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Kinnevik — Interim / Quarterly Report 2012
Apr 20, 2012
2935_10-q_2012-04-20_d8c22732-dba9-4de4-bde8-33ab6100e219.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-31 MARCH 2012
Financial results for the first quarter
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Kinnevik's net asset value 2007-2012
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Kinnevik was founded in 1936 and thus embodies seventyfive years of entrepreneurship under the same group of principal owners. Kinnevik's holdings of growth companies are focused around seven business sectors; Telecom & Services, Online, Media, Microfinancing, Paper & Packaging, Agriculture and Renewable energy. Kinnevik has a long history of investing in emerging markets which has resulted in a considerable exposure to consumer sectors in these markets. Kinnevik plays an active role on the Boards of its holdings.
Total return
The Kinnevik share's average annual total return
| Past 30 years 1) | 20% |
|---|---|
| Past 5 years | 5% |
| Past 12 months | 8% |
1) Based on the assumption that shareholders have retained their allotment of shares in Tele2. MTG. Transcom and CDON
Events during the first quarter
- During the first quarter, Kinnevik invested a total of SEK 2,696 m within Online and Microfinancing, of which SEK 2,679 m in Rocket Internet's portfolio companies. SEK 2,528 m of the consideration for Rocket Internet and its portfolio companies had yet to be paid at the end of the quarter and is recorded as debt in the balance sheet. Out of the investments made in Rocket Internet and portfolio companies, a majority of the funds were invested into Zalando, Dafiti, Lamoda and Namshi, as well as payment for exercising warrants in Rocket Internet. Kinnevik owns 25% of the shares in Rocket Internet following the exercise of warrants.
- On 6 February, Kinnevik announced a cash offer to acquire all outstanding shares, warrants and debentures in Metro International S.A. ("Metro"). When the extended acceptance period ended on 4 April, shareholders representing 94.6% of the shares and holders of 98.1% of the warrants had accepted Kinnevik's offer. The total value of all shares, warrants and debentures acquired (excluding Kinnevik's holdings prior to the offer) amounted to SEK 772 m of which SEK 730 m had been paid as of 31 March
It is Kinnevik's intention to continue operations in accordance with the strategic plan that has been developed by the management of Metro and continue to invest in emerging markets. This strategy entail a balance between cost savings in the free newspaper business while at the same time investing in emerging markets and in the online business. From that perspective, Kinnevik believes that significant opportunities exist to further develop Metro outside of the stock exchange, where Kinnevik, as an active owner with significant capital resources for expansion and investments, can provide the long-term support for the management and the business that is needed in
order to capture and fully capitalise on the opportunities that lie ahead.
• In February, the Swedish Tax Authorities informed Kinnevik in an audit memorandum that they intend to increase the Group's taxes by approximately SEK 700 m pertaining to Kinnevik's acquisition of Emesco AB in 2009. Following correspondence between the two parties and a number of meetings on the issue, the Tax Authorities have maintained their consideration to interpret the nature of the transaction in a manner that Kinnevik strongly refutes. Kinnevik has engaged a number of legal and tax experts, who all confirm Kinnevik's view of the matter. In early April, Kinnevik responded to the audit memorandum. The date for a decision on the issue, in the event the Tax Agency remains firm in its position, is not known at present. If the Tax Authorities maintain their position and move forward with the issue against the company, Kinnevik will appeal the decision since the company is of the strong opinion that the Tax Authorities' interpretation of the law is incorrect. No provision has been made for the potential tax claim in the accounts.
Dividend and capital structure
Kinnevik's Board of Directors and the Boards of Millicom, Tele2 and MTG have proposed to the Annual General Meetings in May that dividends be approved according to the following:
Kinnevik's part of dividends proposed to
| be paid from listed holdings | ||
|---|---|---|
| Millicom | USD 2.40 per share | 6021) |
| Tele 2 | SEK 13 per share | 1761 |
| MTG | SEK 9 per share | 122 |
| Total expected dividends to be recei- | ||
| ved from listed holdings | 2485 | |
| Of which ordinary dividends | 1 605 |
1) Based on an exchange rate of 6.63 SEK/USD.
The proposed dividends will result in a dividend payment to Kinnevik's shareholders corresponding to approximately 95% of the expected ordinary dividends to be received from Millicom. Tele2 and MTG.
The guidance for new investments within Online, Microfinancing, Agriculture and Renewable Energy is approximately SEK 5 billion in 2012, compared to SEK 3 billion invested in 2011. For the remainder of 2012, the parent company's leverage against the listed share portfolio is expected to be in the range of SEK 2 - 6 billion. Leverage against Korsnäs is expected to remain above 3xEBITDA.
Financial overview
Financial overview
Consolidated earnings for the first quarter
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The Group's cash flow and investments
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| Financial instrument | Amount (SEK m) |
|---|---|
| shares/warrants | 521 |
| debentures | 251 |
| 772 | |
| shares/warrants | 2 679 |
| 1 | |
| shares | 16 |
| 2 696 | |
| 5 | |
| shares/warrants | 351 |
| shares | 48 |
| 24 | |
| 7 | |
| 430 | |
The Group's liquidity and financing
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Business combination
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Book and fair value of assets
| 31 Mar 2012 | ||||||
|---|---|---|---|---|---|---|
| SEK million | Equity interest (%) |
Voting interest (%) |
Book value 2012 31 Mar |
Fair value 2012 31 Mar |
Fair value 2011 31 Dec |
Total return 2012 |
| Telecom & services | ||||||
| Millicom | 37.2 | 37.2 | 28 358 | 28 358 | 26 088 | 9% |
| Tele2 | 30.5 | 47.7 | 18 278 | 18 278 | 18 129 | 1% |
| Transcom | 33.0 | 39.7 | 255 | 255 | 189 | 35% |
| Total Telecom and services | 46 891 | 46 891 | 44 406 | |||
| Online | ||||||
| Rocket Internet with portfolio companies | 7 876 | 7 876 | 5 434 | |||
| Groupon, directly owned shares | 959 | 959 | 1 197 | -20% | ||
| Avito (directly and through Vosvik) | 50 1) | 27 | 336 | 336 | 336 | |
| CDON | 25.1 | 25.1 | 940 | 940 | 629 | 50% |
| Other Online investments | 157 | 205 | 204 | |||
| Total Online | 10 268 | 10 316 | 7 800 | |||
| Media | ||||||
| MTG | 20.3 | 49.9 | 4 921 | 4 921 | 4 436 | 11% |
| Metro | 97.1 2) | 97.1 2) | 1 050 | 1 050 | 277 | |
| Metro subordinated debentures, interest bearing | - | - | 287 | |||
| Interest bearing net cash, Metro | 313 | 313 | - | |||
| Total Media | 6 284 | 6 284 | 5 000 | |||
| Microfinancing | ||||||
| Bayport | 37 2) | 37 2) | 407 | 407 | 405 | |
| Seamless | 11.9 2) | 11.9 2) | 45 | 45 | - | 188% |
| Other Microfinancing investments | 37 | 43 | 41 | |||
| Total Microfinancing | 489 | 495 | 446 | |||
| Paper & packaging | ||||||
| Korsnäs Industrial and Forestry | 100 | 100 | 7 408 | 9 702 3) | 9 551 3) | |
| Bergvik Skog 4) | 5 | 5 | 659 | 659 | 653 | |
| Interest bearing net debt relating to Korsnäs | -5 706 | -5 706 | -5 212 | |||
| Total Paper & packaging | 2 361 | 4 655 | 4 992 | |||
| Agriculture | ||||||
| Black Earth Farming | 24.9 | 24.9 | 404 | 404 | 427 | -6% |
| Rolnyvik | 100 | 100 | 199 | 250 | 250 | |
| Total Agriculture | 603 | 654 | 677 | |||
| Renewable energy | ||||||
| Latgran | 75 | 75 | 154 | 268 | 245 | |
| Vireo | 75 | 75 | 53 | 78 | 58 | |
| Total Renewable energy | 207 | 346 | 303 | |||
| Interest bearing net debt against listed holdings | -2 224 | -2 224 | -1 605 | |||
| Debt, unpaid investments | -2 570 | -2 570 | -490 | |||
| Other assets and liabilities | 283 | 283 | 310 | |||
| Total equity/net asset value | 62 592 | 65 130 | 61 839 | |||
| Net asset value per share | 234.97 | 223.10 | ||||
| Closing price, class B share | 153.90 | 133.80 | 15% |
1) After full dilution.
2) After warrants have been utilised.
3) Consensus among analysts covering Kinnevik.
4) Corresponding to 5% of the company's equity.
Kinnevik's holdings
Kinnevik's assets
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Kinnevik's business sectors
Total sum of Kinnevik's proportional part
Telecom & Services
| Investment (SEK m) | Ownership | Estimated fair value |
|---|---|---|
| Millicom | 37.2% | 28 358 |
| Tele2 | 30.5% | 18 278 |
| Transcom | 33.0% | 255 |
| Total | 46 891 | |
| Return Telecom & Services | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | 23% | 10% |
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Proportional part of Change compared to Jan-Mar 2011 Jan-Mar 2012 (SEK m) revenue EBIT revenue EBIT Telecom & Services 6 444 1 136 8% -8% Online 957 -141 164% N/A Media 1 058 74 4% -23% Microfinancing 77 24 72% 36% Paper & Packaging 2 166 240 1% -9% Agriculture 81 -10 54% N/A Renewable energy 122 11 68% 6%
of revenue and operating result 10 904 1 335 13% -12%
Kinnevik's proportional part of revenue and operating result in its holdings
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Kinnevik's holdings
Millicom
| | Jan-Mar | Full yeary-March 2012
Numbers in brackets refer to January-March 2011.
Production
The somewhat lower production volumes during the first quarter of 2012, compared with the year-earlier period, were due to shorter extended maintenance stoppages at the Frövi facility to adapt stock volumes to demand. In other respects, production during the quarter functioned well. No operational problems had any significant impact on production volumes.
The supply of wood-fiber material has been good during the first quarter. Pulpwood prices stabilized during the first quarter, following the price reductions that gradu-
Kinnevik's holdings
ally occurred since September 2011. The official prices for coniferous pulpwood in Central Sweden have declined by slightly more than 15% since October 2011, while prices for birch pulpwood declined by about 11%.
Distribution of operating costs January-March 2012
Excluding depreciation, Korsnäs Industrial. Numbers in brackets refer to January-March 2011.
Investments and maintenance stoppages
The project pertaining to a new bioenergy facility in Korsnäs' industrial area is progressing in cooperation with Gävle Energy AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. All the main components have been procured within the project's budget framework and work to install the equipment is progressing according to plan. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 227 m has been paid to date. In addition to the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 118 m has been paid to date.
Decisions have also been made to invest SEK 270 m in the refurbishment of PM5 in Gävle, of which SEK 54 m has been paid to date. The refurbishment, which will be implemented during scheduled maintenance stoppages in autumn 2012, will affect several sections of the machine and is an aggressive quality investment to improve the surface of cartonboard.
During 2011, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance
| |
|----------------------------------------|---------|------------------|---------|
| Key data (USD m) | 2012 | 2011 | 2011 |
| Revenue | 1 1 6 8 | 1.081 | 4 5 3 0 |
| FBITDAuction**
The somewhat lower production volumes during the first quarter of 2012, compared with the year-earlier period, were due to shorter extended maintenance stoppages at the Frövi facility to adapt stock volumes to demand. In other respects, production during the quarter functioned well. No operational problems had any significant impact on production volumes.
The supply of wood-fiber material has been good during the first quarter. Pulpwood prices stabilized during the first quarter, following the price reductions that gradu-
Kinnevik's holdings
ally occurred since September 2011. The official prices for coniferous pulpwood in Central Sweden have declined by slightly more than 15% since October 2011, while prices for birch pulpwood declined by about 11%.
Distribution of operating costs January-March 2012
Excluding depreciation, Korsnäs Industrial. Numbers in brackets refer to January-March 2011.
Investments and maintenance stoppages
The project pertaining to a new bioenergy facility in Korsnäs' industrial area is progressing in cooperation with Gävle Energy AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. All the main components have been procured within the project's budget framework and work to install the equipment is progressing according to plan. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 227 m has been paid to date. In addition to the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 118 m has been paid to date.
Decisions have also been made to invest SEK 270 m in the refurbishment of PM5 in Gävle, of which SEK 54 m has been paid to date. The refurbishment, which will be implemented during scheduled maintenance stoppages in autumn 2012, will affect several sections of the machine and is an aggressive quality investment to improve the surface of cartonboard.
During 2011, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance
| 517 | 509 | 2 0 8 7 |
| Operating profit, EBIT | 295 | 311 | 1 257 |
| Net profit | 95 | 259 | 925 |
| Number of mobile subscribers (million) | 43.8 | 39.8 | 43.1 |
Millicom's revenues increased by 8.4% compared to the first quarter of 2011. With more than 80% of growth coming from products and services that three years ago were not yet on the market, Millicom has clearly shown that its focus on innovation has been the right strategy to be able to deliver strong results continuously.
In Latin America, the top line growth was 9.2% in local currency and the mobile data usage continues to grow and now accounts for nearly 12% of revenues from the region. Due to the success of Mobile Financial Services in the African region, the top line growth was 5.4% during the first quarter despite negative growth in Ghana, Senegal and Democratic Republic of Congo.
Due to further acceleration in investments within new categories as well as pricing pressures in some markets, the EBITDA margin for the first quarter was diluted to 44.1%. The company has initiated various pricing strategies to improve its' affordability perception on the markets where the growth has been negative.
Millicom's future growth and success will depend on the ability to innovate and seize new growth opportunities while defending the voice and SMS businesses. Mobile data grew 51% in the first quearter 2012 and Millicom now generate more than 30% of revenues from Value Added Services
Tele2ments and maintenance stoppages**
The project pertaining to a new bioenergy facility in Korsnäs' industrial area is progressing in cooperation with Gävle Energy AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. All the main components have been procured within the project's budget framework and work to install the equipment is progressing according to plan. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 227 m has been paid to date. In addition to the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 118 m has been paid to date.
Decisions have also been made to invest SEK 270 m in the refurbishment of PM5 in Gävle, of which SEK 54 m has been paid to date. The refurbishment, which will be implemented during scheduled maintenance stoppages in autumn 2012, will affect several sections of the machine and is an aggressive quality investment to improve the surface of cartonboard.
During 2011, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance
| | Jan-Mar | Full yearsnäs' industrial area is progressing in cooperation with Gävle Energy AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. All the main components have been procured within the project's budget framework and work to install the equipment is progressing according to plan. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 227 m has been paid to date. In addition to the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 118 m has been paid to date.
Decisions have also been made to invest SEK 270 m in the refurbishment of PM5 in Gävle, of which SEK 54 m has been paid to date. The refurbishment, which will be implemented during scheduled maintenance stoppages in autumn 2012, will affect several sections of the machine and is an aggressive quality investment to improve the surface of cartonboard.
During 2011, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance
| |
|---------------------------------|---------|------------------|---------|
| Key data (SEK m) | 2012 | 2011 | 2011 |
| Revenue | 10 481 | 9642 | 40 750 |
| FBITDA1, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance
| 2 5 7 1 | 2.544 | 10852 |
| Operating profit, EBIT | 1 3 8 3 | 1 673 | 6968 |
| Net profit | 869 | 1 2 2 6 | 4 9 0 4 |
| Number of subscribers (million) | 34.8 | 31.2 | 34.2 |
Tele2 will embrace the accelerating move from voice to data and migration from prepaid to postpaid. The immediate and readily evident effect in O1 2012 are additional costs associated with the transition from traditional voice to a more data centric emerging business model. Still, the first quarter of 2012 has continued to show solid revenue growth in Tele2's main markets.
Net sales increased, excluding exchange rate differences, with 8% in the quarter compared to the same period in the preceding year and the EBITDA margin was 25% (26).
Tele2 Sweden increased mobile revenues by 4% as customer demand for smartphones and data services increased further during the quarter. As a result of increased
marketing spend, the EBITDA margin was negatively affected. Tele2 Norway performed well during the quarter, with increased focus on moving traffic on to its own network.
Tele2 Russia withheld a good customer intake and added 304,000 (547,000) customers leading to a total customer base of 20.9 (19.0) million. Tele2 Kazakhstan had a significant operational progress with its successful launch of new regions, resulting in a customer intake of 332,000 $(24,000)$ . The total customer base amounted to 1,703,000 $(308,000)$ .
In Europe, Tele2 Netherlands maintained a stable EBITDA margin compared to same period last year, despite tough market conditions in the consumer and business segments.
Transcom
| Jan-Mar | ||||
|---|---|---|---|---|
| Key data (EUR m) | 2012 | 2011 | 2011 | |
| Revenue | 147.1 | 144.1 | 554.1 | |
| Operating profit/loss, EBIT | 1.1 | 2.5 | $-28.0$ | |
| Net profit/loss | $-1.3$ | 1.9 | -49.4 |
Transcoms efforts to increase sales are starting to show and during the first quarter of 2012, the company signed several contracts with new and existing customers that will contribute positively to the results in the coming quarters. Despite the disposal of two sites in France during 2011 and the significant shift in volume from onshore to offshore in the North America and Asia Pacific region, the company reported an increase in revenue of 2.1%.
With the purpose of consolidating some of the Group Management functions to Stockholm, the company will soon complete the establishment of a Corporate Management office in Stockholm.
Kinnevik's holdings
Online
| Investment (SEK m) | Ownership | Invested amount |
Estimated fair value |
|---|---|---|---|
| Rocket Internet with port folio companies |
mixed | 6 090 | 7 876 |
| Groupon, directly owned shares |
8 377 156 | 20 | 959 |
| Avito (directly and through Vosvik) |
50% | 285 | 336 |
| CDON | 25.1% | 517 1) | 940 |
| Other online investments | mixed | 512 | 205 |
| Total | 7 424 | 10 316 |
1) The value of dividend received from MTG when shares distributed and share purchases made thereafter.
| Return Online | 1 year | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | 70% | 42% |
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Kinnevik's holdings
Groupon
Groupon is a leading daily deal site with a global presence, offering goods and services at a discount on local e-commerce marketplaces. The Company has driven innovation by changing the way merchants market themselves. Groupon is today present in 48 countries. Following the strong trend of growth in data usage within telecom, Groupon continues to increase its mobile footprint with product rollouts in more than 30 countries and further extend current and new strategic relationships with key industry partners. The Company reported revenues of USD 1,610 m (313) and an operating loss of USD $233$ m $(420)$ for the full year 2011.
Avito
Avito.ru is the leading online service for classified advertising in Russia. In the first quarter, the company had an average of 4.2 million new classifieds per month (2.3 million for the corresponding period last year) and 24.2 million (13.1) million unique monthly visitors. The company has during the first quarter continued to invest to further strengthen its leading position. Revenues primarily derive from advertising sales on the website.
CDON
CDON Group is a leading e-commerce company with some of the most well known and appreciated brands in the Nordic area.
| | Jan-Mar | Full yearinnevik.se or contact:
Mia Brunell Livfors, President and Chief Executive Officer, tel +46 (0)8 562 000 00
Torun Litzén, Information and Investor Relations tel +46 (0)8 562 000 83, mobile +46 (0)70 762 00 83
Kinnevik was founded in 1936 and thus embodies seventy-five years of entrepreneurship under the same group of principal owners. Kinnevik's objective is to increase shareholder value, primarily through net asset value growth. The company's holdings of growth companies are focused around seven business sectors; Telecom & Services, Online, Media, Microfinancing, Paper & Packaging, Agriculture and Renewable energy.
Kinnevik has a long history of investing in emerging markets which has resulted in a considerable exposure to consumer sectors in these markets. 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)
| 2012 | 2011 | |||
|---|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development |
||||
| ------------------------ | --------- | ------------------ | ------ | |
| Key data (SEK m) | 2012 | 2011 | 2011 | |
| Revenue | 954 | 572 | 3404 | |
| Operating profit, EBIT | $-12$ | 20 | 129 | |
| Net profit/loss | $-13$ | 13 | 83 |
During the first quarter of 2012, CDON increased its market share for all the Group's business segments and the continued high sales growth of 67% contributed to record sales of SEK 954 m. The operating profit was pushed down by non-recurring costs and the decrease is a result of the ongoing shift in the Entertainment segment, away from the sale of media products towards growth categories such as consumer electronics. Furthermore, margins are affected by the consolidation of Tretti.com from 3 June 2011, the nonrecurring cost from the adjusted offset model for returns within the Fashion segment as well as by the non-recurring cost related to Nelly's warehouse relocation. Investments made during 2011 and the first quarter of 2012 have proven to be the right strategy and CDON doubled its organic growth during the first quarter of 2012 compared to the same period last year. The company has continued to invest in the geographic expansion of Nelly.com and overall, the Group's online stores had 58.7 (34.1) million visitors and generated $1.6(1.3)$ million orders during the quarter.
Media
| Investment (SEK m) | Ownership | Estimated fair value 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)
| 2012 | 2011 | |||
|---|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development |
||||
| ------------------------------ | ------------------------ | ----------------------------- | ----------------- | |
| Modern Times Group | 20.3% | 4921 | ||
| Metro | $97.1\%$ 1) | 2012 | 2011 | |
| ------------------------------------------------------------ | ------ | ------------- | ------------- | ------------- |
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development |
1 363 | |||
| Total | 2012 | 2011 | ||
| ------------------------------------------------------------ | ------ | ------------- | ------------- | ------------- |
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development |
6 2 8 4 | |||
| 1)---------------------------------------------------- | ------ | ------------- | ------------- | ------------- |
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development Fully diluted. |
||||
| Determined the state | . | Processe011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development |
| Return Media | ı year | b years |
|---|---|---|
| Average yearly internal rate of return (IRR) | -25% | -5% |
For advertisers, television is a very important channel for marketing and brand building. The Kinnevik media companies have strong market positions and brands with operations in a total of 41 markets and a combined reach of 125 million daily TV viewers in MTG and 18 million daily readers in Metro covering Scandinavia, Eastern Europe, Africa and Latin America.
Modern Times Group MTG
| | Jan-Mar | Full year | 2 | 2 857 | -101 | 1 171 |
| Interest income and other financial income | | 18 | 19 | 68 |
| Interest expenses and other financial expenses | | -107 | -84 | -328 |
| Profit/loss after financial items | | 3 011 | 95 | 6 688 |
| Taxes | | -49 | -46 | -133 |
| Net profit/loss for the period | | 2 962 | 49 | 6 555 |
| Of which attributable to: | | | | |
| Equity holders of the Parent Company | | 2 960 | 47 | 6 553 |
| Non-controlling interest | | 2 | 2 | 2 |
| Earnings per share before dilution, SEK | | 10.68 | 0.17 | 23.64 |
| Earnings per share after dilution, SEK | | 10.67 | 0.17 | 23.62 |
| Average number of shares before dilution | | 277 183 276 | 277 158 190 | 277 173 242 |
| Average number of shares after dilution | | 277 479 958 | 277 364 583 | 277 396 143 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)
| 2012 | 2011 | ||
|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | |
| 31 March | 31 March | Full year | |
| Net profit/loss for the period | 2 962 | 49 | 6 555 |
| Other comprehensive income for the period | |||
| Translation differences | -6 | -8 | -3 |
| Cash flow hedging | -2 | -55 | -82 |
| Actuarial profit/loss | - | - | -14 |
| Tax attributable to other comprehensive income | 0 | 14 | 25 |
| Total other comprehensive income for the period | -8 | -49 | -74 |
| Total comprehensive income for the period | 2 954 | 0 | 6 481 |
| Total comprehensive income for the period attribu |
|||
| ----------------------------- | --------- | ------------------ | --------- |
| Key data (SEK m) | 2012 | 2011 | 2011 |
| Revenue | 3 2 5 9 | 3 1 2 5 | 13 473 |
| Operating profit/loss, EBIT | 542 | 686 | $-615$ |
| Net profit/loss | 454 | 490 | $-1289$ |
The result of the first quarter of 2012 was influenced by investments within the MTG Group, where investments were made in spring free-TV schedules in Scandinavia and in pay-TV content offering and new technologies across the Nordic region. The work to drive up audience shares is ongoing. Scandinavian TV advertising markets and the Nordic pay-TV operations generated healthy sales and underlying subscriber growth, with a margin that remain high by industry standards.
Both MTG's free-TV and pay-TV businesses in emerging markets reported sales growth and improved profitability levels, despite the fact that there has been no trend shift in the development of the emerging advertising markets and that the company has continued to invest in the development of its emerging market satellite platforms. The target audience and advertising market shares has grown year on year in almost all of MTGs free-TV emerging market territories, as well as its emerging market pay-TV subscriber bases.
Kinnevik's holdings
Metro
| Jan-Mar | ||||
|---|---|---|---|---|
| Key data (EUR m) | 2012 | 2011 | 2011 | |
| Revenue | 47.2 | 45.2 | 197 | |
| Operating profit, EBIT | 0.6 | 1.1 | 19.4 | |
| Net result | -1.7 | -2.2 | 4.7 |
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Microfinancing
| Investment (SEK m) | Ownership | Invested amount |
Estimated fair value |
|---|---|---|---|
| Bayport | 37% 1) | 329 | 407 |
| Seamless | 11.9% 1) | 16 | 45 |
| Milvik | 56% | 10 | 10 |
| Microvest II | fund participation | 30 | 26 |
| Other | 7 | 7 | |
| Total | 392 | 495 | |
| 1) After warrants have been utilised. | |||
| Return Microfinancing | 1 year | 5 years | |
| Average yearly internal rate of return (IRR) | 38% | 16% |
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Kinnevik's holdings
Paper & Packaging
| Investment (SEK m) | Ownership | Estimated fair value | |
|---|---|---|---|
| Korsnäs Industrial and Forestry | 100% | 3996 | |
| Bergvik Skog | 5% | 659 | |
| Total | 4655 | ||
| Return Paper & Packaging | 1 year | 5 years | |
| Average yearly internal rate of return (IRR) 1) | 13% | 12% |
1) Return calculated as net profit divided by average invested capital.
The growth and urbanisation in emerging markets and the changing lifestyle that this entails increases the demand for modern packaging solutions. This is a key value driver for Korsnäs with is clear focus on liquid packaging board and high quality cartonboard.
Korsnäs
Korsnäs is the second largest producer in the world of liquid packaging board, the second largest when it comes to coated white top liner and one of the largest producers of cartonboard. With its vast experience, solid competence and advanced technology, Korsnäs nurtures its ambition to constantly develop and improve its products and services to bring benefit to its customers. The company has two fully integrated mills in Gävle and Frövi and produces CTMP pulp for internal use in Rockhammar. Korsnäs Forestry is responsible for purchases of wood and fiber for Korsnäs Industrial and also conducts external sales, primarily of saw logs. Korsnäs also owns 5% of the shares in Bergvik Skog AB.
| Jan-March | Full year | |||
|---|---|---|---|---|
| Key data (SEK m) | 2012 | 2011 | 2011 | |
| Korsnäs Industrial | ||||
| Revenue | 1887 | 1874 | 7 1 2 9 | |
| FBIT | 235 | 254 | 859 | |
| Operating margin | 12.5% | 13.6% | 12.0% | |
| Korsnäs Forestry | ||||
| Revenue | 279 | 261 | 1 1 2 5 | |
| FBIT | 5 | 10 | 48 | |
| Korsnäs Group | ||||
| Revenue | 2 166 | 2 1 3 5 | 8 2 5 4 | |
| FBIT | 240 | 264 | 907 | |
| Operating margin | 11.1% | 12.4% | 11.0% | |
| Return on operational capital | 11.2% | 13.2% | 11.0% | |
| Cash flow data | ||||
| FBITDA | 393 | 415 | 1515 | |
| Change in working capital | 76 | $-59$ | $-437$ | |
| Cash flow from operations | 499 | 279 | 832 | |
| Investments in tangible fixed assets | $-95$ | $-97$ | $-687$ | |
| Production, thousand tons | 267 | 278 | 1 061 | |
| Deliveries, thousand tons | 263 | 259 | 1 002 |
Korsnäs' operating profit for the first quarter of the year amounted to SEK 240 m, compared with SEK 264 m in the year-earlier period. The decrease was primarily due to lower production volumes, higher costs for chemicals and higher fixed costs. These negative effects were offset by higher sales prices in local currencies, lower costs for pulpwood and external pulp, as well as lower energy costs due to lower energy consumption and lower electricity price. The explanatory items are presented in the table below.
| Explanation items in changes in EBIT (SEK m) | Jan-March |
|---|---|
| FBIT 2011 | 264 |
| Delivery and production volumes and changed product mix |
$-21$ |
| Sales prices including currency effects | 13 |
| Cost changes for energy | 35 |
| Cost changes for pulpwood and external pulp | 10 |
| Cost changes for chemicals | $-23$ |
| Change in fixed costs | $-30$ |
| Other | -8 |
| EBIT 2012 | 240 |
Market
Demand was somewhat weaker during the first quarter of 2012, compared with the year-earlier period. Deliveries of liquid packaging board increased slightly, while other product areas had somewhat weaker delivery volumes, year-on-year. The product range in each product area continued to develop as prioritized products in line with the company's long-term strategy. Price increases were implemented in line with agreements with major liquidpackaging-board customers. Prices in other product areas remained largely unchanged during the first quarter.
Korsnäs Industrial's sales volume divided per product January-March 2012
Numbers in brackets refer to January-March 2011.
Production
The somewhat lower production volumes during the first quarter of 2012, compared with the year-earlier period, were due to shorter extended maintenance stoppages at the Frövi facility to adapt stock volumes to demand. In other respects, production during the quarter functioned well. No operational problems had any significant impact on production volumes.
The supply of wood-fiber material has been good during the first quarter. Pulpwood prices stabilized during the first quarter, following the price reductions that gradu-
Kinnevik's holdings
ally occurred since September 2011. The official prices for coniferous pulpwood in Central Sweden have declined by slightly more than 15% since October 2011, while prices for birch pulpwood declined by about 11%.
Distribution of operating costs January-March 2012
Excluding depreciation, Korsnäs Industrial. Numbers in brackets refer to January-March 2011.
Investments and maintenance stoppages
The project pertaining to a new bioenergy facility in Korsnäs' industrial area is progressing in cooperation with Gävle Energy AB's jointly owned company, Bomhus Energi AB. The aim of the bioenergy facility is to assure delivery of eco-friendly electricity and steam to Korsnäs' plant in Gävle from 2013, as well as district heating to Gävle Energi's customers. All the main components have been procured within the project's budget framework and work to install the equipment is progressing according to plan. For Korsnäs, the investment in 50% of the shares and debenture loans in Bomhus will amount to approximately SEK 320 m, of which SEK 227 m has been paid to date. In addition to the investment in Bomhus Energi, Korsnäs will make further energy investments of about SEK 145 m in the existing plant for the delivery of waste heat to Gävle Energi AB, of which SEK 118 m has been paid to date.
Decisions have also been made to invest SEK 270 m in the refurbishment of PM5 in Gävle, of which SEK 54 m has been paid to date. The refurbishment, which will be implemented during scheduled maintenance stoppages in autumn 2012, will affect several sections of the machine and is an aggressive quality investment to improve the surface of cartonboard.
During 2011, a decision was also made to install a new wash press and to modify the oxygen phase in Fiber-line 3 in Gävle. The expansion is estimated to increase wood replacement and reduce requirements of bleaching chemicals. The investment totals SEK 95 m, of which SEK 41 m has been paid to date.
Maintenance stoppages for the year in the plants in Gävle and Frövi were scheduled for the same quarter as 2011, as stated in the table below.
| Implemented and planned maintenance stoppages |
2012 2011 |
|
|---|---|---|
| Korsnäs Gävle | Q4: 11 days | Q4: 11 days |
| Korsnäs Frövi | $Q2: 8$ days | $Q2: 8$ days |
Agriculture
| Investment (SEK m) | Ownership | amount | Invested Estimated fair value |
|---|---|---|---|
| Black Earth Farming, Russia | 24.9% | 659 | 404 |
| Rolnyvik, Poland | 100% | 174 | 250 |
| Total | 833 | 654 |
| Return Agriculture | 1 vear | 5 years |
|---|---|---|
| Average yearly internal rate of return (IRR) | -42% | -5% |
Current focus in agriculture is to continue the expansion in less developed areas, where larger acreage can be acquired at relatively low prices and developed to achieve higher productivity.
Black Earth Farming
Black Earth Farming (BEF), 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. $\sim$ $\sim$
| Jan-Dec | ||
|---|---|---|
| 2011 | 2010 | |
| 77.6 | 59.9 | |
| $-25.3$ | $-25.7$ | |
| $-41.7$ | $-36.4$ | |
Black Earth Farming's reported an operating loss for 2011. There are several driving factors, both external and internal, affecting crop yield and price including weather conditions as well as issues with harvest and storage logistics. Revenue per hectare was close to 2008 levels when yields were higher but prices lower. Operating costs per hectare were up year-on-year but the severe drought that impacted the 2010 harvest makes it an abnormal reference point, as some inputs were scaled back and volume driven costs were lower. Overhead and indirect costs per hectare are trending lower but the key to improving results going forward will be on the revenue side.
There are a lot of initiatives underway to lift crop yield performance. The end target is to lower the cost per ton to increase the potential of being highly profitable in a favorable year whilst staying profitable in a bad year. With an almost completely new management team put in place in the latter part of 2011 the process of improving performance has begun.
Rolnvvik
Kinnevik's wholly owned Polish agricultural company, Rolnyvik, operates the Barciany and Podlawki farms, with a total area of 6,705 hectares.
Rolnyvik reported an operating profit of SEK 9 m (11) in the first quarter. As in previous years, a large portion of last year's harvest was stored and will be sold during the first half of 2012.
Kinnevik's holdings
Renewable energy
| Investment (SEK m) | Ownership | Invested amount |
Estimated fair value |
|---|---|---|---|
| Latgran | 75% | 129 | 268 |
| Vireo | 78% | 78 | 78 |
| Total | 207 | 346 |
| Return Renewable energy | 1 year | 5 years | |
|---|---|---|---|
| Average yearly internal rate of return (IRR) | 5% | 23% |
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| Jan-March | Full year | ||
|---|---|---|---|
| Key data (SEK m) | 2012 | 2011 | 2011 |
| Revenue | 161 | 97 | 319 |
| EBIT | 17 | 14 | 32 |
| Production, thousand tons | 99 | 61 | 292 |
| Deliveries, thousand tons | 143 | 88 | 265 |
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Parent Company and other
The administration costs within the Parent Company and the Group's other companies amounted to a net expense of SEK 22 m (expense of 18) for the quarter after invoicing for services performed.
Risk Management
The Group's financing and management of financial risks is centralized within Kinnevik's finance function and is conducted on the basis of a finance policy established by the Board of Directors. The Group's operational risks are primarily evaluated and managed within the particular business area and then reported to the Kinnevik Board.
The Group has established a model for risk management, 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.
Kinnevik's wholly owned subsidiary Korsnäs accounts 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.
Kinnevik is exposed to financial risks mainly in respect of changes in the value of the stock portfolio, changes in market interest rates, exchange rate risks and liquidity and refinancing risks.
The Group is also exposed to political risks since the companies Kinnevik has invested in have a substantial part of their operations in emerging markets such as Latin America, Sub-Saharan 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 32 of the 2011 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 and calculation methods applied in this report are the same as those described in the 2011 Annual Report.
Related party transaction
Related party transactions for the period are of the same character and amounts as the transactions described in the 2011 Annual Report.
Kinnevik Annual General Meeting 2012
The Annual General Meeting will be held on Monday 7 May 2012 at 10:00 a.m. at the Hotel Rival, Mariatorget 3 in Stockholm.
Further details on how and when to register are published on Kinnevik's website, www.kinnevik.se.
The Board of Directors has proposed a cash dividend of SEK 5.50 (4.50) per share to be paid to the shareholders.
Financial reports
Reporting dates for 2012: 20 July Interim Report January-June 19 October Interim Report January-September
Stockholm, 20 April 2012
Mia Brunell Livfors President and Chief Executive Officer
This Interim Report has not been subject to specific review by the Company's auditors.
Kinnevik discloses the information in this year-end release pursuant to the Swedish Securities Exchange and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 8.00 CET on 20 April 2012.
For further information, please visit www.kinnevik.se or contact:
Mia Brunell Livfors, President and Chief Executive Officer, tel +46 (0)8 562 000 00
Torun Litzén, Information and Investor Relations tel +46 (0)8 562 000 83, mobile +46 (0)70 762 00 83
Kinnevik was founded in 1936 and thus embodies seventy-five years of entrepreneurship under the same group of principal owners. Kinnevik's objective is to increase shareholder value, primarily through net asset value growth. The company's holdings of growth companies are focused around seven business sectors; Telecom & Services, Online, Media, Microfinancing, Paper & Packaging, Agriculture and Renewable energy.
Kinnevik has a long history of investing in emerging markets which has resulted in a considerable exposure to consumer sectors in these markets. 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)
| 2012 | 2011 | |||
|---|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | ||
| Note | 31 March | 31 March | Full year | |
| Revenue | 2 406 | 2 282 | 8 789 | |
| Cost of goods sold and services | -2 034 | -1 915 | -7 476 | |
| Gross profit/loss | 372 | 367 | 1 313 | |
| Selling, administration, research and development costs |
-146 | -129 | -640 | |
| Other operating income | 21 | 25 | 158 | |
| Other operating expenses | -4 | -2 | -5 | |
| Operating profit/loss | 243 | 261 | 826 | |
| Dividends received | 2 | - | - | 4 951 |
| Change in fair value of financial assets | 2 | 2 857 | -101 | 1 171 |
| Interest income and other financial income | 18 | 19 | 68 | |
| Interest expenses and other financial expenses | -107 | -84 | -328 | |
| Profit/loss after financial items | 3 011 | 95 | 6 688 | |
| Taxes | -49 | -46 | -133 | |
| Net profit/loss for the period | 2 962 | 49 | 6 555 | |
| Of which attributable to: | ||||
| Equity holders of the Parent Company | 2 960 | 47 | 6 553 | |
| Non-controlling interest | 2 | 2 | 2 | |
| Earnings per share before dilution, SEK | 10.68 | 0.17 | 23.64 | |
| Earnings per share after dilution, SEK | 10.67 | 0.17 | 23.62 | |
| Average number of shares before dilution | 277 183 276 | 277 158 190 | 277 173 242 | |
| Average number of shares after dilution | 277 479 958 | 277 364 583 | 277 396 143 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK m)
| 2012 | 2011 | ||
|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | |
| 31 March | 31 March | Full year | |
| Net profit/loss for the period | 2 962 | 49 | 6 555 |
| Other comprehensive income for the period | |||
| Translation differences | -6 | -8 | -3 |
| Cash flow hedging | -2 | -55 | -82 |
| Actuarial profit/loss | - | - | -14 |
| Tax attributable to other comprehensive income | 0 | 14 | 25 |
| Total other comprehensive income for the period | -8 | -49 | -74 |
| Total comprehensive income for the period | 2 954 | 0 | 6 481 |
| Total comprehensive income for the period attribu table to: |
|||
| Equity holders of the Parent Company | 2 952 | -2 | 6 478 |
| Non-controlling interest | 2 | 2 | 3 |
CONDENSED CONSOLIDATED CASH-FLOW STATEMENT (SEK m)
| 2012 | 2011 | ||
|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | |
| 31 March | 31 March | Full year | |
| Operating profit | 243 | 261 | 826 |
| Adjustment for non-cash items | 175 | 147 | 605 |
| Taxes paid | -4 | -59 | -190 |
| Cash flow from operations before change in working capital | 414 | 349 | 1 241 |
| Change in working capital | 37 | -8 | -460 |
| Cash flow from operations | 451 | 341 | 781 |
| Acquisition of subsidiaries | -102 | -5 | -148 |
| Investments in tangible and biological fixed assets | -105 | -115 | -792 |
| Sales of tangible and biological fixed assets | 3 | - | 7 |
| Investments in intangible fixed assets | - | - | -5 |
| Investments in shares and other securities | -869 | -430 | -2 744 |
| Sales of shares and other securities | - | - | 28 |
| Dividends received | - | - | 4 951 |
| Changes in loan receivables | 0 | 9 | -26 |
| Interest received | 0 | 6 | 27 |
| Cash flow from investing activities | -1 073 | -535 | 1 298 |
| Change in interest-bearing liabilities | 1 275 | 333 | -468 |
| Interest paid | -107 | -84 | -328 |
| Dividend paid to equity holders of the Parent company | - | - | -1 247 |
| Dividend paid to holders of non-controlling interest | - | - | -4 |
| Cash flow from financing activities | 1 168 | 249 | -2 047 |
| Cash flow for the period | 546 | 55 | 32 |
| Exchange rate differences in liquid funds | 0 | 0 | 0 |
| Cash and short-term investments, opening balance | 182 | 150 | 150 |
| Cash and short-term investments, closing balance | 728 | 205 | 182 |
.
CONDENSED CONSOLIDATED BALANCE SHEET (SEK m)
| 2012 | 2011 | 2011 | |
|---|---|---|---|
| Note ASSETS |
31 March | 31 March | 31 Dec |
| Fixed assets | |||
| Intangible fixed assets | 1 887 | 826 | 957 |
| Tangible and biological fixed assets | 6 506 | 6 339 | 6 526 |
| Financial assets accounted to fair value through | |||
| profit and loss 3 |
63 964 | 54 647 | 58 615 |
| - whereof interest-bearing | 211 | 179 | 227 |
| Financial assets held to maturity | - | 234 | 263 |
| Investments in companies accounted for using the equity method |
249 | 126 | 242 |
| 72 606 | 62 172 | 66 603 | |
| Current assets | |||
| Inventories | 2 105 | 1 701 | 2 180 |
| Trade receivables | 1 153 | 923 | 771 |
| Tax receivables | 24 | 0 | 25 |
| Other current assets | 376 | 177 | 307 |
| Short-term investments | 0 | 4 | 0 |
| Cash and cash equivalents | 729 | 201 | 182 |
| 4 387 | 3 006 | 3 465 | |
| TOTAL ASSETS | 76 993 | 65 178 | 70 068 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Equity attributable to equity holders of the Parent | |||
| Company | 62 592 | 54 398 | 59 637 |
| Equity attributable to non-controlling interest | 113 | 29 | 50 |
| 62 705 | 54 427 | 59 687 | |
| Long-term liabilities | |||
| Interest-bearing loans | 8 016 | 7 450 | 4 936 |
| Provisions for pensions | 530 | 540 | 534 |
| Other provisions | 11 | 15 | 9 |
| Deferred tax liability | 1 042 | 1 079 | 1 060 |
| Other liabilities | 20 | 4 | 12 |
| 9 619 | 9 088 | 6 551 | |
| Short-term liabilities | |||
| Interest-bearing loans | 11 | 27 | 1 741 |
| Provisions | 21 | 38 | 19 |
| Trade payables | 1 093 | 996 | 999 |
| Income tax payable | 72 | 14 | 10 |
| Other payables | 3 472 | 588 | 1 061 |
| 4 669 | 1 663 | 3 830 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 76 993 | 65 178 | 70 068 |
CONDENSED REPORT OF CHANGES IN EQUITY FOR THE GROUP (SEK m)
| 2012 | 2011 | ||
|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | |
| 31 March | 31 March | Full year | |
| Equity, opening balance | 59 687 | 54 425 | 54 425 |
| Total comprehensive income for the period | 2 954 | 0 | 6 481 |
| Business combination, non-controlling interest | 56 | 22 | |
| Contribution from non-controlling interest | 5 | - | 2 |
| Dividend paid to owners of non-controlling interest | - | - | -4 |
| Dividend paid to shareholders of the Parent company | - | - | -1 247 |
| Effect of employee share saving | 3 | 2 | 8 |
| programme | |||
| Equity, closing amount | 62 705 | 54 427 | 59 687 |
| Equity attributable to the shareholders of the Parent Company | 62 592 | 54 398 | 59 637 |
| Equity attributable to non-controlling interest | 113 | 29 | 50 |
| 2012 | 2011 | 2011 | |
|---|---|---|---|
| KEY RATIOS | 31 March | 31 March | 31 Dec |
| Debt/equity ratio | 0.14 | 0.15 | 0.12 |
| Equity ratio | 81% | 84% | 85% |
| Net debt | 7 617 | 7 399 | 6 539 |
DEFINITIONS OF KEY RATIOS
| Debt/equity ratio | Interest-bearing liabilities including interest-bearing provisions divided by share holders' 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 inte rest-bearing receivables, short-term investments and cash and cash equivalents. |
||||
| 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 receiva bles 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. |
NOTES TO THE GROUP'S FINANCIAL STATEMENTS (SEK m)
Note 1 Condensed segment reporting
Kinnevik is a diversified company whose business consists of managing a portfolio of investments and to conduct operations through subsidiaries. The Kinnevik Group's accounting is distributed on the following three accounting segments:
Paper & Packaging - Korsnäs
Other operating subsidiaries - Latgran, Rolnyvik, Vireo Energy, Relevant Traffic, Guider Media, Duego Technologies and Milvik as well as G3 Good Governance Group.
Parent Company & other - all other companies and financial assets (including change in fair value of financial assets). Following the acquisition of Metro on 29 March 2012, Media will be an accounting segment from the second quarter 2012.
This distribution coincides with management's internal structure for controlling and monitoring the Group's operations.
| Other | Parent | ||||
|---|---|---|---|---|---|
| Paper & | operating | company & | Total | ||
| 1 Jan-31 Mar 2012 | packaging | subsidiaries | other | Eliminations | Group |
| Revenue | 2 166 | 271 | 4 | -35 | 2 406 |
| Operating costs | -1 791 | -241 | -25 | 37 | -2 020 |
| Depreciation | -153 | -6 | -1 | -160 | |
| Other operating income and expenses | 18 | 1 | -2 | 17 | |
| Operating profit/loss | 240 | 25 | -22 | 0 | 243 |
| Change in fair value of financial assets | 6 | 2 851 | 2 857 | ||
| Financial net | -45 | -2 | -42 | -89 | |
| Profit/loss after financial items | 201 | 23 | 2 787 | 0 | 3 011 |
| Investments in subsidiaries and financial fixed | |||||
| assets | 3 468 | 3 468 | |||
| Investments in tangible and biological fixed | |||||
| assets | 95 | 10 | 105 |
| Other | Parent | ||||
|---|---|---|---|---|---|
| Paper & | operating | company & | Total | ||
| 1 Jan-31 Mar 2011 | packaging | subsidiaries | other | Eliminations | Group |
| Revenue | 2 135 | 169 | 6 | -28 | 2 282 |
| Operating costs | -1 741 | -150 | -24 | 28 | -1 887 |
| Depreciation | -151 | -6 | 0 | -157 | |
| Other operating income and expenses | 21 | 4 | -2 | 23 | |
| Operating profit/loss | 264 | 17 | -20 | 0 | 261 |
| Change in fair value of financial assets | 13 | -114 | -101 | ||
| Financial net | -40 | -1 | -24 | -65 | |
| Profit/loss after financial items | 237 | 16 | -158 | 0 | 95 |
| Investments in subsidiaries and financial fixed | |||||
| assets | 435 | 435 | |||
| Investments in tangible and biological fixed | |||||
| assets | 97 | 18 | 115 |
| Paper & | Other operating |
Parent company & |
Total | ||
|---|---|---|---|---|---|
| 1 Jan-31 Dec 2011 | packaging | subsidiaries | other | Eliminations | Group |
| Revenue | 8 254 | 637 | 24 | -126 | 8 789 |
| Operating costs | -6 873 | -607 | -121 | 132 | -7 469 |
| Depreciation | -608 | -37 | -2 | -647 | |
| Other operating income and expenses | 134 | 18 | 7 | -6 | 153 |
| Operating profit/loss | 907 | 11 | -92 | 0 | 826 |
| Dividends received | 4 | 4 947 | 4 951 | ||
| Change in fair value of financial assets | 97 | 1 074 | 1 171 | ||
| Financial net | -155 | -4 | -101 | -260 | |
| Profit/loss after financial items | 853 | 7 | 5 828 | 0 | 6 688 |
| Investments in subsidiaries and financial fixed | |||||
| assets | 112 | 143 | 3 127 | 3 382 | |
| Investments in intangible fixed assets | 5 | 5 | |||
| Investments in tangible and biological fixed assets |
687 | 103 | 2 | 792 |
Note 2 Change in fair value of financial assets and dividends received
| 2012 | 2011 | ||
|---|---|---|---|
| 1 Jan | 1 Jan | 2011 | |
| 31 March | 31 March | Full year | |
| Listed holdings | |||
| Millicom | 2 270 | -1 476 | 2 965 |
| Tele2 | 149 | 840 | 2 873 |
| Transcom | 66 | -26 | -314 |
| CDON | 311 | 45 | 108 |
| Groupon, direct ownership | -238 | - | 747 |
| MTG | 485 | 470 | -1 472 |
| Metro 1) | 39 | 12 | -382 |
| Seamless | 29 | - | - |
| Black Earth Farming | -23 | 62 | -396 |
| Total listed holdings | 3 088 | -73 | 4 129 |
| Unlisted holdings | |||
| Online | -238 | -16 | 1 811 |
| Microfinancing | 1 | -25 | 73 |
| Paper & Packaging | 6 | 13 | 101 |
| Agriculture | 0 | 0 | 8 |
| Total unlisted holdings | -231 | -28 | 1 993 |
| Total | 2 857 | -101 | 6 122 |
Note 3 Financial assets accounted at fair value through profit and loss
| 31 March 2012 | |||||||
|---|---|---|---|---|---|---|---|
| Class | Class | 2012 | 2011 | 2011 | |||
| A shares | B shares | 31 March | 31 March | 31 Dec | |||
| Listed holdings | |||||||
| Millicom | 37 835 438 | 28 358 | 22 834 | 26 088 | |||
| Tele2 | 18 507 492 | 116 988 645 | 18 278 | 19 755 | 18 129 | ||
| Transcom | 247 164 416 | 163 806 836 | 255 | 307 | 189 | ||
| CDON | 16 639 607 | 940 | 513 | 629 | |||
| Groupon, direct ownership | 8 377 156 | 959 | - | 1 197 | |||
| MTG | 5 119 491 | 8 384 365 | 4 921 | 6 479 | 4 436 | ||
| Metro 1) | - | 671 | 277 | ||||
| Seamless | 2 300 000 | 45 | - | - | |||
| Black Earth Farming | 31 087 097 | 404 | 886 | 427 | |||
| Total listed holdings | 54 160 | 51 445 | 51 372 | ||||
| Unlisted holdings | |||||||
| Online | 8 322 | 2 057 | 5 895 | ||||
| Media | 128 | - | - | ||||
| Microfinancing | 440 | 329 | 440 | ||||
| Paper & Packaging | 662 | 575 | 656 | ||||
| Agriculture | 3 | 24 | 3 | ||||
| Parent Company & other | 249 | 217 | 249 | ||||
| Total unlisted holdings | 9 804 | 3 202 | 7 243 | ||||
| Total | 63 964 | 54 647 | 58 615 |
1) Metro became subsidiary to Kinnevik on 29 March 2012. The change in fair value for the first quarter 2012 relates to the period from 1 January until the bid was published on 6 February.
FINANCIAL KEY RATIOS MAJOR UNLISTED HOLDINGS (SEK m)
| 2012 Q1 |
2011 Full year |
2011 Q4 |
2011 Q3 |
2011 Q2 |
2011 Q1 |
2010 Full year |
2010 Q4 |
2010 Q3 |
2010 Q2 |
2010 Q1 |
2009 Full year |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | ||||||||||||
| Korsnäs Industrial | 1 887 | 7 129 | 1 723 | 1 794 | 1 738 | 1 874 | 7 148 | 1 751 | 1 766 | 1 720 | 1 911 | 7 098 |
| Korsnäs Forestry | 279 | 1 125 | 290 | 268 | 306 | 261 | 1 030 | 247 | 252 | 283 | 248 | 941 |
| Total Korsnäs | 2 166 | 8 254 | 2 013 | 2 062 | 2 044 | 2 135 | 8 178 | 1 998 | 2 018 | 2 003 | 2 159 | 8 039 |
| Operating profit before depreciation (EBITDA) |
||||||||||||
| Korsnäs Industrial | 385 | 1 460 | 258 | 481 | 317 | 404 | 1 476 | 257 | 502 | 383 | 334 | 1 430 |
| Korsnäs Forestry | 8 | 55 | 18 | 13 | 13 | 11 | 52 | 12 | 17 | 10 | 13 | 32 |
| Total Korsnäs | 393 | 1 515 | 276 | 494 | 330 | 415 | 1 528 | 269 | 519 | 393 | 347 | 1 462 |
| Operating profit after depreciation (EBIT) |
||||||||||||
| Korsnäs Industrial | 235 | 859 | 107 | 330 | 168 | 254 | 879 | 105 | 352 | 234 | 188 | 826 |
| Korsnäs Forestry | 5 | 48 | 16 | 12 | 10 | 10 | 47 | 11 | 16 | 9 | 11 | 25 |
| Total Korsnäs | 240 | 907 | 123 | 342 | 178 | 264 | 926 | 116 | 368 | 243 | 199 | 851 |
| Operating margin | ||||||||||||
| Korsnäs Industrial | 12.5% | 12.0% | 6.2% | 18.4% | 9.7% | 13.6% | 12.3% | 6.0% | 19.9% | 13.6% | 9.8% | 11.6% |
| Korsnäs Forestry | 1.8% | 4.3% | 5.5% | 4.5% | 3.3% | 3.8% | 4.6% | 4.5% | 6.3% | 3.2% | 4.4% | 2.7% |
| Korsnäs | 11.1% | 11.0% | 6.1% | 16.6% | 8.7% | 12.4% | 11.3% | 5.8% | 18.2% | 12.1% | 9.2% | 10.6% |
| Operational capital employed |
||||||||||||
| Korsnäs Industrial | 8 256 | 7 893 | 8 148 | 7 792 | 7 653 | 7 678 | 7 457 | 7 545 | 7 423 | 7 392 | 7 402 | 7 411 |
| Korsnäs Forestry | 306 | 359 | 367 | 410 | 422 | 306 | 352 | 337 | 343 | 369 | 353 | 438 |
| Total Korsnäs | 8 562 | 8 252 | 8 515 | 8 202 | 8 075 | 7 984 | 7 809 | 7 882 | 7 766 | 7 761 | 7 755 | 7 849 |
| Return on operational capital employed |
||||||||||||
| Korsnäs Industrial | 11.4% | 10.9% | 5.3% | 16.9% | 8.8% | 13.2% | 11.8% | 5.6% | 19.0% | 12.7% | 10.2% | 11.1% |
| Korsnäs Forestry | 6.5% | 13.4% | 17.4% | 11.7% | 9.5% | 13.1% | 13.4% | 13.1% | 18.7% | 9.8% | 12.5% | 5.7% |
| Korsnäs | 11.2% | 11.0% | 5.8% | 16.7% | 8.8% | 13.2% | 11.9% | 5.9% | 19.0% | 12.5% | 10.3% | 10.8% |
| Production,thousand tons | 267 | 1 061 | 247 | 280 | 256 | 278 | 1 019 | 243 | 278 | 237 | 261 | 1 025 |
| Deliveries, thousand tons | 263 | 1 002 | 238 | 255 | 250 | 259 | 1 021 | 241 | 259 | 252 | 269 | 1 034 |
CONDENSED PARENT COMPANY INCOME STATEMENT (SEK m)
| 2012 1 Jan 31 March |
2011 1 Jan 31 March |
2011 Full year |
|
|---|---|---|---|
| Revenue | 4 | 4 | 18 |
| Administration costs | -24 | -19 | -121 |
| Other operating income | 0 | 1 | 2 |
| Operating loss | -20 | -14 | -101 |
| Dividends received | - | - | 3 640 |
| Result from financial assets | 33 | - | -661 |
| Net interest income/expense | 91 | 80 | 111 |
| Profit/loss after financial items | 104 | 66 | 2 989 |
| Taxes | -19 | -17 | -8 |
| Net profit/loss for the period | 85 | 49 | 2 981 |
CONDENSED PARENT COMPANY BALANCE SHEET (SEK m)
| 2012 31 March |
2011 31 March |
2011 31 Dec |
|
|---|---|---|---|
| ASSETS | |||
| Tangible fixed assets | 2 | 2 | 2 |
| Financial fixed assets | 42 488 | 42 599 | 42 581 |
| Short-term receivables | 920 | 18 | 569 |
| Cash and cash equivalents | 1 | 1 | 1 |
| TOTAL ASSETS | 43 411 | 42 620 | 43 153 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity | 38 799 | 37 022 | 38 712 |
| Provisions | 31 | 33 | 32 |
| Long-term liabilities | 4 470 | 5 465 | 1 828 |
| Short-term liabilities | 111 | 100 | 2 581 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 43 411 | 42 620 | 43 153 |
The Parent Company's liquidity, including short-term investments and unutilized credit facilities, totalled SEK 3,477 m at 31 March 2012 and SEK 4,437 m at 31 December 2011. The Parent Company's interest bearing external liabilities amounted to SEK 3,483 m (2,173) on the same dates.
Investments in tangible fixed assets amounted to SEK 0 m (0) during the period.
As of 31 March 2011 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, 228,517,952 are class B shares with one vote each and 399,914 are class C treasury shares with one vote each. This is unchanged since 31 december 2011. The total number of votes in the Company amounted at 31 March 2012 to 715,571,106 (715,171,192 excluding 399,914 class C treasury shares). The Board has authorization to repurchase a maximum of 10% of all shares in the Company. The Board has not used the authorization during the first quarter 2012. There are no convertibles or warrants in issue.