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Kinnevik — Interim / Quarterly Report 2010
Oct 21, 2010
2935_10-q_2010-10-21_0d2a9096-1d6d-4c99-b105-39d14ae96f5b.pdf
Interim / Quarterly Report
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Investment AB Kinnevik
Skeppsbron 18 P.O. Box 2094 SE-103 13 Stockholm Sweden www.kinnevik.se
(Publ) Reg no 556047-9742 Phone +46 8 562 000 00 Fax +46 8 20 37 74
INTERIM REPORT 1 JANUARY-30 SEPTEMBER 2010
Financial results for the third quarter
- t 5IF NBSLFU WBMVF PG UIF (SPVQT TFDVSJUJFT JO Major Listed Holdings amounted to SEK 51,214 m on 30 September, an increase of SEK 4,400 m corresponding to 9% since 30 June 2010.
- t ,PSTOÊT PQFSBUJOH QSPmU JODSFBTFE XJUI UP SEK 368 m (322) and the operating margin was 18.2% (16.8%).
- t 5IF (SPVQT UPUBM SFWFOVF JODSFBTFE UP 4&, m (1,981).
- t /FU SFTVMU BGUFS UBY JODMVEJOH DIBOHFT JO GBJS WBMVF of financial assets, amounted to a profit of SEK 4,512 m (5,942) corresponding to a profit per TIBSF PG 4&,
Financial results for the first nine months of the year
- t 5IF NBSLFU WBMVF PG UIF (SPVQT TFDVSJUJFT JO .B-KPS -JTUFE )PMEJOHT JODSFBTFE CZ 4&, 1) m corresponding to 31%.
- t ,PSTOÊT PQFSBUJOH QSPmU JODSFBTFE XJUI UP SEK 810 m (609) and the operating margin was 13.1% (10.1%) including received conflict compensation.
- t 5IF (SPVQT UPUBM SFWFOVF JODSFBTFE UP 4&, m (6,266).
- t /FU SFTVMU BGUFS UBY JODMVEJOH DIBOHFT JO GBJS WBMVF of financial assets, amounted to a profit of SEK N DPSSFTQPOEJOH UP B QSPmU QFS TIBSF PG 4&,
1) Including dividends received.
Kinnevik's net asset value 2006-2010
Pro forma adjusted for the acquisition of Emesco during Q3 2009. Figures in SEK m.
Market value - Major Listed Holdings
Figures in SEK m.
"A stronger economic cycle is evident in all of Kinnevik's portfolio companies and we see sales growth driven by a stronger demand. Kinnevik's portfolio companies are driven by the ambition to be price leading and by offering the best deal and the margin development clearly demonstrates that cost efficiency remains a top priority. The companies also need to stay on-top of the rapidly changing technological environment which significantly changes customer behavior. Capturing these trends is also an important driver for investments in our New Ventures portfolio which remain a focus area going forward" says Mia Brunell Livfors, CEO of Kinnevik.
Kinnevik was founded in 1936 and thus embodies more than seventy years of entrepreneurship under the same group of principal owners. Kinnevik's holdings of growth companies are focused around three comprehensive business areas; Major Unlisted Holdings which includes the DBSUPOCPBSE BOE QBQFS DPNQBOZ ,PSTOÊT JODMVEJOH TIBSFT in Bergvik Skog, Major Listed Holdings which includes Millicom International Cellular S.A. ("Millicom"), Tele2 AB i5FMFw .PEFSO 5JNFT (SPVQ .5( "# w.5(w 5SBOTcom WorldWide S.A. ("Transcom") and Metro International S.A. ("Metro"), and New Ventures which is active in finding new investments in small and mid sized companies with a significant growth potential. Kinnevik has a long history of investing in emerging markets which has resulted in a con-TJEFSBCMF FYQPTVSF UP DPOTVNFS TFDUPST JO UIFTF NBSLFUT Kinnevik plays an active role on the Boards of its holdings.
Events during the third quarter
Within New Ventures, Kinnevik made the following investments during the quarter:
- t ,JOOFWJL IBT BMPOHTJEF BOPUIFS mOBODJBM JOWFTUPS DPOUSJbuted new capital to the Russian online company Avito. Kinnevik's part of the issue amounted to SEK 148 m, following which Kinnevik is the largest shareholder in Avito.
- t "OPUIFS &63 N IBT CFFO JOWFTUFE JOUP POF PG UIF European online company Rocket Internet's portfolio companies.
- t ,JOOFWJL IBT JODSFBTFE JUT PXOFSTIJQ JO UIF "GSJDBO NJ-DSPmOBODF DPNQBOZ #BZQPSU UP GSPN QSFWJPVTMZ after full dilution. Total amount invested was USD 40 m.
Total return
The Kinnevik share's average annual total return
| Past 30 years 1) | 21% |
|---|---|
| Past 5 years | 22% |
| Full year 2009 | 73% |
1) Based on the assumption that shareholders have retained their allotment of shares in Tele2, MTG, Metro and Transcom.
Consolidated earnings during the third quarter
5IF (SPVQT SFWFOVF BNPVOUFE UP 4&, N EVSJOH UIF third quarter, compared with SEK 1,981 m in the preceding year.
5IF (SPVQT PQFSBUJOH QSPmU BNPVOUFE UP 4&, N (311). The change in fair value of financial assets amounted UP 4&, N PG XIJDI 4&, N XBT related to Major Listed Holdings and a loss of SEK 109 m (loss of 32) to New Ventures. Net profit amounted to SEK N DPSSFTQPOEJOH UP 4&, QFS share.
Consolidated earnings during the first nine months of the year
5IF (SPVQT UPUBM SFWFOVF EVSJOH UIF mSTU OJOF NPOUIT PG the year amounted to SEK 6,442 m, compared with SEK 6,266 m in the preceding year.
5IF (SPVQT PQFSBUJOH QSPmU BNPVOUFE UP 4&, N (604). The increase is primarily attributable to increased PQFSBUJOH QSPmU XJUIJO ,PSTOÊT PG 4&, N
The change in fair value of financial assets and divi-EFOET SFDFJWFE BNPVOUFE UP 4&, N PG XIJDI 4&, N XBT SFMBUFE UP .BKPS -JTUFE Holdings and a loss of SEK 159 m (profit of 111) to New Ventures. Dividends received amounted to SEK 2,689 m PG XIJDI PSEJOBSZ EJWJEFOET 4&, N
/FU QSPmU BNPVOUFE UP 4&, N DPS-SFTQPOEJOH UP 4&, QFS TIBSF
The Group's cash flow and investments
5IF (SPVQT DBTI nPX GSPN PQFSBUJPOT FYDMVEJOH DIBOHF JO XPSLJOH DBQJUBM BNPVOUFE UP 4&, N during the first nine months of the year. The decrease is, BNPOH PUIFST FYQMBJOFE CZ 4&, N IJHIFS UBY QBZments in 2010. Working capital decreased by SEK 10 m (decrease 193). The change in working capital includes a positive effect of reduction in inventories of SEK 90 m (180).
*OWFTUNFOUT JO UBOHJCMF BOE JOUBOHJCMF mYFE BTTFUT BNPVOUFE UP 4&, N EVSJOH UIF QFSJPE PG XIJDI 4&, N XJUIJO ,PSTOÊT
Financial overview
Investments in securities during the period are shown in the tables below.
| 1 Jan-30 Sept 2010 | Financial instrument | Amount (SEK m) |
|---|---|---|
| Other shares and securities | ||
| Avito | shares | 148 |
| Bayport | shares/warrants | 294 |
| Black Earth Farming | shares | 124 |
| Bomhus Energi | shares | 65 |
| Rocket Internet and portfolio companies |
shares/warrants | 470 |
| Microvest II | fund participation | 8 |
| Vosvik (Avito) | capital contribution | 5 |
| Sapato | shares | 13 |
| 1 127 |
1 Jan-30 Sept 2009
Subsidiaries
| Korsnäs Rockhammar | shares | ||
|---|---|---|---|
| 147 | |||
| Other shares and securities | |||
| Bayport | shares | 17 | |
| RawAgro, Ukraine | shares | 33 | |
| Microvest II | fund participation | 10 | |
| R2 International | shares | 21 | |
| Metro | warrants | 106 | |
| Metro | debentures | 168 | |
| Vosvik/Kontakt East | convertible loan | 14 | |
| 369 | |||
| Through acquisition of Emesco AB | |||
| Tele2 | shares, 2.3% | 982 | |
| MTG | shares, 5.4% | 1 114 | |
| Transcom | shares, 5.1% | 108 | |
| Metro | shares, 2.5% | 13 | |
| Metro | warrants | 15 | |
| Metro | debentures | 9 | |
| 2 241 |
The Group's liqudity and financing
5IF (SPVQT BWBJMBCMF MJRVJEJUZ JODMVEJOH TIPSUUFSN JOWFTUments and available credit facilities, totalled SEK 5,829 m at 30 September 2010 and SEK 3,942 m at 31 December 2009.
5IF (SPVQT JOUFSFTUCFBSJOH OFU EFCU BNPVOUFE UP 4&, N BOE 4&, N PO UIF TBNF EBUFT 0G UIF UPUBM net debt at 30 September 2010, SEK 5,211 m pertained to FYUFSOBM OFU EFCU XJUIJO ,PSTOÊT PS XJUI TIBSFT JO ,PSTOÊT as collateral.
Leverage within Major Unlisted Holdings and Major Listed Holdings has developed according to the charts below.
Major Listed Holdings
Debt SEK m (grey bar) and Asset Value SEK m (red bar) Line shows Debt as percentage of Asset Value
Major Unlisted Holdings
Net Debt SEK m (grey bar) and EBITDA SEK m (red bar) Line shows Net Debt in relation to EBITDA (right axis)
3 x 4 x 5 x 6 x 7 x 8 x 9 x During the second quarter, the group signed credit faci-MJUJFT UPUBMJOH 4&, N JO ,PSTOÊT BOE UIF 1BSFOU \$PN-QBOZ SFQMBDJOH GPSNFS DSFEJU GBDJMJUJFT PG 4&, N "GUFS the refinancing the loans carry an interest rate according to Stibor or similar base rate with an average margin of 1.5%. "MM MPBOT IBWF mYFE JOUFSFTU UFSNT PG OP MPOHFS UIBO UISFF months. At 30 September 2010, the average remaining duration for all credit facilities amounted to 3.4 years.
0G UIF (SPVQT JOUFSFTU FYQFOTFT BOE PUIFS mOBODJBM DPTUT PG 4&, N JOUFSFTU FYQFOTFT BNPVOUFE UP 4&, N 5IJT NFBOT UIBU UIF BWFSBHF JOUFSFTU SBUF for the first nine months of the year was 2.2% (2.4%) (cal-DVMBUFE BT JOUFSFTU FYQFOTF JO SFMBUJPO UP BWFSBHF JOUFSFTU bearing liabilities).
5IF (SPVQT CPSSPXJOH JT QSJNBSJMZ BSSBOHFE JO 4&, On an annual basis, the net flow in foreign currencies, FYDMVEJOH EJWJEFOET SFDFJWFE JT B OFU JOnPX PG BCPVU 4&, N DPNQSJTFE NBJOMZ PG ,PSTOÊT TBMFT JO &VSP
Book and fair value of assets
| Book value | Fair value | Fair value | Fair value | Change in | |
|---|---|---|---|---|---|
| 2010 | 2010 | 2009 | 2009 | stock price since 31 Dec |
|
| 30 Sept | 30 Sept | 30 Sept | 31 Dec | 2009 1 ) |
|
| Major Unlisted Holdings | |||||
| Korsnäs Industrial and Forestry | 6 675 | 9 735 2) | 9 0112) | 9 740 2) | |
| Bergvik Skog 3) | 533 | 533 | 460 | 492 | |
| Interest bearing net debt relating to Korsnäs | -5 211 | -5 211 | -5 772 | -6 419 | |
| Total Major Unlisted Holdings | 1 997 | 5 057 | 3 699 | 3 813 | |
| Major Listed Holdings 4) | |||||
| Millicom | 24 328 | 24 328 | 19 220 | 20 166 | 30% |
| Tele2 | 19 173 | 19 173 | 12 533 | 14 932 | 34% |
| MTG | 6 779 | 6 779 | 4 071 | 4 805 | 43% |
| Transcom | 312 | 312 | 485 | 637 | -51% |
| Metro shares | 263 | 263 | 271 | 243 | 8% |
| warrants 5) | 359 | 359 | 345 | 345 | 4% |
| subordinated debentures, interest bearing | 216 | 251 | 192 | 196 | |
| Interest-bearing net debt relating to Major Listed | |||||
| Holdings | -1 647 | -1 647 | -2 780 | -2 001 | |
| Total Major Listed Holdings | 49 783 | 49 818 | 34 337 | 39 323 | |
| New Ventures | |||||
| Black Earth Farming 4) | 578 | 578 | 618 | 595 | -18% |
| Unlisted New Ventures | 1 529 | 1 649 | 802 | 816 | |
| Interest-bearing net debt relating to New | |||||
| Ventures | -72 | -72 | -153 | -117 | |
| Total New Ventures 6) | 2 035 | 2 155 | 1 267 | 1 294 | |
| Other assets and liabilities 7) | 185 | 185 | 49 | 399 | |
| Total equity/net asset value | 54 000 | 57 215 | 39 352 | 44 829 | |
| Net asset value per share, SEK | 206.44 | 141.99 | 161.75 | ||
| Closing price class B share, SEK | 142.60 | 91.25 | 107.00 | 36% |
1) Including dividends paid and received.
2) Consensus among analysts covering Kinnevik.
3) Corresponding to 5% of the Company's equity.
4) Market value.
5) Warrants in Metro are valued at fair value and included in change in fair value of Major Listed Holdings.
6) For split per investment area refer to table on page 11.
7) Book value.
Portfolio highlights
Kinnevik's proportional part of revenue and operating result in its holdings
| Reported | Proportional part of | Change compared to Jan-Sept 2009 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Jan-Sept 2010 (SEK m) | Equity interest | revenue | EBIT | revenue | EBIT | revenue | EBIT | ||
| Korsnäs | 100.0% | 6 180 | 810 | 6 180 | 810 | 3% | 33% | ||
| Millicom | 35.1% | 20 957 | 5 588 | 7 356 | 1 961 | 16% | 21% | ||
| Tele2 | 30.6% | 30 088 | 5 732 | 9 207 | 1 754 | 2% | 30% | ||
| MTG | 20.4% | 10 925 | 1 706 | 2 229 | 348 | 8% | 42% | ||
| Transcom | 22.3% | 4 249 | 122 | 948 | 27 | 6% | -41% | ||
| Metro | 46.6% | 1 467 | 22 | 683 | 10 | 1% | N/A | ||
| New Ventures | - | 984 | -142 | 442 | -58 | 40% | N/A | ||
| Total sum of Kinnevik's proportional part of | |||||||||
| revenue and operating result | 27 045 | 4 852 | 7% | 30% |
The table above is a compilation of the holdings' revenues and operating result reported for the first nine months of 2010. Divested opera-UJPOT BTTFUT IFME GPS TBMF BOE POFPGG JUFNT IBWF CFFO FYDMVEFE
Revenues and operating result reported by the companies have been multiplied by Kinnevik's ownership share at the end of the reporting period, thereby showing Kinnevik's proportional share of the companies' revenues and operating result.
The proportional share of revenues and operating result has no connection with Kinnevik's accounting and is only additional information.
The Kinnevik portfolio January to September 2010
In the third quarter it is increasingly evident that the economic cycle is strengthening, fuelling sales and earnings growth. The challenge for all of our companies going forward is to stay ahead of the rapidly changes technological development which is transforming customer behavior. For FYBNQMF UIF HSPXUI PG TNBSUQIPOFT JO 4XFEFO JT GVFMMJOH GBTUFS UIBO FYQFDUFE HSPXUI GPS 5FMF JO 4XFEFO BOE UIF company is capturing a fair share of this market. The roll-PVU PG ( TFSWJDFT JT QSPDFFEJOH BOE TPPO 5FMF XJMM TUBSU UP PGGFS OFYU HFOFSBUJPO NPCJMF EBUB TFSWJDFT UP JUT 4XFEJTI DVTUPNFST *O .JMMJDPN UIF SPMMPVU PG ( TFSWJDFT BOE TIJGU GSPN ( UP ( JO -BUJO "NFSJDB JT BO JNQPSUBOU SFWFOVF ESJWFS .5( TFFT BO JODSFBTJOH JOUBLF PG *157 TVCTDSJCFST an important platform for subscriber growth. In our New Ventures portfolio, capturing these trends is an important driver for investment and in the third quarter, Kinnevik increased its investment in Avito, the largest Russian site for classifieds, and in Rocket Internet group which includes the FNBSLFUQMBDF ;BMBOEP (SPVQPO F%BSMJOH BOE UIF QSJDF comparison site R2.
Kinnevik's proportional part of revenue and operating result in its holdings Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 x x
Major Unlisted Holdings
Korsnäs
,PSTOÊT JT UIF TFDPOE MBSHFTU QSPEVDFS PG MJRVJE QBDLBging board, the third in line when it comes to white top kraftliners (WTL) and one of the largest producers of cartonboard. The company has two fully integrated mills JO (ÊWMF BOE 'SÚWJ BOE QSPEVDFT \$5.1 QVMQ GPS JOUFSOBM VTF JO 3PDLIBNNBS 8JUI JUT MPOH BOE TPMJE FYQFSJFODF JOOPWBUJWF QPXFS BOE FOFSHZ ,PSTOÊT OVSUVSFT JUT BNCJtion to constantly develop and improve its products and TFSWJDFT UP CSJOH CFOFmU UP JUT DVTUPNFST ,PSTOÊT 'PSFTUSZ JT SFTQPOTJCMF GPS QVSDIBTFT PG XPPE BOE mCFS GPS ,PSTOÊT *OEVTUSJBM BOE BMTP DPOEVDUT FYUFSOBM TBMFT QSJNBSJMZ PG TBXO UJNCFS ,PSTOÊT BMTP PXOT PG UIF TIBSFT JO #FSHvik Skog AB.
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (SEK m) | 2010 | 2009 | 2010 | 2009 |
| Korsnäs Industrial | ||||
| Revenue | 5 397 | 5 341 | 1 766 | 1 730 |
| EBIT | 774 | 595 | 352 | 315 |
| Operating margin | 14.3% | 11.1% | 19.9% | 18.2% |
| Korsnäs Forestry | ||||
| Revenue | 783 | 677 | 252 | 185 |
| EBIT | 36 | 14 | 16 | 7 |
| Korsnäs Group | ||||
| Revenue | 6 180 | 6 018 | 2 018 | 1 915 |
| EBIT | 810 | 609 | 368 | 322 |
| Operating margin | 13.1% | 10.1% | 18.2% | 16.8% |
| Return on operational capital | 13.9% | 10.2% | 19.0% | 16.5% |
| Cash flow data | 15% | |||
| EBITDA | 1 259 | 1 068 | 519 | 472 |
| Change in working capital | 22 | 256 | -86 | 93 |
| Cash flow from operations | 1 020 | 1 324 | 384 | 10% 544 |
| Investments in tangible fixed assets | -371 | -532 | -98 | -160 |
| 5% | ||||
| Production, thousand tons | 776 | 764 | 278 | 268 |
| Deliveries, thousand tons | 780 | 781 | 259 | 255 |
Korsnäs financial development 2007-2010
Rolling four quarters. Revenues and EBIT in SEK m.
The first nine months were characterized by an increa-TJOHMZ TUSPOH EFNBOE JO BMM ,PSTOÊT QSPEVDU BSFBT 5IF demand has now stabilized. During the period 16-26 April, ,PSTOÊT (ÊWMF BOE mWF PUIFS 4XFEJTI QBQFS NJMMT XFSF JOWPMWFE JO B TUSJLF DBMMFE CZ UIF 4XFEJTI 1BQFS 8PSLFST 6OJPO XIJDI FOUBJMFE UIBU BMM QSPEVDUJPO BU ,PSTOÊT (ÊWMF ceased for a total of 12 days. The production decline at ,PSTOÊT (ÊWMF SFTVMUJOH GSPN UIF TUSJLF BNPVOUFE UP BCPVU 24 Ktons. The direct financial consequences of the strike have been offset in accordance with a resolution by the \$POGFEFSBUJPO PG 4XFEJTI &OUFSQSJTF ,PSTOÊT SFDFJWFE 4&, 84 m in compensation, which was included in operating profits for the second quarter and has been paid to the company in beginning of October. Unfortunately, the strike SFTVMUFE JO ,PSTOÊT IBWJOH UP EFDMJOF EFMJWFSJFT EVSJOH primarily the second but also the third quarter, meaning that the delivery volume does not fully reflect the demand increase, compared with the year-earlier period. The effects of the strike have impacted deliveries within all product areas. Within cartonboard, deliveries increased by 16% com-QBSFE XJUI UIF mSTU OJOF NPOUIT PG 1SJDF JODSFBTFT were implemented in all product areas and additional increases were announced for cartonboard, WTL and sack and kraft paper, effective from the fourth quarter. The effects of the implemented price increases were counteracted by the strengthened SEK, which resulted in lower revenues per ton, compared with the corresponding period in 2009, within the product areas in which invoicing takes place in a currency other than SEK.
Korsnäs Industrial's sales volume divided per product Jan-Sept 2010
Numbers in brackets refer to Jan-Sept 2009.
1VMQXPPE QSJDFT XJUIJO ,PSTOÊT DBUDINFOU BSFB JOcreased as of January 2010 by SEK 25/m3fub, and as of 14 May by SEK 30/m3fub for coniferous pulpwood and SEK 25/m3fub for deciduous pulpwood. The price increases for QVMQXPPE IBWF B OFHBUJWF JNQBDU PO ,PSTOÊT PQFSBUJOH QSPmU XJUI B EFMBZ PG BCPVU UISFF UP TJY NPOUIT 5IF QSJDF increases follow on a period with a number of price reductions totaling SEK 80/m3fub from the third quarter of 2008 through the fourth quarter of 2009.
Major Unlisted Holdings
Distribution of operating costs Jan-Sept 2010
Excluding depreciation, Korsnäs Industrial. Numbers in brackets refer to Jan-Sept 2009.
,PSTOÊT PQFSBUJOH QSPmU GPS UIF mSTU OJOF NPOUIT of the year increased to SEK 810 m, an increase of 33% GSPN 4&, N JO UIF ZFBSFBSMJFS QFSJPE 1SPmU JODMVEFT strike compensation of SEK 84 m from the Confederation of Swedish Enterprises. The increase in profit is primarily attributable to increased sales prices in local currencies, increased production and higher delivery volumes (less strike impact), which were counteracted by effects of a strengthe-OFE FYDIBOHF SBUF 0QFSBUJOH QSPmU GPS UIF UIJSE RVBSUFS amounted to SEK 368 m, up 14% from SEK 322 m for the UIJSE RVBSUFS PG UIF QSFDFEJOH ZFBS 5IF FYQMBOBUPSZ JUFNT are presented in the table below.
| Explanation items in changes in EBIT (SEK m) | Jan-Sept | July-Sept |
|---|---|---|
| EBIT previous year | 609 | 322 |
| Delivery and production volumes and changed product mix |
65 | 35 |
| Cost changes for chemicals | 45 | 0 |
| Cost changes for pulpwood and external pulp1) | 20 | -25 |
| Cost changes for energy | -35 | 10 |
| Sales prices including currency effects | -25 | 20 |
| Change in fixed costs | 30 | 0 |
| Requested strike compensation | 84 | - |
| Other | 17 | 6 |
| EBIT current year | 810 | 368 |
1) Includes lower costs for CTMP pulp as a result of the acquisition of Rockhammar.
During February, a permit was granted by the Environmental Court to increase production of chemico-thermo-NFDIBOJDBM QVMQ \$5.1 BU UIF QVMQ NJMM JO 3PDLIBNNBS from 60 Ktons to 90 Ktons per year. With this capacity JODSFBTF XIJDI UPPL QMBDF JO .BSDI ,PSTOÊT JT TFMGTVGm-DJFOU JO QVMQ GPS UIF FOUJSF (SPVQT QBQFS BOE DBSUPOCPBSE production.
In May, a new evaporation plant for the pulp mill in (ÊWMF XBT QVU JO PQFSBUJPO 5IF JOWFTUNFOU BNPVOUFE UP B total of about SEK 550 m, of which SEK 215 m will affect cash flow during 2010 (SEK 161 m during the first nine NPOUIT 5IF OFX FWBQPSBUJPO QMBOU JT FYQFDUFE UP SFEVDF ,PSTOÊT PJM DPOTVNQUJPO CZ BCPVU N QFS ZFBS thus resulting in lower energy costs.
*O .BSDI mOBM BHSFFNFOUT XFSF TJHOFE XJUI (ÊWMF Municipality regarding investment in Bomhus Energi AB ("Bomhus"). On the same date, Bomhus signed a contract GPS FYUFSOBM CBOL mOBODJOH UP FOTVSF GVMM mOBODJOH PG UIF company's investment of about SEK 1.8 billion in a new CJPFOFSHZ QMBOU JO ,PSTOÊT JOEVTUSJBM BSFB JO (ÊWMF 5IF objective of the new bio-energy plant is to ensure delivery starting in 2013 of environmentally friendly electricity and TUFBN UP UIF ,PSTOÊT QMBOU BOE EJTUSJDU IFBUJOH UP (ÊWMF &OFSHJT DVTUPNFST 'PS ,PSTOÊT UIF JOWFTUNFOU JO PG the shares and debenture loan in Bomhus will amount to about SEK 320 m, of which SEK 65 m were paid during the first nine months of the year. In addition to investments JO #PNIVT ,PSTOÊT XJMM NBLF GVSUIFS FOFSHZ JOWFTUNFOUT PG BCPVU 4&, N JO UIF FYJTUJOH QMBOU GPS EFMJWFSZ PG XBTUF IFBU UP (ÊWMF &OFSHJ "# PG XIJDI 4&, N XFSF paid during the first nine months of the year. The invest-NFOUT XJMM NFBO UIBU ,PSTOÊT PJM DPOTVNQUJPO JT TJHOJmcantly reduced, while electricity production and the use of XBTUF IFBU GSPN UIF ,PSTOÊT QMBOU JODSFBTFT 8JUI UIF OFX JOWFTUNFOUT ,PSTOÊT (ÊWMF XJMM JODSFBTF UIF QSPQPSUJPO PG internally produced electricity from 38% to 45%. The new bio-energy plant will be operational during autumn 2012. 5IF JOWFTUNFOUT PG BCPVU 4&, N XJMM BGGFDU ,PSTOÊT cash flow during 2010 to 2012. The investment work is proceeding according to plan and several major contracts will be finalized during the fourth quarter. 4 3 1
1MBOOFE NBJOUFOBODF TUPQQBHFT BU UIF QMBOUT JO (ÊWMF BOE 'SÚWJ BSF TIPXO JO UIF UBCMF CFMPX 5IF RVBSUFSMZ EJGferences compared with planned maintenance stoppages in JT FYQFDUFE UP SFTVMU JO IJHIFS NBJOUFOBODF DPTUT BOE production losses in the fourth quarter, compared with the corresponding quarter in 2009. The total negative effect on PQFSBUJOH JODPNF GPS UIF GPVSUI RVBSUFS JT FYQFDUFE UP CF SEK 40-50 m compared to the fourth quarter in 2009.
| Implemented and planned maintenance stoppages |
2010 | 2009 |
|---|---|---|
| Korsnäs Gävle | Q2: 2 days Q4: 9 days |
Q2: 9 days Q4: 4 days |
| Korsnäs Frövi | Q2: 11 days | Q2: 2 days Q3: 2 days |
Major Listed Holdings
| Fair value | Change in stock |
||||||||
|---|---|---|---|---|---|---|---|---|---|
| Company | Class A shares | Class B-shares | Equity interest % |
Voting interest % |
30 Sept 2010 |
30 Sept 2009 |
31 Dec 2009 |
price since 31 Dec 2009 %1) |
|
| Millicom | 37 835 438 | 35.1 | 35.1 | 24 328 | 19 220 | 20 166 | 30% | ||
| Tele2 | 18 507 492 | 116 988 645 | 30.6 | 47.9 | 19 173 | 12 533 | 14 932 | 34% | |
| MTG | 5 199 491 | 8 304 365 | 20.4 | 47.9 | 6 779 | 4 071 | 4 805 | 43% | |
| Transcom | 16 339 448 | 22.3 | 44.6 | 312 | 485 | 637 | -51% | ||
| Metro shares | 112 122 875 | 133 798 591 | 46.6 | 42.4 | 263 | 271 | 243 | 8% | |
| Metro warrants, 717 715 821 | 359 | 345 | 345 | 4% | |||||
| Metro subordinated debentures, nominal value SEK 359 m |
251 | 192 | 196 | ||||||
| Total | 51 465 | 37 117 | 41 324 |
1) Including dividends received.
Millicom
Millicom offers affordable and easily accessible mobile telephony services to all market segments in 13 countries in Latin America and Africa.
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (USD m) | 2010 | 2009 | 2010 | 2009 1) |
| Revenue | 2 851 | 2 449 | 1 018 | 904 |
| EBITDA | 1 344 | 1 115 | 484 | 418 |
| Operating profit, EBIT | 760 | 626 | 266 | 236 |
| Net profit | 1 495 | 397 | 1 205 | 143 |
| Number of mobile subscribers (million) | 37.4 | 31.9 |
1) Pro forma figures to reflect the full consolidation of Honduras
.JMMJDPNT SFWFOVFT FYDFFEFE 64% CO JO UIF RVBSUFS for the first time and the profitability remained strong with BO &#*5%" MFWFM PG 0QFSBUJOH GSFF DBTI nPX BNPVOted to USD 203 m during the quarter. Net profit for the third quarter was affected by a revaluation of the Honduran business of USD 1,060 million following a new agreement with the minority owner.
Millicom's strategy aims at developing value-added TFSWJDFT 7"4 XIJDI UIF DPNQBOZ TFFT BT UIF OFYU HSPXUI opportunity. The strategy is yielding results and VAS contriIn Latin America Millicom has 1.5 million customers using ( EBUB TFSWJDFT BO JODSFBTF CZ DPNQBSFE UP UIF second quarter.
In October the company announced that it will redeem in full the 2013 10% bond in December 2010. The QBS WBMVF PG UIF CPOET JT BQQSPYJNBUFMZ 64% N and early redemption will incur a penalty of 1.65%, all of which will be paid out of cash balances within the (SPVQ 5IF SFEFNQUJPO JUTFMG JT FYQFDUFE UP MFBE UP FBSnings per share accretion of more than 5% in 2011.
Major Listed Holdings
Tele2
5FMF PGGFST QSPEVDUT BOE TFSWJDFT XJUIJO mYFE BOE NPCJMF telephony, broadband, computer networks and cable TV, with a geographical focus on Russia, Eastern Europe and the Nordics.
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (SEK m) | 2010 | 2009 | 2010 | 2009 |
| Revenue | 30 088 | 29 510 | 9 998 | 9 829 |
| EBITDA | 7 796 | 7 131 | 2 751 | 2 441 |
| Operating profit, EBIT | 5 732 | 4 425 | 1 892 | 1 633 |
| Net profit | 5 425 | 3 605 | 2 513 | 1 755 |
| Number of subscribers (million) | 30.1 | 26.1 |
Tele2's results in the third quarter 2010 were strong, and the positive momentum in the business continued in all markets. Tele2 delivered all-time high profitability, and grew its customer base at a fast pace while improving quality. The strong customer growth in Tele2 Russia continued. During the quarter, the Russian operation added 1.2 million DVTUPNFST BOE UIF DVTUPNFS CBTF DVSSFOUMZ BNPVOUT UP million.
Net sales in Tele2 Sweden increased by more than 10% to SEK 2,219 (2,009) million. The revenue growth was primarily driven by the postpaid segment, where smartphones were a large contributor.
In the third quarter the acquisitions of Spring Mobile and BBNed were completed.
Modern Times Group MTG
.5( JT BO JOUFSOBUJPOBM NFEJB DPNQBOZ XJUI UIF TFDPOE largest geographic spread in radio and TV operations in &VSPQF .5(T GSFF BOE QBZ57 DIBOOFMT SFBDI NPSF UIBO 125 million people in 31 countries.
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (SEK m) | 2010 | 2009 | 2010 | 2009 |
| Revenue | 10 925 | 10 097 | 3 351 | 3 177 |
| Operating profit/loss, EBIT | 1 706 | 1 199 | 458 | 377 |
| Net profit | 1 182 | 836 | 360 | 254 |
.5(T TBMFT BU DPOTUBOU FYDIBOHF SBUFT XFSF VQ in the third quarter of 2010 compared to the same quarter in 2009. At the same time, EBIT increased by 22% year-onyear.
The result reflected sales growth across each of the business areas in the weakest advertising sales quarter of UIF ZFBS .5( BMTP SFQPSUFE IFBMUIZ JODSFNFOUBM PQFSBUJOH margins. The performance was once again led by the Scandinavian free-TV operations, which capitalised on strong advertising demand and rising pricing levels. The Emerging Markets free-TV business reported a second consecutive quarter of year on year growth in stable market conditions, as well as an improved operating result.
.5( JT DPOUJOVJOH UP XPSL UPXBSET UIF QSPQPTFE EJTUSJCVUJPO PG \$%0/ (SPVQ UIF SBQJEMZ FYQBOEJOH /PSEJD internet retailing business to their shareholders before the end of the year.
Major Listed Holdings
Metro
Metro is the world's largest international daily newspaper. Metro is published in over 100 major cities in 19 countries across Europe, North & South America and Asia. Metro att-SBDUT BO BVEJFODF PG BMNPTU NJMMJPO EBJMZ SFBEFST
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (EUR m) | 2010 | 2009 | 2010 | 2009 |
| Revenue | 152.0 | 149.9 | 45.9 | 42.4 |
| Operating profit, EBIT | 2.3 1) | -19.7 | 3.2 1) | -5.3 |
| Net result | -4.4 1) | -27.6 | 1.0 1) | -8.6 |
1) Includes a net gain of EUR 6.1 m relating to revaluation of shares in Mexico.
Metro's result improved in the first nine months of this year as a result of growing advertising markets. Operating profit improved from a loss of EUR 8.1 m in the third quarter 2009 to a profit of EUR 3.2 m in the third quarter 2010. The company reported a net profit of EUR 1.0 m for the third quarter. The performance was particularly strong in 4XFEFO 3VTTJB BOE \$BOBEB XIJDI BMM FYQFSJFODFE SFWFOVF growth. Canada is now Metro's largest market in terms of sales.
In September Metro announced that the company will FYQBOE JO 'SBODF 5IF OFX FYQBOTJPO TUSBUFHZ JT EFWFMPQFE together with Metro's local partner TF1. The aim is to differentiate Metro from other players by becoming the largest GSFF OFXTQBQFS JO 1BSJT BOE BDRVJSJOH UIF CFTU OBUJPOBM coverage of free newspapers in France. Metro also announced that the newspaper will be launched in Rio de Janeiro in Brazil.
Transcom
Transcom is active within outsourcing of Customer Relationship Management (CRM) and Credit Management Services. Today the company is employing more than 22,500 people delivering services from 29 countries.
| Jan-Sept | July-Sept | |||
|---|---|---|---|---|
| Key data (EUR m) | 2010 | 2009 | 2010 | 2009 |
| Revenue | 440.3 | 414.9 | 144.5 | 134.3 |
| Operating profit, EBIT | 12.6 | 21.3 | 4.6 | 7.1 |
| Net profit | 9.1 | 17.6 | 3.3 | 6.0 |
*O UIF UIJSE RVBSUFS PG 5SBOTDPN SFQPSUFE (SPVQ SFWFOVF PG &63 N 8IFO FYDMVEJOH DVSSFODZ JNQBDU third quarter revenue decreased by 2.5% year-on-year.
Year-on-year, CRM revenue increased by 11.6%, with growth in all countries besides the South region, while CMS SFWFOVF EFDMJOFE CZ 5SBOTDPN DPOUJOVE UP FYQFrience volume volatility in its portfolio, driven in most cases by customer decisions related to contract renewals and vendor concentration, as well as weak volume demand across BMM SFHJPOT FYDFQU JO UIF /PSUI 4BMFT SFNBJOT B LFZ GPDVT with Transcom and the company reported new wins during the quarter, both in the CRM and the CMS businesses.
The volumes managed through the site in San Antonio will be discontinued in Q4 2010. This reduction in volume XJMM JNQBDU /PSUI "NFSJDB "TJB 1BDJmD SFHJPOT UPQMJOF growth rate and margins in the short-run.
New Ventures
| Company/sector | Equity and voting interest |
Number of shares |
Book value 30 Sept 2010 (SEK m) |
Estimated fair value 30 Sept 2010 (SEK m) |
|---|---|---|---|---|
| Agriculture | ||||
| Black Earth Farming | 25% | 31 087 097 | 578 | 578 |
| Rolnyvik | 100% | 188 | 250 | |
| RawAgro | 30% | 21 | 21 | |
| Total Agriculture | 787 | 849 | ||
| Renewable energy | ||||
| Latgran | 51% | 80 | 138 | |
| Vireo Energy | 75% | 2 | 2 | |
| Total Renewable energy | 82 | 82 | ||
| Online | ||||
| Rocket Internet and portfolio com | ||||
| panies | 485 | 485 | ||
| Avito (direct and through Vosvik) | 56% | 274 | 274 | |
| Other Online investments | 83 | 83 | ||
| Total Online | 842 | 842 | ||
| Microfinancing | ||||
| Bayport | 34% | 310 | 310 | |
| Microvest | 17% | 14 | 14 | |
| Total Microfinance | 324 | 324 | ||
| Total New Ventures | 2 035 | 2 155 |
Within New Ventures, Kinnevik invests at an early stage in TFDUPST BOE NBSLFUT XJUI BO FYQFDUFE IJHI BOE MPOHUFSN growth potential. Investments to date are in growth markets in which Kinnevik has a long tradition and a strong platform or in new growth areas in more mature markets. Kinnevik's new investments shall have a substantial longterm market potential and the investments must have the conditions to grow through market growth and scalability. Kinnevik invests at an early stage, often already in a startup phase, and is an active owner. Investments are focusing on the following four areas: agriculture, renewable energy,
online and micro financing. The operating profit for New Ventures amounted to SEK 1 m (23) during the first nine months of the year, of which 4&, N SFMBUFE UP 3PMOZWJL 4&, N SFMBUFE UP -BUHSBO BOE B MPTT PG 4&, N MPTT PG SFMBUFE UP 3FMFvant Traffic (including SEK 34 million in impairment loss of goodwill). The change in fair value of financial assets totaled a loss of SEK 159 m (profit 111) where a loss of SEK 141 m (profit of 148) related to Black Earth Farming, and a MPTT PG 4&, N MPTT PG SFMBUFE UP 7PTWJL:FMMPX 1BHFT (former Kontakt East).
Agriculture
Kinnevik's investments in agriculture comprise 25% of shares in Black Earth Farming, the wholly owned company 3PMOZWJL JO 1PMBOE BOE PG UIF BHSJDVMUVSBM DPNQBOZ RawAgro in the Ukraine.
\$VSSFOU GPDVT JO BHSJDVMUVSF JT UP DPOUJOVF FYQBOTJPO JO less developed areas, where larger acreage can be acquired at relatively low prices and developed to achieve higher productivity.
Black Earth Farming, with shares listed on NASDAQ OMX Stockholm, is a leading agricultural company with operations in Russia. The company acquires and cultivates agricultural land in the fertile Black Earth region in Southwest Russia. Most of the land was uncultivated when acqui-SFE &YUFOTJWF JOWFTUNFOUT JO NBDIJOFSZ XJUI DPSSFTQPOding labor input are required to make efficient cultivation possible. The potential is high since the large areas of land facilitate efficient and large-scale production. As of 30 June 2010, the company controlled 328,000 hectares of land of which about 228,000 hectares were under full registered ownership.
%VSJOH UIF DPNQBOZ DVMUJWBUFE BQQSPYJNBUFMZ 200,000 hectares for harvest. Due to the heat wave and drought in Russia during the summer, the harvest yield was lower than the preceding year. As of 24 August, the company harvested 194,000 tons of wheat, corn and rape from 128,000 hectares of land. Harvest of other grains has not CFFO DPNQMFUFE 5IF FYUSFNF XFBUIFS DPOEJUJPOT SFTVMUFE in generally low yield throughout Russia, which led to significant price increases in grain during the third quarter. In NJE"VHVTU 3VTTJB JOUSPEVDFE BO FYQPSU CBO PO XIFBU
During 2010, Black Earth Farming has continued its effort to enhance production efficiency and reduce admi-OJTUSBUJPO FYQFOTFT \$PTU QFS TPME UPO ESPQQFE BOE UIF DPNQBOZ SFQPSUFE MPXFS BENJOJTUSBUJPO FYQFOTFT EVSJOH UIF mSTU TJY NPOUIT PG UIF ZFBS DPNQBSFE XJUI UIF year-earlier period.
During the first half year, Kinnevik purchased shares in Black Earth Farming on the stock market for SEK 124 m, corresponding to 3.9% of the company's capital.
New Ventures
,JOOFWJLT XIPMMZ PXOFE 1PMJTI BHSJDVMUVSBM DPNQBOZ 3PMOZWJL PQFSBUFT UIF #BSDJBOZ BOE 1PEMBXLJ GBSNT XJUI B UPUBM BSFB PG IFDUBSFT
"MTP JO 1PMBOE UIF IBSWFTU ZJFME XBT MPXFS UIBO QSFvious years due to unfavorable weather conditions. In terms of results, the lower yield will be offset by price increases for grain. As in previous years, a large portion of the year's harvest will be stored for sale at the beginning of 2011.
RawAgro controls about 14,000 hectares of leased farm land in Ukraine.
Renewable energy
Kinnevik's investments in renewable energy comprise 51% PG UIF TIBSFT JO -BUHSBO BT XFMM BT PG UIF TIBSFT JO Vireo Energy.
| Latgran | Jan-Sept | July-Sept | ||
|---|---|---|---|---|
| SEK m | 2010 | 2009 | 2010 | 2009 |
| Revenue | 207 | 171 | 55 | 45 |
| EBIT | 37 | 21 | 9 | 6 |
| Deliveries, thousand tons | 163 | 126 | 46 | 34 |
| Production, thousand tons | 173 | 154 | 50 | 53 |
Latgran conducts production of pellets from forest raw materials at the company's two production facilities in Lat-WJB "MM QSPEVDUJPO JT FYQPSUFE UP TFWFSBM NBKPS JOEVTUSJBM customers in Scandinavia and the rest of Northern Europe. Demand for pellets remained favorable during the first nine months of the year, and the company signed a number PG OFX NVMUJZFBS DPOUSBDUT XJUI FYJTUJOH DVTUPNFST GPS continued deliveries. The increased production and stable raw materials prices resulted in improved profitability for -BUHSBO 5IF PQFSBUJOH NBSHJO BNPVOUFE UP GPS UIF first nine months of the year, compared with an operating NBSHJO PG GPS UIF GVMMZFBS
The project to construct a third pellets plant in South-FBTU -BUWJB GPS BQQSPYJNBUFMZ &63 N JT QSPHSFTTJOH according to plan. The plant will have a planned annual QSPEVDUJPO PG BQQSPYJNBUFMZ UPOT GSPN JUT DPNNJTsioning during the second half of 2011.
In June, Vireo Energy commenced operations aimed at building, owning and operating facilities that produce energy from renewable sources, with geographic focus on Eastern Europe. Initially, the company is focusing on starting projects to recover energy from waste facilities in 1PMBOE
Online
Consumer-related online services are growing strongly and Kinnevik is searching for various types of investments that will benefit from households spending a great deal of time and budget online. The main focus is consumeroriented services, with relatively reliable business concepts. Kinnevik's primary investments in online services comprise JOWFTUNFOUT JO UIF (FSNBO DPNQBOZ 3PDLFU *OUFSOFU BOE
its portfolio companies, as well as Avito.
Rocket Internet owns a portfolio with various e-commerce companies and other consumer-oriented online DPNQBOJFT JODMVEJOH UIF FNBSLFUQMBDF ;BMBOEP (SPVpon, e-Darling and the price comparison site R2. Kinnevik IBT JOWFTUFE B UPUBM PG BQQSPYJNBUFMZ &63 N JO TIBSFT and options in Rocket Internet, with portfolio companies, of which EUR 10 m during the third quarter of the year. &YQBOTJPO JO DPOTVNFSSFMBUFE *OUFSOFU TFSWJDFT JT DBQJUBM intensive and competition in the market is tough, but at the same time, the growth potential is significant.
Avito.ru is the leading online service for classified advertising in Russia with more than one million new classifieds every month and over seven million unique monthly WJTJUPST (SPXUI JT TUSPOH BOE UIF DPNQBOZ IBT EVSJOH continued to invest to strengthen its leading position. Revenues primarily derive from advertising sales on the website.
At the beginning of July, Kinnevik, alongside another financial investor, contributed new capital to Avito. Kinnevik's part of the issue amounted to SEK 148 m, following which Kinnevik is the largest shareholder in Avito.
Micro financing
Similar to the manner in which telecom developed strongly in new emerging markets through new innovative products and distribution networks, Kinnevik is searching for investment opportunities in the innovative micro finance sector. To date, investments in Bayport are clearly the largest investment in the sector, but Kinnevik is actively searching for new investment opportunities.
Bayport offers micro credits and financial services in (IBOB 6HBOEB ;BNCJB 5BO[BOJB BOE #PUTXBOB (IBOB and Zambia are the largest markets, while Tanzania is displaying rapid growth. Bayport was founded in 2002 and has grown with profitability into a leading African micro credit company. The company has about 250,000 custo-NFST BOE UIF QSPEVDU QPSUGPMJP JT DPOUJOVPVTMZ FYQBOEJOH primarily with loans with longer duration. Loans are used QSJNBSJMZ GPS mOBODJOH MBSHFS OPOSFDVSSFOU FYQFOTFT TVDI as school fees, investment in farming or for starting smaller companies.
At the beginning of July, Kinnevik signed agreements to invest USD 40 m in Bayport, following which ownership JODSFBTFE UP GSPN QSFWJPVTMZ BGUFS GVMM EJMVUJPO The transaction was part of Bayport's refinancing aimed at strengthening the company's financial position and facilitating continued growth. The investment resulted in Bayport repaying the acquisition facility that financed management's CVZPVU PG UIF DPNQBOZ JO GPMMPXJOH XIJDI ,JOOFWJL recovered USD 8 m of the outstanding loan credit to the company.
Microvest II is a fund focusing on equity investments in micro financing companies in emerging markets. The fund has currently four investments, of which two in India, one JO 1BSBHVBZ BOE POF JO 1FSV
Parent Company and other
5IF BENJOJTUSBUJPO DPTUT XJUIJO UIF 1BSFOU \$PNQBOZ BOE UIF (SPVQT PUIFS DPNQBOJFT BNPVOUFE UP B OFU FYQFOTF PG 4&, N FYQFOTF PG BGUFS JOWPJDJOH GPS services performed.
At the end of March, the Administrative Court of Ap-QFBMT JTTVFE B SVMJOH PO UIF 1BSFOU \$PNQBOZT UBYBUJPO for the years 2001-2002. The court's ruling was in the \$PNQBOZT GBWPS XJUI SFTQFDU UP B UBY EJTQVUF JOWPMWJOH SEK 100 m for divested receivables. The Company did thus SFHBJO 4&, N JO JODPNF UBY BOE JOUFSFTU PG 4&, N why a total of SEK 32 m has been recognized as revenue during the period.
*O +VOF UIF 4XFEJTI 5BY #PBSE TVCNJUUFE B QFUJUJPO to the Administrative Court that Kinnevik's sale of Invik in XBT OPU UBYFYFNQU BT SFQPSUFE JO ,JOOFWJLT BDcounts. Kinnevik's distinct opinion of the issue is that the Company complied with applicable regulations and general QSBDUJDFT BOE UIBU UIF USBOTBDUJPO JT UBYFYFNQU XIZ UIF QFUJUJPO GSPN UIF 5BY #PBSE IBT CFFO DPOUFTUFE *O UIF FWFOU UIF 5BY #PBSE JT TVDDFTTGVM JO UIF EJTQVUF UIF NBYJ-NVN FYQPTVSF GPS ,JOOFWJL JT BQQSPYJNBUFMZ 4&, N JO BEEJUJPOBM UBY BGUFS PGGTFUUJOH QSFWJPVTMZ VOVUJMJ[FE DBQJUBM losses that have not been not recognized in the accounts.
Risk Management
5IF (SPVQT mOBODJOH BOE NBOBHFNFOU PG mOBODJBM SJTLT is centralized within Kinnevik's finance function and is conducted on the basis of a finance policy established by UIF #PBSE PG %JSFDUPST 5IF (SPVQT PQFSBUJPOBM SJTLT BSF primarily evaluated and managed within the particular business area and then reported to the Kinnevik Board.
5IF (SPVQ IBT FTUBCMJTIFE B NPEFM GPS SJTL NBOBHFment, the aims of which are to identify, control and reduce risks. The identified risks and how they are managed are reported to the Kinnevik Board on a quarterly basis.
,JOOFWJLT XIPMMZ PXOFE TVCTJEJBSZ ,PSTOÊT BDDPVOUT for most of the operational risks and they are mainly related to market development, customers and suppliers and the risk for a major accident in the production plants.
,JOOFWJL JT FYQPTFE UP mOBODJBM SJTLT NBJOMZ JO SFTQFDU of changes in the value of the stock portfolio, changes in NBSLFU JOUFSFTU SBUFT FYDIBOHF SBUF SJTLT BOE MJRVJEJUZ BOE refinancing risks.
5IF (SPVQ JT BMTP FYQPTFE UP QPMJUJDBM SJTLT TJODF UIF companies Kinnevik has invested in have a substantial part of their operations in emerging markets such as Latin America, Africa and Russia.
For a more detailed description of the Company's risks and risk management, refer to the Board of Directors' report and Note 31 of the 2009 Annual Report.
Accounting principles
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. This report was prepared in accordance with the Annual Accounts Act and IAS 34, Interim Financial Reporting.
The accounting principles applied in this report are the same as those described in the 2009 Annual Report, with UIF FYDFQUJPOT EFTDSJCFE CFMPX
New Accounting policies in 2010
The following standards and amendments to standards have been applied for 2010 but have not yet had any influ-FODF PO UIF (SPVQT JODPNF TUBUFNFOU PS CBMBODF TIFFU – Changes to IFRS 3R involve a number of changes in the reporting of business combinations, which will impact the size of reported goodwill, reported earnings for the period when the acquisition occurred, and future reported earnings.
o \$IBOHFT UP *"4 3 NFBO UIBU DIBOHFT JO QBSUJDJQBUJOH interests in a subsidiary, in which the majority owner does not lose controlling interest, are reported as equity transactions.
Kinnevik Annual General Meeting 2011
5IF "OOVBM (FOFSBM .FFUJOH XJMM CF IFME PO .BZ 2011 in Stockholm. Shareholders wishing to have matters DPOTJEFSFE BU UIF "OOVBM (FOFSBM .FFUJOH TIPVME TVCNJU their proposals in writing to [email protected] or to The \$PNQBOZ 4FDSFUBSZ *OWFTUNFOU "# ,JOOFWJL #PY SE-103 13 Stockholm, Sweden, at least seven weeks before UIF "OOVBM (FOFSBM .FFUJOH JO PSEFS UIBU UIF QSPQPTBM NBZ be included in the notice to the meeting. Further details on how and when to register will be published in advance of the Meeting.
Nomination Committee for the 2011 Annual General Meeting
*O BDDPSEBODF XJUI UIF SFTPMVUJPO PG UIF "OOVBM (FOFral Meeting, Cristina Stenbeck has convened a Nomination Committee consisting of members representing the largest shareholders in Kinnevik. The Nomination Committee is comprised of Cristina Stenbeck, Ramsay Brufer on behalf of "MFDUB )FOSZ (VZ PO CFIBMG PG 7FSEFSF 4ËSM 4BQFSF "VEF Trust and other shareholders, Edvard von Horn on behalf of the von Horn family and Wilhelm Klingspor on behalf of the Klingspor family.
Information about the work of the Nomination Committee can be found on Kinnevik's corporate website at www. kinnevik.se.
Shareholders wishing to propose candidates for election to the Board of Directors of Kinnevik should submit their proposal in writing to [email protected] or to the Company 4FDSFUBSZ *OWFTUNFOU "# ,JOOFWJL #PY 4& Stockholm, Sweden.
Financial reports
The year-end release for 2010 will be published on 16 February 2011.
Stockholm, 21 October 2010
Mia Brunell Livfors 1SFTJEFOU BOE \$IJFG &YFDVUJWF 0GmDFS
Kinnevik discloses the information in this interim report QVSTVBOU UP UIF 4XFEJTI 4FDVSJUJFT &YDIBOHF BOE \$MFBSJOH Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 8.00 CET on 21 October 2010.
Review Report
We have reviewed the interim report of Investment AB Kinnevik (publ) for the period 1 January to 30 September 2010. It is the Board of Directors and the CEO who are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual "DDPVOUT "DU 0VS SFTQPOTJCJMJUZ JT UP FYQSFTT B DPODMVTJPO on this interim report based on our review.
We conducted our review in accordance with Standard PO 3FWJFX &OHBHFNFOUT 4½( i3FWJFX PG *OUFSJN 'JOBODJBM *OGPSNBUJPO 1FSGPSNFE CZ UIF *OEFQFOEFOU "Vditor 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 compared to an audit conducted in accordance with Standards on Auditing in Sweden RS 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. Accordingly, the DPODMVTJPO FYQSFTTFE CBTFE PO B SFWJFX EPFT OPU DPOTUJtute the same level of assurance as a conclusion 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 pre-QBSFE JO BMM NBUFSJBM SFTQFDUT GPS UIF (SPVQ JO BDDPSEBODF XJUI *"4 BOE UIF "OOVBM "DDPVOUT "DU BOE GPS UIF 1BSFOU Company in accordance with the Annual Accounts Act.
Stockholm, 21 October 2010 Ernst & Young AB
Thomas Forslund "VUIPSJ[FE 1VCMJD "DDPVOUBOU
For further information, please visit www.kinnevik.se or contact:
.JB #SVOFMM -JWGPST 1SFTJEFOU BOE \$IJFG &YFDVUJWF0GmDFS tel +46 (0)8 562 000 00
Torun Litzén, Information and Investor Relations UFM ? NPCJMF
Investment AB Kinnevik's objective is to increase shareholder value, primarily through net asset value growth. Kinnevik manages a portfolio of investments focused around three comprehensive business areas; Major Unlisted Holdings which includes the cartonboard and paper company Korsnäs including shares in Bergvik Skog, Major Listed Holdings which includes Millicom International Cellular, Tele2, Modern Times Group MTG, Metro International and Transcom WorldWide, and New Ventures which is active in finding new investments in small and mid sized companies which have a significant growth potential. Kinnevik plays an active role on the Boards of its holdings.
The Kinnevik class A and class B shares are listed on NASDAQ OMX Stockholm's list for Large Cap companies within the financial and real estate sector. The ticker codes are KINV A and KINV B.
CONDENSED CONSOLIDATED INCOME STATEMENT (SEK m)
| 2010 | 2009 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| 1 Jan | 1 Jan | 1 July | 1 July | 2009 | |
| 30 Sept | 30 Sept | 30 Sept | 30 Sept | Full year | |
| Revenue | 6 442 | 6 266 | 2 079 | 1 981 | 8 397 |
| Cost of goods sold and services | -5 406 | -5 317 | -1 617 | -1 540 | -7 075 |
| Gross profit/loss | 1 036 | 949 | 462 | 441 | 1 322 |
| Selling, administration, research and development costs |
-371 | -369 | -112 | -121 | -520 |
| Other operating income | 257 | 205 | 54 | 73 | 243 |
| Other operating expenses | -154 | -181 | -73 | -82 | -203 |
| Operating profit/loss | 768 | 604 | 331 | 311 | 842 |
| Dividends received | 2 689 | 687 | - | 3 | 1 027 |
| Change in fair value of financial assets | 9 968 | 10 621 | 4 305 | 5 734 | 14 826 |
| Interest income and other financial income | 47 | 26 | 12 | 13 | 40 |
| Interest expenses and other financial expenses | -151 | -183 | -59 | -46 | -219 |
| Profit/loss after financial items | 13 321 | 11 755 | 4 589 | 6 015 | 16 516 |
| Taxes | -144 | -116 | -77 | -73 | -143 |
| Net profit/loss for the period | 13 177 | 11 639 | 4 512 | 5 942 | 16 373 |
| Of which attributable to: | |||||
| Equity holders of the Parent Company | 13 159 | 11 631 | 4 509 | 5 940 | 16 361 |
| Non-controlling interest | 18 | 8 | 3 | 2 | 12 |
| Earnings per share before dilution, SEK | 47.48 | 44.51 | 16.27 | 22.58 | 61.66 |
| Earnings per share after dilution, SEK | 47.46 | 44.51 | 16.26 | 22.58 | 61.66 |
| Average number of shares before dilution | 277 158 190 | 261 337 123 | 277 158 190 | 263 019 622 | 265 324 899 |
| Average number of shares after dilution | 277 267 140 | 261 337 123 | 277 311 090 | 263 019 622 | 265 324 899 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)
| 2010 1 Jan 30 Sept |
2009 1 Jan 30 Sept |
2010 1 July 30 Sept |
2009 1 July 30 Sept |
2009 Full year |
|
|---|---|---|---|---|---|
| Net profit/loss for the period | 13 177 | 11 639 | 4 512 | 5 942 | 16 373 |
| Other comprehensive income for the period | |||||
| Translation differences | -43 | -26 | -15 | -12 | -23 |
| Cash flow hedging | 24 | -56 | -8 | -95 | 81 |
| Actuarial profit/loss | - | - | - | - | -1 |
| Tax attributable to other comprehensive income | -6 | 15 | 3 | 25 | -21 |
| Total other comprehensive income for the period | -25 | -67 | -20 | -82 | 36 |
| Total comprehensive income for the period | 13 152 | 11 572 | 4 492 | 5 860 | 16 409 |
| Total comprehensive income for the period attributable to: | |||||
| Equity holders of the Parent Company | 13 139 | 11 566 | 4 490 | 5 860 | 16 398 |
| Non-controlling interest | 13 | 6 | 2 | 0 | 11 |
CONDENSED CONSOLIDATED CASH-FLOW STATEMENT (SEK m)
| 2010 | 2009 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| 1 Jan | 1 Jan | 1 July | 1 July | 2009 | |
| 30 Sept | 30 Sept | 30 Sept | 30 Sept | Full year | |
| Operating profit | 768 | 604 | 331 | 311 | 842 |
| Adjustment for non-cash items | 471 | 446 | 179 | 150 | 613 |
| Taxes paid | -269 | 5 | -55 | -13 | -13 |
| Cash flow from operations before change in working capital | 970 | 1 055 | 455 | 448 | 1 442 |
| Change in working capital | 10 | 193 | -84 | 79 | 256 |
| Cash flow from operations | 980 | 1 248 | 371 | 527 | 1 698 |
| Acquisition of subsidiaries | - | -147 | - | - | -147 |
| Investments in tangible and biological fixed assets | -406 | -441 | -110 | -165 | -653 |
| Sales of tangible and biological fixed assets | 0 | 2 | 0 | 1 | 2 |
| Investments in intangible fixed assets | -22 | - | -9 | - | - |
| Investments in shares and other securities | -1 127 | -369 | -510 | -30 | -388 |
| Dividends received | 3 029 | 687 | 0 | 3 | 687 |
| Changes in loan receivables | 54 | 0 | 54 | 0 | 0 |
| Interest received | 19 | 19 | 5 | 6 | 24 |
| Cash flow from investing activities | 1 547 | -249 | -570 | -185 | -475 |
| Change in interest-bearing liabilities | -1 506 | -638 | 328 | -349 | -751 |
| Interest paid | -138 | -174 | -55 | -43 | -223 |
| Dividend paid | -831 | -521 | 0 | - | -521 |
| Cash flow from financing activities | -2 475 | -1 333 | 273 | -392 | -1 495 |
| Cash flow for the period | 52 | -334 | 74 | -50 | -272 |
| Exchange rate differences in liquid funds | 0 | 0 | 0 | 0 | 0 |
| Cash and short-term investments, opening balance | 237 | 509 | 215 | 225 | 509 |
| Cash and short-term investments, closing balance | 289 | 175 | 289 | 175 | 237 |
.
CONDENSED CONSOLIDATED BALANCE SHEET (SEK m)
| 2010 | 2009 | 2009 | |
|---|---|---|---|
| ASSETS Fixed assets |
30 Sept | 30 Sept | 31 Dec |
| Intangible assets | 823 | 836 | 836 |
| Tangible and biological fixed assets | 6 271 | 6 305 | 6 368 |
| Financial assets accounted to fair value through profit and | |||
| loss | 53 770 | 38 539 | 42 776 |
| - whereof interest-bearing | 283 | 310 | 307 |
| Investments in companies accounted for using the equity | |||
| method | 76 | 11 | 11 |
| 60 940 | 45 691 | 49 991 | |
| Current assets | |||
| Inventories | 1 626 | 1 810 | 1 725 |
| Trade receivables | 816 | 791 | 741 |
| Tax receivables | 0 | 12 | 16 |
| Other current assets | 225 | 164 | 530 |
| Short-term investments | 3 | 0 | 51 |
| Cash and cash equivalents | 286 | 175 | 186 |
| 2 956 | 2 952 | 3 249 | |
| TOTAL ASSETS | 63 896 | 48 643 | 53 240 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Equity attributable to equity holders of the Parent Company | 53 950 | 36 803 | 41 637 |
| Equity attributable to non-controlling interest | 50 | 33 | 38 |
| 54 000 | 36 836 | 41 675 | |
| Long-term liabilities | |||
| Interest-bearing loans | 6 690 | 7 736 | 7 611 |
| Provisions for pensions | 575 | 576 | 580 |
| Other provisions | 28 | 56 | 51 |
| Deferred tax liability | 1 050 | 1 147 | 1 146 |
| Other liabilities | 4 | 4 | 4 |
| 8 347 | 9 519 | 9 392 | |
| Short-term liabilities | |||
| Interest-bearing loans | 11 | 570 | 586 |
| Provisions | 46 | 55 | 59 |
| Trade payables | 869 | 845 | 843 |
| Income tax payable | 124 | 115 | 163 |
| Other payables | 499 | 703 | 522 |
| 1 549 | 2 288 | 2 173 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 63 896 | 48 643 | 53 240 |
CONDENSED REPORT OF CHANGES IN EQUITY FOR THE GROUP (SEK m)
| 2010 | 2009 | 2010 | 2009 | ||
|---|---|---|---|---|---|
| 1 Jan | 1 Jan | 1 July | 1 July | 2009 | |
| 30 Sept | 30 Sept | 30 Sept | 30 Sept | Full year | |
| Equity, opening balance | 41 675 | 23 530 | 49 507 | 28 722 | 23 530 |
| Total comprehensive income for the period | 13 152 | 11 572 | 4 492 | 5 860 | 16 409 |
| New share issue (asset acquisition Emesco) | 0 | 2 253 | 0 | 2 253 | 2 253 |
| Dividend paid | -831 | -521 | 0 | - | -521 |
| Effect of employee share saving programme | 4 | 2 | 1 | 1 | 4 |
| Equity, closing amount | 54 000 | 36 836 | 54 000 | 36 836 | 41 675 |
| Equity attributable to the shareholders of the Parent Company |
53 950 | 36 803 | 53 950 | 36 803 | 41 637 |
| Equity attributable to non-controlling interest | 50 | 33 | 50 | 33 | 38 |
| 2010 | 2009 | 2009 | |
|---|---|---|---|
| KEY RATIOS | 30 Sept | 30 Sept | 31 Dec |
| Debt/equity ratio | 0.13 | 0.24 | 0.21 |
| Equity ratio | 85% | 76% | 78% |
| Net debt | 6 704 | 8 397 | 8 233 |
| DEFINITIONS OF KEY RATIOS | |
|---|---|
| Debt/equity ratio | Interest-bearing liabilities including interest-bearing provisions divided by shareholders' equity. |
| Equity ratio | Shareholders' equity including non-controlling interest as percentage of total assets. |
| Net debt | Interest-bearing liabilities including interest-bearing provisions less the sum of interest-bearing recei vables, short-term investments and cash and bank. |
| Operating margin | Operating profit after depreciation divided by revenue. |
| Operational capital employed | Average of intangible and tangible fixed assets, investments in companies accounted for using the equity method, inventories and short-term non-interest bearing receivables less other provisions and short-term non interest bearing liabilities. |
| Return on operational capital employed | Operating profit after depreciation divided by average operational capital employed. |
CONDENSED SEGMENT REPORTING (SEK m)
| Major | Parent | |||||
|---|---|---|---|---|---|---|
| Unlisted | Major Listed | New | Company | |||
| 1 Jan-30 Sept 2010 | Holdings | Holdings | Ventures | and other | Eliminations | Total Group |
| Revenue | 6 180 | 353 | 18 | -109 | 6 442 | |
| Operating costs | -5 047 | -316 | -61 | 114 | -5 310 | |
| Depreciation | -449 | -15 | -3 | -467 | ||
| Other operating income and expenses | 126 | -21 | 3 | -5 | 103 | |
| Operating profit/loss | 810 | 1 | -43 | 0 | 768 | |
| Dividends received | 4 | 2 685 | 2 689 | |||
| Change in fair value of financial assets | 41 | 10 086 | -159 | 9 968 | ||
| Financial net | -84 | -4 | 11 | -27 | -104 | |
| Profit/loss after financial items | 771 | 12 767 | -147 | -70 | 0 | 13 321 |
| Investments in financial fixed assets | 65 | 1 062 | 1 127 | |||
| Investments in intangible fixed assets | 22 | 22 | ||||
| Investments in tangible fixed assets | 371 | 34 | 1 | 406 | ||
| Impairment of goodwill | -34 | -34 |
| Major | Parent | |||||
|---|---|---|---|---|---|---|
| Unlisted | Major Listed | New | Company | |||
| 1 Jan-30 Sept 2009 | Holdings | Holdings | Ventures | and other | Eliminations | Total Group |
| Revenue | 6 018 | 329 | 22 | -103 | 6 266 | |
| Operating costs | -4 965 | -300 | -47 | 103 | -5 209 | |
| Depreciation | -459 | -14 | -4 | -477 | ||
| Other operating income and expenses | 15 | 8 | 1 | 24 | ||
| Operating profit/loss | 609 | 23 | -28 | 0 | 604 | |
| Dividends received | 6 | 677 | 4 | 687 | ||
| Change in fair value of financial assets | 7 | 10 503 | 111 | 10 621 | ||
| Financial net | -120 | -45 | 8 | -157 | ||
| Profit/loss after financial items | 502 | 11 135 | 142 | -24 | 0 | 11 755 |
| Investments in financial fixed assets | 2 515 | 95 | 2 610 | |||
| Investments in intangible fixed assets | ||||||
| (acquisition of operations) | 37 | 37 | ||||
| Investments in tangible fixed assets | 532 | 6 | 3 | 541 | ||
| - of which acquisition of operations | 100 | 100 |
CONDENSED SEGMENT REPORTING (SEK m)
| Major | Parent | |||||
|---|---|---|---|---|---|---|
| Unlisted | Major Listed | New | Company | |||
| 1 July-30 Sept 2010 | Holdings | Holdings | Ventures | and other | Eliminations | Total Group |
| Revenue | 2 018 | 100 | 6 | -45 | 2 079 | |
| Operating costs | -1 510 | -92 | -17 | 47 | -1 572 | |
| Depreciation | -151 | -5 | -1 | -157 | ||
| Other operating income and expenses | 11 | -28 | 0 | -2 | -19 | |
| Operating profit/loss | 368 | -25 | -12 | 0 | 331 | |
| Change in fair value of financial assets | 14 | 4 400 | -109 | 0 | 4 305 | |
| Financial net | -46 | 4 | 4 | -9 | -47 | |
| Profit/loss after financial items | 336 | 4 404 | -130 | -21 | 0 | 4 589 |
| Investments in financial fixed assets | 32 | 478 | 510 | |||
| Investments in intangible fixed assets | 9 | 9 | ||||
| Investments in tangible fixed assets | 98 | 12 | 110 | |||
| Impairment of goodwill | -34 | -34 |
| Major | Parent | |||||
|---|---|---|---|---|---|---|
| Unlisted | Major Listed | New | Company | |||
| 1 July-30 Sept 2009 | Holdings | Holdings | Ventures | and other | Eliminations | Total Group |
| Revenue | 1 915 | 88 | 4 | -26 | 1 981 | |
| Operating costs | -1 435 | -82 | -14 | 26 | -1 505 | |
| Depreciation | -150 | -4 | -2 | -156 | ||
| Other operating income and expenses | -8 | -2 | 1 | -9 | ||
| Operating profit/loss | 322 | 0 | -11 | 0 | 311 | |
| Dividends received | 1 | 2 | 3 | |||
| Change in fair value of financial assets | 5 | 5 761 | -32 | 5 734 | ||
| Financial net | -32 | -3 | 2 | -33 | ||
| Profit/loss after financial items | 296 | 5 758 | -30 | -9 | 6 015 | |
| Investments in financial fixed assets | 2 241 | 30 | 2 271 | |||
| Investments in tangible fixed assets | 160 | 3 | 2 | 165 |
CONDENSED SEGMENT REPORTING (SEK m)
| Major | Parent | |||||
|---|---|---|---|---|---|---|
| Unlisted | Major Listed | New | Company | |||
| 1 Jan-31 Dec 2009 | Holdings | Holdings | Ventures | and other | Eliminations | Total Group |
| Revenue | 8 039 | 467 | 26 | -135 | 8 397 | |
| Operating costs | -6 605 | -422 | -69 | 135 | -6 961 | |
| Depreciation | -611 | -19 | -4 | -634 | ||
| Other operating income and expenses | 28 | 13 | -1 | 40 | ||
| Operating profit/loss | 851 | 39 | -48 | 0 | 842 | |
| Dividends received | 6 | 1 017 | 4 | 1 027 | ||
| Change in fair value of financial assets | 40 | 14 705 | 81 | 14 826 | ||
| Financial net | -148 | -48 | 17 | -179 | ||
| Profit/loss after financial items | 749 | 15 674 | 137 | -44 | 0 | 16 516 |
| Investments in financial fixed assets | 2 515 | 114 | 2 629 | |||
| Investments in intangible fixed assets (acqui | ||||||
| sition of operations) | 37 | 37 | ||||
| Investments in tangible fixed assets | 740 | 10 | 3 | 753 | ||
| - of which acquisition of operations | 100 | 100 |
FINANCIAL KEY RATIOS MAJOR UNLISTED HOLDINGS (SEK m)
| 2010 Q 3 |
2010 Q 2 |
2010 Q 1 |
2009 Full year |
2009 Q 4 |
2009 Q 3 |
2009 Q 2 |
2009 Q 1 |
2008 Full year1) |
2008 Q 41) |
2008 Q 3 |
2008 Q 2 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | ||||||||||||
| Korsnäs Industrial | 1 766 | 1 720 | 1 911 | 7 098 | 1 757 | 1 730 | 1 823 | 1 788 | 6 608 | 1 465 | 1 602 | 1 785 |
| Korsnäs Forestry | 252 | 283 | 248 | 941 | 264 | 185 | 317 | 175 | 788 | 203 | 166 | 221 |
| Total Korsnäs | 2 018 | 2 003 | 2 159 | 8 039 | 2 021 | 1 915 | 2 140 | 1 963 | 7 396 | 1 668 | 1 768 | 2 006 |
| Operating profit before depreciation (EBITDA) |
||||||||||||
| Korsnäs Industrial | 502 | 383 | 334 | 1 430 | 381 | 464 | 318 | 267 | 1 090 | 89 | 361 | 332 |
| Korsnäs Forestry | 17 | 10 | 13 | 32 | 13 | 8 | 4 | 7 | 34 | 2 | 13 | 8 |
| Total Korsnäs | 519 | 393 | 347 | 1 462 | 394 | 472 | 322 | 274 | 1 124 | 91 | 374 | 340 |
| Operating profit after de preciation (EBIT) |
||||||||||||
| Korsnäs Industrial | 352 | 234 | 188 | 826 | 231 | 315 | 165 | 115 | 472 | -68 | 208 | 178 |
| Korsnäs Forestry | 16 | 9 | 11 | 25 | 11 | 7 | 2 | 5 | 28 | 1 | 11 | 6 |
| Total Korsnäs | 368 | 243 | 199 | 851 | 242 | 322 | 167 | 120 | 500 | -67 | 219 | 184 |
| Operating margin | ||||||||||||
| Korsnäs Industrial | 19.9% | 13.6% | 9.8% | 11.6% | 13.1% | 18.2% | 9.1% | 6.4% | 7.1% | -4.7% | 13.0% | 10.0% |
| Korsnäs Forestry | 6.3% | 3.2% | 4.4% | 2.7% | 4.2% | 3.8% | 0.6% | 2.9% | 3.6% | 0.5% | 2.1% | 2.7% |
| Korsnäs | 18.2% | 12.1% | 9.2% | 10.6% | 12.0% | 16.8% | 7.8% | 6.1% | 6.7% | -4.1% | 12.4% | 9.2% |
| Operational capital em ployed |
||||||||||||
| Korsnäs Industrial | 7 423 | 7 392 | 7 402 | 7 411 | 7 332 | 7 345 | 7 443 | 7 476 | 7 746 | 7 620 | 7 807 | 7 886 |
| Korsnäs Forestry | 343 | 369 | 353 | 438 | 389 | 449 | 449 | 471 | 429 | 475 | 408 | 415 |
| Total Korsnäs | 7 766 | 7 761 | 7 755 | 7 849 | 7 721 | 7 794 | 7 892 | 7 947 | 8 175 | 8 095 | 8 215 | 8 301 |
| Return on operational capi tal employed |
||||||||||||
| Korsnäs Industrial | 19.0% | 12.7% | 10.2% | 11.1% | 12.6% | 17.2% | 8.9% | 6.2% | 6.1% | -3.6% | 10.7% | 9.0% |
| Korsnäs Forestry | 18.7% | 9.8% | 12.5% | 5.7% | 11.3% | 6.2% | 1.8% | 4.2% | 6.5% | 0.8% | 10.8% | 5.8% |
| Korsnäs | 19.0% | 12.5% | 10.3% | 10.8% | 12.5% | 16.5% | 8.5% | 6.0% | 6.1% | -3.4% | 10.7% | 8.9% |
| Production, thousand tons | 278 | 237 | 261 | 1 025 | 261 | 268 | 253 | 243 | 1 052 | 235 | 273 | 270 |
| Deliveries, thousand tons | 259 | 252 | 269 | 1 034 | 253 | 255 | 271 | 255 | 993 | 222 | 247 | 264 |
1) Excluding restructuring charges of SEK 71 m in Q4 2008.
FINANCIAL KEY RATIOS MAJOR LISTED HOLDINGS (SEK m)
| 2010 Q 3 |
2010 Q 2 |
2010 Q 1 |
2009 Full year |
2009 Q 4 |
2009 Q 3 |
2009 Q 2 |
2009 Q 1 |
2008 Full year |
2008 Q 4 |
2008 Q 3 |
2008 Q 2 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in fair value through income statement and dividends received |
||||||||||||
| Millicom | 246 | 1 610 | 4 124 | 7 075 | 1 286 | 2 800 | 4 786 | -1 797 | -14 329 | -4 200 | -6 016 | 2 773 |
| Tele2 | 3 320 | 318 | 1 396 | 5 950 | 2 398 | 1 776 | 1 713 | 63 | -6 606 | -1 129 | -4 988 | 1 675 |
| MTG | 970 | 212 | 867 | 2 067 | 734 | 827 | 788 | -281 | -2 668 | -765 | -1 078 | -437 |
| Transcom | -80 | -132 | -113 | 337 | 152 | 92 | 102 | -9 | -395 | -67 | -127 | -29 |
| Metro shares | -27 | -27 | 74 | 69 | -28 | 94 | -42 | 44 | -979 | -360 | -433 | -165 |
| Metro warrants | -29 | -144 | 186 | 224 | 0 | 172 | 51 | - | - | - | - | - |
| 4 400 | 1 837 | 6 534 | 15 722 | 4 542 | 5 761 | 7 398 | -1 980 | -24 977 | -6 521 | -12 642 | 3 817 | |
| Book value end of the period |
||||||||||||
| Millicom | 24 328 | 24 082 | 24 290 | 20 166 | 20 166 | 19 220 | 16 421 | 11 635 | 13 432 | 13 432 | 17 631 | 23 647 |
| Tele2 | 19 173 | 15 853 | 16 327 | 14 932 | 14 932 | 12 533 | 9 775 | 8 690 | 8 627 | 8 627 | 9 756 | 14 744 |
| MTG | 6 779 | 5 809 | 5 672 | 4 805 | 4 805 | 4 071 | 2 131 | 1 393 | 1 674 | 1 674 | 2 439 | 3 517 |
| Transcom | 312 | 392 | 525 | 637 | 637 | 485 | 285 | 183 | 192 | 192 | 259 | 386 |
| Metro shares | 263 | 290 | 317 | 243 | 243 | 271 | 163 | 204 | 160 | 160 | 521 | 954 |
| Metro warrants | 359 | 388 | 531 | 345 | 345 | 345 | 157 | - | - | - | - | - |
| 51 214 | 46 814 | 47 662 | 41 128 | 41 128 | 36 925 | 28 932 | 22 105 | 24 085 | 24 085 | 30 606 | 43 248 | |
| Investments | - | - | - | 2 338 | - | 2 232 | 106 | - | - | - | - | - |
NEW VENTURES (SEK m)
| 2010 | 2010 | 2010 | 2009 | 2009 | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Q 3 | Q 2 | Q 1 | Full year | Q 4 | Q 3 | Q 2 | Q 1 | Full year | Q 4 | Q 3 | Q 2 | |
| Change in fair value through income state ment |
||||||||||||
| Black Earth Farming | -75 | -173 | 107 | 119 | -29 | -31 | 189 | -10 | -775 | -86 | -571 | -397 |
| Unlisted holdings | -34 | 0 | 16 | -38 | -1 | -1 | -36 | 0 | -11 | -51 | 5 | 32 |
| -109 | -173 | 123 | 81 | -30 | -32 | 153 | -10 | -786 | -137 | -566 | -365 | |
| Book value end of period | ||||||||||||
| Black Earth Farming | 578 | 653 | 765 | 595 | 595 | 618 | 649 | 460 | 470 | 470 | 521 | 1 092 |
| Unlisted holdings | 1 529 | 1 219 | 1 114 | 777 | 777 | 752 | 726 | 703 | 692 | 692 | 913 | 703 |
| 2 107 | 1 872 | 1 879 | 1 372 | 1 372 | 1 370 | 1 375 | 1 163 | 1 162 | 1 162 | 1 434 | 1 795 | |
| Investments | 478 | 152 | 432 | 114 | 19 | 30 | 57 | 8 | 193 | 35 | 149 | 1 |
CONDENSED PARENT COMPANY INCOME STATEMENT (SEK m)
| 2010 1 Jan 30 Sept |
2009 1 Jan 30 Sept |
2010 1 July 30 Sept |
2009 1 July 30 Sept |
2009 Full year |
|
|---|---|---|---|---|---|
| Revenue | 14 | 17 | 4 | 3 | 22 |
| Administration costs | -53 | -46 | -14 | -14 | -71 |
| Other operating income | 3 | 2 | 0 | 0 | 3 |
| Operating loss | -36 | -27 | -10 | -11 | -46 |
| Dividends received | 1 140 | 1 754 | - | 3 | 1 754 |
| Result from financial assets | 12 | 8 | 0 | 0 | 15 128 |
| Net interest income/expense | 315 | -75 | 105 | -12 | -88 |
| Profit/loss after financial items | 1 431 | 1 660 | 95 | -20 | 16 748 |
| Taxes | -45 | 26 | -25 | 6 | 34 |
| Net profit/loss for the period | 1 386 | 1 686 | 70 | -14 | 16 782 |
CONDENSED PARENT COMPANY BALANCE SHEET (SEK m)
| 2010 | 2009 | 2009 | |
|---|---|---|---|
| 30 Sept | 30 Sept | 31 Dec | |
| ASSETS | |||
| Tangible fixed assets | 2 | 2 | 2 |
| Financial fixed assets | 41 763 | 25 708 | 40 846 |
| Short-term receivables | 21 | 49 | 412 |
| Cash and cash equivalents | 1 | 1 | 53 |
| TOTAL ASSETS | 41 787 | 25 760 | 41 313 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity | 36 297 | 20 524 | 35 740 |
| Provisions | 39 | 46 | 44 |
| Long-term liabilities | 5 340 | 4 562 | 4 666 |
| Short-term liabilities | 111 | 628 | 863 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 41 787 | 25 760 | 41 313 |
The Parent Company's liquidity, including short-term investments and unutilized credit facilities, totalled SEK 5,079 m at 30 September 2010 and SEK 3,182 m at 31 December 2009. The Parent Company's interest bearing external liabilities amounted to SEK 1,883 m (3,645) on the same dates.
Investments in tangible fixed assets amounted to SEK 1 m (0) during the period.
As of 30 September 2010 the number of shares in Investment AB Kinnevik amounted to 277,583,190 shares of which 48,665,324 are class A shares with ten votes each, 228,492,866 are class B shares with one vote each and 425,000 are class C treasury shares with one vote each. The total number of votes in the Company amounted to 715,571,106 (715,146,106 excluding 425,000 class C treasury shares). During the reporting period, following approval at the AGM in May, 135,000 class C shares held in treasury have been newly issued to be delivered to participants in incentive programs. The Board has authorization to repurchase a maximum of 10% of all shares in the Company. The Board has not used the authorization during 2010. There are no convertibles or warrants in issue.