAS 7 Cash Flow Statements. Cash and cash equivalents refer to bank deposits and short-term investments with a maturity of less than three months.
When preparing the financial statements, the management is required to make certain estimates and assumptions for accounting purposes. Actual outcomes may differ from these estimates and assumptions. The estimates and assumptions estimates which can lead to significant adjustments in the financial statements of later years are described 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 2007 the Group has applied the following EU endorsed new and changed standards and interpretations from IFRIC:
This standard deals with disclosures about financial instruments and the risks associated with these. For more information, see Note 26.
This additions require companies to provide disclosures that make it possible for the users of financial reports to assess the company's objectives, policies and processes for managing capital (see Note 26).
This interpretation requires the application of IFRS 2 for all transactions where the company is unable to specify all or parts of the goods or services received, particularly when the identifiable consideration given appears to be less than the fair value of the equity instruments granted as payment for these.
IFRIC 10 – Interim Financial Reporting and Impairment The interpretation states that impairment losses recognised by the company in an interim financial statement in respect of goodwill, investments in equity instruments and financial assets carried at amortised cost may not be reversed in subsequent interim or annual financial statements.
Below is a list of amendments to existing standards, new standards and interpretations effective in 2008 or later:
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. IFRS 8 is effective for annual periods starting on or after 1 January 2009.
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.
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions The interpretation requires a share-based payment arrangement in which the company receives goods or services as consideration for its own equity-instruments to be accounted for as an equity-settled share-based payment transaction regardless of how the equity instruments needed are obtained. IFRIC 11 is effective for annual periods beginning on or after 1 March 2007.
Furthermore, the IASB has issued IFRIC 7 – Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies, IFRIC 9 – Reassessment of Embedded Derivatives, IFRIC 12 – Service Concession Arrangements, IFRIC 13 Customer Loyalty Programmes, and IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. This are not assessed to have any impact on Bure's financial statements. It should also be noted that IFRIC 12, 13 and 14 have not yet been endorsed by the EU.
Unless otherwise stated, the Parent Company applies the same account policies as the Group, with the addition of the Swedish Financial Reporting Board's recom mendation 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 "Taxes".
Shares in subsidiaries and associated companies are measured in accordance with the purchase method. For unlisted 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 is an investment company, which makes the company's tax situation special. The main principles for taxation of an investment company are as follows:
Positive and negative goodwill arising on consolidation have been attributed to the respective companies. Transactions between the various segments are insignifi cant in scope and amount to less than 0.1 per cent of total sales. Companies accounting for less than 10 per cent of total assets and profi t/loss are reported under the heading "Other companies". For a description of the companies' operations, see pages 13–24.
| SEK M | 2007 | Mercuri 2006 |
2007 | Anew 2006 |
2007 | Citat 2006 |
2007 | Textilia 2006 |
2007 | Other companies 2006 |
2007 | Elimina tions, etc. 2006 |
2007 | Parent Company 2006 |
2007 | TOTAL 2006 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | ||||||||||||||||
| Total revenue | 769 | 715 | 841 | 534 | 510 | 377 | 323 | 325 | 209 | 197 | -4 | -1 | – | – 2 648 2 147 | ||
| Shares in profi t | 1 | 6 | 2 | – | – | 6 | 3 | |||||||||
| Profi t/loss Profi t/loss by segment |
58 | 45 | 70 | 27 | 43 | 27 | 13 | -17 | 13 | 21 | 4 | 3 | – | – | 201 | 106 |
| Unallocated costs Reversals/impairment losses in investing activities |
-214 | -38 | -38 214 |
-38 | -38 0 |
|||||||||||
| Dividends Exit gains/losses |
31 | 15 | 37 | -3 -344 |
-18 -594 |
3 452 |
18 626 |
– 154 |
– 69 |
|||||||
| Operating profi t | 417 | 820 | 323 | 140 | ||||||||||||
| Net fi nancial items The year's tax expense |
60 1 |
13 28 |
||||||||||||||
| Continuing operations |
384 | 181 | ||||||||||||||
| Profi t from discon tinued operations |
663 | 704 | ||||||||||||||
| Net profi t for the year |
1,047 | 885 | ||||||||||||||
| Other disclosures | ||||||||||||||||
| Assets Shares in equity Unallocated assets Available-for-sale |
647 4 |
577 4 |
438 | 237 | 387 | 297 | 210 8 |
235 | 402 | 395 | -234 7 |
18 | 194 | 20 1,589 1,343 3,439 3,104 | 213 95 |
22 76 |
| (AFS) fi nancial assets | 683 | – | 683 | |||||||||||||
| Total assets | 3,747 3,885 | |||||||||||||||
| Liabilities | 206 | 200 | 233 | 102 | 141 | 92 | 53 | 72 | 58 | 89 | -83 | 61 | 82 | 72 | 690 | 688 |
| Unallocated liabilities Liabilities attributable to AFS fi nancial assets |
205 | 303 – |
255 205 |
|||||||||||||
| Total liabilities | 993 1,148 | |||||||||||||||
| Investments | 6 | 16 | 97 | 8 | 9 | 6 | 35 | 65 | 4 | 4 | -5 | – | 191 | 220 | 336 | 319 |
| Amort./depreciation | -9 | -10 | -21 | -11 | -8 | -6 | -50 | -48 | -5 | -25 | -6 | -3 | 0 | 0 | -99 | -103 |
| Costs other than amort./depr. that are not matched by payments |
1 | – | – | – | – | – | – | 1 |
| Secondary segment | Sweden | Rest of Europe |
North America |
Asia | Other markets |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 | |||||||||||
| Sales by market | 1,982 1,530 | 616 | 573 | 18 | 16 | 27 | 24 | 5 | 4 | ||
| Assets by market | 3,533 3,185 | 96 | 673 | 104 | 12 | 2 | 15 | 12 | 0 | ||
| Investments by market | 331 | 303 | 2 | 7 | 3 | 0 | 0 | 9 | 0 | 0 |
Cont'd on next page
Total exit gains in the Group during 2007 amounted to SEK 816.7M, of which SEK 662.6M is attributable to discontinued operations (refers to sale of Cygate, SYSteam and Innkap Fond I). In the Parent Company, total exit gains in 2007 amounted to SEK 451.9M, of which SEK 176.2M was attributable to Cygate, SEK 119.3M to SYSteam, SEK 52.6M to Retea and SEK 5.0M to other holdings. Capital gains on available-for-sale fi nancial assets totalled SEK 98.8M (Grontmij).
| Group | |||
|---|---|---|---|
| SEK M | 2007 | 2006 | |
| Celemi | -0.2 | 1.9 | |
| AcadeMedia | 5.7 | – | |
| Others | 0.3 | 1.2 | |
| Total | 5.8 | 3.1 | |
| Discontinued operations | – | 9.9 | |
| Total shares in profi t | 5.8 | 13.0 |
| Group | Parent Company | |||||
|---|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | ||
| Investing activities, | ||||||
| impairment losses | ||||||
| Sancera | -3.3 | |||||
| Business Communication Group | -0.5 | |||||
| Total impairment losses | – | – | – | -3.8 | ||
| Investing activities, | ||||||
| reversals | ||||||
| Business Communication Group | 1.4 | |||||
| Mercuri International Group | 114.0 | |||||
| CR&T Holding | 22.9 | |||||
| Cygate | 151.7 | |||||
| Gårda Äldrevård Holding | 8.9 | |||||
| SYSteam | 65.0 | |||||
| Sancera | 56.0 | |||||
| Total reversals | – | – | 201.7 | 218.1 | ||
| Net impairment losses/ | ||||||
| reversals | – | – | 201.7 | 214.3 |
The reversal in Sancera has taken place subsequent to valuation of loss carryforwards.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | |
| Income from fi nancial assets | |||||
| at fair value through profi t or loss |
|||||
| - Fair value change in hedge fund | 13.0 | 3.7 | 11.0 | 3.7 | |
| - Dividends | 1.6 | – | 1.2 | – | |
| Dividends from AFS | |||||
| fi nancial assets | 3.3 | – | – | – | |
| Option premiums received | 0.5 | 6.9 | 0.5 | 6.9 | |
| Capital gain on fi nancial items | – | 2.7 | – | – | |
| Exchange diff. on receiv./liab. | -0.4 | -1.9 | 0.3 | -0.2 | |
| Interest income | 66.3 | 17.9 | 54.5 | 18.1 | |
| Interest expense | -24.4 | -12.5 | -1.4 | -2.0 | |
| Other fi nancial items | – | -4.2 | – | -0.6 | |
| Total interest and similar | |||||
| profi t/loss items | 59.9 | 12.6 | 66.1 | 25.9 | |
| Operating profi t includes ex change differences on operating receivables and liabilities |
|||||
| in the following amounts | -0.6 | 0.1 | – | – |
| Group | |||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | |||
| Current tax | -20.9 | -18.6 | |||
| Deferred tax | 22.1 | 47.0 | |||
| Total | 1.2 | 28.4 | |||
| Tax in discontinued operations | – | -37.9 |
Due to Bure Equity's status as an investment company, exit gains/losses are exempted from taxation and a deduction is allowed for payment of cash dividends. See also "Accounting policies", under the heading "Taxes".
The Bure Group reported a total deferred tax asset of SEK 94.8M (69,5) in continuing operations, which is almost exclusively attributable to loss carryforwards in subsidiaries that are expected to be offset against future profi ts. Furthermore, there are loss carryforwards and temporary differences between carrying amounts and tax values amounting to SEK 818M, for which no deferred tax asset has been recognised since it is currently deemed unlikely that the loss carryforwards can be utilised against future profi ts in the Group. Of uncapitalised loss carryforwards, SEK 368M refers to the Parent Company. Additional future tax relief of approximately SEK 229M can be expected if these loss carryforwards can nonetheless be utilised in the future. 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. The loss carryforwards will increase by an additional SEK 93M if Bure's AGM approves the Board's proposed dividend.
| Items included in deferred tax | Group | |
|---|---|---|
| SEK M | 2007 | 2006 |
| Deferred tax assets: | ||
| Loss carryforwards | 95.4 | 70.2 |
| Temporary differences | -0.6 | -0.7 |
| Total | 94.8 | 69.5 |
| Deferred tax liabilities: | ||
| Temporary differences | 1.0 | 3.1 |
| Deferred tax attributable to goodwill on net assets | 27.2 | 19.7 |
| Total | 28.2 | 22.8 |
| Deferred tax, net | 66.6 | 46.7 |
| Composition of tax expense | ||
| Reported profi t before taxes | 383.3 | 152.4 |
| Effect of associated companies, net | -5.8 | -0.1 |
| Subtotal | 377.5 | 152.3 |
| Tax according to the applicable tax rate, 28% | -105.7 | -42.6 |
| Reported tax expense in continuing operations |
1.2 | 28.4 |
|---|---|---|
| Tax effect of unrecognised loss carryforwards | – | -4.2 |
| Other | 4.6 | 13.9 |
| Capitalisation of loss carryforwards | 53.5 | 45.0 |
| - Deductible tax items | 8.9 | 4.0 |
| - Exit gains/losses | 43.1 | 19.3 |
| Tax effect of non-taxable income: | ||
| At end of year | 66.6 | 46.7 |
|---|---|---|
| Recognised in the income statement | 22.1 | 47.0 |
| Translation differences | -1.5 | -1.5 |
| Companies sold | 1.4 | -20.8 |
| Companies acquired | -2.1 | -2.0 |
| At beginning of year | 46.7 | 24.0 |
| Gross change in deferred tax |
| Group | Parent Company | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | ||||
| The period's lease payments (operating) | ||||||||
| Cars | 18.3 | 15.8 | 0.2 | 0.3 | ||||
| Premises | 172.5 | 175.1 | 1.0 | 1.1 | ||||
| Other equipment | 21.1 | 18.6 | 0.4 | 0.3 | ||||
| Total | 211.9 | 209.5 | 1.6 | 1.7 | ||||
| Group | Parent Company | |||||||
| Contracted lease payments | 2008 | 2009–2011 | > 2012 | 2008 | 2009–2011 | > 2012 | ||
| Operating leases | ||||||||
| Cars | 13.4 | 20.0 | 0.0 | 0.1 | – | – | ||
| Premises | 197.7 | 631.0 | 716.5 | 1.0 | 1.0 | – | ||
| Other equipment | 18.9 | 29.8 | 0.0 | 0.3 | 0.3 | – | ||
| Total | 230.0 | 680.8 | 716.5 | 1.4 | 1.3 | – | ||
| Finance leases | ||||||||
| Cars | 0.4 | 1.3 | – | |||||
| Premises | 8.4 | 43.2 | 39.2 | |||||
| Other equipment | 10.2 | 11.4 | – | |||||
| Total | 19.0 | 55.9 | 39.2 | |||||
| Interest | -1.3 | -7.3 | -13.3 | |||||
| Present value of future lease payments: | 17.7 | 48.6 | 25.9 |
Properties held under fi nance leases represent a large proportion of the Bure Group's most signifi cant lease payments. The fi nance leases are held on behalf of the subsidiary Textilia, and consist of four leases held for properties located in Örebro, Rimbo, Karlskrona and Långsele that are used in the company's laundry operations.
| SEK M | Group 2007 |
2006 | Parent Company 2007 |
2006 |
|---|---|---|---|---|
| Fees to Ernst & Young Auditing fees |
4.7 | 3.7 | 0.5 | 0.5 |
| Consulting fees Total fees to E & Y |
2.9 7.6 |
3.6 7.3 |
0.5 1.0 |
2.2 2.7 |
| Group | ||||
|---|---|---|---|---|
| SEK M | 2007 | 2006 | ||
| Opening cost | 13.7 | 29.0 | ||
| The year's acquisitions | 8.4 | 1.3 | ||
| Discontinued operations | – | -15.2 | ||
| Sales/Reclassifi cations | -0.2 | -1.3 | ||
| Translation differences | 0.2 | -0.1 | ||
| Closing cost | 22.1 | 13.7 | ||
| Opening amortisation | -9.0 | -14.6 | ||
| The year's acquisitions | 0.0 | 0.0 | ||
| Discontinued operations | – | 5.9 | ||
| Sales/Reclassifi cations | 0.2 | 0.9 | ||
| The year's amortisation | -2.3 | -1.2 | ||
| Translation differences | -0.1 | 0.0 | ||
| Closing accumulated amortisation | -11.2 | -9.0 | ||
| Carrying amount | 10.9 | 4.7 |
R&D expenses of SEK 0.0M (0.0) were expensed during the year.
| Group | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening cost | 1,196.1 | 1,797.9 |
| The year's acquisitions | 79.6 | 147.1 |
| Discontinued operations | – | -718.0 |
| Sales/Reclassifi cations | -84.0 | -10.9 |
| Translation differences | 14.1 | -20.0 |
| Closing cost | 1,205.8 | 1,196.1 |
| Opening amortisation | -186.2 | -323.0 |
| The year's acquisitions | – | – |
| Discontinued operations | – | 131.7 |
| Sales/Reclassifi cations | 13.3 | 1.6 |
| Translation differences | -1.0 | 3.5 |
| Closing accumulated amortisation | -173.9 | -186.2 |
| Group | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening impairment losses | -336.3 | -556.6 |
| Discontinued operations | – | 208.8 |
| Sales/Reclassifi cations | 71.3 | 9.2 |
| The year's impairment losses | – | -3.2 |
| Translation differences | – | 5.5 |
| Closing accumulated impairment losses | -265.0 | -336.3 |
| Carrying amount | 766.9 | 673.6 |
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 management.
| Growth, % | EBITA, % | |||||
|---|---|---|---|---|---|---|
| Goodwill | Forecast period |
Terminal period |
Forecast period |
Terminal period |
Discount rate, %1 |
|
| Mercuri | 325.2 | 3–5 | 3 | 7 | 7 | 12 |
| Citat | 157.8 | 3–5 | 3 | 7–8 | 7 | 12 |
| Anew Learning | 204.6 | 3–8 | 3 | 6–7 | 7 | 12 |
| EnergoRetea | 79.3 | 3–12 | 3 | 3–15 | 7–8 | 11–12 |
| Total | 766.9 |
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 assumption or EBITA assumption should change by one percentage point, there is still a secure 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. The assumed rate of growth in the terminal period is not higher than anticipated growth in the general economy, i.e. approximately 3 per cent.
| Group | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening cost | 97.2 | 192.3 |
| The year's acquisitions | – | – |
| Discontinued operations | – | -94.8 |
| Sales/Reclassifi cations | -0.7 | – |
| Translation differences | 0.3 | -0.3 |
| Closing cost | 96.8 | 97.2 |
| Opening depreciation | -15.5 | -42.8 |
| The year's acquisitions | – | – |
| Discontinued operations | – | 29.1 |
| Sales/Reclassifi cations | 0.2 | – |
| The year's depreciation | -1.9 | -2.0 |
| Translation differences | -0.2 | 0.2 |
| Closing accumulated depreciation | -17.4 | -15.5 |
| Opening impairment losses | -61.7 | -71.9 |
| The year's acquisitions | – | – |
| Discontinued operations | – | 23.9 |
| Sales/Reclassifi cations | – | – |
| The year's impairment losses | – | -13.7 |
| Translation differences | – | – |
| Closing accumulated impairment losses | -61.7 | -61.7 |
| Carrying amount | 17.7 | 20.0 |
| Tax assessment values, buildings | 51.6 | 51.6 |
| Carrying amount, buildings | 11.6 | 13.9 |
| Tax assessment values, land | 6.5 | 6.5 |
| Carrying amount, land | 6.1 | 6.1 |
Not all buildings have been assigned tax assessment values. The reported values include properties held under fi nance leases in the following amounts:
| Opening cost | 90.1 | 90.1 |
|---|---|---|
| Discontinued operations | – | – |
| Closing cost | 90.1 | 90.1 |
| Opening accumulated depreciation | -12.1 | -10.4 |
| The year's depreciation | -1.7 | -1.7 |
| Reclassifi cations | – | – |
| Closing accumulated depreciation | -13.8 | -12.1 |
| Opening accumulated impairment losses | -61.7 | -48.0 |
| The year's impairment losses | -13.7 | |
| Closing accumulated impairment losses | -61.7 | -61.7 |
| Carrying amount | 14.6 | 16.3 |
There are no commitments for future property investments (SEK 0M). Certain mortgage deeds have been furnished as collateral for liabilities to credit institutions, see Note 22.
| Group | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening cost | 122.7 | 104.9 |
| The year's acquisitions | 9.4 | 21.5 |
| The year's sales | -3.5 | -3.7 |
| Closing cost | 128.6 | 122.7 |
| Opening depreciation | -43.6 | -35.1 |
| Sales/Disposals | 3.1 | 3.4 |
| The year's depreciation | -13.8 | -11.9 |
| Closing accumulated | ||
| depreciation | -54.3 | -43.6 |
| Carrying amount | 74.3 | 79.1 |
| The reported values include machinery held under fi nance leases in the following amounts: |
||
| 2007 | 2006 | |
| Opening cost | 38.6 | 38.6 |
| The year's acquisitions | – | – |
| Closing cost | 38.6 | 38.6 |
| Opening accumulated depreciation | -10.4 | -5.6 |
| The year's depreciation | -4.8 | -4.8 |
| Closing accumulated depreciation | -15.2 | -10.4 |
| Carrying amount | 23.4 | 28.2 |
There are no future investment commitments for acquisition of machinery.
| Group | Parent Company | |||
|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 |
| Opening cost | 547.9 | 825.9 | 4.9 | 9.3 |
| The year's acquisitions | 97.9 | 132.9 | 0.1 | 0.3 |
| Discontinued operations | – | -349.4 | – | – |
| Sales/Reclassifi cations | -70.0 | -61.4 | -0.1 | -4.7 |
| Translation differences | 3.4 | -0.1 | -0.1 | – |
| Closing cost | 579.2 | 547.9 | 4.8 | 4.9 |
| Opening depreciation | -368.7 | -585.0 | -4.1 | -8.4 |
| The year's acquisitions | -19.7 | -35.3 | – | – |
| Discontinued operations | – | 265.0 | – | – |
| Sales/Reclassifi cations | 66.3 | 58.0 | – | 4.7 |
| The year's depreciation | -80.1 | -71.0 | -0.3 | -0.4 |
| Translation differences | -2.0 | -0.4 | 0.1 | – |
| Closing accumulated | ||||
| depreciation | -404.2 | -368.7 | -4.3 | -4.1 |
| Group | Parent Company | |||
| SEK M | 2007 | 2006 | 2007 | 2006 |
| Opening impairment losses | – | -6.7 | – | – |
| The year's acquisitions | – | – | – | – |
| Discontinued operations | – | 6.7 | – | – |
| Sales/Reclassifi cations | – | – | – | – |
| Translation differences | – | – | – | – |
| Closing accumulated | ||||
| impairment losses | 0.0 | 0.0 | – | – |
| Carrying amount | 175.0 | 179.2 | 0.5 | 0.8 |
The reported values include equipment held under fi nance leases in the following amounts:
| Group | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening cost | 62.2 | 108.3 |
| The year's acquisitions | 0.1 | 24.1 |
| Discontinued operations | -0.4 | -61.6 |
| Sales/Reclassifi cations | – | -8.6 |
| Translation differences | 0.1 | – |
| Closing cost | 62.0 | 62.2 |
| Opening depreciation | -30.0 | -59.0 |
| The year's acquisitions | – | -9.4 |
| Discontinued operations | – | 36.3 |
| Sales/Reclassifi cations | -6.3 | 8.1 |
| The year's depreciation | -13.7 | -6.0 |
| Translation differences | -0.1 | – |
| Closing accumulated depreciation | -50.1 | -30.0 |
| Carrying amount | 11.9 | 32.2 |
In 2007 the acquisition of group companies has affected cash and cash equivalents in an amount of SEK 71.0M. The companies acquired during the year are Rytmus, Proteam, Fenestra and Primrose.
Total value of acquired assets and assumed liabilities during the year:
| 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 |
| Unsettled purchase price commitments | 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 | 82.9 |
| Cash and cash equivalents in the acquired | |
| subsidiaries | -14.8 |
| Effect on the Group's cash and cash | |
| equivalents, total net outfl ow | 68.1 |
Fair value corresponds to carrying amount in the specifi cation above. In addition to the above, Bure has paid additional purchase consideration in a total amount of SEK 1.0M during 2007, primarily to Mercuri.
On 22 May, Anew Learning acquired 100 per cent of the shares in Rytmus AB. The company is active in the educational market and operates an independent high school in Stockholm. The acquisition will increase Bure's consolidated annual sales by more than SEK 40M.
Rytmus is Sweden's leading music high school and has contributed to the development of many known musicians and artists since its establishment in 1993.
The school is based in Stockholm and currently has some 380 pupils. Rytmus offers an educational programme in which the focus is on contemporary music. The acquisition has given the Group a new platform for highly specialised high schools.
On 23 May Bure's independent education group acquired 100 per cent of the shares in Proteam Sweden Utbildning och Förlag AB. The company is active in the educational market and operates independent high schools. The acquisition will increase Bure's consolidated annual sales by more than SEK 30M.
Proteam operates three small independent high schools with a total of 270 pupils in the Swedish province of Östergötland. The company offers education in Automation, CNC, Industrial Welding and HVAC and Plumbing Engineering. These operations will eventually be coordinated with Framtidsgymnasiet, which has a similar orientation.
Cont'd on next page
On 11 September Anew Learning acquired 100 per cent of the shares in Fenestra Utbildning AB. Via subsidiaries, the acquired company is active in the educational market and operates independent schools. The acquisition will increase Bure's consolidated annual sales by around SEK 50M.
Fenestra operates one preschool and two compulsory schools in Göteborg with a total of more than 700 children and pupils. The schools are characterised by a Montessori-inspired learning, modern information technology and a good study environment. Fenestra's operations will be integrated with Vittra, which since its establishment in 1993 has developed a unique educational model that is highly similar to approach behind Fenestra's success.
During the forth quarter Anew Learning aquired Primrose Friskolor in Östersund. The operations include a high school and a compulsory school in Östersund with a total of 320 pupils. Primrose will be integrated with operations in Vittra. The acquisition will increase consolidated sales by approximately SEK 25M.
According to the prepared acquisition analysis, an excess value of 76.5M constitutes goodwill, since this portion of the purchase price could not be attributed to any separately identifi able assets. The goodwill is attributable to the companies' future ability to generate profi ts and cash fl ows. This is a combined effect of many individual factors, including competent and dedicated employees, strong enrolment of pupils and a good reputation in the market.
The acquisition of these four schools has contributed SEK 67M in net sales and SEK 3M in net profi t during the year. If the companies had consolidated for the full year, the Group's sales would have increased by SEK 155M and net profi t by SEK 8M.
| SEK M | 2006 |
|---|---|
| Tangible assets | 4.5 |
| Financial assets | 0.2 |
| Current assets | 35.1 |
| Cash and cash equivalents | 5.7 |
| Total assets | 45.5 |
| Current liabilities | -21.6 |
| Long-term liabilities | -2.4 |
| Total liabilities | -24.0 |
| Total acquired net assets | 21.5 |
| Goodwill | 61.9 |
| Total purchase price | 83.4 |
| Purchase price paid in cash | 81.0 |
| Direct costs arising from the acquisition | 2.4 |
| Effect on the Group's cash and cash equivalents: | 83.4 |
| Purchase price paid in cash | |
| including direct costs | 83.4 |
| Cash and cash equivalents in the acquired subsidiary | -5.7 |
| Effect on the Group's cash and cash equivalents, | |
| total net outfl ow | 77.7 |
Energo was acquired on 31 December 2006 and the acquisition analysis for 2006 was stated as preliminary. The acquisition analysis was fi nalised in 2007, leading to an increase in goodwill to SEK 2.1M. The Group's cash and cash equivalents were thus affected by a total amount of SEK 2.1M in 2007.
Total value of acquired assets and assumed liabilities in other acquisitions during the year:
| SEK M | 2006 |
|---|---|
| Tangible assets | 3.5 |
| Financial assets | 4.8 |
| Current assets | 27.6 |
| Cash and cash equivalents | 25.0 |
| Total asstes | 60.9 |
| Minority interest sold/acquired | -0.2 |
| Current liabilities | -49.4 |
| Total liabilities | -49.6 |
| Total acquired net assets | 11.3 |
| Goodwill | 77.5 |
| Total purchase price | 88.8 |
| Purchase price paid in cash | 87.9 |
| Direct costs arising from the acquisition | 0.9 |
| Effect on the Group's cash and cash | |
| equivalents | 88.8 |
| Purchase price paid in cash including direct costs | 88.8 |
| Cash and cash equivalents in the acquired | |
| subsidiaries | -25.0 |
| Effect on the Group's cash and cash | |
| equivalents, total net outfl ow | 63.8 |
The most signifi cant acquisitions in 2006 were IT-Gymnasiet and Framtids gymnasiet. These acquisition analyses were fi nalised in 2007 without any corrections.
The sale of Bure's former subsidiary Cygate was completed in January 2007, and provided the Group with net proceeds of SEK 536M. In July 2006, an agreement was signed for the sale of Bure's holding in Carl Bro. The sale was completed in August and had the following effect on the Bure Group's cash fl ow.
| SEK M | 2007 | 2006 |
|---|---|---|
| Intangible assets | 112.1 | 270.1 |
| Tangible assets | 10.1 | 90.0 |
| Financial assets | 0.2 | 4.8 |
| Current assets | 216.6 | 700.4 |
| Cash and cash equivalents | 111.1 | 218.2 |
| Minority interest | -2.4 | -128.9 |
| Liabilities | -196.1 | -737.7 |
| Capital gains | 395.8 | 618.4 |
| Total purchase price for all divestitures in | ||
| the Bure Group during the year | 647.4 | 1 035.3 |
| Cash and cash equivalents in divested subsidiary | -111.1 | -218.2 |
| Shares received in Grontmij | – | -168.9 |
| Effect on the Group's cash and cash | ||
| equivalents, total net infl ow | 536.3 | 648.2 |
Grontmij's shares are quoted on Euronext in Amsterdam. The above value is based on the fair market value on the transaction date.
| Total value of divested assets and liabilities for other divestitures: | |||
|---|---|---|---|
| SEK M | 2007 | 2006 | |
| 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 | |||
| equivalents, total net infl ow | 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 |
|---|---|---|---|---|---|---|
| AcadeMedia AB | 2,201,620 | 38.3/49.8 | 185.1 | 190.8 | 556057 - 2850 | Göteborg |
| Other companies | ||||||
| Celemiab Group AB | 258,010 | 30.1 | 8.5 | 9.7 | 556562 - 3997 | Malmö |
| InnovationsKapital Fond 1 AB | 244 | 23 | 0.0 | 0.0 | 556541 - 0056 | Göteborg |
| 193.6 | 200.5 | |||||
| Other equity shares | 12.2 | |||||
| Carrying amount | 193.6 | 212.7 | ||||
| Of which, AFS fi nancial assets | – |
The difference between the carrying amount in the Group and the Parent Company is due to the fact that shares in profi t/loss of associated companies are reported according to the equity method. The difference, amounting to SEK 19.1M, consists partly of accumulated shares in profi t/ loss of associated companies with a deduction for goodwill amortisation/impairment and dividends received, as well as reversals of previously recognised impairment losses, which have been carried out only in the Parent Company. The difference is also due to equity shares reported by the subsidiaries.
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 profi t |
|---|---|---|---|---|
| AcadeMedia | 561.2 | 307.5 | 489.0 | 43.6 |
| Celemiab Group AB | 29.1 | 8.1 | 48.1 | -0.8 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | |
| Opening cost | 192.6 | 29.5 | 179.9 | 15.2 | |
| The year's acquisitions | – | 188.2 | – | 179.9 | |
| Sales | -192.3 | -23.1 | -179.6 | -15.2 | |
| Discontinued operations | – | -0.2 | – | – | |
| Reclassifi cation | – | -1.7 | – | – | |
| Translation differences | – | -0.1 | – | – | |
| Closing cost | 0.3 | 192.6 | 0.3 | 179.9 | |
| Opening revaluation gains/losses Revaluation gains/losses |
49.7 | 38.0 | 49.7 | – | |
| recognised in equity The year's reversals of revalua |
– | 49.7 | – | 49.7 | |
| tion gains/losses | -49.7 | -38.0 | -49.7 | – | |
| Closing accumulated | |||||
| revaluation gains/losses | 0.0 | 49.7 | 0.0 | 49.7 | |
| Opening impairment losses The year's impairment losses |
– – |
-1.3 – |
– – |
– | |
| Reversal of impairment losses | – | – | – | – | |
| Discontinued operations | – | 1.3 | – | – | |
| Sales | – | – | – | – | |
| Closing accumulated | |||||
| impairment losses | – | 0.0 | – | 0.0 | |
| Carrying amount | 0.3 | 242.3 | 0.3 | 229.6 | |
| Unlisted shares and participations1 |
– | 229.0 | – | 229.0 | |
| Unlisted shares and | |||||
| participations | 0.3 | – | 0.3 | – | |
| Measured at fair value | – | – | – | – | |
| Measured at amortised cost2 | 0.3 | 13.3 | 0.3 | 0.6 | |
| Total | 0.3 | 242.3 | 0.3 | 229.6 |
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 | 2007 | 2006 | 2007 | 2006 |
| Prepaid rents | 51.9 | 52.7 | 0.3 | 0.3 |
| Accrued interest income | 1.1 | 0.1 | 1.0 | – |
| Work in progress, less progress | ||||
| billings | 20.6 | 25.2 | – | – |
| Other accrued income | 14.1 | 0.0 | – | – |
| Other items | 32.1 | 27.9 | 1.3 | 2.3 |
| Total | 119.8 | 105.9 | 2.6 | 2.6 |
| Discontinued operations | – | 31.7 | – | – |
| Total | 119.8 | 137.6 | – | – |
| Changes in the restructuring reserve | Group | ||
|---|---|---|---|
| SEK M | 2007 | 2006 | |
| Opening restructuring reserve | 2.5 | 9.3 | |
| The year's increase in connection with restructuring in subsidiary |
|||
| Textilia | – | – | |
| Total | – | – | |
| Dissolved during the year according to plan | |||
| Textilia | -2.5 | -6.8 | |
| Mercuri | – | – | |
| Total | -2.5 | -6.8 | |
| Translation differences | – | – | |
| Closing restructuring reserve | 0.0 | 2.5 |
Cont'd on next page
Cont'd from previous page
| Change in deferred tax liability | Group | |
|---|---|---|
| 2007 | 2006 | |
| Opening deferred tax liability | 22.8 | 31.7 |
| The year's increase in connection with | ||
| acquisitions Energo |
– | 2.0 |
| Anew Learning | 3.4 | – |
| Total | 3,4 | 2,0 |
| Provisions made/increased during the year | ||
| Citat | 0.9 | – |
| Anew Learning | – | 0.8 |
| Övrigt | 0.2 | – |
| Summa | 1.1 | 0.8 |
| Dissolved/utilised during the year | ||
| Discontinued operations | – | -10.8 |
| Translation differences | 0.9 | -0.9 |
| Closing deferred tax liability | 28.2 | 22.8 |
| Change in pension provisions | Group | |
| 2007 | 2006 | |
| Opening pension provisions | 24.0 | 28.1 |
| Provisions made during the year | ||
| Mercuri | 0.2 | 2.2 |
| Textilia | 0.7 | – |
| Total | 0.9 | 2.2 |
| Dissolved/utilised during the year | ||
| Mercuri | -0.5 | -2.0 |
| Total | -0.5 | -2.0 |
| Discontinued operations | – | -3.5 |
| Translation differences | 0.3 | -0.8 |
| Closing pension provisions | 24.7 | 24.0 |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | |
| Total long-term liabilities of which, liabilities directly connected to available-for-sale |
327.8 | 232.4 | – | – | |
| fi nancial assets of which, maturing later than fi ve years after the balance |
– | 11.7 | – | – | |
| sheet date | 16.2 | – | – | – |
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | |
| Accrued vacation pay | 57.7 | 52.1 | 0.8 | 0.6 | |
| Accrued social security expenses | 53.9 | 50.5 | 3.3 | 2.5 | |
| Other accrued expenses | 50.5 | 30.8 | – | – | |
| Prepaid income | 134.4 | 112.4 | 8.6 | 9.1 | |
| Total | 296.5 | 245.8 | 12.7 | 12.2 | |
| Discontinued operations | – | 32.4 | |||
| Total | 296.5 | 278.2 |
| Group | Parent Company | |||
|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 |
| To secure own liabilities and provisions | ||||
| In respect of liabilities to credit institutions | ||||
| Floating charges | 238.4 | 242.3 | – | – |
| Shares in subsidiaries/ | ||||
| associated companies | 200.6 | 897.7 | – | 1,021.5 |
| Blocked bank accounts | 6.1 | 5.2 | – | – |
| Pledged accounts receivable | 11.8 | 33.5 | – | – |
| Pledged properties | 76.3 | 78.0 | – | – |
| Other | – | 22.6 | – | – |
| Total pledged assets | 533.2 1,279.3 | – | 1,021.5 | |
| Discontinued operations | – | 233.7 | ||
| Total | 533.2 1,513.0 | – | 1,021.5 |
| Change in other provisions | 2007 | Group 2006 |
Parent Company 2007 2006 |
||
|---|---|---|---|---|---|
| Opening other provisions | 3.9 | 6.1 | – | ||
| The year's provisions | |||||
| Mercuri | 0.1 | – | – | ||
| Gårda Äldrevård | – | 1.0 | – | ||
| Total | 0.1 | 1.0 | – | ||
| Dissolved/utilised during the year | |||||
| Bure Equity | – | – | – | ||
| Gårda Äldrevård | -3.4 | -1.1 | – | ||
| Mercuri | – | -1.0 | – | ||
| Other | – | – | – | ||
| Total | -3.4 | -2.1 | – | ||
| Discontinued operations | – | -0.5 | – | ||
| Translation differences | – | -0.6 | – | ||
| Closing other provisions | 0.6 | 3.9 | – | ||
| Assessed reversal of |
| provisions in the Group | 2008 | 2009 | 2010 | >2011 |
|---|---|---|---|---|
| Restructuring reserve | – | – | – | – |
| Pension provisions | – | – | – | 24.7 |
| Deferred tax liability | – | – | – | 28.2 |
| Other provisions | – | – | – | 0.6 |
| Total | – | – | – | 53.5 |
The restructuring reserve refers to Textilia, where restructuring has taken place.
| Group | Parent Company | ||||
|---|---|---|---|---|---|
| SEK M | 2007 | 2006 | 2007 | 2006 | |
| Guarantees | – | – | – | – | |
| Surety on behalf of subsidiaries | – | – | 6.8 | 23.5 | |
| Other contingent liabilities | – | 0.6 | 66.1 | 69.1 | |
| Total | – | 0.6 | 72.9 | 92.6 | |
| Discontinued operations | – | 12.8 | |||
| Total | – | 13.4 |
The Parent Company's contingent liabilities consist of guarantees and sureties for subsidiary undertakings of SEK 6.8M and Bure's commitments as guarantor for fi nance leases in Textilia, with a residual value of SEK 66.1M.
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.
In 1997, Carl Bro, in collaboration with a Greek and an Australian company, established a joint venture – HCC – in Greece in order to build up a nationwide register system. The client was Ktimatologio, (KT) a state-controlled Greek company. The contract stipulated a limitation in HCC's liability to EUR 1.2M, presumably that HCC is not liable to serious carelessness or treacherous action. The project was completed in 2000, all invoices were paid, and a phase two project was started. The EU, which funded the project, has subsequently requested that KT repay approximately EUR 58M, since KT has not managed the total project according to the contract signed with the EU. KT has thereafter opened an arbitration case against HCC demanding repayment of fees, etc., amounting to around EUR 9.1M. The arbitration case has been referred to a Greek civil court and the trial is awaited to start in March 2008. On the basis of a report from HCC's Greek lawyers, the Greek lawyers, together with Carl Bro's Danish lawyers and the insurance company's legal representatives, have assessed that there are no grounds for the claim against HCC. In the event that HCC is found liable for damages of EUR 9.1M, Bure's share, according to an agreement with Grontmij N.V., will amount to approximately EUR 3.2M., equal to 35 per cent. Added to this amount are possible legal fees for conduct of the arbitration proceedings. Bure's potential costs in respect of HCC may be limited by insurance coverage and provisions in Carl Bro and Bure.
A former president of Mercuri has lodged a claim of SEK 22M 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 has been referred to an arbitration board for decision.
| 2007 | 2006 | ||||
|---|---|---|---|---|---|
| No. of employees |
Of whom, women |
No. of employees |
Of whom, women |
||
| Parent Company Subsidiaries |
9 2,674 |
3 1,489 |
10 2,210 |
4 1,269 |
|
| Total Group | 2,683 | 1,492 | 2,220 | 1,273 | |
| Geographical breakdown of employees: | |||||
| Parent Company Sweden |
9 | 3 | 10 | 4 | |
| Subsidiaries Sweden Denmark England Finland Norway Germany |
2,157 33 40 94 31 28 |
1,276 14 15 41 7 9 |
1,694 32 38 94 32 30 |
1,039 14 14 47 12 5 |
|
| Other countries | 291 | 127 | 290 | 138 | |
| Total Group | 2,683 | 1,492 | 2,220 | 1,273 |
The average number of employees in discontinued operations in 2006 was 234 (not including the above). Discontinued operations in 2006 do not include Carl Bro, for which no information was received due to the fact that the company had been divested earlier in 2006.
| 2007 | 2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK M | Salary and other remuneration |
Social security expenses |
Pension expenses1 |
Salary and other remuneration |
Social security expenses |
Pension expenses1 |
||
| Parent Company Subsidiaries |
13.5 983.3 |
4.4 282.5 |
3.1 92.3 |
13.7 816.0 |
5.0 229.8 |
3.1 74.2 |
||
| Total Group | 996.8 | 286.9 | 95.4 | 829.7 | 234.8 | 77.3 | ||
| Board and President |
(of which, bonuses) |
Other employees |
Board and President |
(of which, bonuses) |
Other employees |
|||
| Parent Company | ||||||||
| Sweden | 5.5 | 1.9 | 8.0 | 6.1 | 2.6 | 7.6 | ||
| Subsidiaries | ||||||||
| Sweden | 26.7 | 4.5 | 671.4 | 22.0 | 5.3 | 504.8 | ||
| Denmark | 1.7 | 21.7 | 1.4 | – | 20.0 | |||
| England | 1.5 | 0.6 | 28.7 | 2.1 | 0.6 | 29.2 | ||
| Finland | 2.1 | 0.6 | 59.9 | 1.8 | 0.2 | 53.2 | ||
| Norway | 1.4 | 22.2 | 1.3 | – | 19.3 | |||
| Germany | 6.0 | 0.5 | 18.4 | 3.0 | 0.5 | 25.3 | ||
| Other countries | 20.7 | 4.5 | 101.0 | 24.9 | 5.1 | 107.7 | ||
| Total Group | 65.5 | 12.6 | 931.3 | 62.6 | 14.3 | 767.1 |
Salaries and other remuneration in discontinued operations amounted to SEK 131.8M in 2006. Discontinued operations in 2006 do not include Carl Bro, for which no information was received due to the fact that the company had been divested earlier in 2006.
The Annual General Meeting in 2007 resolved that the Board of Directors would be paid total fees of SEK 990,000 (930,000). Of this amount, the Chairman received SEK 350,000 and other Board members received SEK 160,000 each. No member of the Board is employed in the company. No special fees were paid for work on the Board committees.
Of the Parent Company's pension costs, SEK 0.9M (0.9) refers to the Board and President. Pension costs are stated including payroll tax, broken down by country and between the Board and President and other employees.
The Group is exposed to a number of different fi nancial risks through its operations. As an investment company, Bure has an important overall objective which is established 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. Bure can manage its capital structure among other things through new share issues, dividends, redemption procedures or share buybacks. In 2007 Bure carried out a capital distribution that is described in more detail on page 33, and proposes a dividend for 2008 and authorisation to the repurchase and resale of treasury shares, see page 34. The net loan receivable at 31 December 2007 amounted to SEK 1,514M (1,178) for the Group and SEK 1,462 (1,080) for the Parent Company. See also pages 31 and 32.
Since the subsidiaries are mutually autonomous, 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.
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 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 interest 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 the short term, a change of +/- 1 per cent in the interest rate for the Group would have an estimated impact of SEK 14M on 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 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 465M (see table on page 57, fair value of fi nancial instruments). There are no signifi cant concentrations of credit risk in the Group.
| 2007 | 2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| Receivables | Reserves | Net receivable |
Secured by collateral |
Receivables | Reserves | Net receivable |
Secured by collateral |
|
| Not yet due | 212.7 | 0.2 | 212.5 | – | 193.0 | 0.0 | 193.0 | – |
| Overdue 1-30 days | 88.5 | 88.5 | – | 69.2 | 0.1 | 69.2 | – | |
| Overdue 31-60 days | 17.5 | 0.1 | 17.4 | – | 17.2 | 17.2 | – | |
| Overdue 61-90 days | 11.6 | 0.8 | 10.8 | – | 8.7 | 0.0 | 8 .7 | – |
| Overdue 91-180 days | 3.3 | 3.3 | – | 2.3 | 0.1 | 2.2 | – | |
| Overdue >180 days | 4.5 | 2.6 | 1.9 | – | 1.1 | 0.5 | 0.6 | – |
| Total | 338.1 | 3.7 | 334.4 | – | 291.6 | 0.7 | 290.9 | – |
| SEK M | 2007 | 2006 |
|---|---|---|
| Opening balance The year's provisions |
0.7 3.1 |
0.1 0.6 |
| Amount written off | -0.1 | – |
| Reversal of unutilised reserves | – | – |
| Foreign exchange gains/losses | – | – |
| Total at 31 December | 3.7 | 0.7 |
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 2007 and 31 December 2006.
| Financial items with fi xed interest | <1 month | <3 months | 3-12 months | 1-5 years | > 5 years | Total |
|---|---|---|---|---|---|---|
| Loan liabilities | 16.4 | 58.4 | 43.9 | 17.9 | 16.3 | 152.8 |
| Finance lease liabilities | – | 0.0 | 0.1 | 0.7 | – | 0.8 |
| Total | 16.4 | 58.4 | 44.0 | 18.6 | 16.3 | 153.6 |
| Financial items with variable interest | <1 month | <3 months | 3-12 months | 1-5 years | > 5 years | Total |
|---|---|---|---|---|---|---|
| Bank overdraft facilities | – | – | 2.5 | – | – | 2.5 |
| Liabilities under fi nance leases | 34.0 | 1.7 | 11.3 | 38.8 | – | 85.7 |
| Other loans | – | 1.2 | 3.7 | 97.5 | – | 102.5 |
| Total | 34.0 | 2.9 | 17.5 | 136.3 | – | 190.7 |
Cont'd from previous page
| <1 month | <3 months | 3-12 months | 1-5 years | > 5 years | Total | |
|---|---|---|---|---|---|---|
| Accounts payable | 4.8 | 16.0 | 20.8 | |||
| Other fi nancial liabilities | 8.7 | 10.9 | 19.6 | |||
| Total | 13.5 | 26.9 | – | – | – | 40.4 |
| Liquidity reserve (SEK M) | Group | Parent Company | ||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Investments | 781.4 1,072.6 | 775.0 1,059.7 | ||
| Hedge funds | 586.0 | 111.0 | 556.3 | 83.8 |
| Bank deposits | 448.7 | 252.0 | 91.8 | 22.8 |
| Unutilised committed credits | 205.1 | 182.1 | 100.0 | 100.0 |
| Total | 2,021.2 1,617.7 | 1,523.1 1,266.3 |
Short-term investments consist primarily of the Parent Company's investments of SEK 1,331M. These are made up partly of bank deposits with an interest rate of approximately 4.2 per cent on the balance sheet date and partly of participations in four hedge funds. On the balance sheet date, these investments had an average remaining maturity of 56 days.
The fund offers quarterly redemption, periodically varying from daily to quarterly redemption.
The investments have been measured at amortised cost and the hedge funds at fair value through profi t or loss.
The table below shows the carrying amounts and fair values of Bure's fi nancial instruments.
| 2007 | 2006 | |||
|---|---|---|---|---|
| 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 | 586.0 | 586.0 | 111.0 | 111.0 |
| Available-for-sale (AFS) fi nancial assets | 0.3 | 0.3 | 242.3 | 242.3 |
| Loans and receivables | ||||
| - Other long-term receivables | 15.7 | 15.7 | 13.8 | 13.8 |
| - Accounts receivable | 334.4 | 334.4 | 290.8 | 290.8 |
| - Work in progress, less progress billings | 23.5 | 23.5 | 18.7 | 18.7 |
| - Other current receivables | 55.2 | 55.2 | 23.8 | 23.8 |
| - Accrued income | 35.8 | 35.8 | 32.1 | 32.1 |
| - Cash and cash equivalents and short-term investments | 1,230.1 | 1,230.1 | 1,324.6 | 1,324.6 |
| Total fi nancial assets | 2,281.0 | 2,281.0 | 2,057.1 | 2,057.1 |
| Financial liabilities (SEK M) | 2007 Carrying amount |
Fair value | 2006 Carrying amount |
Fair value |
| Other fi nancial assets measured at fair value through | ||||
| profi t or loss | ||||
| Long-term liabilities | ||||
| - Liabilities to credit institutions | 142.4 | 142.4 | 76.9 | 76.9 |
| - Liabilities under fi nance leases | 81.4 | 81.4 | 96.4 | 96.4 |
| - Other long-term liabilities | 50.5 | 50.5 | 0.6 | 0.6 |
| Current liabilities | ||||
| - Liabilities to credit institutions | 48.0 | 48.0 | 166.5 | 166.5 |
| - Accounts payable | 145.0 | 145.0 | 107.9 | 107.9 |
| - Liabilities under fi nance leases | 14.3 | 14.3 | 19.6 | 19.6 |
| - Other current liabilities | 105.6 | 105.6 | 124.6 | 124.6 |
| - Accrued expenses | 245.7 | 245.7 | 215.0 | 215.0 |
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, net profi t attributable to equity holders of the Parent Company is used in calculation of earnings per share. Earnings per share after full dilution are calculated by dividing the 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 of both the share and the warrant are taken into account.
| Specifi cation of applied parameters | 2007 | 2006 |
|---|---|---|
| Parent Company net profi t, SEK M Consolidated net profi t excl. minority, SEK M |
685.2 1,046.9 |
846.1 867.6 |
| Average number of shares, thousands Scrip element, no. of shares, thousands Average number of shares after full dilution, |
84,465 23,317 |
61,071 60,017 |
| thousands | 107,782 | 121,088 |
In the event of a negative result, the net loss is divided only by the weighted average of the outstanding number of shares.
| NOTE 28 – Equity |
|---|
| ------------------ |
According to the Articles of Association, the share capital shall amount to no less than SEK 300,000,000 and no more than SEK 1,200,000,000. 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 on the following page. For other changes in the equity of the Group and the Parent Company, see statement of changes in equity on page 41.
Cont'd on next page
| 2007 | 2006 | |||||
|---|---|---|---|---|---|---|
| No. of shares | Quota value | Share capital | No. of shares | Quota value Share capital | ||
| Number of registered shares | ||||||
| Registered number on 1 January | 629,186,056 | 0.75 | 471.9 | 604,583,282 | 0.75 | 453.4 |
| Exercise of warrants | 491,383,614 | 0.75 | 368.5 | 24,602,774 | 0.75 | 18.5 |
| Cancellation of treasury shares | -31,332,000 | -23,5 | ||||
| Bonus issue | 23,5 | |||||
| Reverse share split, 10-for-1 | -980,313,903 | 0.75 | ||||
| Bonus issue | – | 83.0 | ||||
| Redemption procedure | -10,545,930 | -81.3 | ||||
| Registered number on 31 December | 98,377,837 | 8.56 | 842.1 | 629,186,056 | 0.75 | 471.9 |
| Treasury shares | ||||||
| Treasury shares on 1 January | -1,000,000 | -1,000,000 | ||||
| Reverse share split, 10-for-1 | 900,000 | |||||
| Repurchase of shares in 2007 | -5,053,200 | |||||
| Treasury shares on 31 December | -5,153,200 | |||||
| Shares outstanding on 31 December | 93,224,637 | 628,186,056 |
In previous years Bure has repurchased a total of 1 million shares. In 2007 Bure repurchased 81,864 000 shares, of which 31,332,000 were cancelled (number before reverse share split).
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.
Revaluation reserve: According to Swedish law, the amount by which fi nancial and tangible assets have been written up must be allocated to a revaluation reserve. This reserve may be used to increase the share capital through a bonus issue or new share issue, or to cover a loss according to the adopted balance sheet when this loss cannot be covered by non-restricted equity. In connection with the depreciation, impairment or sale of the written-up asset, the revaluation reserve must be reduced correspondingly and the amount of reduction added to non-restricted equity.
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 changes 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.
| Change in other reserves, SEK M | Fair value reserve |
Translation reserve |
Total |
|---|---|---|---|
| Opening balance 2006 | 39.7 | 21.2 | 60.9 |
| Provision to fair value reserve | 49.7 | – | 49.7 |
| Reversal of fair value reserve | -38.0 | – | -38.0 |
| Translation differences recognised in income statement | – | -4.4 | -4.4 |
| Translation differences | – | -20.5 | -20.5 |
| Other reserves, 31 December 2006 | 51.4 | -3.7 | 47.7 |
| Provision to fair value reserve | |||
| 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 | – |
| Other reserves, 31 December 2007 | 0.0 | 12.9 | 12.9 |
| SEK M | 2007 | 2006 |
|---|---|---|
| Net sales Exit gains/losses Shares in profi t |
662.6 | – 2,208.2 618.4 9.9 |
| Total operating income | 662.6 2,836.5 | |
| Raw materials and consumables Goods for resale Other external expenses Personnel costs Amortisation/depreciation and impairment losses Other operating expenses |
– – – – – |
-289.9 -519.8 -256.9 – -1,002.7 -21.5 – |
| Total operating expenses | 662.6 -2,090.8 | |
| Operating profi t | – | 745.7 |
| Net fi nancial items | – | -3.5 |
| Profi t after fi nancial items | 662.6 | 742.2 |
| Income tax expense | -37.98 | |
|---|---|---|
| Profi t from discontinued operations | 662.6 | 704.3 |
| Earnings per share before dilution | 7.84 | 11.53 |
| Earnings per share after dilution | 6.15 | 5.83 |
| Cash fl ow from operating activities | – | 62.1 |
| Cash fl ow from investing activities | 1,023.0 | 637.4 |
| Cash fl ow from fi nancing activities | – | -76.8 |
| Net cash fl ow from discontinued operations | 1,023.0 | 622.7 |
| Average number of shares before dilution | 84,465 | 61,071 |
| Average number of shares after dilution | 107,782 | 121,086 |
Discontinued operations in 2007 refer to purchase consideration received on the sale of Cygate and SYSteam. Although agreements were signed for the sale of these companies in 2006, they had an effect on cash fl ow in 2007. Discontinued operations in 2006 refer to the divested subsidiary Carl Bro which was sold in August 2006, and to Cygate and SYSteam. In 2006, the holdings in SYSteam and Cygate are reported under the headings "Assets held for sale" (SEK 683.0M) and "Liabilities directly connected to assets held for sale" (SEK 204.8M).
Cont'd from previous page
| Assets held for sale | 2007 | 2006 |
|---|---|---|
| Intangible assets | 112.1 | |
| of which, goodwill | 112.1 | |
| Tangible assets | 10.1 | |
| Financial assets | 0.3 | 7.4 |
| Inventories, etc. | 24.3 | |
| Current receivables | 194.7 | |
| Cash and cash equivalents and | ||
| short-term investments | 111.1 | |
| Total assets held for sale | 0.3 | 459.7 |
| Long-term liabilities | 11.6 | |
| Current liabilities | 193.2 | |
| Total liabilities held for sale | – | 204.8 |
Consolidated equity at 31 December 2006 includes a positive translation difference of SEK 0.7M attributable to Cygate.
| SEK M | 2007 | Parent Company 2006 |
|---|---|---|
| Opening cost | 2,086.0 | 2,271.0 |
| The year's acquisitions/additions | 25.0 | 218.2 |
| Repayment of shareholder contributions | -20.0 | – |
| Sales | -583.8 | -402.3 |
| Reclassifi cations | – | -0.8 |
| Closing cost | 1,507.2 | 2,086.0 |
| Opening impairment losses | -797.4 | -945.3 |
| The year's impairment losses | – | -3.8 |
| Reversal of previously recognised | ||
| impairment losses | 201.7 | 151.7 |
| Sales | – | – |
| Reclassifi cations | – | – |
| Closing accumulated impairment losses | 595.7 | -797.4 |
| Carrying amount | 911.5 | 1 288.6 |
The reversals refers to Mercuri SEK 114M, CR &T Holding SEK 23M, Gårda Äldrevård Holding SEK 9M and Sancera SEK 56M. The possession in CR&T Holding has been reversted with consideration to the sales of Spotfi re shares and the possession in Sancera has been reversted in sequence with the valutation of loss carried forward.
| SEK M | Number of shares |
% of capital/ votes |
Carrying amount in Parent Company |
Corporate ID number |
Domicile |
|---|---|---|---|---|---|
| Portfolio company | |||||
| Anew Learning AB 1, 5 | 10,000 | 100.00 | 95.5 | 556402 - 8925 | Stockholm |
| Citat Group AB 5 | 9,008,178 | 100.00 | 191.1 | 556382 - 3656 | Göteborg |
| EnergoRetea Group AB 2, 5 | 934,000 | 93.40 | 102.7 | 556551 - 7355 | Stockholm |
| Länia Material AB 3, 5 | 1,000 | 100.00 | 20.0 | 556548 - 1289 | Örebro |
| Mercuri International Group AB 5 | 1,000 | 100.00 | 357.7 | 556518 - 9700 | Göteborg |
| 767.0 | |||||
| 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 | 1,139,07 | 100.00 | 19.2 | 556548 - 1297 | 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 |
| Sancera AB 4 | 1,000 | 100.00 | 76.6 | 556551 - 6910 | Göteborg |
| 144.5 |
Anew Learning owns 100 per cent of Vittra, IT-Gymnasiet, Framtidsgymnasiet, Rytmus, Proteam, Fenestra and Primrose.
EnergoRetea Group owns 100 per cent of the subsidiaries Energo and Retea.
Länia Material owns 100 per cent of Textilia Tvätt och Textilservice and Textilia Rimbo.
Sancera owns 100 per cent of the subsidiary Bure Kapital.
See disclosures on next page regarding options/warrants issued on the holdings in Anew Learning, Citat, EnergoRetea, Länia Material and Mercuri.
Cont'd on next page
The following information is provided as a disclosure regarding the dilution effects in the companies where Bure carried out ownership diversification programmes:
| Scope | Textilia | Anew Learning EnergoRetea | Mercuri | Citat | ||
|---|---|---|---|---|---|---|
| The number of warrants/options granted corresponds to a holding of, %1 | 9.9 | 3.9 | 1.6 | 23.4 | 8.0 | |
| Exercise date for subscription rights | Sept 2012 | May 2012 | May 2012 | Aug 2011 Aug 2011 | ||
| Exercise price calculated on 100 % of the company, SEK M2 | 29 | 725 | 177 | 443 | 400 | |
| Exercise price for premature exercise of subscription rights on different dates 2 |
Period | Textilia | Anew Learning EnergoRetea | Mercuri | Citat | |
| Exercise price calculated on 100 % of | ||||||
| the company, SEK M2 | 31 Dec. 2007 | 20 | 477 | 117 | 313 | 282 |
| 31 Dec. 2008 | 22 | 525 | 128 | 344 | 310 | |
| 31 Dec. 2009 | 24 | 577 | 141 | 378 | 342 | |
| 31 Dec. 2010 | 26 | 635 | 155 | 416 | 376 | |
| 31 Dec. 2011 | 28 | 698 | 171 | |||
| 31 May 2012 | 29 | 725 | 177 |
The specified 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.
| Cygate | Textilia | Anew Learning EnergoRetea | Mercuri | Citat | ||
|---|---|---|---|---|---|---|
| No. of options/warrants outstanding at | ||||||
| beginning of period | 36,757,975 | 0 | 0 | 0 | 220.9 | 720,654 |
| No. of options/warrants granted during the period | 0 | 99 | 390 | 16,000 | 22.7 | 0 |
| No. of options/warrants exercised during the period | -36,757,975 | 0 | 0 | -9.6 | 0 | |
| No. of options/warrants outstanding at | ||||||
| end of period | 0 | 99 | 390 | 16,000 | 234.0 | 720,654 |
| No. of exercisable options/warrants at end of period | – | 0 | 0 | 0 | 0 | 0 |
Bure's related parties are:
Skanditek (due to board representation and share ownership), Board members and companies closely related to them, Bure's subsidiaries, associated companies and executive management in the Parent Company.
The Parent Company has purchased computer equipment and consulting services from the associated company SYSteam. Services related to production of the annual report have been purchased from the subsidiary Citat. Purchases have been carried out at marketbased 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 280,000 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 2.0M (0.9) and intragroup interest expenses of SEK 1.4M (2.0).
Carl Backman, an employee of the Parent Company and member of the Executive Management, has purchased services from the subsidiary EnergoRetea for SEK 5,000. The purchase was carried out on market-based terms.
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.
| Parent Company | ||
|---|---|---|
| SEK M | 2007 | 2006 |
| Opening cost | 434.2 | 395.5 |
| The year's acquisitions1 | 186.7 | 38.7 |
| Sales | -369.2 | – |
| Reclassifi cations | – | – |
| Closing cost | 251.7 | 434.2 |
| Opening impairment losses | -58.5 | -123.5 |
| The year's impairment losses | – | – |
| Reversal of previously recognised impairment losses | 0.4 | 65.0 |
| Sales | – | – |
| Reclassifi cations | – | – |
| Closing accumulated impairment losses | -58.1 | -58.5 |
| Carrying amount | 193.6 | 375.7 |
During the year, Bure received dividends of SEK 3.3M, of which SEK 3.2M from the holding in Grontmij and SEK 0.1M from the holding in Jeeves.
| 2007 SEK M |
Fixed annual salary/Board fees remun./bonus |
Variable | Other benefi ts1 |
Pension cost |
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 | |
| 2006 SEK M |
Fixed annual salary/Board fees |
Variable remun./bonus |
Other benefi ts1 |
Pension cost |
Other remuneration |
Total |
| Board Chairman | 0.3 | – | – | – | – | 0.3 |
| Other Board members | 0.6 | – | – | – | – | 0.6 |
| President | 2.9 | 2.6 | 0.1 | 0.7 | – | 6.3 |
| Other senior executives | 2.2 | 1.7 | 0.1 | 0.6 | – | 4.6 |
| 6.0 | 4.3 | 0.2 | 1.3 | – | 11.8 |
Other benefi ts refer to company car and meal benefi ts.
The 2007 AGM resolved that the Board of Directors would be paid total fees of SEK 990,000 (930,000). Of this amount, the Chairman received SEK 350,000 and the other Board members received SEK 160,000 each. No special fees have been paid for work on the committees.
In 2007 the President, Mikael Nachemson, received annual salary of SEK 2.8M. A total deduction of SEK 0.2M from contractual annual salary has been made for board fees received from group companies. The net amount is reported in the column Fixed annual salary/Board fees above. In addition to annual salary, Nachemson receives pension insurance premiums corresponding to 25 per cent (SEK 0.7M) of annual salary. Bonuses may be paid in an amount of up to 100 per cent of annual salary. Bonus payments are not pensionable. 70 per cent of bonus is based on quantitative goals related to share price development and operating profi t/loss in the portfolio companies. The remaining 30 per cent is paid on a discretionary basis. In 2007 bonuses amounted to SEK 1.9M. In the event of termination by the company, the President has a 12-month term of notice and is entitled to additional severance pay corresponding to 6 monthly salaries. In the event of his resignation, the President has a 6-month term of notice. The retirement age for the President is 60 years.
In a press release dated 21 January 2008, Bure announced that Mikael Nachemson would be leaving the company on a predetermined date in the autumn of 2008, after completing the strategic realignment and streamlining processes that have been his primary tasks. The Board of Directors fi nds that Mikael Nachemson has fulfi lled these duties and has therefore signed a supplementary contract granting an increase in his annual salary to SEK 3.0M as of 2008 and specifying termination of employment at the latest by 30 September 2008, after which he will receive a severance pay equal to 18 monthly salaries. In all other respects, the terms of his contract remain unchanged.
Salaries to other senior executives in the Parent Company's executive management have been paid in a total amount of SEK 2.2M, and refer to two individuals. A total deduction of SEK 0.3M from contractual annual salary has been made for board fees received from portfolio companies. The net amount is reported in the column Fixed annual salary/Board fees above. Bonuses in 2007 amounted to SEK 2.0M. The employment contracts for senior executives grant the right to pension from the age of 65 and a notice term of no more than 12 months. Pension premiums to other senior executives were paid in a total amount of SEK 0.7M. Bure applies individual pension plans for members of the executive management. Pension premiums are of the defi ned contribution type. The pension cost refers to the cost excluding payroll tax that has been charged to the year's profi t.
In 2007 Bure had a variable compensation system for all employees, limited to 10-100 per cent of fi xed salary. 70 per cent of the bonus is based on quantitative targets related to share price development and operating profi t in the portfolio companies. The remaining 30 per cent is discretionary.
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 2007 will be put before the AGM for approval.
Mikael Nachemson, President, 102,400 shares directly and 1,270,400 shares held through an endowment insurance.
Anders Mörck, CFO, 6,000 shares, 162,500 stock options and 13,882 shares held through an insurance-like solution.
Carl Backman, Investment Manager, 7,040 shares, 162,500 stock options and 8,618 shares held through an insurance-like solution.
| Parent Company 2007 |
2006 | |
|---|---|---|
| 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 adjusted for the share in discontinued operations.
Not reported due to the exemption rule in 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 2007. The company's annual report and consolidated annual report are included in this document on pages 31-61. These accounts and the administration of the company as well as the application of the International Financial Reporting Standards (IFRS) adopted by the EU and the Annual Accounts Act when preparing the annual accounts and 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, 22 February 2008 Ernst & Young AB, Göteborg
Björn Grundvall Staffan Landén Auditor in Charge Assistant Auditor in Charge Born in 1955 Born in 1963
Authorised Public Accountant Authorised Public Accountant
© PhotoAlto/Johnér
Corporate governance in Bure is regulated by Swedish law, primarily the Swedish Companies Act, and the listing agreement with the stock exchange. Bure is quoted on the Mid Cap list of the OMX Nordic Exchange Stockholm, and is therefore subject to compliance with the rules in the Swedish Code of Corporate Governance (the Code) as of 1 July 2005. These rules are 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 specifi c issues related to the Code. This report on Bure's corporate governance in 2007 has not been examined by the company's auditors.
On 12 October 2007 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 2006 AGM. These state that the Board Chairman, no later than at the end of the third quarter each year, shall ensure that the company's three largest shareholders are given the opportunity to appoint a member to the nomination committee. Should any of these three shareholders waive its right to appoint a member, the shareholder next in order of size 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 committee.
Bure's Board of Directors consists of fi ve 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 Anders Mörck has served as Secretary of the Board.
The work of the Board of Directors is governed by a procedural plan, which was most recently adopted at the statutory meeting on 26 April 2007. The work of the Board follows a yearly plan with fi xed 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 fi nancial year, the Board held 15 meetings, consisting of 7 scheduled meetings and 8 extra meetings, of which 4 were held per capsulam and 3 by tele phone. In connection with one of these meetings, the Board met with the Presidents of the portfolio companies. The Board formed a quorum at all meetings. Board member Björn Björnsson was 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 committees of the Board.
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 fi nancial 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 listing agreement 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 fi nancial commitments and agreements, as well as any signifi cant 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 a relevant basis for decision ahead of the AGM.
Every year, the Board establishes and documents the company's goals and strategies and discusses marketing, strategy and budgetary issues. The Board determines the company's fi nance policy, right of authorisation and decision-making process. The Board has formulated specifi c instructions regarding the responsibilities and powers of Bure's 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 report their observations from the annual audit directly to the Board. Once a year, the auditor meets with the Board without the presence of any member of the Executive Management.
In 2007 the Board of Directors of Bure Equity AB was paid total fees of SEK 990,000, of which the Chairman received SEK 350,000. No compensation has been paid other than that resolved on by the AGM.
The Board's procedural plan contains instructions regarding the compensation and audit committees. 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 2008 AGM for decision. At present, there are no outstanding share or share-price related 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 fi nancial reporting is based on the applicable laws, regulations, rules, agreements and recommendations for companies listed on the OMX Nordic Exchange Stockholm. A more detailed description of the company's accounting policies is provided on pages 43-46 of the annual report. The audit report for the fi nancial year is found on page 62 of the annual report. The Board and auditors communicate on an ongoing basis. The Board continuously ensures that the company's fi nance 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 fi nancial information to be provided by the subsidiaries. This information includes income statements, balance sheets, cash fl ow statements and fi nancial key ratios. A more extensive reporting package is required in connection with the annual closing of the books.
According to section 3.2.4 of the Code, the majority of Board members elected by the AGM shall have an independent status in relation to the company and its management. As shown below, two of Bure's fi ve Board members also have board assignments in subsidiaries of Bure. Because Bure is an investment company which appoints professional boards also in its portfolio companies, it is the Board's assessment that Bure can achieve better control over the holdings by having its Board members also serve on the boards of subsidiaries.
According to section 3.7.3 of the Code, the Board 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 have the expertise and resources needed to fulfi l their duties in the preparation of fi nancial reports. The evaluation of the need for an internal audit function will be reassessed in 2008.
The Board has consisted of fi ve members since the 2007 AGM. The President is not a member of the Board. Of the company's fi ve Board members all, except the Chairman Patrik Tigerschiöld, are independent from the company's largest shareholders. During the period from January to April, Patrik Tigerschiöld was also chairman of the subsidiary Anew Learning AB.
Since March 2007, board member Kjell Duveblad has also served on the board of the subsidiary EnergoRetea Group AB. Board member Ann-Sofi Lodin has also served on the board of Textilia's parent company, Länia Material AB, and Anew Learning AB during the year.
Patrik is 43 years old, M.B.A. and President of Skanditek Industriförvaltning AB, one of the company's largest shareholders. Elected to the Board in 2004. Previously active in SEB and former President of SEB Allemansfonder.
Håkan is 60 years old, M.B.A. and President of Rederi AB Transatlantic. Previously active in the Schenker Group. Elected to the Board in 2002. Håkan is independent from both the company and its major shareholders.
Ann-Sofi is 45 years old, M.Pol.Sc. and economist. COO of the healthcare company Global Health Partner. Previously employed in the healthcare group Capio, for example as General Director of Capio Lundby Sjukhus. Elected to the Board in 2006. Ann-Sofi is independent from the company's major shareholders.
Björn is 61 years old, M.Pol.Sc., and operates his own fi nancial consulting business. Elected to the Board in 2002. Björn is independent from both the company and its major shareholders.
Kjell is 53 years old, M.B.A., and operates his own management and IT consulting business. Previously active in IBM and as Regional Manager of Oracle in Sweden, the Nordic region and the Baltics. Elected to the Board in 2005. Kjell is independent from both the company and its major shareholders.
Mikael is 48 years old, M.B.A. Former President of Custos AB and Öhmans Fondkommission. Mikael is independent from the company's major shareholders. Holdings in Bure: 102,400 shares directly and 1,270,400 via an endowment insurance. Other assignments: Chairman of Mercuri International Group AB, Anew Learning AB and Textilia's parent company, Länia Material AB, and board member of Avanza AB and Energo-Retea Group AB.
A description of the Board members' shareholdings and other assignments is provided on page 67.
The principles for remuneration, other terms of employment and shareholdings, etc. for the President and other senior executives are shown in Note 37 of the annual report.
Ernst & Young AB has been elected as Bure's auditing fi rm. Ernst & Young has appointed Björn Grundvall, 52 years old, as Auditor in Charge, and Staffan Landén, 44 years old, as Assistant Auditor in Charge.
This report has been prepared in accordance with the Swedish Code of Corporate Governance, the guidelines issued by FAR SRS (the professional institute for authorised public accountants in Sweden) and Svenskt Näringsliv (the Confederation of Swedish Enterprise), and the application of the transition rules announced by the Swedish Corporate Governance Board on 15 December 2005. This means that this report is limited to a description of how internal control over financial reporting is organised.
The procedural plan for the Board and instructions for the President and Board committees 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 emphasises the importance of having clear 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 managing 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.
The company has formulated a model for assessing the risk for irregularities in the financial reporting in which a number of areas with a heightened risk for errors have been identified. Special attention will be 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 informal communication paths to the 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 transparency towards the market.
The Board and its audit committee continuously monitor and evaluate the information provided by the Executive Management. This includes ensuring that action is taken with respect to the deficiencies and recommendations identified in internal and external audits.
So far, the company has not found sufficient reason to set up an internal audit function.
This report is not part of the formal annual report and has not been audited by the company's auditors.
Göteborg, 22 February 2008
Patrik Tigerschiöld Håkan Larsson Björn Björnsson Chairman
Ann-Sofi Lodin Kjell Duveblad
Stockholm, born in 1964 Board member and Chairman since 2004 President of Skanditek Industriförvaltning AB Chairman of Vitrolife AB CMA Microdialysis AB The Chimney Pot AB Mydata Automation AB Partnertech AB Board member of D. Carnegie & Co
Shareholding in Bure, own and held by related parties: 21,150
Göteborg, born in 1947 Deputy Chairman, Board member since 2002 Chairman of Consafe Logistics AB Nimbus Boats 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 Board member of a number of small companies Shareholding in Bure, own and held by related parties: 10,000
Göteborg, born in 1962 Board member since 2006
Deputy chairman of the board of Skaraborg Hospital
Board member of Richard C. Malmsten Memorial Foundation, Anew Learning AB St. Erik Eye Hospital Textilia's parent company, Länia Material 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 TradeDoubler AB Trio Enterprise AB Remium Holding AB Board member of Telelogic AB Energo-Retea Group AB and several unlisted companies Shareholding in Bure, own and held by related parties: 200,000
Bertil Carlsson Accounting Manager Kristofer Hammar Financial Analyst
Jonas Alfredson Chief Financial Officer Daniel Utbult Financial Analyst
Pia-Lena Olofsson Group Accounting Manager Carl Backman Vice President/ Investment Manager
Mikael Nachemson President & CEO
Agneta Erneholm Executive Assistant
Kristina Weréen Reception/Accounting
Proposed dividend divided by the share price at 31 December.
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.
Earnings per share divided by the average number of share outstanding during the year after full dilution. For the Group, net profi t less minority share in profi t for the year is used. The average number of shares after full dilution is calculated according to the rules in IFRS, IAS 33 Earnings per Share.
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.
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.
Equity in the Parent Company after full exercise of outstanding warrants, divided by the number of shares outstanding after full exercise of outstanding warrants. Bure's earlier warrant programme expired on 15 June 2007, after which Bure had no remaining warrant programmes at the end of 2007.
Increase in net sales in relation to the previous year's net sales. The key fi gure thus includes both organic and acquisition-driven growth.
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.
Financial interest-bearing assets minus interest-bearing liabilities.
Defi nition as net loan receivable, but is used when interest-bearing liabilities exceed interest-bearing assets.
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.
Bure Equity AB (publ), Box 5419, SE-402 29 Göteborg, Tel +46 (0)31-708 64 00, Fax +46 (0)31-708 64 80, www.bure.se
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