Annual Report • Jul 17, 2014
Annual Report
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| Total return | ||||||
|---|---|---|---|---|---|---|
| NAV (%)* | Investor B (%) | SIXRX (%) | ||||
| Q2 2014 | 4.9 | 10.5 | 4.3 | |||
| 1 year | 30.7 | 43.6 | 28.3 | |||
| 5 years | 15.9 | 20.2 | 17.0 | |||
| 10 years | 12.1 | 16.2 | 11.8 | |||
| 20 years | 14.1 | 14.1 | 12.3 | |||
| *Incl. dividend added back | ||||||
| 6/30 2014 | ||||||
| NAV, SEK per share | 305 | |||||
| Share price (B-share), SEK | 250.70 |
Overview annual average performance
Our net asset value, with dividend added back, rose by 5 percent during the second quarter. The SIXRX index rose 4 percent and our total shareholder return was 11 percent.
The Central Banks around the world maintain expansionary monetary policies. Most likely, interest rates will remain low for an extended period, with the flip side of potential asset bubbles. Basically, we should ask whether the current interest rate level is the real cost of money, and who will end up without a chair when the music eventually stops?
We continued adding to our holding in ABB during the quarter. Given its large emerging markets exposure and structural growth drivers such as electricity system build-out, increased focus on energy efficiency and a strong portfolio in automation, we find ABB an attractive long-term investment.
We supported the Board of AstraZeneca in rejecting the bid from Pfizer, as it didn't reflect the value of the company. While its product pipeline carries risk, we believe in AstraZeneca's prospects and higher value standalone.
Mölnlycke Health Care's growth during the quarter was lower due to production problems within advanced wound care, which also impacted profitability. Volumes are now being increased again. In addition, one-time costs related to management transition affected EBITDA negatively. The process to capture growth opportunities continues.
In April, we acquired most of the shares in Mölnlycke that its management bought in 2007. The rest was bought by the current key staff at the same price. This transaction did not incur any economic loss of value, as we paid market price. However, since it exceeds our reported value, which is book equity, IFRS mandated a charge. In the new program at Mölnlycke (and for all subsidiaries), we have committed to buying back shares at market price if the participants want to sell. With this obligation, IFRS requires us to base the minority interest on market price. However, we plan to continue with similar programs in the future and thus do not expect to buy back any shares. I encourage you all to read note 1) on page 6 to see all accounting effects on Mölnlycke's contribution on our net asset value.
Permobil continued its good development. In May, it acquired TiLite, a leading manufacturer of advanced manual wheelchairs with a strong market position in the U.S., but with limited non-U.S. sales. The combination of TiLite's superior products and Permobil's sales network creates opportunities for continued growth in the U.S. and expansion in Europe. Both companies are devoted to improving the quality of life for their users. The acquisition is in line with Permobil's strategy to grow in adjacent product areas to become a leader in complex rehabilitation solutions.
We continue to build Aleris, but do not expect any materially visible positive P&L impact until late 2015. While Aleris has started up many new contracts this quarter, they have not fully compensated for margins in lost ones in which we had come further down the learning curve. As a result, sales are higher while EBITDA is lower than in the first half of 2013.
During the quarter, we received net distribution from EQT of SEK 117 m. The value change was 10 percent in constant currency, driven by liquidity events. In May, EQT celebrated its 20th anniversary. As a sponsor since its inception, we can look back at stellar performance. Especially the sponsor economics create an extra boost. Longer-term, we expect EQT to generate good cash flow to Investor.
Investor Growth Capital distributed SEK 105 m. to Investor. Lower multiples on listed peers, mainly in the tech sector, resulted in a value decline of 3 percent in constant currency.
3 Scandinavia continued to perform well, with strong growth in service revenue and solid cash flow generation. In June, the company repaid SEK 0.7 bn. of its external debt, reducing Investor's loan guarantee by another SEK 0.3 bn.
Over the last few decades, many global industries have consolidated, initially domestically then over time increasingly cross-border. Sometimes Swedish companies are the consolidators, sometimes they become targets. This process is unavoidable in open economies and will continue.
We focus on doing what we believe is industrially right for each company. We are long-term owners without any exit strategy. However, occasionally we arrive at the conclusion that a company could develop better with another owner. In such cases, our responsibility is to find a new owner, while making sure that we maximize returns to our shareholders.
In many cross-border mergers, the location of the headquarters depends on where conditions such as access to well-educated employees, infrastructure, tax regimes, and so on, are the most favorable. It is thus imperative that Sweden continues to improve its competitiveness.
In a consolidating world, it is important that we create new Swedish companies with industrial champion potential. I believe that we have a positive entrepreneurial environment, but we lack venture capital for promising companies. Today, many growth companies are forced to seek financing outside Sweden. When financing is obtained elsewhere, the threshold for relocating headquarters and operations becomes lower. This is something that we, as a nation, cannot afford. Of course, we need policies making it rational for our existing global companies to remain in Sweden, but we also need to improve the capital formation for young growth companies to ensure that we re-stock our industrial base.
Over the last year, we have lowered the group's leverage, including our ring-fenced subsidiaries. The cash flow from our portfolio allows us to reinvest in our business without compromising our ability to pay a steadily rising dividend. Actually, additional investments will support our dividend capacity. Therefore, we will continue to search for NPV positive opportunities. The top priority is for our holdings to make acquisitions to strengthen their businesses, and allowing us to capture synergies. For new investments, our focus is to add new wholly-owned companies, which we can fully control to maximize long-term shareholder value.
Dear shareholder, we will never give up our relentless focus on maintaining cost efficiency and we will work hard to keep generating a steadily rising dividend, all in order to create attractive long-term value for you. As Babe Ruth once noted: "you just can't beat a person who never gives up".
Börje Ekholm
| Number of shares |
Ownership capital/votes1) (%) |
Share of total assets |
Value, SEK/share |
Value, SEK m.2) |
Contribution to net asset value |
Value, SEK m.2) |
|
|---|---|---|---|---|---|---|---|
| 6/30 2014 | 6/30 2014 | 6/30 2014 (%) | 6/30 2014 | 6/30 2014 | YTD 2014 | 12/31 2013 | |
| Core Investments | |||||||
| Listed3) | |||||||
| SEB | 456 198 927 | 20.8/20.8 | 16 | 54 | 40 727 | 3 927 | 38 618 |
| Atlas Copco | 206 895 611 | 16.8/22.3 | 15 | 52 | 39 775 | 4 226 | 36 687 |
| ABB | 193 365 142 | 8.4/8.4 | 12 | 39 | 29 780 | -2 042 | 31 738 |
| AstraZeneca | 51 587 810 | 4.1/4.1 | 10 | 34 | 25 629 | 6 516 | 19 753 |
| Ericsson | 175 047 348 | 5.3/21.5 | 5 | 18 | 13 663 | 959 | 13 229 |
| Sobi | 107 594 165 | 39.8/39.8 | 4 | 13 | 9 587 | 2 459 | 7 128 |
| Electrolux | 47 866 133 | 15.5/30.0 | 3 | 11 | 8 089 | 339 | 8 061 |
| Saab | 32 778 098 | 30.0/39.5 | 3 | 9 | 6 729 | 1 226 | 5 651 |
| Wärtsilä | 17 306 978 | 8.8/8.8 | 2 | 8 | 5 766 | 351 | 5 537 |
| NASDAQ OMX | 19 394 142 | 11.4/11.4 | 2 | 7 | 5 049 | 56 | 5 023 |
| Husqvarna | 97 052 157 | 16.8/31.0 | 2 | 7 | 5 021 | 1 414 | 3 749 |
| 74 | 249 | 189 815 | 19 431 | 175 174 | |||
| Subsidiaries | |||||||
| Mölnlycke Health Care | 99/99 | 9 | 30 | 22 766 | 959 | 20 684 | |
| Aleris | 100/100 | 1 | 5 | 3 840 | -2 | 3 830 | |
| Permobil | 94/90 | 1 | 5 | 3 806 | 47 | 3 759 | |
| Grand Hôtel/Vectura | 100/100 | 1 | 2 | 1 296 | 38 | 1 258 | |
| 12 | 42 | 31 708 | 1 042 | 29 531 | |||
| 86 | 291 | 221 523 | 20 3944) | 204 705 | |||
| Financial Investments | |||||||
| EQT | 5 | 17 | 13 287 | 2 657 | 11 615 | ||
| Investor Growth Capital | 4 | 15 | 11 328 | 1 002 | 10 793 | ||
| Partner-owned investments | |||||||
| Lindorff | |||||||
| Equity | 58/50 | 2 | 6 | 4 880 | 232 | 4 648 | |
| Mezzanine debt | 0 | 1 | 340 | 28 | 312 | ||
| 3 Scandinavia | 40/40 | 1 | 4 | 2 877 | 234 | 2 643 | |
| Other Investments5) | 1 | 2 | 1 597 | -111 | 2 245 | ||
| 13 | 45 | 34 309 | 4 0154) | 32 256 | |||
| Other Assets and Liabilities | 1 | 2 | 1 1636) | -7 3254,7) | 1 5606) | ||
| Total Assets | 100 | 337 | 256 995 | 238 521 | |||
| Net debt | -10 | -32 | -24 494 | -23 104 | |||
| Net Asset Value | 90 | 305 | 232 501 | 17 084 | 215 417 |
Calculated in accordance with the disclosure regulations of Sweden's Financial Instruments Trading Act (LHF). ABB, AstraZeneca, NASDAQ OMX and Wärtsilä in accordance with Swiss, British, U.S. and Finnish regulations.
Includes market value of derivatives related to investments if applicable. The subsidiaries within Core Investments and the partner-owned investments within Financial Investments are reported according to the acquisition method and equity method respectively.
Valued according to the class of share held by Investor, with the exception of Saab and Electrolux, for which the most actively traded class of share is used. Wärtsilä is valued based on the underlying value of shares in Wärtsilä through Avlis AB.
Including management costs. Management costs attributable to Core Investments, Financial Investments and Groupwide amounted to SEK 79 m., SEK 27 m. and SEK 75 m. respectively.
Includes Investor's trading activities and investments in Active Biotech, Affibody, Alligator, Atlas Antibodies, Kunskapsskolan, Madrague, Newron, Novare Human Capital, RAM and Samsari, among others.
Including SEK 1.2 bn. of the proceeds from the divestiture of Gambro held in escrow.
Including paid dividends of SEK 6,089 m.
During the first half of the year, the net asset value increased from SEK 215.4 bn. to SEK 232.5 bn. The change in net asset value, with dividend added back, was 11 percent during the period (8), of which 5 percent during the second quarter (-2). The corresponding total return of the Stockholm Stock Exchange (SIXRX) was 9 percent and 4 percent respectively.
For balance sheet items, figures in parentheses refer to year-end 2013 figures. For income statement items, the figures in parentheses refer to the same period last year.
Net debt totaled SEK 24,494 m. on June 30, 2014 (23,104), corresponding to leverage of 9.5 percent (9.7).
| SEK m. | H1 2014 | 2013 |
|---|---|---|
| Opening net debt | -23 104 | -22 765 |
| Core Investments | ||
| Dividends | 5 869 | 5 441 |
| Investments, net of proceeds | -2 192 | -8 277 |
| Financial Investments | ||
| Dividends | 9851) | 711 |
| Investments, net of proceeds | 1 181 | 9 022 |
| Investor Groupwide | ||
| Other | -1 144 | -1 905 |
| Dividends paid | -6 089 | -5 331 |
| Closing net debt | -24 494 | -23 104 |
Distribution from IGC of SEK 160 m. pending over the end of the quarter have been accounted for as receivables in Other Assets and Liabilities.
| Core Investments Q2 2014 |
||||||
|---|---|---|---|---|---|---|
| SEK m. | Listed | Subsidiaries | Total | Financial Investments |
Investor Groupwide |
Total |
| Dividends | 2 954 | - | 2 954 | 415 | - | 3 369 |
| Other operating income | - | - | - | 53 | - | 53 |
| Changes in value | 6 294 | -11 | 6 283 | 842 | - | 7 125 |
| Net sales | - | 5 204 | 5 204 | 6 | - | 5 210 |
| Management cost | -41 | -14 | -36 | -91 | ||
| Other items | - | -4 008 | -4 008 | 141 | -247 | -4 114 |
| Profit/loss for the period | 9 248 | 1 185 | 10 392 | 1 443 | -283 | 11 552 |
| Non-controlling interest | - | -9 | -9 | -1 | - | -10 |
| Dividends paid | -6 089 | -6 089 | ||||
| Other effects on equity | - | -574 | -574 | 519 | -481 | -536 |
| Contribution to net asset value | 9 248 | 602 | 9 809 | 1 961 | -6 853 | 4 917 |
| Net asset value, June 30, 2014 | ||||||
| Carrying amount | 189 815 | 31 708 | 221 523 | 34 309 | 1 163 | 256 995 |
| Investors net debt | -24 494 | -24 494 | ||||
| Total net asset value | 189 815 | 31 708 | 221 523 | 34 309 | -23 331 | 232 501 |
| Core Investments Q2 2013 |
Investor | |||||
|---|---|---|---|---|---|---|
| SEK m. | Listed | Subsidiaries | Total | Financial Investments |
Groupwide, incl. elimination |
Total |
| Dividends | 2 791 | 2 791 | 149 | 2 940 | ||
| Other operating income | 36 | 36 | 128 | -36 | 128 | |
| Changes in value | -7 482 | 54 | -7 428 | 729 | -6 699 | |
| Net sales | 4 657 | 4 657 | -34 | 4 623 | ||
| Management cost | -37 | -17 | -37 | -91 | ||
| Other items | -4 285 | -4 285 | -44 | -52 | - 4 381 | |
| Profit/loss for the period | -4 691 | 462 | -4 266 | 945 | -159 | -3 480 |
| Non-controlling interest | -2 | -2 | -2 | |||
| Dividends paid | -5 331 | -5 331 | ||||
| Other effects on equity | 617 | 617 | 506 | -641 | 482 | |
| Contribution to net asset value | -4 691 | 1 077 | -3 651 | 1 451 | -6 131 | -8 331 |
| Net asset value, June 30, 2013 | ||||||
| Carrying amount | 147 792 | 25 930 | 173 722 | 37 155 | 23 | 210 900 |
| Investors net debt | -28 201 | -28 201 | ||||
| Total net asset value | 147 792 | 25 930 | 173 722 | 37 155 | -28 178 | 182 699 |
Core Investments contributed to the net asset value with SEK 20,394 m. during the period (12,186), of which SEK 9,809 m. in the second quarter (-3,651).
Read more at www.investorab.com under "Our Investments" >>
| SEK m. | Q2 2014 | H1 2014 | H1 2013 |
|---|---|---|---|
| Changes in value, listed | 6 294 | 13 562 | 6 274 |
| Dividends, listed | 2 954 | 5 869 | 5 107 |
| Change in reported value, subsidiaries |
602 | 1 042 | 878 |
| Management cost | -41 | -79 | -73 |
| Total | 9 809 | 20 394 | 12 186 |
Listed core investments contributed to the net asset value with SEK 19,431 m. during the period (11,381), of which SEK 9,248 m. in the second quarter (-4,691). The combined total return amounted to 11 percent during the period, of which 5 percent during the second quarter.
Dividends received totaled SEK 5,869 m. during the first half of the year (5,107), of which SEK 2,954 m. in the second quarter (2,791). We expect to receive approximately SEK 6.2 bn. in total during 2014.
| Contribution to net asset value, SEK m. |
Total return, Investor1) (%) |
|
|---|---|---|
| Listed | ||
| SEB | 3 927 | 10.2 |
| Atlas Copco | 4 226 | 11.5 |
| ABB | -2 042 | -6.4 |
| AstraZeneca | 6 516 | 33.0 |
| Ericsson | 959 | 7.2 |
| Sobi | 2 459 | 34.5 |
| Electrolux | 339 | 4.2 |
| Saab | 1 226 | 21.7 |
| Wärtsilä | 351 | 6.3 |
| NASDAQ OMX | 56 | 1.1 |
| Husqvarna | 1 414 | 37.7 |
| Total | 19 431 | |
| Subsidiaries | ||
| Mölnlycke Health Care | 959 | |
| Aleris | -2 | |
| Permobil | 47 | |
| Grand Hôtel/Vectura | 38 | |
| Total | 1 042 |
Calculated as the sum of share price changes and dividends added back, including add-on investments and/or divestments.
Second quarter
5,334,242 shares were purchased in ABB for SEK 833 m.
1,450,758 shares were purchased in ABB for SEK 239 m. In SEB, 1,275,372 C-shares were purchased for SEK 108 m. and 1,165,709 A-shares were divested for SEK 101 m.
| A leading Nordic financial services group. SEB is present in some 20 countries, with main focus on the Nordic countries, Germany and the Baltics. |
www.seb.se |
|---|---|
| A global leader in compressors, construction and mining equipment, power tools and assembly systems. |
www.atlascopco.com |
| A global leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. |
www.abb.com |
| A global, innovation-driven, integrated biopharmaceutical company. | www.astrazeneca.com |
| The world's leading provider of communications technology and services. Ericsson operates in 180 countries and employs more than 100,000 people. |
www.ericsson.com |
| A leading integrated biopharmaceutical company with international market presence, developing and commercializing pharmaceuticals for patients with rare diseases. |
www.sobi.com |
| A global leader in household appliances and appliances for professional use, selling more than 40 million products to customers in more than 150 markets every year. |
www.electrolux.com |
| Serves the global market with world-leading products, services and solutions for military defense and civil security. |
www.saabgroup.com |
| A global leader in complete lifecycle power solutions for the marine and energy markets. | www.wartsila.com |
| One of the world's largest exchange operators, which offers listings, trading, exchange technology and public company services across six continents. |
www.nasdaqomx.com |
| The world's largest producer of outdoor power products for garden, park and forest care, European leader in watering products, and a world leader in cutting equipment and diamond tools to the construction industry. |
www.husqvarna.com |
The subsidiaries contributed to the net asset value with SEK 1,042 m. during the period (878), of which SEK 602 m. during the second quarter (1,077).
Investor acquired shares in Mölnlycke Health Care's Management Participation Program (a combination of common and preferred shares) for a total SEK 1,121 m. The acquisition price was confirmed through a third party fairness opinion. As a result of the transaction, Investor's ownership in Mölnlycke Health Care (including shareholder loans) increased from 98 percent to 99 percent. The shares were purchased at a price exceeding the book value of the minority shareholders' share of equity, and therefore Investor's net asset value was affected by SEK -754 m.
No investments or divestments were made.
| 6/30 2014 | 12/31 2013 | ||||
|---|---|---|---|---|---|
| SEK/share | SEK m. | SEK/share | SEK m. | ||
| Mölnlycke Health Care | 30 | 22 766 | 27 | 20 684 | |
| Aleris | 5 | 3 840 | 5 | 3 830 | |
| Permobil | 5 | 3 806 | 5 | 3 759 | |
| Grand Hôtel/Vectura | 2 | 1 296 | 2 | 1 258 | |
| Total | 42 | 31 708 | 39 | 29 531 |
| 2014 | 2013 | |||
|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 |
| Mölnlycke Health Care | 5901) | 959 | 1 135 | 986 |
| Aleris | -19 | -2 | -36 | -37 |
| Permobil | 32 | 47 | -24 | -24 |
| Grand Hôtel/Vectura | -1 | 38 | 2 | -47 |
| Total | 602 | 1 042 | 1 077 | 878 |
Investor's acquisition of shares from Mölnlycke Health Care's previous Management Participation Program increased the value by SEK 1,121 m. However, due to IFRS accounting rules, this affected book value by SEK -754 m. as the price paid exceeded the book value. The new Management Participation Program has to be reported at fair value, which reduced the book value by SEK 246 m. Following a final tax ruling, tax loss carry-forwards have been written up by SEK 714 m. during the second quarter. Currency-related effects had a positive effect of SEK 491 m. during the quarter.
Read more at www.molnlycke.com >>
A world-leading manufacturer of single-use surgical and wound care products and services for the professional health care sector.
| Income statement items, | 2014 | 2013 | Rolling 4 | ||
|---|---|---|---|---|---|
| EUR m. | Q2 | H1 | Q2 | H1 | quarters |
| Sales | 297 | 584 | 292 | 569 | 1 168 |
| Sales growth, % | 2 | 3 | 5 | 4 | |
| Sales growth, constant | |||||
| currency, % | 4 | 5 | 6 | 5 | |
| EBITDA | 77 | 154 | 86 | 160 | 338 |
| EBITDA, % | 26 | 26 | 29 | 28 | 29 |
| Balance sheet items, EUR m. | 6/30 2014 | 12/31 2013 | |||
| Net debt | 646 | 728 | |||
| 2014 | 2013 | ||||
| Cash flow items, EUR m. | Q2 | H1 | Q2 | H1 | |
| EBITDA | 77 | 154 | 86 | 160 | |
| Change in working capital | 6 | -16 | -2 | -40 | |
| Capital expenditures | -11 | -21 | -12 | -24 | |
| Operating cash flow | 72 | 117 | 72 | 96 | |
| Acquisitions/divestments | - | - | - | - | |
| Shareholder | - | - | |||
| contribution/distribution | - | - | |||
| Other1) | -20 | -35 | -31 | -71 | |
| Increase(-)/decrease (+) in | |||||
| net debt | 52 | 82 | 41 | 25 | |
| Key ratios | Rolling 4 quarters |
||||
| Working capital/sales, % | 12 | ||||
| Capital expenditures/sales, % | 4 | ||||
| 6/30 2014 | 6/30 2013 | ||||
| Number of employees | 7 515 | 7 390 |
Includes effects of exchange rate changes, interest and tax.
A leading private provider of healthcare and care services in Scandinavia.
| Income statement items, | 2014 | 2013 | Rolling 4 | ||
|---|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 | quarters |
| Sales | 1 894 | 3 735 | 1 767 | 3 523 | 7 187 |
| Sales growth, % | 7 | 6 | 2 | 4 | |
| Organic growth, constant | |||||
| currency, % | 7 | 6 | 3 | 5 | |
| EBITDA | 77 | 178 | 105 | 190 | 295 |
| EBITDA, % | 4 | 5 | 6 | 5 | 4 |
| Balance sheet items, SEK m. | 6/30 2014 | 12/31 2013 | |||
| Net debt | 970 | 991 | |||
| 2014 | 2013 | ||||
| Cash flow items, SEK m. | Q2 | H1 | Q2 | H1 | |
| EBITDA | 77 | 178 | 105 | 190 | |
| Change in working capital | 61 | -11 | 55 | -35 | |
| Capital expenditures | -26 | -79 | -42 | -81 | |
| Operating cash flow | 112 | 88 | 118 | 74 | |
| Acquisitions/divestments | -12 | -12 | - | - | |
| Shareholder contribution/ | |||||
| distribution | - | - | - | - | |
| Other1) | -63 | -55 | 892) | 1042) | |
| Increase(-)/decrease (+) in net | |||||
| debt | 37 | 21 | 207 | 178 | |
| Key ratios | Rolling 4 quarters |
||||
| Working capital/sales, % | -2 | ||||
| Capital expenditures/sales, % | 2 | ||||
| 6/30 2014 | 6/30 2013 |
Number of employees 6 485 6 070 Includes effects of exchange rate changes, interest, tax and other non-cash items.
Includes the release of the cancelled SEK 125 m. acquisition-related earn-out payment.
A world-leading manufacturer of advanced powered wheelchairs.
| Income statement items, | 2014 | 2013 | Rolling 4 | ||
|---|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 | quarters |
| Sales | 482 | 893 | 438 | 820 | 1 815 |
| Sales growth, % | 10 | 9 | 6 | 8 | |
| Organic growth, constant | |||||
| currency, % | 5 | 6 | 8 | 10 | |
| EBITDA | 103 | 166 | 50 | 110 | 311 |
| EBITDA, % | 21 | 19 | 11 | 13 | 17 |
| Balance sheet items, SEK m. | 6/30 2014 | 12/31 2013 | |||
| Net debt | 1 421 | 1 117 | |||
| 2014 | 2013 | ||||
| Cash flow items, SEK m. | Q2 | H1 | Q2 | H1 | |
| EBITDA | 103 | 166 | 50 | 110 | |
| Adjustments to EBITDA | - | - | -252) | -252) | |
| Change in working capital | -64 | -24 | -31 | -35 | |
| Capital expenditures | -29 | -64 | -19 | -40 | |
| Operating cash flow | 10 | 78 | -25 | 10 | |
| Acquisitions/divestments | -362 | -362 | - | - | |
| Shareholder | |||||
| contribution/distribution | - | - | - | - | |
| Other3) | 2 | -20 | -31 | -19 | |
| Increase(-)/decrease (+) in net | |||||
| debt | -350 | -304 | -56 | -9 | |
| Rolling 4 | |||||
| Key ratios | quarters | ||||
| Working capital/sales, % | 19 | ||||
| Capital expenditures/sales, % | 7 | ||||
| 6/30 2014 | 6/30 2013 | ||||
| Number of employees | 955 | 750 |
1) Consolidated as of May 14, 2013, figures for full prior periods provided for comparison.
2) SEK -36 m. in cash flow-affecting acquisition-related costs and SEK 11 m. in
acquisition-related inventory adjustments that have not affected cash flow.
3) Includes effects of exchange rate changes, interest and tax.
Read more at www.grandhotel.se >>
Includes Grand Hôtel, Scandinavia's leading five-star hotel, opened in 1874, and Lydmar Hotel, a high-end boutique hotel. Both reside in neighboring landmark buildings with unique waterfront locations in central Stockholm.
| Income statement items, | 20141) 2013 |
Rolling 4 quarters |
|||
|---|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 | |
| Sales | 146 | 238 | 113 | 186 | 514 |
| Sales growth, % | 29 | 28 | 13 | 6 | |
| Organic growth, % | 12 | 12 | - | - | |
| EBITDA | 14 | 1 | 0 | -15 | 11 |
| EBITDA, % | 10 | 0 | 0 | -8 | 2 |
Including the operations of Lydmar Hotel.
| VECTURA | |||
|---|---|---|---|
Manages real estate in Sweden, including Investor's office building, Näckström Fastigheter (operates real estate related to Aleris), the Grand Hôtel property, and other land and real estate.
| Income statement items, | 2014 | 2013 | Rolling 4 | ||
|---|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 | quarters |
| Sales | 35 | 61 | 34 | 54 | 131 |
| Sales growth, % | 3 | 13 | 10 | 0 | |
| EBITDA | 22 | 35 | 22 | 27 | 84 |
| EBITDA, % | 63 | 57 | 65 | 50 | 64 |
| Balance sheet items, SEK m. | 6/30 2014 | 12/31 2013 |
|---|---|---|
| Net debt, Grand Hôtel/Vectura | 1 098 | 943 |
Financial Investments contributed to the net asset value with SEK 4,015 m. during the period (1,832), of which SEK 1,961 m. during the second quarter (1,451).
Read more at www.investorab.com under "Our Investments" >>
SEK 499 m. was invested and SEK 710 m. was distributed to Investor.
Investor acquired an additional 3 percent of Affibody. Following this, Investor's owns 71 percent of the company.
SEK 476 m. was invested and SEK 1,913 m. was distributed to Investor.
Investor acquired an additional 44 percent of the Swedish biotech company Affibody for SEK 109 m.
| 6/30 2014 | 12/31 2013 | ||||
|---|---|---|---|---|---|
| SEK/Share | SEK m. | SEK/Share | SEK m. | ||
| EQT | 17 | 13 287 | 15 | 11 615 | |
| Investor Growth | |||||
| Capital | 15 | 11 328 | 14 | 10 793 | |
| Partner-owned | |||||
| Lindorff | |||||
| Equity | 6 | 4 880 | 6 | 4 648 | |
| Mezzanine debt | 1 | 340 | 1 | 312 | |
| 3 Scandinavia | 4 | 2 877 | 3 | 2 643 | |
| Other investments | 2 | 1 597 | 3 | 2 245 | |
| Total | 45 | 34 309 | 42 | 32 256 |
| 2014 | 2013 | |||
|---|---|---|---|---|
| SEK m. | Q2 | H1 | Q2 | H1 |
| EQT | 1 552 | 2 657 | 716 | 860 |
| Investor Growth Capital | 76 | 1 002 | 321 | 408 |
| Partner-owned | ||||
| Lindorff | 186 | 260 | 297 | 248 |
| 3 Scandinavia | 122 | 234 | 76 | 90 |
| Other investments | 39 | -111 | 58 | 258 |
| Management cost | -14 | -27 | -17 | -32 |
| Total | 1 961 | 4 015 | 1 451 | 1 832 |
Read more at www.eqt.se >>
The EQT private equity funds invest in companies in Northern and Eastern Europe, Asia and the U.S., in which EQT can act as a catalyst to transform and grow operations.
| SEK m. | Q2 2014 | H1 2014 | H1 2013 |
|---|---|---|---|
| Net asset value, beginning of period | 11 852 | 11 615 | 10 984 |
| Contribution to net asset value (value change) |
1 552 | 2 657 | 860 |
| Draw-downs (investments and management fees) |
474 | 841 | 765 |
| Proceeds to Investor (divestitures, fee surplus and carry) |
-591 | -1 826 | -793 |
| Net asset value, end of period | 13 287 | 13 287 | 11 816 |
Read more at www.investorgrowthcapital.com >>
Investor Growth Capital (IGC) manages expansion stage venture capital investments in growth companies within technology and healthcare in the U.S. and China.
| SEK m. | Q2 2014 | H1 2014 | H1 2013 |
|---|---|---|---|
| Net asset value, beginning of period | 11 357 | 10 793 | 10 727 |
| Contribution to net asset value (value change) |
76 | 1 002 | 408 |
| Distribution to Investor | -1051) | -467 | -363 |
| Net asset value, end of period | 11 328 | 11 328 | 10 772 |
| Of which net cash | 3 652 | 3 652 | 2 510 |
The distribution was pending over the closing of the quarter and has been accounted for as a receivable in Other Assets and Liabilities.
As of June 30, 2014, the U.S., Asian and European portfolios represented 59, 33 and 8 percent of the total value, excluding net cash. 38 percent of the market value was composed by listed holdings. Net cash represented 32 percent of IGC's net asset value.
The five largest investments were (in alphabetical order): ChinaCache (China), Mindjet Corporation (U.S.), NS Focus (China), Retail Solutions (U.S.) and Venda (U.S). In total, these holdings represented 42 percent of the total portfolio value, excluding net cash.
Read more at www.lindorff.com >>
A leading European provider of debt-related administrative services. The company has operations in Denmark, Estonia, Finland, Germany, Latvia, Lithuania, The Netherlands, Norway, Russia, Spain and Sweden.
| Income statement items, | 2014 | 20132) | Rolling 4 | ||
|---|---|---|---|---|---|
| EUR m. | Q2 | H1 | Q2 | H1 | quarters2) |
| Sales | 112 | 224 | 116 | 225 | 444 |
| Sales growth, % | -3 | 0 | 11 | 12 | |
| Sales growth, constant | |||||
| currency, % | 0 | 4 | 10 | 11 | |
| EBITDA3) | 32 | 66 | 37 | 67 | 138 |
| EBITDA, % | 29 | 29 | 32 | 30 | 31 |
| Balance sheet items, EUR m. |
Q2 2014 | Q4 2013 | |
|---|---|---|---|
| Net debt | 809 | 745 | |
| Q2 2014 | Q2 2013 | ||
| Number of employees | 2 595 | 2 605 |
Income statement and balance sheet items are reported with one month's delay.
Restated.
EBITDA after portfolio amortization.
An operator providing mobile voice and broadband services in Sweden and Denmark. The company has close to 2.9 m. subscribers and is recognized for its high-quality network.
| 2014 | 2013 | Rolling 4 | |||
|---|---|---|---|---|---|
| Income statement items | Q2 | H1 | Q2 | H1 | quarters |
| Sales, SEK m. | 2 353 | 4 951 | 2 219 | 4 661 | 9 611 |
| Sweden, SEK m. | 1 640 | 3 336 | 1 442 | 3 057 | 6 417 |
| Denmark, DKK m. | 590 | 1 347 | 677 | 1 396 | 2 698 |
| Service revenue2), SEK m. | 1 402 | 2 748 | 1 179 | 2 376 | 5 353 |
| Sweden, SEK m. | 906 | 1 760 | 763 | 1 546 | 3 409 |
| Denmark, DKK m. | 411 | 823 | 362 | 722 | 1 642 |
| EBITDA, SEK m. | 672 | 1 314 | 480 | 971 | 2 616 |
| Sweden, SEK m. | 487 | 947 | 321 | 650 | 1 840 |
| Denmark, DKK m. | 154 | 306 | 139 | 279 | 657 |
| EBITDA, % | 29 | 27 | 22 | 21 | 27 |
| Sweden | 30 | 28 | 22 | 21 | 29 |
| Denmark | 26 | 23 | 21 | 20 | 24 |
| Balance sheet items | Q2 2014 | Q4 2013 | |||
| Net debt, SEK m. | 8 989 | 9 676 | |||
| Q2 2014 | Q2 2013 | ||||
| Number of employees | 2 060 | 2 035 | |||
| Key figures | Rolling 4 quarters |
||||
| Capital expenditures/sales, % | 12 | ||||
| Other key figures3) | 6/30 2014 | 6/30 2013 | |||
| Subscribers | 2 856 000 | 2 575 000 | |||
| Sweden | 1 787 000 | 1 638 000 | |||
| Denmark | 1 069 000 | 937 000 | |||
| Postpaid/prepaid ratio | 81/19 | 84/16 |
Income statement and balance sheet items are reported with one month's delay.
Mobile service revenue excluding interconnect revenue.
Other key figures are reported without delay.
| 2014 2014 2013 2013 2013 2013 2013 2012 2012 2012 2012 Core Investments – Subsidiaries Mölnlycke Health Care (EUR m.) Sales 297 287 1 153 300 284 292 277 1 119 294 279 279 EBITDA 77 77 344 97 87 86 74 321 89 81 80 EBITDA (%) 26 27 30 32 31 29 27 29 30 29 29 Net debt 646 698 728 728 822 1 358 1 399 1 383 1 383 1 450 1 488 Employees 7 515 7 390 7 375 7 375 7 340 7 390 7 265 7 175 7 175 7 170 7 175 Aleris (SEK m.) Sales 1 894 1 841 6 975 1 807 1 645 1 767 1 756 6 732 1 779 1 569 1 728 EBITDA 77 101 307 38 79 105 85 330 58 38 104 EBITDA (%) 4 5 4 2 5 6 5 5 3 2 6 Net debt 970 1 007 991 991 1 970 1 983 2 190 2 161 2 161 2 684 2 586 Employees 6 485 6 375 6 220 6 220 6 175 6 070 5 995 6 010 6 010 5 955 5 785 Permobil (SEK m.)1) Sales 482 411 1 742 472 450 438 382 1 562 413 392 415 EBITDA 103 63 255 77 68 50 60 313 86 74 98 EBITDA (%) 21 15 15 16 15 11 16 20 21 19 24 Net debt 1 421 1 071 1 117 1 117 1 161 1 291 1 235 1 282 1 282 1 305 1 339 Employees 955 765 775 775 775 750 710 680 680 690 700 Grand Hôtel 2) (SEK m.) Sales 146 92 462 145 131 113 73 383 112 95 100 EBITDA 14 -13 -5 7 3 0 -15 0 2 1 4 EBITDA (%) 10 -14 -1 5 2 0 -21 0 2 1 4 Employees 325 295 335 335 295 260 220 265 265 255 255 Vectura2) (SEK m.) Sales 35 26 124 38 32 34 20 116 30 32 31 EBITDA 22 13 76 28 21 22 5 58 15 19 10 EBITDA (%) 63 50 61 74 66 65 25 50 50 59 32 Net debt (Grand Hôtel/Vectura) 1 098 1 015 943 943 986 951 876 820 820 - - Financial Investments EQT (SEK m.) Reported value 13 287 11 852 11 615 11 615 10 305 11 816 10 923 10 984 10 984 11 267 12 624 Reported value change, % 13 10 22 12 2 7 1 0 -1 -5 1 Value change, constant currency,% 10 9 20 10 4 2 4 3 -2 -2 2 Draw-downs from Investor 841 367 1 914 606 543 390 375 1 284 90 707 176 Proceeds to Investor 1 826 1 235 3 697 565 2 339 213 580 3 460 303 1 414 32 Net proceeds to Investor 985 868 1 783 -41 1 796 -177 205 2 176 213 707 -144 Investor Growth Capital (SEK m.) Reported value 11 328 11 357 10 793 10 793 11 102 10 772 10 701 10 727 10 727 10 827 11 445 Reported value change, % 1 9 13 3 6 3 1 4 0 -4 2 Value change, constant currency,% -3 9 14 2 10 1 1 9 0 1 -3 Capital contribution from Investor - - - - - - - 750 - - - Distribution to Investor 105 362 1 308 678 267 250 113 607 81 155 114 Partner-owned investments Lindorff 3, 4) (EUR m.) Sales 112 112 445 108 112 116 109 420 - - - EBITDA 32 34 139 31 41 37 30 123 - - - EBITDA (%) 29 30 31 29 37 32 28 29 - - - Net debt 809 780 745 745 770 773 758 764 764 792 795 Employees 2 595 2 505 2 565 2 565 2 580 2 605 2 620 2 680 2 680 3 010 2 950 3 Scandinavia3) Sales 2 353 2 598 9 321 2 432 2 228 2 219 2 442 9 341 2 461 2 113 2 507 Sweden, SEK m. 1 640 1 696 6 138 1 612 1 469 1 442 1 615 6 336 1 666 1 386 1 794 Denmark, DKK m. 590 757 2 747 699 652 677 719 2 561 689 635 592 EBITDA 672 642 2 273 734 568 480 491 2 425 683 651 598 Sweden, SEK m. 487 460 1 543 522 371 321 329 1 712 478 458 449 Denmark, DKK m. 154 152 630 181 170 139 140 609 179 167 124 EBITDA, % 29 25 24 30 25 22 20 26 28 31 24 Sweden 30 27 25 32 25 22 20 27 29 33 25 Denmark 26 20 23 26 26 21 19 24 26 26 21 Net debt, SEK m. 8 989 9 417 9 676 9 676 9 612 10 048 10 184 9 652 9 652 9 841 10 391 Employees 2 060 2 035 2 075 2 075 2 050 2 035 1 980 1 980 1 980 1 955 2 185 |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q2 | Q1 | FY | Q4 | Q3 | Q2 | Q1 | FY | Q4 | Q3 | Q2 | |
Consolidated as of May 14, 2013, figures for prior periods provided for comparison.
Numbers up until the first quarter 2013 pro forma.
Income and balance sheet items are reported with one month's delay.
Restated numbers prior to 2013 not provided on a quarterly basis.
Net debt totaled SEK 24,494 m. on June 30, 2014 (23,104). Debt financing of the subsidiaries within Core Investments and the partner-owned investments within Financial Investments, is arranged on an independent ring-fenced basis and hence not included in Investor's net debt. Investor guarantees SEK 3.7 bn. of 3 Scandinavia's external debt, but this is not included in Investor's net debt.
| SEK m. | Consolidated balance sheet |
Deductions related to Core Investments subsidiaries and IGC |
Investor's net debt |
|---|---|---|---|
| Other financial investments |
2 022 | -2 | 2 0201) |
| Cash, bank and short-term investments |
13 121 | -7 289 | 5 8321) |
| Receivables included in net debt |
736 | -8 | 728 |
| Loans | -45 848 | 12 921 | -32 927 |
| Provision for pensions | -659 | 512 | -147 |
| Total | -30 628 | 6 134 | -24 494 |
Included in cash and readily available placements.
Investor's cash and readily available placements amounted to SEK 7,852 m. as of June 30, 2014 (6,864). The shortterm investments are invested conservatively, taking into account the risk-adjusted return profile. Gross debt excluding pensions for Investor amounted to SEK 32,199 m. at the end of the period (29,814).
The average maturity of Investor AB's debt portfolio was 11.0 years on June 30, 2014 (10.8), excluding the debt of Mölnlycke Health Care, Aleris, Permobil and Grand Hôtel/Vectura.
| SEK m. | Group - Net Financial Items |
Deductions related to Core Investments subsidiaries and IGC |
Investor's Net Financial Items |
|---|---|---|---|
| Interest income | 63 | -8 | 55 |
| Interest expenses | -733 | 155 | -578 |
| Realized result from loans and swaps |
- | - | - |
| Unrealized result from revaluation of loans, swaps and short-term investments |
-170 | 22 | -148 |
| Foreign exchange result | 158 | -82 | 76 |
| Other | -26 | 4 | -22 |
| Total | -708 | 91 | -617 |
The price of the A-share and B-share was SEK 244.00 and SEK 250.70 respectively on June 30, 2014, compared to SEK 215.10 and SEK 221.30 on December 31, 2013.
The total shareholder return amounted to 11 percent during the second quarter 2014 (-1).
The total market capitalization of Investor, adjusted for repurchased shares, was SEK 188,740 m. as of June 30, 2014 (166,451).
Investor's share capital amounted to SEK 4,795 m. on June 30, 2014 (4,795).
| Class of share |
Number of shares |
Number of votes |
% of capital |
% of votes |
|---|---|---|---|---|
| A 1 vote | 311 690 844 | 311 690 844 | 40.6 | 87.2 |
| B 1/10 vote | 455 484 186 | 45 548 418 | 59.4 | 12.8 |
| Total | 767 175 030 | 357 239 262 | 100.0 | 100.0 |
On June 30, 2014, Investor owned a total of 5,994,985 of its own shares (6,293,360). The net decrease in holdings of own shares is attributable to repurchase of own shares and transfer of shares and options within Investor's long-term variable remuneration program.
The Parent Company's result after financial items was SEK 18,850 m. (10,230). The result is mainly related to listed core investments which contributed to the result with dividends amounting to SEK 5,713 m. (4,965) and value changes of SEK 13,302 m. (4,961).
During the period, the Parent Company invested SEK 2,442 m. in financial assets (8,453), of which SEK 1,215 m. in Group companies (8,334) and purchases in listed core investments of SEK 1,180 m. (59). By the end of the period, shareholder's equity totaled SEK 203,758 m. (190,944).
In April 2014, the participants, approximately 140 people, in Mölnlycke Health Care's Management Participation Program agreed to sell all of their shares under the program. A new program was set in place for current Board members, management and key employees, approximately 70 people in total.
In total, Investor acquired shares in Mölnlycke Health Care from approximately 140 participants for a total amount of EUR 112 m, of which EUR 74 m. from the Board, management. The participants in the new program have invested EUR 35 m., of which Board members and management EUR 15 m. Gunnar Brock is one of the participants of the Management Participation Program since his appointment as Chairman of Mölnlycke Health Care in 2007, prior to his election to the Board of Directors of Investor in 2009. The total investment by Gunnar Brock under the program is approximately EUR 0.7 m. As disclosed in the Interim Report January-March 2012, Gunnar Brock divested part of his holding to Investor in March 2012. As part of the transactions described above, Gunnar Brock has sold his remaining holding of shares to Investor for approximately net EUR 1.9 m. and reinvested EUR 0.4 m. in the new program.
The main risks that the Group and the Parent Company are exposed to are primarily related to the value changes of the listed assets due to market price fluctuations. The development of the global economy is an important uncertainty factor in assessment of near-term market fluctuations. The development of the financial markets also affects the various unlisted holdings' businesses and opportunities for new investments and divestments.
The Core Investments subsidiaries are, like Investor, exposed to commercial risks, financial risks and market risks. In addition these companies, through their business activities within respective sector, also are exposed to legal/ regulatory risks and political risks, for example political decisions on healthcare budgets and industry regulations.
Whatever the economic situation in the world, operational risk management requires a continued high level of awareness and focused work in line with stated policies and instructions.
Investor's risk management, risks and uncertainties are described in detail in the Annual Report, (Administration report and Note 3). No significant changes have been assessed subsequently, aside from changes in current macro economy and thereto related risks.
For the Group, this Interim report was prepared in accordance with IAS 34 Interim Financial Reporting and applicable regulations in the Swedish Annual Accounts Act, and for the Parent Company in accordance with Sweden's Annual Accounts Act, chapter 9 Interim report. Unless otherwise specified below, the accounting policies that have been applied for the Group and Parent Company are in agreement with the accounting policies used in the preparation of the company's most recent annual report.
Changes in accounting policies due to new or amended IFRS
Applied as of January 1, 2014:
Other new or revised IFRSs and interpretations from the IFRS Interpretations Committee have had no significant effect on the profit/loss, financial position or disclosures for the Group or Parent Company.
On March 4, 2014, Investor acquired an additional 44 percent of the capital and votes of the Swedish biotech company Affibody Medical AB (publ). An additional 3 percent were acquired during April. The company is focused on developing next generation biopharmaceuticals based on its unique proprietary technology platforms: Affibody® molecules and AlbumodTM. Following the acquisitions, Investor owns 71 percent of the company. The consideration from Investor amounted to SEK 116 m. and was paid in cash.
In the preliminary Purchase Price Allocation, intangible assets amount to SEK 211 m. and consist of customer contracts that are depreciated over the life of the contracts.
Identifiable assets acquired and liabilities assumed (SEK m.)
| Affibody | |
|---|---|
| SEK m. | Preliminary Purchase Price Allocation |
| Intangible assets | 211 |
| Property, plant and equipment | 2 |
| Accounts receivables | 1 |
| Other current assets | 5 |
| Cash and cash equivalents | 33 |
| Non-current liabilities and provisions | -3 |
| Deferred tax liabilities | -46 |
| Current liabilities | -12 |
| Net identifiable assets and liabilities | 191 |
| Fair value of previously held share | -74 |
| Non-controlling interest | -1 |
| Consideration | 116 |
On May 27, 2014, Permobil acquired 100 percent of the capital and votes in TiLite, an American leading manufacturer of innovative and individually customized manual wheelchairs. Through the acquisition, Permobil is taking the next step in its strategy to become a leading healthcare company, providing solutions for people with complex rehabilitation needs. The consideration amounted to SEK 362 m. The acquisition is financed by retained cash and new debt.
In the preliminary purchase price allocation, goodwill amounts to SEK 141 m. The goodwill recognized for the acquisition corresponds to the combined company's opportunities for synergies and sales growth due to TiLites strong market position in the U.S. and Permobil´s sales network in Europe among others. The goodwill recognized is not expected to be deductible for income tax purposes.
Identifiable assets acquired and liabilities assumed (SEK m.)
| SEK m. | Preliminary Purchase Price Allocation |
|---|---|
| Intangible assets | 164 |
| Property, plant and equipment | 38 |
| Inventory | 45 |
| Accounts receivables | 27 |
| Other current assets | 7 |
| Cash and cash equivalents | 5 |
| Deferred tax liabilities | -49 |
| Current liabilities | -16 |
| Net identifiable assets and liabilities | 221 |
| Consolidated goodwill | 141 |
| Consideration | 362 |
The Purchase Price Allocation is preliminary.
Transaction related costs amounted to SEK 8 m. and derive from external legal fees and due diligence expenses. The costs have been included in the item Administrative, research and development and other operating cost in the Group's consolidated income statement.
For the one-month period from the acquisition date until June 30, TiLite contributed net sales of SEK 20 m. and profit of SEK 0 m. to the Group's result. If the acquisition had occurred on January 1, 2014, management estimates that consolidated net sales for the Investor Group would have increased by SEK 81 m. and consolidated profit for the period would have increased by SEK 5 m.
No significant changes of pledged assets and contingent liabilities occurred during the period.
| Oct. 22, 2014 | Interim Management Statement January September 2014 |
|---|---|
| Jan. 28, 2015 | Year-End Report 2014 |
| Apr. 21, 2015 | Interim Management Statement January March 2015 |
Jul. 16, 2015 Interim Report January-June 2015
Susanne Ekblom, Chief Financial Officer: +46 8 614 2000 [email protected]
Stefan Stern, Head of Corporate Relations and Communications: +46 8 614 2059, +46 70 636 7417 [email protected]
Magnus Dalhammar, Head of Investor Relations: +46 8 614 2130, +46 73 524 2130 [email protected]
Investor AB (publ) (CIN 556013-8298) SE-103 32 Stockholm, Sweden Visiting address: Arsenalsgatan 8C Phone: +46 8 614 2000 Fax: + 46 8 614 2150 www.investorab.com
Ticker codes:
INVEB SS in Bloomberg INVEb.ST in Reuters INVE B in NASDAQ OMX
The information in this Interim Report is such that Investor is required to disclose under Sweden's Securities Market Act.
The report was released for publication at 08:15 CET on July 17, 2014.
This Interim Report and additional information is available on www.investorab.com
The Board of Directors declares that the undersigned six-month interim report provides a true and fair overview of the Parent Company's and Group's operations, their financial position and performance, and describes material risks and uncertainties facing the Parent Company and other companies in the Group.
Stockholm, July 17, 2014
Jacob Wallenberg Chairman Josef Ackermann Gunnar Brock Sune Carlsson Director Director Director Magdalena Gerger Tom Johnstone Grace Reksten Skaugen Director Director Director O. Griffith Sexton Hans Stråberg Lena Treschow Torell Director Director Director
Marcus Wallenberg Peter Wallenberg Jr
Director Director
Börje Ekholm President and Chief Executive Officer Director
We have reviewed the interim report of Investor AB (publ), corporate identity number 556013-8298, for the period January 1-June 30, 2014. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit.
Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Stockholm, July 17, 2014
Deloitte AB
Thomas Strömberg Authorized Public Accountant
This review report is a translation of the original review report in Swedish
| SEK m. | 1/1-6/30 2014 | 1/1-6/30-2013 | 4/1-6/30 2014 | 4/1-6/30 2013 |
|---|---|---|---|---|
| Dividends | 6 754 | 5 266 | 3 369 | 2 940 |
| Other operating income | 105 | 254 | 53 | 128 |
| Changes in value | 16 018 | 7 424 | 7 125 | -6 699 |
| Net sales | 10 093 | 8 802 | 5 210 | 4 623 |
| Cost of goods and services sold | -6 539 | -5 818 | -3 358 | -2 980 |
| Sales and marketing cost | -1 551 | -1 345 | -802 | -696 |
| Administrative, research and development and other operating cost | -1 138 | -825 | -596 | -460 |
| Management cost | -181 | -181 | -91 | -91 |
| Share of results of associates | 273 | 8 | 116 | 4 |
| Operating profit/loss | 23 834 | 13 585 | 11 026 | -3 231 |
| Net financial items | -708 | -909 | -227 | -280 |
| Profit/loss before tax | 23 126 | 12 676 | 10 799 | -3 511 |
| Income taxes | 589 | 39 | 753 | 31 |
| Profit/loss for the period | 23 715 | 12 715 | 11 552 | -3 480 |
| Attributable to: | ||||
| Owners of the Parent Company | 23 684 | 12 721 | 11 542 | -3 482 |
| Non-controlling interest | 31 | -6 | 10 | 2 |
| Profit/loss for the period | 23 715 | 12 715 | 11 552 | -3 480 |
| Basic earnings per share, SEK | 31.12 | 16.71 | 15.16 | -4.57 |
| Diluted earnings per share, SEK | 31.05 | 16.69 | 15.14 | -4.57 |
| SEK m. | 1/1-6/30 2014 | 1/1-6/30 2013 | 4/1-6/30 2014 | 4/1-6/30 2013 |
|---|---|---|---|---|
| Profit for the period | 23 715 | 12 715 | 11 552 | -3 480 |
| Other comprehensive income for the period, including tax | ||||
| Items that will not be recycled to profit/loss for the period | ||||
| Revaluation of property, plant and equipment | 64 | 9 | - | 9 |
| Re-measurements of defined benefit plans | - | - | - | - |
| Items that have been or may be recycled to profit/loss for the period | ||||
| Cash flow hedges | -125 | 161 | -77 | 45 |
| Foreign currency translation adjustment | 540 | 599 | 549 | 639 |
| Share of other comprehensive income of associates | -24 | 4 | -11 | 25 |
| Total other comprehensive income for the period | 455 | 773 | 461 | 718 |
| Total comprehensive income for the period | 24 170 | 13 488 | 12 013 | -2 762 |
| Attributable to: | ||||
| Owners of the Parent Company | 24 140 | 13 475 | 12 004 | -2 771 |
| Non-controlling interest | 30 | 13 | 9 | 9 |
| Total comprehensive income for the period | 24 170 | 13 488 | 12 013 | -2 762 |
| SEK m. | 6/30 2014 | 12/31 2013 | 6/30 2013 |
|---|---|---|---|
| ASSETS | |||
| Goodwill | 26 585 | 25 819 | 26 336 |
| Other intangible assets | 11 590 | 11 530 | 11 997 |
| Property, plant and equipment | 5 027 | 4 666 | 4 596 |
| Shares and participations | 219 042 | 202 710 | 171 912 |
| Other financial investments | 2 022 | 1 761 | 377 |
| Long-term receivables included in net debt | 734 | 174 | 393 |
| Other long-term receivables | 4 518 | 3 654 | 6 258 |
| Total non-current assets | 269 518 | 250 314 | 221 869 |
| Inventories | 1 583 | 1 441 | 1 566 |
| Shares and participations in trading operation | 99 | 149 | 305 |
| Short-term receivables included in net debt | 2 | 1 | 0 |
| Other current receivables | 3 926 | 3 529 | 3 888 |
| Cash, bank and short-term investments | 13 121 | 11 716 | 6 795 |
| Assets held for sale | - | - | 5 455 |
| Total current assets | 18 731 | 16 836 | 18 009 |
| TOTAL ASSETS | 288 249 | 267 150 | 239 878 |
| EQUITY AND LIABILITIES | |||
| Equity | 232 519 | 215 966 | 183 241 |
| Long-term interest bearing liabilities | 45 480 | 42 212 | 45 063 |
| Provisions for pensions and similar obligations | 659 | 642 | 757 |
| Other long-term provisions and liabilities | 4 416 | 3 738 | 3 905 |
| Total non-current liabilities | 50 555 | 46 592 | 49 725 |
| Current interest bearing liabilities | 368 | 52 | 2 389 |
| Other short-term provisions and liabilities | 4 807 | 4 540 | 4 523 |
| Total current liabilities | 5 175 | 4 592 | 6 912 |
| TOTAL EQUITY AND LIABILITIES | 288 249 | 267 150 | 239 878 |
| SEK m. | 1/1-6/30 2014 | 1/1-12/31 2013 | 1/1-6/30 2013 |
|---|---|---|---|
| Opening balance | 215 966 | 175 106 | 175 106 |
| Profit for the period | 23 715 | 45 106 | 12 715 |
| Other comprehensive income for the period | 455 | 1 055 | 773 |
| Total comprehensive income for the period | 24 170 | 46 161 | 13 488 |
| Dividends paid | -6 089 | -5 331 | -5 331 |
| Changes in non-controlling interest | -1 042 | 89 | 82 |
| Reclassification of non-controlling interest | -539 | - | - |
| Repurchase of own shares | - | -195 | -195 |
| Effect of long-term share-based remuneration | 53 | 136 | 91 |
| Closing balance | 232 519 | 215 966 | 183 241 |
| Attributable to: | |||
| Owners of the Parent Company | 232 501 | 215 417 | 182 699 |
| Non-controlling interest | 18 | 549 | 542 |
| Total equity | 232 519 | 215 966 | 183 241 |
| Operating activities Core Investments Dividends received 5 869 5 107 Cash receipts 10 180 9 440 Cash payments -8 605 -8 299 Financial Investments and management cost Dividends received 886 167 Net cash flow, trading operation 346 -162 Cash payments -434 -213 8 242 6 040 Cash flows from operating activities before net interest and income tax Interest received/paid -821 -1 109 Income tax paid -116 -164 7 305 4 767 Cash flows from operating activities Investing activities Acquisitions -2 462 -1 263 Divestments 2 601 1 337 Increase in long-term receivables -1 0 Decrease in long-term receivables 47 60 Acquisitions of subsidiaries, net effect on cash flow -1 450 -3 564 Increase in other financial investments -2 586 -1 728 Decrease in other financial investments 2 329 2 425 Net change, short-term investments -180 577 Acquisitions of property, plant and equipment -511 -263 Proceeds from sale of property, plant and equipment 3 6 Acquisitions of other investments - -4 -2 210 -2 417 Net cash used in investing activities Financing activities Borrowings 1 998 1 319 Repayment of borrowings -27 -1 136 Repurchase / Sale of own shares - -195 Dividend paid -6 089 -5 331 Net cash used in financing activities -4 118 -5 343 977 -2 993 Cash flows for the period 9 783 7 696 Cash and cash equivalents at the beginning of the year Exchange difference in cash 226 -8 |
SEK m. | 1/1-6/30 2014 | 1/1-6/30 2013 |
|---|---|---|---|
| 10 986 4 695 Cash and cash equivalents at the end of the period |
| Investor | |||||
|---|---|---|---|---|---|
| SEK m. | Core investments | Financial investments |
Groupwide | Elimination | Total |
| Dividends | 5 869 | 885 | - | - | 6 754 |
| Other operating income1) | - | 105 | - | - | 105 |
| Changes in value | 13 548 | 2 470 | - | - | 16 018 |
| Net sales | 10 087 | 6 | - | - | 10 093 |
| Cost of goods and services sold | -6 538 | -1 | - | - | -6 539 |
| Sales and marketing cost | -1 539 | -12 | - | - | -1 551 |
| Administrative, research and development and | |||||
| other operating cost | -1 083 | -55 | - | - | -1 138 |
| Management cost | -79 | -27 | -75 | - | -181 |
| Share of results of associates | 3 | 268 | 2 | - | 273 |
| Operating profit/loss | 20 268 | 3 639 | -73 | - | 23 834 |
| Net financial items | -99 | 8 | -617 | - | -708 |
| Income tax | 784 | -123 | -72 | - | 589 |
| Profit/loss for the period | 20 953 | 3 524 | -762 | - | 23 715 |
| Non-controlling interest | -30 | -1 | - | - | -31 |
| Net profit/loss for the period attributable to the | |||||
| Parent Company | 20 923 | 3 523 | -762 | - | 23 684 |
| Dividends paid | - | - | -6 089 | - | -6 089 |
| Other effects on equity | -529 | 492 | -474 | - | -511 |
| Contribution to net asset value | 20 394 | 4 015 | -7 325 | - | 17 084 |
| Net asset value by business area 6/30 2014 | |||||
| Carrying amount | 221 523 | 34 309 | 1 163 | - | 256 995 |
| Investors net debt | -24 494 | -24 494 | |||
| Total net asset value | 221 523 | 34 309 | -23 331 | - | 232 501 |
| Financial | Investor | ||||
|---|---|---|---|---|---|
| SEK m. | Core investments | investments | Groupwide | Elimination | Total |
| Dividends | 5 107 | 159 | - | - | 5 266 |
| Other operating income1) | 69 | 254 | - | -69 | 254 |
| Changes in value | 6 267 | 1 157 | - | - | 7 424 |
| Net sales | 8 859 | - | - | -57 | 8 802 |
| Cost of goods and services sold | -5 875 | - | - | 57 | -5 818 |
| Sales and marketing cost | -1 345 | - | - | - | -1 345 |
| Administrative, research and development and | |||||
| other operating cost | -751 | -74 | - | - | -825 |
| Management cost | -73 | -32 | -76 | - | -181 |
| Share of results of associates | 3 | 5 | - | - | 8 |
| Operating profit/loss | 12 261 | 1 469 | -76 | -69 | 13 585 |
| Net financial items | -570 | - | -408 | 69 | -909 |
| Income tax | 98 | - | -59 | - | 39 |
| Profit/loss for the period | 11 789 | 1 469 | -543 | - | 12 715 |
| Non-controlling interest | 6 | - | - | - | 6 |
| Net profit/loss for the period attributable to the | |||||
| Parent Company | 11 795 | 1 469 | -543 | - | 12 721 |
| Dividends paid | - | - | -5 331 | - | -5 331 |
| Repurchase of own shares | - | - | -195 | - | -195 |
| Other effects on equity | 391 | 363 | 52 | - | 806 |
| Contribution to net asset value | 12 186 | 1 832 | -6 017 | - | 8 001 |
| Net asset value by business area 6/30 2013 | |||||
| Carrying amount | 173 722 | 37 155 | 23 | - | 210 900 |
| Investors net debt | -28 201 | -28 201 | |||
| Total net asset value | 173 722 | 37 155 | -28 178 | - | 182 699 |
Includes interest on loans.
| SEK m. | 1/1-6/30 2014 | 1/1-6/30 2013 | 4/1-6/30 2014 | 4/1-6/30 2013 |
|---|---|---|---|---|
| Dividends | 5 713 | 4 965 | 2 937 | 2 777 |
| Changes in value | 13 302 | 4 961 | 6 241 | -7 685 |
| Net sales | 6 | 5 | 2 | 4 |
| Operating cost | -181 | -181 | -90 | -94 |
| Impairment of associates | - | - | - | - |
| Impairment subsidiaries | - | - | - | - |
| Operating profit/loss | 18 840 | 9 750 | 9 090 | -4 998 |
| Profit/loss from financial items | ||||
| Net financial items | 10 | 480 | 152 | 426 |
| Profit/loss after financial items | 18 850 | 10 230 | 9 242 | -4 572 |
| Income tax | - | - | - | - |
| Profit/loss for the period | 18 850 | 10 230 | 9 242 | -4 572 |
| SEK m. | 6/30 2014 | 12/31 2013 | 6/30 2013 |
|---|---|---|---|
| ASSETS | |||
| Intangible assets and Property, plant and equipment | 25 | 26 | 30 |
| Financial assets | 264 467 | 251 986 | 221 820 |
| Total non-current assets | 264 492 | 252 012 | 221 850 |
| Current receivables | 1 189 | 810 | 1 346 |
| Cash and cash equivalents | - | 0 | 0 |
| Total current assets | 1 189 | 810 | 1 346 |
| TOTAL ASSETS | 265 681 | 252 822 | 223 196 |
| EQUITY AND LIABILITIES | |||
| Equity | 203 758 | 190 944 | 166 144 |
| Provisions | 255 | 248 | 280 |
| Non-current liabilities | 31 305 | 28 337 | 28 481 |
| Total non-current liabilities | 31 560 | 28 585 | 28 761 |
| Total current liabilities | 30 363 | 33 293 | 28 291 |
| TOTAL EQUITY AND LIABILITIES | 265 681 | 252 822 | 223 196 |
| ASSETS PLEDGED AND CONTINGENT LIABILITIES | 6/30 2014 | 12/31 2013 | 6/30 2013 |
|---|---|---|---|
| Assets pledged | 130 | 61 | 112 |
| Contingent liabilities | 9 727 | 10 001 | 10 201 |
The numbers below are based on the same accounting and valuation policies as used in the preparation of the company's most recent annual report. For information regarding financial instruments in level 2 and level 3, see Note 29 in Investor's Annual Report 2013.
| Group 6/30 2014 | Fair value | Valuation technique | Input | Range |
|---|---|---|---|---|
| Shares and participations | 19 272 | Last round of financing | n.a. | n.a. |
| EBITDA multiples | 6.7 – 8.2 | |||
| Comparable companies | Sales multiples | 0.9 – 5.2 | ||
| Comparable transactions | Sales multiples | 1.7 – 4.8 | ||
| NAV | n.a. | n.a. | ||
| Long-term receivables included in net debt | 323 | Present value computation | Market interest rate | n.a. |
| Long-term interest bearing liabilities | 104 | Present value computation | Market interest rate | n.a. |
All valuations in level 3 are based on assumptions and judgments that management consider to be reasonable based on the circumstances prevailing at the time. Changes in assumptions may result in adjustments to reported values and the actual outcome may differ from the estimates and judgments that were made.
A significant part of IGC's portfolio companies are valued based on comparable companies, and the value is dependent on the level of the multiples. The multiple ranges provided in the note show the minimum and maximum value of the actual multiples applied in these valuations. A 10 percent change of the multiples would have an effect on the portfolio value of IGC of approximately SEK 300 m. For the derivatives, a parallel shift of the interest rate curve by one percentage point would affect the value by approximately SEK 900 m.
The table below indicates how fair value is measured for the financial instruments recognized at fair value in the Balance Sheet. The financial instruments are categorized on three levels, depending on how the fair value is measured:
Level 1: According to quoted prices in active markets for identical instruments
Level 2: According to directly or indirectly observable inputs that are not included in level 1
Level 3: According to inputs that are unobservable in the market
| Group 6/30 2014 | Level 1 | Level 2 | Level 3 | Other1) | Total carrying amount |
|---|---|---|---|---|---|
| Financial assets | |||||
| Shares and participations | 191 682 | 1 646 | 19 272 | 6 442 | 219 042 |
| Other financial investments | 2 020 | 2 | 2 022 | ||
| Long-term receivables included in net debt | 411 | 323 | 734 | ||
| Shares and participations in trading operation | 99 | 99 | |||
| Short-term investments included in net debt | 2 | 2 | |||
| Other current receivables | 59 | 3 867 | 3 926 | ||
| Cash, bank and short-term investments | 13 121 | 13 121 | |||
| Total | 206 922 | 2 118 | 19 595 | 10 311 | 238 946 |
| Financial liabilities | |||||
| Long-term interest bearing liabilities | 772 | 104 | 44 6042) | 45 4803) | |
| Short-term interest bearing liabilities | 202 | 166 | 368 | ||
| Other short-term provisions and liabilities | 110 | 118 | 4 579 | 4 807 | |
| Total | 110 | 1 092 | 104 | 49 349 | 50 655 |
To enable reconciliation with balance sheet items, financial instruments not valued at fair value as well as other assets and liabilities that are included within balance sheet items have been included within Other.
The Group's loans are valued at amortized cost.
Fair value on loans amounts to SEK 48,490 m.
| Group 6/30 2014 | Shares and participations |
Long-term receivables included in net debt |
Long-term interest bearing liabilities |
|---|---|---|---|
| Opening balance | 19 973 | 0 | 345 |
| Total gain or losses in profit or loss statement | |||
| in line Changes in value | 1 691 | 323 | -241 |
| Reported in other comprehensive income | |||
| in line Foreign currency translation adjustment | 225 | ||
| Acquisitions | 941 | ||
| Divestments | -2 339 | ||
| Transfer from Level 3 | -1 219 | ||
| Carrying amount at end of period | 19 272 | 323 | 104 |
| Total gains/losses for the period included in profit/loss for instruments held at the end of the period (unrealized results) |
|||
| Changes in value | 1 481 | 323 | -241 |
No financial assets and liabilities have been set off in the Balance Sheet.
| Financial assets | ||||||
|---|---|---|---|---|---|---|
| 6/30 2014 | 12/31 2013 | |||||
| Not set off in the balance sheet |
Not set off in the balance sheet |
|||||
| Group, SEK m. | Gross and net amounts of financial assets |
Financial instruments |
Net amounts of financial assets |
Gross and net amounts of financial assets |
Financial instruments |
Net amounts of financial assets |
| Shares1) | 248 | -110 | 138 | 191 | -39 | 152 |
| Derivatives2) | 728 | -728 | - | 174 | -174 | - |
| Derivatives3) | 65 | -59 | 6 | 79 | -78 | 1 |
| Total | 1 041 | -897 | 144 | 444 | -291 | 153 |
1) Included in the Balance sheet under Shares and participations, SEK 219,042 m. (202,710).
2) Included in the Balance sheet under Long-term receivables included in net debt, SEK 734 m. (174)
3) Included in the Balance sheet under Other current receivables, SEK 3,926 m. (3,529)
| 6/30 2014 | 12/31 2013 | |||||
|---|---|---|---|---|---|---|
| Not set off in the balance sheet |
Not set off in the balance sheet |
|||||
| Group, SEK m. | Gross and net amounts of financial liabilities |
Financial instruments |
Net amounts of financial liabilities |
Gross and net amounts of financial liabilities |
Financial instruments |
Net amounts of financial liabilities |
| Derivatives1) | 999 | -734 | 265 | 1 342 | -190 | 1 152 |
| Derivatives2) | 110 | -53 | 57 | 76 | -62 | 14 |
| Securities lending 3) | 110 | -110 | - | 39 | -39 | - |
| Total | 1 219 | -897 | 322 | 1 457 | -291 | 1 166 |
1) Included in the Balance sheet under Long-term interest bearing liabilities, SEK 45,480 m. (42,212).
2) Included in the Balance sheet under Current interest bearing liabilities, SEK 368 m. (52).
3) Included in the Balance sheet under Other short-term provisions and liabilities, SEK 4,807 m. (4,540).
The Groups derivatives are covered by ISDA agreements. For repurchase agreements GMRA agreements exist and for securities lending there are GMSLA agreements. According to the agreements the holder has the right to set off the derivatives and keep securities when the counterparty does not fulfill its commitments.
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