Annual Report • Mar 30, 2012
Annual Report
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YOUR WORLDWIDE PRINTING PARTNER
t h e f u t u r e o f personalization
This year's edition of Elanders' Annual Report is different from its predecessors. All you have to do is compare the covers to understand that Elanders and the graphic industry are at a crossroads.
Digitalization has changed the whole situation in our industry. It is driving the structural changes that Elanders participates wholeheartedly in. Digitalization is not only changing the graphic industry. Almost every business is facing the choice of embracing or ignoring developments. We at Elanders have made our choice.
Mass communication and digitalization are intertwined. Users and recipients have become senders, producers and opinion makers. In some countries they have been so successful that they have forced corrupt regimes and dictators to abdicate.
At the same time the communication buzz is getting louder and louder as publication channels multiply. Being seen and heard in the wave of information that washes over consumers and companies is becoming increasingly difficult.
Cutting off communicating isn't an option so you have to make yours smarter and more captivating than the competition. Attention must be earned. With this in mind we felt it was time to get personal and that's the theme of this Annual Report.
At Elanders we believe in the individual, the person, the relation. It's the core of our operations. It's why we are leaders in developing printed, personalized communication.
Take a trip with us back through 2011 and see the future from our perspective.
Welcome to the Elanders Annual Report.
Magnus Nilsson President and CEO
...not an anonymous mass consumer among billions of others
2–3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 32 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114
A necessary and sometimes painful restructuring of the graphic industry is going on nationally and globally.
According to the market research company Pira International Ltd there are obvious winners and losers as the battle for customers' attention hardens.
Few other printing groups have Elanders' broad offer. Here are some highlights from production in 2011.
2011 in the Elanders Group was characterized by good financial results combined with new acquisitions.
Elanders has operations on four continents in a total of ten countries and growing global cooperation between our production units.
Almost three years have passed since Magnus Nilsson became President and CEO of Elanders. In this article he talks about the Group's development and what drives him personally.
A company develops best if it has a clear business concept and vision. Here you can read about Elanders' goals and strategies.
Commercial Print is Elanders' largest product area. By adding personalization and cooperating across borders we have created a unique position for ourselves.
Elanders has brought together a number of e-commerce solutions under the W2B product area and we're prepared to expand quickly, both organically and through acquisitions. W2B has a bright future.
Daniel Grizelj is the Gothenburg-based photographer selected to visualize the visions of the future given in the Annual Report.
Make-up artist Maria, model Daniel and AD Pär worked an entire day with Daniel in his studio to get the right feeling in the photos.
The greatest challenge for the team was to capture the term "mass communication" and its opposite, personalization, in Elanders' different product areas.
The packaging market is enormous and everything points to continued expansion. We currently offer a wide range of solutions.
50 sustainable development Successful environmental and quality work go hand-in-hand and benefit from each other. For years Elanders has been a role model in the industry by putting a focus on environmental issues.
56 five years in summary The positive trend in Elanders continues. The year finished with a ten percent increase in net sales. Here are the most important events between 2007 and 2011.
& the share A presentation of the largest shareholders and the development of the Elanders' share.
62 risk & sensitivity analysis All business operations face different kinds of risks. Elanders focuses on prevention.
66 the financial reports
120 board of directors
122 group management
In 2011 the world population passed seven billion people. Never before have so many people lived on this planet – a planet created billions of years ago and which has not gotten any bigger since.
Today's information technology has made the world noticeably smaller, metaphorically speaking. Mass communication has become a common concept and now it can be accompanied with highly detailed and personalized information.
And this is exactly the way things are. Regardless of the fact that we have seven billion brothers and sisters all over the world, we are all unique individuals with very different situations and needs.
At Elanders, our personalized solutions mean we see each person as the unique individual they are!
We live in exciting times. There have never been so many ways to communicate between people and between companies and their customers. The rise in publishing channels is dramatic and there is always some new phenomena that wants to become an influential force in the media mix.
Everything is fast today. You can order goods and services 24/7 regardless of where you are. Customers expect companies to respond immediately and be extremely available. It's no coincidence that some companies have moved their customer service to Facebook.
In just over ten years American Google has become one of the highest valued companies in the world with its advanced search service that has even become a verb – to google. More powerful and increasingly accurate search engines are part of the reason why this section of the advertisement market is growing the fastest.
Corporate bullshit is not recommended. Almost any claim or fact can easily be verified. Modern society has a transparency that was not possible previously and it affects anyone who wants to provide information.
High credibility is closely related to transparency. Neither companies nor organizations should claim to be something they are not. You have to practice what you preach to be credible.
New channels are launched continuously but very few existing media disappear. This is why testing and measuring is becoming more and more vital to finding the ultimate mix.
Greater consumer and customer power doesn't just change roles. We are also changing how we organize our professional and private lives. If you don't want banners with ads on your screen or watch advertisements on TV you can omit them as easily as saying no to direct mail.
When Internet started up a number of people already predicted that more and more industries would be subject to hyper competition. Now we're there. Practically every service and offer can be checked and compared with just a few clicks.
Many self-proclaimed experts projected a quick death for printed media as soon as digitalization took off. That's not how it turned out. Lots of printed products still have a natural role in the media mix and they are particularly strong in the packaging industry. However, in many other cases the role of printed media will be more focused on directing traffic to websites.
Everything seems to indicate that the number of printing assignments will not decrease in the years come but editions will be smaller. To a much greater extent printed matter will only be sent to recipients who have ordered it. For every company who claims to work with sustainable development this is a cost-efficient and credible development.
the myriad of channels has made many companies and organizations unsure. How, what and to whom do you communicate in order to get the best effect? Budgets are almost always limited and it's important to find the right media mix.
But the crucial change is not the host of channels. The paradigm shift lies in the fact that traditional mass communication is becoming less important. People want to be approached and treated like the individuals we all are.
Marketing and information departments all over the world are working frenetically to understand the new media landscape and find their way in an ever changing environment. However, there are some changes that can be identified as both trailblazing and here to stay:
Previously customers and consumers were passive recipients. Today they are active seekers. The word consumer power has taken on a whole new meaning. Naturally companies try to present what and who they are but customers and consumers have the final say.
Elanders' offer is divided into three product areas: Commercial Print, Packaging and W2B. The product areas have different circumstances and markets but one common denominator; they can all be combined with personalized information or print.
commercial print is Elanders' origin and represents the lion's share of our range and net sales. Competition is fiercest in this section of the market and Elanders actively contributes to structural changes by making strategic acquisitions. The traditional graphic industry that offers simple printing services like newspapers, catalogues, direct mail etc. was hit hard by the economic crisis in 2008 and the natural elimination of unprofitable players is taking place all over the world.
However, Elanders has an advantage over several smaller competitors since the company can offer print in low-cost countries. For instance, Polish operations are a part of the Swedish organization and the Hungarian operations are considered part of the German organization. Our ability to offer the customers the same print quality at a lower price was successful in 2011 and will be developed further in the coming years.
Commercial Print includes magazines, books, catalogues and other information and marketing material. Manuals and product information are also included in this category and they have been Elanders' successful mainstay for many years. Manuals, however, have gone through a transformation in recent years. They are simpler, thinner and part of the information that was previously printed is now delivered digitally. To compensate for this Elanders also offers printing of the packaging and fulfillment in combination with production of the manual.
The demand for customized and chassis unique manuals is on the rise in the automotive industry. Elanders has long and extensive experience in this area and a large number of leading, global car manufacturers are our customers.
packaging, is becoming an increasingly important component in how companies nurture their brands or when they want to clinch a purchase as a customer walks through a store. Elanders offers an entire range from simple boxes to exclusive handmade packaging and everything from small to enormous editions.
Another competitive advantage Elanders has is that we offer personalized print on packaging. You will find a number of examples of this later on in the Annual Report.
The strongest trend in packaging is that it is becoming more exclusive, expensive and requires more advanced technology to produce. In addition to the home and electronics industries, Elanders has in recent years won orders from pharmaceuticals and the food and cosmetics industries.
web-to-business (w2b) is a relatively young product area for Elanders but it's growing quickly and its future is exciting. It's a prioritized development area where the personalization element is more tangible than in any other product area.
This product area is characterized by the use of specially designed websites where customers can put in their orders and in some cases follow the entire process from order to delivered printed matter.
Our strategy is to serve Elanders' existing customers in the best way possible via order portals and to be the best global supplier for customers that are focused on W2P. Included in this strategy is continuing to develop our own technical solutions and use the experience that we have. Volumes have increased as more and more customers want to design their own personalized photo books, calendars and other printed material.
in an industry that is pressured to transform and is undergoing clear structural changes there are a number of winners and losers. The international market research company Pira International Ltd (Pira) has compiled the development of the printing industry since 2006 and it has also made a projection as far as 2016.
The changes that have taken place until now will probably continue until 2016. The survey shows that books and magazines will slowly decrease in terms of total editions while the drop in newspapers will be much faster with a tangible decline in coming years. Catalogues will have the same negative curve as newspapers.
So who are the winners? Well, first of all print that can add value, like personalized information. Packaging will also develop strongly even if this category is tied to the business cycle. Pira believes
that packaging will be the big winner, growing from today's levels by around four percent in 2016.
(MUSD)
| 2016 | ||||
|---|---|---|---|---|
| 38,527 | 39,803 | 35,917 | 35,080 | 32,130 |
| 72,597 | 74,411 | 69,211 | 68,561 | 67,114 |
| 54,487 | 54,690 | 48,181 | 46,564 | 41,437 |
| 111,295 | 113,857 | 108,281 | 108,159 | 109,012 |
| 47,972 | 46,834 | 37,109 | 35,506 | 30,427 |
| 155,361 | 157,100 | 150,571 | 153,127 | 157,732 |
| 17,764 | 17,869 | 16,409 | 15,920 | 14,101 |
| 16,005 | 14,393 | 13,485 | 13,440 | 15,017 |
| 10,613 | 11,729 | 11,728 | 11,960 | 14,115 |
| 248,700 | 261,050 | 270,639 | 279,971 | 324,327 |
| 30,798 | 30,390 | 29,724 | 31,495 | 39,865 |
| 806,123 | 824,135 | 793,269 | 801,796 | 847,293 |
| 2006 | 2008 | 2011 | 2012 |
The arrows to the right of the table indicates the development between 2012–2016.
Last year was not only financially successful. Some of our most challenging and exciting assignments in 2011 are presented on this and the next pages. The common denominator is that our customers have had special requests that Elanders has been able to meet, and in some cases more than one of our production units have been involved.
Product: Exclusive packaging Production: Elanders in Germany and China
Elanders is a top producer of the most exclusive packaging on the market. We have created a series of luxury packaging for Thomas Sabo's jewelry, perfumes and other accessories. We know how to meet the demands of trendy customers.
Product catalogues & packaging Production: Elanders in Sweden, China and Poland
Producing the Swedish industrial Seco Tools' six product catalogues in 22 languages in an edition of 75,000 copies was Elanders' single largest project since directories. The catalogues are packaged and delivered to retailers and distributors in more than 50 countries together with a DVD, a sales brochure and a personnel magazine, all wrapped up in packaging from Elanders in China.
Product: Manual Production: Elanders in Great Britain
Elanders produces manuals and product information in many shapes to a number of prestigious brands in the automotive industry, among them the luxury sport car brand Aston Martin.
Annual and Sustainability Reports Production: Elanders in Sweden
Every year Elanders produces and distributes Annual and Sustainability Reports for more than 100 Swedish companies. One of these is Svenska Cellulosa Aktiebolaget SCA, a global hygiene and paper company which provides essential products that improve the quality of everyday life. Their Annual and Sustainability Reports are printed on paper certified by both the Swedish ecolabel the Swan and FSC®, and are climate neutral.
Product: Magazines production: Elanders in Sweden
IDG is the largest media company in IT/technology, environment, Life Science and business, in Sweden and the world. Elanders produces a total of 16 Swedish titles such as MacWorld, Cap&Design, Internet world, Miljöaktuellt, the music magazine Studio and a number of photo magazines. They are all certified by the Swedish ecolabel the Swan.
Photo books, calendars, wedding photographs, paintings
production: Elanders in
Great Britain
For many years Elanders has sold, produced and distributed photo books in Great Britain under the brand Photocreator. The British TV channel Channel Five tested photo books from 15 suppliers and Elanders was named the best British supplier in the test and the third best of all.
Operating result amounted to MSEK 110 (MSEK –76). The result was affected by one-off items of MSEK –25 (–59).
amounted to MSEK 60 (–84) or SEK 3.09 (–6.79) per share.
for 2012 is increased net sales and results compared to 2011, excluding one-off items.
continues to actively participate in the structural change in the Swedish printing industry. During 2011 some operations in the Swedish sheet printers Fälth & Hässler and NRS Tryckeri were acquired.
personalized print and packaging resulted in several new orders and contributed to higher net sales and the improved result.
• Net sales increased by 6 percent and amounted to MSEK 434 (409).
• The positive development was due primarily to success in Poland, Sweden, Germany and Hungary.
• Personnel from the sheet-fed printer Fälth & Hässler went over to Elanders on 1 April.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Net sales, MSEK | 1,838.8 | 1,705.9 | 1,756.7 | 2,191.2 | 2,035.6 |
| Operating result, MSEK | 109.8 | –76.2 | –60.1 | 16.0 | 226.8 |
| Result before taxes, MSEK | 80.0 | –105.2 | –96.1 | –34.4 | 184.1 |
| Average number of employees | 1,546 | 1,520 | 1,581 | 1,809 | 1,579 |
| Earnings per share, SEK | 3.09 | –6.79 | –7.57 | –2.62 | 18.06 |
| Dividend per share, SEK | 0.501) | 0.00 | 0.00 | 0.00 | 4.50 |
1) Proposed by the Board.
artcopy was founded in 1970 and initially focused on copying. Elanders acquired parts of Artcopy in 2007 and took over all the shares three years later. A new 3,000 m2 facility with the very latest in high tech equipment was inaugurated in 2010 in order to meet the demands of an expansive and exciting market.
The country is a part of the so-called BRIC countries and it's the largest country in surface and inhabitants (192 million) in South America. Strong economic development when the former president Lula da Silva was in power.
we built our own factory in Beijing in 2005 and from the start in 2006 it has been focused on offering traditional print together with digital print, storage and just-in-time deliveries, just to mention a few of the products it produces. One specialty is packaging production and we offer everything from handmade exclusive packaging to more traditional corrugated cardboard packaging.
China has become the powerful motor of the global economy. It's quickly becoming one of the most infl uential countries in the world with its 1.3 billion inhabitants. Will probably be the largest economy within the next 10–20 years.
sommer corporate media was acquired in 2007. The German business has quickly developed into an important player in the Group and is the second largest after Swedish operations. Offensive investment in new technology, services and acquisitions are some factors behind how the high profile printer continuously gains new market shares.
The German economy can best be described as Europe's locomotive. Since the unifi cation with East Germany in 1990 it has the second largest population in Europe. With its 82 million inhabitants it is just behind Russia.
elanders in Great Britain has a comprehensive offer. The British automotive industry is a particularly important customer where Elanders produces manuals and other marketing material. In addition to producing traditional printed matter Elanders also offers electronic publication solutions.
Great Britain is the world's sixth largest economy despite the fact that the population is only slightly more than 60 million. The economy is expected to bounce back after the past few years fi nancial crisis.
elanders has had operations in Hungary for over ten years, specializing in user manuals, often in very large editions directly delivered to the assembly lines in every major telecommunication and electronics manufacturer in the country. Hungarian operations work under the German organization since 2010 and receive more and more print assignments when customers demand the highest quality at very competitive prices.
Since Hungary joined the EU in 2004 the country, with just over ten million inhabitants, has had promising fi nancial growth but it took a fall after the fi nancial crisis in 2008 and is currently battling a major defi cit in state fi nances.
ITALY Treviso
the unit was established by Elanders in 2007 and in 2010 we invested in the best equipment for digital print and finishing on the market along with new software solutions. Customers here require extremely short lead times and flexibility. Manuals are delivered just-in-time to our customers' factories.
Has a large national market with almost 60 million inhabitants. Weak economic growth since the mid-1990s and is strongly a ected by the fi nancial crisis in Southern Europe.
novum was a small player founded in 1999. Two years later it was acquired by Elanders. The company has great expansion plans and will be twice as large in five years' time. The idea is to further develop the flexible production unit with focus on digital print and supplement it with logistics and storage functions.
With close to fi ve million inhabitants the national Norwegian market is one of the smallest markets in Europe but its economy is very healthy with strong purchasing power on many levels of society.
elanders has been present in Poland since 1995. Since the company has both sheet-fed and web offset machines it can produce a broad variety of marketing material and packaging. Since 2010 the Polish operations work under the Swedish organization and recieve more and more orders from Swedish customers due to high quality print at very competitive prices.
With nearly 40 million inhabitants Poland's economy has developed best of all the countries in Eastern Europe. It has been a member of the EU since 2004 and has close trading ties with Germany, Italy, Russia and France.
the seed to all of Elanders' operations was sown in Sweden. The first printing plant was founded back in 1908. Today Elanders has production facilities in four locations and sales offices in several other places. This year Värnamo and Jönköping were added through the acquired operations in Fälth & Hässler and NRS Tryckeri.
For years Sweden has been one of the best countries in the world when it comes to education levels and the standard of living. A strong export industry and good state fi nances have profi ted its stable fi nancial development.
the american printing industry is the undisputedly largest in the world. Elanders established itself in the USA as late as in 2008 via the acquisition of Seiz Printing. Elanders in the USA has always been service oriented and proud of its high class equipment used to deliver high quality products like multi-color brochures, books and packaging.
The USA, with its 308 million inhabitants, has a huge national market. However, its leading fi nancial role has taken a beating after the fi nancial crisis 2008 and the country is currently deep in debt.
Discretely and slowly but surely Elanders has climbed up from the havoc the financial crisis reeked. Three years of losses have been turned into a stable profit and good margin in 2011.
"We've never been better at using the Group's capacity and know-how. Now we are going to further sharpen the organization and our offer in order to acheive sustainable growth and profitability," says Magnus Nilsson. interview: jan-olof ekelund photo: daniel grizelj
magnus nilsson is a typical competitive person. That was probably why he accepted the CEO post when Elanders' Board of Directors offered it to him in May 2009. Like so many other players in the business the graphic Group had noticed that the phones had stopped ringing and many customers held back, indicating a recession.
Elanders did what had to be done. The Group moved ahead in some areas and slowed down in others. That strategy got them back on the track. With net sales of over SEK 1.8 billion and operations in ten countries on four continents it takes both patience and command to change a negative trend.
With five profitable quarters in a row the negative trend is definitely broken. It may have been done discreetly but the result is no less impressive.
"The results of the steps we took in 2010 could be seen in 2011. These measures cut costs in the Swedish operations and they became profitable, which was very positive."
"In 2011 we also got to see the results of our reorganization where organizationally Hungary works under Germany and Poland under Sweden. More printing assignments in our low-cost countries is profitable both for Elanders and our customers."
"Showing a stable profit each quarter in 2011 after some very difficult years. The Swedish operations are still the largest in Elanders and the fact that they went from red to black figures means a lot. We managed to grow organically in both the Swedish and German markets while the industry at large struggled with profitability issues and had fewer assignments. We grew organically by five percent in Sweden and by ten in Germany."
"Even on other markets where Elanders isn't as big, we managed to turn loss into profit. I have China and Poland in mind when I say this. Brazil is really the only place which didn't live up to our expectations but we're taking forceful measures there in 2012 in order to develop the relatively small operations."
"We also got proof that our investment in product development is working. I'm thinking about our offer regarding luxury packaging and personalized solutions for both packaging and personalized printed matter. A good example of the latter is the work we did for the Swedish trade magazine Cap&Design where Elanders printed 11,003 unique covers!"
The structural change is continues to be felt in the graphic industry and Elanders has taken initiatives both in Sweden and on other markets. Which actions and acquisitions were the most important?
"The acquisition of the Swedish printers Fälth & Hässler and NRS was important because we acquired net sales and moved the operations and productions to our own units."
"In 2012 we will continue our strategy of moving our resources to where we get the most out of them. In high-cost countries like Germany and Sweden we will work on concentrating and optimizing the machines we have. The major part of our new investments take place in growth countries like Poland and Hungary where it looks like volumes will increase significantly in the coming years."
"Up to now we have taken advantage of the market situation in the graphic industry by buying used equipment at very good prices and this is a strategy that we will be able to use for a number of years in order to keep our investment levels down."
"A fundamental part of Elanders' strategy is that our high-cost countries must use their capacity to the hilt and our goal is to have at least three shifts operating and in periods of high capacity utilization as much as four. It's better that we have a slight overcapacity in our low-cost countries so that we can shift production there when needed."
"Little by little we have become better at analyzing where it's more profitable to produce an assignment. This also means that we're in the process of realizing the vision of One Elanders, which means being able to work across borders in order to offer the best printing quality at competitive prices while maintain stable and satisfactory profitability."
"In 2011 we did much better in comparison to the development on the Swedish market. There were
a number of bankruptcies and mergers in 2011 as in previous years and this trend will and must continue since there is still so much overcapacity."
"It's harder to make an international comparison since there are so few international competitors similar to Elanders. What I can see is that the traditional graphic industry that only offers offset declines year by year. But we are still talking about really large printing volumes. However, international growth is in digital print, packaging and personalization.
"Commercial print is our largest product area and has had a good development since we expanded both organically and through acquisitions. We clearly won new market shares in 2011. In Com-
person that is at his best when he meets customers and can be one of the "gang", like here with Fredrik Einarsson, Group Reporting Manager in Elanders.
mercial Print personalized print developed well."
"Through the development of a global W2P platform we've been able to increase volumes for our customers with global needs. For instance, a market leading global customer uses our global order platform in order to serve all of its retailers and factories all around the world, allowing them to order printed matter easily and around the clock. This mainly concerns manuals, marketing material and catalogues, but also CDs, DVDs as well as exhibition and shop material."
"Packaging continues to develop well. China, for instance, initially only offered commercial print but today packaging stands for more than half of its net sales. The demand for luxury packaging and personalized packaging is growing and we also see that there is a market for a global player that can serve global customers with different kinds of packaging solutions."
"In Packaging growth is in personalized print, particularly for company customers. An example is the German Postbank where last year we bought 300,000 chocolate bars from Ritter Sport in order to send personalized packaging from Postbank on their customers' birthdays."
"We have great expectations for W2B and we are receiving more and more assignments, particularly in Germany and Great Britain. In this area Elanders is both a subcontractor for W2P to companies and an important development and production partner in increasing our customers' added value sales through products like personalized chocolate boxes and personalized photo products. We also develop our own W2B platforms for sales directly to the consumer."
"Yes, we see this trend too. Printed matter has to be up-to-date. That means smaller but more numerous editions so the end sum might still be the same."
"We have increased our net sales on all our markets where we are active and did it profitably. The exception is Brazil where net sales increased but didn't make a profit since we had to restructure to develop the company and broaden our offer."
"The trend continues positively. We sell more to many of our major global customers and we've been able to offer them more kinds of products. This is particularly true for work from global automotive manufacturers."
"Absolutely. We will develop in packaging, personalized print and W2B."
"Continued strong growth combined with greater margins and that the necessary consolidation in the industry speeds up so that there is less overcapacity. This will create a better business climate and enable sustainable price development for printed matter."
Age: 46 years. Family: Wife and three children.
Lives: Villa in Billdal, Sweden. Education: Education in
Graphic Technology, Design, Business Administration and Marketing. Career: Active within the
graphic industry since 1987, started as business developer with Elanders in 1999. Head of production in Elanders' operations in Hungary during 2002. Managing Director of Elanders Skogs Grafiska AB during 2003– 2005. Managing director for the operations in China 2005–2009. President of Elanders since June 2009. Leisure time: Prioritizes his family, likes to exercise and often reads books.
"It's a great challenge to work in an industry that is changing so much in such a short period of time. It's gone from having a surplus capacity in traditional printing to getting competition from completely new publication channels that are launched in technology accessible to everyone. In this environment we have to be best in everything in order to succeed. We have to be best at selling and producing and at the same time innovative. To meet that challenge we need the most competent personnel led by the most inspiring managers. We don't have any unique production technology so we have to puzzle our parts together instead in order to be the best alternative. That's quite a challenge."
"I've always liked to work, to be able to deliver and manage the business. I like challenges and getting the opportunity to deliver results in competition with other players. I've also always liked to combine sales, product development, striving for better margins and continuously improving. My favorite part of work is being one of the 'gang' and meeting customers."
Elanders' goal and strategy is unequivocal. We want to make the Group's customers more competitive with the help of our knowledge, high capacity and technology. Not only that, we are one of few printing companies that can offer global solutions for almost any kind of printed information. Our customers will always be local, but their needs may be local and global.
Elanders helps its customers to take control over the challenges in their communication processes. We believe in the printed word, naturally in combination with new media. Elanders, one of the few printers that can really deliver global solutions for any kind of information, is determined to be one of the most efficient companies.
Elanders' vision is to develop our position as one of the leading graphic companies in the world. By leading we do not mean largest. We mean it is going to be the company that best meets customer demands on efficiency and delivery ability.
Elanders' core values Effective, Innovative and Responsible are not only a part of the Group's vision as they are also a natural part of our daily work.
By Effective we mean being able to offer uniform and automated processes throughout the entire production chain from order and execution to invoicing.
By Innovative we mean continuous development of our technology so that we create solutions which suit each customer's unique printed matter requirements. We readily take on the challenge of solving
our customers' different problems by using profitable production methods and by being pioneers in new technology.
By Responsible we mean that we always put customers' needs first. The reason Elanders can be found in Hungary, China, the USA and Brazil today is because Elanders followed its customers out into the world so that we could meet their special needs on location in these countries.
Elanders' strategies to fulfill our vision, support our business concept and reach our goals are to:
// Elanders has a unique position in the industry with its presence in almost all of the world's interesting economic zones. //
Develop local customers with global needs into global customers Elanders has a unique position in the industry with its presence in almost all of the world's interesting economic zones, which is a primary factor in why we have so many multinationals as customers. Nonetheless, marketing in Group companies is largely based on identifying and fulfilling customers' local needs. However, local customers often have global needs as well. By im-
proving the exchange of information all the units in the Group will chart the needs their local customers have in other countries. Naturally this also includes services that can be offered locally in some other part of the Group. For example, most of the packaging capacity and competence in packaging which Elanders has in China and Eastern Europe has
been used for local deliveries. A couple of years ago we began to offer Swedish customers printing in Poland. In the same way our operations in Hungary have received more and more work from German customers.
This offer and working method has resulted in more orders from the automotive industry and consumer electronics producers.
Most of Group units have similar equipment and competence but there is still room to improve capacity utilization. We can achieve this in part by developing an exchange of customers within the Group as well as improving our calculation of available capacity and order stock, flexible pricing and adapting our organization.
Elanders' units in Sweden and Poland are now run under the same management as are the units in Germany and Hungary, which significantly increases the ability to offer high quality deliveries at competitive prices on the Swedish and German markets.
We move existing production equipment to the sites where production can be made at the low-
est cost which increases Group profitability. For instance, equipment has been moved from Sweden and Germany to Poland, Hungary and Brazil.
The Group continually evaluates new technology (for example modern digital ink-jet equipment) but investments will only be made where they, from a Group perspective, make the most money. Elanders is also going to take a closer look at increasing specialization in our various units in order to raise quality and productivity.
We have every possibility to improve profitability by more efficient use of our current capacity and the work to move production to Eastern Europe continues.
Elanders has worked with many of its major customers through order portals on the Internet for years. Most of these portals have order interfaces that are tailor-made to the customer.
The number of customers, particularly small businesses and consumers with relatively standardized needs, who order printed matter over the Internet is rapidly increasing. Through the order portal the customer decides on the design of the printed matter, pays for it and then creates print-ready material that goes directly into production.
Customers can then follow the status of their orders as in most Web shops. Production and delivery is supported by a business system that handles the orders, print files and invoicing with the help of information that comes from the customer via the portal. A typical order in this case is significantly smaller but the number of orders is vastly higher.
Elanders is in the process of developing and integrating order portals with our business system in order to achieve the automation of order management needed to handle that many orders. Conventional order and project management will continue to be important in the foreseeable future, particularly for customers that need tailor-made printing. But even conventional management fundamental processes must and will be successively automated.
This is a crucial factor in our ability to remain competitive. Nonetheless, we believe W2P will
become more and more important and Elanders sees excellent opportunities to develop in this area and we have already made two successful company acquisitions internationally.
Customer steered development of new offers has always been one of Elanders' strongest features and it has been one of the crucial factors in the company's development from a local Swedish company to the global printing Group it is today. Sometimes our eagerness to fulfill customers' wishes has had a negative effect on short-term profitability because our existing production capacity was not suited to handle the new services.
Elanders will not slow down the pace of new product development. On the contrary, Elanders is going to raise the tempo but product development will, to a higher degree than previously, be based on the needs we believe our customers will have in two or three years' time and take into consideration our current capacity, competence and organization.
Elanders' product development must continually address the question of how we can meet the needs our customers will have a few years ahead and what is required to do so. This does not mean, for example, that just because Elanders is not a cargo company and does not plan to become one that we will not handle our customers' transportation needs. We will always have outsourced services connected to our deliveries. However, our primary services will always be based on the capacity and competence of the Group.
Lately we have experienced a growing demand for different and more exclusive packaging solutions. For our customers packaging that stands out can be critical when a customer is about to choose a product. The idea is to create packaging that strengthens both the product and the brand.
We have also noticed that demand for personalized print is steadily increasing. Photo books and calendars are some examples and Elanders offers both companies and consumers with our valuable products, service and expertise. Another category in personalized print is customized and chassis unique manuals for the automotive industry where Elanders is on the cutting edge of technology. Bank and insurance companies also increasingly require personalized print in their communication to their customers.
Elanders' strategy is to secure the long-term development of the company thereby creating value for shareholders and other interested parties. To support this process Elanders has established a number of financial and growth goals. Below is a follow-up of the goals that were presented in the Annual Report 2010.
elanders has divided the long-term, externally communicated goals into financial and growth goals. Elanders works continuously with goals and strategies that are normally formulated on a rolling three-year basis.
the Group's current structure while growth goals consider new establishments, alliances, acquisitions, divestitures and other vital changes in Group structure. However, the long-term financial goals will not be lowered because of such changes.
| financial goals | ||
|---|---|---|
| Long-term goal of an operating margin of 7–10 percent. |
Operating margin in 2011 amounted to 6 percent cleared of one-off items of 5 percent. This shows that the ac tion plan carried out in previous years has been eff ective. In 2012 Elanders will continue to consolidate and optimize existing production units to increase capacity utilization and profi tability. |
Long-term goal of an operating mar gin of 7–10 percent. |
| A return on capital employed of at least 10 percent long-term. |
Return on capital employed 2011 was 7 percent; excluding one-off items 5 percent. |
A return on capital employed of about 10 percent long-term. |
| An equity ratio of at least 30 percent. | The equity ratio on the balance sheet date was 44 percent. |
Equity of at least 30 percent. |
| Debt/equity ratio of less than 1. | The debt/equity ratio on the balance sheet date amounted to 0.8. |
A debt/equity ratio of less than 1. |
| Over time investments in production equipment will not exceed deprecia tion or 4 percent of net sales. |
Investment in production equipment amounted to MSEK 33, correspond ing to 38 percent of depreciation and 2 percent of net sales. |
Over time investments in production equipment will not exceed deprecia tion or 4 percent of net sales. |
| growth goals | ||
| Net sales and operating result will increase annually 5–10 percent. |
With unchanged exchange rates net sales growth amounted to 12 percent. Operating result went from negative to positive. |
Net sales and operating result will increase annually by 5–10 percent. |
| At least half of growth will be through organic growth. |
With unchanged exchange rates growth amounted to 12 percent, of which 8 percent was organic. |
At least half of growth will be through organic growth. |
We live in a day and age where the number of newspaper articles, catalogues and other printed material is swelling but editions are shrinking. Commercial Print is the largest product area at Elanders and we are approaching future challenges in the area and industry by raising the level of personalized information to new heights.
The information flow grows day by day and senders need increasingly sophisticated methods to their receiver's get attention. To print 11,003 unique covers for a trade magazine is one way to make an impression. Elanders' product area Commercial Print holds the knowledge and technology to help our customers stand out from the crowd.
| Change in percent | |
|---|---|
| 2011–2016 | |
| USA | –0.8% |
| Japan | –1.1% |
| China | +7.8% |
| Germany | –7.7% |
| Great Britain | –0.8% |
| France | –0.9% |
| Italy | 1.5% |
| Canada | +0 |
| Brazil | +4.8 |
| India | +5.9 |
before we dive into Elanders' product area Commercial Print let's take a look at the international situation. Global printing volumes have developed at an even rate in the past five years with a slight decline after the financial crisis in 2008.
The total global market for 2011 was estimated at about USD 790 billion which is on par with 2006 when net sales were USD 804 billion. 2008 was the best year so far with USD 822 billion. In the coming five years net sales are expected to increase by 1.3 percent to USD 845 billion in 2016.
Today the global market can be divided into three equally large parts: Europe, Asia and the American continents. Japan has the second largest printing industry in the world but growth is driven by development in other countries in Asia, particularly China and India. Because such a large part of all products are produced in Asia, packaging is on the rise in these markets. In Europe and North America relatively small growth is expected, except in digital print, while the growth for traditional offset print is diminishing.
The graph above shows the development in the graphic industry for the ten largest countries and expected development up to 2016. It is worth noting that China is expected to overtake Japan
and move into second place after the USA. The so-called BRIC countries are gaining ground and production is growing in China, Brazil and India. The mature economies in the West will probably have zero growth or a slight decrease in the same period.
Even if printing volumes are decreasing in the USA the country still dominates total volumes and produces almost twice the printed matter compared to runner up Japan and also twice as much as Germany, France, Great Britain and Italy together.
about 40 percent of the total civil print market is sheet offset and digital print, which are Elanders' primary production methods. Almost two thirds of the global market consists of products that Elanders provides while the rest is newspaper and magazine print. Considering that these are primarily produced with other methods it is a reasonable conclusion that about half of the global market is available for Elanders with our present capacity and competence.
Naturally from Elanders' perspective it is interesting to note that the Group is represented in two of the countries that will grow the fastest in the coming years, namely China and Brazil.
the graphic market in the USA is estimated at USD 200 billion and is the single largest market. The industry has been consolidating in this mature market for years but it is still fragmented and the 50 largest players have no more than 30 percent of the market share together.
Digital print, which makes up 10 percent of the market today, is rapidly growing and is expected to increase twice as fast as offset in the near future.
the latin american market amounts to more than USD 50 billion. The two largest markets are Brazil and Mexico and together they represent some 80 percent of the market. Books are a large part of the Latin American market but packaging print is driving growth.
The market in Brazil is estimated at USD 23 billion and is the market believed to have the greatest growth rate in the area. Development in Brazil and other Latin American countries creates a growing demand for educational material and magazines and the rising living standard keeps domestic consumption thriving and stabilizes the demand for vehicles and consumer electronics.
increased digitalization Digital print will have the fastest growth rate regardless of geographic market. The technology will be connected to marketing or personal off ers ordered via the Internet.
smaller editions The number of printing assignments will grow over time but editions will be smaller. More titles with niched information and short series. Just-in-time deliveries will be more in demand.
The ongoing structural change will intensify. Large comprehensive players and smaller specialized players will take market shares from the medium-sized printers.
volumes move On mature markets like Western Europe low-cost countries will increasingly take printing assignments from high-cost countries.
offset production reduced As the share of digital print increases off set production will decrease globally, particularly on mature markets, while in Asia and Eastern Europe it will be more resilient.
the total european graphic market amounts to approximately SEK 1,500 billion and has a yearly average growth of less than one percent. Growth can be found in packaging print, offset in Eastern Europe and digital print while offset print is decreasing in Western Europe due to capacity-related drops in prices as well as actual volume reductions. Western Europe still represents almost 90 percent of the European market.
The largest Western European market is Germany, (about 20 percent of the European market), followed by Great Britain, France and Italy. The Eastern European market has a considerably higher growth rate than Western Europe but most of this growth originates in offshore production for West European countries. Offset volumes in Eastern Europe in the foreseeable future will increase at the same rate as digital print. A consolidation of the industry is probable, partly in the form of mergers and partly through companies being bought up by Western European players. Elanders' units in Eastern Europe and their integration, in addition to being a vital low-cost alternative for Western Europe, are a source of good growth through market shares won and the fact that the markets in Eastern Europe are still growing. However, Elanders is closely monitoring financial developments as several countries are battling major budget deficits.
annual growth of the total graphic market in China is estimated at 8 percent during the next few years and is expected to reach US 130 billion in a few years. Almost 75 percent of the market is in southern and eastern China. Although there is no clear picture of the competition it is believed that there are close to 200,000 printers in the country. In relation to the number of inhabitants it does not, however, seem like very many and it would appear that most of Chinese printing production is focused on product information and trade dressing rather than newspapers, magazines and books.
China's popularity with the Western graphic industry has grown and many companies are starting up there while the Chinese are concentrated on exports. China is already the world leading offshore supplier of printed matter to Western Europe and North America. Digital print is looked upon positively in China but growth has only been around five percent annually. A clear trend is the development of franchise chains for digital printing.
The competition Commercial Print faces varies between different customer categories, geographic markets and types of production.
The graphic industry looks pretty much the same in most countries. There are thousands of small, family printers that only offer conventional printing and that part of the market is experiencing a major restructuring.
there are just a few groups the size of Elanders in each country. Several of them are not commercial printers. They are publishers or newspapers with in-house printing that sell their overcapacity on the market.
In Sweden, Elanders' single largest market,
Elanders is an important player and we work with the automotive and home electronics industries, the public sector as well as with publishers. Our size, capacity, broad offer and long experience give us an advantage over many competing companies.
We are practically the only company in Sweden that can cross country borders to provide large companies with full-service solutions that contain both printed matter and packaging as well as other services. Elanders is the most international company among
Swedish printers and we offer competitive produc-
as it is in Sweden but even during the financial crisis Elanders developed well in Germany and Great Britain. In the Nordic area and Germany
Elanders competes with different W2P players that are primarily aimed at consumers and smaller companies.
The competition in just-intime production of manuals and other after sales information is an endless number of small printers that on their own cannot handle the needs of global customers. Elanders has the advantage of its graphic expertise and with our broad customer base we cover the entire value chain.
TRENDS ON
4
have created the option of advanced personalized information and printing assignments.
More and more we are being asked to offer and cover the entire support chain. In some cases this goes from developing the material to printing it, planning database solutions and adding packaging and storage.
Purchasing decisions have a tendency to move higher up in the purchaser's organization and in some cases they are matter for management. Global purchasing departments are becoming more and more influential in major companies.
One way of meeting the market's demand for lower prices is to use production capacity in low-cost countries. Elanders started this process back in 2010 and now Polish operations work under Swedish operations and Hungarian operations work under the German operations.
Global printing
– 2006 to 2016
volumes
34–35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128
Customer: Cap&Design Advertising agency: Vår Photographer: Valdemar Asp Model: Alma Helgesson Project Manager Elanders: Daniel Jonasson Team
Seeing your name on printed matter is no big deal today since it's so often used in marketing. To create completely unique covers for the 11,003 readers of the Swedish magazine Cap&Design is a whole different challenge. Elanders got the job.
the idea to give each reader their own cover was born when the editorial office at the Swedish magazine Cap&Design decided to write about unique printing. A little bit like numbered art in a limited edition. The assignment was given to the advertising agency Vår and together with Elanders they figured out how to make it happen.
Photographer Valdemar Asp took pictures while Björn Altdax and Karl Grandin from Vår decorated model Alma Helgesson with watercolors. Twelve
Coordination Group Publications, CGP, is the leading publisher of educational material in Great Britain. Since 1995 they have published over 600 titles in many areas, primarily books on different subjects and maps for compulsory school.
our goal is to make serious subjects accessible to students. The books are richly illustrated and include a lot of diagrams. The text is usually straightforward and written the way we talk and joke in order to make learning fun and easy. And even if the style is sometimes considered controversial the students really like the books.
Elanders' good work for the environment has always been an important factor for CGP, especially since the editions are so large. Already back in May 2003 they asked Elanders to print an environmental declaration in the books. This has contributed to many environmental discussions in the classrooms.
CGP Founded: 1985 Net sales: About MGBP 15 Number of employees: 140 Market area: Great Britain Range: School books and other useful children's books Website: www.cgpbooks.co.uk
quality printing process with digital and offset technology, in both one and four colors, Elanders is helping CGP develop its digital offer. In cooperation with Elanders CGP has now started looking at different types of iPhone applications.
In addition to the high
Serious school subjects are presented in an easily accessible way by the British Publisher CGP.
hours and 12,000 photographs later the first part of the assignment was completed.
Elanders, which prints a large part of IDG's magazines, including Cap&Design, has great experience in working with large volumes of photographs and variable data. The challenge this time was the need to combine randomly selected high quality images with a unique number for each cover and static cover text. And the quality of each image had to be equally good – from the first to the last cover printed.
"It would have taken months to produce them manually but we could use an automated script in Photo-
shop and several other automated settings to generate 7,000 covers per hour in three parallel processes," says Daniel Jonasson, Project Manager at Elanders.
Jonas Brännerud, CEO for Elanders in Sweden, was also very happy about how well the cover project went.
"Our ambition is to always be at the cutting edge of technology in order to solve our customers' challenges and needs. This particular Swedish project shows the strength in having different expertise under one roof. It's also an excellent example of how Elanders and the graphic industry continuously develop," says Jonas Brännerud.
Watch the stopmotion videos on how we worked and how the motifs were created here: capdesign.se/unikaomslag
Screens have become the medium that affects us the most. Whether it comes through ad campaigns on television, captivating tablet computers or practical Web portals the noise from media is massive. The secret behind successful business is to get to, and get through to, increasingly choosy customers.
E-commerce has created completely new business opportunities for the players in the graphic industry that have dared to take advantage of the new technology. Not long from now the sky will be the limit when it comes to what products can be ordered or produced with Web portals as the natural link between customers and printers.
whenever we switch from one technology to another discussions spring up about its effect and the development of the industry we're in. The first digital printing presses were introduced almost at the same time as surfing the Internet became a common concept.
Some experts predicted that traditional printers would dry up and be forgotten while others saw the technology as insufficient, expensive and a fashion that would soon become unfashionable. Today we see that neither of the extremes was right. It is true that things have slowed down for traditional printers in the past few years but it is still a multi-billion industry and will remain so for a long time to come. It is also true that digitalized communication keeps gaining market shares, but not always at the expense of conventional printing jobs. In the best of worlds the different communication channels work together and to a certain extent printed communication is currently used to market digital meeting places or other offers connected to the Web.
in mass communication the previous technology shift took years to get its breakthrough. If we skip the jungle drum, smoke signals and Johannes Gutenberg's printing press it took almost a century before the phone belonged to everybody. It took decades for radio to reach people in general and the story with television was almost the same. It took 38 years for radio to reach 50 million listeners and television took 13 years. The introduction of Internet created completely new opportunities for mass communication without any major technical investments. In 1998 the search engine Google was founded and today it has about 300 million daily
users who make about 2 billion searches. Other digital phenomena like Facebook and Twitter have grown to 850 and 175 million users in just a few years. On YouTube the most watched clip, the teen idol Justin Bieber singing the song Baby, has been seen 700 million times.
So what does a completely new communication style mean to the printing industry? Naturally it means we have to adapt and change but it also opens the door to niched information solutions and revenue. A key concept is target accuracy and it will become increasingly important in the years to come. In order to achieve target accuracy messages must be relevant and appetizingly packaged. In short, it will be crucial to control or influence the entire production chain, or parts of it, to be successful.
The greatest difference now compared to previously is that today you can communicate much more closely with end customers and consumers. Customers both need to and can create their own printed matter but they have to have printers to finish the job. No longer are consumers considered a nuisance and the value of their orders almost worthless. Order portals online, often combined with digital printing technology, have totally changed the way the game is played.
Completely automated processes The constant need for rationalization in businesses makes them welcome e-commerce, usually in combination with digital print technology, wholeheartedly. The ability to quickly and easily order your printed matter in a customized Web portal is both efficient and economic.
New product areas and markets Soon the sky will be the limit when it comes to what can be printed by a personal sender. For years it has been possible to produce a personal photo book but now you can also become your own editor and print a single copy of your own bound book of 100 pages or more at a reasonable price.
Satisfies new needs Personalization is in line with the times. As the media buzz gets louder, and being constantly online becomes more and more natural, people increasing feel the need to display their personality.
web–to– business
Elanders has chosen to gather e-commerce solutions for consumers and business where Elanders works with companies to create e-commerce solutions or provide production under the product area W2B.
W2B is an area with rapid global growth and a bright future.
elanders' strategy for the product area is to combine organic growth with strategic cooperation and company acquisitions. Even if W2B is a new product area for Elanders we have extensive experience in personalized database solutions and early on we invested in digital print technology. At the beginning of the 1980s we established Elanders' Electronic Printing using a Rank Xerox 9700 as our basic unit. Since then a number of national and international acquisitions have been made with the intention of becoming a leader in digital print, often in combination with smart and specially developed database solutions.
In W2B Elanders offers products and services to companies that sell to consumers via e-commerce platforms. We also have our own solutions like Photocreator in Great Britain. The common denominator is the use of specially designed websites where customers can place their orders.
W2B brings together a broad spectrum of products and most of the projects contain a high degree of personalization. For professional users the ability to communicate personally often creates the added value by being able to offer individualized and unique information.
W2B has made it possible for consumers to order their own photo books, even a single copy of a novel at a reasonable price. This market segment is growing strongly. The number of products that can be decorated with yourself or those near and dear is growing all the time and includes everything from printing on canvas to calendars, cups, or why not an entire wall.
with the use of digital print technology and Webbased order platforms anyone that wants to publish a single copy of his or her own novel or collect vacation photos in a book to send to their friends and family can do so.
The difference between traditional offset technology and digital printing is that the latter doesn't need a printing plate. Information is instead transferred digitally and last minute changes can be made without expensive alterations. This is why digital print is particularly suitable for smaller editions and personalized material.
Both the German companies Deutsche Post DHL and Personal Novel have taken advantage of these features.
deutsche post dhl has developed the Facebook application "Social Memories" that transforms the users' continuous Facebook flow to a visual and long-lasting memory. The user first chooses the time frame they want to document and then the application automatically collects images, status updates and statistics. Facebook sends the information directly to Elanders which then produces a bound book in a glossy film finish.
Deutsche Post DHL is planning to develop the application to make it even more personal.
personal novel is specialized in individual novels and children's books. Customers order books via the company's website and decide the names of the characters, what they look like and where they live. In order to make it even more personal the design, format and images can be changed. The fully-automated digital printing process means the customer's bound book is then sent to them in just one or two days.
The Web-based personalized printed matter production orders are popular and Elanders sees the chance to get involved in more, similar projects.
Founded: 1995 Net sales: EUR 52 billion Range: Postal services and logistics Market area: Global player Website: www.dp-dhl.com
PERSONAL NOVEL Founded: 2003 Range: Personalized litterature Market area: Germany and Great Britain Website: www.personalnovel.de
a company that has truly embraced the digital revolution is the German fotokasten. In ten years it has developed from offering digital print services to becoming one of the leading players in photo books and other personalized consumer products.
fotokasten was founded in 2000 and has since then continuously invested in new technology. A few years after started the company invested in photo books and today it has a customer group that consists of both end users and retail chains like Lidl and Netto. The real breakthrough for photo books and similar products came when fotokasten launched its Web portal. The latest version of the Web portal was started up last year and in real time allows users to transform their personal photographs to memorable albums, calendars, postcards,
posters or photos printed on canvas. Customers can follow the entire process from the photos being scanned to the production itself, right up to the moment the product is ready for delivery.
fotokasten has always prioritized high printing quality and user friendliness in the order process which is why so many customers come back to order more. Almost half of its customers make new orders and they have about 200 products to choose from when designing with their own pictures or those of others.
Surveys in a number of consumer and industry magazines confirm the image of fotokasten as one of the leading companies in Germany.
fotokasten Founded: 2000 Net sales: MEUR 16 Number of employees: 35 Range: About 200 different photo products Market area: Germany Website: www.fotokasten.de
PERFUME PERFUME Millions of anonymous mass produced products sent to as many equally anonymous customers. Is this the future? Not if you ask us at Elanders.
like Elanders, can offer personalized packaging. When was the last time you gave your sweetheart a box of chocolates or perfume?
the goods
the estimated global net sales for the packaging industry is USD 500 billion annually and expanding as consumption grows on both established and growing markets. Cardboard and corrugated cardboard still dominate packaging materials.
A clear trend in the past few years is the demand for more exclusive packaging, particularly in the home electronics industry. This is also true for the cosmetics industry and sections of the pharmaceuticals and food industries which have always had this demand.
In actuality the packaging industry is influenced by several trends at the same time. The time when packaging was only meant to protect the product or enable transport is long gone. For years, and as a result of the growing interest in the value of a strong brand, packaging design has evolved from being something the marketing department and its bureaus handle to in some cases a matter for the board of directors.
Visual identification can be crucial in stores for which product is purchased. This can happen in a split second and if you want to break old purchasing habits packaging must be graphically pleasing and radiate quality. For example, eight out of ten purchasing decisions are made in the stores.
These habits have led to completely new research areas like eye tracking. Scientists have begun to investigate the connection between eye movements, packaging design and purchasing decisions. This science is still quite young in the area of store exposure and packaging. Eye tracking is also used to measure the amount of attention that advertisements in printed media and on websites receive. Eye tracking is a well documented method in the automotive industry and it's used to increase traffic safety.
It has proven to be very difficult to launch new products. For instance, only ten percent of all new products in the food industry survive one year after their introduction. The numbers are similar in the cosmetics industry and for new titles among magazines. Only one out of ten newcomers get to celebrate their first anniversary and that indicates that consumers are conservative and do not buy just any new product that they see regardless if it is food, perfume or a new magazine.
Packaging must do more than convince the customer to buy the product. The demand for functionality and packaging has grown and all the different customer groups have to think it's smart and user friendly. Hard to open packaging has created the
Skånemejerier, a Swedish dairy company, uses new milk cartons to intensify dialogue with its customers.
new phenomenon "wrap rage". Wrap rage has been called a new disease that can very quickly do a lot of damage to an established brand.
The opposite of wrap rage is packaging which is so subtly designed that it becomes a part of the user experience and might be kept years after making a purchase. Apple is one of the companies that puts a lot of effort into their packaging and other companies have followed in their footsteps, both competitors and players on other markets alike.
The greatest challenge for the packaging industry lies in meeting new environmental demands, demands that come from authorities, consumers and buyers alike. Increasingly packaging is expected to reduce waste of, for example food, and be easily recyclable. Studies show that paper and corrugated cardboard packaging are the materials that are recycled more frequently than any others. Almost 70 percent of all recycled packaging material is paper and this is more than glass, metal and plastic put together.
Packaging as conveyor of information is nothing new. Who hasn't read about contests, or gotten information and new knowledge by reading a carton of milk while eating breakfast? But now some milk producers have taken this one step further. For example, the Swedish dairy company Skånemejerier invested in intensifying its dialogue with customers through the new packaging it presented at the end of the last year. To show that the milk has been produced close by a number of farms are presented and the information will be updated as the seasons change. Four of the farms have also volunteered to answer questions on how the milk is produced and what it's like to work on a milk farm in southern Sweden.
In the past few years Elanders has broadened its product offer both organically and through acquisitions and invested in packaging print as well as increasingly advanced packaging solutions.
elanders' product area packaging has expanded in later years, both organically and through acquisitions but the most characteristic trait of the product area is the complexity of its many products. Packaging can be very simple, produced from recycled material under a tough price press. On the other end of the scale is handmade, exclusive luxury packaging in small editions with better margins.
Several of Elanders' projects involve developing special solutions, for instance in the automotive industry where Elanders has a number of large groups all over the world as customers. Work that originally consisted of printing simple user manuals in large editions have in many cases turned into developing packaging solutions in order to pack manuals in a way that concurs with the car manufacturer's strong brand.
There are the same trends and needs in the telecommunication industry. In many cases industryleading brands believe packaging can be decisive for purchasing decisions made in stores. They order large editions of both manuals and high profile
packaging to be delivered just-in-time which makes big demands on technical knowledge, capacity and coordination.
the automotive and telecommunication industries have been important customer segments for Elanders for a long time. We are now investing in expanding the product area Packaging into completely new segments. With the acquisition of the German packaging company Printpack in 2010 our customer base also came to include the food, cosmetics and pharmaceuticals industries. These companies have higher demands on quality and hygiene and they also broaden Elanders' offer and competence.
One way of refining our offer in Packaging has been to invest in products with personal senders. You can read more about Elanders' work for the chocolate manufacturer Ritter Sport on this spread and about the life style company Thomas Sabo which orders handmade, exclusive packaging when the customers demand that little extra.
the german company Ritter Sport is a major player in the confectionary industry. The company produces two million chocolate bars daily and has offices in 90 countries. In its work to develop its leading position Ritter Sport, together with Elanders, made it possible for consumers and compa-
nies in Germany to order and distribute personalized chocolate greetings.
The customer can choose size, flavor and type of packaging and then design parts of the packaging with suitable text and images via the Web or the special app that has been developed. Since it
was launched in 2010 somewhere between 500 and 1,500 greetings have been sent weekly.
Elanders handles the digital printing, punching and gluing. We deliver to Ritter within four days and the boxes are produced up to three times a week depending on the number of orders in the Web
store. Ritter Sport produces the chocolate, packages it and sends it to the customer.
The fact that Elanders was voted Supplier of the Year by Ritter Sport in 2010 shows how well we work together. That was a very palatable award!
1912 Net sales: MEUR 274 Number of employees: 800 Market area: Represented in 90 countries Range: Chocolate bars in different sizes Website: www.ritter-sport.de
thomas sabo manufactures jewelry, perfumes and accessories for fashion and trend conscious customers. The collection is characterized by Thomas Sabo's unique eye for details.
The products are of high quality in both design and production. Thomas Sabo only uses the best materials in order to live up to the high quality standards in the industry.
This also characterizes the packaging production for the company's exclusive perfume collection.
For this collection Elanders in China manufactures handmade luxury packaging of solid-board boxes with offset print treated with glossy film. For the foldable boxes packaging we use offset print with an UV varnish and manufacture them at Elanders in Germany.
more exclusive Demand is growing for more exclusive packaging and packaging solutions. This also raises the requirements on equipment and production technology know-how. Personalization defi nitely creates added value in this segment.
56/7/50/0Seasickness 0/0/90/70Amusement park 1 0/40/30/0Lime popsicle 75/44/65/20 65/0/40/0Dried up grass 10/10/70/30 0/25/5/0 Vacation anxiety Cottage Scratch and Sniff 58/0/90/0Wheelbarrow 90/10/80/0 40/25/70/0Ground sheet Och så sjövädret: Skagerrak och Kattegatt får vind omkring syd tre till sju meter i sekunden imorgon sydväst mest god sikt men framförallt i natt regnskurar med lokal åska. På Vänern sydväst två till sex måttlig till god sikt imorgon regnskurar. Öresund, Bälten och sydvästra imorgon något ökande och då regnskurar men i övrigt god sikt. Sydöstra Östersjön: Först växlande tre till sju i de östra farvattnen nordväst men i övrigt syd sent imorgon även regnskurar. Mellersta och norra Östersjön: I östra farvattnen inledningsvis nordväst tre till sju och dimma senare idag syd med början i västra farvattnen och då efterhand måttlig sikt. Ålands hav, Skärgårdshavet och Bottenhavet: Skagen sydväst fyra. Nordkoster sydväst fyra. Väderöarna väst fem. Måseskär sydväst fyra. Pålgrunden lugnt. Naven sydost en och dålig sikt. Vinga sydväst fyra. Nidingen syd fem. Hallands Väderö sydväst tre. Drogden sydväst tre. Falsterbo lugnt. Arkona väst en och Skillinge lugnt. Hammerodde sydväst fyra. Hanö väst två, dålig sikt. Utklippan sydväst två. Ölands södra udde sydväst tre och dimma. Och norra udden syd en och dimma. Harstena sydost två. Hoburg väst två. Östergarns-Märket väst en. Örskär sydväst tre. Kuggören syd två. Brämön syd tre. Skagsudde väst fyra. Järnäsklubb väst tre. Holmön sydväst två. Bjuröklubb väst två. Pite-Rönnskär väst sydväst en. Rödkallen syd fyra. Och slutligen då Kemi fyr sydost fem meter i sekunden. Slut från SMHI. You have to create attention if you want to be heard over the media buzz. Advanced fi nishing techniques guarantee high quality results and this is particularly important for strong brands.
Digital print technology became the starting point for personalized printed matter and personal messages and consumers have become producers as well as senders. All material that can be printed can be personalized.
The graphic industry has been at the forefront of initiatives measures that lower environmental impact. Starting with more environmentally friendly paper and inks it has moved on to reviewing the entire production chain and in some cases off ering a lifecycle analysis for selected products.
Our overriding environmental goal is to minimize the company's environmental impact without affecting the quality of the finished product. Interest for climate neutral printed matter grew in 2011 and Elanders intensified its cooperation with paper suppliers to further reduce waste.
Reduced paper waste, reduced greenhouse gas emissions, less use hazardous waste and lower energy consumption are just a few of the tools that Elanders uses to reduce its ecological footprint. Elanders has progressively broadened its environmental scope in the Group to where it now includes our customers' choices of printing and distribution solutions in which minimal environmental impact is becoming an increasingly common request. Elanders environmental goal is that all companies will work actively to reduce the environmental impact of energy consumption and that more companies will be able to offer FSC® production (Forest Stewardship Council®).
Each company in the Group has appointed personnel responsible for the environment and quality. On Group level this work is conducted by a group which consists of these employees. This group has broad competence and its members have experience in graphic technology and production, environmental science, quality management, chemistry, the work environment, environmental law and management systems. In order to achieve the best results group members keep up contact with each other for support and help in their work on a global level as well.
Each subsidiary in Elanders is responsible for its own work with environmental and quality matters and they are therefore handled in different ways in different countries. These differences stem from both cultural and legal differences. All told there are 13 fulltime positions involved in quality and environmental work in the Group. There are also a great number of internal quality auditors among the staff.
The interest for climate neutral products grows every year, and although this is particularly true in Germany and Sweden where Elanders offers climate neutral products Elanders in Great Britain and China also calculate their carbon-dioxide emissions. This development parallels the number of companies that have become active in CSR (Corporate Social Responsibility).
On the Swedish market companies can be part of Climate Neutral Companies (Klimatneutrala företag). This is a program that incorporates much more than just a product or printed matter. It takes into consideration how all the operations in the company affect the environment. All of Elanders' Swedish printing plants have been climate neutral since 2010.
Reports are also coming in from other markets in the Group on a growing interest from customers
duced the use of solvents and hazardous waste.
The Gothenburg Award for Sustainable Development 2011 was awarded Kofi Annan and the Tigray Project in Ethiopia. In the photograph the former UN Secretary-General accepts the prize from the Minister for the Environment Lena Ek.
about how Elanders works with environmental and quality issues. ISO 9001 and 14001 certification is a common requirement and on many markets so is an ecolabel. One example is in the production of manuals where customers demand active quality and environmental work. This is particularly true for the customers in the automotive industry where Elanders works with many of the leading manufacturers.
FSC® certified Elanders companies report an increasing demand for products with this global ecolabel. These demands also exist in the production of Annual Reports and when the assignments come from customers in the public sector or from political parties.
Elanders is one of the companies that together with the City of Gothenburg supports the international Gothenburg Award for Sustainable Development.
The laureates share one million Swedish crowns equally. The theme for 2011 was Sustainable Food Supply and the laureates were the former UN Secretary-General Kofi Annan and the Tigray Project represented by Sue Edwards.
After Kofi Annan's tenure in the UN he has taken a leading position in starting a green revolution in Africa on the countries' own terms. Kofi Annan has been a bridge between western capital and knowledgeable, good local initiatives. One example is the creation of Alliance for a Green Revolution in Africa (AGRA) that has been working systematically since 2006 to create the
basis for economic development of small farms, which are normally run by women and involve a lot of people.
The Tigray Project also represents successful investments in small farms. Since 1996 the Tigray Project in northern Ethiopia has been working to create sustainable farming based on local resources. The project is primarily aimed at women who cultivate small plots of land. It has resulted in larger harvests and greater incomes while raising ground water levels, soil fertility and biodiversity.
Africa faces a huge challenge. Its 900 million inhabitants are expected to grow to 3.6 billion in this century. At the same time 60 percent of the world's unused farmable land is on this continent. Africa should not only be able meet its own food needs, it should be able to contribute to supplying the entire world with food produced with biodynamic sustainability.
IVL, the Swedish environment institute on the effect of printed and digital media on the environment from a lifecycle perspective. The entire study can be found on www.powerofprint.se (in Swedish only). Naturally the brochure is climate neutral and was produced with as little environmental impact as possible.
• Some hundred climate neutral productions were made on the Swedish market and the largest was the course catalogue for The Faculty of Engineering at Lund University in an edition of 300,000. Just under 50 climate neutral productions were made in Germany.
• Elanders has intensified cooperation with paper wholesalers in our efforts to get precisely the right amount of paper delivered and to improve the options for returns without increasing transportation.
| SEK '000 | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Environmentally related expenses | 3,643 | 3,819 | 3,330 | 5,276 | 5,037 |
| Waste expenses and treatment | 2,147 | 1,927 | 2,262 | 4,051 | 3,846 |
| Ecolabeling fees, net1) | 216 | 431 | 116 | 141 | 104 |
| Fees, insurance and carbon dioxide tax | 1,280 | 1,461 | 952 | 1,084 | 1,087 |
| Environmentally related income | |||||
| Paper waste | 11,402 | 5,246 | 4,399 | 7,374 | 6,614 |
| Environmentally related investments | |||||
| Investments for the purpose of minimizing environmental impact or conserving resources |
119 | 362 | 277 | 48 | 238 |
1) Up until 2007 only fees related to the Swedish ecolabel the Swan were presented. From 2008 FSC® and PEFC are also included 1) and from 2010 Climate Neutral Product, so the sums cannot be compared.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Solvent consumption, kilos per MSEK in net sales | 111 | 92 | 98 | 115 | 107 |
| Solvent consumption per ton product | 5.9 | 5.6 | 6.1 | 6.3 | 6.5 |
| Electricity, kWh per ton product | 832 | 915 | 985 | 800 | 848 |
| Hazardous waste, tons | 333 | 368 | 396 | 473 | 383 |
| Hazardous waste, kg per ton product | 10 | 13 | 12 | 13 | 11 |
| Proportion of vegetable cleansers, % | 2.8 | 1.3 | 1.8 | 1.4 | 1.9 |
Key ratios show the use in all Elanders production units of certain factors with an environmental impact. New acquisitions or newly started companies are shown in their entirety from the year they were acquired.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Financial effect of the change in paper waste (SEK '000) |
–1,821 | –3,602 | 4,074 | 7,127 | 3,996 |
| Paper waste compared with previous years (%) |
2 | 5 | –6 | –8 | –5 |
The increase in paper waste in 2010 and 2011 is the result of an increase in production of packaging where paper waste is higher than in commercial print.
"elanders is serious about its environmental work and continually strives to improve processes, production methods and products to reduce environmental impact. We will meet or exceed legislation and other regulation."
fsc®
(NORDIC ECOLABEL)
(GLOBAL ECOLABEL)
The Swan may be used by printers that meet stipulated criteria concerning choice of products, ink and chemicals as well as procedures in production and waste management.
Forest Stewardship Council® is a certification for responsible forestry. Forest products that are entirely or partly made from lumber from FSC® certified forests may be FSC® labeled. This is possible for printed matter etc.
Elanders has offered Swan ecolabeled products since the 1990s.
Elanders started offering FSC® production in 2004.
In order to participate in the program it is necessary to calculate CO2 emissions with a structured and limited method. It is also necessary to set goals and take action in order to reduce the company's impact on the climate.
All Elanders' Swedish printing plants have been climate neutral since 2010.
In order for a product to be certified as climate neutral the climate impact of the product's life cycle must first be calculated, resulting in a so called Carbon Footprint. The manufacturer must then present the measures they have taken to reduce the climate impact of the product.
Together with Chalmers University of Technology Elanders in Sweden has developed an environmental calculator that enables the company's customers to calculate how a product can become climate neutral.
Printing Manufacturers Association in Germany has developed a climate calculator that calculates carbon dioxide emissions for each individual product. Elanders invests in certificates that sponsor projects for recycled energy. These certificates are then offered to our customers.
Employees in Elanders are encouraged to take great personal responsibility and initiatives. These core values, together with entrepreneurship, continue to be important now that a new organization and business model have been implemented.
2011 was a more positive year for Elanders' employees compared to the years after the financial crisis when the Group had to change production as demand dwindled. In 2011 almost all of Elanders' units had good capacity utilization and our broader product offer has resulted in more customers and work.
On one hand the Swedish operations acquired the sheet printers Fälth & Hässler and NRS Tryckeri and on the other there were reductions in personnel. The number of employees was dropped by 50 in Sweden in 2011 but it increased in the Group as a whole. The acquisitions raised the number of employees from 1,564 to 1,582 at year end.
In the new organization the distribution of responsibility in the Group is different. One of the differences is that Polish operations now sort under the Swedish unit. The same applies for Hungarian operations that are now included in the German organization. This change allows Elanders to profit from having printing operations in different regional markets, making it more competitive when price levels or lead times steer customers' choices. The exchange of experience between employees and between companies is intensified in the new model and internal networking takes on a whole new importance when production moves between countries.
On the European level an agreement has been signed with European Work Council. EWC is an inter-professional organ for all employees in Elanders' European companies. It will serve as Group Management's link to the employees in cross-border matters concerning communication, consultation and negotiations.
A similar inter-professional organ, Elanders Svenska Företagsråd (SFR), has also been established for Elanders' Swedish units to deal with questions in those operations.
at elanders employees are encouraged to take responsibility and initiative and entrepreneurial skills are an important part of company culture. Customer demands drive our organization and employees forward, naturally always with a focus on profitability and growth, even in hard times.
Employees are active in the company by, for instance, giving their suggestions for improvement. They feel pride in always doing their best and taking responsibility for customer deliveries.
Low absence due to sickness is highly beneficial for both employees and companies and we continuously work with preventive health care in order to raise health ratios.
elanders works continuously with physical fitness in part through a Health Group made up of representatives from different units. The Health Group arranges various activities like seminars connected to diet, health, stress and physical wellbeing. Elanders works extensively to prevent stress related illnesses, through for example, workplace adjustments that facilitate returning to work after convalescence. Elanders is also a member of the Good Graphic Company, a group of union and company representatives that, among other things, work to augment health ratios in the graphic industry.
| 2011 | 2010 | 2009 | |
|---|---|---|---|
| Average number of employees | 1,546 | 1,520 | 1,581 |
| Number of employees per 31 December | 1,582 | 1,564 | 1,538 |
| Average age | 39.2 | 39.0 | 39.4 |
| Personnel turnover, % | 5.6 | 7.3 | 15.1 |
| Revenues per employee, SEK '000 | 1,189 | 1,122 | 1,111 |
| Added value per employee, SEK '000 | 655 | 599 | 627 |
| Operating result per employee, SEK '000 | 71 | –50 | –38 |
| Academic education more than 2 years, % | 13 | 14 | 15 |
| Upper secondary education, % | 38 | 37 | 38 |
| Other education, % | 49 | 49 | 47 |
| Competence development cost per employee, SEK '000 |
1 | 1 | 3 |
After three tough years in the turbulence after the financial crisis 2008, 2011 developed into a really strong year for Elanders. The change in 2010 continued all throughout 2011 with five profitable quarters in a row. Although the uncertainty in the world economy in the autumn and winter made demand somewhat hesitant it did not have any significant effect on the year's result.
the year started with a definite increase in net sales and result. This was a testament to the efficiency of the structural changes that we made the previous year. More German production in our Hungarian unit and Swedish production in our Polish unit also contributed to increasing profitability.
In January parts of the Swedish printer Fälth & Hässler were acquired, broadening Elanders' product offer with qualified illustrated books. The deal can also be seen as a part of the necessary consolidation of the Swedish printing industry.
Elanders' conscious investment in offering personalized print and develop new product concepts gave results and brought in new customers and projects. One of many successful examples was the project to print 11,003 unique covers for the Swedish magazine Cap&Design.
The positive trend continued in the third quarter, usually Elanders' weakest, A deal was signed with the CPT Group in September to take over parts of the Swedish printer NRS Tryckeri, which further broadened Elanders' customer base.
The year ended with a ten percent increase of net sales in the fourth quarter and a strong result of MSEK 57 (6). For the full year the operating result was MSEK 110 (–76), of which one-off items corresponded to MSEK 25 (–59).
Increased net sales and improved result are projected for 2012 as well.
the entire year was characterized by the budding global recovery in many important markets. This became particularly apparent for Elanders in the third and fourth quarters with the increased demand from customers primarily in automotives and other industries. The Group received more orders for packaging, marketing materials and personalized products.
The year's result was a reflection of the aftermath of the recession that affected Elanders during 2010 and the wait and see attitude many customers still had. This was acutely evident in Swedish operations where reductions in personnel became necessary in order to adjust operations to the lower demand. The entire cost for these structural changes was charged to 2010. The result for the year was a loss of MSEK 110, of which one-off items amounted to MSEK 75. Net sales for the full year were 1,706 (1,757), a reduction of 3 percent.
A new share issue in the third quarter strengthened Elanders' financial position and created a platform for continued expansion of the company, raising MSEK 208 for the Group after issue expenses. A good example of Elanders' desire to expand was the acquisition of the German packaging company Printpack. This acquisition also took place in the third quarter and the integration of Printpack was much quicker than expected. The acquisition will make a positive contribution to Elanders in 2011. In the first quarter the remaining shares in the Brazilian operations were acquired.
the group was generally hit hard by the downturn in the economy and the financial crisis that started in Europe and the USA in the second half of 2008. The most important customer categories in industry, mainly automotives and consumer electronics, reduced their orders by up to 50 percent compared to the previous year. Swedish operations, with their main focus in the automotive industry, were hit the hardest while the foreign operations were generally spared. Nevertheless these operations experienced reduced volumes and the price press too, particularly in Germany, Hungary and China.
At the end of the first half-year Magnus Nilsson became President and CEO of Elanders.
Personnel cuts in the Group as a whole were 15 percent, mainly in Sweden and Hungary, and in Sweden in particular they were 20 percent. Personnel reductions, together with other measures to further adjust price levels in Sweden, Germany and Hungary, amounted to MSEK 35. An extensive program to organize the Group for the best use of production capacity, mainly in low-cost countries, was initiated. The job of turning around the Swedish operations was also given the highest priority. The increasing trend towards more and more business connected to the entire Group made the former division of the Group's companies into business areas redundant and starting in the fourth quarter operations were concentrated in one business area consisting of the Group.
Group net sales fell by 20 percent and operating result dropped by MSEK 76 to MSEK –60.
a major source of joy during our Jubilee Year was our operations in China which surpassed all expectations through the successful development of packaging production. The Group also did well in Germany, in part due to the acquisition of Mairs Graphische Betriebe, which was integrated and gave us access to new technology and important customers. Seiz Printing Co in Atlanta, US was also acquired with the aim of creating a platform on the important North American market.
The year, particularly the latter half, was characterized by a general downturn in orders from consumer electronics customers, white goods and automotives. This downturn is calculated to have charged Group result with about MSEK 75, above all in Sweden and Hungary. Business in the USA, Poland and Italy did not meet expectations either and measures were taken to adjust costs in Sweden and Hungary to the worsening market situation. Costs for these measures amounted to a total of MSEK 89.
Group net sales increased by 8 percent (1 percent not including acquisitions) and operating result was down by 93 percent (93 percent not including acquisitions).
this was a mixed year for the business area Infologistics. Chinese operations were very successful during the year and expanded through the manufacture and print of packaging. Results in the Hungarian and British operations were better than expected. In Great Britain this was mainly due to success in the automotive segment. The German Sommer Corporate Media company in Stuttgart, Germany was acquired in January and the company's result also surpassed expectations. In addition, 80 percent of Artcopy in São Paulo, Brazil was acquired.
The Swedish section of the business area had a difficult year and a program was launched to adapt capacity and coordinate production, sales and administration in one legal entity. This led to costs of MSEK 20 in the fourth quarter.
The Hungarian operations in User Manuals had a very good year while the Polish plant struggled with production stops.
Tax costs were reduced by MSEK 21.1 after Elanders won a tax case in the Swedish administrative court of appeal. Operations in Kungsbacka were sold according to plan in February, which did not affect the result and in December the property in Kungsbacka was sold generating capital gains of MSEK 40.6.
In comparable units Group net sales increased by 21 (3) percent and operating result in comparable units rose by 30 (4) percent.
Equity, MSEK Return, %
Net sales, MSEK Operating result, MSEK
| MSEK | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Net sales | 1,838.8 | 1,705.9 | 1,756.7 | 2,191.2 | 2,035.6 |
| Operating expenses | –1,729.0 | –1,782.1 | –1,816.8 | –2,175.1 | –1,808.8 |
| EBIT | 109.8 | –76.2 | –60.1 | 16.0 | 226.8 |
| Financial items | –29.8 | –29.0 | –36.0 | –50.4 | –42.7 |
| Result after financial items | 80.0 | –105.2 | –96.1 | –34.4 | 184.1 |
| Result for the year | 60.4 | –83.7 | –74.4 | –25.7 | 172.2 |
| EBITDA | 196.2 | 25.8 | 41.0 | 122.1 | 311.4 |
| 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| 833.6 | 836.1 | 894.9 | 917.7 | 844.7 |
| 515.3 | 575.4 | 624.6 | 660.4 | 546.7 |
| 125.6 | 118.7 | 95.1 | 120.1 | 125.7 |
| 385.3 | 365.1 | 351.5 | 470.9 | 450.6 |
| 63.6 | 66.9 | 68.8 | 75.9 | 191.4 |
| 81.2 | 50.1 | 78.9 | 141.7 | 65.2 |
| 879.6 | 819.3 | 765.1 | 877.7 | 864.6 |
| 757.7 | 782.3 | 916.3 | 970.7 | 882.7 |
| 367.2 | 410.7 | 432.4 | 538.3 | 477.0 |
| 2,004.6 | 2,012.3 | 2,113.8 | 2,386.7 | 2,224.3 |
| MSEK | 2011 | 2010 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|
| Cash flow from operating activities | 84.3 | –57.8 | 54.6 | 120.6 | 89.9 |
| Paid taxes | –6.8 | –7.6 | –7.9 | –31.7 | –32.3 |
| Investments | –27.6 | –69.2 | –52.2 | 14.5 | –402.5 |
| Operating cash flow | 93.3 | –90.4 | 42.1 | 217.2 | –230.0 |
| Change in net debt | –56.6 | –96.9 | –5.9 | 25.8 | 222.2 |
All comparable years are shown as they are presented in the Annual Report each year.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Operating margin, % | 6.0 | –4.5 | –3.4 | 0.7 | 11.1 |
| Profit margin, % | 4.3 | –6.2 | –5.5 | –1.6 | 9.0 |
| Gross profit/Added value, % | 34.8 | 28.1 | 33.0 | 36.7 | 46.2 |
| Capital net sales rate, times | 0.9 | 0.8 | 0.8 | 1.0 | 1.1 |
| Equity ratio, % | 43.9 | 40.7 | 36.2 | 36.8 | 38.9 |
| Risk capital ratio, % | 45.6 | 42.1 | 37.6 | 38.0 | 40.0 |
| Interest coverage ratio, times | 4.4 | neg. | neg. | 0.4 | 5.5 |
| Debt/equity ratio, times | 0.8 | 0.9 | 1.1 | 1.0 | 0.9 |
| Return on equity, % | 7.1 | –10.6 | –9.1 | –3.0 | 24.2 |
| Return on capital employed, % | 7.1 | –4.8 | –3.6 | 0.9 | 16.0 |
| Return on total assets, % | 5.7 | –3.2 | –2.2 | 1.7 | 12.0 |
| EBIT-multiple, times | 9.1 | –14.1 | –19.5 | 68.2 | 3.6 |
| Average number of employees | 1,546 | 1,520 | 1,581 | 1,809 | 1,563 |
| Net debt/EBITDA, times | 3.4 | 28.4 | 20.5 | 6.9 | 2.6 |
| Enterprise Value, MSEK | 1,004.6 | 1,269.3 | 1,174.3 | 1,092.3 | 2,174.8 |
| Risk capital, MSEK | 915.0 | 848.0 | 793.6 | 907.7 | 888.5 |
| Capital employed, MSEK | 1,556.2 | 1,551.5 | 1,602.5 | 1,721.0 | 1,682.0 |
| Net debt, MSEK | 676.5 | 732.2 | 837.4 | 843.3 | 817.5 |
All comparable years are shown as they are presented in the Annual Report each year.
| 2011 | 2010 | 2009 | 2008 | 2007 | |
|---|---|---|---|---|---|
| Result, SEK | 3.09 | –6.79 | –7.57 | –2.62 | 18.06 |
| Share price at year-end, SEK | 16.80 | 27.50 | 34.50 | 25.50 | 139.00 |
| P/e ratio | 5.4 | –4.1 | –4.5 | –9.7 | 7.7 |
| P/s ratio | 0.2 | 0.2 | 0.2 | 0.1 | 0.7 |
| Dividend, SEK | 0.501) | 0.00 | 0.00 | 0.00 | 4.50 |
| Dividend yield, % | 2.3 | 0.0 | 0.0 | 0.0 | 2.6 |
| Share price/equity, times | 0.4 | 0.4 | 0.4 | 0.3 | 1.6 |
| Net asset value, SEK | 45.04 | 66.39 | 78.35 | 89.88 | 88.54 |
| Risk capital, SEK | 46.80 | 68.71 | 81.27 | 92.96 | 90.99 |
| EBITDA, SEK | 10.04 | 2.09 | 4.19 | 12.50 | 32.65 |
| Operating cash flow, SEK | 4.78 | –7.33 | 4.31 | 22.24 | –24.12 |
| Cash flow from operating activities, SEK | 4.31 | –4.68 | 5.60 | 22.24 | –24.12 |
| Average number of outstanding shares, in thousands |
19,530 | 12,342 | 9,765 | 9,765 | 9,537 |
| Turnover rate | 0.13 | 0.32 | 0.45 | 0.23 | 0.36 |
1) Proposed by the Board.
Like the Nasdaq OMX Nordic Stockholm general index the Elanders share had an unfavorable development in 2011. There were no major changes in ownership in 2011 and the principle owner Carl Bennet AB kept its holdings.
Elanders' B shares were first listed on the Stockholm Stock Exchange on 9 January 1989. On 31 December 2011 the company had 18,363,332 B shares listed on the OMX Nordic Exchange Small Cap list under the ELAN B symbol. The development of the number of outstanding shares is shown in the chart on the next page.
The market value of B shares fell by 38.9 (–20.3) percent during 2011 while the general index of the OMX Nordic Exchange decreased by 18.3 (+23.1) percent during the same period. During 2011 a total of 2,633,829 Elanders shares (3,908,156 shares) were traded, which is equivalent to an average trading rate of approximately 0.13 times (0.32 times). The total turnover rate of the OMX Nordic Exchange was 0.89 times (0.87 times) during the same period.
The lowest share price was SEK 16.40 on 30 December and the highest was SEK 32.30 on 28 January. The final share price in 2011 was SEK 16.80 (SEK 27.50), which means that Elanders' stock market value at year-end was approximately MSEK 328 (537).
At year-end there were 1,166,666 A shares and 18,363,332 B shares issued. Each A share is worth ten votes and each B share one. The shares' quota value is SEK 10. All shares are entitled to the same dividend. See the tables on this page and the next for share capital and voting disposition. The B share is covered by a liquidity guarantee and Remium AB is the guarantor.
There were 2,413 (2,641 shareholders) Elanders shareholders at year-end. The allocation is analyzed in the tables on this page and the next.
Regarding the dividend in years to come, the Board of Directors has taken into account the Group's development potential, its financial position and the adopted key ratio goals relating to debt/equity ratio, equity ratio and profitability. The objective is to have dividends follow the long-term profit trend and, on the average, represent approximately 30 percent of profit after tax.
Elanders' financial information can be found at the Group website www.elanders.com in the section Investor relations. Questions can also be asked Elanders directly via e-mail at [email protected].
Annual Reports, quarterly reports and other information can be requested from Group headquarters at telephone number +46 31 750 00 00, our website or through the above e-mail address.
We are also happy to provide information about the many occasions when we present Elanders at activities that are arranged by shareholder organizations, Swedish and foreign stockbrokers and banks.
Remium monitors our development and regularly publishes analyses of Elanders. For further information please see www.introduce.se/foretag/elanders
| Number of A-shares |
Number of B-shares |
Percent of votes | Percent of share capital |
|
|---|---|---|---|---|
| Carl Bennet AB | 1,166,666 | 10,382,098 | 73.42 % | 59.13 % |
| Carnegie Funds | 1,640,400 | 5.46 % | 8.40 % | |
| Avanza Pension Försäkring AB | 1,033,617 | 3.44 % | 5.29 % | |
| Odin Funds, Norway | 322,373 | 1.07 % | 1.65 % | |
| Per Anders Bendt with companies | 250,000 | 0.83 % | 1.28 % | |
| Nordnet Pensionsförsäkring AB | 190,655 | 0.63 % | 0.98 % | |
| Knowledge Foundation | 175,000 | 0.58 % | 0.90 % | |
| Ålandsbanken Funds | 100,000 | 0.33 % | 0.51 % | |
| SHB Funds | 98,635 | 0.33 % | 0.51 % | |
| Willi Persson | 96,250 | 0.32 % | 0.49 % | |
| Other shareholders | 4,074,304 | 13.57 % | 20.86 % | |
| TOTAL | 1 166 666 | 18 363 332 | 100.00 % | 100.00 % |
| Number of A-shares |
Number of B-shares |
Accumulated shares |
Share capital, SEK |
|
|---|---|---|---|---|
| At Stock Exchange introduction in 1989 | 200,000 | 1,380,000 | 1,580,000 | 15,800,000 |
| 1991 Directed share issue to acquire Fabritius A/S in Norway | 252,000 | 1,832,000 | 18,320,000 | |
| 1993 Bonus issue 1:1 | 200,000 | 1,632,000 | 3,664,000 | 36,640,000 |
| 1997 Directed share issue to acquire the Graphic Systems Group | 650,000 | 4,314,000 | 43,140,000 | |
| 1997 Directed share issue to acquire Skandinaviska Lithorex | 250,000 | 4,564,000 | 45,640,000 | |
| 1997 Directed share issue to acquire Gummessons | 350,000 | 4,914,000 | 49,140,000 | |
| 1997 New share issue 1:4 in connection with the acquisition of the Minab Group | 100,000 | 1,128,000 | 6,142,500 | 61,425,000 |
| 1998 Directed share issue to acquire the Skogs Group | 1,287,500 | 7,430,000 | 74,300,000 | |
| 2000 Directed share issue to acquire the shares in KåPe Group | 450,000 | 7,880,000 | 78,800,000 | |
| 2000 Directed share issue to acquire the shares in Novum Group | 490,000 | 8,370,000 | 83,700,000 | |
| 2007 New share issue 1:6 in connection with the acquisition of the Sommer Corporate Media Group |
83,333 | 1,311,666 | 9,764,999 | 97,649,990 |
| 2010 New share issue 1:1 | 583,333 | 9,181,666 | 19,529,998 | 195,299,980 |
| Outstanding shares and share capital on 31 December 2011 | 1,166,666 | 18,363,332 | 19,529,998 | 195,299,980 |
| Number of shareholders |
Number of A-shares |
Number of B-shares |
Percent of share capital |
Percent of votes | |
|---|---|---|---|---|---|
| 1–500 | 1,634 | 291,315 | 1.49 % | 0.97 % | |
| 501–1,000 | 321 | 257,241 | 1.32 % | 0.86 % | |
| 1,001–2,000 | 185 | 290,628 | 1.49 % | 0.97 % | |
| 2,001–5,000 | 144 | 502,773 | 2.57 % | 1.67 % | |
| 5,001–10,000 | 49 | 389,709 | 2.00 % | 1.30 % | |
| 10,001–20,000 | 30 | 456,992 | 2.34 % | 1.52 % | |
| 20,001–50,000 | 28 | 910,134 | 4.66 % | 3.03 % | |
| 50,001–100,000 | 12 | 868,033 | 4.44 % | 2.89 % | |
| 100,001–1,000,000 | 6 | 1,340,392 | 6.86 % | 4.46 % | |
| 1,000,001– | 3 | 1,166,666 | 13,056,115 | 72.83 % | 82.33 % |
| TOTAL | 2,412 | 1,166,666 | 18,363,332 | 100.00 % | 100.00 % |
| Percent of | ||
|---|---|---|
| share capital | Percent of votes | |
| Swedish institutions and investment companies | 12.61 % | 8.20 % |
| Swedish companies and private persons | 80.28 % | 87.18 % |
| Foreign institutions | 6.50 % | 4.23 % |
| Foreign companies and private persons | 0.60 % | 0.39 % |
| TOTAL | 100.00 % | 100.00% |
Sources: SIS Ägarservice and Euroclear Sweden AB.
Strategic work with risk management is handled by the Board of Directors and the audit committee while operational work is handled by the CEO and Group Management. The risks that Elanders faces are circumstantial risks, financial risks and business risks. On the following pages we will describe the risks that Elanders has identified and the work done to prevent and minimize these.
like all business operations Elanders faces different kinds of risks. Handled correctly these risks can be turned into opportunities while risks that are not handled correctly can lead to damages and losses. In the cases when Elanders can affect
the probability for a risk-related event to take place effort is put into prevention. When the events are outside Group control actions are taken to minimize any effects through hedges or insurance.
The circumstantial risks with the largest effect on Elanders' operations are the future of printed matter and the global economy. Since these factors are outside of Group control we continuously work to minimize any negative effects by adapting operations. This work is steered by the strategy decided by the Board. In recent years working to broaden Elanders' offer has been prioritized.
Printed matter will continue to grow as a bearer of information on a global level in coming decades although to a lesser degree as time passes. The major part of this increase will consist of packaging as well as information and marketing material. The latter will mainly increase through the use of digital print technology, i.e. individually oriented printed matter. Printing capacity for offset in Western Europe and North America will exceed demand for some time, which will keep prices for printed matter produced with offset technology low or cause prices to fall even lower. In Eastern Europe, Asia and Latin America the demand for offset technology will continue to increase in the foreseeable future.
Elanders' position as one of the leading digital printed matter players in Europe and our competitive offset capacity in Eastern Europe and Asia concurs with this development. Investments in
// Printed matter will continue to grow as a bearer of information on a global level in coming decades although to a lesser degree as timepasses. //
offset are almost exclusively made in the Polish, Hungarian and Brazilian units while the units in Sweden, Germany and Great Britain increasingly shift their production to receiver oriented printed matter, produced with digital technology and orders made via a Web interface.
The most tangible business cycle sensitivity is in Group operations that supply our customers in industry, particularly automotives and consumer electronics, as well as advertising financed products to publishers. Our customers in food stuffs, cosmetics, pharmaceuticals, publishers of educational material and the public sector are not as sensitive.
We work consciously to reduce the influence of business cycles by increasing net sales to existing and new customers active in the less sensitive industries. The Group's growing focus on product areas packaging and W2B also reduces sensitivity to business cycles since these products are not so dependent on them. These investments gave results this year in the form of new customers and sales of new products to existing customers.
We also work with smaller companies where the prices are not as pressed. This is another area where the Group's work to create W2B interfaces for ordering standardized printed matter is crucial.
The greatest financial risks for Elanders are currency risk, interest risk and financing risk. The financial policy established by the Board governs which currency risks must be hedged and how interest, financing and liquidity risks are handled. Group Finance is primarily responsible for handling these risks.
The Group runs into currency risk through transactions in currencies other than the companies local currency (transaction exposure) or when converting net result and net assets from foreign subsidiaries (translation exposure).
The transaction risk is relatively low since most income and costs in companies are in local currencies. In cases of transactions in other currencies this risk is hedged by using forward exchange
contracts. Contracted payables and liabilities where the timeframe of the flow is within the next twelve months are hedged. Contracted orders where the timeframe of the flow is beyond twelve months are normally hedged at 80 percent since there is room for certain volume deviations within the framework of the contracts. Expected and budgeted flows are not hedged. Elanders' net inflow of foreign currency consists primarily of EUR, CNY, USD, GBP and PLN. Exposure of net assets in foreign subsidiaries is mainly connected to EUR. Net assets in the German operations have been hedged by taking loans in EUR. Apart from this hedging no other hedging has been made to counter the translation risk.
Exposure in the form of changes in interest level is mainly attributed to the Group interest-bearing liabilities with floating interest. Outstanding liabilities are primarily in SEK and EUR.
Elanders strives to achieve a balance between cost-effective financing and the risk exposure of a negative influence in the result if interest levels suddenly changed significantly. The interest level for debts of MSEK 300 have been hedged until 30 September 2014, which means that 44 percent of Group net debt is currently protected against an increase in interest rates.
Elanders is dependent on obtaining financing from credit institutions. The Group financing need comprises current operations and preparedness for possible future investments. The availability of financing depends on factors such as the general availability of capital and Elanders' credit rating.
The Group's goal is to always have more than one party that is willing to offer financing on market terms. Currently the Group has credit agreements with two Swedish banks regarding operational financing. The credit agreements end 30 September 2012 and negotiations concerning new agreements are expected to begin in the spring of 2012. The Group's financing policy specifies a liquidity buffer of MSEK 100. At the end of 2011 the liquidity buffer amounted to MSEK 266.
The Group is exposed to losses through the risk of a counterparty to a financial instrument not meeting their obligations. Credit risk can be divided into financial credit risk and commercial credit risk where the financial risk primarily is attributed to investing surplus liquidity and trading exchange
derivative instruments. Elanders' commercial credit risk is spread out over a large number of customers. However, in actuality a few customers represent a large part of the Group's accounts receivable. These customers are for the most part large, reputable, listed companies with good credit ratings.
The financial credit risk is limited and controlled by the fact that financial transactions may only be carried out with reputable financial institutions with good credit ratings. All financial transactions go through Group Finance. The commercial credit risk is primarily handled by each subsidiary through regular communication with customers, monitoring their ability to pay and following up their financial reports. The Group also has credit insurance that covers substantial credit losses attributable to insured customers. In 2011 41 (55) percent of net sales was insured.
Elanders encounters risks in operations daily and normally these are within the Group's control. The size of the Group and the fact that Group Management is composed of members that come from Group operations which they have profound insight into are the key factors counteracting business risks in Elanders. All Group operations are represented in terms of responsibility in Group Management, which meets and communicates regularly.
The Group's major customers are primarily active in industry and agreements with these customers normally run over two or three years. Elanders' ten largest customers represent 36 (33) percent of net sales. No single customer represents more than 7 percent of Group net sales.
Elanders' strategy is to be more than a supplier of printed matter. We also serve customers with information and printed matter logistics, thereby creating customer value which makes Elanders more a strategic partner than a pure supplier. This approach builds the basis for long-term business relations.
The risk that the Group will suffer a major stop in operations is minimal. The Group's production units are largely compatible and can help each other if there are any hitches in operations and it is rare that there are no alternative suppliers of input goods. Elanders works in a structured way to identify and prevent risks for fire, burglary and other security aspects in the producing units.
To reduce the risk of an income loss the Group has business interruption insurance that covers the loss of margins for up to twelve months.
Elanders' main operating costs are personnel costs, paper costs and the cost of outwork. These three categories represent 65 (65) percent of total operating costs. The individual subsidiaries are primarily responsible for controlling cost developments but some purchase procurements, for example of paper, are also done at Group level.
Direct personnel costs make up around 31 (32) percent of operating costs. First and foremost changes in the Group's health ratio have a direct effect on the result but higher salary levels also have a direct effect.
Both personnel and the company have a great deal to gain from low levels of sick leave and Elanders work continuously to promote health in order to raise health ratios. The salary development of employees follows general developments on the labor market in each individual country, which in its turn is connected to the economy in general.
Elanders' most important input goods is paper. It represents approximately 21 (18) percent of operating costs. Paper costs have been stable for a long time and they are expected to continue to be stable.
The Group protects itself in part against price fluctuations through a paper price clause in the larger and longer contracts with our customers. When selling to customers without contractual prices production and delivery generally take place quite close in time and customer prices are based on current paper prices.
Outwork refers to production steps that the Group has contracted to subcontractors. At times when we are already operating at full capacity we can use subcontractors for the total production of smaller deliveries.
Since the industry is characterized by surplus capacity and there is a price press on most markets Elanders is active in, there is normally no difficulty in finding subcontractors with competitive prices. The Group's size compared to that of the competitors on the local markets usually creates a good situation to negotiate reasonable prices for outwork.
In business daily operations can give rise to disputes. In order to minimize the risk of disputes Elanders normally uses the contracts prepared by our trade organizations. Elanders believes no dispute attributable to daily operations has or will have important consequences for the Group's financial position. The Group's insurance program contains global liability insurance that, among other things, covers general liability, product liability, crime fidelity, business interruption and limited protection against environmental damage. The Group also has liability insurance for members of the Board and officers.
In note 19 to the financial reports there is a summary of an analysis of how some of the variables described above would have affected Group results after financial items in 2011.
The Board of Directors and the President and Chief Executive Officer of Elanders AB (publ) present their annual report and the consolidated financial statements for 2011.
The corporate governance, management and control are shared by the shareholders at the Annual General Meeting, the Board of Directors and the Chief Executive Officer in accordance with the Companies Act, the articles of association as well as the Group Management.
Elanders is back in the black. We won new market shares in 2011 and grew both organically and through acquisitions.
The Group's net sales increased during the year with 8 percent to MSEK 1,839 and the operating result improved with MSEK 102 excluding onetime items and amounted to MSEK 110.
comprehensive income
Total comprehensive income for the year attributable to parent company shareholders amounted to MSEK 60.
The Group's total assets decreased by MSEK 8 to MSEK 2,005 and the capital employed increased with MSEK 4 and amounted to MSEK 1,555.
The Group's equity amounted to MSEK 880 and the equity ratio increased with 3 basis points and amounted to 44 percent.
Cash flow from the Group's operating activities amounted to MSEK 84 and net debt decreased from MSEK 732 to MSEK 676.
83 notes The Group's accounting principles and supplementary disclosures to the financial statements.
105 parent company
105 statements of comprehensive income
106 balance sheets
108 cash flow statements
109 notes
The Board of Directors and the Chief Executive Officer propose that SEK 0.50 per share total SEK 9,764,999 is paid as dividend to the shareholders.
The auditor's recommend that the profit is dealt with in accordance to the proposed appropriations of profits and that the members of the board of directors and the Chief Executive Officer is discharged from liability for the financial year.
The Board of Directors and the President and Chief Executive Officer of Elanders AB (publ), corporate identity no 556008-1621, herewith present their annual report and the consolidated financial statements for 2011. Elanders AB is the parent company of Elanders, a global printing group.
In September 2010 Elanders AB (publ) became a subsidiary to Carl Bennet AB, corporate identity no 556379-0715, registered in Gothenburg. Carl Bennet AB prepares consolidated financial statements that includes Elanders.
Elanders reports the entire business as one segment since this reflects the manner in which the Group is led, managed and operates. Operations in each country are all managed by Group Management and ultimately by the President.
Elanders is a global printing group with production units in ten countries on four continents. In 2011 our product areas consisted of: books & magazines, photo products, packaging, information & marketing material as well as manuals & product information. In combination with these products Elanders also offers services in web-to-print (W2P), EDI, advanced premedia, fulfillment, and logistics. In 2012 these product areas will be replaced by three new ones: Commercial Print, Packaging and Web-to-business (W2B). Elanders' typical customers are companies in the automotive industry, manufacturers of consumer electronics and white goods, companies in the food industry and publishers.
In 2011 the Group had operations in 13 companies in ten countries. Production units are located in Brazil (São Paulo), Italy (Treviso), China (Beijing), Norway (Oslo), Poland (Płon´sk), Great Britain (Newcastle), Sweden (Falköping, Gothenburg, Malmö and Stockholm), Germany (Stuttgart), Hungary (Zalalövo´´ and Jászberény) and the USA (Atlanta). Elanders is also represented by sales offices in a number of locations.
Group net sales increased by 8 percent to MSEK 1,839 (1,706) in 2011. With the same exchange rates as last year, net sales would have been MSEK 1,919, i.e. an increase of MSEK 213, or MSEK 1,834 with comparable units. The increase is primarily due to Elanders' competitive offer with low-cost production in Poland and Hungary for the Swedish and the German markets.
Group operating result increased by MSEK 186 to MSEK 110 (–76), and cleared of one-off items of MSEK 25 (–59) in 2011 which consists solely of book VAT recognized as income, the improvement in the result was MSEK 102. The positive development is a result of a better use of existing production capacity, the cost saving measures taken and the success Elanders has had on the Swedish and German markets. Result before tax totaled MSEK 80 (–105) and result after tax was MSEK 60 (–84).
The necessary consolidation in the industry continues. In order to create long-term profitability in the industry and enable future investments the industry must increase the speed of the consolidation. Today the industry is too fragmented with too many players, often consisting of small familyowned companies. In 2011 Elanders contributed to the consolidation by taking over parts of the operations in the Swedish sheet-fed printers Fälth & Hässler and NRS Tryckeri, and they closed down their remaining production. The integration of these operations has continued according to plan.
In February 2010 a verdict was reached in the Court of Justice of the European Union in the so called Graphic Procédé case. In Sweden this is of particular importance for establishing the limits between printing companies delivery of goods (i.e. printed matter) and services as well as for the application of the so-called book VAT, i.e. a Value Added Tax of six percent. At the end of December 2010 Elanders submitted a claim for a VAT refund pertaining to 2004 to the Swedish Tax Agency. The reason for this was that a part of Elanders' income subject to VAT in this period came from goods, not services, according to the delineation now considered correct. A decision in this matter was taken in April 2011 and Elanders received a refund of MSEK 70. In the fourth quarter, MSEK 25 attributable to 2004 was recognized as income but there are still much uncertainty about the remaining amount. Elanders has also submitted a claim for a VAT refund of MSEK 67 pertaining to 2005. Due to a number of uncertain factors it is difficult at this time to assess which effect this will have on Elanders' result and therefore the sum for 2005 has not been recognized as income.
During the year investments amounted to MSEK 43 (76), of which MSEK 10 (27) was acquisitions. Investments in production equipment were mostly new and replacement investments, primarily in Eastern Europe. Costs for depreciation and writedowns amounted to MSEK 86 (102).
At year-end net debt was MSEK 676 (732). Unused credit facilities including cash and cash equivalents amounted to MSEK 266 (172) at year-end. After an agreement with the banks the unused credit facilities were reduced by MSEK 30 in February 2012. Operating cash flow amounted to MSEK 93 (–90) for the full year, of which company acquisitions amounted to MSEK –10 (–27). The cash flow is affected negatively to a certain extent by the capital tied up in the operations that were taken over in 2011. Equity at year end amounted to MSEK 880 (819), making for an equity ratio of 44 (41) percent.
Since 30 September 2011 loans from the Group's main banks are reported as interest-bearing current liabilities since the credit agreement matures on 30 September 2012. Negotiations for a new credit agreement will be initiated in the spring of 2012. In the fourth quarter the Group signed agreements regarding interest swaps for MSEK 300 of Group debt. As a result the interest level for these debts has been hedged until 30 September 2014.
The Group continuously develops different offers
that are usually developed in connection with specific customer projects and consist of, for instance, order interfaces, image databases and other publication tools.
The average number of employees in the Group during the year was 1,546 (1,520) of which 395 (445) were in Sweden. The total number of employees at year-end amounted to 1,582 (1,564) of which 399 (416) were in Sweden. Further information concerning the number of employees, as well as salaries, remuneration and terms of employment is given in note 5 to the Group financial reports.
During the year the parent provided business support services for other companies within the group. No external sales took place. Investments in 2011 amounted to MSEK 1 (7), with MSEK 0 (1) for investments in subsidiaries. The average number of employees during the year was 8 (18) and the number at year-end amounted to 8 (10). Other information concerning the number of employees, salaries, remuneration and conditions of employment is given in note 5 to the Group financial reports.
The Group is responsible for direct environmental impact primarily through noise and emissions of solvents into the air as well as some minor water emissions.
The Group strictly follows legal requirements concerning the environment to avoid events that can result in considerable business risks and/or fines. We put therefore great store in guaranteeing compliance with the law in our regular environmental audits according to ISO 14001 and in the due diligence reports carried out before an acquisition. Under the Environmental Act several printing plants are required to have permits or submit reports, depending on their total consumption of solvents.
In 2011 Elanders had operations in Vällingby
and Falköping that were obliged to submit reports and operations that required permits in Mölnlycke. Outside Sweden Elanders has operations in Great Britain, Poland, Hungary, China, Germany and the USA that require permits to different degrees. No significant accidents or incidents occurred in 2011.
In 1999 a limited area of ground contamination was discovered under a building in one of Elanders' previous locations. The ground contamination is due to leaks in the drainage system previous to 1970 and mainly consists of heavy metals such as zinc, chrome and copper. The Environmental Court has on formal grounds sent the matter back to the Environmental Authority in Gothenburg for continued processing. The Environmental Authority in Gothenburg has deemed that, because of the location of the pollution, it does not present any risk to health or the environment. An investigation has been conducted to determine the cost of various decontamination measures and discussions are being held with the property owner on how to continue the process. Judging from the circumstances concerning responsibility and the limited scope of the contamination we believe that this matter will not result in any material financial risk for Elanders.
Elanders divides risks into circumstantial risks (the future of printed matter, business cycle sensitivity), financial risks (currency, interest, financing and credit risk) as well as business risks (customer concentration, operational risk, risks in operating expenses, contracts and disputes). For more detailed information than given below, as well as a sensitivity analysis, please see note 19 to the Group financial reports.
Elanders believes printed matter will continue to grow on a global level as a bearer of information in coming decades although to a lesser degree in the foreseeable future. Growth will mainly take place in Eastern Europe, South America and Asia and in packaging as well as digital print where Elanders is well positioned. However, volumes are expected to
shrink on mature markets such as North America and Western Europe and primarily in offset production. Elanders works constantly on making the best of our global presence, broadening our offer with packaging, offering production in countries with lower costs as well as developing solutions for the automated ordering of digital print.
The greatest business cycle sensitivity is primarily connected to supplying customers concentrated on consumer markets such as vehicles and electronics. Elanders works continuously to broaden our customer base and increase volumes to industries that are less sensitive to changes in business cycles such the food, cosmetics and pharmaceuticals industries as well as educational printers and the public sector.
As far as competition is concerned Elanders is one of the few players in the world that can provide global deliveries to international customers through its own organization. This is one of the most important platforms for the Group's competitiveness in the future.
The currency risk in the Group primarily comes from transactions in other currencies than the companies' local currency and the conversion of net results and net assets from our foreign subsidiaries. Elanders' net influx of foreign currency is mainly in EUR, CNY, USD, GBP and PLN. In part the Group handles currency risks by hedging transactions, accounts payables and liabilities that are in foreign currency. Exposure regarding changes in interest levels stems mainly from Group interest-bearing loans with floating interest rates. Outstanding debt is mostly in SEK and EUR. In 2011 Elanders hedged the interest level for MSEK 300 of Group debt. The hedge matures on 30 september 2014.
Elanders is dependent on receiving financing via credit institutes and the Group's goal is to always have more than one party willing to offer financing on market terms. Currently the Group has credit contracts with two Swedish banks that cover operational financing. The contracts run until September 2012 and negotiations for new contracts will begin in the spring of 2012. The Group's policy specifies
a liquidity buffer of MSEK 100. On 31 December 2011 the liquidity buffer amounted to MSEK 266.
The Group is exposed to credit risks through the risk that a counterparty cannot meet its obligations. The most crucial financial credit risk for the Group arises when investing surplus liquidity and trading exchange derivative instruments. This risk is limited through the sole usage of well-known financial institutions. Although the commercial credit risk is spread out over many different customers it is concentrated to a few. These customers are for the most part large, listed companies that have good credit ratings. The Group also has credit insurance that covers bad debt losses from insured customers.
None of Elanders' customers generate more than 7 percent of net sales. The ten largest customers represented less than 36 (33) percent of its net sales. Elanders' strategy is to be more than a supplier of printed matter. We also serve customers with information and printed matter logistics, thereby creating customer value which makes Elanders more a strategic partner than a pure supplier. This approach builds the basis for long-term business relations.
The risk that the Group will suffer a major stop in operations is minimal since the Group has similar production capacity in several production units and since it is rare that there are no alternative suppliers of input goods. The Group also has a business interruption insurance that covers loss of margins caused by a stop in production of up to twelve months.
The most significant operating cost is personnel which makes up around 31 (32) percent of operating costs and the Group works to continually improve the health of its employees. Paper costs are next and make up approximately 21 (18) percent of operating costs. Elanders protects itself as is customary against price fluctuations through a paper price clause in contracts with our customers. Costs for outwork are 13 (15) percent of operation costs. Elanders sees no direct risk connected to substantial cost hikes in outwork as there is a price press on most markets the Group operates in. Costs for
other resources are not individually large enough for price fluctuations to have a significant effect on the Group.
Elanders believes there are no disputes that will have any significant consequences for the Group's financial position. The Group's insurance program contains global liability insurance, product liability, crime fidelity, business interruption and limited protection against environmental damage.
On 31 December 2011 there were 1,166,666 registered A shares and 18,363,332 registered B shares; in total 19,529,998 shares. B shares are listed under the symbol ELAN B on the NASDAQ OMX Nordic Exchange, Small Cap list. Each A share represents 10 votes and each B share represents one vote. Shareholders may vote for all the shares they own or represent. All shares receive the same dividend. The Annual General Meeting has not given the Board any authority to purchase shares or issue shares. There are no bonus programs with dilution effects.
There are no restrictions in B shares transferability according to the articles of association or current legislation. The articles of association do contain a preemption clause concerning the company's A shares.
The company knows of no other agreements between shareholders that limit the transferability of the shares.
The only direct or indirect shareholding exceeding a tenth of the votes in the company per 31 December 2011 was Carl Bennet AB with 73.4 percent. No shares are owned by personnel through pension foundations or the like.
Contracts with clauses regarding ownership changes The company has a number of contracts that can be terminated if there is a change in ownership.
There are no contracts between the company and
Board members or employees that prescribe remuneration if they terminate their contract, are made redundant without reasonable grounds or if their employment or assignment ceases to exist because of a public purchase offer.
The company's guidelines for remuneration to senior officers were adopted by the Annual General Meeting on 5 May 2011. The Board proposes that the Annual General Meeting 2012 adopt guidelines that to all extents and purposes correspond to the present guidelines and that are as follows:
Senior officers are persons who together with the Chief Executive Officer constitute Group Management. The guidelines are valid for employment contracts signed after the Annual General Meeting has adopted the guidelines as well as those cases in which changes are made in existing agreements according to a decision by the Annual General Meeting.
Elanders will offer total compensation on par with market levels so that the company can recruit and keep qualified senior officers. Remuneration to senior officers will consist of a basic wage, variable remuneration, other benefits and a pension.
The basic wage will take into consideration the individual's responsibility and experience.
The division between basic wage and variable remuneration will be in proportion to the officer's responsibility and authority. The variable remuneration will be based on results in relationship to individual targets. Variable remuneration for the CEO may amount to, at most, 50 percent of the basic wage. For other senior officers variable remuneration may amount to, at most, 40 percent of the basic wage.
Senior officers have the right to other customary benefits such as company cars, company health care, etc.
Pension provisions are no more than 35 percent of the basic wage or, if applicable, no more than the ITP cost and the legal general pension, or the equivalent. The Board has the right to renew already signed pension agreements with essentially unchanged conditions without the new guidelines creating any hindrance. Salary pension is based on the basic wage.
The period of notice for termination of the Chief Executive Officer by the company is 18 months. The period of notice from the Chief Executive Officer is 6 months. The period of notice for termination of other senior officers by the company normally varies between 3 to 18 months. Normal wages are paid during the period of notice. No severance pay is paid.
The Board has the right to deviate from the above mentioned guidelines if it believes an individual case warrants this.
Elanders continues to have a dominant position among our global industrial customers and this is where the largest opportunities for short-term expansion can be found. The undeniable trend is that a growing number of global companies centralize their purchasing processes while requesting local deliveries. Elanders also has to grow quickly in packaging and continue to create order interfaces online for medium and large companies in order to increase volumes in primarily digital printing where there normally are better margins.
Elanders' market position and our solid graphic expertise together with our access to low-cost production in Eastern Europe and China provides a good platform to increase market shares particularly on the Swedish and German markets, Elanders' two most important markets. Investments in production equipment in Eastern Europe and Asia will be prioritized over investments in Western Europe.
We continue to invest in broadening our customer base in order to attract customers in industries less sensitive to fluctuations in the business cycle such as food stuffs, cosmetics and pharmaceuticals. This, together with a broader product range, is expected to make Elanders less sensitive to changes in the economy within a few years.
The forecast for 2012 is an increase in net sales and a better result before tax compared to 2011, apart from the MSEK 25 in positive one-off items recorded in 2011.
No important events took place after the balance sheet date and until the signing of this Annual Report.
The Board of Directors and Chief Executive Officer propose that the profit and other unreserved funds of SEK 180,708,911 in the parent company at the disposition of the Annual General Meeting should be dealt with accordingly:
The Board of Directors believes that the proposed dividends are justifiable in relation to the demands that the business' nature, scope and risks make on Group equity and on the Group's consolidation needs, liquidity and its position in general.
This corporate governance report, a part of the Board of Director's report in the Annual Report, describes Elanders' corporate governance, which is comprised of the management and administration of the company operations as well as internal control over financial reporting. The role of corporate governance in Elanders is to create a good foundation for active and responsible ownership, a suitable distribution of responsibility between the different
company bodies as well as good communication with all of the company's interested parties.
Elanders follows the Swedish Code of Corporate Governance ("the Code"). The Code is based on the principle "follow or explain", meaning that a company following the Code can deviate from certain rules, but then needs to explain why. The following deviations from the Code at Elanders are:
• The Chairman of the Board is the Chairman of the nomination committee.
This deviation is further explained in the section on the nomination committee.
More information about the Code can be found at www.corporategovernanceboard.se
Corporate governance in Elanders is based on legal requirements (primarily the Companies act and accounting regulations), the articles of association, NASDAQ OMX Stockholm's issuer rules, internal regulations, policies and the Code.
The Elanders Group's corporate governance, management and control are shared by the shareholders at the Annual General Meeting, the Board of Directors and the Chief Executive Officer in accordance with the Companies Act, the articles of association as well as the Group Management. Shareholders appoint the company's nomination committee, Board and external auditors at the Annual General Meeting.
On 31 December 2011 there were 2,413 shareholders and the foreign ownership in Elanders was 7 (7) percent of shares and 5 (5) percent of votes.
The only direct or indirect shareholding exceeding a tenth of the votes in the company per 31 December 2011 was Carl Bennet AB with 73.4 percent. No shares are owned by personnel through pension foundations or the like.
Shareholders execute their influence at the Annual General Meeting, the company's highest decisionmaking body. See figure above. All shareholders recorded in the share register that have declared their intention to participate in the Annual General Meeting within the stated time limit have the right to participate in the Meeting. Shareholders that cannot participate in person can elect a representative. At the Annual General Meeting an A share represents ten votes and a B share represents one vote. A shares and B shares have the same right to a share of company assets and profit. At the Annual General Meeting each person with voting rights is entitled to vote for their entire holding or represented holding without restrictions. Elanders' A shares are included in preemption as stated in the articles of association.
The Annual General Meeting decides on changes in the articles of association, chooses a Chairman, the Board and external auditors, adopts the annual accounts, decides on dividends if any and any other disposition of the result as well as discharges the
Board from liability. Furthermore the Annual General Meeting decides on guidelines for salaries and other remuneration for leading senior officers, any new share issue and the manner in which the nomination committee is to be elected. Any shareholder with a matter they would like the Annual General Meeting to deal with should present their proposal to the Chairman of the Board or present any nomination proposal to the nomination committee. Minutes from Elanders' Annual General Meetings can be downloaded from www.elanders.com under Investor relations/Corporate Governance.
At the Annual General Meeting 5 May 2011 the following decisions were taken:
The next Annual General Meeting for shareholders in Elanders will take place at Elanders headquarters in Mölnlycke Thursday 3 May 2012. Further information about the Annual General Meeting will be published at www.elanders.com.
The nomination committee prepares proposals for the Annual General Meeting concerning the election of, and remuneration to, the Chairman of the Board, Board members, committee members and external auditors, the latter having been proposed by the audit committee. The nomination committee meets as needed and at least once a year. The nomination committee met twice last year and discussed the work of the Board, the independence of Board members, Board members' evaluation of the work of the Board, the work of the committees, the audit and the composition of the nomination committee. This year the committee has consisted of Carl Bennet, Chairman (Carl Bennet AB), Göran Erlandsson (representative for the smaller shareholders) and Hans Hedström (Carnegie Funds). No remuneration has been paid to the nomination committee. The members' contact information is found in the Annual Report and on www.elanders.com under Investor Relations/Corporate Governance.
The Chairman of the Board is also the chairman of the nomination committee, which is a deviation from the Code. Elanders believes it is reasonable that the shareholder with the largest number of votes be the chairman of the nomination committee since he ought to have a decisive influence on the composition of the nomination committee because he has a majority of the votes at the Annual General Meeting.
The Board is elected by the Annual General Meeting and proposed by the nomination committee. The Board is ultimately responsible for the management of the company, monitoring the Chief Executive Officer and continuously following developments in operations as well as the reliability of the company's internal control. The Board also decides on
significant changes in the organization, investments and divestitures, adopts the budget and approves the annual accounts. The Board is ultimately responsible for ensuring that the Group has adequate systems for internal control, that the accounts are prepared and that they are reliable when published. The Group and its Group Management have several methods to control the risks connected to operations. The Board supports Group Management by continually monitoring and identifying business risks in a structured manner as well as steering the work in the Group in how it handles the most significant risks. In conclusion this constitutes the Board's responsibility for corporate governance.
In accordance with Elanders' articles of association the Board of Directors should consist of at least three and no more than nine members with a maximum of two deputies. In 2011 the Board consisted of eight members without deputies: Carl Bennet, Chairman, Tore Åberg, Vice Chairman, Göran Johnsson, Cecilia Lager, Magnus Nilsson, Hans-Olov Olsson, Kerstin Paulsson and Johan Stern. In addition, employees were represented by Lilian Larnefeldt, and Tomas Svensson. Lena Hassini and Olle Zetterquist are deputies to the employee members. All the members of the Board elected by the Annual General Meeting have an independent relationship to the company except Magnus Nilsson. Göran Johnsson, Cecilia Lager, Hans-Olov Olsson, Kerstin Paulsson and Tore Åberg are independent in relationship to the company's largest owner. Carl Bennet is dependent with regards to the shareholder Carl Bennet AB where he is Chairman of the Board and owner. Johan Stern is also dependent in relation to Carl Bennet AB where he is a member of the Board.
The Board has produced and adopted a formal work plan that regulates the division of responsibility between the Board, its Chairman and the Chief Executive Officer. It also includes a general meeting plan and instructions on financial reports as well as the other matters that must be put before the Board. The work plan is revised once a year or as needed.
The Board has seven ordinary meetings per year; four of them in conjunction with the annual accounts and interim reports, a meeting dedicated to strategic
| Member | Board, attendance (number of meetings) |
Remuneration Committee, presence (number of meetings) |
Audit Committee, attendance (number of meetings) |
Total attendance, % |
Remuneration Board + Committee work, SEK '000s |
Share holding, including related parties1) |
Independent |
|---|---|---|---|---|---|---|---|
| Members n by the AGM |
|||||||
| Carl Bennet, Chairman | 8 (8) | 1 (1) | Not member | 100 | 500 + 50 | 1,166,666 A 10,382,098 B |
No, owner |
| Tore Åberg, Vice Chairman | 7 (8) | 1 (1) | 3 (3) | 92 | 250 + 125 | 18,000 B | Yes |
| Göran Johnsson | 8 (8) | Not member | 3 (3) | 100 | 250 + 50 | 2,066 B | Yes |
| Cecilia Lager | 8 (8) | 1 (1) | Not member | 100 | 250 + 25 | 1,600 B | Yes |
| Magnus Nilsson, CEO | 8 (8) | Not member | Not member | 100 | Employee | 20,800 B | No, company |
| Hans-Olov Olsson | 8 (8) | 1 (1) | Not member | 100 | 250 + 25 | 1,700 B | Yes |
| Kerstin Paulsson | 8 (8) | Not member | 3 (3) | 100 | 250 + 50 | 2,000 B | Yes |
| Johan Stern | 8 (8) | Not member | 2 (3) | 91 | 250 + 50 | 65,000 B | No, owner |
| Emp loyee ntatives |
|||||||
| Lena Hassini | 8 (8) | Not member | Not member | 100 | Employee | – | No, company |
| Lilian Larnefeldt | 8 (8) | Not member | Not member | 100 | Employee | – | No, company |
| Tomas Svensson | 8 (8) | Not member | Not member | 100 | Employee | – | No, company |
| Olle Zetterquist | 8 (8) | Not member | Not member | 100 | Employee | 200 B | No, company |
| Tota l |
98 |
1) Shareholding per 31 December 2011.
matters, a meeting to adopt the coming year's budget and a constitutional meeting following the Annual General Meeting. In addition, the Board is called to further meetings as needed. The Group's external auditors participate in the meeting that deals with the report for the first nine months of the year as well as the meeting regarding the annual accounts to report on all the results of their audit.
The Board followed the meeting plan for the year. The Board also met once to handle matters concerning remuneration for senior officers. The Board has otherwise been involved primarily in assessing market conditions, external circumstances and Elanders' business position as well as the Group's strategic expansion.
At the constitutional meeting of the Board the formal work plan and instructions for the Chief Executive Officer are reviewed and the customary decisions concerning authorized signatories are taken. In addition, the work plans for the remuneration and audit committees are adopted and their members appointed. At the constitutional meeting of the Board after the Annual General Meeting 2011 Tore Åberg was made Vice Chairman. The Board in its entirety is authorized to sign for the company as well as two of the following persons together: the Chairman of the Board, the Chief Executive Officer and the Chief Financial Officer. At the meeting concerning the financial statements the Board met the auditors without the presence of the CEO or any other member from Group Management. The Board travels as often as possible to visit and hold its meetings in one of the Group's subsidiaries in Sweden or abroad. The Board members' remuneration and presence is presented in detail in the table above.
The Chairman leads and organizes the Board and is responsible for making sure the Board meets its responsibilities and that the members receive the information necessary to ensure the work done by the Board is of high quality and performed according to legal stipulations and the contract with the stock exchange. The Chairman of the Board must also make sure that during the year an evaluation of the Board's work is carried out and that the nomination committee is informed of the results. The evaluation is carried out in the form of a questionnaire and encompasses the Board's composition, remuneration, materials, administration, work methods, meeting content, reports from the committees and education. The evaluation is on a scale of 1–5, where the highest grade is 5. The average score in 2011 was 4.70 (4.63). In addition, the Chairman of the Board represents the company in ownership matters and communicates viewpoints from the owners to the Board. The Chairman of the Board is elected by the Annual General Meeting. Carl Bennet has been the Chairman of the Board since 1997.
The remuneration committee is composed of Board members with the highest competence in this field. It deals with matters concerning remuneration to the Chief Executive Officer and officers that report directly to him. Decisions concerning remuneration to other employees in management positions in the Group are made by each individual's closest superior in consultation with their closest superior, also known as the "grandfather principle". During the year the remuneration committee held one meeting during which they adopted their work plan and prepared a proposal for remuneration. During the year the remuneration committee consisted of Carl Bennet, Chairman, Cecilia Lager, Hans-Olov Olsson and Tore Åberg. The guidelines for remuneration to leading officers adopted at the Annual General Meeting 2011 can be found in note 5 in the formal Annual Report and on the company's website, www.elanders.com under Investor Relations/Corporate Governance. The guidelines for remuneration to leading officers for 2011 and the Board of Director's proposal for guidelines for 2012 can be found on page 71 in the Annual Report 2011. The company has not issued, and will not issue any share-based payment obligation, or any similar incitement programs.
The audit committee is appointed from within the Board based on members' experience of, and expertise in financial reporting and internal control. The committee follows a work program adopted by the Board. Its primary task is monitoring internal control, procedures for financial reporting, compliance of related laws and regulations as well as the external audit in the Group. The committee also evaluates the external auditors' qualifications and independence. The audit committee reports their observations on a regular basis to the Board and provides, as needed, external auditor candidates to the nomination committee. The committee meets at least twice a year and as needed. The external auditors normally participate in committee meetings. The committee met three times in 2011. The auditors reported on the audit of the nine month report and the annual accounts, the company's situation with the Code of Corporate Governance and internal control were discussed. The members of the audit committee in 2011 were Tore Åberg, Chairman, Göran Johnsson, Kerstin Paulsson and Johan Stern.
The Chief Executive Officer is the President of the Group, a member of the Board and leads the Group's operations. The Chief Executive Officer's work is steered by the Companies Act, other laws and regulations, current laws for listed companies including the Code, the articles of association and the framework established by the Board in, among other things, the CEO instruction. The Chief Executive Officer is authorized to sign for the company in daily management in accordance with the Companies Act as well as sign for all Group subsidiaries. The Chief Executive Officer is responsible for
providing the Board with continual reports on Group results and financial position as well as the information the Board needs to make qualified decisions. The Chief Executive Officer also keeps the Chairman of the Board apprised of developments in operations. All the managing directors in the Group's subsidiaries receive written instructions. These instructions contain a division of responsibility between the Board and the managing director and guidelines the managing director must observe in the running of operations.
The President and Chief Executive Officer lead the work performed by Group Management and make decisions in consultation with members of Group Management. Group Management is responsible for day-to-day financial and commercial management and follow-up in the Group. It also strives to continually achieve synergies, identify acquisition and structural opportunities as well as adapt Group operations to market demands and short and longterm developments. Group Management makes sure that the competence and capacity of the Group is coordinated and adjusted to be as useful and profitable as possible in the short and long term. Elanders' Group Management consists of Magnus Nilsson, President and Chief Executive Officer as well as responsible for operations in Great Britain, Per Brodin, responsible for Asia, Jonas Brännerud, responsible for Sweden, South America, Poland and Norway, Peter Sommer, responsible for Germany, North America, Hungary and Italy as well as Andréas Wikner, Chief Financial Officer. Group Management meets once a month, often in conjunction with a visit to a unit within the Group.
The purpose of internal control over financial reporting is to insure that the financial reports are reliable and follow generally accepted accounting principles and otherwise follow applicable laws and regulations concerning listed companies. According to the Swedish Companies Act and the Code
of Corporate Governance the Board is ultimately responsible for an effective, functioning internal control in the Group. Internal control is based on the framework for internal control published by COSO (Committee of Sponsoring Organizations of the Treadway Commission) and which comprises the control environment, risk assessment, control activities, information, communication as well as follow-up. The Chief Executive Officer is responsible for an organization and processes that ensure the quality of financial reports to the Board and the market.
The control environment at Elanders is characterized by the proximity between Group Management and the operating units. All members of Group Management, except the Chief Executive Officer and the CFO are also MDs in one or more of the larger operative units in the Group. The framework for internal control regarding financial reporting in Elanders consists of routines and distribution of responsibility that are clearly communicated in internal policies and different kinds of manuals. The Board has adopted a formal work plan that regulates the Board's responsibility and the manner in which work is done in committees. The Board also has an audit committee that is responsible for ensuring that established principles in financial reporting and internal control are complied with and developed. It also maintains regular contact with the external auditors. In order to maintain an effective control environment and good internal control the Board has delegated the practical responsibility to the Chief Executive Officer and established a CEO instruction which defines the division of responsibility between the Board and the Chief Executive Officer.
It is the responsibility of the Board to identify and handle any major financial risks and the risk of mistakes in financial reporting. This includes identifying areas in financial reporting where the risk of making a crucial mistake is higher as well as developing control systems to prevent and discover these faults. This is primarily done by identifying situations in operations and events in the outside world that could have an impact on financial reporting.
The aim of the control procedures is to ensure that financial reporting is correct and complete and that it is based on the Group's minimum requirements for internal control over financial reporting. Control procedures consist of general and detailed controls and can be both preventive and detective. For instance, the Board continuously follows developments in the operations through monthly reports containing detailed financial information as well as the CEO's comments on operations and result and financial position. Group Management or representatives from Group Finance regularly visit each unit and evaluate internal control and financial reporting. The MD in each subsidiary is responsible for making sure Group governance regulations are implemented and followed and that any deviations are reported. Companies in the Elanders Group make annual evaluations of how internal control functions in relation to the Group's goals. In this year's evaluation several areas there improvements have been made were identified as well as areas where further improvements are necessary. Measures were taken to make these changes.
In order to make Elanders employees aware of the Group's policies and manuals the information is available on the Group intranet. Information is also regularly communicated via internal newsletters. To ensure that information communicated externally is correct and complete the Board has adopted an Information policy that dictates what should be communicated, by whom and how the information should be released.
The Board follow-up of the internal control over financial reporting is first and foremost handled by the audit committee. The observations and potential areas of improvement in internal control that have been identified in the external audit are processed by the audit committee together with the external auditors and the CFO. The annual evaluation of internal control in each individual company is reviewed by Group Finance, sometimes in cooperation with the external auditors. Conclusions from this review have been reported to the audit committee.
Elanders does not have a special internal audit function at the moment. This function is performed by Group Management and Group Finance, supported by the audit committee and the external auditors. The Board annually evaluates the need for an internal audit function but so far, considering the size of the Group and Group Management's operative character, it does not believe a special audit function would be of any significant advantage. A continuous dialogue between the company and the external auditors together with the controls carried out by Group Management is considered sufficient to ensure that internal controls are kept on an acceptable level. This assessment is regularly evaluated and the matter will be tested once again in 2012.
The Annual General Meeting 2008 chose for a period of four years the authorized public accounting company PricewaterhouseCoopers AB. Head auditor is the authorized public accountant Johan Rippe. Once a year the auditors meet the Board in its entirety without the CEO or any other member of Group Management present, normally at the meeting that deals with the annual accounts. The auditors also participate in the Board meeting dealing with the report for the first nine months of the year.
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| Net sales | 2 | 1,838,831 | 1,705,923 |
| Cost of products and services sold | –1,486,297 | –1,450,317 | |
| gross profit | 352,534 | 255,606 | |
| Selling expenses | –110,059 | –122,197 | |
| Administrative expenses | –174,633 | –212,417 | |
| Other operating income | 3 | 54,013 | 49,692 |
| Other operating expenses | 3 | –12,059 | –40,588 |
| Shares in result from jointly controlled entities | 4 | – | –6,278 |
| operating result | 5, 6, 7, 8 | 109,796 | –76,182 |
| Financial income | 9 | 4,939 | 10,632 |
| Financial expenses | 9 | –34,772 | –39,603 |
| Result after financial items | 79,963 | –105,153 | |
| Taxes | 10 | –19,592 | 21,404 |
| result for the year | 60,371 | –83,749 | |
| Result for the year attributable to: | |||
| – parent company shareholders | 60,260 | –83,749 | |
| – non-controlling interests | 111 | – | |
| Earning per share, SEK1) | 11 | 3.09 | –6.79 |
1) There have been no dilution effects.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| result for the year | 60,371 | –83,749 |
| Other comprehensive income | ||
| Translation differences | 2,882 | –75,946 |
| Change in value of cash flow hedges, net | –4,244 | –282 |
| Tax effect on change in value of cash flow hedges, net | 1,116 | 74 |
| Change in fair value on the hedge of the net investment abroad | 232 | 8,985 |
| Tax effect on the change in fair value of the hedge of net investment abroad | –61 | –2,363 |
| Total other comprehensive income | –75 | –69,532 |
| Total comprehensive income for the year | 60,296 | –153,281 |
| Total comprehensive income attributable to | ||
| – parent company shareholders | 60,185 | –153,281 |
| – non-controlling interests | 111 | – |
Group net sales increased by MSEK 113 compared to the previous year, primarily due to success in raising sales on the German and Swedish markets. With the same exchange rates as last year net sales would have been MSEK 1,919 or MSEK 1,765 with comparable units. During the year parts of the Swedish sheet-fed printers Fälth & Hässler and NRS Tryckeri have been acquired. The contribution from these operations is calculated at close to MSEK 50 during the second half of the year.
The improved result is due to higher net sales, the rationalizations made mainly in the Swedish operations and continued success on the Swedish and German markets. One-off items of MSEK 25 (–59) are included in the operating result. The one-off items recognized as income in 2011 consist entirely of so-called "book VAT".
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | 26 | ||
| Intangible assets | 14 | 869,508 | 875,218 |
| Tangible assets | 15, 25 | 320,277 | 371,721 |
| Shares in jointly controlled entities | 4 | 1,383 | 1,383 |
| Deferred tax assets | 10 | 145,420 | 149,014 |
| Other financial assets | 12,281 | 14,142 | |
| TOTAL FIXED ASSETS |
1,348,869 | 1,411,478 | |
| Current assets | |||
| Inventory | 16 | 125,608 | 118,676 |
| Accounts receivable | 19 | 385,252 | 365,063 |
| Current tax receivables | 10 | 6,034 | 7,930 |
| Other receivables | 24,930 | 27,188 | |
| Prepaid expenses and accrued income | 17 | 32,671 | 31,843 |
| Cash and cash equivalents | 18 | 81,195 | 50,144 |
| TOTAL CURRENT ASSETS |
655,690 | 600,844 | |
| TOTAL ASSETS |
2,004,559 | 2,012,322 | |
| EQUITY AND LIA BILITIES |
|||
| EQUITY | |||
| Equity attributable to parent company shareholders | |||
| Share capital | 20 | 195,300 | 195,300 |
| Other contributed capital | 549,062 | 549,062 | |
| Hedging reserves | –3,323 | –195 | |
| Translation reserves | –8,344 | –11,397 | |
| Retained earnings | 146,817 | 86,557 | |
| TOTAL Eq uity attributable to parent company shareholders |
879,512 | 819,327 | |
| Equity attributable to non-controlling interests | 111 | – | |
| TOTAL EQUITY |
879,623 | 819,327 | |
| LIA BILITIES |
|||
| Long-term liabilities | |||
| Other interest-bearing liabilities | 19, 21, 25 | 25,184 | 423,655 |
| Provisions for post-employment benefits | 22 | 11,191 | 11,259 |
| Other provisions | 23 | 4,809 | 5,596 |
| Deferred tax liabilities | 10 | 35,343 | 30,420 |
| total long-term liabilities | 76,527 | 470,930 | |
| Current liabilities | |||
| Interest-bearing liabilities | 19, 21, 25 | 720,469 | 347,534 |
| Accounts payable | 19 | 152,440 | 163,249 |
| Current tax liabilities | 10 | 5,674 | 2,239 |
| Other liabilities | 43,897 | 54,836 | |
| Accrued expenses and deferred income | 24 | 107,803 | 106,536 |
| Other provisions | 23 | 18,126 | 47,671 |
| Total current liabilities | 1,048,409 | 722,065 | |
| TOTAL EQUITY AND LIA BILITIES |
2,004,559 | 2,012,322 |
| Equity attributable to parent company shareholders | ||||||||
|---|---|---|---|---|---|---|---|---|
| SEK '000s | Share capital |
Other contributed capital |
Hedging reserves |
Transla tion reserves |
Retained earnings |
Total | Equity of non controlling interests |
Total equity |
| Opening balance on 1 Jan. 2010 |
97,650 | 438,632 | 13 | 57,928 | 169,066 | 763,289 | 1,775 | 765,064 |
| New share issue | 97,650 | 110,430 | – | – | – | 208,080 | – | 208,080 |
| Transactions with share holders with non controlling interest |
– | – | – | – | 1,239 | 1,239 | –1,775 | –536 |
| Total comprehensive income for the year |
– | – | –208 | –69,325 | –83,748 | –153,281 | – | –153,281 |
| Closing balance on 31 Dec. 2010 |
195,300 | 549,062 | –195 | –11,397 | 86,557 | 819,327 | – | 819,327 |
| Total comprehensive income for the year |
– | – | –3,128 | 3,053 | 60,260 | 60,185 | 111 | 60,296 |
| Closing balance on 31 Dec. 2011 |
195,300 | 549,062 | –3,323 | –8,344 | 146,817 | 879,512 | 111 | 879,623 |
The Group's total assets decreased by MSEK 8 to MSEK 2,005 (2,012) and the capital employed on the balance sheet date was MSEK 1,555 (1,551). Both inventory and accounts receivable increased slightly as a result of higher net sales.
As of 30 September 2011 loans from the Group's main banks are reported as interest-bearing current liabilities since the existing credit agreements mature on 30 September 2012. Negotiations regarding new credit agreements are expected to begin in the spring of 2012. Funds paid out for the rationalizations made mainly in the Swedish operations and primarily during the previous year reduced Other provisions.
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| Operating activities | |||
| Result after financial items | 79,963 | –105,153 | |
| Adjustments for items not included in cash flow | 12 | 58,741 | 119,063 |
| Paid taxes | 10 | –6,824 | –7,606 |
| Cash flow from operating activities | |||
| before changes in working capital | 131,880 | 6,304 | |
| Cash flow from changes in working capital | |||
| Increase (–) / Decrease (+) in inventory | –7,100 | –19,909 | |
| Increase (–) / Decrease (+) in operating receivables | –19,637 | –47,073 | |
| Increase (+) / Decrease (–) in operating payables | –20,891 | 2,895 | |
| Cash flow from operating activities | 84,252 | –57,783 | |
| Investing activities | |||
| Acquisition of intangible and tangible assets | 14, 15 | –32,842 | –48,731 |
| Divestment of tangible assets | 15 | 13,522 | 19,272 |
| Acquisition of operations | 28 | –10,145 | –26,754 |
| Changes in of long-term receivables | 1,859 | –13,005 | |
| Cash flow from investing activities | –27,606 | –69,218 | |
| Financing activities | |||
| New share issue | – | 208,080 | |
| Amortization of loans | –30,362 | –24,427 | |
| Other changes in interest-bearing liabilities | 12 | 2,779 | –81,597 |
| Cash flow from financing activities | –27,583 | 102,056 | |
| Cash flow for the year | 29,063 | –24,945 | |
| Cash and cash equivalents at the beginning of the year | 50,144 | 78,856 | |
| Translation difference in cash and cash equivalents | 1,988 | –3,767 | |
| Cash and cash equivalents at year-end | 81,195 | 50,144 | |
| Change in net debt | |||
| Net debt at the beginning of the year | 732,201 | 837,446 | |
| Net debt in acquired operations | – | 8,599 | |
| Translation difference | –176 | –16,937 | |
| Change in interest-bearing liabilities and cash and cash equivalents | –56,479 | –96,907 | |
| Net debt at year-end | 675,546 | 732,201 | |
| Operating cash flow | 13 | ||
| Cash flow from operating activities excl. financial items and paid tax | 120,909 | –21 206 | |
| Net investments | –27,606 | –69 218 | |
| Operating cash flow | 93,303 | –90 424 |
Cash flow from operating activities improved by MSEK 142 amounting to MSEK 84 (–58) compared to 2010, primarily as a result of the considerably better result in underlying operations. Cash flow was, however, slightly weighed down by more capital tied up.
MSEK –33 (–49) of total net investments of MSEK –28 (–69) represented investments in intangible assets and production equipment in Group operations, mainly in Eastern Europe. Cash flow was also affected by acquisitions of MSEK –10 (–27) referring to the acquisition in 2011 of parts of the Swedish sheet-fed printers Fälth & Hässler and NRS Tryckeri.
Net debt amounted to MSEK 676 (732) at year-end.
Elanders AB (publ.), corporate identity number 556008-1621, is a limited company registered in Sweden. The parent company is registered in Mölnlycke. Elanders is listed on NASDAQ OMX Stockholm, Small Cap. The company's primary business and its subsidiaries are described in the Board of Directors' Report in this Annual Report. The annual accounts for the financial year ending on 31 December 2011 were approved by the Board and will be presented to the Annual General Meeting on 3 May 2012 for adoption.
The Group has prepared the annual accounts according to the Annual Accounts Act, the EU approved International Financial Reporting Standards (IFRSs) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) endorsed by the European Union as of 31 December 2011. In addition, the Group follows the Swedish Financial Reporting Board Recommendation RFR 1 Supplemental Accounting Regulations for Groups, which specifies the additions to IFRSs information that are required according to the provisions in the Annual Accounts Act. In group accounting all items are valued at acquisition value, unless otherwise specified. The Group reports in Swedish crowns. All amounts are given in thousands of Swedish crowns, unless otherwise specified. The following is a description of the accounting principles considered elemental.
Group accounting comprises the parent company, Elanders AB, and companies in which Elanders AB directly or indirectly holds a controlling interest. Controlling interest is defined as the right to form a company's financial and operative strategies in order to obtain financial advantages. This is normally achieved if the holding corresponds to more than 50 percent of the voting rights. Equity in the Group is comprised of equity in the parent company and the part of the equity in subsidiaries generated after acquisition. All transactions and balances between group companies are eliminated in the consolidated accounts.
Subsidiaries are reported in accordance with the acquisition method. Acquired identifiable assets, liabilities and contingent liabilities are recorded at fair value based on the date of acquisition. The surplus arising from the difference between the cost of the shares in subsidiaries and the fair value of the acquired identifiable assets and liabilities is recorded as goodwill. Acquisition value is the fair value of the assets left as reimbursement to the seller as well as the liabilities taken over on the acquisition date. If the acquisition price is lower than the fair value of the acquired subsidiary's net assets, the difference is recorded directly in the income statement. All acquisition costs are expensed. Companies acquired in the current year are included in group accounting from the acquisition date. Divested companies are included in group accounting up until the divestiture date.
Operations classified as jointly controlled entities are those in which Elanders, together with one or several joint owners, has a shared controlling influence. Shares in jointly controlled entities are reported according to the equity method. The equity method means that shares in a company are recorded at cost at the time of acquisition and thereafter are increased or decreased by the Group's share of the change in the company's net assets. The Group share of the jointly controlled entity's result is recognized in the consolidated income statement. In transactions between the Group and a jointly controlled entity the part of unrealized results which are equivalent to the Group's share in the jointly controlled entity are eliminated.
Non-controlling interests consist of the fair value of shares in net assets of subsidiaries, owned by non-controlling interests, which are included in group accounting at the time of the original acquisition and their share of changes in equity after the acquisition. Non-controlling interests are reported as a separate category in equity. The result for the year attributable to non-controlling interests is specified after the result for the year in the income statement.
Revenue from products and services is reported on delivery if ownership has been transferred to the buyer. Net sales represent the sales value less VAT, returns and discounts. Service contracts in progress are reported, whenever possible, when contractual partial deliveries are made or otherwise when the final delivery is made. Net sales include product and service sales. Since all services are essentially integrated parts of product deliveries, a split of revenues into products and services is not meaningful.
A finance lease agreement involves a transfer of virtually all rights and obligations that normally characterize ownership from the lessor to the lessee. The leasing agreements that are not finance leases are classified as operating lease agreements. An asset possessed through a finance lease agreement is accounted for as a fixed asset in the balance sheet and an equivalent financial liability is entered as an interest bearing liability. The initial value of both of these items is the lowest of the asset's fair value or the current value of the minimum lease payments. The lease payments are divided into amortization according to plan and accrued interest on the amount of the liability and recognized so that each accounting period is charged with the fixed interest on the recorded liability for the respective period. Lease payments under an operating lease are expensed systematically over the leasing term.
Items that are included in the financial reports from the various units in the Group are originally recognized in the currency used in the primary economical environment where the respective unit chiefly operates (functional currency). In the consolidated financial statements all amounts are translated to Swedish crowns, which is the parent company's functional and reporting currency.
Transactions in foreign currency are reported in each unit based on the unit's functional currency according to the transaction day exchange rate. Monetary assets and liabilities in foreign currency are translated to balance sheet date rates and translation differences are reported under the result for the period. Translation differences in operating receivables and payables are recorded under operating results while differences in financial assets and liabilities are reported under financial items.
When preparing the consolidated financial statements the balance sheets of foreign operations are translated to Swedish crowns with balance sheet date rates while income statements are translated to the average exchange rates for the period. Translation differences are recognized as translation reserves under equity. The accumulated translation differences are redistributed and reported as part of capital gains/losses in the event of a divestiture of a foreign operation. Goodwill and adjustments to fair value attributable to acquisitions with another functional currency than Swedish crowns are reported as assets and liabilities in the acquired unit's currency and translated to balance sheet date rates.
The Group does not report governmental funding or grants in the income statement or balance sheet before there is a reasonable assurance that the
company will meet the requirements attached to the funds. Furthermore the Group recognizes the funds in the same way and over the same period as the costs they are intended to cover occur.
Remuneration to employees in the form of wages, paid vacation and sick leave, pensions and so forth is reported as it is earned. Pensions and other post-employment contributions are classified as defined contribution plans or defined benefit plans.
In the case of defined contribution plans the company pays a fixed fee to a separate, independent legal entity and is not obligated to pay further fees. Group payments for defined contribution plans are recorded as an expense as they are earned, which is normally the same period the premium is paid.
The expenses connected to defined benefit plan obligations are measured actuarially with the Projected Unit Credit Method and calculated on the balance sheet date. Actuarial profits and losses that exceed 10 percent of the highest of the pension obligation's market value and the fair value of plan assets are distributed throughout the expected average remaining service period of the employees in the plan. The cost of service from prior periods is recorded immediately, as long as the compensation is already untouchable. If, however, a condition of the compensation is that the employee continues to work during a specific period of time, the cost is spread out over the earning period. The liability reported in the balance sheet referring to defined benefit plans is equivalent to the defined benefit plan obligation on the balance sheet date less the fair value of plan assets, adjusted for unrecorded actuarial profits and losses for service from prior periods. Taxes on pension costs are reported according to UFR 4 Recording of special employers' contribution and tax on returns. In the Elanders Group there are a number of employees that have defined benefit ITP plans in Alecta, which are classified as defined benefit multi-employer pension plan. This means that a company must report their proportional share of the defined benefit pension obligation and the plan assets and expenses that are connected to this pension plan. Since Alecta cannot provide the necessary information, these pension obligations are recognized as defined contribution pension plans according to point 30 in IAS 19.
The period's tax expense or income consists of current tax and deferred tax. Current tax is based on the fiscal result for the year. The annual fiscal result differs from the result reported for the year due to adjustments for non-taxable and non-deductible items. Deferred tax is tax relating to taxable or tax deductible temporary differences that cause or reduce tax in the future. Deferred tax is calculated according to the balance sheet method based on temporary differences between recorded and fiscal values of assets and liabilities. Calculation of the amounts is based on how the temporary differences are expected to reverse using enacted tax rates or tax rates announced on the balance sheet date. Deferred tax liabilities that refer to tax deficits and deductible temporary differences are only reported in cases where it is probable that tax deficits can be recognized against tax surpluses in the future. Deferred tax is reported as an income or an expense in the income statement except in cases where it refers to a transaction that is recorded against equity. Then the tax effect is recorded directly against equity. Deferred tax assets and liabilities are offset against each other if they refer to income tax that is charged by the same tax authority and where the Group intends to pay the net amount in tax.
Earnings per share is calculated by dividing the result for the year attributable to parent company shareholders with the average number of outstanding shares during the period. The average number of outstanding shares during the period is adjusted for all potential dilution of ordinary shares when calculating earnings per share after dilution.
Tangible assets are reported at their acquisition value less accumulated depreciation and write-downs. Tangible assets are straight-line depreciated over the estimated useful life of the asset. Costs for reparation and maintenance are recorded as expenses. The following useful lives are used to calculate depreciation:
| • Buildings | 25–30 years |
|---|---|
| • Service facilities in buildings | 5–15 years |
| • Land improvements | 20 years |
| • Printing presses, web offset | 10 years |
| • Printing presses, sheet-fed offset | 7 years |
| • Other mechanical equipment | 7–10 years |
| • Computer equipment and systems | 3–5 years |
| • Vehicles | 5 years |
| • Other equipment | 5–10 years |
The residual value and useful life of assets are tested on every closing day. Capital gains/losses from the sale of tangible assets are recorded as Other operating income respectively Other operating expenses.
Goodwill is the difference between the acquisition value and the Group's share of the fair value of the acquired subsidiary's, associated company's or jointly controlled entity's identifiable assets, liabilities or obligations on the date of acquisition. If at acquisition the fair value of the acquired assets, liabilities or obligations exceed the acquisition price the difference is recorded directly as income in the income statement. Goodwill has an undefined useful life and is recorded at acquisition value less accumulated write-downs. When a company is sold the portion of goodwill attributable to that company which has not been written-down is calculated in capital gains/losses.
Other intangible assets are customer relations, brands, favorable contracts identified at the time of an acquisition as well as the cost of purchasing and developing software. Internally created intangible assets are reported as an asset only in cases where an identifiable asset has been created, it is fairly certain that the asset will lead to financial gains and invested expenses for developments can be calculated reliably. If it is not possible to report an internally created intangible asset the costs for development are recorded as expenses in the period in which they occur. Other intangible assets are depreciated on a straight-line basis over a useful life period of 2–5 years.
Group assets are assessed at every reporting date to determine whether or not there are a potential need for a write-down. Potential impairment losses relating to goodwill is, however, tested at least once a year. If there is an indication the recoverable amount of the asset is calculated. Goodwill is allocated to the smallest cash generating unit, which corresponds to Group operating segments. The recoverable amount is the highest of the value in use or the net realizable value of the asset. The value in use is the current value of all in and out payments attributable to the asset during its estimated useful life together with the current net realizable value at the end of the assets useful life. If the calculated recoverable amount is lower than the book value a write-down is made equivalent to the asset's recoverable amount. Prior write-downs are recovered when a change occurs in the premises that were the basis for deciding the assets' recoverable amount when it was written-down and which entails that the write-down is no longer considered necessary. Recoveries of prior write-
downs are tested individually and are recorded in the income statement. Impairment losses relating to goodwill are not recovered in a following period.
Inventory is valued at the lower of cost and net realizable value. Cost is calculated in accordance with the First-in, First-out method (FIFO) or weighted average prices. Acquisition value includes the cost of materials, direct labor costs and overhead charges involved in production of the goods. Net realizable value is the calculated sales value less sales expenses.
A financial asset or liability is recorded in the balance sheet when Elanders becomes a party in the instrument's contractual conditions. A financial asset is derecognized from the balance sheet when the rights in the contract are realized, have matured or the company loses control over them. A financial liability is derecognized from the balance sheet when the obligation in the contract is met or resolved in some other way. Financial instruments are valued the first time at fair value plus transaction costs, which applies to all financial assets and liabilities not recognized at fair value through the result. Financial assets and liabilities recognized at fair value through the result are valued the first time at fair value, while attributable transaction costs are valued through the result. Acquisitions and divestitures of financial assets are recorded on the date of business, which is the date the company pledges to acquire or sell the asset, except in cases where the company acquires or sells listed securities, in which case settlement date accounting is applied. Financial assets are controlled at every external reporting instance to determine whether or not there are objective indications that one or a group of financial assets should be written-down. Financial instruments are recorded at their amortized cost or fair value depending on the initial classification under IAS 39 (see below).
Official quotations at year-end are used to determine the fair value of long-term derivative instruments. The market value of other financial assets and liabilities is determined by generally accepted methods such as discounting of future cash flows with the quoted interest rate corresponding to the period of the contract.
Amortized cost is calculated with the help of the compound interest method, which means that premiums or discounts together with directly related expenses or income is recorded over the period the contract is valid with the help of the calculated compound interest. The amortized cost is the value generated from a present value calculation with the compound interest rate as the discount factor.
Financial assets and liabilities are set off against each other and presented as net amount in the balance sheet where there exists a legal right to set off and where the intention is to settle the items with a net amount or realize the asset and liability at the same time.
Cash and cash equivalents are cash in financial institutions and short-term liquid placements with a term of less than three months that run no real risk of fluctuations in value. They are reported as Loans and receivables.
Accounts receivable are categorized as Loans and receivables, which means they are recorded at amortized cost. Write-downs of accounts receivables are included in operating expenses.
Long-term receivables, current receivables and other receivables The receivables above are categorized as Loans and receivables, which means they are recorded at amortized cost. In the case the term of a receivable is short it is recorded at its nominal value without a discount according to the method for amortized cost.
Derivative instruments are recorded at their fair value in the balance sheet. Changes in the value of cash flow hedges are reported in particular categories under other comprehensive results until the hedged item is recorded in the income statement. Any result on hedge instruments attributable to the effective part of the hedge are recorded as equity under hedge provisions. Any result on hedge instruments attributable to the ineffective part of the hedge are recorded in the income statement. Hedges of net investments in foreign subsidiaries are recorded in the same way as cash flow hedges, with the exception that any effects from the hedge is recorded in the translation reserve.
Accounts payable are categorized as Other financial liabilities which means they are reported at amortized cost. Accounts payable are recorded at their nominal value without a discount due to their expected shortterm.
Liabilities to credit institutions are categorized as Other financial liabilities which means they are reported at amortized cost and directly related expenses such as arrangement fees are distributed throughout the period of the loan with the help of the compound interest method. Long-term liabilities mature after the period of one year while current liabilities fall due within one year.
The Group has financial guarantee contracts in which the Group has a commitment to reimburse the holder of a debt instrument for loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified contract terms. Financial guarantee contracts are initially recognized at fair value. Financial guarantee contracts are then recognized continuously at the higher amount of the best estimate of the present value of anticipated net fees to settle the guarantee commitment, and the original amount recorded as a liability.
Provisions are recorded in the balance sheet when a company has a formal or informal obligation as a result of a past event and it is likely that an outflow of resources will be necessary to resolve the obligation and a reliable estimation of the amount can be made. Provisions for restructuring costs are reported when the Group has an established, detailed restructuring plan that has been announced to the parties concerned. Provisions are reconsidered every time an external report is made.
Group operations are reported as one reportable segment, since this is how the Group is now governed. This analysis identified the President as the highest executive decision-maker and the units in different countries, or groups of countries, were identified as operating segments. The operating segments were then merged to create a single reportable segment, consisting of the entire Group, since the units have similar financial characteristics and resemble each other regarding the nature of their products and services, production processes, customer types etc. When presenting geographical sales the customer's location has determined which geographic area sales are allocated to.
of existing standards that came into effect during 2011
During the year no interpretations or amendments of existing standards have come into effect and had a significant effect on Elanders' financial reports.
International Accounting Standards Board (IASB) has issued the following new and revised standards that have not yet come into effect but which could have a certain effect on Elanders financial reports in the future:
| Will be applied in the fiscal year that begins: |
|---|
| 1 January 2013 |
| 1 January 2015 |
| Varies, earliest 1 July 2012 |
The standards above are not expected to have any significant effect on Group financial reports during the period they are applied for the first time. Other issued, but not presented here, new and amended standards and interpretations are not expected to have any significant effect on Elanders' financial reports during the period they are applied for the first time.
When preparing the financial reports estimations and assumptions are made about the future that effect balance sheet and income statement items in the annual accounts. These assessments are based on historic experience and the various assumptions that Group Management and the Board of Directors consider plausible under existing circumstances. In cases where it is not possible to ascertain the book value of assets and liabilities through information from other sources these estimations and assumptions form the basis of the valuation. If other assumptions are made or other circumstances influence the matter the actual outcome can differ from these assessments. Individual assessments can have a particularly significant effect on Elanders' result and position in the areas of goodwill impairment testing, valuation of tax carryforwards, provisions for and book VAT.
Goodwill that has an infinite useful life is subject to impairment tests annually or when there is an indication that a write-down may be needed. Testing is performed on the lowest identified cash generating level, which for Elanders is the operating segment level. The impairment test contains a number of assumptions that can, according to different assessments, have a significant impact on the calculation of recoverable values such as:
Essential assumptions when testing the need for write-downs for goodwill and a description of the effect of plausible, possible changes in these assumptions that are basis of the calculations are found in note 14.
Deferred tax assets concerning tax loss carryforwards reported by the Group amount to MSEK 132 (135) per 31 December 2011. The recorded value of these tax asstes have been tested at year-end and it is deemed probable that these can be set off against taxable gains. The tax assets primarily refer to Swedish tax loss carryforwards that can be utilized for an unlimited amount of time. The Group's Swedish operations, with the exception of the operations in Kungsbacka disposed of in 2007, have historically been profitable and are expected to generate a substantial surplus in the future. Elanders therefore believes it is safe to say that it will be possible to set off the deficit deduction which the tax assets stem from, against future taxable surpluses.
Provisions for restructuring contain estimations regarding when planned, future activities will take place and what they will cost. The estimations refer to expenses for redundancies or other obligations connected to terminating contracts or other costs for withdrawals. These estimations are based on the current situation in negotiations with other parties.
In February 2010 a judgment in the so-called Graphic Procédé case was reached in the Court of Justice in the European Union. In Sweden this is particularly important when differentiating between providing goods (i.e. printed matter) and providing services, and the application of the socalled book VAT, a value added tax of six percent. Elanders has applied to the Swedish Tax Agency for a repayment of VAT for the years 2004 and 2005, the reason being that a part of Elanders' net sales liable to VAT in this period refers to goods and not services according to the delineation now considered to be correct. In 2011 the Swedish Tax Agency delivered its decision on 2004 and repaid MSEK 70. Elanders put in a claim of MSEK 67 for 2005 but no decision has been taken yet.
Crediting customers for any corrections in reported VAT for the fiscal years before 2008 is not required according to existing legislation, and the years in question in this case are 2004–2007. MSEK 25 attributable to 2004 was recognized as revenue in the fourth quarter but there is still a great deal of uncertainty regarding the remaining sum. Due to a number of uncertain factors nothing in the claim for 2005 has been recognized as revenue since it is difficult to assess at this time what impact this might have on Elanders' result in the future.
Group operations are reported as one reportable segment, since this is how the Group is governed. The units in each country or sometimes groups of countries are identified as operating segments. The operating segments have then been merged to create a single reportable segment, consisting of the entire Group, since the units have similar economic characteristics and resemble each other regarding the nature of their products and services, production processes, customer types etc. The President has been identified as the highest executive decision-maker.
Financial information concerning the Group's reportable segment is reported in consolidated income and financial position statements as well as other pertaining notes.
INVESTMENTS BY GEOGRAPHIC AREA
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Sweden | 689,544 | 628,292 |
| Germany | 466,228 | 432,832 |
| Great Britain | 163,827 | 188,665 |
| Poland | 82,474 | 92,275 |
| USA | 67,530 | 89,812 |
| China | 110,191 | 87,062 |
| Hungary | 69,291 | 48,111 |
| Other countries | 189,746 | 138,874 |
| total | 1,838,831 | 1,705,923 |
SEK '000s 2011 2010 Germany 3,558 38,841 Hungary 8,618 14,646 Sweden 14,839 6,437 China 474 2,235 USA 1,800 1,989 Poland 8,740 1,772 Great Britain 3,051 323 Other countries 1,911 9,244 TOTAL 42,991 75,487
| SEK '000s | 2011 | 2010 |
|---|---|---|
| China | 78,070 | 88,902 |
| Hungary | 77,450 | 85,192 |
| Germany | 60,770 | 82,287 |
| Sweden | 56,649 | 63,502 |
| Great Britain | 12,630 | 17,067 |
| USA | 24,886 | 30,319 |
| Other countries | 47,073 | 44,972 |
| TOTAL | 357,528 | 412,241 |
Fixed assets above include tangible and other intangible assets as well as shares in jointly controlled entities.
Goodwill of MSEK 833.6 (836.1) has not been divided geographically since it is divided into the various operating segments which do not always coincide with each country.
| 2011 | 2010 | |||
|---|---|---|---|---|
| Whereof | Whereof | |||
| Total | men | Total | men | |
| Sweden | 395 | 66 % | 445 | 66 % |
| China | 283 | 59 % | 256 | 55 % |
| Germany | 242 | 74 % | 208 | 75 % |
| Hungary | 195 | 54 % | 175 | 54 % |
| Great Britain | 169 | 77 % | 166 | 77 % |
| Poland | 136 | 61 % | 136 | 62 % |
| USA | 69 | 64 % | 61 | 66 % |
| Brazil | 24 | 59 % | 37 | 51 % |
| Italy | 21 | 25 % | 23 | 22 % |
| Norway | 12 | 92 % | 13 | 85 % |
| total | 1,546 | 63 % | 1,520 | 64 % |
The Group has no customer where sales exceed 10 percent of the Group's total net sales.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Exchange rate gains | 6,088 | 8,777 |
| Capital gains from the sales of fixed assets | 4,278 | 11,777 |
| Result from negative goodwill in connection to acquisition |
– | 3,932 |
| Income relating to VAT refund | 25,000 | – |
| Other | 18,647 | 25,206 |
| total | 54,013 | 49,692 |
Investments above are including acquisitions amounting to MSEK 10 (27).
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Exchange rate losses | –6,440 | –8,006 |
| Capital losses from the sales of fixed assets | –2,170 | –12,548 |
| Other | –3,449 | –20,034 |
| total | –12,059 | –40,588 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening book value | 1,383 | 8,667 |
| Shares in the result from jointly controlled entities |
– | –6,278 |
| Translation difference | – | –1,006 |
| Closing book value | 1,383 | 1,383 |
Group shares in jointly controlled entities consist of the following companies:
| Company | Registered office | Share holding |
|---|---|---|
| Hansaprint Elanders Kft | Komarom, Hungary | 50 % |
SEK '000s 2011 2010 Share of (50 %): – total assets 1,383 1,698 – total liabilities – 315 – net sales – 89 – result before tax – –6,278
The table above is a summary of the financial information for jointly controlled entities.
The company is under liquidation.
| 2011 | 2010 | ||||
|---|---|---|---|---|---|
| Whereof | Whereof | ||||
| Total | men | Total | men | ||
| Parent company | 8 | 75 % | 18 | 72 % | |
| Subsidiaries | 1,538 | 63 % | 1,502 | 64 % | |
| total | 1,546 | 63 % | 1,520 | 64 % |
| 2011 | 2010 | ||||||
|---|---|---|---|---|---|---|---|
| of which variable |
of which variable |
||||||
| SEK '000s | Board and CEO |
remunera tion |
Other em ployees |
Board and CEO |
remunera tion |
Other em ployees |
|
| Parent company | 8,172 | 1,910 | 6,552 | 6,140 | – | 12,066 | |
| Subsidiaries | 15,405 | 1,907 | 418,041 | 14,426 | 954 | 406,859 | |
| totalt | 23,577 | 3,817 | 424,593 | 20,566 | 954 | 418,925 | |
| 2011 | 2010 | |||||
|---|---|---|---|---|---|---|
| SEK '000s | Salaries and remunera tion |
Social security contribu tions |
of which pension contribu tions |
Salaries and remunera tion |
Social security contribu tions |
of which pension contribu tions |
| Parent company | 14,724 | 9,584 | 4,462 | 18,206 | 15,559 | 7,247 |
| Subsidiaries | 433,446 | 109,697 | 22,222 | 421,285 | 117,959 | 29,625 |
| total | 448,170 | 119,281 | 26,684 | 439,491 | 133,518 | 36,872 |
| 2011 | 2010 | |||
|---|---|---|---|---|
| Total | Whereof men |
Total | Whereof men |
|
| Board members | 8 | 75 % | 8 | 75 % |
| Group Management | 5 | 100 % | 5 | 100 % |
| Supervisors | 86 | 71 % | 86 | 74 % |
| SEK '000s | Basic wage/ Board remu neration |
Variable remune ration |
Other benefits |
Pension contri butions |
Remunera tion for committee work |
|---|---|---|---|---|---|
| Carl Bennet, Chairman | 500 | – | – | – | 50 |
| Tore Åberg, Vice Chairman | 250 | – | – | – | 125 |
| Göran Johnsson | 250 | – | – | – | 50 |
| Cecilia Lager | 250 | – | – | – | 25 |
| Hans-Olov Olsson | 250 | – | – | – | 25 |
| Kerstin Paulsson | 250 | – | – | – | 50 |
| Johan Stern | 250 | – | – | – | 50 |
| Total remuneration to the Board | 2,000 | – | – | – | 375 |
| Magnus Nilsson, Chief Executive Officer | 3,887 | 1,910 | 70 | 1,337 | – |
| Other senior officers (4 persons) | 9,690 | 2,577 | 1,365 | 1,362 | – |
| Total remuneration to CEO and senior officers |
13,577 | 4,487 | 1,435 | 2,699 | – |
| Total remuneration to the Board, CEO and senior officers |
15,577 | 4,487 | 1,435 | 2,699 | 375 |
In addition to remuneration reported above, in 2011 termination wages and benefits of 1,016 were paid to former senior officers. The entire cost was expensed in previous years.
| SEK '000s | Basic wage/ Board remu neration |
Variable remune ration |
Other benefits |
Pension contri butions |
Remunera tion for committee work |
|---|---|---|---|---|---|
| Carl Bennet, Chairman | 500 | – | – | – | 50 |
| Tore Åberg, Vice Chairman | 250 | – | – | – | 125 |
| Göran Johnsson | 250 | – | – | – | 50 |
| Cecilia Lager | 250 | – | – | – | 25 |
| Hans-Olov Olsson | 250 | – | – | – | 25 |
| Kerstin Paulsson | 250 | – | – | – | 50 |
| Johan Stern | 250 | – | – | – | 50 |
| Total remuneration to the Board | 2,000 | – | – | – | 375 |
| Magnus Nilsson, Chief Executive Officer | 3,765 | – | 69 | 1,314 | – |
| Other senior officers (4 persons) | 8,677 | 954 | 1,003 | 1,660 | – |
| Total remuneration to CEO and senior officers |
12,442 | 954 | 1,072 | 2,974 | – |
| Total remuneration to the Board, CEO and senior officers |
14,442 | 954 | 1,072 | 2,974 | 375 |
In addition to remuneration reported above, in 2010 termination wages and benefits of 3,248 respectively 1,687 were paid to the former CEO and other former senior officers. Of these 3,248 were expensed in previous years.
The Chairman of the Board and Board members receive compensation for their participation on the Board and committee work from the total remuneration sum for the Board determined by the Annual General Meeting. Board members and deputies employed in the Group did not receive any fees or benefits in addition to those pertaining to their employment. The Chairman of the Board has not received any compensation other than Board and committee remuneration. Remuneration to the Chief Executive Officer, the former Chief Executive Officer and other senior officers consists of a basic salary, variable remuneration, other benefits and pension. Senior officers are the persons who, together with the Chief Executive Officer, comprised Group Management in 2011.
The proportion between basic salary and variable remuneration corresponds to the officer's responsibility and authority. For the Chief Executive Officer variable remuneration may not exceed 50 percent of his annual salary. For the other senior officers variable remuneration may not exceed 40 percent of their annual salary. Variable remuneration is based on results in relation to individually targeted goals.
Pension benefits as well as other benefits to the Chief Executive Officer and senior officers are part of the total remuneration. Variable remuneration is carried as an expense for the financial year 2011 and paid out in 2012.
Bonus for the Chief Executive Officer is based on goals established by the Board. For other senior officers variable remuneration is based on goals established by the President together with the remuneration committee. No variable remuneration or any other kind of remuneration had a dilution effect.
Other benefits are mainly company cars.
The Group has both defined benefit and defined contribution pension plans. Pension cost is the cost that affects the result for the year. Two former employees and members of Group Management had defined benefit and defined contribution pension plans. The present value of the defined benefit obligation under those plans was 31 December 2011 MSEK 11.9 (12.1) on the balance sheet date. All pensions are fully vested, i.e. there is no dependency on future employment.
Chief Executive Officer: The current Chief Executive Officer only has a defined contribution pension corresponding to 35 percent of the salary pension. The pension premium, however, may never exceed the amount that is fully deductable for the company. The salary pension is based on is the basic wage. The retirement age is 65 years.
Other senior officers: For the other senior officers the retirement age is 65 years. Pension provisions are no more than 35 percent of the basic wage or, if applicable, no more than the ITP cost and the legal general pension, or the equivalent.
There is no compensation or benefits in the form of financial instruments.
No other remunerations have been distributed.
The period of notice for termination of the Chief Executive Officer by the company is 18 months. The period of notice from the Chief Executive Officer is 6 months. The period of notice for termination of other senior officers is normally 12 months. Usually no severance pay is paid no matter which party gives notice. Normal wages are paid during the period of notice.
The remuneration committee has during the year presented the Board with recommendations concerning principles for the remuneration of senior officers. The recommendations have included proportions between fixed and variable remuneration as well as the size of possible raises. In addition, the remuneration committee has proposed criteria for deciding on variable remuneration as well as pension terms and severance pay. The Board has discussed the remuneration committee's proposals and made its decisions guided by their recommendations.
The Board has determined the remuneration for the Chief Executive Officer for the financial year of 2011 based on the remuneration committee's proposals. The Chief Executive Officer has determined the remuneration for other senior officers after consultation with the chairman of the remuneration committee.
Members of the remuneration committee during the year were Carl Bennet, Chairman, Cecilia Lager, Hans-Olov Olsson and Tore Åberg. The remuneration committee meets when necessary but at least once a year to prepare proposals for the remuneration of the Chief Executive Officer. In addition, the remuneration committee draws up principles for salary levels and employment terms for Group Management. The remuneration committee proposes remuneration, terms and principles to the Board that then decides on these matters. The remuneration committee has met once in 2011. The committee has been supported by external expertise in matters concerning compensation levels and structures.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| PwC | ||
| Audit assignment | 1,946 | 2,016 |
| Audit-related services | 200 | 315 |
| Tax advisory services | 2,136 | 54 |
| Other services | 777 | 419 |
| Other | ||
| Audit assignment | 91 | 81 |
| Audit-related services | 82 | 197 |
| Tax advisory services | 45 | 86 |
| Other services | – | – |
| total | 5,277 | 3,168 |
Audit assignment is defined as the statutory audit, i.e. the work necessary to produce the auditors' report as well as so called audit consultation given in connection with the audit.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Depreciation and write-downs | 86,388 | 101,956 |
| Cost for remuneration to employees | 554,007 | 579,288 |
| Changes in work-in-progress and finished products |
1,732 | –9,763 |
| Cost of paper | 364,108 | 314,995 |
| Other material | 168,951 | 148,997 |
| Cost of sub-contracted work | 233,102 | 260,924 |
| Other production costs | 184,956 | 186,805 |
| Freight costs | 60,567 | 50,123 |
| Cost for advertising and marketing | 33,401 | 34,279 |
| Other costs | 83,777 | 117,327 |
| total | 1,770,989 | 1,784,931 |
The table shows the total cost for sold products and services, sales costs and administrative costs allocated per type of cost.
| Annual cost | ||||||
|---|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | ||||
| Computer equipment | 2,092 | 4,401 | ||||
| Machinery and other equipment | 55,445 | 50,455 | ||||
| Rental contracts, premises | 44,411 | 56,864 | ||||
| total | 101,948 | 111,720 |
| Future lease payments and rental costs | ||||||
|---|---|---|---|---|---|---|
| SEK '000s | 2012 | 2013–2016 | 2017– | |||
| Computer equipment | 2,123 | 2,060 | – | |||
| Machinery and other equipment |
42,880 | 61,985 | 6,698 | |||
| Rental agreements, premises | 42,087 | 114,773 | 46,938 | |||
| total | 87,090 | 178,818 | 53,636 |
Lease agreements for machines and equipment normally run for 3–8 years.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Interest income | 1,448 | 922 |
| Exchange rate gains | 3,491 | 9,710 |
| total | 4,939 | 10,632 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Interest expenses | –25,176 | –27,777 |
| Exchange rate losses | –5,998 | –10,114 |
| Other | –3,598 | –1,712 |
| total | –34,772 | –39,603 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Current tax on the result for the year | –12,103 | –5,828 |
| Withholding tax on dividends | – | –1,644 |
| Correction of previous years' current tax expense |
1,861 | 181 |
| Deferred tax | –9,350 | 28,695 |
| Recorded tax | –19,592 | 21,404 |
Allocation of deferred tax assets and liabilities in
| 145,420 | 149,014 |
|---|---|
| –35,343 | –30,420 |
| 110,077 | 118,594 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Result before taxes | 79,963 | –105,153 |
| Tax according to Swedish tax rate of 26.3 % | –21,030 | 27,655 |
| Tax effect of: | ||
| Differences in tax rates for foreign | ||
| subsidiaries | 4,289 | –4,206 |
| Non-deductible costs | –1,916 | –956 |
| Change in unrecorded deferred tax assets | 887 | – |
| Change in legal tax rate | 128 | 2,622 |
| Tax losses carried forward not valued | –3,643 | –2,244 |
| Correction of previous years' tax expense | 1,861 | 181 |
| Other | –168 | –1,648 |
| Recorded tax | –19,592 | 21,404 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening value, net | 118,594 | 90,534 |
| Recorded deferred tax on the result for the year | –9,350 | 28,695 |
| Tax items charged directly against equity | 1,055 | –2,289 |
| Translation differences | –222 | 1,654 |
| Closing value, net | 110,077 | 118,594 |
Tax items charged directly against equity refer to the Group's hedge reserve and hedging of net investments abroad.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Due within a year | 594 | 592 |
| Due within 2–5 years | – | 1,741 |
| Due within 6–10 years | – | – |
| Due within 10 years | 2,060 | 2,531 |
| No due date | 142,450 | 138,241 |
| Closing value, net | 145,104 | 143,105 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Tax loss carryforwards | 145,104 | 143,105 |
| Restructuring reserves | 4,765 | 10,338 |
| Fixed assets | –35,102 | –34,889 |
| Other items | 8,601 | 8,595 |
| 123,368 | 127,149 | |
| Less: | ||
| Unrecorded deferred tax assets | –13,291 | –8,555 |
| Deferred tax assets/liabilities, net | 110,077 | 118,594 |
Unrecorded deferred tax assets refer to not valued tax loss carryforwards and primarily stem from operations in Brazil and Italy. For information concerning the valuation of the tax loss carryforwards please see note 1, section Important estimations and assessments on page 86.
| 2011 | 2010 | |
|---|---|---|
| Result for the year attributable to shareholders, SEK '000s |
60,260 | –83,749 |
| Average number of outstanding shares, in thousands |
19,530 | 12,342 |
| earnings per share, SEk1) | 3.09 | –6.79 |
Earnings per share is calculated by dividing the result attributable to the parent company's shareholders with the average number of outstanding shares during the year.
1) Earnings per share before and after dilution.
Cash and cash equivalents consist primarily of cash and bank transactions. Short-term placements are classified as cash and cash equivalents when: – the risk of changes in their fair value is insignificant
– they are easily converted
– they mature in less than three months from the date they were acquired.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Depreciation, amortization and write-downs of intangible and tangible assets |
86,388 | 101,958 |
| Shares in the result from jointly controlled entities |
– | 6,278 |
| Changes in provisions that affect cash flow | –30,074 | 21,506 |
| Unrealized exchange rate gains and losses | 5,198 | –12,353 |
| Result from the disposal of tangible | ||
| assets | –2,771 | 1,674 |
| total | 58,741 | 119,063 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Paid interest | –25,482 | –27,234 |
| Interest received | 1,448 | 922 |
| total | –24,034 | –26,312 |
The item Other changes in long and short term borrowing refers mainly to changes stemming from the use of bank overdrafts.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Cash flow from operating activities | 84,252 | –57,782 |
| Financial items | 29,833 | 28,971 |
| Paid taxes | 6,824 | 7,606 |
| Acquisitions and sales of operations | –10,145 | –26,754 |
| Other items included in cash flow from investing activities |
–17,461 | –42,465 |
| Operating cash flow | 93,303 | –90,424 |
Operating cash flow is defined as cash flow from operating activities, excluding financial items and paid taxes, and cash flow from investing activities.
| Goodwill | Other intangible assets | Total | ||||
|---|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 |
| Opening acquisition value | 836,771 | 895,591 | 71,480 | 96,994 | 908,251 | 992,585 |
| Acquisitions, incl. acquisition of operations | – | – | 11,397 | 10,194 | 11,397 | 10,194 |
| Disposals | – | – | –2,105 | –30,181 | –2,105 | –30,181 |
| Reclassification | – | – | 1,825 | 124 | 1,825 | 124 |
| Translation difference | –2,441 | –58,820 | –511 | –5,651 | –2,952 | –64,471 |
| Closing acquisition value | 834,330 | 836,771 | 82,086 | 71,480 | 916,416 | 908,251 |
| Opening accumulated amortization | – | – | –26,605 | –33,162 | –26,605 | –33,162 |
| Disposals | – | – | 2,105 | 29,472 | 2,105 | 29,472 |
| Amortization for the year | – | – | –14,626 | –25,973 | –14,626 | –25,973 |
| Reclassification | – | – | –1,825 | – | –1,825 | – |
| Translation difference | – | – | 471 | 3,058 | 471 | 3,058 |
| Closing accumulated amortization | – | – | –40,480 | –26,605 | –40,480 | –26,605 |
| Opening accumulated write-downs | –690 | –690 | –5,738 | –5,738 | –6,428 | –6,428 |
| Closing accumulated write-downs | –690 | –690 | –5,738 | –5,738 | –6,428 | –6,428 |
| Net residual value | 833,640 | 836,081 | 35,868 | 39,137 | 869,508 | 875,218 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Cost of products and services sold | –6,558 | –17,586 |
| Selling expenses | –143 | –239 |
| Administrative expenses | –7,925 | –8,148 |
| total | –14,626 | –25,973 |
Goodwill is subjected to impairment tests annually and when there are indications that a write-down may be necessary. Normally tests are made on the cash generating unit connected to the goodwill.
The recoverable amount for cash generating units is based on a calculation of useful value. Impairment tests are performed on the lowest identified cash generating level, which for Elanders corresponds to operating segments and which also corresponds to operations in individual countries, or groups of countries.
Useful value of goodwill attributable to Elanders' cash generating units is based on discounted endless cash flows. Cash flows for the first three years are based on budgets and strategic plans. In the following period cash flows are assumed to have a growth rate corresponding to inflation of 2 (2) percent, which is below the company's expectations. The discount rate 9.1 (9.6) percent before tax has been used in all calculations, which was calculated based on the weighted average capital cost (WACC). Based on the assumptions given above the useful value exceeds the recorded value for all cash generating units.
Goodwill with infinite useful life divided by cash generating unit
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Germany/Hungary | 423,026 | 425,351 |
| Sweden/Poland | 205,811 | 205,811 |
| China | 120,000 | 120,000 |
| Great Britain | 38,513 | 38,112 |
| USA | 35,128 | 34,863 |
| Brazil | 11,162 | 11,944 |
| Total | 833,640 | 836,081 |
A number of sensitivity analyses have been made to evaluate whether or not feasible unfavorable changes could lead to write-downs. A reduction in the average rate of growth in income or an increase in the discount rate with one percent unit would indicate the need for write-downs of MSEK 7 respectively MSEK 9 for operations in the USA. A combination of a lower rate of growth and an increase in the discount rate with one percent unit would indicate the need for write-downs of a total of MSEK 52 divided among operations in the USA, China and Germany.
| Buildings and land1) | Plant and machinery | Equipment, tools, fixtures and fittings |
Fixed assets under construction2) |
Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 |
| Opening acquisition value | 68,177 | 75,879 | 693,944 | 782,676 | 107,356 | 99,364 | 10,382 | 7,005 | 879,859 | 964,924 |
| Acquisitions, incl. acquisition of operations | 159 | 859 | 17,237 | 26,661 | 4,831 | 11,388 | 9,367 | 25,710 | 31,594 | 64,618 |
| Disposals | –7,064 | –553 | –75,101 | –75,754 | –10,337 | –1,404 | –40 | – | –92,542 | –77,711 |
| Reclassification | 573 | 199 | 6,547 | 14,632 | 2,682 | 6,310 | –15,173 | –21,266 | –5,371 | –125 |
| Translation difference | –1,760 | –8,207 | 235 | –54,271 | 105 | –8,302 | –1,002 | –1,067 | –2,422 | –71,847 |
| Closing acquisition value | 60,085 | 68,177 | 642,862 | 693,944 | 104,637 | 107,356 | 3,534 | 10,382 | 811,118 | 879,859 |
| Opening accumulated depreciation and write-downs |
–16,109 | –15,697 | –409,757 –440,590 | –82,272 | –73,542 | – | – | –508,138 | –529,829 | |
| Depreciation for the year | –2,408 | –2,488 | –59,744 | –62,393 | –9,610 | –11,104 | – | – | –71,762 | –75,985 |
| Disposals | 7,064 | 67 | 64,814 | 56,299 | 9,910 | 1,108 | – | – | 81,788 | 57,474 |
| Reclassification | – | – | 5,734 | 4, 894 | –363 | –4,893 | – | – | 5,371 | 1 |
| Translation difference | 490 | 2,009 | 1,661 | 32,033 | –251 | 6,159 | – | – | 1,900 | 40,201 |
| Closing accumulated depreciation and write-downs |
–10,963 | –16,109 | –397,292 | –409,757 | –82,586 | –82,272 | – | – | –490,841 | –508,138 |
| Net residual value | 49,122 | 52,068 | 245,570 | 284,187 | 22,051 | 25,084 | 3,534 | 10,382 | 320,277 | 371,721 |
1) Buildings and land include land with a book value of 487 (489).
2) Fixed assets under construction include advances related to tangible assets of 0 (9,129).
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Cost of products and services sold | –66,486 | –70,052 |
| Selling expenses | –678 | –745 |
| Administrative expenses | –4,598 | –5,188 |
| total | –71,762 | –75,985 |
The net residual value of tangible assets possessed through finance leases is 24,176 (30,113). All leasing objects are reported as plant and machinery.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Within 1 year | 4,327 | 8,126 |
| Between 1 and 5 years | 10,872 | 14,085 |
| More than 5 years | 2,150 | 3,646 |
| Total | 17,349 | 25,857 |
| Future interest expenses for finance leases | –1,667 | –2,626 |
| Current finance lease liability | 15,682 | 23,231 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Raw materials and consumables | 37,101 | 38,926 |
| Work in process | 33,291 | 41,168 |
| Finished goods | 55,100 | 38,582 |
| Advance payments to suppliers | 116 | – |
| total | 125,608 | 118,676 |
Costs relating to obsolescence expensed during the year amounted to 7,283 (2,783) and at year-end the obsolescence reserve was 7,054 (3,922).
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Machine rent paid in advance | 4,799 | 5,184 |
| Premise rent paid in advance | 8,436 | 8,233 |
| Other prepaid expenses and accrued | ||
| income | 19,436 | 18,426 |
| total | 32,671 | 31,843 |
| SEK '000s | 2011 | 2010 | |
|---|---|---|---|
| Cash and bank | 81,195 | 50,144 | |
| Cash and cash equivalents | 81,195 | 50,144 |
Translation differences in cash and cash equivalents were 1,988 (–3,767).
The major financial goal of Elanders is to create value for the owners of the company. The purpose of the goals regarding group capital structure are to ensure the company's ability to continue operations and generate returns to its shareholders as well as be useful to other interested parties. Achieving a good balance between equity and loan financing ensures the flexibility the Group needs in order to be able to invest in operations while maintaining control over the cost of capital. Dividends to shareholders, redemption of shares, issuing new shares or divesting assets are examples of measures the Group can use to adjust its capital structure.
Elanders' goal is a debt/equity ratio under 1 times and on 31 December 2011 it amounted to 0.8 (0.9) times.
Elanders' goal is a return on employed capital of at least 12 percent long-term. In 2011 it amounted to 7.1 (–4.8) percent.
Elanders' goal is an equity ratio of at least 30 percent and on 31 December 2011 it amounted to 44 (41) percent.
The major purpose of group financial risk management is to identify, control and minimize the Group's financial risks. Risk management is centralized to Group Finance. All current or future financial risks in the Group's subsidiaries are managed by Group Finance that acts as an internal bank. The exception is commercial credit risks, which are handled by each subsidiary. The financial policy adopted by the Board steers which currency risks are hedged as well as how interest, financing and liquidity risks are handled. The greatest financial risks the Group is exposed to are currency risk, interest risk, financing risk and credit risk.
Elanders runs into an currency risk primarily through transactions in another currency than that of the companies local currency (transaction exposure) and when converting net profit and net assets from foreign subsidiaries (translation exposure).
Actual receivables and payables along with contracted purchase and sales orders with payment flows within a twelve month period are hedged in their entirety. Orders with flows for longer periods are normally hedged at 80 percent since there is often room for volume deviations within the framework of the contract. Anticipated or budgeted flows are not hedged.
The Group uses forward exchange contracts to handle exchange risk exposure and hedge accounting for contracted future payment flows as well as translation of financial assets and liabilities. The hedge reserve for forward exchange contracts per 31 December 2011 amounted to MSEK –1.0 (–0.3) and will be returned to the income statements in 2012.
Translation differences on operating receivables and payables as well as forward exchange contracts that are held for hedging purposes are reported as other operating income or expenses. Translation differences on financial liabilities and assets and the associated hedging instruments are reported under financial items.
Financial assets and liabilities are hedged at 100 percent while exposure due to the translation of net results in foreign subsidiaries is not hedged. Elanders' net results from foreign subsidiaries in foreign currency consist
primarily of EUR, CNY, USD, GBP and PLN. A change in the currency rates up or down by 5 percent in these currencies would affect profit by MSEK 2.8 (2.2).
In regards to net assets in foreign subsidiaries the exposure is primarily in EUR. The German operations have been partly hedged through a loan in EUR. If the exchange rate in EUR changed by 5 percent it would affect equity by MSEK 11.7 (10.9), including hedging effects.
The table below shows a compilation over the Group's outstanding forward exchange contracts per 31 December 2011. All the contracts are due within a year. Positive figures refer to hedging purchases of the first named currency and negative figures refer hedging sales.
| Nominal amount SEK '000s |
Average hedging rate |
|
|---|---|---|
| GBP/SEK | 63,872 | 10.77 |
| PLN/SEK | 52,271 | 2.07 |
| EUR/SEK | –38,574 | 9.27 |
| EUR/PLN | –17,665 | 4.43 |
| USD/SEK | –14,186 | 7.00 |
| EUR/GBP | –732 | 0.87 |
Interest risk is defined as the risk of lower profits caused by a change in interest rates. The Group strives to achieve a balance between cost efficient borrowing and the risk exposure of a negative influence on profits and cash flow if a sudden, substantial interest rate change should occur. In 2011 an interest rate swap was contracted to hedge the interest level of MSEK 300 of the Group's liabilities. The due date of the hedge is 30 September 2014 at a level of 3.7 percent. A change in market interest rates by one percentage point affects Group profit after financial items by MSEK 3.8 (7.3), calculated on the outgoing net debt minus liabilities with a fixed interest rate. The hedging reserve per 31 December 2011 amounted to MSEK –2.3 (0) and will be returned to the income statements in 2012. The table below presents the allocation of interest-bearing and noninterest-bearing financial assets and liabilities. Reserves for pensions have been included in interest-bearing liabilities. In the table regarding dividing financial instruments into categories farther down in this note they are included in financial liabilities.
| Interest-bearing | |||
|---|---|---|---|
| SEK '000s | Fixed interest |
Floating interest |
Non-interest bearing |
| Long-term receivables | – | – | 12,013 |
| Current receivables | – | – | 402,740 |
| Cash and bank | – | 81,195 | – |
| Long-term liabilities | – | –36,375 | –103 |
| Current liabilities | –300,000 | –420,469 | –174,831 |
| total | –300,000 | –375,649 | 239,819 |
Financing risk is defined as the risk of not being able to meet payment obligations as a result of insufficient liquid funds or difficulties in finding financing. The Group aims to always have several sources of credit that are willing to offer financing on market terms. The Group holds a very
close dialogue with its main banks in order to mutually ensure our longterm relationship and thereby reduce financing risks. Currently the Group has credit agreements with two Swedish banks that cover operational financing. The agreements run until September 2012 and negotiations for new agreements are expected to begin in the spring of 2012. The Group's policy specifies a liquidity buffer of MSEK 100. On 31 December 2011 the liquidity buffer amounted to MSEK 266 (170). See page 99 concerning due date structure regarding finacial liabilities.
Credit risk is defined as the risk of a counterparty not meeting their obligations. Credit risk can be divided into financial credit risk and commercial credit risk.
The most crucial financial credit risk for the Group arises when trading exchange derivative instruments and investing surplus liquidity. The financial policy stipulates that financial credit risks must be limited through the sole usage of well-known financial institutions. On 31 December 2011 total exposure regarding financial credit risks was MSEK 108.5 (75.9). The exposure is based on the recorded value of all financial assets except shareholdings and accounts receivable.
The commercial credit risk consists of the payment ability of customers and is handled by the subsidiaries through careful monitoring of payment ability, follow up of customers' financial reports and good communication. The Group's total credit risk is spread out over many different companies. However, in actuality a few customers represent a large part of the Group's accounts receivable. These customers are for the most part large, listed companies that have been thoroughly investigated. The total commercial credit exposure is equivalent to the book value of accounts receivable and amounted to MSEK 385.3 (365.1) per 31 December 2011.
The Group has also taken out a credit insurance that covers bad debt losses up to MSEK 50 with an excess of MSEK 2.5. Approximately 40 (50) percent of annual net sales are covered by insurance, however with the limits given above, and this covers almost 200 of our biggest customers with a few exceptions. In 2011 credit losses amounted to MSEK 5.7 (3.5), of which MSEK 0.8 (1.8) were previously reserved.
Financial instruments used to hedge currency and interest risks in contracted cash flows as well as net investments abroad have been recorded, in accordance with IAS 39, at market value in the balance sheet.
The hedge reserve consists of forward exchange contracts and interest rate swaps that fix the interest levels of interest-bearing liabilities.
In addition to the financial risks above Elanders is exposed to risks tied to daily operations. Handling operational risks is part of the day-to-day work in our subsidiaries and in Group Management. In terms of responsibility all group operations are represented in Group Management which meets and communicates on a regular basis.
The table below presents how group results after net financial items would have been affected by a change of one percentage point in the variables connected to Elanders various operational risks. Each variable has been treated individually under the condition that the others remain constant. It is assumed that a change in net sales will affect the value added on the margin which thereafter will presumably fall straight through the income statement. A change in the cost of paper is multiplied with total
paper costs. A change in personnel costs is multiplied with total personnel costs. Regarding sick leave costs, it is assumed that all employees contribute the same value added and that the change in sick leave affects those not present who are not substituted. The analysis does not pretend to be exact. It is merely indicative and aims to show the most relevant, measurable factors in this connection. The figures are presented in MSEK.
| 10.1 |
|---|
| 3.6 |
| 5.8 |
| 10.1 |
Derivative
• Cost of sub-contracted work 2.9
The categorization of financial instruments in the balance sheets for 2011 and 2010 is presented in the tables below.
| 2011 assets SEK '000s |
Derivative instruments in designa ted hedge accounting relation ships |
Loans and receivables |
Available for-sale financial assets |
Non financial assets |
Total |
|---|---|---|---|---|---|
| Intangible assets | – | – | – | 869,508 | 869,508 |
| Tangible assets | – | – | – | 320,277 | 320,277 |
| financial assets | – | 8,793 | 3,220 | 147,0711) | 159,084 |
| Current assets | |||||
| Inventory | – | – | – | 125,608 | 125,608 |
| Accounts receivable | – | 385,252 | – | – | 385,252 |
| Current tax receivables | – | – | – | 6,034 | 6,034 |
| Other receivables | 1,781 | 15,707 | – | 7,442 | 24,930 |
| Prepaid expenses and deferred income | – | – | – | 32,671 | 32,671 |
| Cash and cash equivalents | – | 81,195 | – | – | 81,195 |
| Total current assets | 1,781 | 482,154 | – | 171,755 | 655,690 |
| Total assets | 1,781 | 490,947 | 3,220 | 1,508,611 | 2,004,559 |
1) Mainly refers to deferred tax assets.
| SEK '000s | instruments in designa ted hedge accounting relation ships |
Other financial liabilities |
Non financial liabilities |
Total |
|---|---|---|---|---|
| Long-term liabilities and provisions | – | 25,184 | 51,343 | 76,527 |
| Current liabilities and provisions | ||||
| Interest-bearing liabilities | – | 720,469 | – | 720,469 |
| Accounts payable | – | 152,440 | – | 152,440 |
| Current tax liabilities | – | – | 5,674 | 5,674 |
| Other liabilities | 5,560 | 16,831 | 21,506 | 43,897 |
| Accrued expenses and prepaid income | – | – | 107,803 | 107,803 |
| Provisions | – | – | 18,126 | 18,126 |
| Total current liabilities and provisions | 5,560 | 889,740 | 153,109 | 1,048,409 |
| Total liabilities and provisions | 5,560 | 914,924 | 204,452 | 1,124,936 |
| 2010 assets SEK '000s |
Derivative instruments in designa ted hedge accounting relation ships |
Loans and receivables |
Available for-sale financial assets |
Non financial assets |
Total |
|---|---|---|---|---|---|
| Intangible assets | – | – | – | 875,218 | 875,218 |
| Tangible assets | – | – | – | 371,721 | 371,721 |
| financial assets | – | 10,652 | 3,220 | 150,6671) | 164,539 |
| Current assets | |||||
| Inventory | – | – | – | 118,676 | 118,676 |
| Accounts receivable | – | 365,063 | – | – | 365,063 |
| Current tax receivables | – | – | – | 7,930 | 7,930 |
| Other receivables | 1,291 | 12,783 | – | 13,114 | 27,188 |
| Prepaid expenses and deferred income | – | – | – | 31,843 | 31,843 |
| Cash and cash equivalents | – | 50,144 | – | – | 50,144 |
| Total current assets | 1,291 | 427,990 | – | 171,563 | 600,844 |
| Total assets | 1,291 | 438,642 | 3,220 | 1,569,169 | 2,012,322 |
1) Mainly refers to deferred tax assets.
| 2010 liabilities | Derivative instruments in designa ted hedge accounting |
Other | Non | |
|---|---|---|---|---|
| SEK '000s | relation ships |
financial liabilities |
financial liabilities |
Total |
| Long-term liabilities and provisions | – | 423,655 | 47,275 | 470,930 |
| Current liabilities and provisions | ||||
| Interest-bearing liabilities | – | 347,534 | – | 347,534 |
| Accounts payable | – | 163,249 | – | 163,249 |
| Current tax liabilities | – | – | 2,239 | 2,239 |
| Other liabilities | 1,044 | 26,479 | 27,313 | 54,836 |
| Accrued expenses and prepaid income | – | – | 106,536 | 106,536 |
| Provisions | – | – | 47,671 | 47,671 |
| Total current liabilities and provisions | 1,044 | 537,262 | 183,759 | 722,065 |
| Total liabilities and provisions | 1,044 | 960,917 | 231,034 | 1,192,995 |
Due date structure regarding financial liabilities including interest expenses, excluding utilized bank overdrafts, is presented in the table below. The credit agreement with the Group's main banks expires 30 September 2012. Negotiations regarding new credit agreement will start during spring 2012.
| SEK '000s | Jan.–Mar., 2012 |
Apr.–Dec., 2012 |
2013–2014 | 2015–2016 | 2017– |
|---|---|---|---|---|---|
| Borrowing debts | 7,969 | 475,044 | 8,989 | 2,996 | – |
| Finance lease liabilities | 3,692 | 3,298 | 6,280 | 4,669 | 2,147 |
| Accounts payable | 152,440 | – | – | – | – |
| Other financial liabilities | 12,730 | 416 | – | – | – |
| Interest | 4,070 | 8,611 | 1,476 | 931 | 36 |
| total | 180,901 | 487,369 | 16,745 | 8,596 | 2,183 |
Financial instruments are valued the first time at fair value plus transaction costs, which applies to all financial assets and liabilities not recognized at fair value through profit or loss. Financial assets and liabilities recognized at fair value through profit or loss are valued the first time at fair value, while attributable transaction costs are valued through profit or loss.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| 1–30 days overdue | 43,588 | 27,529 |
| 31–60 days overdue | 11,111 | 9,989 |
| 61–90 days overdue | 3,276 | 5,066 |
| 91–120 days overdue | 1,355 | 1,913 |
| More than 120 days overdue | 981 | 3,694 |
| Total | 60,311 | 48,191 |
Only accounts receivable are included in the table above. No other overdue receivables existed per 31 December 2011 or in 2010.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening provision for doubtful receivables | –3,640 | –6,704 |
| Reversal of provision from previous year | 952 | 2,574 |
| Confirmed losses | 820 | 1,841 |
| Provided for during the year | –4,926 | –1,679 |
| Translation difference | 393 | 328 |
| closing provision for doubtful receivables |
–6,401 | –3,640 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Interest income from financial assets | 1,448 | 922 |
| Interest expenses due to financial liabilities | –24,373 | –26,917 |
| total | –22,925 | –25,995 |
The reason the result is not the same as the interest result recorded under financial items is mainly due to the fact that financial items stemming from pensions have been excluded.
The table below contains the following items that have been recorded in the income statement:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Loans and receivables | –6,923 | –1,690 |
| Other financial liabilities | 2,490 | 2,630 |
| total | –4,433 | 940 |
All hedging relations regarding cash flow and net investment hedging have been effective within a span of 80 percent to 125 percent. See the presentation of Other comprehensive income for further information.
| Number of registered shares in the parent company |
2011 | 2010 | Number of votes |
Number of shares |
Share capital, SEK |
|
|---|---|---|---|---|---|---|
| Issued per 1 January | 19,529,998 | 9,764,999 | A shares | 10 | 1,166,666 | 11,666,660 |
| New share issue | – | 9,764,999 | B shares | 1 | 18,363,332 | 183,633,320 |
| Issued per 31 December | 19,529,998 | 19,529,998 | 19,529,998 | 195,299,980 |
All shares are completely paid for. No shares are reserved for transfer according to option agreements or other contracts.
The Group had a total of MSEK 886 (884) per 31 December 2011 in credit facilities, of which MSEK 185 (122) were unutilized. During February 2012 a reduction amounting to MSEK 30 has been made regarding the Group's unutilized bank overdrafts.
The financing cost is priced according to a fixed interest term and an agreed margin. The Group's average effective interest during the year was 3,5 (3,3) percent.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Finance lease liabilities | 13,074 | 20,285 |
| Borrowing debts | 12,110 | 403,370 |
| total | 25,184 | 423,655 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Bank overdraft facilities, utilized amount | 230,466 | 313,092 |
| Finance lease liabilities | 6,991 | 15,610 |
| Borrowing debts | 483,012 | 18,832 |
| total | 720,469 | 347,534 |
Utilized amounts and available credit in Group bank overdraft facilities are given below:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Bank overdraft facilities, utilized amount | 230,466 | 313,092 |
| Bank overdraft facilities, granted amount | 365,450 | 408,492 |
| Unutilized amount | 134,984 | 95,400 |
See note 25 for information on pledged assets.
| Funded plans | Unfunded plans | Total | |||||
|---|---|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |
| Present value of pension obligations | 11,895 | 12,130 | 11,670 | 12,819 | 23,565 | 24,949 | |
| The fair value of plan assets | –14,290 | –12,827 | – | – | –14,290 | –12,827 | |
| Unrecognized actuarial profit (+)/losses (–) | 2,524 | 865 | –608 | –1,728 | 1,916 | –863 | |
| Provisions for pensions recognized in the statements of financial position |
129 | 168 | 11,062 | 11,091 | 11,191 | 11,259 |
Defined benefit pension plans mainly cover retirement pensions and widow pensions where the employer has an obligation to pay a lifelong pension corresponding to a certain guaranteed percentage of wages or a certain annual sum. Retirement pensions are based on the number of years a person is employed. The employee must be registered in the plan for a certain number of years in order to receive full retirement pension. For each year at work the employee earns an increasing right to pension, which is recorded as pension earned during the period as well as an increase in pension obligations. These plans are financed through payments made regularly by the employer.
The actuarial measurement of pension obligations and costs for defined benefit plans are based on the following actuarial assumptions:
| Percent | 2011 | 2010 |
|---|---|---|
| Discount rate1) | 3.4 | 3.5 |
| Expected future annual raises in wages | 3.0 | 3.0 |
| Expected inflation | 1.5 | 2.0 |
| Expected personnel turnover | 5.0 | 5.0 |
| Expected return on plan assets | 3.4 | 3.5 |
1) The discount rate is based on anticipated returns from a mortage bond with a maturity 1) that mirrors the obligation. A zero coupon yield curve has been used for this specific 1) purpose.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening balance | 24,949 | 25,074 |
| Interest on the obligation | 803 | 860 |
| Current year service cost | 152 | 1,751 |
| Pensions paid out | –298 | –454 |
| Translation difference | –234 | –196 |
| Actuarial profit (–)/losses (+) | –1,807 | 568 |
| Early redemption | – | –2,654 |
| closing balance | 23,565 | 24,949 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening balance | 12,827 | 10,913 |
| Expected return on plan assets | 484 | 413 |
| Payments made by employer | 131 | 2,029 |
| Pensions paid out | – | – |
| Actuarial profit (–)/losses (+) | 848 | –528 |
| closing balance | 14,290 | 12,827 |
The actuarial profit and losses are not recorded in the income statement or balance sheet for 2011 since the Group applies the "corridor" rule. This rule stipulates that actuarial profits and losses are entered in the income statement or balance sheet for future periods if they exceed 10 percent of the current value of pension obligations or 10 percent of the plan asset's fair value.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Current year service cost | 151 | 1,751 |
| Interest on the obligation | 803 | 860 |
| Amortization of actuarial profit (–)/losses (+) | 124 | 577 |
| Expected return on plan assets | –484 | –413 |
| pension costs for defined benefits plans |
594 | 2,775 |
These plans mainly cover retirement, sick and family pensions. The premiums are paid regularly during the year by individual Group companies to different insurance companies. The size of the premiums is based on wages. Pension costs for the period are included in the income statement and amount to 26,224 (34,709).
The obligations for retirement and sick pensions for white-collar workers for several of the Swedish companies have been safeguarded through insurance in Alecta. According to an opinion from the Swedish Financial Reporting Board, UFR 3, this is a defined benefit multi-employer plan. The Group has not had access to the information necessary to report these plans as defined benefit pension plans for the financial year 2011 since at the moment Alecta cannot provide specific defined benefit pension for those insured. Pension plans that are safeguarded through insurance in Alecta are therefore reported as a defined contribution plan. Fees for 2011 for pension insurance from Alecta totaled 3,826 (4,031).
| Percent | 2011 | 2010 |
|---|---|---|
| Cost of products and services sold | 52 | 49 |
| Administrative expenses | 35 | 35 |
| Selling expenses | 13 | 16 |
| Provided for during the |
Utilized during the |
Reversal of unutilized |
Translation | |||
|---|---|---|---|---|---|---|
| SEK '000s | 2011 | year | year | amounts | difference | 2010 |
| Provisions for restructuring measures | ||||||
| regarding personnel | 5,304 | – | –20,370 | – | – | 25,674 |
| regarding premise costs | 5,706 | – | –3791 | – | – | 9,497 |
| regarding other | 3,004 | – | –4,161 | –5,000 | –52 | 12,217 |
| Other provisions | ||||||
| Other | 8,921 | 5,050 | –1,500 | –490 | –18 | 5,879 |
| Total | 22,935 | 5,050 | –29,822 | –5,490 | –70 | 53,267 |
| of which current | 18,126 | 47,671 |
Provisions for restructuring measures are primarily for cost adjustments and reorganizations. The closing provisions are expected to be used primarily in 2012.
Other provisions are expected to be used primarily in 2012.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Holiday pay liability | 28,313 | 27,454 |
| Social security contributions | 17,454 | 25,576 |
| Accrued salaries and remuneration | 9,581 | 6,110 |
| Other accrued expenses and deferred income | 52,455 | 47,396 |
| Total | 107,803 | 106,536 |
| Pledged assets | ||
|---|---|---|
| SEK '000s | 2011 | 2010 |
| Real estate mortgages | 40,886 | 53,748 |
| Floating charges | 201,753 | 211,990 |
| Other pledged assets | 593,981 | 555,666 |
| total | 836,620 | 821,404 |
| Given to: | ||
| – credit institutions | 836,620 | 821,404 |
| total | 836,620 | 821,404 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Other contingent liabilities | 1,805 | 6,973 |
| total | 1,805 | 6,973 |
Other pledged assets refer primarily to collateral in the form of shares in subsidiaries. The item also includes assets held under a retention of title clause, such as financial leasing. See note 15 for further information.
There were no material investment obligations per 31 December 2011 or 31 December 2010.
Internal group transactions and balances have been eliminated in group accounts and are therefore not included in the figures below concerning the Group.
During the year the following transactions with related parties have taken place:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Jointly controlled entities | – | 182 |
| total | – | 182 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Carl Bennet AB | 472 | 451 |
| Jointly controlled entities1) | – | 815 |
| total | 472 | 1,266 |
1) Purchases include acquisition of machines.
The transactions between subsidiaries have taken place with normal business terms and at market prices. During the year group internal sales of products and services amounted to MSEK 194 (135). The transactions with Carl Bennet AB primarily concern costs stemming from Carl Bennet's role as Chairman of the Board in Elanders AB.
The following balances existed at the end of the year:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Jointly controlled entities | – | 10 |
| total | – | 10 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Carl Bennet AB | 187 | 2,647 |
| Jointly controlled entities | – | 453 |
| total | 187 | 3,100 |
No Board member or senior officer has or has had direct or indirect participation in any business transactions, between themselves or the Group that are or were of an unusual nature concerning the terms.
Remuneration to Board members and management is reported in note 5 to Group financial reports.
Peter Sommer, who is a member of Group Management and Chief Executive Officer in the German subsidiary, has an interest in a customer to the German operations, Deutsche Online Medien GmbH. He owns the equivalent of 40 percent of the shares in the company. Sales to this company during the year amounted to MSEK 59 (57). Prices were set according to market terms.
Related parties to Peter Sommer own the property where Elanders GmbH runs most of its operations. During the year Elanders GmbH has paid MSEK 7.8 (8.2) in rent for this property, which is on par with the market.
Elanders acquired the assets and liabilities in Fälth & Hässler AB in Värnamo, Sweden in January 2011. The company was specialized in high quality printing and its customers were mainly publishers. The business was consolidated in the middle of 2011. The entire purchase sum referred to the company's brand and customer relations.
Elanders acquired some of the assets and liabilities in NRS Tryckeri AB in September 2011 which meant that parts of their sales organization and project management were taken over by Elanders. These operations were consolidated as of 15 October 2011. The entire purchase sum referred to the company's brand and customer relations.
Acquisitions costs for the operations above amounted to MSEK 0.3. In total these companies have contributed to net sales in 2011 by some MSEK 50.
Elanders acquired the assets and liabilities in Printpack CW – GmbH in Stuttgart, Germany in August. The company was specialized in packaging production and had a number of international customers. The contractual purchase sum was MSEK 23.6 along with the takeover of a leasing liability of MSEK 8.6. Negative goodwill of MSEK 3.9 occurred in connection with the acquisition and is accounted for as other operating income in its entirety.
| 2011 | 2010 | |||||
|---|---|---|---|---|---|---|
| SEK '000s | Net book value in acquired operations |
Fair value adjustments |
Consoli dated net book value |
Net book value in acquired operations |
Fair value adjustments |
Consoli dated net book value |
| Intangible assets | – | 9,750 | 9,750 | – | 4,725 | 4,725 |
| Tangible assets | 395 | – | 395 | 21,356 | – | 21,356 |
| Inventory | – | – | – | 11,481 | – | 11,481 |
| Non- interest-bearing long-term liabilities | – | – | – | – | –1,506 | –1,506 |
| Interest-bearing long-term liabilities | – | – | – | –8,599 | – | –8,599 |
| Identifiable net assets | 395 | 9,750 | 10,145 | 24,238 | 3,219 | 27,457 |
| Negative goodwill | – | –3,931 | ||||
| Total purchase sum | 10,145 | 23,526 | ||||
| Less: | ||||||
| Unpaid purchases sums | – | – | ||||
| Cash and cash equivalents in acquisitions | – | – | ||||
| Negative effect on Group cash and cash equivalents |
10,145 | 23,526 |
No significant events have taken place from the end of the fiscal year until the date of the signing of this Annual Report.
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| Net sales | – | – | |
| Cost of products and services sold | – | – | |
| gross profit | – | – | |
| Administrative expenses | 2, 7, 8 | –31,740 | –43,803 |
| Other operating income | 3 | 6,558 | 17,197 |
| Other operating expenses | 3 | –777 | –2,747 |
| operating result | 4, 16 | –25,959 | –29,353 |
| Result from shares in group companies | 79,600 | –44,985 | |
| Result from shares in jointly controlled entities | 10 | – | –7,284 |
| Interest income | 7,708 | 8,895 | |
| Other financial income | 5,611 | 32,125 | |
| Interest expenses | –17,054 | –20,157 | |
| Other financial expenses | –7,890 | –24,886 | |
| Result after financial items | 5, 16 | 42,016 | –85,645 |
| Taxes | 6 | –34 281 | 25,334 |
| Result for the year | 7,735 | –60,311 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| result for the year | 7,735 | –60,311 |
| other comprehensive income | – | – |
| Total comprehensive income for the year | 7,735 | -60,311 |
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible assets | 7 | 6,239 | 7,394 |
| Tangible fixed assets | 8 | 455 | 529 |
| Shares in subsidiaries | 9 | 1,017,536 | 1,014,528 |
| Shares in jointly controlled entities | 10 | 1,383 | 1,383 |
| Receivables from group companies | 84,975 | 99,357 | |
| Deferred tax assets | 6 | 100,056 | 135,477 |
| Other receivables | 11,902 | 13,761 | |
| Total fixed assets | 1,222,546 | 1,272,429 | |
| Current assets | |||
| Accounts receivable | 2 | 1 | |
| Receivables from group companies | 95,508 | 65,671 | |
| Current tax receivables | 6 | 553 | 225 |
| Other receivables | 5,048 | 3,720 | |
| Prepaid expenses and accrued income | 4,802 | 6,983 | |
| Cash and bank balances | 95 | 640 | |
| Total current assets | 106,008 | 77,240 | |
| Total assets | 1,328,554 | 1,349,669 |
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| EQUITY , PROVISIONS AND LIA BILITIES |
|||
| EQUITY | |||
| Restricted equity | |||
| Share capital | 195,300 | 195,300 | |
| Statutory reserve | 332,383 | 332,383 | |
| Total restricted equity | 527,683 | 527,683 | |
| Unrestricted equity | |||
| Retained earnings | 172,974 | 181,695 | |
| Result for the year | 7,735 | –8,721 | |
| Total unrestricted equity | 180,709 | 172,974 | |
| Total equity | 708,392 | 700,657 | |
| PROVISIONS | |||
| Provisions for pensions and similar obligations | 1,343 | 1,247 | |
| Other provisions | 11 | 2,516 | 7,516 |
| Total provisions | 3,859 | 8,763 | |
| LIA BILITIES |
|||
| Long-term liabilities | |||
| Liabilities to credit institutions | 12, 14 | – | 238,132 |
| Liabilities to group companies | 65,044 | – | |
| Other liabilities | 103 | 103 | |
| Total long-term liabilities | 65,147 | 238,235 | |
| Current liabilities | |||
| Liabilities to credit institutions | 12, 14 | 425,650 | 265,801 |
| Accounts payable | 3,417 | 1,921 | |
| Liabilities to group companies | 103,113 | 106,877 | |
| Other liabilities | 852 | 8,648 | |
| Accrued expenses and deferred income | 13 | 18,124 | 18,767 |
| Total current liabilities | 551,156 | 402,014 | |
| TOTAL EQUITY , PROVISIONS AND LIA BILITIES |
1,328,554 | 1,349,669 | |
| Pledged assets | 14 | 788,828 | 788,828 |
| Contingent liabilities | 14 | 267,179 | 264,401 |
| SEK '000s | Share capital | Statutory reserve | Retained earnings and result for the year |
Total |
|---|---|---|---|---|
| Opening balance on 1 Jan. 2010 | 97,650 | 332,383 | 122,855 | 552,888 |
| New share issue | 97,650 | – | 110,430 | 208,080 |
| Total comprehensive income for the year | – | – | –60,311 | –60,311 |
| closing balance on 31 dec. 2010 | 195,300 | 332,383 | 172,974 | 700,657 |
| Total comprehensive income for the year | – | – | 7,735 | 7,735 |
| closing balance on 31 dec. 2011 | 195,300 | 332,383 | 180,709 | 708,392 |
| SEK '000s | Note | 2011 | 2010 |
|---|---|---|---|
| Operating activities | |||
| Result after financial items | 42,016 | –15,645 | |
| Adjustments for items not included in cash flow | |||
| from operating activitites | 15 | –8,480 | –25,427 |
| Paid taxes | 1,139 | –1,644 | |
| Cash flow from operating activities before changes in working capital |
34,675 | –42,716 | |
| Cash flow from changes in working capital | |||
| Increase (–)/decrease (+) in operating receivables | 525 | –3,108 | |
| Increase (+)/decrease (–) in operating liabilities | –7,249 | –12,339 | |
| Cash flow from operating activities | 27,951 | –58,163 | |
| Investing activities | |||
| Acquisition of tangible assets and intangible assets | 7, 8 | –965 | –5,935 |
| Investment in subsidiaries | 9 | –470 | –669 |
| Paid group contributions | – | –70,000 | |
| Received dividends from subsidiaries | 15 | 4,600 | 25,015 |
| Received amortizations on long-term receivables | 2,429 | 1,417 | |
| Lending to and from subsidiaries | –8,626 | 13,079 | |
| Cash flow from investing activities | –3,032 | –37,093 | |
| Financing activities | |||
| Changes in long and short term borrowing | –19,910 | –112,237 | |
| Amortization of loans | –5,554 | – | |
| New share issue | – | 208,080 | |
| Cash flow from financing activities | –25,464 | 95,843 | |
| Cash flow for the year | –545 | 587 | |
| Cash and cash equivalents at the beginning of the year | 640 | 53 | |
| Cash and cash equivalents at year-end | 95 | 640 | |
| Change in net debt | |||
| Net debt at the beginning of the year | 452,627 | 565,613 | |
| Change in interest-bearing liabilities and cash and cash equivalents | –25,729 | –112,986 | |
| Net debt at year-end | 426,898 | 452,627 |
A presentation of Elanders' accounting principles can be found in note 1 to Elanders' consolidated financial statements. The parent company has prepared its annual accounts according to the Annual Accounts Act and the Swedish Financial Reporting Board Recommendation RFR 2 Accounting for legal entities and where applicable statements made by the Swedish Financial Reporting Board. RFR 2 requires the parent company to, in the annual accounts for the legal entity, use all the EU approved IFRSs and interpretations as far as possible within the framework of the Annual Accounts Act and the Security Law, taking into consideration the connection between accounting and taxation. The parent company generally follows the same previously described principles as the Group. Differences between Group and parent company accounting principles are presented below.
Tax laws allow provisions for special reserves and funds that are reported separately in the parent company. This allows companies within limits to allocate and retain recorded results in operations without them being immediately taxed. The untaxed reserves are not subject to taxation until they are dissolved. If companies lose money the untaxed reserves can be used to cover the losses without being taxed.
The parent company amortizes goodwill according to plan, which is not permitted for the Group. Goodwill is amortized on a straight-line basis over a twenty-year period since it relates to acquisitions of a strategic nature.
Shares in associated companies, jointly controlled entities and subsidiaries are reported in the parent company according to the acquisition method. Acquisition-related costs for subsidiaries, which are expensed in group accounting, are included as part of the acquisition value for participation in subsidiaries. Reported values are tested on every balance sheet date in order to determine if the need for write-downs is indicated.
The parent company's pension obligations have been calculated and reported based on the Swedish Security Law. Application of the Swedish Security Law is a prerequisite for fiscal deductions.
The parent company's financial guarantee contracts consist primarily of guarantees on behalf of subsidiaries. A financial guarantee contract is a contract in which the company has a commitment to reimburse the holder of a debt instrument for loss it incurs because a specified debtor fails to make payment when due according to the contract terms. The parent company applies RFR 2 p. 71 to account for financial guarantees, which is a relief compared to the rules in IAS 39 connected to reporting and taxation. The parent company recognizes financial guarantee contracts as a provision on the balance sheet when the company has a commitment for which payment is most likely required to settle the commitment.
Group and shareholder contributions are recognized according to the Swedish Financial Reporting Board Recommendation RFR 2. This means that received group contributions are recognized as income from shares in group companies according to the same principles used for normal dividends. Paid group contributions are also recognized as income from shares in group companies. Shareholder contributions are recognized in equity in recipient accounting and activated in shares and participations in contributor accounting, as long as write-downs are not required.
The Swedish Financial Reporting Board has withdrawn UFR 2 Group contributions and shareholder contributions. These are now reported according to RFR 2, which is described above. Comparable figures have been recalculated since this is a change in an accounting principle. The change in principle has not had any effect on the balance sheet as of 1 January 2010.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| PwC | ||
| Audit assignment | 450 | 450 |
| Audit-related services | 200 | 315 |
| Tax advisory services | 261 | 18 |
| Other services | 27 | 293 |
| total | 938 | 1,076 |
No fees were paid to other auditing firms.
Audit assignment is defined as the statutory audit, i.e. the work necessary to produce the auditors' report as well as so called audit consultation given in connection with the audit.
| Other operating income | Other operating expenses | ||||
|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | SEK '000s | 2011 | 2010 |
| Exchange rate gains | 451 | 2,495 | Exchange rate losses | –777 | –2,747 |
| Other | 6,107 | 14,702 | total | –777 | –2,747 |
| total | 6,558 | 17,197 |
Please see note 5 to the consolidated financial statements for personnel related information.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Received group contribution | 170,000 | – |
| Paid group contribution | – | –70,000 |
| Write-down of shares in subsidiaries | –95,000 | – |
| Dividends from subsidiaries | 4,600 | 25,015 |
| total | 79,600 | –44,985 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Write-down of shares | – | –7,284 |
| total | – | –7,284 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Interest income, external | 594 | 326 |
| Interest income, subsidiaries | 7,114 | 8,569 |
| total | 7,708 | 8,895 |
Other financial income consists entirely of exchange rate gains.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Interest expenses, external | –15,350 | –19,721 |
| Interest expenses, subsidiaries | –1,704 | –436 |
| total | –17,054 | –20,157 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Exchange rate losses | –5,594 | –23,907 |
| Other financial expenses | –2,296 | –979 |
| total | –7,890 | –24,886 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Withholding tax on dividends from subsidiaries | – | –1,644 |
| Correction of previous years' current tax expense |
1,141 | –85 |
| Deferred tax | –35,422 | 27,063 |
| total | –34,281 | 25,334 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Tax loss carryforwards | 93,531 | 129,209 |
| Other items | 6,525 | 6,268 |
| total | 100,056 | 135,477 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Result before taxes | 42,016 | –85,645 |
| Tax according to Swedish tax rate of 26.3 % | –11,050 | 22,525 |
| Tax effect of: | ||
| Withholding tax on dividends from subsidiaries |
– | –1,644 |
| Correction of previous year's tax expense | 1,141 | –85 |
| Non-taxable dividends from subsidiaries | 1,210 | 6,579 |
| Non-deductible write-downs of shares in subsidiaries and jointly controlled entities |
–24,985 | –1,916 |
| Contribution, representation and association costs |
–20 | –35 |
| Other | –577 | –90 |
| total | –34,281 | 25,334 |
| Goodwill Other intangible assets |
Total | |||||
|---|---|---|---|---|---|---|
| SEK '000s | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 |
| Opening acquisition value | 1,959 | 1 959 | 10,204 | 5,312 | 12,163 | 7,271 |
| Acquisitions | – | – | 925 | 5,892 | 925 | 5,892 |
| Disposals | – | – | – | –1,000 | – | –1,000 |
| Closing acquisition value | 1,959 | 1 959 | 11,129 | 10,204 | 13,088 | 12,163 |
| Opening accumulated amortization | –686 | –588 | –3,057 | –2,301 | –3,743 | –2,889 |
| Disposals | – | – | – | 1,000 | – | 1,000 |
| Amortization for the | –98 | –98 | –1,982 | –1,756 | –2,080 | –1,854 |
| Closing acc umulated amortization | –784 | –686 | –5,039 | –3,057 | –5,823 | –3,743 |
| Opening accumulated write-downs | – | – | –1,026 | –1 026 | – | – |
| Closing acc umulated write-downs | – | – | –1,026 | –1 026 | –1,026 | –1 026 |
| Net residual value | 1,175 | 1,273 | 5,064 | 6,121 | 6,239 | 7,394 |
Amortization has been charged entirely to administrative expenses.
Other intangible assets refer to software.
| Equipment, tools, fixtures and fittings |
||
|---|---|---|
| SEK '000s | 2011 | 2010 |
| Opening acquisition value | 1,854 | 1,811 |
| Acquisitions | 40 | 43 |
| Closing acquisition value | 1,894 | 1,854 |
| Opening accumulated depreciation | –1,325 | –1,216 |
| Depreciation for the year | –114 | –109 |
| Closing acc umulated depreciation | –1,439 | –1,325 |
| Net residual value | 455 | 529 |
Depreciation has been charged entirely to administrative expenses.
There has been no financial leasing.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening book value | 1,014,528 | 1,013,859 |
| Investment/subscription for new shares | 18,008 | 669 |
| Shareholders' contribution | 80,000 | – |
| Write-downs | –95,000 | – |
| Closing book value | 1,017,536 | 1,014,528 |
| Owned | |||||
|---|---|---|---|---|---|
| Number | share | Book value | |||
| SEK '000s | Identity no. | Registered office | of shares | in percent | of holding |
| Elanders Anymedia AB | 556559-5922 | Stockholm, Sweden | 6,000 | 100 | 13,614 |
| Elanders (Beijing) Printing Company Ltd | 77765103X | Beijing, China | – | 100 | 186,564 |
| Elanders (Beijing) Digital Development Ltd | 110000450078296 | Beijing, China | – | 100 | 2,824 |
| Elanders do Brasil Ltda | 08.789.936/0001-55 | São Paulo, Brazil | – | 100 | 12,228 |
| Elanders Reprodução de Imagens Ltda | 51.959.310/0001-79 | São Paulo, Brazil | – | 100 | 2,538 |
| Elanders GmbH | HRB722349 | Waiblingen, Germany | – | 100 | 108,576 |
| Elanders Printpack GmbH & Co. KG | HRB211285 | Ostfildern, Germany | – | 100 | – |
| Elanders Hungary Kft | 20-09-065426 | Zalalövő, Hungary | – | 100 | 146,112 |
| Elanders Infologistics AB | 556121-8891 | Gothenburg, Sweden | 314,330 | 100 | 286,765 |
| Elanders Sverige AB | 556262-1689 | Härryda, Sweden | – | 100 | – |
| Falköping Karlavagnen 6 AB | 556832-7844 | Härryda, Sweden | – | 100 | – |
| Elanders NRS AB | 556229-6938 | Härryda, Sweden | 1,000 | 100 | 100 |
| Elanders FoH AB | 556099-5663 | Härryda, Sweden | 30,000 | 100 | 50,342 |
| Elanders International AB | 556058-0622 | Kungsbacka, Sweden | 1,000 | 100 | 155 |
| Elanders Italy S.r.l. | 5686620963 | Ponzano Veneto, Italy | – | 100 | 2,702 |
| Elanders Ltd | GB 3788582 | Newcastle, Great Britain | – | 100 | 31,403 |
| Elanders Novum A/S | 980849910 | Oslo, Norway | – | 52 | 63 |
| Elanders Polska Sp. z o.o. | KRS 0000101815 | Płońsk, Poland | – | 100 | 89,869 |
| Elanders Taiwan Co. Ltd | 53729508 | Taipei, Taiwan | 200,000 | 100 | 470 |
| ElandersUSA Inc. | 58-1448183 | Atlanta, USA | – | 100 | 82,288 |
| Elanders UK Ltd | GB 2209256 | Harrogate, Great Britain | – | 100 | 923 |
| total | 1,017,536 |
No book value is stated for the companies not directly owned by the parent company.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Opening book value | 1,383 | 8,667 |
| Write-downs | – | –7,284 |
| Closing book value | 1,383 | 1,383 |
Holdings in jointly controlled entities consist of the following:
| Owned share |
||
|---|---|---|
| Company | Registered office | in percent |
| Hansaprint Elanders Kft | Komarom, Hungary | 50 |
The company is under liquidation.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Share (50 %) of: | ||
| – total assets | 1,383 | 1,698 |
| – total liabilities | – | 315 |
| – net sales | – | 89 |
| – result before taxes | – | –6,278 |
The table above shows financial information in summary for jointly controlled entities.
| 2011 | Provided for during the year |
Utilized during the year |
Reversal of unutilized amounts |
2010 |
|---|---|---|---|---|
| 1,500 | ||||
| 5,000 | ||||
| 1,016 | – | – | – | 1,016 |
| 2,516 | – | –5,000 | – | 7,516 |
| 1,500 – |
– – |
– –5,000 |
– – |
Provisions for environmental obligations are based on any future obligations that were not yet completed on the balance sheet date.
Other provisions primarily refer to costs for any future financial obligations.
All long-term liabilities are borrowing debts.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Bank overdraft facilities, utilized amount | 188,424 | 257,684 |
| Borrowing debts | 237,226 | 8,117 |
| total | 425,650 | 265,801 |
Liabilities to Elanders' main banks follows the terms in the credit agreement and maturity is in September 2012.
Elanders AB has loans in EUR and SEK. The interest rate on the loans per 31 December 2011 was in the interval 2.89–4.06 (2.51–3.05) percent.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Salaries and holiday pay | 3,639 | 4,079 |
| Social security contributions | 6,088 | 5,598 |
| Interest | 641 | 947 |
| Other accrued expenses and deferred income | 7,756 | 8,143 |
| Total | 18,124 | 18,767 |
Accrued expenses contain provisions for salaries and other remuneration, including social security contributions for former employees.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Floating charges | 3,300 | 3,300 |
| Other pledged assets | 785,528 | 785,528 |
| total | 788,828 | 788,828 |
| Given to: | ||
| – credit institutions | 788,828 | 788,828 |
| total | 788,828 | 788,828 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Surety and contingent liabilities given for subsidiaries |
294,431 | 264,401 |
| total | 294,431 | 264,401 |
Other pledged assets primarily refer to collateral in the form shares in subsidiaries.
Utilized amounts and available credit in bank overdraft facilities:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Bank overdraft facilities, utilized amount | 188,424 | 257,684 |
| Bank overdraft facilities, granted amount | 281,611 | 324,617 |
| total | 93,187 | 66,933 |
Cash and cash equivalents consist primarily of cash and bank transactions. Short-term investments are classified as cash and cash equivalents when: – the risk for changes in their fair value is insignificant
– they mature in less than three months from the date they were acquired.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Depreciation, amortization and write-downs of intangible and tangible assets |
2,194 | 1,963 |
| Write-downs of shares in jointly controlled entities |
– | 7,284 |
| Dividends from subsidiaries | –4,600 | –25,015 |
| Other items | –6,074 | –9,659 |
| total | –8,480 | –25,427 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Paid interest | –17,360 | –19,432 |
| Interest received | 7,708 | 8,895 |
| total | –9,652 | –10,537 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Elanders (Beijing) Printing Company Ltd | – | 15,689 |
| Elanders Hungary Kft | 4,600 | 9,326 |
| total | 4,600 | 25,015 |
During the year the following transactions with related parties have taken place:
The parent company invoices subsidiaries for outlays for services for the entire Group such as marketing, IT, auditing, insurance, etc. Invoicing for such outlays and the costs they stem from was recorded net. During 2011 parent company invoicing for outlays amounted to MSEK 19.6 (27.5). Besides this there have been no sales of products or services to related parties.
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Subsidiaries | 4,895 | 3,140 |
| Carl Bennet AB | 472 | 451 |
| Total | 5,367 | 3,591 |
The transactions with Carl Bennet AB and Elanders primarily concern costs stemming from Carl Bennet's role as Chairman of the Board in Elanders AB.
The following balances existed at year-end:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Subsidiaries | 180,483 | 165,028 |
| Total | 180,483 | 165,028 |
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Carl Bennet AB | 187 | 2,647 |
| Subsidiaries | 168,157 | 106,877 |
| Total | 168,344 | 109,524 |
Per 31 December 2010 the parent company had issued following loans to subsidiaries and jointly controlled entities:
| Currency | Amount, SEK '000s |
Interest rate | |
|---|---|---|---|
| Elanders GmbH | EUR | 7,800 | 3.92 % |
| Elanders Printpack GmbH | EUR | 1,700 | 3.50 % |
| Elanders Hungary Kft | EUR | 536 | 3.50 % |
| Elanders Italy s.r.l. | EUR | 1,344 | 3.50 % |
| Elanders Reprodução | |||
| de Imagens Ltda | USD | 977 | 3.28 % |
| Elanders Polska Sp.z o.o | PLN | 3,500 | 7.44 % |
| Elanders Ltd | GBP | –5,386 | 2.66 % |
No reserve has been required during 2011 or 2010 for the loans granted to subsidiaries.
No Board member or senior officer has or has had direct or indirect participation in any business transactions, between themselves or the company that are or were of an unusual nature concerning the terms.
Remuneration to Board members and Group Management is reported in note 5 to the consolidated financial statements.
Elanders AB has paid (–) or received (+) Group contributions to/from the following companies:
| SEK '000s | 2011 | 2010 |
|---|---|---|
| Elanders Infologistics AB | 70,000 | – |
| Elanders Sverige AB | 100,000 | –70,000 |
| Total | 170,000 | –70,000 |
The Board of Directors and Chief Executive Officer hereby certify that the Annual Report has been prepared in accordance with good accounting practice in Sweden and that the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs), referred to in the European Parliament's and Council's directive 1606/2002 of 19 July 2002 regarding the application of International Financial Reporting Standards, and that they give a true and fair view of the parent company's and Group's financial position and result, and that the Board of Directors' Report provides a true and fair view of the development of the parent company's and Group's operations, financial position and result and describes significant risks and uncertainties that the parent company and the companies within the Group face.
The Board of Directors and Chief Executive
Officer propose that the profit and other unreserved funds of SEK 180,708,911 in the parent company at the disposition of the Annual General Meeting should be dealt with accordingly:
The Board of Directors believes that the proposed dividends are justifiable in relation to the demands that the business' nature, scope and risks make on Group equity and on the Group's consolidation needs, liquidity and its position in general.
This Annual Report will be presented at the Annual General Meeting 3 May 2012 for adoption.
Mölnlycke 28 February 2012
Carl Bennet Chairman of the Board Tore Åberg Vice Chairman of the Board Cecilia Lager Göran Johnsson Hans-Olov Olsson Johan Stern Kerstin Paulsson Magnus Nilsson Chief Executive Officer Lilian Larnefeldt Tomas Svensson
Our auditor's report was presented on 28 February 2012 PricewaterhouseCoopers AB
Johan Rippe Authorized Public Accountant
[This is a translation of the Swedish original.]
To the annual meeting of the shareholders of Elanders AB (publ), corporate identity number 556008-1621
We have audited the annual accounts and consolidated accounts of Elanders AB (publ) for the year 2011, except for the corporate governance statement on pages 72–78. The annual accounts and consolidated accounts of the company are included in the printed version of this document on pages 67–115.
The Board of Directors and the Chief Executive Officer are responsible for the preparation and fair presentation of these annual accounts and consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act, and for such internal control as the Board of Directors and the Chief Executive Officer determine is necessary to enable the preparation of annual accounts and consolidated accounts that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the annual accounts and consolidated accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts and consolidated accounts. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the annual
accounts and consolidated accounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation and fair presentation of the annual accounts and consolidated accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors and the Chief Executive Officer, as well as evaluating the overall presentation of the annual accounts and consolidated accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the annual accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent company as of 31 December 2011 and of its financial performance and its cash flows for the year then ended in accordance with the Annual Accounts Act, and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the group as of 31 December 2011 and of their financial performance and cash flows in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual Accounts Act. Our opinions do not cover the corporate governance statement on pages 72–78. The statutory administration report is consistent with the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the annual meeting of shareholders adopt the income statement and balance sheet for the parent company and the group.
In addition to our audit of the annual accounts and consolidated accounts, we have examined the proposed appropriations of the company's profit or loss and the administration of the Board of Directors and the Chief Executive Officer of Elanders AB (publ) for the year 2011. We have also conducted a statutory examination of the corporate governance statement.
The Board of Directors is responsible for the proposal for appropriations of the company's profit or loss, and the Board of Directors and the Chief Executive Officer are responsible for administration under the Companies Act and that the corporate governance statement on pages 72–78 has been prepared in accordance with the Annual Accounts Act.
Our responsibility is to express an opinion with reasonable assurance on the proposed appropriations of the company's profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors' proposed appropriations of the company's profit, we examined the Board of Directors' reasoned statement and a selection of supporting evidence in order to be able to assess whether the proposal is in accordance with the Companies Act.
As a basis for our opinion concerning discharge from liability, in addition to our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to determine whether any member of the Board of Directors or the Chief Executive Officer is liable to the company. We also examined whether any member of the Board of Directors or the Chief Executive Officer has, in any
other way, acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Furthermore, we have read the corporate governance statement and based on that reading and our knowledge of the company and the group we believe that we have a sufficient basis for our opinions. This means that our statutory examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing standards in Sweden.
We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report and that the members of the Board of Directors and the Chief Executive Officer be discharged from liability for the financial year.
A corporate governance statement has been prepared, and its statutory content is consistent with the other parts of the annual accounts and consolidated accounts.
Gothenburg 28 February 2012 PricewaterhouseCoopers AB
Johan Rippe Authorized Public Accountant
Added value | Net turnover minus forward invoiced disbursements for outwork and material.
Added value ratio | Added value in relation to net turnover.
Average number of employees | The number of employees at the end of each month divided by twelve.
Average number of shares | The number of shares at the end of each month divided by twelve.
Capital employed | Total assets less liquid funds and non-interest bearing liabilities.
Capital turnover rate | Net sales in relation to average total assets.
Debt/equity ratio | Interest bearing liabilities less liquid funds in relation to total equity, including equity relating to non-controlling interest.
Dividend yield | Dividends in relation to average share price.
Ea rnings per share | Result for the year divided by the average number of shares.
EBIT | Earnings before interest and taxes; operating result.
EBITD A | Earnings before interest, taxes, depreciation and amortization; operating result plus depreciation, amortization and write-downs of intangible assets and tangible assets.
EBIT -multiple | Enterprise value divided by operating result.
Enterprise Value | Market value at year-end plus net debt and minority shares.
Equity ratio | Equity (including minority shares) in relation to total assets.
Interest coverage ratio | Operating result plus interest income divided by interest costs.
Net debt | Interest bearing liabilities less liquid funds.
Operating cash flow | Cash flow from operating activities and investing activities, adjusted for paid taxes and financial items.
Operating margin | Operating result in relation to net sales.
Operating RESULT | Earnings before financial items; EBIT.
P/ce ratio | Share price at year-end in relation to EBITDA per share.
P/e ratio | Share price at year-end in relation to earnings per share.
Profit margin | Result after financial items in relation to net turnover.
Proportion of risk capital | Risk capital in relation to total assets.
P/s ratio | Share price at year-end in relation to net turnover per share.
Return on capital employed (RO CE) | Operating result in relation to average capital employed.
Return on equity | Result for the year in relation to average equity.
Return on total assets | Operating result plus financial income in relation to total assets.
Risk capital | Equity plus deferred tax liabilities.
Commercial print | Production of printed matter such as magazines, books, catalogues, manuals, marketing material etc. Production is made by both offset technique and digital print.
TE CHNIQUE | The transfer of information to paper via a digital file that is then printed out with the help of a high-speed printer. This technique is a prerequisite for Print-on-Demand and makes quick deliveries in small editions possible. Offset technique is still more efficient for larger editions and four color production.
transfer of structured information according to an agreed-upon format. The acronym EDI refers often, but not always, to the transfer of information such as stock balances, catalogue information, orders, order confirmation, delivery notification and invoices between companies.
Fulfilment | This term is increasingly used, particularly in the automotive industry, to describe a number of steps in the process between printing and distribution. They can include packaging for end customers, bar-coding, adding other objects such as plastic cards etc.
Just-in-time | Delivery precision – delivery exactly when the need arises. The concept also entails that customers do not need to store their publications. Often includes digital printing, see Print-on-Demand.
OFFSET TECHNI QUE | A printing method in which ink and water are spread out on a printing plate that is then pressed against a rubber blanket. This absorbs the ink and transfers it to the paper. The expression offset comes from the fact that the printing plate never touches the paper. For smaller editions (1,000–30,000) sheet-fed offset is used. In this process the paper is fed into the press page by page. Web offset is usually more efficient for larger editions (over 30,000). The press is fed from a roll of paper and the printed paper is then cut into sheets.
One stop shopping |With a single contact you gain access to Elanders' entire global and broad product range and can easily order the products and services that you need.
Outsourcing | Companies or organizations choose to let an external party handle an activity or a process. This activity or process is then said to be outsourced.
Premedia | Our collective term for the work done before printing/publishing. The term includes layout, typography, image retouching and production of originals. In our world even other services are included such as: advertisement management, file management, quality assurance, printing plate production as well as database solutions for digital material.
Print-on-Demand (PO D) |With the help of highspeed printers printed matter can be produced as needed and in very small editions.
WEB-TO-Business (W2B) |When the order is placed directly by the end customer using e-commerce platforms. Contains both when Elanders is selling direct to consumers and as supplier to e-commerce companies.
WEB-TO-PRINT (W2P) | A Web-based order interface where the production and distribution of information and marketing material can easily be ordered and made accessible for editing and ordering via the Internet.
b. 1942 elected in: 2001. education: Bachelor of Science (Econ.). appointments on the elanders board: Chairman of the audit committee and member of the remuneration committee. other appointments: Member of the board of Tellbe AB and Tellbe Vietnam Ltd Co. shareholding: 18,000 class B shares.
b. 1963 elected in: 2009. education: Business Administration. appointments on the elanders board: Member of the remu-
neration committee. other appointments: Chairman of the board of Föreningen Enskilda Gymnasiet, Sherpani Advisors AB and Max Matthiessen Värdepapper AB. Member of the board of Kungl. Tennishallen AB and Kvinvest AB. shareholding: 11,000 class B shares.
elected in: 2007. education: Master of Science (Pol.), Honorary Doctor of Economics at the School of Business, Economics and Law at the University of Gothenburg. appointments on the elanders board: Member of the remuneration committee. other appointments: Chairman of the board of Chalmers Tekniska Högskola AB. Sr. Industrial Advisor to N M Rothschild & Sons. Deputy chairman of Volvo Personvagnar AB. Member of the board of Aktiebolaget SKF and Geely Sweden AB. shareholding: 1,700 class B shares.
b. 1964 Transport Manager, Elanders Sverige AB. elected in: 2009. education: Graphic college education and university education in journalism. shareholding: 200 class B shares.
b. 1945 elected in: 2006. education: Elementary school and education within the trade unions. appointments on the elanders board: Member of the audit committee. other appointments: Chairman of the board of Sveriges Television AB, Calmando AB and Rådhusgruppen City AB. Deputy chairman of EKN. Member of the board of IQ-Initiativet AB, the University of Umeå and Stockholm Business Region AB. shareholding: 2,066 class B shares.
b. 1963 elected in: 2007. education: Master of Science in Engineering. appointments on the elanders board: Member of the audit committee. other appointments: Member of the board of the Swedish Defence Materiel Administration and the Swedish Agency for Economic and Regional Growth. Deputy board member and managing director of Netsoft Lund AB and Netsoft Lund Development AB. Deputy board member of Netsoft Lund Holding AB. shareholding: 2,000 class B shares.
Deputy employee representative
Premedia/Prepare, Elanders Sverige AB. Elected in: 2008. Education: Upper secondary education. Shareholding: None.
b. 1951 Elected in: 1997. Education: Bachelor of Science (Econ.) Dr. Technol. h.c.
Board
Appointments on the Elanders board: Chairman of the nomination committee and remuneration committee. Other appointments: Chairman of the board of Getinge AB, the University of Gothenburg and Lifco AB. Member of the board of Holmen AB and L E Lundbergföretagen
AB. Shareholding: 1,166,666 class A shares and 10,382,098 class B shares.
b. 1951 Elected in: 1998. Education: Bachelor of Science (Econ.). Appointments on the Elanders board: Member of the audit
committee. Other appointments: Chairman of the board of Fädriften Invest AB and HealthInvest Partners AB. Chairman of the foundation Harry Cullbergs fond. Member of the board of Carl Bennet AB, Getinge AB, Lifco AB, Rolling Optics AB, RP Ventures AB and Svensk Fastighetsfond AB. Shareholding: 65,000 class B shares.
b. 1950 Storage/Distribution, Elanders Sverige AB. Elected in: 2009. Education: College Diploma in Business Administration from Vasa Handelsläroverk. Shareholding: None.
b. 1957 Printer operator, Elanders Sverige AB. Elected in: 2007. Education: Typographer. Shareholding: None.
Employed since 2007. Master of Science in Business Administration. Auditor during 1997–2007. Approved public accountant 2004. Authorized public accountant 2005. Shareholding: 3,000 class B shares.
b. 1966
Active within the graphic industry since 1987, started as business developer with Elanders in 1999. Head of production in Elanders operations in Hungary during 2002. Managing director of Elanders Berlings Skogs Grafiska AB and Elanders Skogs Grafiska AB during 2003–2005. Managing director for the operations in China 2005–2009. Education in Graphic Technology, Design, Business Administration and Marketing. Shareholding: 37,800 class B shares.
Sommer Responsible for operations in Germany, North America, Hungary and Italy. b. 1957
Employed since 2007. Graphic engineer. Sole founder of Sommer Corporate Media. Joined Elanders in connection with the acquisition of Sommer Corporate Media in 2007. Shareholding:
None.
Per Brodin Responsible for operations in Asia. b. 1961
Employed since 1998. Diploma from Grafiska Institutet. Active within the graphic industry since 1976. Joined Elanders in connection with the acquisition of the Skogs group in 1998. Managing director of Elanders Hungary Kft during 2002–2009. Shareholding: 50,000 class B shares.
Responsible for operations in Sweden, South America, Poland and Norway. b. 1982
PricewaterhouseCoopers AB with the authorized public accountant:
johan rippe, b. 1968 Company auditor since 2008 Other appointments: Getinge AB, AB Volvo and Collector AB
Carl Bennet: Chairman and contact, represents Carl Bennet AB, telephone: +46 31 741 64 00
Göran Erlandsson: Member of Aktiespararna in Kungsbacka and representative for the smaller shareholders, telephone: +46 300 130 64
Hans Hedström: CEO and responsible for owner matters in Carnegie Funds, telephone: +46 8 696 17 00
President and Chief Executive Officer: Magnus Nilsson [email protected]
Designvägen 2 Box 137, 435 23 Mölnlycke, Sweden Telephone: +46 31 750 00 00, Fax: +46 31 750 07 25
www.elanders.com [email protected]
MD: Per Brodin [email protected]
No. 2, AnXiang Street, District B. Beijing TianZhu Airport Industrial Zone, Shunyi District, Beijing 101318, China Telephone: +86 10 80 48 33 00 Fax: +86 10 80 48 31 18
MD: Peter Sommer [email protected]
Anton-Schmidt-Str. 15, 71332 Waiblingen, Germany Telephone: +49 71 51 95 63-0 Fax: +49 71 51 95 63-109
www.elanders-germany.com [email protected]
MD: Peter Sommer [email protected]
Zalalövo´´ Újmajor u. 2, 8999 Zalalövő, Hungary Telephone: +36 92-57 25 00 Fax: +36 92-57 10 78
www.elanders-hungary.com [email protected]
MD: Nicola Scabbia [email protected]
Via Delle Industrie 8 31050 Ponzano Veneto (TV), Italy Telephone: +39 422 44 22 53 Fax: +39 422 44 22 53
MD: Kevin Rogers [email protected]
Newcastle Merlin Way, New York Business Park, North Tyneside NE27 0QG, England Telephone: +44 1912-80 04 00 Fax: +44 1912-80 04 01
Harrogate 32 Kings Road, Harrogate, North Yorkshire HG1 5JW, England Telephone: +44 1423-53 03 62 Fax: +44 1423-53 06 10
MD: Knut Johannessen [email protected]
Brobekkveien 80, 0582 Oslo, Norway Telephone: +47 23-37 13 00 Fax: +47 23-37 13 01
www.novum.no
MD: Jonas Brännerud [email protected]
Ul. Mazowiecka 2, 09-100 Płońsk, Poland Telephone: +48 23-662 23 16, Fax: +48 23-662 31 46
MD: Peter Sommer [email protected]
Dieselstraße 8-10, 71116 Gärtringen, Germany Telephone: +49 70 34 25 46-0 Fax: +49 70 34 25 46-131
www.elanders-printpack.com [email protected]
MD: Jonas Brännerud [email protected]
Falköping Lovenegatan 4, Box 807, 521 23 Falköping, Sweden Telephone: +46 515 72 32 00, Fax: +46 515 164 64
Designvägen 2, Box 137, 435 23 Mölnlycke, Sweden Telephone: +46 31 750 00 00, Fax: +46 31 750 00 10
Jönköping, Elanders NRS Tryckeri Linnégatan 2, Box 3188, 550 03 Jönköping, Sweden Telephone: +46 36 17 40 80
Lund
Ruben Rausings gata, 221 86 Lund, Sweden Telephone: +46 46 36 28 80, Fax: +46 46 36 28 66
Källvattengatan 9, 212 23 Malmö, Sweden Telephone: + 46 40 38 57 00, Fax: +46 40 93 18 68
Sergels Torg 12, 2 tr., Box 16285 103 25 Stockholm, Sweden Telephone: +46 31 750 00 00
Telephone: +46 18 480 10 00, Fax: +46 18 480 10 39
Sorterargatan 23, Box 518, 162 15 Vällingby, Sweden Telephone: +46 8 454 68 00, Fax: +46 8 454 68 16
Värnamo, Elanders Fälth & Hässler Box 2246, 331 02 Värnamo, Sweden Telephone: +46 370 69 96 00
Västerås Hydrovägen 4, 721 36 Västerås, Sweden Telephone: +46 31 750 09 91, Fax: +46 21 13 05 70
MD: Mark Rhodes [email protected]
4525 Acworth Industrial Drive Acworth, Georgia 30101, USA Telephone: +1 770 917 70 00, Fax: +1 770 917 70 20
www.elandersusa.com
MD: Jonas Brännerud [email protected]
Avenida Ferraz Alvim, 832 – Serraria 09980-025 – Diadema – SP, Brazil Telephone: +55 11 3195 3400, Fax: +55 11 3195 3400
Shareholders in Elanders AB (publ) are welcomed to the company's Annual General Meeting Thursday 3 May 2012 at 3 p.m. at Elanders' headquarters at Designvägen 2, Mölnlycke, Sweden.
shareholders who wish to participate in the Annual General Meeting must be inscribed in the register of the shareholders held by Euroclear Sweden AB no later than Thursday 26 April 2012. Intent to participate must be reported by Friday 27 April 2012, 1:00 p.m.
Shareholders who have nominee registered their shares must, through the services of a nominee, temporarily register their shares in their own name with Euroclear Sweden AB. This reregistering must be carried out after having requested it from the nominee no later than Thursday 26 April 2012. This means that the shareholder must notify the nominee of this well in advance of this day.
Intent of participation can be made in writing to
Elanders AB (publ), Box 137, SE-435 23 Mölnlycke, Sweden and please write "Annual General Meeting" on the envelope. It is also possible to notify via telephone +46 31 750 07 21, fax +46 31 750 07 25, via e-mail [email protected], or via the company website www.elanders.com.
Please include name, personal or organization number, address and telephone number, number of shares and, if applicable, the number of assistants (no more than two), that will assist at the Annual General Meeting.
The Annual General Meeting will handle the matters stipulated in the articles of association together will any other business named in a separate summons.
annual general meeting 3 May 2012
interim report Q1 3 May 2012
interim report Q2 12 July 2012
interim report Q3 22 October 2012 annual accountS 2012 28 January 2013
annual report 2012 30 March 2013
elanders' annual report is distributed to all shareholders that have not actively declined to receive a printed version. New shareholders are welcomed with their own copy of the Annual Report but it is possible to unsubscribe from future printed reports. To unsubscribe from future printed Annual Reports from Elanders please go to www.elanders.com/annualreport.
It is possible to download the Annual Reports both in Swedish and English from Elanders' website. Those interested can via the website read Elanders' Annual Reports from the last ten years and order printed Annual Reports five years back.
production Elanders AB in collaboration with More PR and Rubrik AB photo Daniel Grizelj
paper Cover: Scandia 2000 Smooth White 200 g Insert: Scandia 2000 Smooth White 115 g, MultiArt Silk 130 g translation Camille Forslund
The sections of the Annual Report that consist of uncoated paper (pages 1–66 and 119–128) are printed with high density print to increase the blackness and color range. This means that we have used 20 percent more color and higher screen frequency than recommended by ISO. Elanders Fälth & Hässler, which has long been a leader in this technology having used it in innumerable advanced book and catalogue productions, has done the repro work and extreme compensation of images.
Statistics and net sales for the industry have been provided by the market research company Pira International Ltd and the interest organization Packbridge.
This document is essentially a translation of the Swedish language version. In the event of any discrepancies between this translation and the original Swedish document, the latter shall be deemed correct.
There have been tremendous developments concerning the environment in the past few years and ecolabeled printed matter has become standard. Elanders makes every effort to further this development. We do it for the environment, for our customers, for ourselves and for the future. Naturally this Annual Report is both Swan ecolabeled and FSC® labeled. It is also a climate neutral product.
Please find more information about climate neutral products on page 53.
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